Spot.IM, which offers a platform for publishers (including TechCrunch) to manage their user comments, announced this week that it’s rebranding as OpenWeb.

CEO and co-founder Nadav Shoval told me that the new name reflects a vision that’s far grander and more ambitious than the company’s initial product, a location-based messaging service.

“We all felt that this is the time to be proud of what we actually do,” Shoval said. “It’s about saving the open web.”

Specifically, Shoval is hoping to move more online conversations away from the big social platforms like Facebook and back to independent publishers. To illustrate this, he pointed to recent discussions about reexamining or revising Section 230 of the Communications Decency Act, a crucial legal protection for the big online platforms.

While you don’t have to take President Donald Trump’s complaints of Twitter censorship at face value, Shoval said the key is that “no one big tech company should control the conversation.”

To that end, the company has also unveiled an upgraded version of its platform, which includes features like scoring the overall quality of conversation for a specific publisher, incentivizing quality comments by allowing users to earn reputation points and even asking users to reconsider their comment if it appears to violate a publisher’s standards — OpenWeb describes these warnings as “nudges,” so you can still go ahead and post that comment if you want.

“We stopped focusing only on algorithms to identify bad behavior, which we’ve done for years and have become commodity,” said Ido Goldberg, OpenWeb’s senior vice president of product. “What we did here is, we put a lot of time into understanding how we should look at quality and scale in millions of conversations.”

A big theme in our conversation and demonstration was civility — for example, Goldberg showed me how OpenWeb’s nudges had convinced some users to adopt less incendiary language. But I argued that civility doesn’t always lead to quality conversations. After all, racist (and sexist and homophobic and otherwise hateful) ideas can be expressed in ostensibly polite language.

“For us, civility is the baseline,” Goldberg replied. “When things become incivil folks that want to [have a productive conversation] don’t want to be there.”

Shoval added, “There is no silver bullet for quality conversations.” He argued that OpenWeb is trying to encourage these conversations without being seen as “East Coast lefties who are censoring the internet” — a balance it tries to find by working with each of its publishers and being aware of different standards in different geographies. “What we want to do is a never-ending journey.”

Telemedicine is becoming more widely embraced by the day — and not just for humans. With a pet in roughly 65% of U.S. homes, there is now a dizzying number of companies enabling vets to meet with their furry patients remotely, including Petriage, Anipanion, TeleVet, Linkyvet, TeleTails, VetNOW, PawSquad, Vetoclock and Petpro Connect.

One of these — a two-year-old, 13-person, LA-based startup called Airvet — unsurprisingly thinks it is the best among the bunch, and it has persuaded investors of as much. Today, the company is announcing $14 million in Series A funding led by Canvas Ventures, with participation by e.ventures, Burst Capital, Starting Line, TrueSight Ventures, Hawke Ventures and Bracket Capital, as well as individual investors.

The pandemic played a role in Canvas’s decision, as did a smart model, suggests general partner Rebecca Lynn, who says she has looked at many telemedicine startups over the last 11 years and that she fell for Airvet after using the service for the animals that live on her own small farm. Plus, she adds, “COVID has been a massive accelerant to adoption.”

We asked Airvet’s founder and CEO, Brandon Werber, to make the company’s case to us separately.

TC: Why start the company?

BW: My dad is one of the most well-known vets in the U.S. — celebrity vet Dr. Jeff Werber. We saw the impact that telehealth was making in the human world and wanted to bring the same access and level of care we get for ourselves to our pets. Since I grew up in the pet space, I know it intimately and recognized a lot of inefficiencies in the delivery of care and how vets have been unable to meet the evolving expectations of pet owners.

TC: How are you connecting vets with their pet patients?

BW: We have two apps. One is for pet-owners to download to talk with a vet, and one is for vets to download to organize workflows and talk to their clients. We do not usurp any existing vet relationships. Instead, we partner with vet clinics and enable them to conduct telehealth visits and simultaneously enable pet-owners to have access to vets 24/7, even if they don’t live nearby a vet hospital.

A huge portion of pet owners in the U.S. don’t even have a primary vet. For serious health issues like surgery, animals still need to go in-person, and network vets can even refer them. We’ve also seen Airvet used as curbside check-in, where pet-owners can chat and follow their pet’s in-person vet appointment via live video from the parking lot.

TC: I see there is a minimum charge of $30 per visit. How do you make this model work financially for vets?

