Super Accelerator and Discovery Fund

Investor Pitch

America faces profound challenges…

…to reinvent education, health, energy, government, and politics.

…to be leaner. …to be better.

…to be more responsive to citizens as consumers.

Consumer Web: $70b

Education: $869b Health: $1,067b

…in markets that account for over 50% of GDP

Energy: $1,200b

Washington is the most powerful city on earth…

…with a nexus of connections to every major corporation, NGO, government agency, and country in the world.

…with unparalleled domain expertise in the public sector, regulated industries, and global markets.

…with unrealized pools of talent and capital.

The 1776 platform…

…connects the hottest startups in the world, tackling the biggest challenges, with the unique assets of DC.

1776 Campus 501c3

1776 LLC For Profit

1776 Fund Partnership

Campus School Super

Accelerator Media and

Events Fund

Revenue from Startups

Donors Sponsors Investors

Cofounder, 1776 Chair, Startup DC

Founder, Synteractive Founder, netDecide

Evan Burfield Donna Harris Cofounder, 1776

MD, Startup America Vice Chair, Interpoint Group

4X startup Founder and Executive

The Leaders…

The Advisors…

Brad Feld Foundry Group

Jonathon Perrelli Fortify.vc

Patrick Riley Global Accelerator Network

Kevin Willer 1871

Paul Singh 500 Startups

David Cohen TechStars

Scott Case Startup America

The Strategy of the 1776 Super Accelerator and 1776 Discovery Fund

To identify and attract the most promising startups disrupting the

status quo in highly regulated industries

To leverage proprietary networks of advocates and corporate partners to provide them with an unfair competitive advantage

To benefit financially by investing in these startups through a

structured, data-driven methodology (the Moneyball approach)

The 1776 Super Accelerator will…

Be a “graduate” accelerator that focuses on startups that have already demonstrated product-market fit and capital readiness

Select “Seed C stage“ companies that already have clear evidence of traction raised seed capital from credible sources but have not yet raised a “Venture A round”

Focus on startups engaged in the “consumerization of the public sector” with consumer-style products in complex, highly regulated industries such as education, health, energy, transportation, and government

The Super Accelerator program will…

Help startups develop scalable business models compatible with complex industry dynamics

Navigate regulatory risks and opportunities

Develop corporate partnerships focused on distribution and whole product solutions

Activate a federal, state, and local advocacy network to drive revenue growth

The Super Accelerator program will…

Be open to 10 to 12 startups per class

Be a 90 day program with key elements of team based in DC

Provide ongoing virtual alumni engagement with regular alumni events in major cities

Super Accelerator mentors will be…

Advocates with deep networks within regulated industries both in DC and at state and local level

Experts from key corporate partners within regulated industries, formed into Industry Councils for each key industry

Accomplished entrepreneurs with a track record of successful disruption in regulated industries

Super Accelerator deal flow will come from…

Direct partnerships with top tier Accelerator such as 500 Startups, TechStars, and members of the Global Accelerator Network

Personal networks with the Startup America regional leaders

Other 1776 programs such as the 1776 Campus and 1776 Events

Super Accelerator deal selection will leverage…

Due diligence from the 1776 advocacy network with direct expertise within regulated industries and at the state and local level

Expertise from Industry Councils of corporate partner within regulated industries

Panel of venture capital advisors with expertise in regulated industries

The 1776 rules of thumb checklist Product shows evidence of multiple data-driven iterations

Product solves a problem for a specific target customer within regulated industry

Capital-efficient business – operational @ < $1 million in funding

Primarily internet-based distribution – search, social, mobile, local

Simple revenue models – transactions, subscriptions, or affiliates

Measurable usage – some customers, early revenue

Potential to create barriers to entry through solving regulatory or distribution challenges

Small but cross-functional team – engineer, design/UX, marketing

The 1776 Discovery Fund will…

Make initial investments of between $75,000 and $150,000 into Super Accelerator companies plus select non-accelerator companies (typically leading a Seed C round of $400,000 to $650,000)

Track performance data on portfolio in a near real time basis to determine winners and losers

Leverage pro rata rights to make follow on investments in most promising startups in portfolio

Leverage feedback loop…

Build strategic relationships with corporate partners and venture funds as both sponsors and LPs

Understand what corporate partners are interested in acquiring and what venture funds are interested in funding

Use inside information to increase odds of early acquisitions (regular small wins) and major funding rounds into companies with right attributes to build something great (a few big wins)

The Moneyball approach…

30% of capital in initial investments 30 to 40 investments per year

70% of capital in follow on Filter out failures

Follow on in top 20% to 30%

Early acquisitions by corporate partners

Major venture investments into companies with potential to be great

Selection benefits from advocacy network, corporate partners, and venture partners

Follow on investment decisions based on analysis

of private performance data

1776 Discovery Fund terms…

$25 million fund

Seven year life with option for two year extension

Two year investment period

2% management fee

20% carry with ratchet for portfolio return above 3x