Earlier this week, ServiceNow reported its quarterly results that surpassed market expectations. Despite the COVID-19 crisis, it crossed a milestone of $4 billion ARR for subscriptions in the...

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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

We had the full team this week: Myself, Danny and Natasha on the mics, with Chris running skipper as always.

Sadly this week we had to kick off with a correction as I am 1) dumb, and, 2) see point one. But after we got past SPAC nuances (shout-out to David Ethridge), we had a full show of good stuff, including:

Y Combinator Demo Day is going virtual, as before, and its coming iteration will also be live. The Equity crew all agree that this is the right thing to do, and probably more fun, to boot. And now the founders can sweat a live event, too! What fun.Speaking of live events going digital, Disrupt is coming up. And it is going to be great. Read more here.A group of Stanford business school students are putting together an investment vehicle to invest money into themselves, which is a good idea and something that is highly risible. Luckily, Danny and Natasha had good things to say about the effort.Ro raised $200 million, and any jokes that were inappropriate are Danny’s fault. The company’s reported $1.5 billion valuation makes the news that its competitor Hims could go public via a SPAC all the more exciting.I covered a neat round: $20 million for Instrumental, a super neat startup that has me hyped.Facebook is still hunting up ways to get a better look into growing startups — this time via investments in venture capital funds.And, finally, there were some hearings this week, you might have heard. We’re working on something neat that you are going to love on just that topic, so stay tuned.

And that’s Equity for this week. We are back Monday morning early, so make sure you are keeping tabs on our socials. Hugs, talk soon!

Sramana Mitra: Talk to me a little bit about the go-to market strategy. It’s all user-generated content. You have a great coverage of high school, college students, and post-academic learning. What...

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During this week’s roundtable, we had as our guest Julianne Zimmerman, Managing Director at Reinventure Capital, a firm focused on minority founders. Scribando As for entrepreneur pitches, this week...

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“What happens after a company gets called out?” he asked over the phone. “Do you know what happens to the people in-house that come forward?”

I didn’t.

A Black male engineer at a fashion tech company who wished to remain anonymous was telling me how he’d been passed over for promotions white counterparts later received after they’d pursued risky and unsuccessful projects. At one point, he said management tasked him with doing recon on a superior who made disparaging comments about women because his subordinates were uncomfortable reporting it directly to HR.

When human resources eventually took up the matter, the engineer said his participation was used against him.

More recently, his company brought furloughed employees back and managers promoted a younger, white subordinate over him. When he asked about the move, his direct supervisor said he was too aggressive and needed to be more of a role model to be considered in the future.

In the absence of industry leadership, there’s no blueprint to remedy institutional problems like these. The lack of substantial progress toward true representation, diversity and inclusion across several industries illustrates what hasn’t worked.

Audrey Gelman, former CEO of women-focused co-working/community space The Wing, stepped down in June following a virtual employee walkout. Three months earlier, a New York Times exposé interviewed 26 former and current employees there who described systemic discrimination and mistreatment. At the time, about 40% of its executive staff consisted of women of color, the article reported.

Within days, Refinery29’s EIC Christene Barberich also resigned after allegations of racism, bullying and leadership abuses surfaced with hashtag #BlackatR29.

In December 2019, The Verge reported allegations of a toxic work environment at Away under CEO Steph Korey. After a series of updates and corrections in reporting, it seemed she would be stepping away from her role or accelerating an existing plan for a new CEO to take over. But the following month, she returned to the company as co-CEO, sharing the statement: “Frankly, we let some inaccurate reporting influence the timeline of a transition plan that we had.”

Last month, after Korey posted a series of Instagram stories that negatively characterized her media coverage, the company again announced she would step down.

Bon Appétit former editor-in-chief Adam Rapaport resigned his position the same month after news broke that the cooking brand didn’t prioritize representation in its content or hiring, failed to pay women of color equally and freelance writer Tammie Teclemariam shared a 2013 photo of Rappaport in brown face.

In a public apology, staffs of Bon Appétit and Epicurious acknowledged that they had “been complicit with a culture we don’t agree with and are committed to change.”

