The Rise of the Government-Savvy VC

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The past 24 months have seen a substantial pullback in VC dollars deployed. In particular, anything that touches real estate has fallen dramatically out of favor, with proptech investment dropping by more than 60% from its peak in early 2022.

But a new kind of venture investor is gaining mindshare just as the sector as a whole has pulled back: the government-savvy firm that touts its ability to help its portfolio companies navigate the halls of federal, state, or local power. These firms have particular appeal to companies working in the brick-and-mortar world—including novel real estate concepts—where working with the government is inevitable.

Today’s letter will explore the rise of these new venture firms, including:

• The market trends and thesis behind this new kind of venture firm;
• Interviews with several government-savvy VCs each with unique approaches to the public sector: Nate Loewentheil of Commonweal Ventures, Laura Fox of Streetlife Ventures, and Drew Oetting of 8VC;
• Implications for real estate operators and entrepreneurs;
• Potential impacts on policy and innovation.