The FiscalNote Origin Story
How Three Friends Started a Company their Senior Year in College, Raised $19M in Venture Capital, and Changed an Industry
Q: Age is no guarantee of efficiency.
James Bond: And youth is no guarantee of innovation.
I’ve always found the above exchange between Q and James Bond in Skyfall (2012) to be particularly prescient of the tech industry. It seems these days that there is a deluge of people who are in tech or want to be in tech. And what’s perhaps even more fascinating than the constant barrage of billion-dollar unicorn announcements is the mainstream media’s fascination with the young founders that lead these growing empires and their seemingly effortless and inevitable rise.
It is perhaps the most asked question we get as founders: how did you do it at such a young age? I’ve always thought the question to be strange given the context of history and all the great founders that had begun or succeeded at a younger age than us. Nevertheless, I thought it’d be interesting to recount our experiences and draw upon some lessons we’ve learned along the way.
The Road to Silicon Valley
One and a half years ago, Jonathan (our Chief Technology Officer), Gerald (our Chief Strategy Officer), and I sat uncomfortably on a couch in my parents’ living room, waiting to hear back about an accelerator in Silicon Valley to which we had applied. I’d known Jonathan since our first encounter in our 4th grade social studies class and Gerald since our lunchroom shenanigans in 6th grade. After weeks of debate, we had decided to make the leap and start a company together. It was a simple idea: to create a search and analytics platform for legislation across the United States — a problem I had encountered when I worked on the Obama ’08 campaign, served in elected office, and ran a national advocacy organization.
At the time (June 2013) we were all entering the summer before our senior year of college. I was returning to Princeton, Jonathan to Maryland, and Gerald to Emory. We had all just turned 21. Not knowing much about the tech industry at the time, we stumbled upon a program and had decided to submit an application.
After a short Skype call with the organizers, we were ecstatic to find out that we had been accepted. Jonathan immediately quit his job (three days prior to his start date!) and Gerald, who had been toying with some Big 4 accounting jobs, decided to jump in as we began to make plans to fly out to Silicon Valley.
Silicon Valley! The Promised Land of our generation and the birthplace of game-changing technologies. We didn’t know what to expect as we got off the plane at San Jose International Airport, but we knew that this was an opportunity that we simply could not pass up.
The next few months were all a blur. Unable to find housing, we ended up staying in a room at the Motel 6 in Sunnyvale for an extended period of time. Jonathan and I shared one bed, while Gerald and one of our first engineers, Dev, shared the other (occasionally sleeping on the floor). It would literally take us over an hour in the mornings to get ready as we all shared one bathroom. To save money, we would go to Meetup events for the free food and stock our fridge with anything we could find. Our largest expense as a company at the time, apart from the Motel 6, was the gas from all the driving I did up and down the 101 as I pitched investors. The buzz of stress was almost mind-numbing most days, as we struggled to build and define our company.
We were working almost 24/7. From the moment we got up to one in the morning, we would be coding, writing customer lists, pitching, and recruiting. Days merged into weeks, and often it was hard to tell what day it was. Grinding through the work didn’t come easy, but we stuck it out as we relentlessly debated our value proposition, refined our pitch, and fought about the direction of the company in the early stages.
There were many nights when we simply threw our hands up at 3 AM and said it was impossible. Sheer and utter determination is what got us through and kept us going to the next morning. Looking back, while those early days were excruciatingly hard, those months of bonding later become the foundation of our company’s culture and work ethic.
In July 2013, YS Chi, the Chairman of Reed Elsevier, and Chris Lu, the former White House Cabinet Secretary, both agreed to join our Advisory Board and gave us the crucial credibility we needed to get our venture off the ground. A month later, on a Friday night, we were chowing down on dinner when we received an unexpected email from Mark Cuban. We immediately dropped everything we did and rushed backed to the office to address the last minute diligence items. We ended up closing a $1.3 million seed round with Mark Cuban, NEA, Jerry Yang, and First Round’s Dorm Room Fund after cold-emailing Mark and getting the green-light that he would lead the round. A great way to end out the summer.
Growing Pains
That September, we made the decision to move our company out of the Valley and back to Washington, DC, where we saw a lot of customer interest. We set up shop in Bethesda, stocking our office with free furniture leftover from the workplace of Gerald’s mother, and began to recruit our core team.
Gerald and I literally did the hard lifting of setting up the tables, getting on our knees, plugging in the electric cords, and running to Costco to grab snacks for the fridge. Each of our company’s conference rooms was named after a different Pokemon, a nod to our childhood days (just imagine a grown man saying “let’s meet in the Pikachu room at 3”). The office was a 10 minute walk from the Bethesda Metro Station, which was a horrible choice given the constant disruption on the Red Line and the inordinate amount of snow we received that year.
Even so, the pace of work never really relented as we came in day in and day out, seven days a week, grinding out the hard work of building a company. We would hold daily 10 a.m. standups to catch up on what we were working on and kept a small inflatable bed in the corner room as we took turns napping throughout the day. One of our engineers even stayed in the office an entire week, taking the occasional shower at a local gym.
To this day, I am so incredibly grateful to the team that joined us at this stage (we must have looked like scrubs). To place trust in a group of 21-year olds that operated out of a makeshift office speaks volumes about the belief they had in the company and its future potential.
