Bronwyn discusses a critical aspect of telehealth that is seeing significant adoption in the Covid era. Sramana Mitra: Let’s start by introducing our audience to yourself as well as to FORCE...

___

Veteran journalist Maria Ressa, the founder of Filipino independent news site Rappler, was found guilty on Monday of cyber libel charges by a Manila court. She faces up to six years in prison. Critics of the charges, which include prominent human rights and press freedom advocates, say charges filed against Ressa and Reynaldo Santos Jr, a former Rappler researcher and editor, demonstrate how the government is cracking down on media freedom and the independent press in the Philippines.

After Ressa was arrested in February 2019, the United Nations High Commissioner for Human Rights issued a statement that said Ressa’s treatment “appears to be the latest element in a pattern of intimidation of a media outlet that has fiercely guarded its independence and its right to conduct in-depth investigations and to criticize the authorities.”

Both Ressa and the journalists of Rappler, which was founded in 2012, have written critically about the administration of President Rodrigo Duterte, conducting investigations into corruption charges.

Ressa and Santos were arrested in 2019 on cyber libel security charges related to an article published in 2012 that reported on the alleged ties between Supreme Court Justice Renato Corona, who was impeached in 2011, and wealthy businessmen including Wilfredo Keng.

Keng filed the cyber libel complaint against the two journalists in 2017. The five year gap between the article’s publication and Keng’s complaint was much longer than the one-year prescriptive period for ordinary libel in the Philippines’ penal code, and in order to charge Ressa and Santos, the Department of Justice extended that period to 12 years for cyber libel. Rappler’s legal counsel argued this could impact their constitutionally protected rights.

In today’s verdict, issued by Manila Regional Trial Court Judge Rainelda Estacio-Montesa, Rappler was found to have no liability, but Ressa and Santos were both found guilty and ordered to pay 200,000 pesos (about $3,978 U.S. dollars) in moral damages and another 200,000 pesos fine in exemplary damages. They are entitled to post-conviction bail and an appeal the verdict.

In a statement after the verdict, Amal Clooney, the head of Ressa’s legal defense team, said, “This conviction is an affront to the rule of law, a stark warning to the press, and a blow to democracy in the Philippines. I hope the appeals court will set the record straight in the case.”

Ressa said, “Freedom of the press is the foundation of every single right you hvae as a Filipino citizen. If we can’t hold power to account, we can’t do anything. Are we going to lose freedom of the press? Will it be death by a thousand cuts, or are we going to hold the line so that we protect the rights that are enshrined in our constitution?”

This feature from Barron’s looks at the latest IPOs that are booming and what it means for the broader market. For this week’s posts, click on the paragraph links. Tech Posts Cloud...

___

Sramana Mitra: We’ve looked at a bit of what you’ve done and how you operate. We’ve got a flavor. In one of your examples, you said you’ve invested in a problem that you were already familiar with....

___

Sramana Mitra: Let’s do another one. Joshua Posamentier: We have a company called Energetic Insurance which is a pure-play InsurTech company. They make an insurance product backed by a top 5 global...

___

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7am PT). Subscribe here.

Many in the tech industry saw the threat of the novel coronavirus early and reacted correctly. Fewer have seemed prepared for its aftereffects, like the outflow of talented employees from very pricey office real estate in expensive and troubled cities like San Francisco.

And few indeed have seemed prepared for the Black Lives Matter protests that have followed the death of George Floyd. This was maybe the easiest to see coming, though, given how visible the structural racism is in cities up and down the main corridors of Silicon Valley.

Today, the combination of politics, the pandemic and the protests feels almost like a market crash for the industry (except many revenues keep going up and to the right). Most every company is now fundamentally reconsidering where it will be located and who it will be hiring — no matter how well it is doing otherwise.

