A court has granted a bid by Microsoft to seize and take control of malicious web domains used in a large-scale cyberattack targeting victims in 62 countries with spoofed emails in an effort to defraud unsuspecting businesses.
The technology giant announced the takedown of the business email compromise operation in a Tuesday blog post.
Tom Burt, Microsoft’s consumer security chief, said the attackers tried to gain access to victims’ email inboxes, contacts and other sensitive files in order to send emails to businesses that look like they came from a trusted source. The end goal of the attack is to steal information or redirect wire transfers.
Last year, the FBI said businesses lost more than $1.7 billion as a result of business email compromise attacks.
Microsoft said it first detected and scuppered the operation in December, but that the attackers returned, using the COVID-19 pandemic as a fresh lure to open malicious emails. In one week alone, the attackers sent malicious emails to millions of users, Microsoft said.
Last month, the company secretly sought legal action by asking a federal court to allow it to take control and “sinkhole” the attacker’s domains, effectively shutting down the operation. The court granted Microsoft’s request shortly after but under seal, preventing the attackers from learning of the imminent shutdown of their operation.
Details of the case were unsealed Monday after Microsoft secured control of the domains.
It shows a growing trend of using the U.S. courts system to shut down cyberattacks when time is of the essence, without having to involve the federal authorities, a process that’s frequently cumbersome, bureaucratic, and seldom quick.
“This unique civil case against COVID-19-themed [business email compromise] attacks has allowed us to proactively disable key domains that are part of the criminals’ malicious infrastructure, which is a critical step in protecting our customers,” said Burt.
Microsoft declined to say who, or if it knew, who was behind the attack but a spokesperson confirmed it was not a nation state-backed operation.
The attack worked by tricking victims into turning over access to their email accounts. Court filings seen by TechCrunch describe how the attackers used “phishing emails are designed to look like they come from an employer or other trusted source,” while designed to look like they are legitimate emails from Microsoft.
The malicious web app that steals victims’ account access tokens. (Image: Microsoft)
Once clicked, the phishing email opens a legitimate Microsoft login page. But once the victim enters their username and password, the victim is redirected to a malicious web app that was built and controlled by the attackers. If the user is tricked into approving the web app access to their accounts, the web app siphons off and sends the victim’s account access tokens to the attackers. Account access tokens are designed to keep users logged in without having to re-enter their passwords, but if stolen and abused, can grant full access to a victim’s account.
Burt said the malicious operation allowed the attackers to trick victims into giving over access to their accounts “without explicitly” requiring the victim to turn over their username and password, “as they would in a more traditional phishing campaign.”
With access to those accounts, the attackers would have full control of the accounts to send spoofed messages designed to trick companies into turning over sensitive information or carry out fraud, a common tactic for financially-driven attackers.
By taking out the attackers’ domains used in the attack, Burt said the civil case against the attackers let the company “to proactively disable key domains that are part of the criminals’ malicious infrastructure.”
It’s not the first time Microsoft has asked a court to grant it ownership of malicious domains. In the past two years, Microsoft took control of domains belonging to hackers backed by both Russia and Iran.
Since the killing of George Floyd at the hands of four police officers heightened awareness about racial justice, the experiences of Black people in tech — and the industry’s lack of racial diversity — are getting new attention.
In the tech ecosystem at large, the industry is still predominantly white and male, and venture capital is no different. Just 3% of investment partners are Black, according to a 2018 survey from by the National Venture Capital Association and Deloitte. Meanwhile, more than 80% of VC firms don’t have a single Black investor and just 1% of venture-backed startups have a Black founder, according to BLCK VC.
“Venture capital certainly plays a role,” GV Principal Terri Burns told TechCrunch about the overall lack of diversity in tech. “VC is a tool that can enable businesses to scale greatly and quickly, and historically, this tool hasn’t been equally distributed. For example, VC has traditionally focused on founders from a small number of institutions and pedigrees that are not particularly diverse (in 2016 we learned from Richard Kerby, general partner at Equal Ventures, that 40% of VCs went to either Harvard or Stanford). With more equal distribution of funds across backgrounds, underrepresented people will have a greater chance at success.”
Burns shared the above and more as part of our survey of a handful of Black VCs in tech. Burns, and others, described what they’re looking for in their next investment, identified overlooked opportunities that are ripe for innovation and offered advice for founders navigating COVID-19 amid this racial justice uprising.
“Both COVID-19 and the racial justice uprising have had really profound impacts on our society and the tech ecosystem,” Precursor Ventures Managing Partner Charles Hudson told TechCrunch. “For me, the main takeaway from COVID-19 is that planning in an uncertain environment is extremely stressful for founders. Advice that made sense in March and April might not apply in May and June. We went from a world where it felt like we might shelter-in-place through the fall to an attempted reopening of the economy. I think the racial justice uprising is a different thing. It’s bigger than technology, it’s about our society coming to grips with some really important, structural issues.
“While I think everyone is really struggling with the impacts of COVID-19, I think employees and founders of color are being particularly impacted by the racial justice issue and it is weighing heavily on the minds and hearts of many who are trying to process what’s happening while also trying to be productive and engaged at work. I think it’s important to be aware of that and do what you can to support folks who are struggling under the weight of this.”
Below, we’ve gathered insights from:
Image Credits: Photo by Kimberly White/Getty Images for TechCrunch)
What are the industries you’re most interested in right now?
I am into things that promote sustainability, that are clever. I like the senior care industry, but also pushing that a little further into senior activity and thriving entrepreneurship, et cetera. And media. I think media has a really interesting, exciting opportunity right now because of the way representation is so important, has always been, but it’s even more now. I’m seeing more and more interesting and unique media options rather than the status quo.
What are you looking for in your next investment?
I’m looking for people who can break down barriers within their industries, who can offer something exciting, and new, and innovative to their end user, and someone who is daring, and risk-taking, and not afraid to go against the grain. That’s really the main thing I’m looking for.
What are some overlooked opportunities that are ripe for innovation?
Again, I think senior care is something a lot of people are thinking about, thankfully. At the same time, we don’t spend a lot of time thinking about what value seniors can bring to the ecosystem, to even tech. I think you have millions and millions of people who have a gained experience that no one else has, that’s their junior, and you have all this technology at their fingertips. I’ve noticed that a lot of seniors I know have some sort of… it’s intuitive, some of this tech, like voice. They’re used to having to track down their children, and so they’re used to yelling out in the middle of an empty room, to be honest. I think that’s part of where it comes from.
They don’t have the same vanities that a lot of younger people have, and so they’re willing to take more risk when it comes to trying something new. It’s not necessarily something they want to be dangerous about because they are, by and large, taking care of themselves and caring about damage to their bodies, but they’re not afraid to look silly or to sound silly when they’re trying out a new device. I think that’s something that we can really tap into, because a lot of these people who are 70, 75, 80 years old, there’s still 20 years purchasing power there, at the least, and it’s just important that we don’t discard them and forget about them.
Why is Uber so far ahead of Lyft, its domestic ride-hailing rival that is suffering from the same economic impacts? It appears that investors are heartened that Uber has closed its Postmates acquisition after both firms danced around each other for some time, leading to all sorts of leaks that wound up being not coming true.
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This explains why Uber investors are excited about Uber’s Postmates buy; what about the smaller company is making Uber shares so buoyant? Let’s take a walk through the numbers this morning.
