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Look Ma, No Chads! VoteHere Nets $10M

While this year’s election mess has wreaked havoc on the public stock market, at least one Internet-based start-up can cite dimpled chads for its recent popularity.

Online voting solutions provider VoteHere.net Inc. recently netted $10 million in a third round of venture funding from new investors Northwest Venture Associates, Compaq Computer Corp. and Cisco Systems. While future private equity forays are not currently being considered, such plans may soon change given growing public demand for increased electoral accuracy.

“Our plans may change as a result with what happened in Florida,” said Victor Woodward, vice president of marketing and business development for VoteHere.net. “We may want to go out for more money, to take advantage of what’s happened.”

At first glance, the financing coincided nicely with the extended publicity and timeline the presidential election has taken on. However, Tom Simpson, managing partner of Northwest Venture, said details for the round were already hammered out before the November 7 brouhaha commenced.

“One month before the election we started putting this together,” Simpson explained. “Of course, we’ve had all sort of investment inquiries since then.”

There is also the possibility of an eventual public offering, although Woodward said that such a route has not yet been a source of any serious talks.

Founding Funders

The Bellevue, Wash.-based company was formed in 1996 and raised $5 million over two rounds of angel financing, prior to the Series C deal. Monies from that new round will be used to complete the certification process each state requires for election equipment vendors, as well as for sales, marketing and logistics.

“It was a challenge, because the environment had changed against anything Internet-related. But we’re not a company with a business plan based on a new concept,” Woodward said. “Elections are a very straightforward business.”

While some privacy concerns lingered, Woodward stated the most challenging part of securing funding was overcoming VC wariness of government bodies – which just happen to also be VoteHere.net’s target audience. Much of that unease was overcome by the fact that Compaq did over $1 billion worth of business within the government sector last year.

Getting Down To Business

Along with the investment round, VoteHere.net recently staged pilot voting programs in two states. Voters in San Diego and Sacramento Counties in California, and in Arizona’s Maricopa County, were able to participate in non-binding e-elections.

According to VoteHere.net’s exit poll in Arizona, 100% of all the respondent found the online system easy or very easy to use, eight out of 10 would prefer to vote online and 85% believe VoteHere.net.net’s system is secure. This pilot program was deployed in association with the California and Arizona secretaries of state.

“Unlike dotcom investments, this company had been around for a while. I knew at some point in time, online voting would come to fruition, but I thought it would take a long time before people really started voting this way,” Simpson said.

He added that he had originally anticipated that five to seven years would elapse before the technology would be embraced. However, in light of the unexpected presidential election snafu, all bets are now off.

“States from all over are calling. They want us to talk to their legislators and advisors about online voting,” Woodward revealed.

Ironically, VoteHere.net had already been in the midst of discussions with Florida, although Woodward stressed that online voting would not have been ready in time for Nov. 7.

A few additional VoteHere.net pilot programs are planned for early next year, as states test out the best way to deploy the technology within their own borders. But at least one east coast state has signed on to perform a binding election late next year.

“That’s a huge deal for us,” said Woodward.

For now, online voting will be concentrated in public places, such as polling stations and election offices. Malls and libraries are under consideration as well.

With all of the dissention concerning over-seas military ballots, that group of voters will likely become the first mobilized for remote balloting. VoteHere.net is concerned with deploying the technology in small, controlled steps, rather than an overwhelming full-scale national rollout.

“The harshest critics have been people who don’t want voting access increased,” noted Woodward, describing the possibility of people in pajamas using PCs in their bedrooms to vote for the President one day. “Right now, they only want the most motivated of all the voters to count. They worry about making voting that easy.”