BW: Vets view us as an additional revenue-generating tool on top of their base income. We don’t hire vets. Our network of 2,600+ vets are largely the same vets who use Airvet within their own hospital. They can decide at will, like an Uber driver, to swipe online to be part of the on-demand network and take calls from pet parents anywhere in the country to generate additional income.

TC: What have you learned from startups that tried this model before?

BW: All the startups that came before us are not consumer-first and are just focused on building tools for vets, so their platforms cannot be used by every pet owner. Instead, they can only be used by pet owners whose own vets use that specific platform, which is a tiny fraction of vets and therefore a tiny fraction of pet parents.

TC: Do you have ancillary businesses? Beyond these vet visits, are you selling anything else?

BW: For now, just the vet visits, which range from a $30 minimum to higher, based on the vet and specialty. Over time, we have plans and partnerships lined up to expand into other pet health verticals.

A projected $99 billion will be spent on pets in the U.S. alone in 2020, and for us, telemedicine is only the beginning.

TC: Does Airvet involve specific practice management software?

BW: No. We provide the workflow layer enabling vets to schedule virtual appointments, which will soon be able to be fully integrated with their existing systems and workflows.

TC: When a customer calls a vet for $30, is there a time limit?

BW: There is no time limit and cases will usually stay open for three full days, so pet parents can continue to access the vet via chat for any follow-up questions or concerns.

TC: Are you competing at all on pricing?

BW: Our goal is to work alongside the hospitals, not to compete with them or replace them. You can’t take blood virtually or feel a tumor or do a dental. People always will need to go to the vet.

What we want to do is help [pet owners] understand when [to come in]. The average pet parent only goes to the vet 1.5 times a year. A huge segment of users on Airvet have already connected with a vet six times more than that and save time and stress in doing so.

It’s not about competing for us, it’s about being the provider of care in between office visits [and helping] pet parents who have used our service ultimately avoid an unnecessary emergency visit.

Nearly 40 million Americans are unemployed, and a recent study that examined more than 66,000 tech job layoffs found that sales and customer success roles are most vulnerable amid COVID-19. In response, some quarters of Silicon Valley are abuzz about a long-standing technology: reskilling, or training individuals to adopt an entirely new skillset or career for employment.

As millions look for a way to reenter the workforce, the question arises: Who really benefits from reskilling technology?

That depends on how you look at it, said Jomayra Herrera, a senior associate at Cowboy Ventures. Reskilling for a well-networked manager looks a lot different than it does for someone who doesn’t have as much leverage, and the vast majority of people fall into the latter. Not everyone has a friend at Google or Twitter to help them skip the online application and get right to the decision-makers.

Beyond the accessibility offered by live online classes, she pointed to the difference between assets and opportunities.

“You can give someone access to something, but it’s not true access unless they have the tools and structure to really engage with it,” Herrera said. In other words, how useful is content around reskilling if the company doesn’t support job placement post-training.

Herrera said companies must give individuals opportunities to test skills with real work and navigate the career path. Her mother, who did not go to college and speaks English as a second language, is looking to pursue training online. Before she can proceed, however, she has to surmount hurdles like language support, resume creation, job search and other challenges.

All of a sudden, content feels like a commodity, regardless of if it has active and social learning components. It’s part of the reason that MOOCs (massive open online courses) feel so stale.

Udacity, for example, was almost out of cash in 2018 and laid off more than half of its team in the past two years, according to The New York Times. Now, like other edtech companies, it is facing surges in usage.

In a blog post this Friday afternoon, Y Combinator’s president Geoff Ralston said that the accelerator would make two changes to its terms for startups.

The first would see the size of the standard deal for YC startups decline from $150,000 for 7% (roughly a $2.1 million post-money valuation) to $125,000 for the same equity (or roughly a $1.79 million post-money valuation). The deal will continue to be offered using a SAFE, which YC and a group of others pioneered as a simpler investment option compared to convertible notes.

Interestingly, the firm is always writing into its terms that it will only take pro rata up to 4% of a subsequent round’s size, which is obviously smaller than the 7% ownership that the company is buying in its financing. That 4% number is a ceiling — in cases where the accelerator has less ownership than 4%, the smaller percentage applies. Full terms of Y Combinator’s deal are available on its website.

The new deal will apply to startups who join Y Combinator in the Winter 2021 batch, and doesn’t include startups in the current summer batch (who have already presumably been funded)

YC’s deal has varied over the years. When it first launched more than a decade ago, it offered terms of $20,000 for 6%.

