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Why we raised $17mm Nick Bowden Medium
Why we raised$17mm
While the core purpose of MindMixer has remained consistent since the beginningbuild great civic engagement softwarethe tactics change as the market evolves. In many respects, this fundraise represents an evolving and maturing govtech market, an opportunity for continued growth, and an affirmation of the good work done to date. Before I talk more specifically about why we raised the capital, I want to talk briefly about theprocess.
Every fundraise is uniqueeach has its own personality. That unique personality reflects the current financial state of the company (need), the partners and potential partners involved, the recent past performance of the company, the plan for the future, and the team assembled to see that plan through. The available capital pool will be a reflection of these itemsright combination means lots of available funds. Some fundraising efforts are all consumingthe company needs capital immediately. Some, however, come together under conditions of opportunity. These kinds of fundraising efforts arent any easier to get done, but certainly come together with a different pace. For us, this most recent round represents the latter. Growing market + fantastic parters + evolving product = unique opportunity.
Standing back from situations gives you the perfectview.
So, why did we raise the funds?
- Massive Market. I distinctly remember a conversation with a well known VC during our Series A round (2.5 years ago), who said you must be crazy if you are trying to raise money for a tech company that works with government. What most people dont realize is government spends nearly $74 billion on technology annually. As a point of comparison, the video game market is a $15 billion annual market. That lack of market insight, combined with the usual perceptionsgovernment is slow, the sales cycle is too long, government isnt innovativeprevented both potential founders and investors from entering the market. Thats starting to change. Several companies in the space are now seeing success and the funding has followed. Fellow Code for America accelerator companies LearnSprout and Captricity have raised significant rounds. Additionally, companies like OpenGov have raised funds from mainstream investors. As the saying goes, a high tide does raise all boats. The additional capital and continued drum beat have also increased buyer awareness, something that helps all companies. This fundraise enables us to tap into bigger and broader parts of the govtech market, something we are incredibly excited about.
- High Friction = Big Opportunity. One of the things that we can likely all agree on is that governments ability to efficiently communicate and engage in ongoing conversations is very limited. From the election process to town hall meetings to the DMV, the way civic organizations communicate is still very antiquated and inefficient. In fact, a high percentage of the communication efforts still happen through traditional mail or require physical presence. I recently visited a DMV in Kansas and was pleasantly surprised to find a SMS-based line reservation system. I provided my number, left the DMV, and was sent periodic updates on my position in line. At 15 minutes out, I was instructed to return. This isnt earth shattering or new technology, but its implementation radically changed my perception of the Kansas DMV, it felt progressive. That matters more than the 90 minutes I saved. There are hundreds of opportunities to use technology to improve the communication infrastructure between civic entities and citizens. I believe deeply that technology can reduce the friction in citizenship, and in turn, create a better and more efficient democracy.
- A strong offline network will lead to strong online network effects. Cities are arguably the original social network in this country. Theyre emergent, theyre connected, and they enable people to accomplish things together (at scale) that would be impossible to accomplish alone. I would venture to guess that most citizens would vastly underestimate the number of times they interactboth implicitly and explicitlywith government everyday. I was curious about how many different governmental boundaries I crossed on my drive to work. Over the course of the 18 mile drive, I cross 9 city boundaries, 2 counties, 2 states, 5 school districts, 18 representative districts, and god knows how many special taxing districts. That doesnt include the fact that both my house, office, and every building I enter has been codified, reviewed, and inspected by several government agencies. In the Kansas City MSA, there are more than 4,000 places of civic interest (parks, DMVs, etc). Think about that network, its pretty amazing. With that said, those network effects have not yet translated into a seamless online citizen experience. Thats a massive opportunity; one that we intend to play a role in building and defining.
These new funds dont change our mission, but they do allow us to be more ambitious. I believe what lies in front of us are some of the defining opportunities and, in fact, responsibilities of our generation. Our job is to build products that enable everyday citizens to contribute, connect, and have an impact in their local communities; and that is something we are very excited about.
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