Some, like Google and Thumbtack, have been caught in the awkward position of scaling back diversity efforts as part of pandemic cuts right before making statements in support of the protesters, as Megan Rose Dickey covered on TechCrunch this week. But it is also the pandemic helping to create the focus, as Arlan Hamilton of Backstage Capital tells her:

It is like the world and the country has a front-row seat to what Black people have to witness, take in, and feel all the time. And it was before they were seeing some of it, but they were seeing it kind of protected by us. We were kind of shielding them from some of it… It’s like a VR headset that the country is forced to be in because of COVID. It’s just in their face.

This also putting new scrutiny on how tech is used in policing today. It is renewing questions around who gets to be a VC and who gets funding right when the industry is under new pressure to deliver. It is highlighting solutions that companies can make internally, like this list from BLCK VC on Extra Crunch.

As with police reforms currently in the national debate, some of the most promising solutions are local. Property tax reform, pro-housing activism and sustainable funding for homelessness services are direct ways for the tech industry to address the long history of discrimination where the modern tech industry began, Catherine Bracy of TechEquity writes for TechCrunch. These changes are also what many think would make the Bay Area a more livable place for everyone, including any startup and any tech employee at any tech company (see: How Burrowing Owls Lead To Vomiting Anarchists).

Something to think about as we move on to our next topic — the ongoing wave of tech departures from SF.

Where will VCs follow founders to now?

In this week’s staff survey, we revisit the remote-first dislocation of the tech industry’s core hubs. Danny Crichton observes some of the places that VCs have been leaving town for, and thinks it means bigger changes are underway:

“Are VCs leaving San Francisco? Based on everything I have heard: yes. They are leaving for Napa, leaving for Tahoe, and otherwise heading out to wherever gorgeous outdoor beauty exists in California. That bodes ill for San Francisco’s (and really, South Park’s) future as the oasis of VC.

But the centripetal forces are strong. VCs will congregate again somewhere else, because they continue to have that same need for market intelligence that they have always had. The new, new place might not be San Francisco, but I would be shocked just given the human migration pattern underway that it isn’t in some outlying part of the Bay Area.

And then he says this:

As for VCs — if the new central node is a bar in Napa and that’s the new “place to be” — that could be relatively more permanent. Yet ultimately, VCs follow the founders even if it takes time for them to recognize the new balance of power. It took years for most VCs to recognize that founders didn’t want to work in South Bay, but now nearly every venture firm of note has an office in San Francisco. Where the founders go, the VCs will follow. If that continues to be SF, its future as a startup hub will continue after a brief hiatus.

It’s true that another outlying farming community in the region once became a startup hub, but that one had a major research university next door, and at the time a lot of cheap housing if you were allowed access to it. But Napa cannot be the next Palo Alto because it is fully formed today as a glorified retirement community, Danny.

I’m already on the record for saying that college towns in general are going to become more prominent in the tech world, between ongoing funding for innovative tech work and ongoing desirability for anyone moving from the big cities. But I’m going to add a side bet that cities will come back into fashion with the sorts of startup founders that VCs would like to back. As Exhibit A, I’d like to present Jack Dorsey, who started a courier dispatch in Oakland in 2000, and studied fashion and massage therapy during the aftermath of the dot-com bubble. His success with Twitter a few years later in San Francisco inspired many founders to move as well.

Creative people like him are drawn to the big, creative environments that cities can offer, regardless of what the business establishment thinks. If the public and private sectors can learn from the many mistakes of recent decades (see last item) who knows, maybe we’ll see a more equal and resilient sort of boom emerge in tech’s current core.

Insurance provider Lemonade files for IPO with that refreshing common-stock flavor

There are probably some amazing puns to be made here but it has been a long week, and the numbers speak for themselves. Lemonade sells insurance to renters and homeowners online, and managed to reach a private valuation of $3.5 billion before filing to go public on Monday — with the common stockholders still comprising the majority of the cap table.

