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Visa’s Africa strategy banks on startup partnerships

By Jake Bright

Visa has prioritized growth in Africa, and partnering with startups is central to its strategy.

This became obvious in 2019 after the global financial services giant entered a series of collaborations on the continent, but Visa confirmed it in their 2020 Investor Day presentation.

On the company’s annual call, participants mentioned Africa 28 times and featured regional startups prominently in the accompanying deck. Visa’s regional president for Central and Eastern Europe, Middle East and Africa (CEMEA), Andrew Torre, detailed the region’s payments potential and his company’s plans to tap it. “We’re partnering with non-conventional players to realize this potential — fintechs, neobanks and digital wallets — to reach the one billion consumer opportunity,” he said.

Africa strategy and team

TechCrunch has covered a number of Visa’s Africa collaborations and spoke to two execs driving the company’s engagement with startups from Nigeria to South Africa.

Visa’s head of Strategic Partnerships, Fintech and Ventures for Africa, Otto Williams, has been out front, traveling the continent and engaging fintech founders.

Located in Cape Town, Visa’s group general manager for Sub-Saharan Africa, Aida Diarra, oversees the company’s operations in 48 countries. Visa has a long track record working with the region’s large banking entities, but that’s shifted to smaller ventures.

visa africa

Image Credits: Visa

Dear Sophie: How do we craft a strong H-1B petition? If I’m not selected, what are my options?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Most “Dear Sophie” columns are only accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

If I’m selected in this year’s lottery, how do we craft a strong H-1B petition? If I’m not selected, what are my other options?

— Hoping in Hayward

Dear Hoping:

Thank you for asking the questions that are on the minds of many H-1B first-timers. Don’t worry! Several options exist if you’re not selected.

It’s really important, especially for early-stage companies, to work with experienced attorneys to guide them through this process. Now that USCIS has changed it’s system, if you’re already selected, then having a great attorney is really important to mitigate any remaining risk in the rest of the process. There are lots of wonderful, experienced immigration lawyers out there to choose from.

This year’s new H-1B online lottery registration process ended on March 20. By March 31, U.S. Citizenship and Immigration Services (USCIS) will notify companies whose H-1B candidates have been selected.

If USCIS selects you, your sponsoring employer will have 90 days to submit a complete H-1B petition. Employers can file an H-1B petition up to six months before a candidate’s intended start date.

Sophie Alcorn Alcorn Immigration Law Silicon Valley San Francisco 03

Immigration law attorney Sophie Alcorn

It’s great that you’re already here in the U.S. H-1B candidates living outside of the U.S. seeking consular processing may face delays coming here for their employment start date depending on when coronavirus-related consulate closures and travel restrictions are lifted. These situations need to be addressed individually.

If meeting a deadline during any step of the process becomes difficult or impossible due to COVID-19, it’s possible to request special handling from the government. The federal government grants extensions under special circumstances, such as floods and hurricanes. The COVID-19 pandemic is a special circumstance.

Because COVID-19 is prompting policy and procedural changes with little or no warning, I recommend consulting an immigration attorney for assistance.

If you haven’t already, assemble the necessary documents as soon as possible. Obtaining documents may take longer now that most universities and companies are closed due to the pandemic.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms.

Your sponsoring employer will need to assemble documents that demonstrate the appropriate policies and cash flow to hire you. Startups need to be extra careful to meet all the requirements. You should have easily accessible:

  • Current resume
  • Transcripts
  • Diplomas and certificates
  • Passports used to enter U.S.
  • Past immigration documents (I-20, DS-2019, I-797, etc.)

A Labor Condition Application (LCA) approved by the U.S. Department of Labor is required with all H-1B petitions. For the LCA, your startup must promise to pay at least the prevailing wage to you and ensure that your employment conditions won’t negatively affect other workers.

If this is a startup and it’s the company’s first H-1B, it must get its Federal Employer Identification Number (FEIN) verified by the Labor Department’s Office of Foreign Labor Certification before starting. That process typically takes a week or so. Timing is key to filing an LCA. Keep in mind that the Labor Department typically makes a decision on whether to certify an LCA within seven business days.