If we reexamine Uber Eats’ recent growth, contrast it to Ubers Rides’ own growth, mix in Eats’ profitability improvements along with Postmates’ own financial results, we can start to see why public investors might be heartened by the deal.
Afterward, we’ll toss in a note about how Postmates may provide Uber some narrative ammunition heading into earnings. This exercise should be fun, and a good break from our recent IPO coverage. Let’s get into the numbers.
In case you are behind, Uber is buying Postmates for $2.65 billion in an all-cash deal. Uber estimated that it would issue around 84 million shares to pay for the transaction. At its share price as of the time of writing, the deal is worth $2.72 billion at Uber’s newer share price. For reference, that price tag is about 4.8% of Uber’s current-moment market cap.
To understand why Uber would spend nearly 5% of its worth to buy a smaller rival, let’s remind ourselves of the performance of the group that it will plug into, namely Uber Eats.
From Uber’s Q1 2020 financial reporting, the following chart will ground our exploration, showing how Eats has performed in recent quarters:
Via Uber’s financial reporting. Q1 2019 on the left, Q1 2020 on the right.
Meet Envision, a new startup accelerator. The group, built and run by a collection of students and recent graduates, just closed the application process for its first cohort of startups.
Its goal isn’t merely to find some companies and give them a boost, however. According to Annabel Strauss and Eliana Berger, two co-founders of Envision, it’s to shake up the diversity stats that we’ve all come to know.
“We started Envision because we believe in a future where womxn, Black, and Latinx founders receive more than 3% and 1% of venture funding, respectively,” they said in an email. “As a team of students, we wanted to take matters into our own hands to help founders succeed — it’s our mission to support entrepreneurs early in their journeys, and amplify voices that are often underestimated.”
According to its own data, Envision attracted 190 applications, far above its initial, stretch-goal of 100. From its nearly 200 submissions, the group intends to select 15 entrants. According to Strauss and Berger, their initial goal was to winnow it to just 10. But, the pair told TechCrunch in an interview, they doubled the starting cohort size based on the strength of applications.
Envision will provide an eight-week curriculum and around $10,000 in equity-free capital to companies taking part (the group is still closing on part of the capital it needs, but appears to be making quick progress based on numbers shared with TechCrunch).
Each of the eight weeks that Envision lasts will feature a theme, 1:1 mentorship, office hours with startup veterans and, at the end, a blitz of investor-focused mentorship, and an invite-only demo day. The core of the Envision accelerator rotates around the mentors and other helpers it has accreted since coming into existence in early June.
Envision, run by 11 college students and recent graduates, quickly picked up enough startup veterans to run its program (names like Ryan Hoover, Arlan Hamilton, Alexia Tsotsis), and seemingly ample corporate support. In an email this morning, Envision told TechCrunch that Soma Capital, Underscore VC, Breyer Capital, Grasshopper Bank and Lerer Hippeau have joined as sponsors. Indeed, looking at Envision’s partner page reads a bit like a who’s who of Silicon Valley and startup names that you know.
Talking to Envision I was slightly surprised how many students are involved in venture capital today. The Envision team is a good example of the trend. Strauss is involved with Rough Draft Ventures, for example, which is “powered” by General Catalyst. Quinn Litherland from the Envision team is also part of the Rough Draft crew. Contrary Capital, which TechCrunch covered this morning and focuses on student founders, is represented by Timi Dayo-Kayode, James Rogers, Eliana Berger, and Gefen Skolnick on the team. The list goes on, with Danielle Lomax, Angel Onuoha, and Kim Patel all involved, and active in the VC world.
For Strauss, Berger and the rest of the Envision team the pressure is now on to select intelligently from their 190 applications, and provide maximum boost to their first cohort. If the program goes well, and the demo day it has planned in two months proves useful to both startups and investors alike, I don’t see why Envision wouldn’t stage another class down the road. Though of course, it might want to follow in the footsteps of Y Combinator, TechStars and 500 Startups at that point and take an equity stake in the companies it works with.
Envision says in large letters at the top of its website that it is “helping diverse founders build their companies.” If the group succeeds in meeting that mark, it will be an implicit critique of the old-fashioned venture capital world that has historically not invested in diverse founders.
If a dozen college students and recent grads can spin up an accelerator in a few weeks, get nearly 200 applications, and select a diverse cohort to support, then what’s everyone else’s excuse.
The Trump administration’s decision to extend its ban on issuing work visas to the end of this year “would be a blow to very early-stage tech companies trying to get off the ground,” Silicon Valley immigration lawyer Sophie Alcorn told TechCrunch this week.
In 2019, the federal government issued more than 188,000 H-1B visas — thousands of workers who live in the San Francisco Bay Area and other startup hubs hold H-1B and H-2B visas or J and L visas, which are explicitly prohibited under the president’s ban. Normally, the government would process tens of thousands of visa applications and renewals in October at the start of its fiscal year, but the executive order all but guarantees new visas won’t be granted until 2021.
Four TechCrunch staffers analyzed the president’s move in an attempt to see what it portends for the tech industry, the U.S. economy and our national image:
America’s economic supremacy is increasingly precarious.
Outsourcing and offshoring led to a generational loss of manufacturing skills, management incompetence killed off many of the country’s leading businesses and the nation now competes directly with China and other countries in critical emerging industries like 5G, artificial intelligence and the other alphabet soup of technological acronyms.
We have one thing going for us that no other country can rival: our ability to attract top talent. No other country hosts more immigrants, nor does any other country capture the imagination of a greater portion of the world’s top minds. America — whether Silicon Valley, Wall Street, Hollywood, Harvard Square or anywhere in between — is where smart people congregate.
Or at least, it was.
The coronavirus was the first major blow, partially self-inflicted. Remote work pushed employers toward keeping workers where they are (both domestically and overseas) rather than centralizing them in a handful of corporate HQs. Meanwhile, students — the first step for many talented workers to enter the United States — are taking a pause, fearing renewed outbreaks of COVID-19 in America while much of the rest of the developed world reopens with few cases.
The second blow was entirely self-inflicted. Earlier this week, President Donald Trump announced that his administration would halt processing critical worker visas like the H-1B due to the current state of the American economy.
Welcome to The TechCrunch Exchange, a forthcoming weekly newsletter from the TC crew about startups, money, and markets. You can sign up for it here, and receive it regularly when it formally launches in a few weeks. You can email me about it here, or talk to me on Twitter. Let’s go!
In the last week there were 23 rounds worth $50 million in the world, according to Crunchbase data. The rounds were worth a total of $3.72 billion, with a median value of $80 million and an average size of $161.9 million. So in case you were under the impression that late-stage money was under threat, it’s not.
And it’s not hard to see why; with the public markets flirting with new record highs, late-stage startups are able to raise on the back of strong comps. High public valuations help late-stage startups defend their own prices as much as rising stocks can help direct venture investment to certain sectors at the earlier-stages of startup land.
It’s also a situation that can lead to a rash of IPOs, which we’re on the cusp of seeing. With Agora out this week to good effect, and Lemonade in the wings alongside Accolade, nCino, and GoHealth, things are heating up.
This week The Exchange and TechCrunch more broadly tried to take on the matter, asking questions about Lemonade’s impending public offering, trying our best to explore the S-1 filings of nCino and GoHealth (two IPOs not from California or New York), parsing Accolade’s proposed IPO valuation after it reignited its march to the public markets, and working to grok Agora’s pretty solid IPO pricing.
