Steve Graubart is the CFO of 1776, a global incubator and venture fund focusing on identifying, investing, and supporting startups. Previously having acted as CFO for companies undergoing major growth and transformation, he has worked in the U.S. and internationally with companies ranging from startups to complex organizations across varied sectors, including education, financial, and business services.
Previously, Steve was Managing Director of Finance of UDC, serving as the financial leader of the University during a period of major transformation. He was also Partner and Managing Director of Calvert Ventures, a pioneer in the area of Impact Investing. Steve was also a Senior Manager at Ernst & Young and has served as a consultant to organizations such as the World Bank, numerous U.S. and foreign government agencies, and many local DC technology companies.
Graubart is a holder of the Chartered Financial Analyst award and a graduate of the Fletcher School of Law and Diplomacy and SUNY Stony Brook, where he achieved a BA in economics. He serves on the Board of Directors of Goodweave, a nonprofit addressing child labor in South Asia.
DarcMatter: Please provide a high level overview of your investment process.
Steve: 1776 is a global incubator and venture fund focusing on identifying, investing and supporting startups in regulated industries including education, healthcare, energy, transportation, and smart cities. 1776 Seed Investors, LP is a venture fund works integrally with 1776 Global Inc., an incubator and start up platform headquartered in Washington DC with currently over 240 startups members. 1776 Seed Investors gains early access to promising startups through its relationship with 1776 Global. Additionally, the fund has expanded globally by working with the Challenge Cup, a 1776 run global startup competition with over 480 startups participating in 20 cities around the world.
1776 Seed Investors is uniquely positioned to invest at our targeted size due to our relationship with 1776 Global and through our broad industry connections. We have intimate access to hundreds of late stage seed companies and the experience find the ones that offer the highest potential to scale exponentially.
Our investment approach is to make seed investments averaging around $100,000 into later seed stage startups (generally with revenue and clear evidence of traction). Then, using proprietary performance data, the management team will decide whether to follow on with an investment of up to $2 million to successful companies. We look at a number of factors when making an investment:
- The product solves a problem for a particular target customer;
- The company is a capital efficient business: operational for less than $1 million;
- There is a compelling event that is changing industry dynamics;
- The company has a strong distribution plan within its regulated industry;
- There is a clear revenue model: transactions, subscriptions, and affiliates;
- The product is in a market with measurable usage and revenue;
- The team is small but cross-functional with domain expertise.
DarcMatter: What differentiates 1776 from other VC funds and accelerators?
Steve: 1776 focuses on key regulated industries including education, healthcare, energy, transportation, and cities. Through our programs such as the Challenge Cup, Startup Federation, and the 1776 Global incubator in DC, we are able to identify the most promising startups early, connect them with the insiders that can help them win, and put them in front of corporations that actively acquire in these industries. We have 40 corporate partners that are seeking to interact and support startups. We connect our companies with an extensive mentor network, and with classes on how to improve their operations.
We currently have over 250 companies working out of our incubator in DC. In addition, we have developed the Startup Federation, a network of incubators around the world.
DarcMatter: How does 1776 get involved in the companies it invests in?
Steve: We have a variety of tools that we use to add value to our portfolio companies through our relationship with 1776 Global. For example, we
- Introduce our portfolio companies to our strategic corporate partners (e.g., Pearson, Medstar, Dell, Microsoft, Phillips, etc )
- Connect them with potential customers both in the private sector and within federal, state and local government;
- Help with strategy and coaching for CEOs and founders directly or through our extensive mentor network; and,
- Work with the company to develop public affairs or media strategies directly or through our strategic partnerships, such as with Precision Strategies.
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