Ron Bouganim Managing Partner, Govtech Fund

1. Software
Is
Eating
Government:
The
86-­‐Day
Sales
Cycle
Ron
Bouganim
Managing
Partner

2. Private and Confidential
@GovtechFund
• 22
Million
employees
(3M
Federal,
5M
State,
14M
Local)
• 15%
of
entire
the
US
workforce
• DJIA:
Microsoft,
Exxon,
Home
Depot,
McDonalds,
etc:
6
Million
• $7
Trillion
spend;
market
cap
of
DJIA:
$5
Trillion
• Market
cap
of
Apple+Google+Alibaba+Facebook+Amazon
+LinkedIn+:
$2.4T
• 100,000+
government
agencies,
departments
US Gov’t: Single Largest “Company” in America

3. Private and Confidential
@GovtechFund
What is Govtech?
Definition
govtech,
n.
(gov-­‐tek)
the
technology
infrastructure
that
governments
use
to
manage
internal
operations
and
deliver
services
to
citizens

4. Private and Confidential
@GovtechFund
Government’s
“OS”
• procurement
• law
enforcement
• GIS
mapping
• tax
collection
/
fraud
• budgeting
• pension
liability
• bond
issuance
management
• healthcare
What Govtech Isn’t?
govtech
civictech
Citizen’s
“OS”
• community
organizing
• petitions
• advocacy
• elected
officials
comms
• elections

5. Private and Confidential
@GovtechFund
What is Govtech?
US:
$175
Billion
/
Year
Global:
$1
Trillion
/
Year

6. Private and Confidential
@GovtechFund
A Massive Problem
The Veterans Affairs Department canceled
its patient scheduling system -- spending
$167 million over eight years and failing to
deliver a usable product.
Legacy
Vendors
Gov’t
Contractors
historically
no
startups

no
innovation

tech
from
the
80’s
and
90’s!

7. Private and Confidential
@GovtechFund
Enablers Of A Trillion Dollar Opportunity
Budget
Constraints
+
Cloud

Sales
Cycle
Compression
+
Civil
Servant
Retirement/Cultural
+
Open
Data
=
Multi-­‐Decade,
International
Cycle
As
Software
Eats
Government

8. Private and Confidential
@GovtechFund
Timeline: Where Are We?
Next 10 YearsPast 10 Years
Web 2.0
Govt 2.0
Movement
Open Source
Movement
Open Data
Movement
Cities
Getting It
First
Govtech
Accelerator
Code For
America
Launches
Civic
Commons:
650 Apps,
275+ Cities International
Thousands of
Govtech
Startups
Expansion to
State, Federal
Thousands
of Cities

9. Private and Confidential
@GovtechFund
A Little About Me
o 14
investments
since
2007
o 3000+
hours
with
companies
o 19.6x
portfolio
revenue
growth
o 3.5M
average
pre-­‐money
entry
point
o $35M
in
follow-­‐ons
by
Khosla,
Social
+Capital,
Greylock,
August,
Baseline,
Floodgate,
Northbridge
o 4
companies
have
10x
potential
o IRR:
50%
realized,
100%
unrealized
Investor
Entrepreneur
o Co-­‐founder,
early
management
5
startups
(CEO,
COO,
VP
Corp
Dev)
:
o Raised
$300M
in
venture
capital,
vendor
financings
o 7
M&A
transactions
Non-­‐profit
o Donor,
advisor,
board
member:
Limited
Partner

10. Private and Confidential
@GovtechFund
• $23M
fund
launched
9
months
ago
• Focus:
start-­‐ups
that
are
transforming
the
trillion
dollar+
global
government
software
market
• Seed/Series
A
investor
• 5+
years
analyzing
and
working
in
the
space
• Launched
first-­‐ever
govtech
accelerator
• 6
investments
to
date
• $5M
invested,
$40M
of
follow-­‐on
/
co-­‐invested
capital
Introducing…the Govtech Fund

11. Private and Confidential
@GovtechFund
Portfolio: Overview
procurement
marketplace
urban
planning
big
data
law
enforcement
GIS
platform
in
the
cloud
government
forms
long
term
liability
analysis

12. Private and Confidential
@GovtechFund
Portfolio: Govtech Startup Characteristics
• SAAS
• B2G:
government
is
the
customer
• Proprietary
Technology,
Patents
• Engineering
Centric
• Multi-­‐Agency,
All
Levels
(City,
State,
Federal)
• Maximum
1-­‐2
Quarter
Sales
Cycle
• Not
regulatory
plays,
no
lobbying
• Founder
DNA
these
are
enterprise
SAAS
startups
just
addressing
a
new
vertical

13. Private and Confidential
@GovtechFund
Portfolio: Velocity

14. Private and Confidential
@GovtechFund
Portfolio: Velocity
• Average
sales
cycle:
86
days
• 20%
CAGR
• 2x,
2x,
2x
• 1/day
• $300K,
14
days

15.
Ron
Bouganim
Managing
Partner
follow
us
at:
@GovtechFund