But there was still more going on. Over on Extra Crunch and TechCrunch this week, we also chewed over Lemonade’s first whack at IPO pricing (down from its prior valuation) and what’s good about it (better than we’d expected), and talked about the host of companies that we are excited about seeing go public over the next few quarters and years.
There are reasons to expect more of the same going forward in terms of IPO density. Looking into Q3 — now just days away — there are some VCs who anticipate a tide of software IPOs as many unicorns try to get public before the election, and while valuations are super hot.
Redpoint’s Jamin Ball is of this view:
Buy side is rolling out the red carpet for SaaS! Wouldn't shock me to see a flood of SaaS IPOs in Q3. Zoominfo was the first offering of the year and it only happened in June. Crazy to see a 6 month hiatus (https://t.co/Bg1I3WxgBa was last before ZI) Lots of pent up demand!
— Jamin Ball (@jaminball) June 26, 2020
You can think of today’s public markets as a do-over for unicorns that should have gone public last year, but put it off. Or in racing terms, it’s a free pit stop for cars that made an error. But if you don’t get out while the getting is this good, what the hell were you waiting for? That’s the multi-billion-dollar question.
Let’s catch up on the week’s biggest market news and how we feel about it. As always, we’ll lean toward the private markets but talk about public tech companies when they matter to the startup world.
Social companies took a hit late in the week after Snap, Facebook, and Twitter fell sharply was trading came to a close, after major advertisers like P&G, Unilever, and Verizon* decided that they might actually care what sort of content their ads are shown against. Bear in mind that this sort of ad-dollar yanking is not new; publishers have dealt with this sort of thing for ages. However, social tech companies haven’t taken as many hits from this as they might have over time. Welcome to reality, y’all. For startups? It’s not great for social startups that Facebook and Twitter are taking very public knocks. If they the startups wanted to raise new capital, that is.
SaaS startups — early and late-stage alike — should take heart that the recent spate of public SaaS earnings went pretty ok. There were some misfires, but it could have been worse. And with SaaS shares on the rise again, it’s a lovely time to be a SaaS company. Putting metrics on it, you can find over a dozen public SaaS companies that are worth more than 25x their next year’s sales. That’s insane.
Something we’re tracking is the pace of SaaS investing in 2020. So far, Crunchbase has 648 rounds for companies tagged as SaaS in 2020 through June 26, 2020. Looking at the same interval last year, it was 1,135. Dollars are down from $12.15 billion in the year-ago period, to $9.36 billion this year. Now, there is venture data lag there, but, all the same, it’s not precisely what we expected to see. Perhaps middle-tier SaaS startups are struggling?
The Zoox deal with Amazon shows how far private-market self-driving rounds valued startups ahead of reality. At one point self-driving engineers were the unobtanium of the labor market. Now, we wonder. Still, a $1 billion deal isn’t the end of the world for any company. For self-driving startups, it could mark the end of the good times in the sector, if we hadn’t already crossed the zenith and began a trudge towards its nadir.
Cybersecurity is still hot hot hot, as this week Salesforce poured capital into security startup Tanium. Tanium is now worth $9 billion. 2019 IPO CrowdStrike has been outperforming as a public company, making its sector look rosy at the same time. Some of that beneficence could be at play here.
Fintech is hard. Uber is backing out of its fintech push, it appears. Sure, every company is going to be a fintech company of sorts in time, but not, apparently, like this. Chime et al, rest easy, Uber’s downshift from its formerly frenetic fintech fight indicates that not every major company is going to be able to take a slice of this particular consumer pie.
And, finally, the excellent Kate Clark has notes on startup valuation trends: “The median valuation for Series C or later-stage financings increased to a new high of $120 million in the first half of this year, from $80 million for 2019, according to data provided to The Information by research firm PitchBook.” It’s still good times, we suppose.
There’s so much more to talk about in the worlds of startups, money and markets, but we have to stop here. This newsletter will come out every Friday once we get all the pipes linked up. So, go ahead and subscribe here (it’s 100% free) so that you miss precisely zero entries. Chat soon!
*Verizon owns Verizon Media Group, which owns TechCrunch, which, in turns, owns me.
Tim O’Reilly has a financial incentive to pooh-pooh the traditional VC model, wherein investors gamble on nascent startups in hopes of seeing many times their money back. Bryce Roberts, who is O’Reilly’s longtime investing partner at the early-stage venture firm O’Reilly AlphaTech Ventures (OATV), now actively steers the partnership away from these riskier investments and into companies around the country that are already generating revenue and don’t necessarily want to be blitzcaled.
Yet in an interview with O’Reilly last week, he nonetheless argued persuasively for why venture capital, in its current iteration, has begun to make less sense for more founders who genuinely want to build sustainable businesses. The way he sees it, the venture industry is no longer as focused on finding small companies that might one day change the world but more on creating financial instruments for the wealthy — and that shift has real consequences.
Below, we’re pulling out parts of that conversation that may be of interest to readers who are either debating raising venture capital, debating raising more venture capital, and even those who have been turned away from VCs and perhaps dodged a bullet in the process. At a minimum, O’Reilly — who bootstrapped his own company, O’Reilly Media, 42 years ago and says it now produces “a couple hundred million dollars in revenue” yearly — provides a lot of food for thought.
TechCrunch: A lot of companies celebrated Juneteenth this year, which is a big deal. There’s been a lot of talk about making the venture industry more inclusive. How far — or not — do you think we’ve come in the venture industry on this front?
Tim O’Reilly: The thing that I would say about VC and about really everything in tech is, this concept of structural racism [is really the problem]. People think that all it matters is, ‘Well, my values are good, my heart’s in the right place, I donate to charities,’ and we don’t actually fix the systems that cause the problems.
With VCs, the networks from which they’re drawing entrepreneurs are not that different [than they have been historically]. But more importantly, the goals of the VC model are not that different. The industry sets a goal, and it has a certain kind of financial shape, which is inherently exclusionary.
The typical VC model is looking for this high-growth company with exit potential, because it’s looking for this big financial return from an IPO or acquisition, and that selects for a certain type of founder. My partner Bryce decided two funds ago [to] look for companies that are kind of disparaged as lifestyle companies that are trying to build sustainable businesses with cash flow and profits. They’re the kind of small businesses, and small business entrepreneurs, that have banished from America, partly because of the VC myth, which is really about creating financial instruments for the wealthy.
He came up with a version of a SAFE note that allows the founders to buy out the VC at a predetermined amount if they ever become sufficiently profitable but also gives them the optionality, because periodically, some of them do end up becoming a rocket ship. But the founder is not on the treadmill of: you have to get out.
When you start saying, ‘Okay, we’re going to look for sustainable businesses,’ you look all over the country, and Bryce ended up [with a portfolio] that’s made up of more than 50% women founders and 30% people of color, and it has been an incredible investment strategy.
That’s not to say that people who are African-American or women can’t also lead companies that are part of the high-growth VC model that’s typical of Silicon Valley.
No, of course not. Of course, they could lead. The talent pool is just much greater [when you look outside of Silicon Valley]. There’s a certain kind of bro culture in Silicon Valley and if you don’t fit in, sure [you could find a way], but there are a lot of impediments. That’s what we mean by structural racism.
To your point about insular networks, a prominent Black VC, Charles Hudson, has noted that a lot of [traditional VCs] just don’t know have regular or professional associations with Black people, which hampers how they find companies. How has Bryce fostered some of these connections, because it does feel like traditional VCs are right now trying to figure out how to better do this.
