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Sachiko Kuno (center) and her

social impact entrepreneurs at Halcyon House

'%4-8%0 -223:%8-32 MEET THE ENTREPRENEURIAL LEADERS BEHIND WASHINGTON’S START-UP REVOLUTION

WASHINGTON LIFE NOVEMBER 2014 s $7.95

EXCLUSIVES: Steve Case and Walter Isaacson FASHION: Ice, Ice Baby Blues & Cool Suedes REAL ESTATE: The New Tech Corridor MY WASHINGTON: Raul Fernandez

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INNOVATORS | SPECIAL REPORT

CAPITALDISRUPTED A city known for politics is getting hacked by millennials and startups

FRONT ROW (L to R), Julia Alexander, ExecOnline, Uyen Tang, Stylecable, Joseph Santoro, Waveborn, Dan Ye, CollegeNode, Jan Pablo Segura, 1EQ, , SECOND ROW (L to R), Hannah Rho, CollegeNode, Emmanuel Smadja, MPOWER Financing, Richard Graves, Ethical Electric, Ketan Patel, DailyHealth, Dave Haft, ImpactHub, Justin Searles, VentureBoard, John Fanguy, Engagiant, Dave Anderson, Hitch, Camp McCurry, Drizly, Mariama Kabia, Memunatu Magazine, Fatama Kabia, Memunatu Magazine, Gary Hensley, EdBacker, Josh Hurd, NonprofitIQ, Le-Marie Thompson, Nettadonna, Nicole Gallub, Pelonkey, Morgan Giddings, Piper, Ciera Gallub, Pelonkey, Michael Heller, Engagiant, Hunter Hayes, Zerocycle, , THIRD ROW (L to R), Shaofeng Yang, Locus Social, Charles McGuire-Wein, Good World, Michael Madon, RedOwl Analytics, Harun Kazaz, American Story Channel, Mrim Boutla, More Than Money Careers, Grant Elliott, Ostendio, Brian Christie, Fanaticall, Shana Lawlor, POHs, David Gomez, Hilltop Energy Partners, Charles De Vilmorin, Linked Senior, Starr Barbour, Get the Word Out, Michael Cassidy, NineQ, Natasha Iwegbu, InnoPDG, Scott Block, ventureboard, Martin Levine, Whyttle, Hilina Kebede, BlissInvite, Adam Connor, Brigade, Maksim Tsvetovat, Open Health Network, , FOURTH ROW (L to R), Chris LeSchack, iMougul, Matt Colbert, Spend Consciously, Matthew Kemph, Kickball365, D’An Hagan, SmartDetect, Joseph Keum, ClickOrder, Neel Patel, MGNFY.IT, Bilaal Ahmed, LinkTank, Don Frazer, collegesnapps, David Conley, SavingsSquirrel, Dave Cook, Narrative Sciences, Rick Gersten, Urban Igloo, Robert Betteman, Bun Out the Oven, Erik Skantze, Ivy Standard, Cheryl Montalvo, , Julie Gaskins, Geb Jobs Network, Masha Sharma, Totalpass, Robert Mander, Govlish, Gerald Meggett, MyQVO, , FIFTH ROW (L to R), Dan Birdwhistle, Studio Publishing, Kenny Day, BrightRoll, McEwen Hardy, VibeCheck, Thomas Lugbin, Grey Matter, Armin Kiany, EdClub, Jeremy Brosowsky, Agricity, David Fairbrothers, Dorsal, Paul Guthrie, Potomac Health Solutions, Dan Kuenzi, LocalRoots

uick, name the city that ID.me, Speek,Venga, TrendPo, SocialRadar, Contactually and Gryphn call home? What about Vox Media, Zip Car and Wedding Wire? Do BlackBoard, LivingSocial and MicroStrategy ring a geographic bell? How about AOL? Oh, AOL! Of course, it’s Washington, D.C. Innovation in the nation’s capital used to be the opening of a new steak restaurant. Things have changed. Although the city’s main thrust still comes from Capitol Hill,

its soul is being defined by startups and entrepreneurs. It’s hard to pinpoint exactly when this renaissance began, but its family tree has an AOL root. Washington does have a long history of innovation if one considers Duke Ellington, Henry Rollins or the painters of the Washington Color School. Include NASA, the NSA, CIA and Department of Defense, the capital’s innovation net grows exponentially. Still, for years we were left without a game-changing corporate entrant on the Apple/Google scale.

That changed in the late ’80s and early ’90s when AOL and a number of technology and media companies began popping up in the sprawling Virginia suburbs and the likes of Steve Case, Ted Leonsis, Sheila Johnson and Michael Saylor emerged. Flush with cash to invest from their mature companies, these seasoned entrepreneurs became investors, mentors and stakeholders in the early 2000s startup scene. That’s when some of the city’s most recognizable tech brands emerged, including BlackBoard and LivingSocial,

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P H OTO BY TO N Y P OW E L L W I T H S P EC I AL T H A NKS TO TO M T U RK FO R EQ U I P M E N T LOA N

INTRODUCTION BY MICHAEL M. CLEMENTS

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to name a few. By the 2009 presidential inauguration, the city was r ipe for a third wave of entrepreneurial disruption. Fueled by mobile and cloud adoption, crowdfunding, accelerators, incubators, coworking spaces and startup media, this new class of entrepreneurs has stuck a disruptive elbow into the side of the Mid-Atlantic. Expect notable contributions over the next few years in wearables, nano-tech, drones, energy, healthcare, transportation and more. Metropolitan Washington isn’t the only region being hacked by startups — from Miami to both Portland, Oregon and Maine, startups are helping to redefine urban centers, creating jobs and fueling millennial migration. In turn, cranes dot skylines. Better retail, fashion, dining and entertainment options emerge.The arts and creative economy flourish. There has been an explosion of successful art startups over the past five years here, including Art Whino, Art Soiree, No Kings Collective, Pink Line Project and my own company, ArtJamz. All have risen to disrupt the city’s established museums and galleries. Is it progress or gentrification? The debate rages on. Either way, the entrepreneurial genie is out of the bottle and disruptive business minds are becoming more prevalent than legislative aides. This year, Sweetgreen, a Distr ictbased fast-casual salad eatery founded by Georgetown graduates Nicolas Jammet, Nathaniel Ru and Jonathan Neman, received a $22 million investment from Revolution Growth — a local heavyweight VC firm headed by Steve Case, Ted Leonsis and Donn Davis. SnobSwap, founded by Elise Wang and Emily Dang, is an online exchange where fashionistas sell, swap and shop for clothing. Before receiving close to $1 million in three rounds of funding this year, they accelerated with District-based Fortify Ventures and rented cowork space at 1776. Fortify.vc managing director, Jonathon Perrelli helped produce the documentary “Startupland,” which follows the trials and tribulations of three accelerated businesses in “The Fort,” including Snobswap, The Trip Tribe and Ride Post. “When I founded Fortify.vc in May of 2011 there were no accelerators in the region and there were not many angel investors

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either,” Perrelli says. “Fortify started the pitch event series called DistilledIntelligence. com, aka ‘D.I.’ Over 100 companies are listed as having competed in our pitch contest. Following D.I., ... we invested first in many of the companies from our Fort accelerator, including: Social Tables, Hinge, Synapsify, Venga, CoFoundersLab (acquired recently), SnobSwap, The Trip Tribe and several others.” Join a D.C.Tech Meetup and you’ll see how things have exploded. Between 500 to 1,000 attendees regularly attend to mix, mingle and get inspired. It’s co-organized by Shana Glenzer and Stephanie Nguyen, who also head a D.C. Fem Tech collaborative. Shana is vice president of social marketing at Social Radar — the city’s

‘When I founded Fortify.vc in May of 2011 there were no accelerators in the region and there were not many angel investors either’ — Jonathon Perrelli, managing director, Fortify.vc

latest billion-dollar startup hopeful founded by Michael Chasen, co-founder and former CEO of Blackboard Inc. Nguyen is a co-founder of Silica Labs, a company dedicated to helping innovators build revolutionary software for wearable technology. There is a non-stop circuit of startup and entrepreneurial-related groups, meetups, conferences, panels and seminars in the metro area incubating success stories like those above. Hard to believe? Subscribe to various media outlets covering the scene or follow TechCocktail — a media and event company founded by Jen Consalvo and Frank Gruber. It took a $2.5 million investment from Tony Hsieh’s Downtown Project (Hsieh is also the CEO of Zappos. com) in 2013. Does your work e-mail end