Removing one problematic employee doesn’t upend company culture or help someone who’s been denied an opportunity. But with so much at stake when it comes to employing Instagram-ready branding, the lane is wide open for companies to meet the moment when it comes to doing the right thing.

A 2017 report by the Ascend Foundation found few Asian, Black and Latinx people were represented in leadership pipelines, and at that point, the numbers were actually getting worse. Seemingly, in an effort for transparency and accountability to do better, 17 tech companies shared diversity statistics and their plans to improve with Business Insider in June 2020. The numbers were staggering, especially for an initiative supposedly prioritized industry-wide in 2014:

Underrepresented minorities like Black and Latinx people still only make up single-digit percentages of the workforce at many major tech companies. When you look at the leadership statistics, the numbers are even bleaker.

While tech’s shortcomings show up clearly in a longstanding lack of diversity, companies in other industries polished their brands sufficiently to skate by — until COVID-19 and the call for racial justice after George Floyd’s murder called for lasting change.

In June, Adidas employees protested outside the company’s U.S. headquarters in Portland, Oregon and shared stories about internal racism. Just a year ago, The New York Times interviewed current and former employees about “the company’s predominantly white leadership struggling with issues of race and discrimination.”

In 2000, an Adidas employee filed a federal discrimination suit alleging that his supervisor called him a “monkey” and described his output as “monkey work.” When spokesperson Kanye West said in 2018 that he believed slavery was a choice, CEO Kasper Rorsted discussed his positive financial impact on the brand and avoided commenting on West’s statement.

In response to the internal turmoil at Adidas, the brand originally pledged to invest $20 million into Black communities in the U.S. over the next four years, increasing it to $120 million and releasing an outline of what they plan to do internally, Footwear News reported.

On June 30, Karen Parkin stepped down from her role as Adidas’ global head of HR in mutual agreement with the brand. In an all-employee meeting in August 2019, she reportedly described concerns about racism as “noise” that only Americans deal with. She’d been with the brand for 23 years.

Routinely protecting employees perceived as racist, misogynistic or abusive is bad for business. According to a 2017 “tech leavers” study conducted by the Kapor Center, employee turnover and its associated costs set the tech industry back $16 billion.

POC experience-centered social and wellness club Ethel’s Club invested into its community’s well-being and has not only managed to stay open (virtually) through the COVID-19 pandemic, it has managed to grow. Meanwhile, The Wing lost 95% of its business.

So, what really happens after the companies are called out? Often, the bare minimum. While the perpetrators of the injustice may endure backlash, abusers in corporate structures are often shifted into other roles.

Tiffany Wines, a former social media and editorial staffer at media/entertainment company Complex, posted an open letter to Twitter on June 19 alleging that Black women at the outlet were mistreated, sharing a story in which she claimed to have ingested marijuana brownies left in an office that was billed as a drug-free environment. Wines said she blacked out and accused superiors of covering up the incident after she reported it.

Her decision to speak up prompted other former employees to share stories alleging misogyny, racism, sexual assault and protection of abusers. One anonymous editor said she was asked if she would be comfortable with a workplace that had a “locker room culture” during a 2010 interview. (She did not end up working there.)

Complex Media Group put out a statement four days later on its corporate Twitter account, which had approximately 100 followers — as opposed to its main account, which has 2.3 million followers.

“We believe Complex Networks is a great place to work, but it is by no means perfect,” read the statement. “It’s our passion for our brands, communities, colleagues, and the belief that a safe and inclusive workplace should be the expectation for everyone.” It went on to state that they’ve taken immediate action, but it’s unclear if anyone has been terminated. [Complex is co-owned by Verizon Media, TechCrunch’s parent company.]

Members of the fashion community have formed multiple groups to combat systemic racism, establish accountability and advance Black people in the industry.

Set to launch in July 2020, The Black In Fashion Council, founded by Teen Vogue editor-in-chief Lindsay Peoples Wagner and fashion publicist Sandrine Charles, works to advance Black individuals in fashion and beauty.

The Kelly Initiative is comprised of 250 Black fashion professionals hoping to blaze equitable inroads, and they’ve publicly addressed the Council of Fashion Designers of America in a letter accusing them of “exploitative cultures of prejudice, tokenism and employment discrimination to thrive.”