It’s breaking the geographic isolationism of Silicon Valley. It’s breaking the business model isolationism of Silicon Valley that says: only things that fit this particular profile are worth investing in. Bryce didn’t go out there and say, ‘I want to go find people of color to invest in.’ What he said was, ‘I want to have a different kind of investment in different places in the United States.’ And when he did that, he naturally found entrepreneurs who reflect the diversity of America.
That’s what we have to really think about. It’s not: how do we get more Black and brown founders into this broken Silicon Valley model. It’s: how do we go figure out what the opportunities are helping them to grow businesses in their communities?
Are LPs interested in this kind of model? Does it have the kind of growth potential that they need to service their endowments?
It was a bit of a struggle when we did fund four, which was focused on [this newer model]. It was about a third of the size of fund three. But for fund five, the fundraising is [going] like gangbusters. Everybody wants in because the model has proven itself.
I don’t want to name names, but there are two companies [in the portfolio] that are kind of in similar businesses. One was in our third fund and was sort of a traditional Silicon Valley-style investment. And the other was an investment in Idaho of all places. The first company, which involved a more traditional seed round, we’ve ended up putting in $2.5 million for a 25% stake. The one in Idaho we put in 500,000 for a 25% stake, and the one in Idaho is now twice the size of the Silicon Valley one and growing much faster.
So from what you’re seeing, the returns are actually going to be better than with a traditional Silicon Valley venture [approach].
As I said, I’ve been really disillusioned with Silicon Valley investing for a long time. It reminds me of Wall Street going up to 2008. The idea was, ‘As long as someone wants to buy this [collateralized debt obligation], we’re good.’ Nobody is thinking about: is this a good product?
So many things that what VCs have created are really financial instruments like those CDOs. They aren’t really thinking about whether this is a company that could survive on revenue from its customers. Deals are designed entirely around an exit. As long as you can get some sucker to take them, [you’re good]. So many acquisitions fail, for example, but the VCs are happy because — guess what? — they got their exit.
But now, because funds are raised so quickly, VCs have to show much more traction, which is where things like blitzscaling come in.
Just the way you’re describing it. Can’t you hear what’s wrong with that? It’s for the benefit of the VCs, the VCs have to show, not the entrepreneurs have to show.
Aren’t the LPs addicted to that crack? Don’t they want to see that quick financial traction?
Yeah, but you know that VC returns have actually lagged public markets for four decades now. It’s a little bit like the lottery. The only sure winners are the VCs because the VCs who don’t return their fund get their management fees every year.
A huge amount of the VC capital doesn’t return. Everybody just sees the really big wins. And I know when they happen, it’s really wonderful. But I think [those rare wins] have gotten an outsize place, and they’ve displaced other kinds of investment. It’s part of the structural inequality in our society, where we’re building businesses that are optimized for their financial return rather than their return to society.
The new, Los Angeles-based online professional network for Black talent, Valence, has launched a new initiative called the Valence Funding Network to link Black entrepreneurs with top partners at firms including Accel, Sequoia, GGV, First Round Capital, Bessemer Ventures, Greylock, Upfront Ventures and Collab Capital.
“For years, Black entrepreneurs have been told that Silicon Valley is a meritocracy, but at the same time most haven’t had access to the top networks, the warm introductions, and the mentorship that underpin lasting success in tech. Valence is upending this completely by bringing the top VCs to compete for the best Black entrepreneurs,” said Valence co-founder, Kobie Fuller, who also works as a general partner at Upfront Ventures. “We want to even the playing field with the goal of exponentially growing the number of Black-owned startups that get funded.”
Founded in November 2019, Valence is a still-small professional network that provides opportunities for Black entrepreneurs and professionals to connect with peers and mentors. So far, the company has a user base of around 8,000 members, but is growing rapidly, according to Fuller.
That growth may be boosted by the new initiative with investors. Through the Valence Funding Network Black founders and would-be founders have the opportunity to receive direct pitch coaching and mentorship from general partners and partners at some of the nation’s top venture firms. In all, the 26 firms that have committed to working with the Funding Network represent more than $60 billion in assets under management.
Some of the participating firms and investors include:
As Valence noted in a press release, Black founders have been historically disenfranchised by the venture capital community. Only 1% of venture-funded startup founders are Black and the company believes that this underrepresentation contributes to America’s racial wealth gap, which sees roughly 13 percent of the United States population, holding less than 3 percent of the nation’s total wealth. It’s Valence’s mission to change this that statistic.
Along with its new venture capital initiative, the company has also named a new chief executive officer, Guy Primus, the former chief executive of the Virtual Reality Company, an LA-based VR production studio. Primus also serves on the board of trustees of Southern California Public Radio, where he leads the strategic planning committee and is past chairman of the advisory board at Georgia Tech’s top-ranked school of Industrial and systems engineering.
“Facilitating success in the innovation economy is key to Valence’s mission. By creating the Valence Funding Network, we are eliminating one of the most formidable structural obstacles to success—the access to venture investors.” said Guy Primus, Valence’s new CEO. “Our mission has come into focus even more clearly. This moment in America is an urgent one and I feel called to help bring the Valence mission to life. 2020 has showcased how important it is for Black professionals to have as many financial and professional resources as possible.
The coronavirus pandemic has bruised and battered many technology startups, but it has also boosted a small few. One such company is Zoom, which has shouldered the task of keeping us connected to one another in the midst of remote work and social distancing.
Yuan moved to Silicon Valley in 1997 after being rejected for a work visa nine times. He got a job at WebEx and, upon the company’s acquisition by Cisco, became VP of Engineering at the company. He pitched an idea for a mobile-friendly video conferencing system that was rejected by his higher-ups.
And thus, Zoom was born.
Zoom launched in 2011 and quickly became one of the biggest teleconferencing platforms in the world, competing with the likes of Google and Cisco. The company has investors like Emergence, Horizon Ventures and Sequoia, and ultimately filed to go public in 2019.
With some of the most reliable video conferencing software on the market, a tiered pricing structure that’s friendly to average users and massive enterprises alike, and a lively ecosystem of apps and bots on the Zoom App Marketplace, Zoom was well poised to be a public company. In fact, Zoom popped 81% in its first day of trading on the Nasdaq, garnering a valuation of $16 billion at the time.
But few could have prepared the company for the explosive growth it would see in 2020.
The coronavirus pandemic necessitated access to reliable and user-friendly video conferencing software for everyone, not just companies moving to remote work. People used Zoom for family dinners, cocktail hours with friends, first dates and religious gatherings.
In fact, Zoom reported 300 million daily active participants in April.
But that growth led to increased scrutiny of the business and the product. The company was beset by security issues and had to pause product innovation to focus its energy on resolving those issues.
We’ll talk to Yuan about the growing pains the company went through, his plans for Zoom’s future, the acceleration in changing user behavior and more.
It’ll be a conversation you won’t want to miss.
Disrupt 2020 runs from September 14 to September 18, and the show will be completely virtual. That means it’s easier than ever to attend and engage with the show. There are just a few Digital Pro Passes left at the $245 price — once they are gone, prices will increase. Discounts are available for current students and nonprofit/government employees. Or if you are a founder, you can exhibit at your virtual booth for $445 and be able to generate leads even before the event kicks off. Get your tickets today.
When we announced the formation of The TechCrunch List last week, we had no idea what response we would get to our proposal for founders to recommend their “first-check” investors. While plenty of founders over the years have told us that they wanted such a database to rely on or to refer to other founders who are raising for the first time, there is always something nerve-wracking about launching a new product and waiting for feedback.
