The Washington-based start-up incubator known as 1776 has received a $7.2 million investment from Steve and Jean Case and others to help the for-profit consultant find and grow more small businesses throughout the world.
Leading the investment in 1776 is the Pepper Group, a technology investment firm based in Australia. Several unnamed investors also participated.
“This will help us do a whole lot more programs, more education, more mentors and more connecting in more cities for more start-ups,” said 1776 co-founder and co-chief executive Donna Harris.
As a start-up incubator, 1776, headquartered on 15th Street NW in downtown Washington, earns revenue from a monthly fee paid by its members. In return, the members avail themselves of 1776’s business expertise. Members also get access to institutions in their respective industry, connections to investors in the 1776 network as well as educational curriculum and resources.
Harris said her firm has worked with 7,000 companies since it began three years ago and has 600 members. The company also has offices in Northern Virginia and San Francisco.
In a statement released through 1776, Steve Case wrote: “In the oncoming Third Wave of the Internet, we’ll see significant disruption of major real-world sectors, and as a result, successful entrepreneurs will need to understand how to build valuable partnerships, connect with great investors and navigate the public policy environment. The team at 1776 has the proven ability to offer entrepreneurs the critical resources they’ll need in the Third Wave, and we are delighted to help them propel this mission.”
The Cases, Pepper Group and the new investors will receive equity in 1776 as part of the investment. Harris and co-founder Evan Burfield, as well as the company’s 38 employees, also own equity. As part of the investment, Ron Klain, who works for Steve Case’s Revolution LLC investment vehicle, will join the 1776 board of directors. Michael Culhane of Pepper Group will also join the board.
The investment in 1776 comes at a time when venture capital firms are flourishing, with the industry raising money at the fastest rate in more than a decade, according to a report in the Wall Street Journal this week.
The newspaper said data from Dow Jones VentureSource show that U.S. venture funds have collected about $13 billion in the first quarter. That is the highest since the dot.com bubble at the turn of the century.
In addition to its subscription business, 1776 has a $12.5 million fund that it uses to make seed investments in start-ups around the world.
The fund has put money in 27 start-ups since 2014, with seed investments typically ranging between $50,000 and $150,000.