Employers do not need to submit evidence to the Labor Department for an LCA, but they must post a copy of the H-1B notification, which can be done electronically, as well as keep all supporting documents in a file and make it available for public viewing.

The employer will also need to fill out Form I-129 (Petition for a Nonimmigrant Worker), and assemble compelling evidence and supporting documents. Check and double check the form and your documents to avoid mistakes and omissions, which can prompt USCIS to deny a petition. Make sure the info contained in the LCA matches Form I-129. Remember to include all required signatures.

USCIS recently announced that scanned or photocopied signatures will be allowed on all documents and petitions during the COVID-19 emergency. Make sure you pay the proper fees and send your package to the correct address with a way to track that package.

USCIS recently announced the temporary suspension of premium processing for H-1B petitions. The agency expects to resume premium processing for individuals changing status from an F-1 student visa by May 27, and all others by June 29. For an extra fee, premium processing enables employers to receive a decision on a petition within 15 days. Without premium processing, the USCIS California Service Center is currently taking two to four months.

If you don’t get selected in the H-1B lottery, relax! Your startup can sponsor you for an H-1B again next year because there’s no limit on the number of years you can be entered in the lottery, whether you’re inside or outside the U.S. and whether you’re currently employed by them or not. In the meantime, several other visa options exist for individuals like you who qualify for an H-1B:

  • O-1A Visa: If have “extraordinary ability” in the sciences, education or business, you could be eligible for an O-1A. However, the bar for qualifying for an O-1A is higher than for an H-1B.
  • J-1 Visa: Most employers cannot directly sponsor an individual for a J-1 visa, which is a work-and-study visitor exchange program. The U.S. State Department designates public and private sponsor organizations to supervise the exchange programs and application process that can be used to support a J-1 at a specific company.
  • L-1 Visas: If your employer has an office outside of the U.S. — or you can set up one for them — and you can work in that overseas office for 12 months or more, your employer can then transfer you back to the U.S. under an L-1A visa for executives and managers or an L-1B visa for employees with specialized knowledge. No annual quotas exist for L-1 visas, and these visas are “dual intent” and can lead to a green card.
  • F-1 Visa: You could become a full-time student at an accredited college or university under an F-1 visa. Some graduate programs require Curricular Practical Training (CPT) or allow Optional Practical Training (OPT). Both training programs enable students to gain work experience in their field of study.

The following options are available to you if you’re a citizen of Chile, Singapore, Australia, Canada or Mexico:

  • H-1B1 Visa: If you’re a citizen of Chile or Singapore, you’re eligible for an H-1B1. Each year, 1,400 H-1B1 visas are reserved for Chileans and 5,400 are reserved for Singaporeans. Rarely are those visas exhausted.
  • E-3 Visa: If you’re an Australian national, you’re eligible for an E-3 for “specialty occupation” professionals who have specialized theoretical or practical knowledge. An LCA is required. A maximum of 10,500 E-3 visas is available annually, but they rarely are exhausted.
  • TN Visa: If you’re from Canada or Mexico, you could work temporarily under a TN (Treaty National) visa for certain occupations. TN visas have no annual quota and allow for unlimited extensions as long as the employer and conditions of employment remain the same.

Fingers crossed that you get selected in the lottery!

All my best,

Sophie


Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms; if you’d like to be a guest, she’s accepting applications!

Attorney Sophie Alcorn answers readers’ immigration questions

By Natasha Mascarenhas

We had a great time hosting noted immigration attorney Sophie Alcorn on a live conference call with Extra Crunch members earlier this week.

Sophie writes our “Dear Sophie” column, where she answers questions about immigration status, particularly for founders and others in the tech ecosystem who want to work in the United States.

In our conference call, we talked about the changes happening to H-1B visas, what COVID-19 is doing to the immigration system and some of the top concerns of founders in these perilous times. Below the jump, you’ll find an edited transcript, or you can listen to the call in its entirety.

As with all legal advice, always speak with your own retained attorney about specific details regarding your own cases as illustrative examples may or may not apply to your own unique situation.