Co-founders of True To Size, Jazerai Allen-Lord and Mazin Melegy, an extension of the New York-based branding agency Crush & Lovely, started offering their Check The Fit solutions to the brands they were working with in 2019. The initiative is an audit process created to align in-house teams and ensure sufficient representation is in place for brands’ storytelling.

Check The Fit determines who the consumer is, what the internal team’s history is with that demographic and the message they’re trying to communicate to them, and how the team engage’s with that subject matter in everyday life and in the office. Melegy says, “that look inward is a step that is overlooked almost everywhere.”

“At most companies, we’ve seen a lack of coherence within the organization, because each department’s director is approaching the problem from a siloed perspective. We were able to bring 15 leaders across departments together, distill through a list of concerns, find points of leverage and agree on a common goal. It was noted that it was the first time they were able to feel unified in their mission and felt prepared to move forward,” Lord says of their work with Reebok last year.

Brooklyn-based retailer Aurora James established the 15 Percent Pledge campaign, which urges retailers to have merchandise that reflects today’s demographics: 15% of the population should represent 15% of the shelves.

During the melee that transpired largely on Twitter and Instagram only to attempt to be reconciled in boardrooms, one Condé Nast employee and ally has been suspended. On June 12, Bon Appétit video editor Matt Hunziker tweeted, “Why would we hire someone who’s not racist when we could simply [checks industry handbook] uhh hire a racist and provide them with anti-racism training…” As his colleagues shared an outpouring of support online, a Condé Nast representative said in a statement, “There have been many concerns raised about Matt that the company is obligated to investigate and he has been suspended until we reach a resolution.”

Simply reading through accusers’ first-person accounts, it often seems like these stories end up on public forums because little to nothing is done in favor of the people who step forward. The protection has consistently been of the company.

The Black engineer I spoke to escalated his concerns to his company’s CEO and said the executive was unaware of the allegations and seemed deeply concerned.

Seeing someone who seemed genuinely invested in doing the right thing “obviously, means a lot,” he said.

“But at the same time, I’m still really concerned knowing the broader environment of the company, and it’s never just one person.”

Atlassian today announced that it has acquired Mindville, a Jira-centric enterprise asset management firm based in Sweden. Mindville’s more than 1,700 customers include the likes of NASA, Spotify and Samsung.

With this acquisition, Atlassian is getting into a new market, too, by adding asset management tools to its lineup of services. The company’s flagship product is Mindville Insights, which helps IT, HR, sales, legal and facilities to track assets across a company. It’s completely agnostic as to which assets you are tracking, though, given Atlassian’s user base, most companies will likely use it to track IT assets like servers and laptops. But in addition to physical assets, you also can use the service to automatically import cloud-based servers from AWS, Azure and GCP, for example, and the team has built connectors to services like Service Now and Snow Software, too.

“Mindville Insight provides enterprises with full visibility into their assets and services, critical to delivering great customer and employee service experiences. These capabilities are a cornerstone of IT Service Management (ITSM), a market where Atlassian continues to see strong momentum and growth,” Atlassian’s head of tech teams Noah Wasmer writes in today’s announcement.

Co-founded by Tommy Nordahl and Mathias Edblom, Mindville never raised any institutional funding, according to Crunchbase. The two companies also didn’t disclose the acquisition price.

Like some of Atlassian’s other recent acquisitions, including Code Barrel, the company was already an Atlassian partner and successfully selling its service in the Atlassian Marketplace.

“This acquisition builds on Atlassian’s investment in [IT Service Management], including recent acquisitions like Opsgenie for incident management, Automation for Jira for code-free automation, and Halp for conversational ticketing,” Atlassian’s Wasmer writes.

The Mindville team says it will continue to support existing customers and that Atlassian will continue to build on Insight’s tools while it works to integrate them with Jira Service Desk. That integration, Atlassian argues, will give its users more visibility into their assets and allow them to deliver better customer and employee service experiences.

“We’ve watched the Insight product line be used heavily in many industries and for various disciplines, including some we never expected! One of the most popular areas is IT Service Management where Insight plays an important role connecting all relevant asset data to incidents, changes, problems, and requests,” write Mindville’s founders in today’s announcement. “Combining our solutions with the products from Atlassian enables tighter integration for more sophisticated service management, empowered by the underlying asset data.”