Well, the TechCrunch community came through, since in just a few days, we’ve already received more than 500 proposals from founders recommending VCs who wrote their first checks and who have been particularly helpful in fundraising and getting a round closed.
If you haven’t submitted a recommendation, please help us using the form linked here.
The short survey takes five minutes, and could save founders dozens of hours armed with the right intel. Our editorial team is carefully processing these submissions to ensure their veracity and accuracy, and the more data points we have, the better the List can be for founders.
We’ve gotten quite a few questions about this new initiative, so we wanted to answer some common queries.
First check into each round: We want to know who wrote the first check that helped catalyze a round at each stage of a startup. So it’s okay to submit a name for each round.
Only one recommendation per early-stage round: We are holding the line on only allowing one name per round though. We realize that party rounds are not uncommon at the angel and seed stages, but a list of 30 people who all “led” a round is precisely what we are trying to avoid with the List. So keep the recommendations to one name, please, or if you can’t, it’s best not to recommend anyone at all.
Deadline: There is no single deadline. We intend to publish a first draft of the list in the next two-three weeks, so earlier submissions are more likely to be processed in time for the draft list. Our goal with The TechCrunch List is to make it an up-to-date and living product, and so we intend to update it regularly with new information as we learn it. So it’s a rolling deadline.
Founders only: While we certainly appreciate VCs offering to humbly submit their own names for consideration, we really want to hear from the founders themselves who did the fundraise. Feel free to reach out to your founders to submit — many firms have already done so if our early data is any indication.
People not firms: We are obsessed about moving beyond firm brand names and instead identifying individual partners on recommendations, since ultimately, founders work with a person and not a brand.
Weighting: We’ve been asked how we are “weighting” the submissions. The simple answer is that we are (mostly) not weighting them. In addition to fact-checking and verifying each submission, our main consideration is a basic assessment of a startup’s quality — what was the size of the round, has it raised any follow-on financing and any other public displays of performance. The TechCrunch List isn’t assessing investor quality (there are plenty of other lists in our industry for that), but rather assessing the willingness of an investor to write a “first check.”
Keep submitting those names, and reach out to us if you have any questions.
In light of the police killings of George Floyd, Breonna Taylor, Tony McDade and Rayshard Brooks, as well as the killing of Ahmaud Arbery, Juneteenth has quickly made its way onto the radar of tech companies.
On June 19, 1865, slaves in Galveston, Texas, became aware of their freedom. This was about two months after Confederate Gen. Robert E. Lee surrendered in Virginia and more than two-and-half years after President Abraham Lincoln’s Emancipation Proclamation.
In the last couple of weeks, many tech companies have announced plans to make Juneteenth an official holiday for employees or recognize the day in some other way. Jack Dorsey, CEO of Square and Twitter, was the first major tech CEO to announce that Juneteenth would be a paid holiday for employees. Since then, companies like Facebook, Google, Amazon, Uber and Lyft have announced their own respective plans to commemorate the day.
To embrace the meaning of #Juneteenth this year, we’re making it a paid day off. We encourage employees to spend it in a way that allows them to stand up against racism, whether that’s by learning, participating in a community action, or reflecting on how to make change. (1/3)
— dara khosrowshahi (@dkhos) June 17, 2020
Today, Lyft announced its plans to host a Juneteenth panel about the importance of Juneteenth and share a Juneteenth bike route map via Citi Bike. This is in addition to giving employees the day off.
“At Lyft, we recognize that we have more work to do beyond a single action, and celebrating Juneteeth is just one step in our journey,” the company wrote in a blog post. “We are committed to do our best in both material and public ways.”
Other plans by companies include encouraging employees to use the day as a time to learn about racial injustice or to officially commemorate the day on Google Calendar. It’s worth noting that Apple added Juneteenth to its iOS calendar back in 2018.
Recognition of such a historic day is good. But the way these companies are publicly announcing their plans, seeking press as they do, suggests their need for some affirmative pat on the back. It’s perfectly acceptable to do the right thing and not get credit for it. It shows humility. It shows that a company is more interested in doing right by its workers than it is in saving face.
Sure, had these companies not gone public with their respective Juneteenth plans, it’s possible other companies would not have followed suit. But beyond deciding to celebrate Juneteenth, making statements about standing with the Black community and donating money, companies need to ensure they take more than just actions to combat racism in tech.
Instead, as Hustle Crew founder Abadesi Osunsade has said, tech companies need to go beyond one-off actions and form habits around racial justice work. Forming habits around hiring Black people, promoting Black employees, paying Black employees fairly, funding Black founders and making room for Black people in leadership positions is what will lead to concrete change in this industry.
Meanwhile, in response to recent events of police violence, many tech companies have made paradoxical statements. Many of the statements of support are devoid of meaning when you consider how some companies fail to create diverse workforces, respond to hate speech on their platforms and/or continue to hold contracts with police departments.
Today, Facebook announced it would spend at least $100 million annually with Black-owned suppliers. Earlier this month, Reddit founder Alexis Ohanian stepped down from the company’s board of directors to make room for a Black person. Meanwhile, folks over at the Kapor Center for Social Impact are encouraging staff to use Juneteenth as a day of service in the Black community. These are all steps in the right direction — steps that can result in lasting change in the tech industry. Let’s see more of those.
“Yes, Juneteenth is just one day, and we have yet to see how the nation will respond to the injustices in the months and years to come,” Kapor Center Chief People Officer Matt Perry wrote in a blog post. “Here’s to hoping the actions that we take this Juneteenth can be a catalyst for sustainable change… and action.”
Full disclosure, TechCrunch recently decided to make Juneteenth a holiday and I’m here for it.
Over the past two decades, the venture capital industry has exploded beyond anyone’s wildest imaginations.
What began as a sleepy industry in Boston and Menlo Park has now expanded to dozens of cities the world over. The National Venture Capital Association estimates that VCs deployed more than $130 billion in 2018 and 2019, and thousands of new investors have joined the ranks in recent years to find the next great startups.
All that activity, though, poses a dilemma for founders: Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
There are lists that rank VCs by their exit returns. There are lists that rank young VCs by their potential. There are lists of VCs who claim investment interest in various sectors. There are lists that try to ferret out deal volume, impact and other quantitative metrics. There are internal lists at accelerators that share collective wisdom between founders.
Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
All those lists and rankings have an important function to serve, but for all the compilations of investors out there, we couldn’t find a single one that publicly answered a simple yet vital question: Who are the VC investors who are leaders in specific verticals who should be a founder’s first stop during a fundraise?
Today’s venture industry is made up of thousands of investors with varying specialties, and far too many passive investors that are willing to participate in rounds but don’t actively participate in deals unless other investors have committed. Many don’t actively push to get deals done or don’t actively lead the charge to build a syndicate of investors.
With all that in mind, we’re excited to launch a new initiative that we hope will help answer those questions and help founders find that first check — The TechCrunch List.
Over the next few weeks, we’re going to be collecting data around which individual investors are actually willing to write the proverbial “first check” into a startup’s fundraising round and help catalyze deals for founders — whether it be seed, Series A or otherwise (i.e. out of your Series A investors, the first person who was willing to write the check and get the ball rolling with other investors). Once we’ve collected, cleaned and analyzed the data, we’ll publish lists of the most recommended “first check” investors across different verticals, investment stages and geographies, so founders can see which investors are potentially the best fit for their company.