A Y Combinator spokeswoman said that the change was in line with the fundraising and budget realties of the accelerator going forward. “The future of the economy is unpredictable, and we feel it is prudent during these times to switch to a leaner model,” she said. “In our case, we want to be set up to fund as many great founders as possible — especially during a time that is creating an unprecedented change to consumer and business behavior; with these changes comes endless opportunities for startups. And with the changes made to our standard deal, we can fund as many as 3000 more companies.”

Outside of budget, at least a couple of factors are potentially at work here. One is the increased use of Work From Anywhere, which presumably can help lower some of the running costs of a startup, particularly in its earliest days (e.g., no need to pay for that WeWork flex desk).

Y Combinator has also invested more of its funds into emerging markets startups, which can have dramatically lower costs of development given prevailing wages for talent in local markets.

Yet, the cutback is also a sign that the flood of capital entering the Valley in recent years has receded — if ever so slightly — in the wake of COVID-19. Valuations are depressing, and while $25,000 is not a massive loss considering the scale of later venture financings, the 16% valuation haircut is in line with other numbers we have seen in the Valley in recent weeks.

It’s now o’clock, founders. A mere 12 hours stands between you and a chance to compete in Startup Battlefield and launch your pre-Series A startup during Disrupt 2020 — in front of the world’s influential technorati.

You won’t find a bigger launching pad, and this window of extraordinary opportunity slams shut on June 26 at 11:59 pm (PT). Apply to Startup Battlefield right here, right now.

This year’s legendary pitch competition is virtual, but the benefits and opportunity that comes from competing are very real and often life changing — for all participants not just the ultimate winner. Let’s explore that a bit more.

The top prize — $100,000 equity free cash — will do wonders for your bottom line. The TechCrunch feature article – brings you into the league of legends. The Disrupt cup and the acclaim that comes with winning, well, who doesn’t love bragging rights? But it’s the huge exposure — on a global scale — to media, investors, potential customers and big tech players looking to acquire promising startups, that can take Battlefield competitors on a whole new trajectory.

Here’s a quick look at how Startup Battlefield works. We accept applications from founders of any background, geography and industry as long as your company is early stage, has an MVP with a tech component (software, hardware or platform) and hasn’t received much major media coverage.

Our editors screen every application and will choose only startups they feel possess that certain je ne sais quoi. The epic pitch-off takes place during Disrupt 2020, which runs from Sept. 14 – 18. Note: This opportunity is 100 percent free. TechCrunch does not charge any application or participation fees or take any equity.

You’ll receive six weeks of free pitch coaching from TC editors to whip you into prime fighting trim. Plus a virtual webinar series with industry experts. You’ll have just 6 minutes to pitch and demo to the judges — a panel of expert VCs, entrepreneurs and TechCrunch editors. Then you’ll answer their questions — and they’ll have plenty.

Founders who survive the first round move to the finals on the last day of Disrupt. It’s lather-rinse-repeat as you pitch to a fresh set of judges. Then it’s time for the big reveal: one startup takes the title, the Disrupt cup and the $100,000.

Have you clicked the application link yet? No? Here are more reasons to apply. If you earn a spot in the competition, you get a Disrupt Digital Pro pass and you get to exhibit to people around the world in Digital Startup Alley — for free.

You’ll network with CrunchMatch, our AI-powered platform, to set up virtual 1:1 meetings with investors, media, potential customers and the throngs of folks eager to meet a Battlefield competitor.

Need more perks? We got you covered.

A launch article featuring your startup on TechCrunch.comAccess to Leading Voices Webinars: Hear top industry minds share their strategies for adapting and thriving during and after the pandemicA YouTube video promoted on TechCrunch.comFree subscription to Extra CrunchFree passes to future TechCrunch events

This no-cost, perk-packed opportunity disappears in just 12 hours. Do whatever it takes to keep your startup moving forward. Apply to compete in Startup Battlefield before the deadline expires on June 26 at 11:59 pm (PT).

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

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 blitzscaled.

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.

How so?

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 vanished 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 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 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 events of the past few months have shaken the lives of everyone, but especially Black people in the U.S. COVID-19 has disproportionately impacted members of the Black community while police violence has recently claimed the lives of George Floyd, Tony McDade, Breonna Taylor, Rayshard Brooks and others. 

Two weeks ago, two Black transgender women, Riah Milton and Dominique “Rem’mie” Fells were murdered. In light of their deaths, activists took to the streets to protest the violence Black trans women face. Two days after Floyd’s killing, McDade, a Black trans man was shot and killed by police in Tallahassee, Florida. 