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in “.gov”? Check out FedScoop, a tech news outlet and platform dedicated to improving government through technology. Its founder, Goldy Kamali, is quickly establishing herself as a next-gen Beltway power player. Speaking of media companies, millennial darling BYT has expanded to New York, ex-AOL executive Jim Bankoff’s startup, Vox Media, is out to disrupt how we digest information and Amazon founder Jeff Bezos is poised to do the same with his $300 million purchase of the Post, which will certainly herald a new era at our city’s most recognizable media brand. Peter Corbett, whose digital agency iStrategy Labs recently out grew its Dupont office and moved into the old Wonderbread Factory in Shaw in the heart of the Digital DC Tech Opportunity Corridor, has seen the startup scene’s rapid growth first hand. He lists his iStrategyLabs cohort and CMO, DJ Saul; Contactually, CEO, Zvi Band; Shavanna Miller, CEO, Bloompop; Dan Burger, CEO, Social Tables; and Evan Burfield and Donna Harris, co-founders of 1776 as rising business leaders. Corbett was instrumental in connecting Mayor Vincent Gray with the tech community. The mayor made support for technology a linchpin of his economic agenda. His office even had a booth at the South by Southwest conference in Austin. It will be interesting to see if the city’s next mayor embraces technology as openly as Gray did. Have startups hacked Washington? Suffice it to say that hardly anyone notices when Congress goes in recess anymore. Residents used to set their timepieces to the Hill’s seasonal ebb and flow. Summer meant humidity, doldrums and manageable traffic. Not anymore. Some of the city’s hottest tickets are during the hottest months. What will define Washington’s startup scene as it moves forward? Who or what will emerge to carry the banner? The exciting part is that it could be anything — our area startups are as diverse as any in the world, ranging from biotech to ticketing apps. We know our roots, we’ve proven our ability to grow. We’re just waiting for some more Apples to grow ... >>

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INNOVATORS | STEVE CASE

WANT TO GO FAR? GO TOGETHER BY STEVE CASE

he central idea of Walter Isaacson’s new book, “The Innovators,” is this: Innovation is a team sport. Isaacson’s most recent book — the massive bestseller “Steve Jobs” — told the fascinating (and complex) tale of our generation’s most iconic entrepreneur. But the focus on Steve may have left a lot of budding entrepreneurs thinking the path to success was about what they might do. In fact, while passionate leadership is of course important — indeed, essential — ultimately, it is the work of teams that moves things forward. I’m reminded of the African proverb: “If you want to go quickly, go alone — but if you want to go far, you must go together.” As Isaacson notes when he explains “how the technology revolution was fashioned,” the real progress came from “collaborative creativity” — people working together, building on each other’s ideas, and pushing innovation forward. Isaacson devotes a chapter to the “Online” revolution, including the story of the evolution of AOL. He correctly notes that the central idea that animated AOL was community — people interacting with each other. These early adopters weren’t just consumers, they were contributors — and were the pioneers who helped pave the path forward. When we started the company in 1985, only three percent of people were online, and they were only online an hour a week. When we said we wanted to get America online, we were dead serious. It took more than a decade before we got traction. Early on, it became clear that we couldn’t go it alone. We needed to assemble a tapestry of alliances to build the Internet and make it part of everyday life. We needed

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the PC manufacturers to develop consumerfriendly and affordable PCs. We needed them to build modems into PCs, so they would go from being a “peripheral” device to a central, compelling element that helped usher in a new era of connecting to the world. We needed communications networks to create new low-cost ways to connect, so user fees would drop from $10 per hour to less than 10 cents an hour. We needed software designers to create compelling graphical interfaces, to make the Internet accessible to the masses. We needed content companies to offer compelling services. (Ironically, I first met Isaacson more than 20 years ago, when he headed the new media efforts for Time

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Inc., and we struck a deal to bring Time Magazine onto AOL.) The bottom line is that we all needed to do our part to usher in the Internet age. But “The Innovators” is not just a tale of the past, it’s a road map for the future. This week, I’m taking a bus trip across middle America — starting in Madison, Wis., and ending in St. Louis, Mo., — to see how innovation is blossoming in places outside of Silicon Valley or New York. I call it the “Rise of the Rest Tour,” and it’s the second time I’ve made such a trip this year. (You can follow our tour at RiseOfTheRest.com). What I see in these places is something right out of Isaacson’s book: Innovation booming and communities blooming because of collaborative efforts between people with ideas, teams they assemble, local universities and colleges, budding accelerators and tech hubs, forwardthinking policy makers and more. Yes, every now and then we find a company that truly is a one-person show. But the ones I feel the most excited about, the ones that have the best shot of going far, are collaborative efforts that have a great team and a great community behind them. The lessons Isaacson conveys about the role of collaboration are not just important as history lessons, but as guideposts for today’s innovators — and an important guidebook for the next wave of entrepreneurs. Steve Case is chairman and CEO of Revolution, a Washington, D.C.-based venture capital firm, co-founder of AOL, chairman of Up Global, a member of the President’s Ambassadors for Global Entrepreneurship, and chairman of the Case Foundation. Reach him @SteveCase.

INNOVATORS | WALTER ISAACSON

HACKERS GENIUSES AND GEEKS In an excerpt from his latest book,“The Innovators,”Walter Isaacson tells how Jim Kimsey and Steve Case connected the world by turning America Online (AOL) into a computer services company with global reach. B Y WA LT E R I S A AC S O N excerpt

im Kimsey was not the obvious person to whip into shape an interactive digital service; he was far more familiar with guns and whiskey’ glasses than keyboards. But he had the mix of tenacity and rebelliousness that makes for a good entrepreneur. Born in 1939, he grew up in Washington, D.C., and in his senior year was kicked out of the town’s top Catholic school, Gonzaga High, for being disruptive. Nevertheless, he was eventually able to wrangle an appointment to West Point, where he was suited to an atmosphere that celebrated, channeled, and controlled aggression. Upon graduation, he was deployed to the Dominican Republic, then served two tours in Vietnam in the late 1960s. While there as a major with the Airborne Rangers, he took charge of building an orphanage for a hundred Vietnamese kids. Had it not been for his tendency to mouth off to those higher in the chain of command, he may have made the military a career.” Instead he went back to Washington in 1970, bought an office building downtown, rented out much of it to brokerage firms, and on the ground floor opened a bar called ‘The Exchange that had a working ticker-tape machine. He soon opened other popular singles bars, with names like Madharter and Bullfeathers, while embarking on additional real estate ventures. Part of his routine was going on adventure trips with his West Point pal Frank Caufield and their sons. It was on a 1983 rafting trip that Caufield recruited him to CVC as a minder for [William] von Meister [founder of The Source, an AOL predecessor] and, eventually, as CEO. Faced with sluggish sales, Kimsey fired most of the staff except for Steve Case, whom he promoted to vice president of marketing. Kimsey had a colorful saloonkeeper’s way with words, especially scatological ones. “My job is to make chicken salad out of chicken shit,” he declared. And he was fond of the old joke about

Walter Isaacson (photo courtesy of Simon & Schuster)

a young boy who merrily digs through a pile of horse manure and, when asked why, declares, “There must be a pony somewhere in this shit.” It was an odd triumvirate: the undisciplined idea generator William von Meister, the coolly strategic Case, and the rough-edged commando Kimsey. While von Meister played showman and Kimsey played backslapping barkeep, Case hovered in the corner observing and coming up with new ideas. Together they showed once again how a diverse team can promote innovation. Ken Novack, an outside counsel, later observed, “It was no accident that they created this business together.” Case and von Meister had long been interested in building computer networks that could connect ordinary users. When CBS, Sears, and IBM joined forces in 1984 to launch such a service that became known as Prodigy, other computer makers realized that there might be a real market. Commodore came to CVC and asked it to create an online service. So Kimsey reconfigured CVC into a company called Qpantum, which launched a service named Q-Link for Commodore users in

