Washington Business Journal by Daniel J. Sernovitz
Tim Hwang and FiscalNote, the firm he co-founded in 2013 to help companies track important government legislation, is on the move again.
Less than 18 months after moving to One Thomas Circle, the 4-year-old tech company signed a lease earlier this week for 1201 Pennsylvania Ave. NW. With about 120 employees, FiscalNote will be growing its footprint from just under 21,000 square feet to about 36,000 square feet under a long-term lease with an affiliate of Sentinel Real Estate Corp. FiscalNote has retained OTJ Architects to help plan its new space.
It's not atypical for young companies to move offices frequently as they outgrow their current spaces and plan for the future, and the next move was on Hwang's mind even as he settled into his new space at One Thomas Circle. But with its next move, planned for April 2018, Hwang said FiscalNote will establish 1201 Pennsylvania Ave. as its global headquarters and settle in for a while. The company also has offices in New York and Seoul, South Korea.
"What we were thinking for this particular office was that we were going to sign a 10-year lease and we were going to stay here for an extended period of time," Hwang said in an interview. "We wanted to find a place that made sense for us."
FiscalNote, founded in Silicon Valley, has created a platform to gather data on bills and other legislative actions from the local level on up to the federal government. As the WBJ's Andy Medici noted in a July 22 profile, the knowledge is designed to enable the company's growing customer base to develop better, and more financially successful, government relations plans. The company raised raised $28 million in venture capital in its first three years and reached revenue in the mid-seven digits in 2015, with a goal of topping $20 million in 2016.
It's precisely the kind of company the District has sought to attract and retain, particularly as its largest office users, law firms and government agencies, have been shrinking. The District has agreed to provide $750,000 that FiscalNote can use as its security deposit at 1201 Pennsylvania Ave. NW. The District backed the company's move to help foster its growth and ensure it remains in D.C., said Andrew Trueblood, chief of staff for the Office of the Deputy Mayor for Planning and Economic Development.
"We have lots of small startups, and this is one of those that we're really excited about," Trueblood said. "We're excited that they've survived and they're surviving. We see them as important to D.C. and are really thriving."
The company retained real estate services firm JLL to explore its options, which could have included shifting some of its local workforce to New York instead of growing locally. But Hwang said D.C., being the nation's capital, is an important part of what FiscalNote does and picking up an address on Pennsylvania Avenue further cements its presence in Washington.
"We're not just a random tech company that's coming into Washington. Our mission, our reason for existing, is so tied to Washington that we almost feel an obligation to give back and be a part of the community," he told me.
As a fast growing company, he said, it was important to be able to tap into a large pool of potential employees. The District, recently named one of the nation's top tech towns by Cushman & Wakefield, also has a high concentration of tech workers but at less of an operating cost than, say, Boston or Los Angeles. The company has roughly doubled in size since it moved to One Thomas Circle, and aims to grow another 25 percent to 30 percent in the coming months.
Trueblood noted the upfront cost of a security deposit can often be a challenge that keeps a company from committing to a long-term lease. Especially when they're young and growing, the companies need all the capital they get to grow more.
The grant falls under the District's Qualified High Technology Companies program, which was also used to retain and grow The Advisory Board Co. and Blackboard Inc. FiscalNote will not have to repay the grant as long as it meets certain obligations over the next decade, including internships, apprenticeships and other programs to help create the next generation of tech experts, Trueblood said.
The grant was structured with the aid of Chris Ahn of Echelon Economic Development LLC, an adviser who provides attraction and retention corporate assistance to DMPED. Ahn was also involved in crafting the Advisory Board and Blackboard deals. While the District has been fortunate enough to be home to a growing number of tech startups, he said, it risks losing those companies to neighboring jurisdictions once they grow past a certain point. Picking up the cost of their security deposits removes one obstacle that might drive them to Northern Virginia or suburban Maryland.
"This is actually the point where a city can realize a large impact from its investment in the tech ecosystem," Ahn said, "so support for these local companies needs to continue to the latter stages of growth to ensure their impact stays in the city."