In light of Pride month coinciding with one of the biggest racial justice movements of the century amid a pandemic, TechCrunch caught up with Robyn Exton, founder of queer dating app Her, to see how her company is navigating this unprecedented moment. 

Exton and I had a wide-ranging conversation including navigating COVID-19 as a dating startup, how sheltering in place has affected product development, shifting the focus of what is historically a month centered around LGBTQ people to include racial justice work and putting purpose back into Pride month.

“Pride exists because there is inequality within our world and within our community and still there is no clear focus on what it is we should be fighting for as a community,” Exton says. “It almost feels like since equal marriage was passed, there’s a range of topics but no clear voice saying this is what everyone should focus on right now. And then obviously everything changed after George Floyd’s murder. Over the course of the following weekend, we canceled pretty much everything that was going out that talked still about Pride as a celebration. Especially for Black people within our community, in that moment of so much trauma, it felt completely wrong to talk about Pride just in general.”

Worldwide, Pride events have been canceled as a result of the pandemic. But it gives people and corporations time to reflect on what kind of presence they want to have in next year’s Pride celebrations.

It’s time to put on our thinking caps so we can discuss an esoteric but important policy change and how it is going to impact the VC world.

The 2008 financial crisis devastated the global economy. One of the reforms that came from the detritus of that situation was a policy known as the Volcker Rule.

The rule, proposed by former Fed chairman Paul Volcker and passed into law with the Dodd-Frank Act, was designed to limit the ways that banks could invest their balance sheets to avoid the kind of cataclysmic systemic risks that the world witnessed during the crisis. Many banks faced a liquidity crunch after investing in mortgage-backed securities (MBSs), collateralized debt obligations (CDOs), and other even more arcane speculative financial instruments (like POGs, or Piles Of Garbage) in seeking profits.

One of the unintended consequences of the rule is that it limited banks from investing in certain “covered funds,” which was written broadly enough that it, well, covered VC firms as well as hedge funds and other private equity vehicles. Reforms to that policy (and to the rule in general) have been proposed for a decade with little traction until recently.

Now, a number of reforms are underway to the Volcker Rule, which has been a domestic regulatory priority for the Trump administration since Inauguration Day.

First, a simplification to some of the rule’s regulations was passed late last year and went into effect in January. Now, a final rule to reform the Volcker Rule’s applications to VC firms, among other issues, was agreed to by a group of U.S. regulatory agencies, and will go into effect later this year.

The ongoing COVID-19 crisis has had a number of unexpected impacts on global economic activity — most of them negative. But the pandemic has also highlighted the need for alternative solutions to challenges where traditional solutions now prove either too costly, or too difficult to do while maintaining good health and safety practices. Near Space Labs, a startup focused on providing timely, location-specific, high-resolution Earth imaging from balloons in the stratosphere, is one company that has found its model remarkably well-suited to the conditions that have arisen due to the coronavirus crisis.

Near Space Labs is in the process of expanding its offering to Texas, with some imagery already collected, and the team in active conversations with a number of potential customers about subscribing to its imaging services ahead of launching the first full batch of collected imagery by early next month. Adding a new geographic location in the middle of a pandemic required Near Space Labs to move up the development on a way for it to easily ship and deploy its balloon-lofted imaging equipment using remote instruction with local technical talent. It’s now ready to effectively spin up an imaging operation very quickly, basically anywhere in the world, with simple, minimal training to onboard and equip local operators on-demand.

“With travel restrictions, we had to figure out how to deploy hardware in a fully remote way,” explained Near Space Labs’ CEO Rema Matevosyan. “That had been a challenge that we wanted to tackle at some point, for our scalability — but instead we had to tackle that ASAP. Today, I’m really proud to say that the Swift, our robotic vehicles, are able to be shipped anywhere on the globe in a small suitcase. And with a few videos and a manual, it’s super easy to train new people to launch.”

Swift is basically a sophisticated camera attached to a balloon that flies between 60,000 and 85,000 feet, with short duration flights that can nonetheless capture up to 270 square miles of imagery at 30 cm per pixel resolution in a single pass. Swift is also designed to be able to go up frequently, making trips as frequently as twice per day, and it’s designed to provide quick turnaround times for processed images, compared to long potential waits for imaging from geosynchronous or even LEO satellites based on orbital schedules, ground station transmission times and other factors.

And because Near Space Labs can basically ship its imaging equipment in a suitcase and have just about anyone train quickly to use it effectively, versus having to build a satellite that requires delivery via rocket and operation by highly trained engineers, it can offer considerable savings versus the space-based competition — at a time when cost sensitivity for public institutions and the organizations looking for this kind of data has them reluctant to open their wallets.