Today’s the day for all you early-stage startup founders to learn everything you’ve always wanted to know about Startup Alley but were afraid to ask (10 points if you get that pop culture reference). We’re live-streaming an Ask Me Anything session from the TechCrunch LinkedIn page today at 4 p.m. ET/ 1 p.m. PT, and it’s not too late to register for this free event.

Learn about the benefits, opportunities and exposure that come from exhibiting your business in Startup Alley — from founders just like you.

The AMA kicks off with a quick overview of Disrupt and Startup Alley, and then we’ll move into a panel discussion moderated by the Startup Alley team. Our panel of fierce founders and veteran exhibitors includes Felicia Jackson, inventor and founder of CPRWrap; Khrys Hatch, Capital Program Manager at Launch Tennessee; and Luke Heron, founder and CEO of Testcard. Heron’s startup has the added distinction of earning a TC Top Pick designation in 2019 — be sure to ask him about that experience.

Now, 2020 is a year like no other — not exactly a newsflash, right? Digital Startup Alley may be virtual, but the connections and opportunities that come from exhibiting there are very real. Still, you have questions. We get it. That’s why Emma Comeau, our director of Events, will join us toward the end of the session to talk about what you, the Disrupt community, can expect at this year’s conference. You can ask her anything, too.

Today’s the day, founders. Join us for the Digital Startup Ask Me Anything Session — it’s free — at 4 p.m. ET/ 1 p.m. PT. Simply RSVP on the TechCrunch LinkedIn page, bring your burning questions and keep your business moving forward.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact the sponsorship sales team by filling out this form.

Magnetis, an automated wealth management solution for Brazilian investors, has raised $11 million in a new round of funding as it transforms itself into a full-service brokerage for the nation’s investor class.

Investors in the round included Redpoint eventures and Vostok Emerging Finance, the company said.

“We’re quite happy with this vote of confidence from our investors. It only reinforces the credibility of our service and business model, which uses technology for goal-based investment management, without creating a conflict of interest,” said Luciano Tavares, founder and CEO of Magnetis. “The new funding will be used to launch our own brokerage and to develop new functionalities that improve customer experience and provide a complete and curated journey through goal-based investments.”

First launched five years ago, the company has set up 350,000 investment plans and has more than 430 million reals under management, according to a statement from the company.

The company said it planned to hit more than 1 billion reals by the end of 2021.

“Today, the Brazilian market is more sophisticated, with a sharp drop in a dependence on fixed income and a rise in more financial assets, including funds, shares, commodities and fixed-income securities. Defining a personal investment portfolio is a science, not a game or lottery,” said Anderson Thees, founder and managing partner of Redpoint eventures, in a statement. “Magnetis’ great differentiator is its ability to set up a personalized investment plan, with first-rate assets and its use of AI to manage all the variables in a sophisticated way. Magnetis is well-positioned for accelerated growth and our team at Redpoint is excited about guiding them during this new phase of our partnership as the fintech sector continues to boom in Brazil and beyond.”

Fintech in Latin America is a booming investment category, with companies like Nubank skyrocketing to multi-billion-dollar valuations, and accounting for 22% of all Latin American fintech startups.

As the company closes on the new financing, it’s also launching a brokerage, which will enable the company to do more for its customers, according to Tavares. It may also allow the company to keep more money for itself because it doesn’t have to work with outside parties to execute trades.

“Our model for digital assets management and wealth creation is much more complete and sophisticated. The vision is to be a financial guide for our clients; making their investment experience simpler,” Tavares said in a statement. “A total integration with the broker makes the client’s journey simpler, more consolidated and complete.”

Tavares said Magnetis is also making a commitment to transparency around fees.

“We do not receive commissions on the products we recommend to customers,” said Tavares, in a statement. “The asset selection process is done in a transparent and automated way, and customers pay us an annual consulting fee based only on the amount they invest, and not according to the recommended investments. The end result is the selection of high-quality products that are more aligned with the clients’ objectives.”

