LinkedIn co-founder Reid Hoffman (pictured) is just one of the major names behind the funding for the effort. | Steve Jennings/Getty Images for TechCrunch Democrats fund start-ups to leapfrog RNC technology

They want to be like the Koch brothers and the Mercers for campaign tech, but much cheaper, faster and smarter — and for Democrats.

Higher Ground Labs, the incubator fund that last year put $2.5 million behind 12 startup companies specifically focused on pumping up Democratic campaigns, says its beta test worked, so it will unveil its second round of financing on Tuesday for 11 new companies. Each is getting $100,000 of seed capital, with the rest of the money on reserve for programming and follow-up funding for successes.


The fund, which takes 6 percent to 8 percent equity in each company, says profits will be reinvested in future expansion.

“People who have given money before are craving a different way to participate and a different way to invest in the Democratic Party,” said Betsy Hoover, a Higher Ground Labs co-founder and the digital organizing director for former President Barack Obama’s 2012 reelection campaign.

The list of investors includes Reid Hoffman, co-founder of LinkedIn; SoulCycle founders Alan and Elizabeth Cutler; and big Silicon Valley investors Tamim Mourad, Ron Conway and Scott Mason.

Of the new groups, one provides software to automate the process for fundraising calls. Another streamlines online polling for faster, more accurate online polls. Still another connects people to activism through analyzing their social media interests, while a fourth uses that public information to tailor ads and other voter appeals.

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The idea was simple when it started to come together last year: While groups like Indivisible and Swing Left emerged to channel the explosion of Democratic activity after President Donald Trump’s election, Higher Ground Labs would tackle the widespread recognition that Republicans in 2016 had smoked the Democrats in an area that for a decade had been their main electoral advantage.

All of it comes as the Democratic National Committee has been racing to rebuild its own tech operation, left atrophied after years of mismanagement.

“Where innovation is at its healthiest, there are a bunch of really smart people trying a bunch of cutting-edge things. The party is not equipped to provide that space, either in resources or in speed and agility of strategy,” Hoover said. “What the party is equipped to do is take the things that are working well and quickly scale that.”

Perhaps more important than the seed money have been the network and connections provided by Higher Ground Labs. Its board is stocked with prominent alumni of the Obama campaign, offering a seal of approval to startups looking to attract clients and new investors.

They’re looking to win races, but they’re also looking to turn a profit.

“It’s not just that we’re investing in these companies, but able to provide them with the kinds of contacts and relationships and expertise that also helps them grow,” said Ron Klain, the former Al Gore, Joe Biden and Hillary Clinton adviser who serves as Higher Ground Labs board chairman.

Several of the companies originally financed and nurtured by the small fund were cited as providing crucial help in last year’s races in Virginia. Eight companies in the initial round of financing were active in the state’s elections, and they claim to have been involved in reaching out to voters 3 million times.

One of those, MobilizeAmerica, provides an online platform to help connect campaigns with interested volunteers, to work both locally and remotely. For 11 Virginia House of Delegates candidates last year, the company says it connected about 6,000 “shifts” of time — each shift consisting of two or three hours of knocking on doors or making phone calls. For Conor Lamb’s special election win in Pennsylvania last month, they tracked 4,000 shifts, including 1,300 on the Friday before the election, which he went on to win by a very tight 670 votes.

The startup’s overhead is low, and so is the cost: Depending on campaign size, the charge is between several hundred and several thousand dollars per month.

“By virtue of connecting directly to the online community that wants to help candidates, we can win races. We can figure out how to mobilize the movement into an electoral force,” said Mobilize America co-founder and CEO Alfred Johnson.

Johnson said that for 2018, the company is expecting to work with at least 10 to 20 coordinated campaigns, as well as some of the newer grass-roots groups and Democratic campaign committees out of Washington. None of it would be possible, he said, without the initial help from Higher Ground Labs and the continued advice Mobilize America is getting. Some of the incubator fund’s investors have since turned around and invested in the company directly.

The rest of the companies in the first round have similar stories, like one that taps social networks to help people make more personal voting appeals in campaigns and another that has built an updated database of every candidate running for every office around the country to create custom voter guides.

The goal is to add 10 to 15 companies each year, with about the same amount of investment in each to retain the boutique, hands-on approach to the accelerator. But the goal is also to keep making profitable companies.

“HGL has become category-defining institutional capital for innovation in the progressive movement,” said Shomik Dutta, the fund’s other co-founder and a former Obama fundraiser.

Once Higher Ground Labs invests, it brings in the companies three days a month for training around understanding the world of contemporary political technology, then building products and marketing within it. Companies will head to Washington June 11-14 for a series of pitch meetings hosted by the DNC that all the major party committees will attend, and then to San Francisco July 16-19 for a demonstration day with investors.

The DNC is happy to have the help, and the competition. It desperately needs it.

“If we had infinite funds and infinite resources, it would be great to build this all in-house. We have none of those,” said Raffi Krikorian, an alum of Twitter and Uber who was hired as the DNC’s chief technology officer last year to start getting the party headquarters back up to speed. “Let people do some of the R&D work with a different set of funds.”