Founders are used to being specialized; after all, they have to live and breathe their startups every single day. So it can be jarring to start talking to generalist investors who know little about a category and ask shallow questions only to render a judgment with irrelevant advice. One of the greatest impetuses for us to put together The TechCrunch List is that like founders, we also struggle to cut through the noise around the interests of individual VCs.
We’d argue that’s close to impossible. There is more spend on technology than ever before in history. Verticals are getting more competitive — market maps that used to have 10 to 50 companies have expanded to hundreds. The only way to compete today is to specialize, and that has never been more true for VCs.
In all, The TechCrunch List will publish the most recommended “first check” writers across 22 different categories, ranging from D2C & e-commerce brands to space, and everything in between. Through some data analysis around total investments in each space, we believe our 22 categories should cover the entirety or majority of the venture activity today.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly. We will be collecting endorsements submitted by founders through the form linked here.
Through the form, founders will be asked to submit their name, their startup, the stage of company, the name of the one “first check” investor they want to endorse and a couple of minor logistical items. We are asking founders here for their on-the-record endorsement. We ask that you limit your recommendations to one (1) person per fundraise round.
While many investors may have helped you in your journey, we are specifically interested in the person who most helped you get a round underway and closed. The one who catalyzed your round. The one who guided you through the fundraise process. The one investor you would ultimately recommend to other founders who are trying to find their VC champion.
Our main goal is to help founders, dreamers and company builders find investors who will invest in them today, and with your help, we think we can. The TechCrunch List is not meant to identify every possible investor under the sun who might make an investment within a space, nor just the big household-name VCs whose reputations can sometimes seem more linked to their follower counts on Twitter as opposed to their bold term sheets.
Our hope is that this can be a go-to resource for founders looking to fundraise going forward, and with that in mind, we are very determined to improve the glaring representation gaps in the venture industry. It’s no secret that the world of VC still looks like a country-club membership roster, dominated by white men with strong opinions and loud voices. Looking at the data, it’s clear that there are groups that are particularly underrepresented, with only a small portion of the industry made up of Black, Latinx and female investors, for example.
We want to amplify these voices and we want to hear particularly from founders of color, female founders and other underrepresented groups. We also want to make sure our recommended investor lists are sufficiently representative and highlight underrepresented investors who might not have had equal opportunities in the past.
We want to help builders wade through the BS politics and fundraising annoyances that founders complain to us about on a daily basis, and help them identify qualified leads that are actually active, engaged and specialized and are the best fit to help founders raise money and grow now.
Thank you for your support. We’re excited to build The TechCrunch List with you — and for you.
The venture capital industry is less transparent today than at any time in recent memory.
For all the talk about expanding access and improving its sordid record on diversity, in reality, it has never been harder for founders to figure out who can even write a check to their startups in the first place.
When I first returned to TechCrunch after my second stint in venture capital, my first piece was entitled “The loss of first check investors.” While working in the venture capital industry, it was maddening to see — particularly at the pre-seed and seed stages — how few investors were really willing to go out on a limb and invest in founders before another VC had committed a check.
It’s only gotten worse in the past two years since that article, and the complexity comes from a number of different places. As our investigation showed more than a year ago, fewer and fewer venture rounds are being announced through SEC Form D filings.
There are almost no publicly accountable datasets left indicating who is writing checks in the venture industry and which companies are receiving those checks. While stealthiness is valid in the early days of a startup, the excuse wears thin after years.
Twitter tries to make audio tweets a thing, the U.K. backtracks on its contact-tracing app and Apple’s App Store revenue share is at the center of a new controversy.
Here’s your Daily Crunch for June 18, 2020.
Twitter is rolling out audio tweets, which do exactly what you’d expect — allow users to share thoughts in audio form. The feature will only be available to some iOS users for now, though the company says all iOS users should have access “in the coming weeks.” (No word on an Android or web rollout yet.)
This feature potentially allows for much longer thoughts than a 280-character tweet. Individual audio clips will be limited to 140 seconds, but if you exceed the limit, a new tweet will be threaded beneath the original.
The U.K.’s move to abandon the centralized approach and adopt a decentralized model is hardly surprising, but the time it’s taken the government to arrive at the obvious conclusion does raise some major questions over its competence at handling technology projects.
Apple this week is getting publicly dragged for digging in its heels over its right to take a cut of subscription-based transactions that flow through its App Store. This is not a new complaint, but one that came to a head this week over Apple’s decision to reject app updates from Basecamp’s newly launched subscription-based email app called Hey.
Payfone has built a platform to identify and verify people using data (but not personal data) gleaned from your mobile phone. CEO Rodger Desai said the plan for the funding is to build more machine learning into the company’s algorithms, expand to 35 more geographies and to make strategic acquisitions to expand its technology stack.
We had an extensive conversation with Vohra as part of Extra Crunch Live, also covering why the email app still has more than 275,000 people on its wait list. (Extra Crunch membership required.)
Founded in 2017 by ex-Googlers, the AI vending machine startup formerly known as Bodega first raised blood pressures — people hated how it was referenced and poorly “disrupted” mom-and-pop shops in one fell swoop — and then raised a lot of money. But ultimately, it was no match for COVID-19 and how it reshaped our lifestyles.
With TechCrunch Disrupt going virtual, this is your chance to get featured in front of our largest audience ever. The post says you’ve only got 72 hours left, but the clock has been ticking since then — the deadline is 11:59pm Pacific tomorrow, June 19. So get on it!
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
Three years ago almost to the day, Intercom announced that it was bringing former Intuit exec Karen Peacock on board as COO. Today, she got promoted to CEO, effective July 1. Current CEO and company co-founder Eoghan McCabe will become Chairman.
As it turns out, these moves aren’t a coincidence. McCabe had been actively thinking about a succession plan when he hired Peacock. “When I first started talking to Eoghan three years ago, he shared with me that his vision was to hire someone as COO, who could then become the CEO at the right time and he could transition into the chairman role,” Peacock told TechCrunch .
She said while the idea was always there, they didn’t feel the need to rush the process. “We were just looking for whatever the right time was, and it wasn’t something we were expected to do in the first year or two. And now is really the right time to transition with all of the momentum that we’re seeing in the market,” she said.
She said as McCabe makes the transition away from running the company he helped found, he will still be around, and they will continue working together on things like product and marketing strategy, but Peacock brings a pedigree of her own to the new role.
Not only has she been in charge of commercial aspects of the Intercom business for the past three years, prior to that she was SVP at Intuit where she ran small business products that included QuickBooks, and grew it from a $500 million business to a hefty $2.5 billion during her tenure.
McCabe says that experience was one of the reasons he spent six months trying to convince Peacock to become COO at Intercom in 2017. “It’s really hard to find a leader that’s as well rounded, and as unique as Karen is. You know she doesn’t actually fit your typical very experienced operator,” he said. He points to her deep product background, calling her a “product nerd,” and her undergraduate degree in applied mathematics from Harvard as examples.
In spite of the pandemic, she’s taking over a company that’s still managing to grow. The company’s business messenger products, which enable companies to chat with customers online, have become increasingly important during the pandemic with many brick-and-mortar businesses shut down and the majority of business is being conducted digitally.
“Our overall revenue is $150 million in annual recurring revenue, and a supporting data point to what we were just talking about is that our new business to up market customers through our sales teams has doubled year over year. So we’re really seeing some quite nice acceleration there,” she said.