Dear Sophie: How is COVID-19 affecting immigration?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

“Dear Sophie” is an advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

There’s a lot of misinformation going around the internet on immigration right now. Can you provide a clear explanation of how immigration policies are shifting in response to COVID-19?

— Overwhelmed in Palo Alto

Join our conference call with immigration attorney Sophie Alcorn Tuesday at 1pm PDT

By Danny Crichton

The world has been turned upside-down the past few weeks, with flight cancellations, global travel bans and a massive slowdown of worldwide commerce.

For immigrants to the United States here on work visas, these are particularly ambiguous and challenging times.

We’ve had prominent Silicon Valley immigration attorney Sophie Alcorn of Alcorn Immigration Law talk about all the nuances of immigration the past few months across our stages and through her Dear Sophie column on Extra Crunch, where she has answered questions like “how do I get visas for employees who work from home” and answering questions around the changes to the H-1B process.

Now, she’ll join us for a conference call we are hosting for Extra Crunch members tomorrow, Tuesday, March 24 at 1 p.m PDT (dial-in details below the jump) to discuss all the news that has happened the last few weeks and its impact on immigrants to the U.S. going forward.

I’ll join Sophie and Silicon Valley reporter Natasha Mascarenhas to talk about all the changes underway in the immigration system, with a focus on the visas typical for founders and workers in Silicon Valley. And then we will take questions from the audience to discuss the trends on what Sophie is seeing across her clients and across the Valley today.

If you aren’t able to join us, we’ll post a transcript of the discussion on Extra Crunch. Here’s how to dial in to Tuesday’s call:

Africa Roundup: TLcom closes $71M fund, Jumo raises $55M, AWS partners with Safaricom

By Jake Bright

VC firm TLcom Capital closed its Tide Africa Fund at $71 million in February, and announced plans to invest in 12 startup over the next 18 months.

The group —  with offices in London, Lagos, and Nairobi — is looking for tech-enabled, revenue-driven ventures in Africa from seed-stage to Series B, according to TLcom Managing Partner Maurizio Caio.

He told TechCrunch the fund was somewhat agnostic on startup sectors, but was leaning toward infrastructure, logistics ventures vs. consumer finance companies.

On geographic scope, TLcom Capital will focus primarily on startups in Africa’s big-three tech hubs — Nigeria, Kenya,  South Africa — but is also eyeing rising markets, such as Ethiopia.

TLcom’s current Africa portfolio includes Nigerian trucking logistics venture Kobo360, Kenya’s Twiga Foods,  a B2B food supply-chain company and tech-talent accelerator Andela.

Both of these companies have gone on to expand in Africa and receive subsequent investment by U.S. investment bank, Goldman Sachs .

For those startups who wish to pitch to TLcom Capital, Caio encouraged founders to contact one of the fund’s partners and share a value proposition. “If it’s something we find vaguely interesting, we’ll make a decision,” he said.

One $50 million round wasn’t enough for South Africa’s Jumo, so the fintech firm raised another — $55 million — in February, backed by

Goldman Sachs led the Cape Town based company’s $52 million round back in 2018.

“This fresh investment comes from new and existing…investors including Goldman Sachs,  Odey Asset Management and LeapFrog Investments,” Jumo said in a statement —  though Goldman told TechCrunch its participation in this week’s round isn’t confirmed.

After the latest haul, Jumo has raised $146 million in capital, according to Crunchbase.

Founded in 2015, the venture offers a full tech stack for partners to build savings, lending, and insurance products for customers in emerging markets.

Jumo is active in six markets and plans to expand to two new countries in Africa (Nigeria and Ivory Coast) and two in Asia (Bangladesh and India).

The company’s products have disbursed over $1 billion loans and served over 15 million people and small businesses, according to Jumo data.

Jumo joins a growing list of African digital-finance startups raising big money from outside investors and expanding abroad. A $200 million investment by Visa in 2019 catapulted Nigerian payments firm Interswitch  to unicorn status, the same year the company launched its Verge card product on Discover’s global network.