You have a mere 48 hours left to join the first global Disrupt at the lowest possible price. Disrupt 2020 runs September 14-18 — five days packed with opportunity for founders, investors, entrepreneurs and every other role across the startup universe.

Your first opportunity — saving up to $300 on your Disrupt 2020 pass — expires on July 31 at 11:59 p.m. (PT). Don’t put off saving when every dollar counts. Purchase your pass today, and then get ready to grab the keys to success and drive your business forward.

You can always count on Disrupt to deliver an outstanding lineup of speakers, and this year is no different in that respect. Leading industry movers and shakers will grace our virtual stages to share their hard-won insight, discuss trends and share their specific path to startup success.

Here’s just a taste of the Disrupt speaker lineup:

Millions of people around the world have welcomed Alexa, the reigning queen of smart assistants, into their homes. Hear how Alexa came to be such a dominating force from the two people who know her best — Toni Reid, vice president of Alexa Experience & Echo Devices at Amazon, and Rohit Prasad, vice president and head scientist of Alexa Artificial Intelligence.Airtable co-founder and CEO Howie Liu has amassed quite a resume in collaborative enterprise software. TC editors will talk with Liu about the challenges that come with building a very complex product — and teaching the customer base how to use it. We’ll ask him to weigh in on the state of enterprise software sales, no and low-code software and hyper-growth.

Celebrity speakers at Disrupt are nothing new, but they’re never there simply because they’re famous. Case in point, Kerry Washington will join us to talk about her recent move toward tech investment and operations. Plus, we’ll discuss the rapid shift toward streaming platforms like Netflix, Hulu, Quibi, Disney+ and HBO and ways networks are trying to evolve.

You’ll also find plenty of content focused on helping early-stage startup founders build a stronger business. Head to the Extra Crunch Stage for sessions designed to provide actionable tips and tactics you can adapt and apply to your own business. Each session will be helmed by a leading expert — think marketing, investment and business development.

We’re talking topics that every early-stage founder needs to master — or at least understand well enough to hire or partner with the right people. Need to craft a more compelling pitch deck? Do you need a sales team and how do you build one? This is the place for you.

Disrupt 2020 offers so much more: Startup Battlefield, Digital Startup Alley, world-class networking with thousands of global attendees — and CrunchMatch to make finding and connecting with them fast, easy and organized.

Early-bird pricing — and up to $300 in savings — disappears in just 48 hours on July 31 when the clock strikes 11:59 p.m. (PT). Don’t miss out on the lowest possible price. Buy your Disrupt 2020 pass now. Grab the keys and drive your business forward.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

At last week’s Early Stage virtual event, founders and investors shared some of their best insights about startup building and what they’re looking for in their next investments. We’ve assembled a compilation of insights covering different elements of entrepreneurship from a handful of founders and VCs:

Jess Lee, partner at Sequoia Capital on identifying your customerGarry Tan, managing partner at Initialized Capital on finding the right problemAnn Miura-Ko, co-founding partner at Floodgate on product-market fitAli Partovi, Neo founder and CEO on hiring

Jess Lee, partner, Sequoia Capital: Start with your customers

Jess Lee has a whole framework for describing customers as if they were characters in a film.

“The way to think about it is as a fictional character who represents a particular user type that might use your product or company or your brand in a particular way,” she said. “And many companies have multiple personas.”

A more scientific way is thinking of your customers as a cluster of data points. The persona that emerges is at the center of that cluster.

“So if you map out all of the possible customers, you tend to see these clusters and then you describe who the person is at the center of that cluster,” Lee said.

What makes a good persona is someone who feels useful for product design but also memorable. That means creating a persona that has a clear story with real pain points, she said.

“And that’s the most important thing,” she said. “What do they care about and what problems are you trying to solve?”

Point, a new challenger bank in the U.S., is launching publicly today with an invite system. While Point is technically providing a bank account, the company focuses on rewards associated with a debit card.

“I started Point as a solution about everything that is frustrating and complicated about credit cards. The incentives between credit card companies and cardholders are misaligned,” Point co-founder and CEO Patrick Mrozowski told me.

When Mrozowski first got a credit card, he was spending a ton of money to reach a certain level of spending and unlock the sign-up bonus. At the end of the month, he ended up with credit card debt for no valid reason.