Peacock says she wants to continue building the company and using her role to build a diverse and inclusive culture. “I believe that [diversity and inclusion] is not one person’s job, it’s all of our jobs, but we have one person who’s the center post of that (a head of D&I). And then we work with outside consulting firms as well to just try and stay in a place where we understand all of what’s possible and what we can do in the world.”
She adds, “I will say that we need to make more progress on diversity and inclusion. I wouldn’t step back and pat ourselves on the back and say we’ve done this perfectly. There’s a lot more that we need to do, and it’s one of the things that I’m very excited to tackle as CEO.”
According to a February Wall Street Journal article, less than 6% of women hold CEO jobs in the U.S. Peacock certainly sees this and wants to continue to mentor women as she takes over at Intercom. “It is something that I’m very passionate about. I do speak to various different groups of up and coming women leaders, and I mentor a group of women outside of Intercom,” she said. She also sits on the board at Dropbox with other women leaders like Condoleezza Rice and Meg Whitman.
Peacock says that taking over during a pandemic makes it interesting, and instead of visiting the company’s offices, she’ll be doing a lot of video conferences. But neither is she coming in cold to the company having to ramp up on the business side of things, while getting to know everyone.
“I feel very fortunate to have been with Intercom for three years, and so I know all the people and they all know me. And so I think it’s a lot easier to do that virtually than if you’re meeting people for the very first time. Similarly, I also know the business very well, and so it’s not like I’m trying to both ramp up on the business and deal with a pandemic,” she said.
The U.S. Supreme Court ruled today that President Donald Trump’s administration unlawfully ended the federal policy providing temporary legal status for immigrants who came to the country as children.
The decision, issued Thursday, called the termination of the Obama-era policy known as the Deferred Action for Childhood Arrivals (DACA) program “arbitrary and capricious.” As a result of its ruling, nearly 640,000 people living in the United States are now temporarily protected from deportation.
While a blow to the Trump Administration, the ruling is sure to be hailed nearly unanimously by the tech industry and its leaders, who had come out strongly in favor of the policy in the days leading up to its termination by the current president and his advisors.
At the beginning of 2018, many of tech’s most prominent executives, including the CEOs of Apple, Facebook, Amazon and Google, joined more than 100 American business leaders in signing an open letter asking Congress to take action on the DACA program before it expired in March.
Tim Cook, Mark Zuckerberg, Jeff Bezos and Sundar Pichai made a full-throated defense of the policy and pleaded with Congress to pass legislation ensuring that “Dreamers,” or undocumented immigrants who arrived in the United States as children and were granted approval by the program, can continue to live and work in the country without risk of deportation.
At the time, those executives said the decision to end the program could potentially cost the U.S. economy as much as $215 billion.
In a 2017 tweet, Tim Cook noted that Apple employed roughly 250 “Dreamers.”
250 of my Apple coworkers are #Dreamers. I stand with them. They deserve our respect as equals and a solution rooted in American values.
— Tim Cook (@tim_cook) September 3, 2017
The list of tech executives who came out in support of the DACA initiative is long. It included: IBM CEO Ginni Rometty; Brad Smith, the president and chief legal officer of Microsoft; Hewlett Packard Enterprise CEO Meg Whitman; and CEOs or other leading executives of AT&T, Dropbox, Upwork, Cisco Systems, Salesforce, LinkedIn, Intel, Warby Parker, Uber, Airbnb, Slack, Box, Twitter, PayPal, Code.org, Lyft, Etsy, AdRoll, eBay, StitchCrew, SurveyMonkey, DoorDash and Verizon (the parent company of Verizon Media Group, which owns TechCrunch).
At the heart of the court’s ruling is the majority view that Department of Homeland Security officials didn’t provide a strong enough reason to terminate the program in September 2017. Now, the issue of immigration status gets punted back to the White House and Congress to address.
As the Boston Globe noted in a recent article, the majority decision written by Chief Justice John Roberts did not determine whether the Obama-era policy or its revocation were correct, just that the DHS didn’t make a strong enough case to end the policy.
“We address only whether the agency complied with the procedural requirement that it provide a reasoned explanation for its action,” Roberts wrote.
While the ruling from the Supreme Court is some good news for the population of “Dreamers,” the question of their citizenship status in the country is far from settled. The U.S. government’s response to the COVID-19 pandemic has basically consisted of freezing as much of the nation’s immigration apparatus as possible.
An executive order in late April froze the green card process for would-be immigrants, and the administration was rumored to be considering a ban on temporary workers under H1-B visas as well.
The president has, indeed, ramped up the crackdown with strict border control policies and other measures to curb both legal and illegal immigration.
More than 800,000 people joined the workforce as a result of the 2012 program crafted by the Obama administration. DACA allows anyone under 30 to apply for protection from deportation or legal action on their immigration cases if they were younger than 16 when they were brought to the U.S., had not committed a crime and were either working or in school.
In response to the Supreme Court decision, the President tweeted “Do you get the impression that the Supreme Court doesn’t like me?”
Do you get the impression that the Supreme Court doesn’t like me?
— Donald J. Trump (@realDonaldTrump) June 18, 2020
In a new move designed to encourage more economic and scientific collaboration between spacefaring nations, the UK and US governments have signed a new agreement that would make it possible for US companies to take part in space launches from the UK, including its many ind=-development spaceports.
The dal sounds one-way – but the nature of the agreement is designed to bolster the supply, development and customer pipeline for UK’s bourgeoning spaceport industry. The agreement now in place not only allows US companies to launch from UK spaceports, but also means that US tech companies active in any portion of the launch industry supply chain will be able to contribute to UK-based launch site setup and operation.
The goal for the UK space industry is to start active launches sometime this year, and UK regulators and government funding sources have come together to achieve this goal. The country is working on a number of spaceports, including both horizontal launch sites for launch vehicles like those operated by Virgin Orbit and Virgin Galactic, as well as vertical spaceports for more traditional rockets.
Commercial space is an increasingly lucrative market in terms of launch contracts and payload development and integration. UK companies already participate actively in the US-based private launch industry, which is already up and running thanks to private launch companies including SpaceX and Blue Origin, as well as active spaceports in the US including the Mojave Air and Spaceport from which Virgin Orbit operates.
Spaceport Cornwall is one of the sites currently in development, and launch startup Skyhrorar has also been launching from a site in Scotland as it continues its own rocket testing and certification program.
UK-based space industry organization Access Space co-founder and director Tony Azzarelli provided the following statement to TechCrunch regarding this development:
We are thrilled that the UK has signed such agreement as it would boost the space sector in the UK, both from lending a hand to US launchers, as well as increasing the importance of the UK as a launching state and thus investment from government to promote its own launch industry sector, e.g., Skyrora, Orbex, Reaction Engines, Rocket Plane, Spaceport Cornwall, Astroscale, etc.
Chris Sacca is a billionaire today, and he credits his success to having an “unfair advantage” 10 years ago when he first launched his fund.
He thinks women and people of color have that same unfair advantage today, which is why he and his wife, Crystal Sacca, have been investing in “dozens and dozens” of funds, including many led by new managers.
In fact, in an interview earlier today with Axios business editor Dan Primack as part of a virtual event hosted by CB Insights, Sacca suggested that others on the sideline jump in while “capital is still readily available” — and while other limited partners are focused on the issues of diversity that have been brought again to the fore over the last month.
