Last year Ron Bouganim trailblazed a promising new catalyst for government innovation. In September, Bouganim founded the Govtech Fund, a first-of-its-kind, $23 million venture capital fund dedicated exclusively to investment in government tech startups. The fund is the result of an 18-month courtship of investors, an endeavor that drew from Bouganim’s personal expertise in entrepreneurial ventures and his mentorship service in the Code for America Accelerator.
“To be able to publicly announce the first-ever fund for government technology startups, that, for us, was fantastic,” Bouganim said.
To date, the fund has invested in four companies: AmigoCloud, a GIS mapping service; SmartProcure, a government procurement intelligence platform; SeamlessDocs, a solution to digitize government forms; and MindMixer, a community engagement service known for its civic idea contests and public input gathering.
The fund discards assumptions that government officials are too risk averse to buy from innovative startups. It also purports that civic innovation can be profitable. Bouganim says two of the Govtech startups already have received additional funding from investors.
“That just shows confidence from the investor community that we’re moving in the right direction,” he said. “And you just continue to see data point after data point of momentum in the space, which we fully expect to continue in 2015.”
Average initial investments going forward will be around $500,000, and a total of 15 to 20 investments will be made in the next three to five years.