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The greater Washington business community is suffering from the story it is telling about itself, that it is in an old-fashioned government town, dependent on federal contracts, and lacking innovation and fresh ideas.

The reality is very different. Over the past six months, I worked with a multidisciplinary team of data scientists, economists and entrepreneurs to critically and objectively describe the state of technology entrepreneurship here for the 2030 Group, a civic and business organization working to plot a new path forward for the region’s economy.

Our findings suggest much more possibility. Since 2004, this area has created more new businesses than have parts of the United States commonly considered entrepreneurial hotbeds. Over the past 20 years, our region has had the largest number of companies on the Inc. 5000 list of the fastest-growing businesses.

This is a place where entrepreneurs, employees and investors are generously rewarded for growing successful businesses. Over the past 20 years, 6,000 businesses have been sold in the region, including 105 deals with sales prices exceeding $1 billion. Business sales create significant wealth in our region for subsequent investment.

This good news is mitigated by the reality that…

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On Thursday, the D.C.-based 2030 Group—a coalition of influential, local business leaders exploring the potential for growth in the D.C.-area—released a detailed, 53-page report about how the D.C.-area can evolve into a strong economic hub for innovative businesses. While progress has been made, the report describes that there is a significant amount of work left to secure the area’s status as a top destination for business, commerce and innovation.

Headed up by Amplifier Ventures’ Jonathan Aberman, the report makes some interesting and important points about how far the D.C. tech scene has come and also what needs to be done so that it succeeds in the future. Alongside this narrative is a methodical series of recommendations poised by the group, which may be applicable to both business owners and policy makers in the region.

In order to construct this report, more than 120 individuals from the local entrepreneurial community were interviewed.

Read the whole article at DCInno.

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For the past six months, I have been working with a multi-disciplinary team to use research and data to paint an accurate picture of innovation in our region.

It turns out that the months of digging and analysis have proven at least three things: the Greater Washington Region is way more entrepreneurial than we think it is, there is a unique, wildly successful “DC Model of Entrepreneurship” and … we are at risk of losing out if we don’t make swift changes to how we capitalize on what the region has to offer.

Please read the findings here.

I am looking forward to hearing from the Greater Washington Community on ways to use the newly-compiled data to secure a strong innovative entrepreneurial community that will attract and keep high-paying jobs.

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Greater Washington builds great startups – we just can’t keep them here.

Over the past 20 years, 105 D.C. area startups were sold for more than $1 billion, but only 16 of those deals kept the businesses in the region, according to a new report examining innovation in the D.C. area. And out of 6,000 business sales over the last 20 years, about 75 percent were to out-of-region purchasers.

Recent examples include the $1.65 billion purchase of Cvent Inc. by San Fransisco-based private equity firm Vista Equity Partners and the $532 million purchase of Opower Inc. by California-based Oracle Corp.

And when these companies are bought, it’s common for the acquirers to shift those workforces to other cities. More importantly, the executives and leaders who are able to start new companies often go with them, leading to the loss of top talent for the region.

So can the region create the entrepreneurial, innovative businesses it needs to spur growth? The short answer is yes, but the longer answer requires the business community to get involved by prioritizing local acquisitions, forming a new innovation entity and focusing on cutting-edge research to stay ahead of…

Read entire news article at WashingtonBusinessJournal.com.

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As I take part in panel discussions on the investor’s perspective on startup financing and growth, it strikes me how formulaic these events tend to be. A group of investors provides insight to a room full of rapt entrepreneur attendees. Sometimes the entrepreneurs get to ask questions, and sometimes they don’t.

The power dynamic is fascinating: We the investors share our knowledge and the audience is there to listen, and, if they are able, to pitch investors on the panel for a brief moment. But, only if we let them.

Investors are in the driver’s seat, and that is the accepted norm. The person with the gold makes the rules, indeed. Yet I see this very same dynamic when entrepreneurs are the experts; they are on panels because they are “successful.” Success generally being defined as someone who has grown a large business and sold it — often for a very high, life-changing amount and using investor capital. Again, those with the most money are respected.

It makes me wonder. How have we ended up with an entrepreneurial ecosystem where the center of the discussions are gatekeepers with the money?

My own experience in the venture industry might…

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The Robert H. Smith School of Business at the University of Maryland is recognized as one of the top research institutions in the world, but it is also a place where students can learn from some of the best teachers in a highly supportive community.

At the end of each academic year, the school honors its outstanding faculty and staff members with awards of excellence. The awards were presented at the School Assembly on May 6, 2016.

Assembly-06May16-40“It’s a pleasure to work in an environment where there is so much talent and positive energy,” said Alex Triantis, dean of the Smith School.

“I’d like to extend my heartfelt congratulations and thanks to all of the faculty and staff members at Smith who received awards this year for teaching and service excellence.”

Read details at the Robert H. Smith School of Business website.

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According to a recent Harvard University poll, 51 percent of millennials in America don’t support capitalism. The respondents didn’t have a specified alternative such as socialism, communism or otherwise. They just didn’t like capitalism. This struck me as highly revealing.

