Written by Shomik Dutta and Teddy Gold.

Higher Ground Labs is now three and a half years into our mission.

Since inception, HGL has made 61 investments totaling $14.5 million into 37 for-profit political-technology startups. We have vetted close to 500 ideas, led two Series A transactions, celebrated eight acquisitions, and mourned four losses. We have braided talented founders and cutting-edge technology with age-old organizing principles. In doing so, we successfully upgraded the political ecosystem while stumbling in a few places along the way. What follows is a two-part open and honest accounting of the financial lessons we learned and our path forward. Let’s start with the humble-brags:

Startups are an essential vehicle for innovation in politics.

In just three years, our portfolio has dramatically reimagined technology in Democratic politics: a seamless volunteer experience through Mobilize; precise and affordable online polling through Change Research; predictive analytics into every campaign of every size through Deck; voting data and vote by mail tools through BallotReady; digital content testing through Swayable; online focus groups through Avalanche; relational organizing through Outvote; online voter registration and rapid ballot curing through CampaignOS, multichannel advocacy work on legislation through NewMode.

The structure of our for-profit companies permits data-flow between coordinated and independent electoral firewalls, does not saddle organizations with high recurring compliance costs, passes capital losses to investors, and helps align founders with positive economic outcomes.

Our startups have collectively served over 10,000 campaigns and causes and have saved the political ecosystem approximately $95 million by providing cheaper, faster, scaled solutions in lieu of slower, more expensive services.

Political tech is a sustainable market — not just “donations in another name.”

This industry may not guarantee endlessly recurring revenue, but politics does guarantee re-occuring revenue from a guaranteed set of buyers with growing technology needs. The buyers may churn at the end of a campaign, but the next cycle’s buyers replace them like clockwork.

Thanks to this phenomena, eight of our portfolio companies are now profitable, cash-flowing businesses and six of our companies will generate more revenue this year than their initial valuation caps. Across eight acquisitions, our funds have realized 1.6x MOIC. Most of those funds have been re-invested into our next fund, thanks to the generous election of our investors. Instead of shoveling donations into the inferno of campaign spending, we have successfully provided a flywheel for investors to realize impact, and return.