Amazon Web Services  has entered a partnership with Safaricom — Kenya’s largest telco, ISP and mobile payment provider — in a collaboration that could spell competition between American cloud providers in Africa.

In a statement to TechCrunch,  the East African company framed the arrangement as a “strategic agreement” whereby Safaricom  will sell AWS services (primarily cloud) to its East Africa customer network.

Safaricom — whose products include the famed M-Pesa  mobile money product — will also become the first Advanced Consulting Partner for the AWS partner network in East Africa.

Partnering with Safaricom plugs AWS into the network of one East Africa’s most prominent digital companies.

Safaricom, led primarily by its M-Pesa mobile money product, holds remarkable dominance in Kenya, Africa’s 6th largest economy. M-Pesa has 20.5 million customers across a network of 176,000 agents and generates around one-fourth of Safaricom’s ≈ $2.2 billion annual revenues (2018).

safaricomM-Pesa has 80% of Kenya’s mobile money agent network, 82% of the country’s active mobile-money subscribers and transfers 80% of Kenya’s mobile-money transactions, per the latest sector statistics.

A number of Safaricom’s clients (including those it provides payments and internet services to) are companies, SMEs and startups.

The Safaricom-AWS partnership points to an emerging competition between American cloud service providers to scale in Africa by leveraging networks of local partners.

The most obvious rival to the AWS-Safaricom strategic agreement is the Microsoft -Liquid Telecom collaboration. Since 2017, MS has partnered with the Southern African digital infrastructure company to grow Microsoft’s AWS competitor product — Azure — and offer cloud services to the continent’s startups and established businesses.

More Africa-related stories @TechCrunch

African tech around the ‘net

Dear Sophie: I live in India and run a startup

By Walter Thompson

Today we bring you another edition of “Dear Sophie,” an advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie: I live in India and run a startup. Most of our clients are based in the U.S. I also have a Delaware C Corp. established a year ago. We have three full-time contractors doing business development and sales. I currently have a B1/B2 visa. As my company continues to grow, we want to expand in the U.S. and possibly buy a house. I want to know what’s the best visa to obtain. Appreciate your opinion.

Intrigued in India

Dear Intrigued,

You are in good company! Lots of founders with growing businesses around the world are considering different pathways to come to the U.S. for a variety of reasons. You may be motivated to come here for venture capital, U.S. market access, the concentration of talent in Silicon Valley, personal growth or stability and opportunity for your family.

For investors, late-stage fintech startups are a lucrative bet

By Alex Wilhelm

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Over the past three months, a number of financial events have occurred in the fintech and finservices world that have caught our eye. Between two rounds at $500 million and two exits in the billions of dollars, financial technology and services startups have been on fire.

Today I’d like to rewind and go over the four largest events from the past three months in fintech and finservices (total value: $13.4 billion) and pull in data on other rounds that have happened recently. This will help us get a handle on what’s going on in the two heated startup sectors.

Recall that our last look into fintech’s venture activity wrapped up its Q4 2019 results. Today, thanks to the punishing news cycle that the sector has kept up over the last few weeks, we’re going a bit further. Into the breach!

Four events

We have two rounds ($500 million rounds for Revolut and Chime) and two sales (exits for Plaid and Credit Karma) to wrap up today. Here’s what each of those deals might tell us about the current market for money-focused startups and investment, starting with our two rounds and followed by our two exits:

  • Chime raises $500 million, boosting its valuation from $1.5 billion (March 2019) to $5.8 billion (December 2019). Chime’s round demonstrated that the neobanking boom, at least in terms venture interest, is far from over. The America-focused financial services company grew its accounts figure to 6.5 million, giving it a valuation of a little under $1,000 per account; how much revenue and margin it can extract from its existing accounts is almost a red herring given its current pace of growth. But even with the growth caveat, investors have bet big that its long-term revenues will help support a valuation of over $10 billion in time. (The company’s most recent investors expect material return on their funds.) This implies confidence in the long-term economics of neobanking and general bullishness on the company’s category — so the existing 6.5 million accounts better churn out good chunks of top line.