It’s never going to be a walk in the park, Sacca noted. In fact, Sacca called his own experience with raising a first fund “heartbreaking” at times because of how personal the process is. Specifically, Sacca — who has a law degree from Georgetown University and spent four years at Google — said that while he was lucky to know a lot of rich people, asking for their financial help was sometimes deeply painful.
“One guy who told me he’d be my anchor LP told me on the day of the fund’s close that there had been a snafu in his paperwork and that he couldn’t participate,” Sacca said. Others who he’d known for years began to ignore him. Meanwhile, every “no” felt like a slight. “When someone says no to your company, you can brush that off; they don’t like or understand your product, whatever. When someone says no to you, that hurts.”
That Sacca eventually got his fund off the ground owes to “generous” friends who did get behind him, along with “an irrational belief in myself,” he said. But he also maintains that he had unfair advantages at the time, including the ability to write very small checks before other seed-stage firms mushroomed around him, and ties to founders he was meeting at networking events and cocktail parties.
“Once I got married and had kids and stuff, I was out of that flow,” he said, explaining why he is now an investor in other VCs’ funds instead. But he also said that he is particularly keen on backing people of color and women because they have both networks and an understanding about particular products that many established VCs of the white, male variety do not.
One fund he singled out is Base Ventures, a Berkeley, California, venture firm led by former investment banker Erik Moore, saying it has already “paid back multiples on their fund.” He also noted that he missed an exit with Bevel, a grooming company focused on people of color, because “as a white guy who doesn’t shave, I didn’t get it.” (Bevel was acquired in late 2018 by Proctor & Gamble.)
Said Sacca, when you “cut through barriers that have prevented women and other underrepresented groups from telling their stories, you find exceedingly talented, ambitious, driven people who, given the chance to succeed, are kicking ass.”
It’s why Sacca is “putting millions and millions of dollars where my mouth is,” he said.
Before their conversation ended, Primack asked whether Sacca thinks the venture industry would be better off with more, newer fund managers, or whether more established funds should be working harder to bring up women and investors of color into their GP ranks.
Primack noted that there might be just “two or three” black women who are partners at mainstream funds, one of whom is Mercedes Bent, who was hired into Lightspeed Venture Partners last year, and another being Ulili Onovakpuri, who has been with Kapor Capital for the better part of five years.
Sacca said he doesn’t think there can be “just one approach.” He believes that bigger firms can provide a lot of mentorship to rising VCs, as well as startup founders. At the same time, he added, the door for underrepresented investors is right now open thanks to industry’s recent awakening, “and I think people should be taking it.”
VCs have to have “some kind of unfair advantage,” and underrepresented groups in particular do, he reiterated.
Sacca has seemingly come a long way in recent years. In 2017, at the height of the #MeToo movement in Silicon Valley, he conceded in a Medium post that the “percentage of my portfolio companies run by women and other underrepresented groups is still way too low. This is the result of homogeneity in my deal flow and referral network (i.e. white guys), bias in my decision making, and general ignorance of markets and products outside of my bubble.”
Recognizing the need for a more diverse venture capital industry, the Kauffman Fellows program is looking to take steps to train its most diverse class of would-be investors and is adding to its board to foreground diversity and inclusion going forward, the nonprofit said today.
A longtime resource for startup founders and the venture capital industry and a voice for bringing the tools of venture investment to a broader national stage, Kauffman Fellows is bringing diversity to its boardroom with the appointment of Marlon Nichols as one of the organization’s newest directors. Nichols, a founder of MaC Venture Capital, joins Melissa Richlen, who heads up limited partner investments in private equity and venture capital for the MacArthur Foundation, and Allen Taylor, whose work at Endeavor and Endeavor Catalyst is focused on investing in entrepreneurs in undercapitalized markets in the U.S. and around the world.
“This organization is taking diversity very seriously and it’s starting from the top down. The board is now 25% Black and 38% women. And the new class of Kauffman Fellows is the most diverse class in the 25-year history of the program,” said Nichols.
A graduate of the Fellows program, Nichols said the new emphasis on diversity will help to get more new fund managers exposure to a network of dealmakers and potential limited partners.
“It’s setting them up for longevity in the industry so as those funds grow, they’re going to grow from a diverse base, and that foundation in diversity will lead to investments in more diverse founders,” said Nichols. “Instead of setting up a committee to talk about diversity, [the Fellows] is pulling them into the game and setting them up by giving them the resources to succeed in the game.”
The twenty-fifth class of Kauffman Fellows is also the most diverse cohort the Fellows has assembled. Out of 61 fellows, 41% are women and 49% are people of color, while 11% are underrepresented minorities.
“Since our inception, we have believed that in order to best understand the world’s challenges and continue to catalyze innovation, the future of the VC industry must be diverse and more reflective of society as a whole. This has been at the core of the Kauffman Fellows mission, and it started with an extremely diverse group of Fellows in our charter class 25 years ago,” the Fellows said in a statement. “Over the years, we have measured the importance of a trusted diverse network and how it impacts the success and longevity of the best investors in the industry. Research has shown that Kauffman Fellows not only have larger returns than the industry average, but they stay in the industry 15+ years post-fellowship, which is 2X the minimum number of years it takes to recognize success in venture capital.”
Looking for a way to get your early-stage startup the massive attention it deserves? Look no further. TechCrunch is highlighting over 30 companies at Disrupt SF. Selected companies will get a video interview with TC editorial that will be shared with the masses. One of the best ways to get in front of thousands of influencers is by exhibiting in Startup Alley during Disrupt 2020. An even better way is to exhibit for free. Take the first step and apply to be a TC Top Pick.
Applying is easy, but earning the TC Top Pick designation — well, not so much. Discerning TechCrunch editors scour every application searching for creative, potential-laden startups that spark the imagination. Each startup that joins the ranks of the TC Top Picks wins an interview on TechCrunch and a free Digital Startup Alley Package. That’s where the massive exposure comes into play. Everyone — investors, tech media, founders, devs, engineers, R&D folks and more — wants to meet and greet those who made the grade.
Ready to take your shot? Here’s what you need to know. You’re eligible to apply if your pre-Series A startup falls into one of the following categories:
Social Impact + Education, Space, Artificial Intelligence + Machine Learning, Biotech + Healthtech, Enterprise + SaaS, Fintech, Mobility, Retail + E-commerce, Robotics, Hardware + IOT, and Security + Privacy.
TechCrunch editors will choose up to three startups in each category. Note the phrase “up to three.” They won’t fill the bucket without ample cause. What do you get with a Digital Startup Package? Plenty. For starters, it lets three people from your company exhibit from anywhere — remember, virtual Disrupt 2020 is a global event with a global audience. That’s huge.
You’ll demo like crazy — scheduling 1:1 video meetings with the previously mentioned masses — investors, media, potential customers, collaborators and the list goes on. Here’s more good news. You’ll have CrunchMatch, our AI-powered networking platform, to help make your networking easier and more efficient. The platform opens weeks ahead of Disrupt, giving you even more time to find and connect with people who can move your business forward.
Thanks to this next perk, the exposure you get as a TC Top Pick will stretch far beyond Disrupt. TechCrunch editors will create a video interview for each Top Pick startup and promote the videos across its social media platforms. It’s a long-term marketing tool you can use to pitch potential investors and clients.
Does your early-stage startup deserve massive attention? Take advantage of this massive opportunity to keep your startup on track and moving forward. Apply to be a TC Top Pick today.
Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.