“What would American Express look like today?” he says to sum up Point’s vision. It comes down to two important principles — being in charge of your budget so that you don’t end up with debt and unlocking rewards from brands that you actually interact with.

Many challenger banks want to provide a simple banking experience for the underbanked. Point doesn’t have the same positioning. Creating a Point account is more like joining a membership program.

When you sign up, you get a debit card with some level of insurance as it’s a Mastercard World Debit card. You can expect some trip cancellation insurance, rental car insurance, purchase insurance, etc.

As the name of the startup suggests, you earn points with each purchase. You get 5x points on subscriptions, such as Spotify and Netflix, 3x points on food, grocery deliveries and ride sharing, and 1x points on everything else. Points can be redeemed for dollars — each point is worth $0.01. In addition to that, Point is going to create a feed of offers with discounts, content, events and more.

Due to its premium positioning, Point isn’t free. You have to pay $6.99 per month or $60 per year to join Point. Point doesn’t charge any foreign transaction fees.

You can connect your Point account with another bank account using Plaid. It lets you top up your account using ACH transfers. Behind the scenes, Point works with Radius Bank for the banking infrastructure, an FDIC-insured bank.

The company announced earlier this month that it has raised a $10.5 million Series A led by Valar Ventures with Y Combinator, Kindred Ventures, Finventure Studio and business angels also participating.

If you look at the most successful startups today, you’ll find plenty of proof that the hardware-enabled service (Haas) model works: Peloton, Particle, Latch and Igloohome all rely on subscriptions along with product sales. Even tech giants like Apple are rapidly reinventing themselves as service companies.

Yet, if you currently rely on device sales, the prospect of changing your entire business model might seem daunting.

At Minut, we are building smart home monitors (privacy-safe noise, motion and temperature monitoring) and recently made the transition despite the lack of resources on the process. Here are the seven lessons we learned:

It is a question of when  —  not if.The transition will have company-wide impact.Your current and future target audience may differ.Price should reflect the value for the customer. Your revenue should grow with theirs.Avoid your free offer competing with your premium ones.Be transparent (internally and externally) about the changes. Over-communicate.Start the process early, check regularly with your team and set measurable targets.

Why subscriptions are the future of industry (and your startup)

Hardware has one advantage over software: customers understand there is a cost to your product. Now, this allows hardware startups to generate revenue with their first iteration, but it’s unsustainable as the company grows and needs to innovate: the software and user experience need continuous improvement and excellent support, just like in a software-only startup.

That’s why we see most hardware startups eventually launching a subscription model and limit what’s available for free. Even established companies  —  think Strava or Wink  —  often end up having to radically limit free features after years of operations.

Experienced founders and financial markets favor subscription models and recurring revenue. Market valuation multiples are typically much higher for companies that benefit from service revenue in addition to sales.

You’ve probably seen them on highway billboards and your Instagram feeds: startups promising to get it right on racial and gender inequity when it comes to employee pay. But how much progress has actually been made? Are companies even aware that upcoming stock option grants might worsen the very problem they claim to be fixing?

Last week, a top female executive at well-known equity management platform Carta resigned, alleging hypocrisy in the company’s public advertisements for equity compensation — or the now infamous statement by their CEO “Fair equity should be table stakes” — and their actual stance on correcting these wrongs within the company. This top executive was Emily Kramer, the very Harvard MBA brought on board in part to help improve stock option inequity at Carta and within its thousands of company users. These developments left me wondering what more can be done by leaders in equity management to help ameliorate these issues before they get harder to solve.

Anyone who’s worked closely to venture capital and tech in America knows that stock options are a key lever of attracting top talent, especially for companies with risky business models and low odds of success. Yet, equity compensation has received much less attention than cash pay. Further, this “paper wealth” can be invaluable to women and persons of color as the country attempts to attack its shameful income inequality. If you’ve had the opportunity to work with Carta, then you also know that gender and racial inequity in compensation exists with stock options too, not just cash.