Eventually, we began to put in place the crucial building blocks of a now growing company. We iterated on product development processes experimenting with agile methodologies; we iterated on our sales process as we watched our sales cycles dive down and CAC ratio increase; we iterated on our hiring process to make sure we were effectively growing the team in a thoughtful manner. The most important thing though (even more important than the processes) was the family we were building with each individual we brought on to the team.
Rapid Growth and Expansion
It’s hard to pin down exactly when we figured out we were onto something big. Success in hindsight always looks inevitable, particularly to the outside world. We ended up closing our first customer December of 2013 (which we still have framed to this day) and were off to the races ever since. But the work it took to get there — to refine the product and all of its bugs, to get the pricing and messaging down right — was the result of many heated conversations and late night debates.
Throughout 2014 we continued to grow rapidly, both in terms of customer count as well as our team. It became more and more apparent as we grew that we were onto something. We were featured in Bloomberg, the Washington Post, CNN (as one of the top 10 startups of 2014), The Economist, CSPAN, and Meet the Press. We partnered with the Democratic and Republican Governor’s Associations to power their policy operations for governors across the country.
That of course isn’t to say that everyone we met was a strong supporter. It seemed as though every day I was pitching the company multiple times to candidates, investors, advisors, bankers, customers, etc. and we’d get pushed down just as many times as I was pitching it. Wishes for failure, doubts about our age and experience, and flat out rejections by our naysayers were fairly commonplace. But we powered through.
As our team and profile grew, so did our ambitions and vision for the company. We began to think about how we could eventually become the dominant player in the legal software space (a $10 Billion market dominated by LexisNexis, Bloomberg, and Thomson Reuters). We ran out of real estate as our team outgrew our Bethesda office, and promptly took over Facebook’s old office in downtown DC (unfortunately as part of the growing pains we had to get rid of our Pokemon-themed rooms). Throughout this time, I remained laser-focused on building a strong company culture and team that valued constant individual growth, collaboration, transparency, and a family-like environment (which to this day remains my top job).
Financing Drama
Eventually, it came time for us to accelerate our pace and late Spring of 2014 I began the process of raising our Series A. Little did we know that this would be the hardest test of our young company’s history.
Aiming for a $7 million Series A, we lined up several investors and ran a process. There was strong interest as we went into the summer and ended up choosing between multiple term sheets. Splitting my time between Silicon Valley, NYC, and Washington, DC, we eventually signed a term sheet with a fund to which I’ll refer as “XYZ Partners.” We were on our way!
However, as we began the process of due diligence, we realized our visions of the future did not fit. We looked for three things while raising capital: 1. A strong operational background 2. An interest in our space and 3. A long term capital partner that would stick with us through thick and thin. XYZ Partners did not meet our criteria.
As hard as it was, with only six weeks of payroll left in the bank, we parted ways from the financial marriage. That afternoon, I gathered the entire company in the kitchen and stated that despite the deal falling through, we were still confident that we would close out a round. I, for one, would not give up and insisted that we could power through this hardship together as a family–that when we got out on the other side, we would be stronger and more determined than ever.
Astonishingly, each member of the FiscalNote team volunteered to either cut or forgo their salary until the round was closed. Focused on our goal, everyone worked harder than we ever had–many staying late into the night, contributing to document preparation, and acquiring customers. When it seemed like the entire world was against us, our team stood shoulder to shoulder and took it on. It took two more months, but we closed the $7 million Series A for which we had hoped. The sacrifice and trust shown by the team had gotten us here, and for that I will always be grateful.
A short two months later, we closed our Series B — adding an additional $10 million. The days in which we struggled to make ends meet already seem like a lifetime ago.
Epilogue
Today, FiscalNote’s customers around the world use our software to search, track, and analyze legislative and regulatory changes in their industry. From Uber, Allergan, and JP Morgan, to Planned Parenthood and the NAACP, our platform powers real-time decision making in the legal space and is disrupting a sleepy industry from the inside out. Our data driven analytics around legislation and policy-makers help organizations fundamentally change the way they interact with government. And what we’ve discovered as a team over this year is that our mission of unlocking government data and making it useful using beautiful design and cutting-edge technology is not only compelling but also needed in the marketplace.
This year, as I turn 23 and we grow the team to over 100 team members, the most important lesson I have learned over our company’s history continues to be that our team and our culture is the fundamental engine of a high growth startup. We are a team that includes a former Marine Corps captain, PhD computer scientists, theoretical physicists, one of the creators of the iPhone parallax effect, original members of the Obama data science team, diplomats, NASA and Google engineers, and jugglers. We are a team that succeeds together and fails together.
It’s crazy to imagine that only a year and a half ago, we were still debating whether or not we should pursue this path. But it’s important to note that all of the success that we have seen as a company is the result of this small group of intelligent, talented, and relentless personalities that continue to drive the business forward. That always has been and will continue to be our secret sauce. The work we are doing here is not easy — nothing meaningful ever is — in fact, the difficulty of the job has only increased over time. But we are all fortunate to be a part of an incredible team that is driving towards a meaningful and valuable future and it is the lesson I continue to take with me to work every day.
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Tim currently serves as the Founder and CEO of FiscalNote, a real-time legal analytics platform. He can be contacted at tim@fiscalnote.com or @timthwang.