Danny crunched the numbers from the S-1 on Extra Crunch to generate the table, included, that illustrates this rather unusual breakdown. Usually, as you almost certainly know already, the investors own well over half by the time of a good liquidity event. “So what was the magic with Lemonade?” he ponders. “One piece of the puzzle is that company founder Daniel Schreiber was a multi-time operator, having previously built Powermat Technologies as the company’s president. The other piece is that Lemonade is built in the insurance market, which can be carefully modeled financially and gives investors a rare repeatable business model to evaluate.”

Adapting enterprise product roadmaps to the pandemic

Our investor surveys for Extra Crunch this week covered the space industry’s startup opportunities, and looked at how enterprise investors are assessing the impact of the pandemic. Here’s Theresia Gouw of Acrew Capital, explaining how two of their portfolio companies have refocused in recent months:

A common theme we found when joining our founders for these strategy sessions was that many pulled forward and prioritized mid- to long-term projects where the product features might better fit the needs of their customers during these times. One such example in our portfolio is Petabyte’s (whose product is called Rhapsody) accelerated development of its software capabilities that enable veterinarians to provide telehealth services. Rhapsody has also incorporated key features that enable a contactless experience when telehealth isn’t sufficient. These include functionality that enables customers to check-in (virtual waiting room), sign documents, and make payments from the comfort and safety of their car when bringing their pet (the patient!) to the vet for an in-person check-up.

Another such example would be PredictHQ, which provides demand intelligence to enterprises in travel, hospitality, logistics, CPG, and retail, all sectors who saw significant change (either positive or negative) in the demand for their products and services. PredictHQ has the most robust global dataset on real-world events. Pandemics and all the ensuing restrictions and, then, loosening of restrictions fall within the category of real-world events. The company, which also has multiple global offices, was able to incorporate the dynamic COVID government responses on a hyperlocal basis, by geography, and equip its customers (e.g., Domino’s, Qantas, and First Data) with up to date insights that would help with demand planning and forecasting as well as understanding staffing needs.

Around TechCrunch

Extra Crunch Live: Join Superhuman CEO Rahul Vohra for a live Q&A on June 16 at 2pm EDT/11 AM PDT
Join us for a live Q&A with Plaid CEO Zach Perret June 18 at 10 a.m. PDT/1 p.m. EDT
Two weeks left to save on TC Early Stage passes
Learn how to ‘nail it before you scale it’ with Floodgate’s Ann Miura-Ko at TC Early Stage SF
How can startups reinvent real estate? Learn how at TechCrunch Disrupt
Stand out from the crowd: Apply to TC Top Picks at Disrupt 2020

Across the Week

TechCrunch

Theaters are ready to reopen, but is America ready to go back to the movies?
Edtech is surging, and parents have some notes
When it comes to social media moderation, reach matters
Zoom admits to shutting down activist accounts at the request of the Chinese government

Extra Crunch

TechCrunch’s top 10 picks from Techstars’ May virtual demo days
Software’s meteoric rise: Have VCs gone too far?
Recession-proof your software engineering career
The complicated calculus of taking Facebook’s venture money
The pace of startup layoffs may be slowing down

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

After a pretty busy week on the show we’re here with our regular Friday episode, which means lots of venture rounds and new venture capital funds to dig into. Thankfully we had our full contingent on hand: Danny “Well, you see” Crichton, Natasha “Talk to me post-pandemic” Mascarenhas, Alex “Very shouty” Wilhelm and, behind the scenes, Chris “The Dad” Gates.

Make sure to check out our IPO-focused Equity Shot from earlier this week if you haven’t yet, and let’s get into today’s topics:

Instacart raises $225 million. This round, not unexpected, values the on-demand grocery delivery startup at $13.7 billion — a huge sum, and one that should make it harder for the well-known company to sell itself to anyone but the public markets. Regardless, COVID-19 gave this company a huge updraft, and it capitalized on it.Pando raises $8.5 million. We often cover rounds on Equity that are a little obvious. SaaS, that sort of thing. Pando is not that. Instead, it’s a company that wants to let small groups of individual pool their upside and allow for more equal outcomes in an economy that rewards outsized success.Ethena raises $2 million. Anti-harassment software is about as much fun as the dentist today, but perhaps that doesn’t have to be the case. Natasha talked us through the company, and its pricing. I’m pretty bullish on Ethena, frankly. Homebrew, Village Global and GSV took part in the financing event.Vendr raises $4 million. Vendr wants to help companies cut their SaaS bills, through its own SaaS-esque product. I tried to explain this, but may have butchered it a bit. It’s cool, I promise.Facebook is getting into the CVC game. This should not be a surprise, but we were also not sure who was going to want Facebook money.And, finally, Collab Capital is raising a $50 million fund to invest in Black founders. Per our reporting, the company is on track to close on $10 million in August. How fast the fund can close its full target is something we’re going to keep an eye on, considering it might get a lot harder a lot sooner. 

And that is that; thanks for lending us your ears.

Vincent Diallo is Managing Partner at Interlace Ventures, a fund focused on retail tech.

___

I’m publishing this series on LinkedIn called Colors to explore a topic that I care deeply about: the Renaissance Mind. I am just as passionate about entrepreneurship, technology, and business, as I...

___

Sramana Mitra: Where do you see white spaces? I’ll give you an example. One of the things we’re learning in this COVID world is that at the elementary school level, distance learning is performing...

___

Light’s push into smartphones was an inevitability. Sure, the startup turned heads with its pricey L16 camera, but these days mobile photography is almost exclusively the domain of the handset. Early last year, the answer arrived in the form of the trypophobia-inducing Nokia 9 PureView.

In a category where manufacturers raced to add more cameras, the PureView had the most, with a five-hexagonal array. It was new, innovative and for most, it was overkill. At the very least, however, it gave Nokia/HMD some bragging rights and managed to set the handset apart in one of the most hotly contested corners of the smartphone hardware race.

But Light is getting out of the smartphone game. Ultimately, the competition may have just been too stiff for a small startup, especially with many manufacturers working on their own native hardware and software solutions.

Light confirmed the move this week in an email to Android Authority, writing simply that it was “no longer operating in the smartphone industry.” It’s a surprising bit of news, given that mobile partnerships seemed like the most logical way forward for the company, which drummed up a $121 million in a SoftBank-led round back in 2018. That Series D brought the Palo Alto-based company’s total funding up to more than $181 million.

More recently, it also signed deals with Sony and Xiaomi. No word on what such a move means for those partnerships going forward. Nor is it clear what life after smartphones looks like for Light. We’ve reached out to the company for more insight into its plans.

It has been an incredibly tough period for everyone the past few months as the global COVID-19 pandemic has wiped out whole industries from the economic map.

While tech has been among the most resilient industries in the face of this cataclysm, the extreme mobility of the industry’s workforce begs large questions about what the future of startups and work will look like moving forward.

We’ve debated what COVID-19 will do to the rise of the college town as startup hubs and how the pandemic will change the way we work in coffee shops and neighborhoods. Now, we want to address one of the larger questions that has been bugging us: Will tech continue to centralize in hubs like San Francisco and New York City, or will remote work and all the other second-order effects lead to a more decentralized startup ecosystem?

We have three perspectives from our writers, with wildly different predictions about what the future has in store.

First, we have Danny Crichton, who believes that tech, and particularly the VC industry, will remain as concentrated as ever, although where it is concentrated will perhaps shift a bit. Meanwhile, Alex Wilhelm asserts that startup growth outside major hubs will actually accelerate, spreading tech wealth even farther outside the metropolises. Finally, Natasha Mascarenhas argues that the combination of the economic dislocation of COVID-19 and the increasing attention to equity in tech will lead to more intense investment outside core startup hubs.

Danny Crichton: A new Napa Valley café shows why in-person networks matter

First there was Sand Hill Road. Then there was South Park. And now there’s Solbar at Solage in Calistoga.