“In these uncertain economic times, margins and fiscal responsibility become very important for people,” Matevosyan explained. “We have the perfect solution for that — our approach is very flexible, very low-cost. Even states are ‘bankrupt,’ — so everybody’s looking for ways to improve their margins, and to improving their spend.”

Matevosyan told me that Near Space Labs has seen an uptick in interest in its product from two directions as a result of the ongoing global economic shifts. First, there are customers who have traditionally sourced this imaging from satellite providers and who are looking for cost savings and a product that more closely fits their geographic and timing needs. Second, there are organizations looking to start using this kind of imagery for the first time, as an alternative to in-person inspection or sensing, because of the ways in which COVID-19 has put restrictions on workforces.

“COVID also put a spotlight in general on the remote sensing industry, because people are unable to, for instance, go down to the assets or the sites that they usually would check manually,” she said. “So that started looking into remote sensing solutions, and we saw an uptick in applications and signups to our imagery. One example industry where that’s happening is conservation. Conservation wasn’t a vertical that was super active in our pipeline. But suddenly with COVID, it became pretty active.”

Matevosyan says that it took Near Space just “days” to ramp a new technical team to be able to launch its Swifts in Texas, and that’s representative of the speed at which it can now scale to establish imaging basically anywhere in the world. Flexibility and scalability were always key assets of the business, she says, but the COVID crisis pushed that essential value to the forefront, and could help propel the company’s growth a lot quicker than expected.

Deborah Quazzo is Managing Partner at GSV Ventures, a fund focused on Online Education ventures. This is a very good discussion on patterns of success and failure in the sector, and what investors...

___

As far as pandemic-proof businesses go, a startup for barbershops isn’t exactly the first thing that comes to mind — unless you raised millions just days before barbershops were shut down across the country.

Dave Salvant and Songe LaRon, co-founders of New York-based Squire, a back-end barbershop management tool for independent businesses they launched in 2016, raised a $34 million Series B led by CRV in early March (after raising $8 million in a Series A round led by Trinity Ventures in 2018). Days later, “everything went to zero,” LaRon recalls of their customer base: All barbershops closed.

The cash quickly went from an opportunistic raise to needed capital. Squire waived all subscription fees, created a site for information called www.helpbarbershops.com and launched a way for patrons to buy online gift cards for their favorite shops. One barbershop sold more than $30,000 in just a few days.

After weathering a hard few months, Squire is now enjoying high demand from barbershops preparing to reopen. The company provides cashless payment, a way to make appointments and is experimenting with a virtual waiting room, all features that barbershops post-pandemic are considering. It is currently live in 45 cities.

During shelter-in-place, some of us have been forced to cut our own hair, as shown by virtual haircuts done over Zoom and even a VC-hosted haircut workshop. But a DIY session won’t replace the intimacy of a barbershop.

Barbershops have long served as gathering places for Black and African American communities as a place to chat, be vulnerable and complain.

In recent years, the culture has moved more into mainstream conversation. Today, there is an entire talk show series, produced by LeBron James, where guests chat while getting a cut. In Atlanta, there’s a singular Atlanta barbershop that serves as an informal gathering ground for the city’s top politicians.

“We learned it resonated with men from all walks of life, all races and ethnicities and was really kind of a universal experience. So we saw an opportunity for a tech company,” LaRon said.

 

Salvant and LaRon thought of barbershops as places of comfort long before they saw them as a place of business.

“Barbers are part-time therapists for guys,” LaRon said in an interview with TechCrunch.

Salvant and LaRon, friends and then-students at Columbia who were living in Harlem, saw barbershops grow in cultural relevance while the technology behind them remained largely untouched. Long wait times, cash-only and scheduling woes continued to be problems that they themselves faced every time they got their hair cut.

Squire lets businesses schedule appointments, offer loyalty programs and install contactless and cashless payment. The team claims that barbershop operations are more complex than many other types of small businesses because there are multiple parties transacting, plus customers might check out different services from different barbers all within one service. That’s where Squire comes in — to be a point of sale to manage those confusing transactions.

“We don’t want to replace that relationship a guy had with the barber,” said Salvant. “We just wanted to take away all the annoying things about it.”

Squire makes money by charging a monthly fee based on size and needs of the barbershop, ranging from $30 to $250 per month.