November 1985. For $10 a month, Q-Link had everything that von Meister — who was then being eased out of the company — and Case had envisioned: news, games, weather, horoscopes, reviews, stocks, soap opera updates, a shopping mall, and more, along with the regular crashes and downtime that became endemic in the online world. But most important, Q-Link had an area filled with active bulletin boards and live chat rooms, dubbed People Connection, which enabled members to form communities. Within two months, by the beginning of 1986, Q-Link had ten thousand members. But growth began to taper off, largely because Commodore’s computer sales were slumping in the face of new competition from Apple and others.“We have to take control of our destiny,” Kimsey told Case.” It was clear that for Quantum to succeed, it had to create its Link online services for other computer makers, most notably Apple. With the tenacity that came with his patient personality, Case targeted the executives at Apple. Even after its brilliantly controlling co-founder Steve Jobs had been forced out of the company, at least for the time being, Apple was difficult to partner with. So Case moved across the country to Cupertino and took an apartment near Apple’s headquarters. From there he waged his siege. There were many possible units within Apple he could try to conquer, and he was eventually able to get a little desk inside the company. Despite his reputation for being aloof, he had a whimsical sense of humor; on his desk, he put up a sign that said “Steve Held Hostage” (a reference to the phrase used during the 1980 drama in which Americans were held hostage in Iran) along with the number of days he had been there. In 1987, after three months of daily campaigning, he was successful: Apple’s customer service department agreed to strike a deal with Quantum for a service called AppleLink. When it launched a year later,

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Jim Kimsey had the mix of tenacity and rebelliousness that made him the perfect entrepreneur to build AOL into a worldwide colossus.(Photo by Tony Powell)

Steve Case (courtesy photo)

the first live chat forum featured Apple’s lovable cofounder Steve Wozniak. Case went on to make a similar deal with Tandy to launch PC- Link. But he soon realized that his strategy of creating separate private-label services for different computer makers needed to be revised. Users of one service could not connect with those on another. In addition, the computer makers were controlling Quantum’s products, marketing, and future. “Look, we can no longer rely on these partnerships,” Case told his team. “We really need to stand on our own two feet and kind of have our own brand.” This became a more urgent problem — but also an opportunity —when relations with Apple frayed. “The powers that be at Apple decided they were uncomfortable with a third-party company using the Apple brand name,” Case said. “Apple’s decision to pull the rug out on us led to the need to re-brand.” Case and Kimsey decided to combine the users of all three of their services into one integrated online service with a brand name all its own.The software approach pioneered by Bill Gates would apply to the online realm as well: on-line services would be unbundled from the hardware and would work on all computer platforms. Now they needed to come up with a name. There were many suggestions, such as Crossroads and Quantum 2000, but they all sounded like religious retreats or mutual funds. Case came up

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with America Online, which caused many of his colleagues to gag. It was hokey and awkwardly patriotic. But Case liked it. He knew, just as Jobs had when he named his company Apple, that it was important to be, as he later said, “simple, unintimidating, and even a bit sappy.” With no marketing dollars, Case needed a name that clearly described what the service did. And the name America Online accomplished that. AOL, as it became known, was like going online with training wheels. It was unintimidating and easy to use. Case applied the two lessons he had learned at Proctor & Gamble: make a product simple and launch it with free samples. America was carpet-bombed with software disks offering two months of free service. A voice-over actor named Elwood Edwards, who was the husband of an early employee of AOL, recorded perky greetings — “Welcome!” and “You’ve got mail!” that made the service seem friendly. So America went online. As Case understood, the secret sauce as not games or published content; it was a yearning for connection.“Our big bet, even back in 1985, was what we called community,” he recounted.“Now [people refer to it as social media.We thought the killer app of the Internet was going to be people. People interacting with people they already knew in new ways that were more convenient, but also people interacting with people they didn’t yet know but should know because they had some kind of shared interest.” Among AOL’s primary

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offerings were chat rooms, instant messaging, buddy lists and text messaging. As on The Source, there was news, sports, weather, and horoscopes. But social networking was the focus.“Everything else — commerce and entertainment and financial services — was secondary,” Case said. “We thought community trumped content.” Particularly popular were the chat rooms, where people with similar interests — computers, sex, soap operas — could gather.They could even go off into “private rooms” to talk by mutual consent or; at the other extreme, visit one of the “auditoriums” that might feature a session with a celebrity. AOL’s users were not called customers or subscribers; they were members. AOL thrived because it helped to create a social network. CompuServe and Prodigy, which began primarily as information and shopping services, did the same with tools such as CompuServe’s CB Simulator, which replicated in text the wacky pleasure of talking on a citizens-band radio. Kimsey the bar owner could never quite get why healthy people would spend their Saturday nights in chat rooms and on bulletin boards. “Admit it, don’t you think it’s all horseshit?” he would ask Case half jokingly. Case would shake his head. He knew that there was a pony in it. Excerpted from Walter Isaacson’s “The Innovators: How a Group of Hackers, Geniuses and Geeks Created the Digital Revolution” (Simon & Schuster)

INNOVATORS | AOL

AOL FAMILY TREE THEN AND NOW

ON MAY 25, 1985, three men founded an online services company called Quantum Computer Services from the remnants of Control Video Corporation. Co-founder Jim Kimsey became involved after taking a fortuitous rafting trip with his fellow West Point grad Frank Caufield, co-founder of the venture capital firm Kleiner Perkins Caufield & Byers, who encouraged Kimsey to get involved with a struggling company he was serving on the board of, which turned out to be Control Video Corporation. Today, we refer to it as America Online, or AOL. “When we started the company only three percent of people were online, and they were only online an hour a week... it took more than a decade before we got traction,” says co-founder Steve Case. Now, on the other side of the digital revolution hill, AOL owns and operates some of the largest and most influential brands on the internet, including AOL.com, The Huffington Post, TechCrunch, Adap.tv and Advertising.com. Washington Life tracked down the original key players to discover their last known title with AOL (before the merger with Time Warner in January 2001) and what they are doing now, as many of the people who came from AOL have been reshaping so many aspects of our world, from business to philanthropy, sports, the arts and education. the founders

JIM KIMSEY - Founder/CEO

MARC SERIFF - CTO

STEVE CASE* - CEO

Chairman, The Kimsey Foundation

Retired

Chairman/CEO Revolution Growth

The late 80s

JEAN CASE VP, Corporate Communications CEO, The Case Foundation

LEN LEADER* CFO Chairman, The Israel Project

KATHERINE BORSECNIK* SVP President, Ebb Point Foundation

KEN HUNTSMAN* - AOL Fellow Board Member, Wesley Theological Seminary/ Community Foundation of Northern Virginia/United Methodist Family Services SV M

The 90s: left pre-merger

MIKE CONNORS PRESIDENT AOL TECHNOLOGIES Director, Zhone

KATHY RYAN SVP Retired

DAVID COLE GROUP PRESIDENT OF NEW ENTERPRISES GROUP Strategic Advisor, Solazyme Inc.

MARK WALSH SVP Chairman/CEO, GeniusRocket

* Continued on at AOL after the merger with Time Warner

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O R W I K I M E D I A CO M MO N S

JACK DAVIES - PRESIDENT AOL INTERNATIONAL Board Member, Teach for America, Economic Club of Washington, Mobile Posse, Maya Angelou Public Charter School, Scholastic, VPP

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The 90s: stayed post-merger

ROBERT PITTMAN* PRESIDENT/COO Chairman/CEO, iHeartMedia Inc.

NEIL SMIT* PRESIDENT CEO/President, Comcast Cable Communications, LLC

KATHY BUSHKIN CALVIN* EVP AOL FOUNDATION President/COO, U.N. Foundation

DAVID COLBURN* PRESIDENT Co-Founder, Shaman Group

MILES GILBURNE* SVP CORPORATE DEVELOPMENT Managing Director, ZG Ventures

TED LEONSIS* PRESIDENT/VICE CHAIRMAN Founder/CEO, Mounmental Sports & Entertainment

JIM BANKOFF* EVP Chairman/CEO, Vox Media

MYER BERLOW* PRESIDENT AOL INTERACTIVE Co-Founder, Nano Terra Inc.