Carta must act swiftly to implement a new feature across its entire platform: an alert to startup founders and legal administrators that upcoming option grants result in gender and racial inequity, when compared with the rest of the company’s employees doing similar work. Backed by the precept of “equal work, equal pay,” Carta has a unique opportunity to use its near informational monopoly to ameliorate “equity inequity” and make good on unkept promises. This feature ensures internal parity: that women and persons of color are compensated by equity grants on par with white and/or male colleagues performing the same work, in similar positions.

Having input equity compensation into Carta myself as a startup attorney, there’s no way I could have known if new grants were equitable across the capitalization table, unless Carta sent an alert or the company circulated its own report. The sad reality is that it’s way too challenging to independently perform this review on your own. Carta can because it’s a clearinghouse for equity compensation, used by more than 14,000 companies across the marketplace, with unique access to the tools and information required to know if a company’s astray from its stated values.

Wouldn’t it be helpful if Carta notified a client’s management team and lawyers that new grants didn’t achieve gender and racial equity while they still had a chance to adjust the numbers, before board grants? According to Carta’s own 2019 gender equity gap study published following a review of a sample of their own users’ capitalization tables, male founders represented 6.5% of equity holders but own 64% of all equity. Further, at the employee level, female employees own 49 cents in equity for every dollar men own. If companies affirmatively understood the gravity of their actions, the state of paper wealth in the United States would be far more equitable and inclusive.

I’d imagine social justice-minded companies would be happy to make adjustments to stock grants when it was easiest, not after the fact. After all, once options are granted by the board, it becomes an administrative hassle to redo. Yes, many companies do internal audits afterwards, uncovering inequities — but it’s usually too late or burdensome to make all of these employees whole, some of whom might have already departed. Let’s not forget that startups generally can’t even grant options to individuals no longer providing services to their company. A proactive, preemptive approach is not only reasonable, but required. Carta’s well-placed to make up for its broken promises by nudging users to get it right the first time.

Remember, later-stage companies have the money to perform comprehensive equity pay analysis, but early-stage companies often don’t. It’s at formation when inequities are easiest and cheapest to tackle, particularly for the promising early-stage, future unicorns that Carta spends so much time attracting in its successful Launch program — one that offers discounted services to retain startups as they grow. Attorneys, board members, startup operators — heck, even the most junior staff — need to be unafraid in using Carta as a tool to help bring these issues to light.

I want to believe that companies that promise racial and gender equity in compensation make it happen, but not all do. Some don’t care. But others are just overloaded with pitch decks, Slack notifications and the immense expectations of investors searching for big returns. It’s not an excuse, just a reality. What a difference it would make if Carta let management know of the problem before it was too widespread to fix.

Greg Robertson: We began working with this company called J. Williams and the owner of the company is John Morris. He’s an eccentric character. He had this great CMA program, but it didn’t really...

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Since The Exchange last checked in on the world of low- and no-code startup funding, several more interesting rounds in the niche have bubbled up.

This week, TechCrunch covered a startup called Hevo raising $8 million, and Paragon, which raised a $2.5 million seed round. Hevo is a “data pipeline startup” that helps “clients’ employees to integrate data from more than 150 different sources — including enterprise software from Salesforce and Oracle without requiring a technical background,” we reported.

Paragon, part of Y Combinator’s Winter 2020 batch, is a developer productivity-focused service that “makes it easier for non-technical people to be able to build out integrations using our visual workflow editor” according to its co-founder Brandon Foo. Paragon wants to “bring the benefits of low code to product and engineering teams and make it easier to build products without writing manual code for every single integration” to help “streamline the product development process,” Foo added.

And there are more rounds worth highlighting in the space since we last looked, like $4 million for Enduvo (no-code AR/VR), a $3.45 million extension for the fast-growing Turbo Systems (a no-code “engagement platform”), and a seed round for CloudWorx (no-code IoT), among others.

The trend that we noted last week that no-code and low-code startups are raising lots of capital is still hot.

But startups aren’t the only companies working in this space: Apple has long had a foot in the domain via its subsidiary Claris, which rebranded to that name last year after running under the FileMaker moniker. At the time, Claris CEO Brad Freitag told TechCrunch that his company’s vision was to make “powerful technology accessible to everyone.”

That wasn’t merely cliché: Claris’ best-known product, FileMaker, helps users build low-code apps, and its second product is called Connect, a service that helps users link APIs using low-code tooling.