Dear Sophie: I need the latest details on the new H-1B registration process

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Today we bring you another edition of “Dear Sophie,” an advice column that answers readers’ questions about immigration for tech.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, Silicon Valley immigration attorney. “Whether you’re in people ops, a founder, or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”


Dear Readers,

Today I’m sharing answers to the most frequently asked questions following up to the last H-1B Dear Sophie. Fortunately, the government has provided a lot more details over the last few weeks. Additional info about the electronic registration process is available on my H-1B podcast. Enjoy!

Am I limited to sponsoring somebody in the lottery to a maximum of three times?

No, there is no limit to how many times a company can sponsor an individual. A lot of companies tend to do it three times because candidates can often work for you for three years with OPT and STEM OPT, but the law doesn’t set out an upper limit. Also, you can sponsor current F-1 students as well as people who have accepted your offers who are currently outside the United States.

I’m in HR. When can I create my profile for H-1B electronic registration?

You can access my.uscis.gov starting February 24, 2020 at 10 a.m. (EST) to create your profile for the electronic registration process. However, employers will not be able to create registrations for your employees and candidates until March 1st at noon.

I’m working with a lawyer; which category should I select for my my.uscis.gov profile?

This is counterintuitive. If you’re working with an attorney, on the Account Type screen, don’t select the box for “I am an applicant, petitioner, or requestor.” Instead, select the “I am an H-1B registrant” box.

When can I actually register my employees and people who accepted our job offers?

The initial registration period starts March 1, 2020 and is supposed to run through March 20, 2020. USCIS will announce the actual end date of the initial registration period on its website. If not enough people register (unlikely), USCIS can decide to re-open registrations.

How do I add my lawyer to the my.uscis.gov account?

Your attorney will provide a “representative passcode” that you need to enter. This will take you to the G-28 page where you can accept your representative. Talk to your attorney about whether they prefer that you have USCIS send notices to you or their firm.

How many people can I register?

You can enter up to 250 people in one batch and you can review them before you submit.

What if I make a mistake when registering somebody?

You should be able to delete entries even after having submitted them. The website will warn you if there is missing information, but cannot warn you about inaccurate information.

Can I register the same person more than once?

No, don’t do it. It’s against the rules and you will forfeit this person’s opportunity to get an H-1B.

When are we supposed to file full I-129 petitions with all the supporting documents?

For each of your selected candidates, you will receive a selection notice listing the 90-day filing window deadline and the physical mailing address to send the petition package. Therefore, most petitions will be submitted April through June.

What if we electronically register somebody in good faith but we can’t go through with the petition?

USCIS is trusting your company to act in good faith. Make sure that for any candidate you electronically register, they have accepted a position with your company and you actually intend to follow through with hiring them. However, there is currently no requirement to notify USCIS if you won’t be following through with filing the full petition for a selected registration.

Can a current student be included in the “Master’s cap?”

The advanced degree exemption to the H-1B lottery is for candidates who have received master’s degrees and PhDs from U.S. universities. They have a higher chance of lottery selection. Under the new electronic registration system, you have to prove eligibility at the time of filing the physical petition, not at the time of electronic registration. So if somebody is graduating in May or June, you check the Master’s cap box for them in March. However, it’s safest to wait to get their proof of graduation before submitting the full I-129 package.

What are the chances?

Last year, there were more than 200,000 petitions. There are 65,000 available H-1Bs plus 20,000 for the Master’s cap. Just how many petitions will be filed with the new electronic registration system remains to be seen.

Will premium processing continue to be available?

I don’t know, my crystal ball isn’t giving me information on this one right now. ;)

Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here.


Have a story to share about how you navigated immigration to build your dreams? Apply to guest on Sophie’s podcast about immigration law for tech startups.

Future “Dear Sophie” columns will be accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.

These specialized Africa VC funds are welcoming co-investors

By Jake Bright

For global venture capitalists still on the fence about entering Africa, a first move could be co-investing with a proven fund that’s already working in the region.

Africa’s startup scene is performance-light — one major IPO and a handful of exits — but there could be greater returns for investors who get in early. For funds from Silicon Valley to Tokyo, building a portfolio and experience on the continent with those who already have expertise could be the best start.