I M AGE S FR O M I N T E R N AL P H OTOS , COURTE SY OF INDIVIDUALS O R W I K I M E D I A CO M M O N S

AUDREY WEIL* PRESIDENT OF COMPUSERVE Retired

JAY RAPPAPORT* COO AOL NETWORKS Co-Founder/Managing Member, Centurion Investments LLC

LISA BARRY* VP Advisory Board Member, Argol America

TATIANA GAU PLATT* JAN BRANDT* VICE CHAIRMAN/CHIEF MARKETING OFFICER SVP Vice chairman Emeritus, AOL Internet/new media consultant

TOM HARDART VP INTERNATIONAL AFFAIRS Founder, Witnify; CEO, Adirondack Pictures

KEN NOVACK* - VICE CHAIRMAN Member Emeritus, Mintz Levin; Board Member, BBN Technologies

DONN DAVIS* PRESIDENT/COO Co-Founder/President, Revolution Growth

JIMMY LYNN* VP RANDALL BOE* EVP/ GENERAL COUNSEL Co-Founder/VP, Kiswe mobile; Adjunct EVP/General Counsel, Monumental Faculty , Georgetown University Sports & Entertainment

RICHARD HANLON* SVP Board Member, The Washington Ballet

KEVIN CONROY* - EVP President of Digital and Enterprise Development, Univision

MARK STAVISH* EVP President/GM, Evergreen Partners

GEORGE VRADENBURG* SVP Co-Founder USAgainstAlzheimerâ€™s

SHEILA CLARK* SVP Retired

MATT KORN* EVP Independent Consultant

BARRY SCHULER* CHAIRMAN/CEO CEO, Raydiance

MAYO STUNTZ JR * COO Co-Founder/Principal, Pilot Group LLC

GERALDINE MACDONALD* EVP Founder, GMacDonald Consulting

NOT PICTURED@ John Buckley* -EVP of Communications; Managing Director, Harbour Group; David Gang*- EVP of Products; Co-Founder, Perfect Sense; J. Michael Kelly*- CFO; Office of the Chairman/International, ePals Corp; Michael J. Kelly*- President, Media Networks; Chairman of the Board, Unruly Media; Chairman of the Board, Colspace Corporation; Jonathan Miller, CEO; Board of Directors, Clickable/Idearc Media/Mahalo/Kosmix/YP Holdings LLC/Hanley Wood LLC; Ray Oglethorpe*- President; Retired; Tricia Primrose*- EVP of Communications; Partner, Rational 360. WA S H I N G T O N L I F E

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INNOVATORS | PHILANTHROPY

ADVENTURES IN PHILANTHROPIC GIVING Leaders of Venture Philanthropy Partners discuss the successes of the past eight years. BY KIKI BURGER

Venture Philanthropy Partner Jack Davies with co-founders Mario Morino, Mark Warner and Raul Fernandez (Photo by Ben Droz)

ight years ago, Washington Life featured on its cover Venture Philanthropy Partners (VPP), a thenfive-year old group of well-known, wealthy individuals who were quietly working behind the scenes to help the region’s atrisk youth. Their concept: take the skills they learned as venture capitalists, financiers and tech entrepreneurs building some of the country’s most prominent companies (such as AOL) and apply the same model to philanthropy. They would partner with local charities to help provide that “necessary backbone” or “secret sauce,” as one partner called it, to help top executives of local nonprofits become better leaders. For them, it was all about being disruptive innovators

to change the status quo with regard to how the philanthropic sector operates. So, how have they done? The numbers speak for themselves. To date,VPP has raised more than $90 million to help more than 45,000 low-income children in the National Capital Region through supporting local programs that focus on education, health care, afterschool programs, job training and more. The group works under the model of being “place-based,” believing that they should give back to the region where they had their good fortune. They help their neighbors but also take care to assess effectiveness as well. This not only lends credibility, it keeps their endeavors accountable — which is important because they know they’ll likely hear when

things aren’t going right. Washington Life interviewed three of the members of the organization’s current leadership: Carol Thompson Cole, president and CEO of Venture Philanthropy Partners; Jack Davies, founder and former president of AOL International; and Mario Morino, founding chairman of Venture Philanthropy Partners and chairman of the Morino Institute.They told us that this sort of giving isn’t new.What makes it really stand out is that they’ve got their boots on the ground. “The seeds were planted in 1993, 1994 [and] I met with 700 people face-to-face,” Morino explained when describing how the idea of VPP first started. “What I came away with was the conclusion that for the purpose

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of nonprofits, it was a dysfunctional funding system.” As it turned out, the model for doing it better was staring him and his co-founders Raul Fernandez and Mark Warner right in the eye. “It’s the blending of this investment approach in the private sector with the culture and mores of government and nonprofits, in a respectful way,” he added. Next,VPP decided to focus on providing education and support services to at-risk youth in the National Capital Region. All the partners at that time agreed that this was the place they had to start. “There was a real belief if you were really a disruptor and you’re going to break the cycle of poverty and crime, you had to start with education,” Davies said. “Disruptor” is an apt word in describing their work in the community. Take for example, its partnership with the Maya Angelou Public Charter School. “When we met [with the school’s founders] they were serving 85 kids and were really trying to make sure these young people who had been in either juvenile or family court really had a chance to get an education,” Cole said. “So, they started a pizza delivery service that grew into a charter school. ... We immediately needed to help them build the curriculum and support for a school.” People at first questioned their choice of schools, given the relatively small number of students who were enrolled when VPP first came along. But VPP kept to its principle of supporting talented leaders. “We saw two great leaders,” Morino said. “When you looked at what they were doing, it was a different model. It was anything but a school,” yet it was helping juveniles break the cycle and held promise for much more. Another area VPP is shaking up is in the world of technology, which shows great promise for helping grow employment in our community. One example of this is VPP’s work in growing the Year Up program in the National Capital Region. “Most of the jobs in the region are with the federal government,” Morino pointed out while noting that they were “preparing these

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Carol Thompson Cole, president and CEO (File photo)

young people with a technology entry-level skill but they couldn’t get into federal jobs because you had to have a four-year degree.” VPP lobbied to get this changed, convincing the General Services Administration that the students were prepared and ready to start long-term careers in IT specialties. Since then, seven federal agencies have changed this requirement. “Here’s where tech has come full circle,” Davies said. “You have a bunch of mostly tech investors who started VPP 14 years ago … and one of [our] investments is with Year Up, which teaches them a tech skill.” In the end, VPP was instrumental in helping them prove their value. These examples illustrate how VPP pairs with local leaders to attack real problems, which would have been hard to tackle without Year Up and other existing programs that just need a boost. “It is true, if you want to raise a child you need a village,” Morino said. “You realize that if you really want to have an impactful result that makes a difference on people’s lives, an individual organization is still able to do this. But you’re also seeing that if you want to have a really lasting change you’re going to have to bring people together.” Their desire to bring together the greater Washington, D.C. “village” — not just throw their weight around — was something they

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had to prove right from the beginning. “There was a misconception when we started that we were the new sheriffs in town and we were going to show philanthropy what’s to be done. And that couldn’t be farther from the truth,” Davies explained. “We work very closely with traditional foundations and traditional philanthropists. We’re all trying to achieve the same results.” The hands-on collaboration that is a signature of VPP not only benefits the organizations it assists — it also helps VPP appeal to donors. By helping the nonprofit fill in gaps it has in organizational capacity or executive skills while encouraging its leaders to build on their passion and creativity, Cole, Davies and Morino make sure their beneficiaries have a great story to tell donors, connecting on an emotional level. “You’ve got to be realistic about philanthropy and there are certain elements to it,” says Morino. “In reality it is part emotion, part passion and part of it is effectiveness.” While those things get balanced differently depending on who is investing, none of the partners of VPP deny the importance of donors wanting to feel a connection to the charities they support. “That’s part of the ‘secret sauce’ of VPP,” explains Cole. “We do investment and management assistance…and we also appeal to the passion of our investors.”

