Startup Success Frat House

Plan For DC Mayoral Candidates To Build Startup Success

What Not To Do to Build Startup Success

Mayor Vincent Gray formula for startup success? He made a bet last year on adding startup office space. He must have believed the district needed a startup frat house and if you’re going to have a startup animal house, DC’s going to need a John Blutarski. Enter Evan Burfield who working with Gray’s Business Development Director, David Zipper, asked for and received $400K of tax payer money to found a startup coworking space 1776, DC’s own Animal House.

Just a few months after awarding the cash to Burfield and 1776,  Zipper left the Mayor’s office to become a hired rush chairman in the employ of the frat/company he helped fund.**

Had Mayor Gray proceeded with prospective due diligence prior to contracting with DC’s 1776, he may have found that Burfield “left” the only 2 prior companies he’d ever founded* under the kind of cloud that typically translates to fired. Had he done a simple internet search, on his own DC Courts Online, the mayor may have discovered he was contracting with someone with 3 Breach of Contract law suits filed against him***. This mayor however has developed a habit of depending on the US Attorney’s Office to do post mortem due diligence of his hiring and money disposition policies.

The real question may be why did the Mayor think we needed more office space or another gathering place to improve the already abundant office space and startup meetup scene in DC?

Prior to 1776,there were at least two startups events a week, the DCTech Meetup for instance routinely draws over 600 people to the 6th Street Synagogue?

In addition you have to shake your head and ask why the Mayor would penalize and create a government funded competitor to business people who had risked their own financial capital on startup coworking space. Why didn’t he approach existing businesses with a proven working business model about expanding their charter in exchange for cash? He never discussed the possibilities with:

Did the district government really need to invest in yet another co-working space when in the past 6 months, three new additional, non-government funded spaces came online? And does it make sense that these work spaces are actually less costly, better designed and appointed than their government-subsidized competitor?

Perhaps the rent subsidies are offset by Burfield’s personal PR world tour junket as he builds a global reputation for himself under the guise of the “Challenge Cup,” a  DC funded global competition that provides little if any benefit to DC tax payers.

Challenge Cup Boondoggle Cities

  1. Washington DC (Okay, maybe this one makes sense)
  2. Chicago
  3. Moscow
  4. Berlin
  5. London
  6. Los Angeles
  7. New York
  8. Boston
  9. Austin
  10. Denver
  11. Sao Palo
  12. Cape Town
  13. Tel Aviv
  14. Beijing
  15. New Delhi
  16. San Francisco

Want a company from Cape Town to move to DC? Spend money fixing the immigration issue first before you fund a low impact, high cost competition.

If you want to help grow the startup business base you should fix the actual problem and not  throw money away to the wrong people to address a problem that doesn’t exist.

What To Do

Are you listening Muriel Bowser, Jack Evans, and Tommy Wells? While the mayor thinks that DC’s tail is getting whipped by Austin TX because we have less office space than they, companies are failing because they can’t attract risk capital.  We have as much or better available office space than the 10 or so regions that outperform this area as startup hubs. We have as many smart entrepreneurs, engineers and business people. What we don’t have is seed or early stage risk capital.

The DC Region ranks 11th in Seed and Early Stage Capital Raised compared other regions. Got that 11th? As in not in the top 10.

DC’s problem is a lack of Early Stage/Seed Venture Capitalists

Seed Stage By Region Amount in Millions Early Stage By Region
Amount in Millions
Silicon Valley $110 Silicon Valley $1,238
New England $75 New England $380
Southwest $63 NY Metro $316
NY Metro $27 Northwest $266
San Diego $15 LA/Orange County $266
Midwest $11 Midwest $106
Southeast $9 Southeast $64
Northwest $8 San Diego $58
North Central $2 Colorado $58
Philadelphia Metro $0.45 Texas $55
DC/Metroplex $0.35 DC/Metroplex $40


Next time you have $400K to burn, why don’t you spend it in an effort to attract Silicon Valley, New England and New York, Early Stage Investors to create an early stage risk capital base in DC. Incent out of town VCs to open up offices here with Tax incentives when they invest here. We don’t need office space. We don’t need another talking head meetup. We don’t need another Idea. We don’t need to send a failed Entrepreneur to New Delhi to grow the cities business base. We need early stage capital to big idea companies that can’t get off the runway.

DC has all the elements of a great startup town. All the elements except risk capital and instead of throwing money away. Why don’t you try and invest a million dollars to attract a billion dollars of risk capital?

…and Mayoral Candidates? If you’re not asking  Mayor Gray what he was thinking when he lit $400K on fire and funded a frat house, you’re missing an opportunity.

——————–
Footnotes

* Sep 2001 – NetDecide Raises $9.2 Million in C Round, Evan Burfield leaves firm (no reason given) and layoffs announced..
* Oct 2011 – Smartronix makes strategic investment in Synteractive, May 2011 – Burfield leaves Synteractive, leaving behind an unhappy, vengeful, SmartTronix CEO. The terms of the “departure” are confidential and yet there is definite animosity from Smartronix aimed at Burfield.
** Oct 2013 – Zipper Joins 1776 after directing $400K of DC money to 1776
***DC Courts Search: 3 Breach of Contract Lawsuits Naming Burfield as a defendent or co-defendent.

  1. Filed 12/21/20112 by Born and Bread
  2. Filed 4/120/2011 by BB&T Bank
  3. Filed 4/13/2010 by  Former Synteractive Employees, Craig Atkinson & James Hirmas