The Civic Vertical

Towards a New American Dynamism
May 17, 2021
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Startups are a political protest. A small faction of people, disgruntled but determined, leave the relative comfort of an ideology or way of life to build something different. Often, they are radicals—headaches for the defenders of the status quo. They are laughed at, scoffed at, or ridiculed by incumbents. And like the original founders of our brash but singular American experiment, they are serious in their determination to build something better.

At some point in Silicon Valley’s relatively brief history, we stopped calling these radicals entrepreneurs and moved to the more American label of founders. Perhaps it was a stylistic choice to underscore the foundational changes new technology brings to a country and the world. Or maybe it was the recognition that in our technology age what many founders build is not just new businesses, but something greater—new ideologies, new systems, and new ways of working and living for millions of people everywhere.

Silicon Valley has long been very good at building culture. It’s also very good at building businesses that make enterprises more efficient. It’s why so many venture firms have both consumer and enterprise technology practices—we’re good at funding companies that fit these frameworks. But we haven’t acknowledged a third and equally important strength: Silicon Valley is very good at government.

As our political system declines in efficacy and trust, venture capital is producing civic technology companies that have scaled to unfathomable heights. They operate in spaces such as aerospace, education, and public safety; sectors that used to be the siloed territory of policy makers and small contractors. But as the pace of technology accelerates, so too has innovation in these sectors—and private tech companies have become instrumental to solving civic problems that government oversees. In fact, Silicon Valley—the idea, not the place—is quietly becoming a shadow capital of Washington, augmenting and replacing many of the civic functions that government used to provide.

Since the turn of the century, we have watched startups usurp the responsibilities of governments at breathtaking pace: Uber and Lyft are supplementing much of public transport in major cities. Palantir has become one of the biggest complements to the U.S. intelligence community. Elon Musk has done more to combat climate change than most developed countries. In the last ten years, the declining cost of a rocket launch has led to a renaissance in venture-backed aerospace companies, opening up a new frontier for governments around the globe. As geopolitical fortunes change around the world, advanced manufacturing has become even more important to maintaining national and economic security.

There are reasons why we believe it’s often easier to fix civic problems through startups rather than policy. For one, many of these companies require large capital investments, and venture capitalists are better at taking on risks than the American taxpayer. Venture capital has proven itself a robust enough asset class to support this broad innovation in perpetuity. Second, the U.S. government has a growing talent problem dating back to the late eighties, when the National Commission on Public Service Chair Paul Volcker called the decline in public service “a quiet crisis.” A country without a vibrant public service culture cannot thrive. But with talented young people flocking to technology companies or choosing to build their own, the tech industry can work together with government to create new civic companies. Fortunately, we’re finding that more and more founders are interested in building companies that genuinely solve civic missions for their communities.

We often don’t think of companies like Anduril Industries*, SpaceX, Guild Education* or Tesla as civic companies assisting government in its essential work. But the true innovation of these groundbreaking companies is that they’ve aligned business incentives with noble civic pursuits—missions with massive markets in need of smart solutions. They’ve scaled to fix problems that our gridlocked system overlooks or ignores. And more and more civic-minded founders are flocking to startups to build movements that fix problems in mere years, not decades.

At GC, we’ve already committed to tackling one of the most costly and pressing civic problems in America: access to affordable healthcare. The extensive work we’ve done around our Health Assurance thesis is focused on moving from a system of sick care to a resilient, proactive system designed to help people stay well, and make quality care more affordable and more accessible to all. . But throughout our twenty-year history, our team has been quietly funding civic companies that don’t fit the traditional venture box, requiring us to think about their businesses and needs in different ways. Today, we’re excited to announce Civic Technology as a newly formed sector for GC, with a focus on five core areas of investment that are growing rapidly.

Aerospace, Defense and National Security: Companies that sell directly to the U.S. government such as Anduril, Relativity Space, Vannevar Labs and BBN Technologies acquired by Raytheon].

Public Safety: Companies that improve policing and public safety across our cities such as Mark43 and Evolv.

Higher education, elementary education, and reskilling Americans: Companies that democratize and improve access to every level of education such as Guild Education, Multiverse and Class Dojo.

Transportation and Logistics: Companies that improve transportation and logistics such as Samsara and Applied Intuition.

Advanced manufacturing, rural development, and physical infrastructure: Companies that improve and build technologically advanced infrastructure such as Cover and Bowery Farming.

The anti-tech narrative in Washington is overlooking the great civic change happening in America driven by technological advancement. Technologists are building companies that will impact the American civic fabric in truly positive ways, and we have the chance to reimagine civic solutions—with companies based across America, not just Silicon Valley—as private industry and government work in tandem. We’re excited to commit to investing in civic technology companies that support this new American dynamism and the spirit of the American experiment: to challenge the status quo and imagine a better future that only the boldest and most tenacious founders can create.