INNOVATORS | COVER STORY

@SILICON BELTWAY The Nation’s Capital is shaping up to be a serious contender to that other valley of innovation. BY TIMOTHY J. BURGER | PHOTOS BY TONY POWELL

ou’ve got [a check in the] mail! More and m o r e, that’s the transformational news that Washington-region venture capitalists are giving a booming cadre of area start-up entrepreneurs. From enterprise and personal hightech to healthy living, the top guns behind yesterday’s game-changing local startups — think AOL’s Steve Case and Ted Leonsis, among many President Barack Obama speaks to workers at 1776 this summer. others — are now the graybeards and (AP Photo/Jacquelyn Martin) financiers for today’s young guns: the new generation of innovators. says Harry Weller, a general partner running Sure, Silicon Valley in Northern California northeastern U.S. investments at New still throws lots more money around, inks the Enterprise Associates (NEA), based in Chevy biggest deals and gets way more recognition. Chase. And NEA believes in Washington. Maybe that’s partly because local VCs and “Otherwise I wouldn’t be on so many boards entrepreneurs could likely never — and don’t here. We have increased our rate of investment care to — rival the headline-obsessed media here markedly in the last five years relative hogs in our area’s traditional main industry: to other regions,” says Weller, a former Navy politics. But hundreds of VCs and startups, and fighter pilot, DJ and computational physics the vibrant incubators that often help bring major at Duke University. them together, are quietly churning around Nationwide, venture capital investments us. Washington innovators are increasingly for the first half of 2014 rose to $13 billion joining better-known peers on the coasts in in 1,114 deals, the highest since the first fueling today’s innovation explosion. half of 2001, according to a PWC study. Call it Silicon Beltway. And Washington-area companies got $1.54 None other than the U.S. Chamber billion in investments last year, according to a of Commerce named Washington “one National Venture Capital Association study. of Amer ica’s leading laborator ies of Comparing the nation’s capital with other innovation.” startup havens is not the goal and beside the What they’re talking about is a vibrant point, says Donna Harris, one of the area’s world of innovation that the world’s largest startup leaders. “We’re really focusing on venture capital firm, based right here, sees in how to scale our own unique ecosystem,” greater Washington. she says. Harris knows a bit about this. She’s “There is no question in my mind that both a startup and big business veteran, and right here in Silicon Beltway, you can feel the co-founder with Evan Burfield, of one of rise of a next larger generation of innovative the stars of that evolving Washington startup and, most interestingly, important companies ecosystem: 1776, the seed fund centered that can vie for being No. 1 in their markets,” around two beehive-busy, industrial-looking

floors of an otherwise nondescript office building on 15th Street NW. That 1776 is across the street from the Washington Post, also known as Amazon.com founder Jeff Bezos’ newest project, is a fitting symbol of the potential of entrepreneurship to upend — er, disrupt — the old ways. Don’t be surprised if the next Amazon, Google or Facebook sprouts up here. It’s happened before. Washington is where Jim Kimsey, Steve Case, Ted Leonsis and others built AOL into what would become a father of the Internet — perhaps the earliest example of the worldwide web’s equalizing power and limitless business potential. The Washington area has also seen two other major disruptive waves, including SiriusXM Satellite Radio and the work of Craig Venter and William Haseltine in mapping the human genome. And it’s here that many of them are now helping the new generation, dispensing inspiration, advice and, yes, investment. Local entrepreneurs are also bringing ideas to life on their own. Louisa Imperiale has attracted 25,000 active users to an app called Photox (www.GetPhotox.com) that quickly retouches photos for use on social media. She’s bootstrapped the app and says “we’re currently in negotiations for outside investment.” “Let’s not forget that San Francisco still remains the most fertile environment in the world. Yet I have to generate out of our region the same returns as my hotshot West Coast partners in San Francisco, or else I don’t get to stay here,” Weller says with a smile. Her point is that NEA depends on scouting out game-changing companies around here. What makes the Washington area so fertile, he says, is that it includes a strong

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indigenous customer base (starting with the Federal government); a tolerant culture in which there are ample entrepreneurs willing to risk failure; significant investment capital; experienced executive talent (Weller says Washington far outstrips New York in startup-experienced management talent); and a history of successful startups winning big (AOL, UUNet, SirusXM, Advertising.com and Ciena Networks out of Baltimore). A key part is the expertise that resides here, as well as the passion for attacking problems. “If you look at what Washington, D.C., does really well, connections are the currency of the city. It’s all about who you know” — and who and what they know,” Harris says. “Between think tanks, government agencies, within 30 miles of downtown, every subject matter expert you could want is readily at hand.” We live in an all-you-can-eat buffet for information — and data-hungry entrepreneurs. In an era when a company comprised of a dozen computer whizzes and zero revenue can be founded and sold for many billions of dollars in a matter of a year or two — harder than it sounds, of course — Harris sees Washington as possessing unique advantages over Silicon Valley, which also has unique baggage that doesn’t besot Washington’s image. “We’re not super interested in sort of being a corollary to Silicon Valley because we’re taking a different approach. Silicon Valley has its own negatives,” Harris says. “You shouldn’t have to be a 20-something white male to participate, and this is not Instagram and Angry Birds. This is pretty substantive stuff in most cases.” Perhaps it’s because the Washington metro area is more diverse than pockets of Northern California or perhaps it’s the political tinge to so much that goes on here. But others agree with Harris that it seems more open to women entrepreneurs here. “I think D.C.’s more cognizant of the fact that we need to create more opportunities for women,” says Marissa Mitrovich, a founding board member of the Global Women’s Innovation Network. The group, whose honorary co-chairmen are Rep. Martha Roby (R-Ala.) and Debbie Wasserman Schultz (D-Fla.), was created to

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Donna Harris and Evan Burfield of 1776

INNOVATORS | COVER STORY

Evan Morgan

boost womenâ€™s roles in the tech startup and policy world. â€œI do believe Silicon Valley is aware of the issue and there are a lot of large tech and venture capital companies that are trying to do the right thing and bring more women in. But I think itâ€™s the nature of being in D.C. that that conversation is maybe a little more at the front and center.â€? Against this backdrop, a core group of VCs, incubators and other innovators are putting Washington on the map for more than just politics, gridlock and red tape. They span various categories and some defy categorization. All helping Washingtonâ€™s innovation boom. Here are a few:

Partner, Revolution Growth

Photo by Cecilie Olaussen

t just 29 years of age, Washington, D.C. native Evan Morgan has already shot up the ladder of the finance world, rising to the top of investment powerhouse Revolution Growth, whose founders include Steve Case and Ted Leonsis. Previously with the Carlyle Group, he also serves as a founding member of Charter Border Partners, a nonprofit organization focused on board development for District charter schools. The St. Albans graduate is also the son of journalist and CNN chief political analyst Gloria Borger and can often be seen riding his Sweetgreen bicycle to work every day from his home in Logan Circle. YOU IDENTIFY COMPANIES RIPE FOR DISRUPTION WHAT DO YOU LOOK FOR WHEN YOU CONSIDER INVESTING? At Revolution we commit to investing 90 percent of our capital outside of Silicon Valley and Boston in places often overlooked by traditional venture capitalists. I have met with hundreds of companies in many of these places and four key things resonate. First, that sometimes â€œdisruptionâ€? can be a different spin on an old trait. Second, you must identify the characteristics of great leadership in an organization (and there is no one better to learn from than Ted Leonsis). Third, an entrepreneur or a CEO with a great idea or vision, but the inherent talent to hire around that vision, is what makes a big win. Oftentimes the team-building can be harder than the idea itself. Lastly, I have found that all of the great disruptive companies are led by people who can acquire and motivate talent to attack incumbents. YOUâ€™VE WORKED FOR SOME ICONIC FIGURES IN THE TECH AND FINANCE WORLD â€” DAVID RUBENSTEIN TED LEONSIS STEVE CASE WHAT DID THEY TEACH YOU? Be relentless and power through. David, Steve and Ted are all very different people, but at the end of the day they work incredibly hard and can understand the big picture

quickly. I would also add Ed Mathias to that mix. He taught me the importance of deep and broad networks and the â€œpower of getting a phone call returned.â€? WHAT ARE SOME OF THE INVESTMENTS YOUâ€™VE BEEN INVOLVED IN? I have been very involved with Sweetgreen. I brought that investment to Steve and Ted and they liked it a lot. Weâ€™ve put $21 million into it and have been putting the moving parts together ever since. Whatâ€™s great is that I get to do it with three of my best friends. â€Ś We went to school with this one, Optoro, and came back with a software solution for the logistics space, [for] all the stuff people return to Radio Shack and other places that can be re-sold. [Itâ€™s] a really interesting efficiency business. Weâ€™ve put $20 million into that. â€Ś Revolution Foods is an exciting one founded by two moms out of Oakland. Itâ€™s now a leading provider of lunches to school cafeterias. Itâ€™s riding a similar wave of â€œbetter for youâ€? foods. We now serve close to one million meals a week, mostly in charter schools. Forget chicken fingers and fries; this company is making food with all-natural organic ingredients. WHAT TRENDS ARE YOU SEEING IN THE WASHINGTON METRO AREAâ€™S BURGEONING TECH SCENE THAT EXCITE YOU? Over the last decade I have witnessed several impressive companies that have been built here locally. I recognize now that as some of those companies exit, people are moving onto their second acts â€” which is opportune timing for Revolution. I think the city is doing an exceptional job of attracting smart high-energy folks and companies and that momentum will be a self-fulfilling prophecy for some time to come. We have had the pleasure of investing in several â€” Sweetgreen, Echo360, Homesnap and Optoro â€” that are impacting millions of consumers across the globe throughout multiple sectors.