Despite the wide availability of remote work tools over the past two decades, VCs have always miraculously congregated in extraordinarily tight quarters. VCs weren’t attracted to Sand Hill’s low-slung office buildings for the architecture, which were and are a terror to eyes with a taste for anything more sophisticated than “here be four walls and a roof.” VCs didn’t head to South Park to enjoy what Google Maps calls a “tree-lined oval garden” nestled between light industrial buildings. And they aren’t heading to Solbar in Napa Valley for Californian cuisine and a dining room conveniently closed on Partner Mondays.

APX is an early-stage accelerator in Berlin, but it’s not quite your average accelerator — it’s essentially a joint venture between giant European publishing house Axel Springer and Porsche, the German automaker. Earlier this month, we sat down with APX managing director Jörg Rheinboldt to discuss what makes APX different and how it’s weathering the coronavirus pandemic.

Rheinboldt has quite a bit of experience as both an entrepreneur and investor. He co-founded Alando.de, which was acquired by eBay in 1999 and donation platform betterplace.org in 2007. In 2013, he became CEO of Axel Springer Plug and Play and during his time as an investor, he put money into companies like N26, Zizoo, Blogfoster and Careship.

“We started APX because Plug and Play wanted to become more of a platform for matchmaking between startups and corporates,” Rheinboldt said when I asked him about the project’s origin. “We, the team, enjoyed investing in early-stage companies a lot and Axel Springer also enjoyed investing in early-stage startups a lot. So we decided to stop investing in new companies Axel Springer Plug and Play. We had invested in 102 companies — and focus[ed] on finding interesting teams to invest in with a new company that we needed to found.”

Rheinboldt took this discussion to his boss, Mathias Döpfner, the current CEO of Axel Springer, who encouraged him to find another shareholder. “If it’s only us, you might have to do what we want — and maybe you don’t want that,” he said Döpfner told him. In looking for a partner, Rheinboldt approached the Porsche family, which he had met at some of his previous investor events. The family was looking to diversify its portfolio, so after a few more meetings, including a presentation at Porsche’s leadership summit, the two companies decided to get into this business together.

One interesting thing Rheinboldt noted — and this isn’t so much about the Porsche family as a general observation — is that family offices are often resistant to getting into venture capital, at least in Germany.

BLCK VC is on a mission to double the number of Black venture capitalists out there by 2024. The reason behind it shouldn’t need explaining — only 2% of all partner-level VCs are Black, and 81% of VC firms don’t have a single Black partner. It’s no surprise then, that the startup ecosystem that is built underneath the VC community is sadly and drastically homogeneous.

We sat down with BLCK VC co-founder and co-chair Sydney Sykes on an episode of Extra Crunch Live to talk about the ongoing protests, the state of the VC industry with regard to diversity and inclusion, and actionable insights and strategies around how we can be more inclusive across all facets of the tech ecosystem.

Because we believe this is a critical conversation to have and engage with, we’ve made this episode and the complete Q&A free.

Below, you’ll find a lightly edited transcript of highlights from the conversation, as well as a YouTube video of the entire chat. You’ll also find the video from BLCK VC’s “We Won’t Wait” day of action, as well as a list of resources focused on anti-racism education.

On whether tech companies’ energy in this moment will be sustained to foster long-lasting change:

You’re seeing all these tech companies saying ‘Black Lives Matter,’ and all these companies are donating. The truth is, in my mind, donating and posting statements doesn’t change the way your company works. It doesn’t change the way the industry works. So, when I hear those statements, that’s the part where I’m jaded and where I feel pessimistic and feel that things won’t change. Where I feel really optimistic is I’m seeing these employees at tech companies, and I’m seeing citizens saying, ‘No, you can’t just say Black Lives Matter. You need to actually live this.’

There’s a recognition now from the bottom up, a real grassroots effort to say, ‘you need to change what you’ve been doing because it hasn’t worked.’ I think these companies have been and they will need to continue to react to what their employees and what their customers are saying. So, I am more optimistic than I’ve ever been. That being said, I am still a black woman in America and I do not think that what’s going on right now will cure racism in any way. I’m optimistic, though, that things will be better in the future. In a month from now compared to where things were a month ago, how much better? We’ll have to wait and see. But I’m excited to see what the changes will be.