A threat to Squire’s success are small and medium business payment infrastructure companies like Square. The co-founders were confident, noting that Squire is the only venture-backed business that exclusively tailors itself to barbershops, and thus will be the best solution for those businesses. Los Angeles-based Boulevard raised money in November for its salon and spa management software.

But Squire thinks barbershop subculture is niche enough that salon technology doesn’t do the job. Barbers want to partner with businesses that are as passionate as they are.

“They don’t look at it as a job, they look at it as a life calling,” LaRon said.

The high bar is precisely why a healthy chunk of Squire’s early days were defined by LaRon and Salvant sitting in barbershop chairs and asking a lot of questions. In fact, Salvant says he got his hair cut by nearly 600 different barbers.

“Part of them trusting you and you trust them happens if you sit down and get a haircut,” Salvant said. By and large, the feedback the co-founder got from barbers was that they needed a solution for the entire shop, as opposed to Squire’s original product aimed at a customer or individual barber. It gave them the faith to go for a vertical solution versus assuming a horizontal solution such as Square would do the job.

Reid Christian, an investor at Charles River Ventures (CRV) who was part of the Series B, said that he knew Squire would be a success when he experienced the product at Rust Belt Barbering in Buffalo, New York. Christian compared Squire to a “Venmo-like experience” with transactions. He estimates billions of dollars in men’s grooming spend.

When shops broadly reopen, Squire is in a good, timely spot to be adopted by the masses. For the co-founders, the incoming wave of interest was affirmed a long time ago.

Last year, the duo attended the Connecticut Barber Expo. It was an aha moment, as they witnessed over 15,000 make the pilgrimage over to Connecticut to learn about the industry.

“Most people don’t know about it, most people wouldn’t believe it until they saw it,” Salvant said. “It serves as a reminder how powerful it is.”

We’re less than a month away from launching TC Early Stage 2020, our interactive online bootcamp, that runs July 21-22. Don’t miss out on more than 50 expert-led workshops focused on the core subjects every early-stage startup founder needs to ace.

But hold up — today is your last chance to score an early-bird deal. Buy your pass before the clock strikes 11:59 pm (PDT), and you’ll save $50.

Early founders — from pre-seed through Series A — tend to have more questions than answers as they strive to build their startups. That’s where TC Early Stage comes in. Get answers to your questions from a battalion of credible, knowledgeable experts across the startup spectrum.

Is your pitch deck anemic? Does your tech stack stack up? How should you approach a VC? How do you protect your users? Those and a zillion other questions can keep you tossing and turning. This is your chance to learn from the pros and get answers you can put into practice now.

Each session can accommodate around 100 people, so be sure to sign up quickly — especially if you have topic-specific questions you want addressed. Session seats are available first come first serve, so don’t delay. The good news is that ticket holders receive exclusive access to videos of all sessions — on-demand after the event.

Bonus: You also have access to all the Main Stage interviews and CrunchMatch, our AI-powered networking platform — famous for relieving stress and increasing productivity.

Take a peek at just some of the interactive sessions and experts we have waiting for you at TC Early Stage.

How to create great growth assets for paid channels: Learn about the right ways and wrong ways to create great assets for paid channels, landing pages and more in this teardown workshop with Asher King Abramson, a top growth marketer who has worked with 100+ successful startups. Submit your landing page and ads beforehand for a chance to receive feedback live onstage.What scale-stage execs need to know about culture and D&I during hypergrowth: Your company’s culture and commitment to diversity and inclusion shouldn’t take a backseat when hiring at scale. Hear from Sarah Nahm, CEO of Lever, on how her company has evolved their culture as they grew from 20 to 250 while keeping D&I at the forefront of how they hire. A leader in the D&I and hiring space, Sarah will share actionable advice from Lever, her time at Google and examples from leaders in the tech industry.How to sell an idea when you don’t have a product: It takes money to make money. But first, you must get the money on board. Hear from seed-stage investor Charles Hudson about what it takes to convert investors when all you have to show is a great idea and an understanding of the market.

You still have a month to prepare for TC Early Stage 2020, but only a few hours left to keep $50 in your pocket. Don’t miss out — buy your pass before prices increase tonight at 11:59 p.m. (PDT).

Is your company interested in sponsoring TC Early Stage? Contact our sponsorship sales team by filling out this form.