The seed fund and international startup coach, 1776 was founded less than two years ago by Donna Harris and Evan Burfield, who also co-founded K Street Capital. The fund is in its second year running the Challenge Cup, an international startup competition that has put Washington on the world map for startups. Burfield underscores the goal to nurture ideas that enhance some public good. Harris says sheâ€™s yearning to see revolutionary advances in the education field and several of the rising startups they cite among those at 1776 are in that field, such as EdBacker, a teacher crowd-funding platform, and Always Prepped, which analyzes student performance. â€œ1776 maybe couldâ€™ve come out of any city but it didnâ€™t. It came out of D.C. and it came out of D.C. for a reason: So many people came here in the first place because they wanted to make the world a better place,â€? Burfield says. â€œA lot of what weâ€™re doing is helping redirect that brain power so that the idealistic young folks who are interested in politics are not just interning on Capitol Hill, not just writing for Politico, but building a company and bringing it to scale.â€? Washington, he notes, is full of â€œpeople you bump into on the street who think about these problems, who know about these problems and are passionate about doing something about them.â€? While there is no requirement that a

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1776 Transitscreen (Matt Caywood) TransitScreen is privately held transportation software and digital signage company providing real-time transit information displays of all transportation options at a specific location (including subway, bus, train, bikeshare and carshare).

agricultural, manufacturing, and clean-energy ventures. Ethical Electric (Richard Graves) Ethical Electric is powering as many American homes and businesses as possible with 100 percent clean energy from renewable sources like wind and solar, using profits to fund causes that benefit our planet.

ExecOnline (Julia Alexander) ExecOnline provides executives at the world’s great companies with access to outstanding professional development. The team of business, education, and technology veterans and innovators partners with elite business schools to deliver executive development programs empowerring executives to implement critical business knowledge and skills.

1EQ (Juan Pablo Segura) 1EQ’s flagship product, Babyscripts, is the first mobile prescription for a better pregnancy, leveraging smartphone-era technology to improve pregnancy outcomes, patient satisfaction, and provider ROI.

Dorsata (David Fairbrothers) Dorsata is aiming to improve patient outcomes and reduce the cost of delivering care by providing a centralized platform for clinical pathway development and ultimately EHR implementation

Piper (Morgan Giddings) Piper is a cloud-based provider of receipting and personalized offer solutions for both retailers and consumers. It’s Piper Receipting Platform (PRP) automatically captures detailed transaction receipt data anywhere credit or debit cards are used, without requiring email addresses to be entered at the time of purchase.

Good World (Charles McGuire-Wien) GoodWorld empowers non-profits to raise money on social media, making giving as simple as writing a comment or tweet. Agricity (Jeremy Brosowsky) This Washington, D.C.-based company is committed to building healthier, more sustainable, more productive cities through innovative

EdBacker (Gary Hensley) Edbacker is an online funding platform for educators. By combining the principles and technology of crowdfunding with a traditional event sponsorship model, Edbacker allows educators to raise all the money they need for important education related projects, programs and events.

Back Row from left: Matt Caywood, Julia Alexander, David Fairbrothers, Charles McGuire-Wien, Jeremy Brosowsky. Front row from left: Richard Graves, Juan Pablo Segura, Morgan Giddings and Gary Hensley.

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INNOVATORS | COVER STORY

HALCYON INCUBATOR, A PROGRAM OF S & R FOUNDATION PureJoy, purejoyfood.com (Ari Raz and Kevin Friend) Raz and Friend believe that high-quality nutritious food should be a right, not a privilege, for all children and are working not only to produce premium fresh-made baby food and snacks but also deliver them to families no matter their economic situation. Be Girl, begirl.org (Diana Sierra) Sierra’s project provides young women in developing nations with high performance, aspirational and affordable sanitary napkins for girls to manage their menstruation safely and with dignity so they stay in school and complete their educations, something many girls are unable to do when they enter puberty. Control A+, controlaplus.com (Matt Fischer) Fischer is developing an early warning system for children who have asthma through data from physiological and environmental monitors. One in 10 children are afflicted with the respiratory disease with over $56 billion spent on treatment in the United States. Ideal Impact, idealimpact.org (Olivier Kamanda) Princeton and University of Pennsylvania Law School alumnus Kamanda’s project answers the plaguing question “what can I do to help?” Consumers affected by news stories they read are connected to service organizations that need assistance. Datasembly, datasembly.com (Dan Gallagher and Ben Reich) Gallagher and Reich are turning vast amounts of disaggregated open government data into useful information that can lead to groundbreaking change affecting people’s lives. NewsEase, newsease.co (Heather Sewell) Activist wunderkind Sewell is creating a portal for educators to teach children creative writing by tapping into fan culture. Popular books like the Harry Potter series and even video games are used as a launching pad for children to create newspapers based on their favorite stories. Clockwise from bottom left: Dan Gallagher, Ben Reich, Sarah Greenburg, Diana Sierra, Heather Sewell ,Ari Raz, Matt Fischer, Olivier Kamanda and Kevin Friend

company starting at 1776 be a software or app maker, Burfield says they seek to help companies scale quickly and “pretty hard to build a highly scalable business today without software being part of it.” About 240 companies are getting their start there and Burfield notes they help entrepreneurs “build companies that are going to engage in world domination and become really big businesses, or fail. “We help them figure out really fast if their business has potential or if they need to pivot to another idea,” he says. Kenny Day, a veteran of Washington publishing spanning from the end of the print era to today’s digital scene, snagged a founding member slot at 1776 when he signed on to build out Brightroll’s Washington book. “This is the best environment in which I’ve worked. Everyone’s creating, grinding, lost in their own thoughts, ensconced in their armchair raising millions in funding or writing code in a malt shop booth,” Day says. “You get to work surrounded by all these amazing, competitive, hungry innovators, young and old.” He says it’s a bonus that “none of them are your colleagues and people pay no more or less attention to the kid in the hoodie passed out on a couch at noon than they do the huddle of suits around an old picnic table at 10 p.m.” The beehive shares a large, modular, industrial space with a basic cafeteria and a constant supply of coffee, tea and communal PB&J ingredients, plus Nutella. People from an array of companies “bounce ideas off each other, help each other execute on amazing concepts. We also share leftovers and war stories in the kitchen,” Day says. “In one day you’ll run an informal focus group of millennials around your desk, pop over to hear a Cabinet secretary speak and attend a lunch about UX best practices ... all before noon. This is how Congress should work. This is how the U.N. should work.” REVOLUTION AOL alums Case and Leonsis, two of the most visible VCs in town, founded Revolution (along with AOL colleagues Donn Davis

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and Tige Savage) with their twist on a goal characteristic of many VC firms — thinking big. Really big. “Revolution invests in people and ideas that can change the world,” proclaims its website. “We aim to transform markets by shifting power to consumers, and in the process create massive value in our companies.” No big deal. Maybe with a startup like AOL behind you, changing the world while achieving massive value really is no big deal. And maybe it says something that the Revolution website names its 20 employees and posts their photos alphabetically, founders Case and Leonsis included. Overtly or not, the message is: It’s a team, and no one knows who’ll come up with the next Big Idea. It’s time to pass the torch. Indeed, Case and Leonsis are so good at spotting talent that President Obama just raided theirs. In October, Obama stole Ron Klain, general counsel of Revolution and president of Case Holdings, appointing him the White House Ebola czar. And that’s exactly what Revolution and their VC colleagues across Washington are doing. Revolution has given growth funding to some of the area’s most visible startups, among them Sweetgreen, the District’s favorite salad shop (and SweetLife music and food festival producers), who are bringing farm-to-table to the mass market (yes, the Sweetgreen founders are friends of the author). They’ve also funded Flexcar, which became Zipcar, an early harbinger of the “sharing economy,” enabling thousands of Washington area residents to have the convenience of a car on the few occasions when they need it without the expense and strain on common resources like roads and parking that come with owning a car. NEA Founded in 1977 by Richard Kramlich, Chuck Newhall and Frank Bonsal, New Enterprise Associates (NEA) is perhaps the granddaddy of Washington venture capital and one of the country’s leading firms. Bicoastal from inception, it started with a $16 million fund and now has 14 funds totaling some

