When I was asked to write about the startup ecosystem in the US and the DMV area (that’s DC, Maryland, Virginia), a few things immediately came to mind (a quick preface that my experience is biased more towards the Maryland side given that’s where I’ve spent most of my time):
1. Storytelling is hard for everyone, but remains the most powerful communication tool.
2. The DMV ecosystem has tons of resources for startups which can be overwhelming to navigate, but we have a highly collaborative culture and people solving that challenge.
3. The DMV is great at starting new companies (pre-seed/seed), but growing and retaining them is difficult. Multiple major opportunities lie in tackling this – including (1) increased exposure to investors outside the DMV looking for high quality startups with lower valuations than other metros, and (2) untapped potential in new Angels in the DMV as one of top 5 wealthiest metro areas in the country.
Storytelling: As cliché as it sounds, one major commonality across all geographies is that founders tend to have a hard time succinctly describing their value proposition. This is because founders tend to be experts at what they do. And most experts are so good at it that they often struggle to communicate to non-experts. A common advice from investors is “Explain it to me like I’m your grandma.”
A great pitch is no longer the main recipe for getting checks, but it’s still a key ingredient for many unless you have strong personal networks with investors. Founders can improve clarity and confidence simultaneously by honing their narrative. As humans, storytelling is the most fundamental form of communication, so make your pitch tell a story. No matter the format, whether in an email, a coffee shop, a phone call, a conference room, on stage, or at an event, here are some key tips for a great pitch:
· What 1 to 3 things do you want them to remember?
· Who are you talking to? What do they care about? Do you know your investor’s thesis and what they can/can’t invest in?
· Why now? Why you? What’s strategically advantageous about how you’re operating?
· What is the context? Is this a casual chat? An email or a meeting? Your first meeting or your third?
· Cohesiveness and consistency. Your pitch doesn’t have to be perfect, but it shouldn’t be confusing. Your visuals should reinforce rather than distract.
The region is known for a wealth of startup resources from government-backed programs to accelerators to industry associations to meetups to investments, grants, and financial incentives. It’s hard to know what you don’t know is out there, so there are public agencies like the state agencies (MD Dept of Commerce; VA Secretary of Commerce; DC DMPED and DSLBD), state-led VC funds (MD TEDCO, VA VIPC), Small Business Development Centers (SBDC), and local economic development corporations (too long to list) who have teams of people to help entrepreneurs navigate.
There are no wrong doors, and often, opening one door quickly becomes an avalanche of open doors. Whether you talk to someone at a public agency, or pretty much anyone in the startup ecosystem, people are willing to help in some way. It’s been said we’re a melting pot of immigrants, natives, and industries as well as some of that Southern hospitality.
There are even tools built to facilitate ecosystem mapping and searching, available to everyone, like the Bmore Tech Connect (BTC) platform from Greater Baltimore Committee. BTC also offers Resource Navigators, local startup mentors to help tech entrepreneurs navigate the plethora of resources in the Baltimore region.
In my experience, there’s a lot of activity happening at the pre-seed and seed stages in the DMV. Tons of events, pitch competitions, accelerators, incubators, showcases, and programs for startups at these stages across industries. What I have seen and heard from other ecosystem leaders in our region is that we are really great at creating new startups, but we struggle at growing them and therefore keeping them here.
Some of the insights include a lack of industry-specific, structured, hands-on programs that help them get past initial beta testing or early sales from organic growth to scalable, repeatable growth. For example, what a Class III hardware med device startup needs is very different from what a Class I software med device startup needs at the same seed stage but they can sometimes get grouped together into a “med tech” accelerator. They both have unique needs with respect to clinical trials, FDA regulatory pathway, and advisory skill sets. I’m sure I’m ruffling a few feathers but I would love for someone to tell me I’m wrong. I’ll happily correct this blog post.
With fundraising always on every startup founder’s mind, I do believe that there is a critical opportunity to address the gap we have in growing startups and keeping them at home. This is two-fold.
1) What I’ve seen and heard is that DMV VCs’ risk profile is relatively more conservative than those in major markets like Silicon Valley. For what we’re calling the same stage of startup (let’s say Seed), DMV VCs are investing in more mature companies, and at lower valuations. Most VCs already know this. And in general across all VCs, we’re seeing that investors are more risk averse and want to see traction (see this interesting take from a local VC).
Increasing exposure for the DMV’s growth stage startups to investors looking for high quality deals at lower valuations would be a win-win for investors and startups.
2) The DMV has lots of untapped potential with Angels in our region, as one of the top 5 major US metro areas for total millionaires. Millionaires here are defined as households with more than $1M in investable assets – which qualifies them to be accredited investors who can invest in these startup rounds. The DMV area is ranked top 10 highest per capita concentration of millionaires in the nation - Maryland alone ranks 2nd. Combined this is over 522,000 households as of 2019 (source). The icing on top? DC is a top 10 centi-millionaire hotspot in the US (that’s $100M or more liquid net worth – “ultra high net worth”) – an important wealth band due to the large percentage of entrepreneurs(source).
Angels are an important source of early investment for startups that are solving big problems in the world, and more and more people are learning how to become an Angel. One example is locally-based Citrine Angels which teaches female investors and invests in female founders.
I invite you to share your thoughts and challenge mine. Do you agree or disagree? What other opportunities are there for filling gaps in our startup ecosystem? Who is doing this work already? I’d love to meet them and amplify their work.
Are you interested in investing in DMV startups and want to get plugged in to the ecosystem? Send me a message or email me at isabel@be-aurelius.com.
I’ve worked in the DMV tech ecosystem for a few years as an ecosystem builder and startup mentor, having previously served as Growth Director of Venture Development at TEDCO, the state of Maryland’s VC arm and economic development corporation for tech startups. Before that, I worked in San Diego, California – as a business leader and ecosystem builder in life sciences, tech, and impact. I started my career in the lab as a commercial researcher in nanotech.
Now, I’m a Co-Founder of Aurelius, a boutique communications advisory and strategy firm. We empower entrepreneurs to unlock their full potential through training, classes, and coaching. Our focus is on pitching, core brand messaging, fundamentals of investment readiness, and network expansion. If you are an entrepreneur or your organization supports them, I’d love to help.
