But Goldstein doesn’t work for the startup, and his job is not coding. He’s an investor — and he wants to take a run at a new kind of venture capitalism to explore the burgeoning government technology market.
For Ekistic Ventures, which launched Sept. 22, that means tinkering with the cogs that drive the companies in which they invest. It means focusing intense time and resources into a small group of seed-level and series A startups. It means carefully choosing those businesses with the input of people such as Goldstein, who is the former chief data officer for the city of Chicago; Michael Nutter, former two-term mayor of Philadelphia; and David Spielfogel, who has served as senior adviser to Chicago Mayor Rahm Emanuel.
And from time to time, it might also mean starting a new company in-house.
“It’s not just about deploying capital,” Goldstein said. “Yes, it should be a good financial investment, but is it a good match for our skill sets where we would provide direct value?”
The Chicago-based firm is bringing a $15 million fund to the table, which Goldstein said comes from family offices and high-net worth individuals. Its leaders want to invest in four companies and start one new business each year.
If Ekistic were to spread the investments evenly, that would be $3 million per company. By comparison, Silicon Valley’s infamous Y Combinator invests a standard $120,000 each in an average of nearly 100 companies per year.
The company — whose team also includes Tim O’Reilly, founder of O’Reilly Alpha Tech Ventures and O’Reilly Media; Anne Milgram, former attorney general of New Jersey; and Michael Sacks, chief executive officer of asset management firm GCM/Grosvenor — won’t be focused exclusively on investments that serve government. Rather, the idea is to solve urban problems. And that will inevitably touch government.
Goldstein declined to name any of the startups Ekistic is investing in, for the time being. But the fund’s leaders will be looking at areas such as big data, analytics, transportation, public safety and wellness.
Big data and analytics are particularly interesting to Goldstein, who sees something of a void in the market when it comes to government-serving data tools.
“I am very, very interested in — how do we find ways to leverage the plethora of data that is out there and make it operational and useful?” he said.
As someone who has both worked for government and with government — he has served as a Code for America board member since 2014 — Goldstein said he’s noticed a need for flexibility when it comes to serving government. When government hires large, established companies to craft solutions, he said, they often take approaches that have worked in other contexts.
However, he believes that different types of government agencies have unique needs and quirks that demand a certain level of customization.
“When [Spielfogel and I] were inside government, we realized that we saw problem after problem that, candidly, we weren’t in the right position to help fix at that point,” he said. “But now when we came together in our post-government life, we feel that we can pull back and, instead of the traditional approach to a problem, we can do a smaller, more agile approach.”
And if Ekistic sees a need that current market solutions don’t seem to be filling, that’s when the team might turn to partners in research institutions and academia to help build a company from the foundation up.
“We have the patience to create something new,” Goldstein said. “What’s important to me is that we solve real problems, we innovate and we provide the same sort of caliber of solutions that we see in other sectors.”