Given that Claris has been in the no-code, low-code space for longer than most, TechCrunch caught up with Freitag again to chat about recent growth in the market category, what he thinks of the low-code terminology, and, of course, his take on startups in the niche.

The growth of no-code and low-code

Trade tensions between China and the U.S. have not stopped Chinese companies from eyeing to list on American stock exchanges. Li Auto, a five-year-old Chinese electric vehicle startup, raised $1.1 billion through its debut on Nasdaq on Thursday.

The Beijing-based company is targeting a growing Chinese middle class that aspires to drive cleaner, smarter and larger vehicles. Its first model, sold at a subsidized price of 328,000 yuan, or $46,800, is a six-seat electric SUV that began shipping at the end of last year.

Li Auto priced its IPO north of its targeted range at $11.5 per share, giving it a fully diluted market value of $10 billion. It also raised an additional $380 million in a concurrent private placement of shares to existing investors.

The IPO arrived amid a surge of investor interest in EV makers. Tesla’s shares have skyrocketed in the last few quarters. Li Auto’s domestic rival Nio, which raised a similar amount in a $1 billion float in New York back in 2018, also saw its stock price rally in recent months.

Li Auto is one step ahead of its Chinese peer Xpeng in planning its first-time sale. The six-year-old competitor said last year it may consider an IPO. Last month, a source told South China Morning Post that Xpeng was getting ready for the listing.

Founders of China’s emergent EV startups are often shrewd internet veterans who are well-connected in the venture capital and marketing world, attracting investment dollars in the billions. Li Auto, for instance, counts China’s food delivery mogul Wang Xing, boss of Meituan Dianping, as its second-largest shareholder after its CEO Li Xiang. TikTok parent ByteDance shelled out $30 million in its Series C round.

Investors are in part emboldened by Beijing’s national push to electrify China’s auto industry. The question, then, is whether these startups have the right talent and resources to pull things off in an industry that traditionally demands a much longer development cycle.

Wallace Guo, a managing partner at Li Auto’s Series B investor Taihecap, admitted that “the nature of auto consumption, unlike internet products evolving through trial and error, manufacturing a car, is a strategic move with sophisticated system, very long value chain, requiring huge investment and resources and any error can be fatal.”

Mingming Huang, chief executive of Future Capital, said that “it was a no brainer in 2015 to be the first investor” in Li Auto. The venture capitalist said Li, which ran a popular car-buying online portal before getting into manufacturing, “has the rare combination of being a relentless talent as well as a top-notch product manager that excels in creating value for all stakeholders.”

Both investors believed Li Auto has picked the right path of zeroing in on extended-range electric vehicles. EREVs come with an auxiliary power unit, often a small combustion engine, that ensures cars can still operate even when a charging station is not immediately available, a shortage yet to be solved in China.

As my colleague Alex pointed out, Li Auto is on a trajectory similar to that of its peer Nio, going public after a short history of delivering to customers. The startup only began shipping its first model last December and delivered just over 10,000 units as of June, its prospectus showed.

The startup is still deep in the red, losing 2.44 billion yuan ($350 million) in 2019, up from a net loss of 1.53 billion yuan in 2018. It did finish the first quarter of 2020 with a gross profit of $9.6 million after it began monetization.

Its annual revenue — comprised mostly of car sales and a small portion from services like charging stalls — stood at 284 million yuan ($40.4 million) in 2019, a tiny fraction of Nio’s $1.12 billion. But Nio also amassed a greater net loss of $1.62 billion in the same year. In contrast, Tesla has been profitable for four straight quarters.

Li Auto’s investors are clearly bullish that the Chinese startup can one day match Tesla’s commercial success.

“Xiang has a deep understanding of the preferences and pain points of car owners and drivers in China. Li Auto is the first in China to successfully commercialize extended-range electric vehicles, solving the challenges of inadequate charging infrastructure and battery technologies constraints,” Huang asserted.

“The company is able to get positive gross margin when selling the first batch of vehicles and thus with its growth in sales volume, its gross margin was well above competitors and can live long enough to become a ten billion-dollar company with this healthy business model,” said Guo.

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