The tiny size of New Media Ventures’ San Francisco office—there’s just enough space for a handful of people—belies its big ambitions. As the first national network of angel investors sinking time and money into organizations working on progressive change, NMV has made bets on promising companies and nonprofits like Upworthy, NationalField, and Turbovote. NMV’s theory: New media and technology can shake up the world of progressive politics and citizen engagement.
NMV’s roots lie in the Democracy Alliance, another initiative that funds progressive organizations (see this Washington Post piece for a history on the alliance). NMV, however, is more focused on early-stage, new media and tech-focused innovation—think the next MoveOn.org or Huffington Post. "For philanthropists that wanted to invest in technology, the mechanism might look different than Democracy Alliance Funding," says Christie George, director of New Media Ventures.
In 2010, George was hired as NMV’s first employee. She quickly began recruiting investors from within the Democracy Alliance and elsewhere—"everything from entrepreneurs drinking the tech Kool-Aid to philanthropists interested in impact investors to investors interested in being more political with their money," she says. Today, NMV has a network of 60 investors around the country that have made investments in 10 organizations, including the ones listed above.
George admits that the space NMV works in is still new and relatively unformed (she says that most startups are still in the idea stage), but it has been pushed along by the interest in technology used during the 2012 presidential election. Obama’s tech team in particular garnered attention for its effective operation. "For us it’s a great thing because it means people are really thinking about what it means to have top-tier technologists working for progressive change," says George.
NMV sees itself as having a role in growing the political impact investing space. As George explains, "It’s so new that part of our work is in talking about the tensions that exist between for-profit capital and progressive political impact. We’re giving examples of what political impact investing looks like."
For its first 10 investments, NMV sorted through over 300 applications. The successful ones had solid revenue models and a technological bent. "The team is very important. … Having a team that can adapt, be self-aware, and responsive to what the market is telling them. There were a whole bunch of [applications] that were clearly not sustainable, that don’t have real business models, with people who took nonprofit ideas and pasted them onto a business model," explains Mike Mathieu, an investor and founding board member of New Media Ventures as well as the founder of FrontSeat.
NMV referred many of its rejected applicants to other investors who might be more appropriate—in line with the network’s goal to build up the space even outside of its own investments.
One of the challenges for politically-minded organizations is to ensure that they can sustain themselves even in campaign off years. At least one of NMV’s portfolio startups, NationalField, spun out of a national political campaign (Obama '08). A tool for internal communications, NationalField now works with a number of other organizations—including the Hub—as an alternative to enterprise social networks like Yammer.
Not all of NMV’s investments spun out of political campaigns. Upworthy, a web platform designed to spread meaningful content, has origins in the progressive new media space—co-founder Eli Pariser is the former executive director of MoveOn.org—but that’s about it. "I had never done anything like this before. [Cofounder Peter Koechley] had worked at the Onion, and I’ve worked at MoveOn, but a for-profit, mission-driven company was just a new project for us," says Pariser.
These days, Upworthy is enjoying lots of attention. It racked up a $4 million funding round last fall, and as a Fast Company profile recently pointed out, it’s growing faster than Huffington Post or BuzzFeed did during comparable periods. NMV started working with Upworthy early in the process, before the site existed as it does today. "Some of what has been really helpful from NMV is basic business planning tools and ideas," says Pariser. "It’s a great combination of real resources and guidance on how to get started, how this all works, and a very nurturing place for folks like us who have some fairly basic questions."
In 2013, NMV plans to make at least a dozen investments; a dedicated nonprofit fund will also make small grants. George and Mathieu believe that the political impact investing space will only continue to grow. Says Mathieu: "After you’ve dusted off your Nate Silver profiles, the next thing we’re going to start seeing is that there’s this whole cluster of companies and nonprofits using technology models to influence how politics work."