Students’ Startup Analyzing, Predicting Legislation Finds Success
By Lauren Brown
The frustration mounted all last summer for Jonathan Chen ’14 and two high school buddies as their startup business worked to gain traction. While shopping their new way to monitor and predict state and federal legislation, they learned a lesson about Silicon Valley: Edgy trumps wonky.
The trio had been sharing a room in a Motel 6, working 12 to 14 hours a day to compile, organize and analyze the data for FiscalNote. They’d reached out to countless potential investors, and they were about to head back to D.C. when co-founder and CEO Tim Hwang’s email pinged.
It was Mark Cuban, Dallas Mavericks owner and, through his appearances on TV’s “Shark Tank,” one of the nation’s best known startup investors.
He was interested.
After the co-founders sent him their business plan and explained their vision, Cuban invested $740,000 in the fledgling company.
“It was mind-blowing,” Chen, the chief technology officer, recalls. “All our efforts were finally paying off.”
FiscalNote went on to raise $1.2 million, including seed funding from New Enterprise Associates and First Round Capital’s Dorm Room Fund, and just last month opened an office for 17 employees in D.C.
Not bad for Chen, who will graduate with his computer science degree in a few weeks.
He, Hwang and Gerald Yao, childhood friends who attended Wootton High School in Montgomery County, had stayed in touch through college. Hwang, still at Princeton, was running the nonprofit National Youth Association last spring when he suggested to Chen that they take a new approach to government data.
State legislatures pump out more than 100,000 bills a year, he said. Add in federal bills, regulations and court cases, and nobody could sift through such a data dump. But those bills affect industries, small businesses, nonprofits and individuals.
The pair, who later brought on Yao as chief financial officer, came up with the idea of tracking and analyzing that information on a Web-based software platform, as those bills progress through state legislatures and Congress. They put together a few slides on a PowerPoint presentation, entered it into the Maryland Department of Computer Science’s inaugural FISH Bowl tech entrepreneur contest and placed second.
“The only we reason we got second [rather than first] is that we didn’t have a product,” Chen says.
That’s where his experience in the Hinman CEOs living and learning program came in. Twenty-five percent of the students in the entrepreneurship program run by Mtech (the Maryland Technology Enterprise Institute) launch revenue-generating businesses while at Maryland, says Director James V. Green.
The idea for FiscalNote “was interesting and novel and competitive in the market, aligning with new venture success factors as discussed in the Hinman CEOs program,” Green says. “In my 10 years here, I’ve never seen any student try to tackle legislative analytics.”
Mtech awarded FiscalNote a $5,000 Citrin Impact Seed Fund grant, then Hwang and Chen were chosen to participate in the highly selective Plug and Play startup camp in Sunnyvale, Calif. Being surrounded by smart and creative people was inspiring, he says, but “many investors didn’t get our product, because they had limited experience with the government space. They wanted the next SnapChat or Instagram.”
Back at Maryland, Chen took a few classes last semester (and earned all As), and this semester, he’s taken just one independent study that relates to his work on machine learning on natural language processing.
That’s given him the time to handle the technical side of FiscalNote, including creating an algorithm that breaks down factors including sponsors and co-sponsors, committees, demographics, campaign finance data, trends and news, to predict legislative outcomes.
He says FiscalNote plans to extend its current client base beyond government relations and compliance firms and financial and academic institutions, and would like to enter Europe and South America. Chen says the company is also looking to land more funding in the next few months.
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