( function() { var func = function() { var iframe = document.getElementById('wpcom-iframe-9b31d8bb4235e7b50579daa37a4be894') if ( iframe ) { iframe.onload = function() { iframe.contentWindow.postMessage( { 'msg_type': 'poll_size', 'frame_id': 'wpcom-iframe-9b31d8bb4235e7b50579daa37a4be894' }, "https:\/\/tcprotectedembed.com" ); } } // Autosize iframe var funcSizeResponse = function( e ) { var origin = document.createElement( 'a' ); origin.href = e.origin; // Verify message origin if ( 'tcprotectedembed.com' !== origin.host ) return; // Verify message is in a format we expect if ( 'object' !== typeof e.data || undefined === e.data.msg_type ) return; switch ( e.data.msg_type ) { case 'poll_size:response': var iframe = document.getElementById( e.data._request.frame_id ); if ( iframe && '' === iframe.width ) iframe.width = '100%'; if ( iframe && '' === iframe.height ) iframe.height = parseInt( e.data.height ); return; default: return; } } if ( 'function' === typeof window.addEventListener ) { window.addEventListener( 'message', funcSizeResponse, false ); } else if ( 'function' === typeof window.attachEvent ) { window.attachEvent( 'onmessage', funcSizeResponse ); } } if (document.readyState === 'complete') { func.apply(); /* compat for infinite scroll */ } else if ( document.addEventListener ) { document.addEventListener( 'DOMContentLoaded', func, false ); } else if ( document.attachEvent ) { document.attachEvent( 'onreadystatechange', func ); } } )();

Housing has been constructed for millennia, and while clearly our modern abodes are ever so slightly better than the elk tents we used to live in, the construction techniques behind housing today haven’t progressed all that much. What has progressed are prices — it’s more expensive than ever to build a modern unit, and that’s just for housing — head over to commercial real estate and the numbers don’t look much better.

For Martin Diz and his team, that’s a problem. Diz is not exactly a lifelong builder — in fact, he was building proverbial rockets as an aerospace engineering PhD researcher several years ago. As he was talking to his roommate back then, who was studying structural engineering, he realized that some of the techniques that his roommate’s field was trying to pioneer had already been discovered by the aerospace folks decades ago.

His roommate was trying to simulate an earthquake to model how the tremors would affect objects like a table inside a building. As Diz recalled, he said “Hey dude, did you know that in aerospace engineering, we did the same thing for the space station 50 years ago? … I learned this in grad school, you know, in our basic course because it’s a very old technique.”

Diz is legitimately a nice chap, and totally not the kind of aerospace engineer who goes around talking about how aerospace solved everything a century ago (okay, maybe just a tad of that). But the interaction and followup conversation got him thinking about what aerospace as a field had solved, and whether some of those techniques could be used in other domains.

Diz and his roommate kept talking over the years, and eventually, the two formed Tango Builder. Tango’s main premise is to bring more sophisticated engineering techniques to construction, improving performance and quality while lowering costs. It’s part of the current YC batch, and previously raised a small seed round, which included participation from Tracy Young, co-founder and CEO of PlanGrid.

The two, plus one employee, have already worked on a handful of projects, with some early promising results. Tango helped to design a hospital for COVID-19 patients in Ecuador that saw total savings of $1 million by lowering structural costs by a third. They consulted on the creation of a justice center in Mexico, and were able to reduce the required steel in the project by 40%. And they used their platform to optimize wall thickness in a masonry home to bring total cost down by 15%. All numbers are reported by the company and have not been independently verified.

There is a heavy focus on structural integrity (as there should be in construction), but Tango particularly shines around seismic modeling. While earthquakes are perhaps most pronounced in places like California and Mexico, both of which suffered major tremors this past week, earthquakes are a lingering threat throughout the world, and buildings need to be designed to handle them even if they are rare.

Diz and his team want to give designers better tools to model what happens in different scenarios while understanding the trade-offs of various building materials and designs. “You’re building with steel stock, but it’s much more expensive now, so it’s up to the user or the owner to decide which of the paths he wants to take,” he said. Safety is always important, but how much steel do you place in a building that might see an earthquake once a century? That’s what Tango wants to help answer.

Beyond improving structural modeling, Tango’s big ambition is to find additional efficiencies in the construction process by helping everyone involved with construction work together through a better workflow. “Each person has benefits from the platform, the architect will get the approvals … faster, the engineer can focus on the creative side of things, the contractor” can bid earlier knowing what design is coming, Diz explained. Saving time in all these processes ultimately translates directly to a project’s bottom line.

It’s very early days of course, with just Diz, his co-founder Juan Aleman, and one employee “working extremely hard.” The hope though is that melding some aerospace engineering techniques with a much more robust and technical platform will help push construction to better quality while saving costs as well. After all, aerospace did all this a century ago.

