Crowdsourcing to fill local startup funding voids

Despite being one of the wealthiest areas in the United States, the D.C. region is still a tough place for startups to raise growth capital.

“There’s a gap after the friends and family to the pre-series. So, anywhere from $200,000 on up to one million, three, five,” said innovators trying to solve this problem, Kevin Morgan, director of Tech Sector and Retention for the Washington Economic Partnership. “We’re just trying to figure out how to fill that gap.”

The D.C. region is more risk-averse than places such as SIlicon Valley. “That’s what I call East Coast entrepreneurship, or East Coast investment… what we see is a little more conservative, a little more risk-averse, and looking very much at business fundamentals–profitability, revenue,” said Morgan.

Morgan is trying to educate area investors on why risk tolerance is important for a booming technology region.

It’s not that there aren’t any investors in the area, it’s that many have made their money from less risky ventures, he told What’s Working in Washington.

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One of the best ways for the community to help figure out how to fix the problem is to crowdsource ideas. “Is it an issue of educating these potential investors… is it about engaging them? Is it creating that angel community or investor network of untapped investment in capital?”

Morgan is currently accepting ideas via email and at the Washington DC Economic Partnership website.

“We have a lot of great startups, a lot of great ideas, a lot of people getting friends and family rounds. If we can unlock and add value in where the hole of that donut is, that, I think, is where we springboard and accelerate the entire tech ecosystem in D.C.,” he said.