VC in Africa

Africa has one of the fastest-growing tech sectors in the world, as ranked by startup origination and year-over-year increases in VC spending. There’s been a mass mobilization of capital toward African startups around a basic continent-wide value proposition for tech.

Significant economic growth and reform in the continent’s major commercial hubs of Nigeria, Kenya, Ghana and Ethiopia is driving the formalization of a number of informal sectors, such as logistics, finance, retail and mobility. Demographically, Africa has one of the world’s fastest-growing youth populations, and continues to register the fastest global growth in smartphone adoption and internet penetration.

Africa is becoming a startup continent with thousands of entrepreneurs and ventures who have descended on every problem and opportunity.

Dear Sophie: My H-1B was renewed, but I’m getting laid off

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

“Dear Sophie” is a collaborative forum hosted by Extra Crunch and curated by Sophie Alcorn, who is certified as a specialist attorney in immigration and nationality law by the State Bar of California Board of Legal Specialization. Sophie is the founder of Alcorn Immigration Law, the fastest-growing immigration law firm in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.”

Extra Crunch subscribers enjoy full access to “Dear Sophie” — use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie: I’m a software developer at a large company. I just found out that I’m getting laid off and my last day of employment will be in 30 days. I have an H-1B visa that just got renewed, so it’s valid for almost three more years.

I need to stay in the United States because my wife has her own H-1B and a great job that she loves, we have a U.S. citizen baby and we bought a house last year. I’m starting to look for jobs. What should I do from an immigration standpoint?

— Nervous in New Haven

Dear Nervous: First of all, congratulations on turning over a new leaf in your career ;) — I know it can feel scary, but you’re now open to new possibilities for your professional and personal development. I’ve spoken to a lot of people in your situation and have noticed that these sorts of situations usually turn out for the best.

You’re already doing the best thing you can do: looking for another job. You’ll have a 60-day grace period after your last day at work in which you can remain in the U.S. without working. If you can get another job in that time, you’re all set — just make sure your new company knows that they need to file a new petition before the final day of your grace period.

US regulators need to catch up with Europe on fintech innovation 

By Walter Thompson
Alastair Mitchell Contributor
Alastair Mitchell is a partner at multi-stage VC fund EQT Ventures and the fund's B2B sales, marketing and SaaS expert. Ali also focuses on helping US companies scale into Europe and vice versa.
More posts by this contributor

Fintech companies are fundamentally changing how the financial services ecosystem operates, giving consumers powerful tools to help with savings, budgeting, investing, insurance, electronic payments and many other offerings. This industry is growing rapidly, filling gaps where traditional banks and financial institutions have failed to meet customer needs.

Yet progress has been uneven. Notably, consumer fintech adoption in the United States lags well behind much of Europe, where forward-thinking regulation has sparked an outpouring of innovation in digital banking services — as well as the backend infrastructure onto which products are built and operated.

That might seem counterintuitive, as regulation is often blamed for stifling innovation. Instead, European regulators have focused on reducing barriers to fintech growth rather than protecting the status quo. For example, the U.K.’s Open Banking regulation requires the country’s nine big high-street banks to share customer data with authorized fintech providers.

The EU’s PSD2 (Payment Services Directive 2) obliges banks to create application programming interfaces (APIs) and related tools that let customers share data with third parties. This creates standards that level the playing field and nurture fintech innovation. And the U.K.’s Financial Conduct Authority supports new fintech entrants by running a “sandbox” for software testing that helps speed new products into service.

Regulations, if implemented effectively as demonstrated by those in Europe, will lead to a net positive to consumers. While it is inevitable that regulations will come, if fintech entrepreneurs take the action to engage early and often with regulators, it will ensure that the regulations put in place support innovation and ultimately benefit the consumer.

The paradox of 2020 VC is that the largest funds are doing the smallest rounds

By Danny Crichton

I talked yesterday about how VCs are just tired these days. Too many deals, too little time per deal, and constant hyper-competition with other VCs for the same equity.