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FORTIFY Feastie, feastie.com (Valerie Coffman) Coffman’s Feastie is a recipe search engine that delivers the best recipes fitting a cook’s search criteria. It also imports ingredient lists and sorts items by grocery store aisle to make shopping easier. Aquicore, aquicore.com (Logan Soya) Soya has developed a real-time energy management software solution that allows clients like commercial real estate and industrial facilities to analyze energy data on one centralized platform, helping companies to control energy costs. Synapsify, gosynapsify.com (Stephen Candelmo and Lawrence Au) Candelmo and Au’s Bethesda-based company builds applications that can read and learn from written content similar to humans for accelerated discovery, insight and recommendations. Starshooter Entertainment, starshooter.co (Jeff Sickles) Sickles’ describes his company as a next-generation entertainment company that combines animation, story telling, interactivity and unique consumer experiences to build relationships between audiences and StarShooter characters. TalkLocal, talklocal.com (Gurpreet Singh, Manpreet Singh and Amandeep Bakshi) This local trio have developed a system that matches consumers with various service providers like plumbers, contractors, handymen and more. Consumers submit their job requests and wait for the best offers to contact them. Onevest, onevest.com (Shahab Kaviani) Shahab was co-founder of CoFoundersLab, which recently merged to form Onevest, a startup investment platform which connects talent and capital to deserving startups. Back row from left: Logan Soya, Gurpreet Singh, Shahab Kaviani, Jonathon Perelli, Valerie Coffman, Stephen Candelmo, Amandeep Bakshi, Lawrence Au. Front row, seated: Manpreet Singh and Jeff Sickles.

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INNOVATORS | COVER STORY

GREATEST HITS TOP COMPANIES LAUNCHED FROM WASHINGTON INCUBATORS AND VCS NEW ATLANTIC VENTURES

Invincea, invincea.com Based in Fairfax, Virginia, this cybersecurity company provides malware threat detection, end-user threat protection and pre-breach forensic analysis and came out of the Defense Advanced Research Projects Agency (DARPA).

Moda Operandi, modaoperandi.com Based in NYC, Moda Operandi lets you pre-order designer collections straight off the runway and shop at its curated in-season boutique. Co-founded by Vogue contributing editor Lauren Santo Domingo with premiere designers like Oscar de la Renta as affiliates and Conde Nast and LVMH as investors.

GlobalLogic, globallogic.com Based in McLean, VA, GlobalLogic has design and engineering centers all over the world. Theyâ€™re behind some of the magic of LinkedIn, Google, Medtronic, Oracle and hundreds of other brands. Last year around this time, it was acquired, generating a 15X return.

DivXNetworks DivX essentially brought movies to the Web. It was created to make it more efficient to store and distribute video through the Internet.

Mobile365 Chantilly, Virginiaâ€™s Mobile365 helped bring text messaging solving compatibility issues between carriers that prevented text messages from going through in the early 2000s. Bay Area Sybase acquired it for $425M in 2006.

through mathematically driven data analyses to target precise consumer segments. Earned $200M. FORTIFY VENTURES

Talk Local, talklocal.com Formerly named SevaCall, Talk Local connects businesses directly to consumers through a survey asking for the required service, desired appointment time and location. Talk Local then broadcasts the consumerâ€™s service request for free. Fortify was one of the first investors and a $2.6M round recently closed led by Disruption Corp.

Social Tables, socialtables.com Social Tables is a web-based event planning and community building platform with the worldâ€™s first social seating chart, allowing guests to interact before and after an event. Bessemer Ventures recently led an $8M round.

SnobSwap, snobswap.com Snobawap is an online exchange where fashionistas can sell, swap and shop designer clothing and accessories. They recently closed $500K+ round.

The Trip Tribe, triptribe.com The Trip Tribe is a newtwork for bucket list adventurers to find world-class experiences with folks who travel the same way. They recently closed a $500K+ round

IntroHive, introhive.com IntroHive allows organizations to analyze enterprise data to create a firehose of personal introductions to the right prospects. Fortify was one of the first investors and Salesforce.com invested in IntroHive last year

NEA

Appian, appian.com

Reston, Virginia-based Appianâ€™s platform allows enterprises and governments to build custom software to automate processes via the cloud. Rated number one in the business process management space by Gartner and Ovum, the company earned $100M this year.

Water Lens, waterlensusa.com As fracking remains a controversial source of energy production, Water Lens set out to develop technology that can immediately analyze the chemical and molecular components of water at a well site, allowing people to quickly and safely determine whatâ€™s in their drinking water.

Sourcefire, sourcefire.com

OPower, opower.com

(cyber intrusion detection software) â€“ sold for $2.5B (to Cisco), top 10 deal of last 20 years around here.

CVENT, cvent.com Worldâ€™s largest software-as-a-service provider of online event management, venue selection and web survey solutions launched by Reggie Agarwal. Went public 18 months ago and is worth $1B.

Opower, opower.com Energy efficiency software-as-a-service company offering an analytics platform that enables utilities to communicate with residential customers about energy usage and how to cut consumption. Went public and is currently worth $1B.

Videology, videologygroup.com Screen-agnostic video advertising technology platform founded by the same group who also founded Advertising.com, which was bought by AOL. The platform works to connect brands with consumers

This sophisticated software engine collects data from utilities companies, then analyzes that data and provides recommendations to utility customers that reduce energy consumption, reducing our carbon footprint and saving money.

HandUp, handup.us As government and social services are increasingly subject to budget cuts, HandUp leverages the power of the Internet to match specific online donors to homeless in need and ensure that usersâ€™ direct donations go to their intended purpose, such as rent assistance and medical care.

RideScout, ridescoutapp.com This mobile app pulls together a host of transportation sources and allows users to quickly plan trips. Daimler recently acquired RideScout after 1776 fueled its early growth into a startup capable of innovating rideshare technology within Germanyâ€™s highly regulated transportation sector.

ID.me After years of bureaucratic mismanagement, the Veterans Affairs administration began using ID.me, a digital authentication program and 1776-fueled startup, to help identify and track veterans who are eligible for benefits.

CRYSTAL TECH FUND DISRUPTION CORPORATION

Aquicore, aquicore.com Aquicore puts sensors in buildings to monitor energy consumption, allowing building managers to analyze all energy data real-time in one centralized platform. Most importantly, it helps to identify opportunities to reduce consumption and save money.

nvite, nvite.com Nvite is the worldâ€™s first attendee-focused event ticketing and registration platform, using social data to expand and structure guest lists and reordering them for each attendee based on his or her connections.

Contactually, contactually.com This web-based CRM tool that helps maximize network ROI, get more referrals, gain more repeat business and build stronger relationships with the people who matter most to a profession or career.

Bloompop, bloompop.com Bloompop is an nline marketplace for the unique floral design collections of individual florists, presenting floral designs that are rustic, modern, and everything in-between.

Power Supply, dc.mypowersupply.com Power Supply is a subscription service for great tasting food, made from the good stuff, by admired local chefs and artisans, with lots of variety and choice, in a super simple experience.

REVOLUTION

Zipcar, zipcar.com Zipcar quickly became the worldâ€™s leading car-sharing service with more than 730,000 members. The company was acquired by Avis in 2013.

Sweetgreen, sweetgreen.com This fast-growing organic, farm-to-table salad shop was founded in Washington, D.C. by three Georgetown graduates in 2007, and has expanded to nearly 30 stores nationwide.

CustomInk, customink.com CustomInk is a web-based custom shirts company for groups and occasions delivering more than 20 million t-shirts per year.

Optoro Inc, optoro.com This Washington, D.C. based technology company enables Fortune 500 companies, retailers and manufacturers to increase revenue from returned and excess inventory.

Homesnap, homesnap.com Homesnap is an app instantly providing consumers with detailed information about a home simply by snapping a photo.

