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The Fund Founder Spotlight Interview: Alex White of Subcity
The Fund is a founder community and early stage fund, by founders for founders.
Welcome to The Founder Spotlight where we highlight the incredible people behind the companies we’ve backed at The Fund. This week the spotlight is on Alex White, co-founder and CEO of Subcity, a startup helping manufacturers discover, claim and collect federal, state and local economic incentives and tax credits.
What is a subsidy? It’s a benefit given to an individual, business or institution in the form of cash or tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.
Subsidies have been around since the founding of the United States and they are designed to help promote prosocial behavior and spur economic development. Each year, even pre-Covid, the US government sets aside over $100B to help businesses. Most of this money either goes unclaimed, or goes to large corporations that can afford to have teams of tax attorneys and consultants. Small and medium-sized businesses often struggle or don’t even know what’s available to them. In order to help these businesses with this cumbersome task, co-founder and CEO Alex White, along with co-founders Gil Gonzales and Chris Clark have created Subcity. The founding team brings their collective knowledge of SaaS, government, and data to develop a software platform that combines human expertise with algorithmic automation. It’s a double play on words: subsidy and sub-city. Underneath the city, there are programs and infrastructure designed to support the buildings, equipment, people, and jobs - the very things that have always made cities engines of upward mobility for humanity.
Alex is a second time founder. His first company, Next Big Sound, was acquired by Pandora in 2015. After spending a decade in the digital music industry, he reflected on his next venture and wanted to create a company focused on cities and the physical world. After connecting with his co-founders, he got excited about the opportunity to democratize access to the billions of dollars in incentive programs. These incentives are designed to help small business owners buy equipment, hire employees, and invest in their communities, but are complicated and are distributed across hundreds of different forms and websites.
Tell us about Subcity.
Subcity is a software program - the first ever to date - with a database of incentives that we personalize for every individual business owner, and then actually apply on their behalf. We think about the product in terms of three pillars:
Discovering which incentives you are qualified for and worth your time
Claiming them and filing the application
Collecting the money, the tax credit, or the reduction
What's Subcity’s “North Star”?
Our purpose is to help small businesses succeed and ensure that our cities continue to be engines of opportunity for humanity.
Are there competitors in this space, and if so what sets Subcity apart?
The biggest competition is that people don't know these programs exist on a municipal website - or there are broken links or PDFs that they don't know about. The second biggest competitor is tax firms that charge huge upfront fees or are really prohibitively expensive, unless you're one of the big, big, big companies. And then there are several companies tackling this that see the opportunity focused on different sectors like startups or agriculture. We think it's a big enough space that there can be multiple venture scale winners in this area.
Tell us about a recent milestone Subcity crushed.
We’re really excited to share that last week one of our manufacturing clients was awarded a $10M tax credit from the state of California! This represents one of the top 25 largest tax-credits to ever be awarded in the state’s history. We’re looking forward to helping companies receive similar tax credits.
Do you have a favorite book that’s impacted your founder journey?
The Second Mountain by David Brooks was fantastic for me, as I thought about this next chapter after spending years in digital music. The first mountain is all about personal accomplishments, where you went to school, test scores, Forbes 30 Under 30 lists and other kinds of external accolades. The second mountain is one you climb for your own intrinsic reasons. That really resonated with me. The entrepreneurs I love being around are those who clearly are climbing their second mountain, where you can feel their intentionality and purpose.
What drives you into startup battle day after day?
I was fortunate enough to be able to take time off after spending my time at Pandora. After a few months I realized I never want to retire, I just want to work on hard problems with smart people. I love working with people who constantly want to better themselves. I really love pushing people past where they thought they could go and understanding where they want to be professionally in 10 years and how do we shrink that down to two years or one year or six months. In startup land I think there’s a lot of “if we only get into this program or get this financing round done then it will be smooth sailing and we’ll be able to figure it out." But you know, life exists on the side of the mountain, not on the rock-covered peak, and it's all about learning to enjoy the climb. I'm allowing myself to enjoy the climb a lot more this time around.
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