One founder friend of mine noted to me last night that he has already received inbound requests from more than 90 investors over the past year about his next round — and he’s not even (presumably) fundraising. “I may have missed a few,” he deadpans, and really, how could one not?

All that frenetic activity though leads us to the paradox at the heart of 2020 venture capital: it’s the largest funds that are writing the earliest, smallest checks.

That’s a paradox because big funds need big rounds to invest in. A billion dollar fund can’t write eight hundred $1 million seed checks with dollars left over for management fees (well, they could, but that would be obnoxious and impossible to track). Instead, the usual pattern is that as a firm’s fund size grows, its managing partners increasingly move to later-stage rounds to be able to efficiently deploy that capital. So the $200 million fund that used to write $8 million series As transforms into a $1 billion fund writing $40 million series Bs and Cs.

That’s logical. Yet, the real logic is a bit more complicated. Namely, that everyone is raising huge funds.

As this week’s big VC report from the National Venture Capital Association made clear, 2019 was in many ways the year of the big fund (and SoftBank didn’t even raise!). 21 “mega-funds” launched last year (defined as raising more than $500 million), and that was actually below the numbers in 2018.

All that late-stage capital is scouring for late-stage deals, but there just aren’t that many deals to do. Sure, there are great companies and potentially great returns lying around, but there are also dozens of funds plotting to get access to that cap table, and valuation is one of the only levers these investors have to stand out from the fray.

This is the story of Plaid in many ways. The fintech data API layer, which Visa announced it is intending to acquire this past week for $5.3 billion, raised a $250 million series C in late 2018 from Index and Kleiner, all according to Crunchbase. Multiple VC sources have told me that “everyone” looked at the deal (everyone being the tired VCs if you will).

But as one VC who said “no” on the C round defended to me this week, the valuation last year was incredibly rich. The company had revenues in 2018 in the upper tens of millions or so I have been told, which coupled with its publicly-reported $2.65 billion series C valuation implies a revenue multiple somewhere in the 30-50x range — extremely pricey given the company’s on-going fight with banks to ensure it can maintain data access to its users’ accounts.

Jeff Kauflin at Forbes reported that the company’s revenues in 2019 are now in the lower three digits of millions, which means that Visa likely paid a similarly expensive multiple to acquire the company. Kleiner and Index doubled their money in a year or so, and no one should complain about that kind of IRR (particularly in growth investing), but if it weren’t for Visa and the beneficial alchemy of exit timing, all might have turned out very differently.

Worse that just expensive valuations, these later-stage rounds can become very proprietary and exclusive. From the sounds of it, Plaid ran a fairly open process for its series C round, which allowed a lot of firms to look at the deal, helping to drive the valuation up while limiting dilution for earlier investors and the founder. But that’s not the only way to handle it.

Increasingly, firms who invested early are also trying to invest later. That series A investor who put in $5 million also wants to put in the $50 million series B and the $250 million series C. After all, they have the capital, already know the company, have a relationship with the CEO, and can avoid a time-consuming fundraise in the process.

So for many deals today, those later-stage cap tables are essentially locking out new investors, because there is already so much capital sitting around the cap table just salivating to double down.

That gets us straight to the paradox. In order to have access to later-stage rounds, you have to already be on the cap table, which means that you have to do the smaller, earlier-stage rounds. Suddenly, growth investors are coming back to early-stage rounds (including seed) just to have optionality on access to these startups and their fundraises.

As one VC explained to me last week (paraphrasing), “What’s weird today is that you have firms like Sequoia who show up for seed rounds, but they don’t really care about … anything. Valuation, terms, etc. It’s all a play for those later-stage rounds.” I think that’s a bit of an exaggeration to be clear, but ultimately, those one million-dollar checks are essentially a rounding error for the largest funds. The real return is in the mega rounds down the road.

Does that mean seed funds will cease to exist? Certainly not, but it’s hard to make money and build a balanced, risk-adjusted portfolio when your competitors literally don’t care and consider the investment a marketing and access expense. As for founders — the times are still really, really good if you can check the right VC boxes.