Jeff discloses subprime lending as the number of consumers needing loans escalate exponentially in this post-COVID world. Sramana Mitra: Let’s start by having you introduce yourself as well as the...

___

This discussion with Madwire Co-CEO JB Kellogg includes all sorts of interesting nuances, including DIFM vs. DIY. Read on. Sramana Mitra: Let’s start at the very beginning of your journey. Where are...

___

In a move that highlights how open the American IPO window may be at the moment, China-based Agora priced its public offering at $20 per share last night, ahead of its $16 to $18 proposed price range. (Update: As noted here, the company has a second HQ in California.)

At $20 per share, the 17.5 million shares sold in its debut raised $350 million, a huge haul for a company that reported around 10% of that figure in Q1 2020 revenue. Provided that your humble servant is doing his Class A to ADS share conversion calculations correctly, Agora is worth about $2 billion at its IPO price.

Agora raised well over $100 million while a private company, backed by GGV Capital, Coatue and others, according to Crunchbase data.

The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.

Agora is an API-powered company that allows customers to embed real-time video and voice abilities in their applications; appropriately, the company’s ticker symbol in America will be “API.”

With an annual run rate of $142.2 million, a $2 billion valuation gives Agora a run-rate multiple of around 14x. That’s rich, but not stratospheric. Perhaps Agora wasn’t able to command a higher multiple due to its sub-70% margins (68.8% in Q1)?

Agora’s financials make its IPO pricing a neat puzzle, so let’s pull apart the good and the bad to better understand why the market was willing to pay more than the company anticipated.

After that short exercise, we’ll make note of the current IPO climate, inclusive of what we learn from Agora. (Spoiler for unicorns out there: Things look good.)

The good, the bad, the odd

We can’t calculate Agora’s enterprise value with confidence until we get updated filings. But taking into account the company’s pre-IPO cash and liabilities, its implied enterprise value/run rate is something around 13x. (That figure will dip if the company’s shares don’t rise after its debut, as its cash position rises from its share sale; more on enterprise values here.)

The direct-to-consumer health insurer Oscar has raised another $225 million in its latest, late-stage round of funding as its vision of tech-enabled healthcare services to drive down consumer costs becomes more and more of a reality.

In an effort to prevent a patient’s potential exposure to the novel coronavirus, COVID-19, most healthcare practices are seeing patients remotely via virtual consultations, and more patients are embracing digital health services voluntarily, which reduces costs for insurers and potentially provides better access to basic healthcare needs. Indeed, Oscar now has a $2 billion revenue base to point to and now a fresh pile of cash from which to draw.

“Transforming the health insurance experience requires the creation of personalized, affordable experiences at scale,” said Mario Schlosser, the co-founder and chief executive of Oscar.

Oscar’s insurance customers have the distinction of being among the most active users of telemedicine among all insurance providers in the U.S., according to the company. Around 30% of patients with insurance plans from the company have used telemedical services, versus only 10% of the country as a whole.

The new late-stage funding for Oscar includes new investors Baillie Gifford and Coatue, two late-stage investor that typically come in before a public offering. Other previous investors, including Alphabet, General Catalyst, Khosla Ventures, Lakestar and Thrive Capital, also participated in the round.

With the new funding, Oscar was able to shrug off the latest criticisms and controversies that swirled around the company and its relationship with White House official Jared Kushner as the president prepared its response to the COVID-19 epidemic.

As the Atlantic reported, engineers at Oscar spent days building a standalone website that would ask Americans to self report their symptoms and, if at risk, direct them to a COVID-19 test location. The project was scrapped within days of its creation, according to the same report.

The company now offers its services in 15 states and 29 U.S. cities, with more than 420,000 members in individual, Medicare Advantage and small group products, the company said.

As Oscar gets more ballast on its balance sheet, it may be readying itself for a public offering. The insurer wouldn’t be the first new startup to test public investor appetite for new listings. Lemonade, which provides personal and home insurance, has already filed to go public.

Oscar’s investors and executives may be watching closely to see how that listing performs. Despite its anemic target, the public market response could signal that more startups in the insurance space could make lemonade from frothy market conditions — even as employment numbers and the broader national economy continue to suffer from pandemic-induced economic shocks.

In case you missed it, you can listen to the recording here: 491st 1Mby1M Roundtable June 25, 2020: With Deborah Quazzo, GSV Ventures

___

Sramana Mitra: Talk to me about your go-to market strategy. What has worked? What turned out to be the repeatable customer acquisition strategy? Rich Waldron: For a long time, we were relying on...

___