Jonathan Chen and longtime friend Tim Hwang were college juniors when they first batted around the idea of aggregating government information.
Hwang was then president of the National Youth Association and had experience dealing with government data that was difficult and time-consuming to sift through. His idea was to create a platform to aggregate all the data in one place in a standardized way to make it easy to search and understand.
Hwang, a student at Princeton University, and Chen, a student at the University of Maryland, entered the idea in a University of Maryland entrepreneurship competition. They won second place, $1,500 in seed funding and parlayed the momentum to participate in a Silicon Valley venture accelerator program.
Along with friend Gerald Yao, the team started FiscalNote and spent the summer of 2013 building their platform, Prophecy. They also added a twist: a tool that could predict the probability that a bill would become law.
It was that new prediction engine that attracted veteran entrepreneur Mark Cuban in September 2013. Cuban’s lead investment brought along AME Cloud Ventures, New Enterprise Associates and First Round Capital’s Dorm Room Fund for a total of $1.2 million in seed round funding.
They launched their platform in December. Based in the District, FiscalNote is working quickly to scale up, with 17 employees and a growing list of clients.
Chen, chief technology officer
“No one else in the industry has a tool to predict whether a bill will become law. Our clean, easy-to-use Prophecy platform aggregates legislation for all 50 states and at the federal level. Our tool tracks whether a bill will get to the voting floor and the likelihood that it will pass into law. We show an overview of the whole bill, including an analysis of the bill text, what industries will be affected, all the legislators and committees involved with the bill. We map out which legislators will be most likely to vote ‘yes’ or ‘no.’
“We sell on a tiered subscription basis. We are targeting the financial services industry, government relations, compliance groups and academic institutions. It’s going well and things are moving pretty fast, even though sales cycles for enterprise software can be long.
“Our biggest challenge as we grow quickly is scaling up on the operations side. It’s difficult to manage a growing team of new people. We have a business development team, two operations managers, our technical team, and we’re expanding with a small presence in New York. How do we grow and make sure operations are still efficient?”
Elana Fine, managing director, Dingman Center for Entrepreneurship, Robert H. Smith School of Business
“You’re at a point where a lot of entrepreneurs really stumble as they have to transition from being the visionaries and strategists who do everything to delegating and operating more like a company. It’s great that you’re identifying this issue early on, and the key is looking for really strong hires who can take over more of the operations and tactics so you can focus on higher-level strategy and tactics.
“As you are going into your round of series A fundraising, it is important to have those key people and a strong C-level team in place that you can trust. Investors place a lot of importance on these factors. Hire strong managers — people who are obsessed with attention to detail, efficient processes, setting clear job expectations, accounting and human resources. When you’re growing at this rate, you have to start delegating those things. This can be really difficult for an entrepreneur — this start-up is like your baby and you want to be involved in every decision.
“You want the large customers that you are going to start dealing with to see you as an even bigger company than you are. You have to know your strengths, but you have to know your weaknesses. Decide what you focus on and the things you can hire others to do.
“Hire fast and fire fast in a start-up. If people aren’t working in a specific role, let them go quickly. Be very consistent on probation periods, milestones and specific metrics. You can’t afford to be paying people who aren’t performing. You don’t have the luxury of wasting money on people who aren’t going to be good long-term fit for the company.
“Use your advisers and investors as much as you can to find the right people. Surround yourself with people whose advice you trust and listen to them.”
“We know we have to hire the right people quickly, especially as we look to raise more money. We do not currently have a COO; we have an operations manager who we are grooming to fill that role after we get series A financing.”