For years, our nation defined itself by what it was not. We emerged into the world as a counterbalance to monarchy and aristocracy with our democracy. We defined ourselves by our political lives. Over time, democracy became the dominant organizing rule book for much of the world. Democracy won.

Competition between nations became a struggle of capitalism – largely supported by democratic institutions. And the struggle was against collectivism – whether it was fascism, communism or socialism.

Since the collapse of the Soviet Union and China’s move toward a more capitalistic approach to economics, the world has not provided a competing economic ideology to capitalism. Capitalism won.

Even socialist approaches to organizing economies generally have capitalist aspects to them — especially if they wish to engage in foreign trade and share economic prosperity. The ideological belief that capitalism was the best type of economy became …

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A local “overnight success” (17 years in the making!) is being acquired for $1.65 billion by a leading private equity investor and its story is chock full of lessons for business in this region.

The best time to sell a business is when you are not looking to sell, and that was definitely the case for Cvent. The price per share offered in this deal — a 69 percent premium on the trading price immediately prior to the deal announcement — demonstrates just how much the buyer wanted Cvent. First lesson for entrepreneurs to remember: The best time to sell a business is not when you say it is, but when the market says it is.

Cvent is also a story of individual entrepreneurial success. The company was born during the Internet wave of the late 90s and managed to survive the subsequent downturn in the venture capital markets and engage in a long-term strategic growth plan. This is a lesson in the power of sticking to a plan and grinding it out as an entrepreneur.

Chief executive Reggie Aggarwal is a terrific example of how the entrepreneurial characteristics of commitment, optimism and failing upward combined to help him lead his business to this point. Aggarwal was resourceful, irrepressible and willing to be accountable — and he still talks candidly today about devastating failures that…

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Vista Equity Partners is betting big on Cvent Inc. — and the California private equity firm looks to be in it for the long term as it takes the event management software company private.

One thing is for sure: Vista is paying a high price for the Tysons company, according to Michael Faulkender, an associate finance professor at the University of Maryland. The nearly 70 percent premium is about twice as much as the 30 to 40 percent premium on share price he would expect in a deal like this.

That means the private equity group sees a financial upside much higher than the $36 per share it offered. It also means that existing shareholders were not eager to sell, which is why the offer is so much higher than the $21 per share the company had been trading at for the last several weeks.

Vista and Cvent can only realize that gain by taking the company private, freeing the company from the short-term interests and share prices that can prevent long-term investment.

“The private equity investors are not idiots,” Faulkender said. “The only way this is rational for them is that they think by taking it private and getting it focused they can get some big long-term gains.”

The purchase was the end result of an unsolicited offer for Cvent that triggered a bidding war, CEO Reggie Aggarwal told me. He said the company reviewed the multiple offers and picked the best one for shareholders that would allow the company to continue investing in the future. The ultimate purchase price of $1.65 billion is more than eight times revenue, putting it near the top for technology companies.

“They paid such a high premium it was difficult to say no,” Aggarwal said.

While he declined to say what the strategy would be when the company goes private — since the deal must still be approved by the shareholders — he said Cvent has made it clear it wants to grow organically and through acquisitions whenever possible and that Vista Equity Partners has “deep pockets” for additional purchases.

“We are going to be growing and acquiring companies and there is no reason to think that will change,” Aggarwal said.

When newly private, Cvent will be able to ditch the quarterly earnings reports that make it more difficult to balance the short-term gains many stock traders want with the long-term gains that private investors desires.

Jonathan Aberman, the managing director of Amplifier Ventures, a seed and early-stage venture capital fund based in McLean, said strategic pivots can be difficult — if not impossible — when a company has to appease shareholders.

“When you are a public company you pretty much have to manage yourself quarter to quarter,” Aberman said. “There aren’t a lot of long-term investors in the markets anymore.”

Read entire news story at WashingtonBusinessJournal.

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There’s a general consensus that in the future, our region’s jobs will largely mirror today’s. However, my work with tech innovation has convinced me that the future is going to be very different from what we imagine.

Education and infrastructure needs will be challenged in significant new ways and even entrepreneurs will have their worlds rocked.

Advances in robotics and software are already eliminating human jobs. Banks are phasing out tellers in favor of kiosks that use intelligent software. In Europe, a convoy of autonomous trucks recently completed a cross-European trip without human intervention. Amy Ingram is all the rage; she is an artificial intelligence-enabled app who organizes meetings for a growing number of small businesses.

Meanwhile, entrepreneurs are developing business models that center around using DNA to build new life forms, or as a medium for data storage to replace magnetic hard disks. Elon Musk, Jeff Bezos and Richard Branson compete to create new businesses to transport tourists to space, while Boeing and Lockheed Martin develop tourist habitats for spacefarers. Facebook and others will unleash virtual reality later this year and, closer to home, Inova in Fairfax is making strides in cancer treatment on a personal genetic level.

All of these technology trends, and many others, are well under way and have taken root. Quite arguably, our society will…

Read entire column at WashingtonPost.com.

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