Visa’s Plaid acquisition shows a shifting financial services landscape

By Ron Miller

When Visa bought Plaid this week for $5.3 billion, a figure that was twice its private valuation, it was a clear signal that traditional financial services companies are looking for ways to modernize their approach to business.

With Plaid, Visa picks up a modern set of developer APIs that work behind the scenes to facilitate the movement of money. Those APIs should help Visa create more streamlined experiences (both at home and inside other companies’ offerings), build on its existing strengths and allow it to do more than it could have before, alone.

But don’t take our word for it. To get under the hood of the Visa-Plaid deal and understand it from a number of perspectives, TechCrunch got in touch with analysts focused on the space and investors who had put money into the erstwhile startup.

The crypto rich find security in Anchorage

By Josh Constine

Not the city, the $57 million-funded cryptocurrency custodian startup. When someone wants to keep tens or hundreds of millions of dollars in Bitcoin, Ethereum, or other coins safe, they put them in Anchorage’s vault. And now they can trade straight from custody so they never have to worry about getting robbed mid-transaction.

With backing from Visa, Andreessen Horowitz, and Blockchain Capital, Anchorage has emerged as the darling of the cryptocurrency security startup scene. Today it’s flexing its muscle and war chest by announcing its first acquisition, crypto risk modeling company Merkle Data.

Anchorage Security

Anchorage founders

Anchorage has already integrated Merkle’s technology and team to power today’s launch of its new trading feature. It eliminates the need for big crypto owners to manually move assets in and out of custody to buy or sell, or to set up their own in-house trading. Instead of grabbing some undisclosed spread between the spot price and the price Anchorage quotes its clients, it charges a transparent per transaction fee of a tenth of a percent.

It’s stressful enough trading around digital fortunes. Anchorage gives institutions and token moguls peace of mind throughout the process while letting them stake and vote while their riches are in custody. Anchorage CEO Nathan McCauley tells me “Our clients want to be able to fund a bank account with USD and have it seamlessly converted into crypto, securely held in their custody accounts. Shockingly, that’s not yet the norm–but we’re changing that.”

Buy and sell safely

Founded in 2017 by leaders behind Docker and Square, Anchorage’s core business is its omnimetric security system that takes passwords that can be lost or stolen out of the equation. Instead, it uses humans and AI to review scans of your biometrics, nearby networks, and other data for identity confirmation. Then it requires consensus approval for transactions from a set of trusted managers you’ve whitelisted.

With Anchorage Trading, the startup promises efficient order routing, transparent pricing, and multi-venue liquidity from OTC desks, exchanges, and market makers. “Because trading and custody are directly integrated, we’re able to buy and sell crypto from custody, without having to make risky external transfers or deal with multiple accounts from different providers” says Bart Stephens, founder and managing partner of Blockchain Capital.

Trading isn’t Anchorage’s primary business, so it doesn’t have to squeeze clients on their transactions and can instead try to keep them happy for the long-term. That also sets up Anchorage to be foundational part of the cryptocurrency stack. It wouldn’t disclose the terms of the Merkle Data acquisition, but the Pantera Capital-backed company brings quantative analysts to Anchorage to keep its trading safe and smart.

“Unlike most traditional financial assets, crypto assets are bearer assets: in order to do anything with them, you need to hold the underlying private keys. This means crypto custodians like Anchorage must play a much larger role than custodians do in traditional finance” says McCauley. “Services like trading, settlement, posting collateral, lending, and all other financial activities surrounding the assets rely on the custodian’s involvement, and in our view are best performed by the custodian directly.”

Anchorage will be competing with Coinbase, which offers integrated custody and institutional brokerage through its agency-only OTC desk. Fidelity Digital Assets combines trading and brokerage, but for Bitcoin only. BitGo offers brokerage from custody through a partnership with Genesis Global Trading. But Anchorage hopes its experience handling huge sums, clear pricing, and credentials like membership in Facebook’s Libra Association will win it clients.

McCauley says the biggest threat to Anchorage isn’t competitors, thoguh, but hazy regulation. Anchorage is building a core piece of the blockchain economy’s infrastructure. But for the biggest financial institutions to be comfortable getting involved, lawmakers need to make it clear what’s legal.

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