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GovTech Fund's portfolio companies average a sales cycle under 90 days
“So the average sales cycle in our portfolio is actually less than 90 days. So let's start with that fact.”
Government agencies actively market software vendors to their peer agencies
“Governments are unique in that when they adopt innovation, one of the things they'll often do, and literally this happens in the U.S. Hundreds of times a day, is once they adopt an innovation in a given department, since they're not earning stock options and b…”
Shared procurement vehicles make government software sales faster than enterprise sales
“So I've seen many cases, actually, where it's faster than a traditional enterprise. We will see multiple agencies jump onto the same procurement vehicle, making that sales process look more like an upsell to an existing customer rather than a cold start sales …”
GovTech Fund targets startups hitting $25M ARR within four years of investment
“We're looking for are companies that can hit twenty-five million dollars of annual recurring ARR, annual recurring revenue, Within three to four years of our investment. So that means you roughly need to be growing 15 to 17% per month. We have a number of comp…”
US government procurement spending is ten times Amazon's Gross Merchandise Volume
“The U.S. Government spends a trillion dollars a year on stuff. Forget about, like, missiles and submarines. I'm talking about, like, paper and pencils. It's 10 times Amazon's current GMV, just what the U.S. Government spends every year.”
One-third of GovTechFund's deal flow comes directly from the US government
“In fact, probably about a third of our deal flow today comes from the U.S. Government. I think I'm the only VC that can say that.”
Investor and customer introductions are mere table stakes for seed VCs
“Making a few Series A investor intros, or finding a candidate, you know, or making a couple of customer intros. For us, that's table stakes, right?”
Early-stage tech founders do not know how to conduct pipeline reviews
“Even if the entrepreneur thinks they know about pipeline review, they don't, right? And I don't mean that in a condescending way. It's just, I've done this now 20 times with my portfolio companies, plus my own companies, right?”
GovTech Fund portfolio companies avoid lobbyists and custom government contracting
“Our companies do neither. We neither do any government And we don't use any lobbyists, actually, across the portfolio. If we have, it's been extremely rare for a one-off scenario, but no, this doesn't look like anything that's come before it.”
Historical VC data showed government was a terrible sector for venture investment
“For 40 years, VCs had data telling them the government was a terrible place to invest”
GovTech Fund doubles its ownership stake in select early-stage portfolio companies
“Adding to my position, we would invest typically through a series B kind of round, but I would, in some cases, perhaps even doubled my ownership position over those first early stages.”
US government employs 3.5x as many people as Dow Jones combined
“It employs three and a half times as many people as all of the Dow Jones public companies. If you look at the Dow Jones The US government is three and a half times bigger than all of them combined.”
GovTech Fund startups reach 20,000 US agencies, adding 10 per day
“We now in four years across 19 companies Are connected to roughly 20,000 agencies in the U.S. As a group of companies, we're adding about 10 a day.”
Only two of GovTech Fund's first 19 founders were over 28
“So the data is I've got 19 companies in the portfolio. One is already exited. So of the 19 investments we've made, only two are founders who are over the age of 28.”
Mission is the only way early startups compete with Big Tech hiring
“Well, the only way you compete with it is mission. And what we are finding across the board Is our millennials and folks straight out of school and so on who really are connecting with these missions, and that has been a major competitive advantage in recruiti…”
US government IT spending exceeds the entire online advertising market
“The U.S. Government alone this past year spent a hundred and fifty billion dollars on technology, IT and software. That's bigger than the entire online advertising market.”
GovTech software companies capture marketplace valuations by connecting agencies with constituents
“What's interesting is they start to capture marketplace valuations as well on top of the SaaS valuation because of the value they're creating by acting as the glue between government and their constituents.”
GovTechFund maintains a concentrated portfolio of 15 to 16 companies per fund
“Fund one, which we stopped investing out of in December of last year of 20, of 2017, had 15 portfolio companies in it, so we're roughly doing one investment a quarter, Think about a sort of three to five year investment horizon. So, 15, 16 portfolio companies …”
Chris Sacca hosted three-day founder deep-dive offsites at his Truckee home
“Chris Saka Had his famous offsite over in Truckee, north of San Francisco, in ski country, where he would sequester these entrepreneurs for like three days, living in his home, and all they would do was these deep dives.”
GovTech Fund invested $17M and generated $300M in follow-on capital
“I've invested now seventeen million all in. Our companies have raised nearly three hundred million in follow on capital.”
VC funds must be built like products with unique competitive moats
“Because I think a fund is effectively a new product in the context of a ton of competitors. Money's coming from all sorts of directions, and you have to have a unique value proposition that I think will create a long-term competitive moat.”
GovTech Fund's portfolio is exclusively comprised of SaaS startups
“So the GovTech funds portfolio today is exclusively comprised of SaaS startups, software as a service startups that, for example, run a police department or manage foster care.”