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VENTUREHOUSE StockUp, stockup.co (Vinay Bhargava) Bhargava’s app (available for both iPhone and Android) helps consumers save on grocery items by listing prices from nearby stores. Consumers can comparison shop from the convenience of their home or office, or scan products in stores. The company is also working on a new smart grocery list, which automatically crunches numbers to help shoppers save. SocialRadar, socialradar.com (Michael Chasin and Kevin Alansky) Chasen (former co-founder and CEO of Blackboard) and partner Alansky’s social media app provides users with real-time information about people around them, whether they are in a restaurant, a conference or a concert. The app tells you who is nearby, how they are connected to you and what they’ve been up to while also allowing you to set privacy levels. Kastle Systems, itsanewkastle.kastle.com (Piyush Sodha) Sodha’s company

provides a complete integrated security system for properties, including installation, monitoring, intrusion detection and video surveillance. The offsite, around-the-clock service reduces security gaps and reduces costs. NGP Technology Partners, ngpetp.com (Phil Deutch) Founded in 2005, Deuth’s NGP Technology Partners is a private equity firm that invests in companies that provide products and services to the oil and gas, power, environmental energy efficiency and alternative energy sectors. It manages about $500 million in committed capital and have invested in companies including GroSolar, Lehigh Technologies and others. Venga, getvenga.com (Winston Lord) With investors like ThinkFoodGroup, Gus DeMillo and Jonathan Segal among others, Venga helps restaurants gather point-of-sale data and guest information to enhance the dining experience and create more effective, targeted marketing.

Clockwise from bottom left: Mark Ein, Piyush Sodha, Vinay Bhargava, Phil Deutch, Kevin Alansky and Winston Lord.

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INNOVATORS | COVER STORY

$13 billion in “committed capital.” They’ve invested in everything from clean energy to tech to lingerie and even a DJ booking and training company. Among the area startups they’ve backed: Everfi, an education technology company that helps schools with off-curricular issues like bullying and financial understanding for kids; Sonatype, which is headed by serial entrepreneur Wayne Jackson and helps developers reduce risk in the use of open-source software building blocks; and Science Logic, a cloud systems management company; among others. GROTECH Since Frank Adams founded it in 1984, GroTech has put more than $1 billion into 100-plus ventures, typically investing in tranches of $500,000 to $5 million. Local investments include SocialRadar, a cross between Tinder and Facebook, or as SocialRadar chief marketing officer Kevin Alansky puts it, “Waze for people.” VENTUREHOUSE Mark Ein is a homegrown Washington, D.C., success story. Even at the relatively young age of 49, he’s no newcomer to the business startup and turnaround space. He spent seven years at the Carlyle Group, starting there when Washington’s other homegrown financial powerhouse was just five years old. Before that, he honed his skills at Goldman Sachs. He’s proud to suggest he was the first to set up an urban business incubator. In 1999, long before Washington’s Penn Quarter became the hot spot it is today, Ein set up Venturehouse in a loft-like space on 7th Street NW, a couple of blocks down from the Verizon Center, which had only opened two years earlier. Numerous startups have begun there, whether they received investment and leadership from Ein or simply took space under his umbrella. “Most of the venture capital and technology community was located in Northern Virginia, but I always thought the creative class and younger entrepreneurs would prefer an urban environment,” he says. “I also believed it was important to support and encourage the growth of a vibrant entrepreneurial ecosystem

in the District. Fifteen years later, the world has come our way and this is now where all of the interesting activity is occurring.” And Venturehouse has seen a lot of action. “I’ve been an early investor or a founder of six companies that ended up being worth over $1 billion, either upon exit or they hit a billion dollar valuation.We’ve been involved in some extraordinary things,” Ein says, chatting in his high-windowed conference room over an Evian and a Diet Coke. He may be best known for buying Kastle Systems, a local office building security company that he turned into a national company offering an expanded suite of

‘There is no question in my mind that right here in Silicon Beltway, you can feel the rise of a next larger generation of innovative and, most interestingly, important companies that can vie for being No. 1 in their markets.’ — Harry Weller, NEA services. Its success inspired the name of Ein’s five-time champion World Team Tennis team, the Washington Kastles. But there are many others. Ein’s biggest successes also include Sirius XM satellite radio company; Matrics, an early RFID company; Aether Systems, one of the first to add data to the voice traffic that cellular networks were transmitting; and Cibernet, a back-end clearing house for cell phone network companies to pay each other for roaming charges. Ein bought Cibernet for $35 million and sold it four years later for $210 million. So, how does Ein spot opportunities? “You need to be able to put seemingly disparate

bits of information or trends together to see things that will happen several years out that aren’t obvious if you haven’t put those pieces together,” he says. “And then you have to take that idea and pair it with the right people and they have to execute really, really well to make the dream become a reality.” There are surely infinite people who would like to pitch Ein, but he stays focused. “I don’t do a ton of things, I don’t make a ton of bets. I try to pick the ones I think are the best opportunities and put more time and capital into a fewer number of things … And once we’re in I really try to make sure they work at some level, I hate failing … What we’ve done a lot in recent years is buy existing businesses and change them to attack bigger opportunities.” In addition to great ideas and execution, Ein says timing is crucial. In 2006, he started a mobile payments business within Cibernet. It didn’t take off. “That was an example of a really good idea and good strategy with bad execution and timing,” he says. Today, of course, mobile payments is coming of age and between Square, Google Wallet and now Apple’s smartphone payment system, a huge business. A similar example is Aether Systems, one of the first to add data to cellular networks. “It was a very successful company for awhile,” Ein says. “and then it didn’t adapt to the times.” “I’m not a gadget guy. I’m more a ‘where’s the world going?’ guy — what’s going to happen in the future as opposed to today. It’s often not that hard because oftentimes what happens in the future is not about inventing things, it’s about putting things together that already exist to solve a big problem.” Ein’s record is such that a certain folklore surrounds him. One Washington denizen active in the startup and VC space said they heard that a friend of Ein was once at a loss on what to do with a certain flailing dog of a company, offering it to Ein for nothing. He bought it for $1, the story goes, and turned it around into a $100 million sale in short order. Asked about this, Ein is modest: “I think that is a bit of hyperbole and urban mythology, but I’ll take it.”

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INNOVATORS | SHARED WORKSPACES

ALL TOGETHER NOW Gone are the days of toiling on the Next Big Thing in the solitude of your parents’ garage. Slick, hip shared workspaces offer all the features of a traditional office plus collaboration, educational events and cost-savers designed to boost entrepreneurial potential. The free beer isn’t bad either.

WEWORK WONDERBREAD Founded: 2010 by Adam Neumann and Miguel Mckelvey in New York City Locations: 3 in the District with a new Dupont Circle spot opening Nov. 2014. 25 locations in 11 cities worldwide. Membership: 550+, every industry imaginable Vibe: A “village” of entrepreneurs who view work as lifestyle Décor: Stylish industrial Benefits: Discounts at Zipcar, Moo business cards, UPS, Amazon and others Perks: Free beer and coffee, rooftop terraces Cost: $325 for drop-in desk to offices for 21 people, ranging from $500/desk to $675/desk

AFFINITY LAB Founded: 2001 by Philippe Chetrit, Berit Oskey and Charles Plank in Washington, D.C., making it the oldest in the world, according to founders Locations: 6,000 square feet on U Street NW Membership: 60, ranging from service-oriented freelancers to growing startups Vibe: Collaborative community Décor: Millennial modern Benefits: The lack of walls encourages members to work with tablemates, which can lead to better ideas and greater opportunities Perks: Locally sourced coffee, fulltime support staff, 24/7 access Cost: $325/month to $895/month

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innovators | shared workspaces

CANVAS.CO Founded: By designers Martin Ringlein and Alex Giren in the District Locations: 1 6,000-square-foot space in Dupont Circle Membership: 50-60 creative professionals and tech startups Vibe: Communal creatives — no separate offices here. Members share large tables. Décor: Industrial loft art studio Benefits: Membership includes being able to organize events; an open floor plan allows for networking Perks: Double Stuff Oreos, themed lunches and monthly happy hours Cost: $30 for a day pass on the low end to $600/month for a dedicated desk and 10 hours of conference room time.

COVE Founded: 2013 by Adam Segal in Washington, D.C. while getting his master’s in business Locations: four throughout the District, the latest in Old Town Membership: Space capacity ranges 15-40 per location Vibe: Casual community Benefits: Come-and-go setup has members paying for only the time they spend in the office; paid via app Perks: Each location offers discounts or freebies from neighborhood spots: baked goods from Bakehouse, coffee from Peregrine Espresso plus team yoga classes. Cost: $24/month for eight hours to $124/month for 50 hours

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