A Cold E-mail to Mark Cuban Helped Turn FiscalNote Into One of DC’s Hottest Startups

Six years ago, Tim Hwang was a 21-year-old college student working out of a Sunnyvale, California, Motel 6 on a new way to collect and analyze government records. Today, this boyish executive has $230 million in investment capital, a sixth-floor office overlooking the Trump hotel, and a business with a staff of more than 500 people. “I’ve gotten to the point where I can barely recognize the names of all of our employees,” Hwang says, “which is a really strange feeling because we used to quite literally be three guys and a laptop.”

Hwang’s company, now called FiscalNote, is helping pioneer a new industry that brings Big Data technology to bear on an old-fashioned Washington business: government advocacy. His software lets anyone track all kinds of legislation, bypassing the complicated government systems that have traditionally provided that kind of information.

Other startups, such as Quorum and GovPredict, have also built digital tools that can give insight to lobbyists and help activists better steer their efforts. But after last year’s $180-million acquisition of CQ Roll Call, Hwang has become the highest-profile player in an emerging field that’s creating new ways to help Beltway insiders predict which bills are worth advocates’ time.

It all began in Potomac. The son of Korean immigrants, Hwang was a preposterously overachieving teenager who founded a nonprofit for homeless children at age 14 and took 22 Advanced Placement classes in high school. He became active in politics, serving as a field organizer for Obama’s 2008 campaign and launching the National Youth Association, a 750,000-member organization that advocated for policies that the group says benefit millennials. The disjointed manner in which government records were maintained—scattered across state legislatures, federal agencies, and municipal offices—made it impossible to keep up with new laws and regulations affecting the issues he cared about. “So I was thinking, if the government can’t even monitor what the government is doing,” Hwang recalls, “how does everybody else monitor what the government is doing?”

Along with a buddy from Wootton High back in Rockville, he came up with an idea for a digital platform that assembled all of these legislative records in one place. In 2013, they put together some PowerPoint slides about it, entered the concept in a University of Maryland startup competition, and took home second prize. Afterward, the judges told Hwang they loved the idea; while the other entries were narrowly focused consumer apps, his tackled a large-scale problem. The only reason Hwang’s team didn’t win first prize, the judges told him later, was because they didn’t have a working prototype. During the summer after his junior year at Princeton, he and a few high-school pals headed to Silicon Valley. Working out of a $70-a-night room, they scraped data from government websites—it was all there, just waiting—and cold-called trade associations, lobbying shops, and law firms to try to drum up business.

One evening after watching an episode of ABC’s Shark Tank, Hwang had a thought: “We should just e-mail Mark Cuban.” To his surprise, the Dallas Mavericks owner replied enthusiastically and, within a month, had written FiscalNote a $740,000 check. Other investors—eventually including Jerry Yang, Steve Case, and the Winklevoss twins—followed, and Hwang decided to move back to Washington in order to be closer to his clients.

Today, more than 4,000 organizations—Fortune 500 companies, nonprofits, federal agencies—use FiscalNote, whose legislative database now tracks 2,800 municipalities, 2,500 state agencies, and 500 federal bodies. What’s in it for clients? FiscalNote can, for example, alert ride-sharing companies when a city-council member introduces a bill that would outlaw their services.

Beyond laws and regulations, there’s also the business of figuring out what to take seriously. The company uses artificial intelligence to analyze the key words and arguments contained in the hundreds of thousands of letters and e-mails that get filed during the federal rule-making process, allowing FiscalNote to determine whether or not these public comments, in aggregate, support or oppose a proposed regulation. By crunching historical data on party control and lawmaker performance, it can even assess the likelihood that a particular piece of legislation will become law.

That predictive feature, says FiscalNote vice president of research Vlad Eidelman, helps lobbyists and other advocates make better use of their time. “Do you need to go to this committee hearing, fly out to California or New York?” Eidelman says. “Or is [the bill] sponsored by a freshman legislator who is positioning himself as someone who cares about this issue but it’s not really going to go anywhere?”

That’s the theory, at any rate. Can FiscalNote’s technology really do all of this? “It’s not going to magically solve all of your government-relations issues,” says Sue Zoldak, a public-affairs strategist and adjunct faculty member at George Washington University’s Graduate School of Political Management. “But it can be quite useful if everyone on your team is using it correctly.”

Last summer, FiscalNote expanded the scope of its offerings by acquiring the DC political-media company CQ Roll Call. This more traditional newsgathering operation, says publisher Josh Resnik, provides FiscalNote’s customers with the stories behind the legislative data they see on the platform.

Hwang hopes to take FiscalNote public within the next few years. Until then, CQ Roll Call is expanding its coverage to include new federal agencies and subject areas such as financial technology. FiscalNote’s platforms will also collect legislative data from additional cities and municipalities in the US as well as other markets abroad. “My goal within the next couple of years is to have FiscalNote basically digitize every law and every regulation in every country on the planet,” Hwang says. “And if you want to look up any law that governs humanity, you can do it on one single search bar.”

This article by Luke Mullins appears in the October 2019 issue of Washingtonian.