On creating and fostering change from within versus outside of an organization:

I first got interested in venture late in college. I was scrolling through the different pages of different VC firms, just black and white photos of white male investors. I felt that, just by being in this industry, just by joining a venture firm as an investor as a black woman, that I was initiating change and that I was making a difference. For me, I personally felt like the best way that I can cause action and that I can cause changes was from being on the inside. I don’t think that’s the right choice for everyone. I also don’t think that the onus should always be on people of color to put themselves in uncomfortable positions because they don’t think that those industries, those companies, will change without them being there. So I think it’s a balance.

On the one hand, you have boycotts that have worked in the past. That’s total abstinence. That’s total removal from a system that’s unjust. And on the other hand, you have people who are inside and they also are driving change in the environment.

I think there’s no right answer to how you drive change. If you are listened to and you have a voice, you need to speak up in the way that’s most powerful. So in the case of Alexis Ohanian, if he leaves, and him leaving is him raising his voice, that’s a powerful way to use your voice. There’s also a powerful way to use your voice from the inside. But at the same time, if he’s been speaking up all along and nothing’s changed, then maybe him leaving is speaking even louder, and maybe that is one approach. If you can’t make change from the inside, why should you waste your time there? Why not go somewhere else where you can actually drive change?

On the importance of tracking diversity numbers within VC firms:

It’s really important for people within firms, existing GPs and investors, to be aware of how big the issue is. If you don’t write it down, you don’t have to recognize what you’re missing and what is lacking. I’m not optimistic that, in the next couple of years as firms start writing down their data, that they will suddenly be representative of the U.S. population, or that they will be recognizing the value. But I also think it’s a bit of a snowball effect. If you get more diverse talent in the door or in the network, or at least on the radar, then you’re thinking about diversity more when you do your investment, when you host your events, when you’re expanding what the ecosystem looks like, even though it’s not going to change right away.

Frankly, a lot of the firms that reach out to us are already aware of and understand, to some extent, institutional racism. They understand implicit bias, and they understand that they are missing talent. It’s true that those are not the people or the firms who need the most help.

But when we do get firms who are willing to engage with us, or when we get in contact with firms that aren’t diverse or don’t have any diverse investors, it’s about talking about the value that diversity adds. In study after study, we see that businesses, investors and companies are better when they are more diverse, that their company will be better if they have that diversity. It’s just shown time and time again.

So even if you think your portfolio is as good as it could be, or your investor is as good as they could be, it’s probably not true. I also like to highlight the fact that it’s about having an informed perspective.

Your investors, the people you’re speaking with, the people you’re making investment decisions with, that perspective is only as informed as it is diverse. So if you don’t have diversity on that investment committee, making decisions about sending out those dollars, then you’re lacking a perspective and you’re missing information.

On best practices around tracking D&I:

On the VC firm side of things I recommend tracking top-level employees. What percent of your high-level employees represent diverse backgrounds, gender, LGBTQ and all that kind of data. Then, I also recommend tracking that at the seniority level, so associates, controllers, partners, GPs. How many of those people have diverse backgrounds. Then, beyond that, I think it’s also important to track your pipeline. How many of your candidates coming in are from diverse backgrounds or different schools. All those metrics are important, as well, because then you can see where the pipeline is falling short. When you host events, what do your speaker series look like? Do your panelists all look just like you?

I also think, on the entrepreneur side of things, it’s really important to look at the dollar amount spent. How many dollars are going towards founders from different backgrounds, rather than the number of diverse founders you’re investing in.

And lastly, and this is more of an intangible thing, but where are you going to find the entrepreneurs you’re investing in. Are they recommendations from other investors? Are they reaching out to you via cold calls and emails? Are you going to different colleges and universities and inviting them to your pitch days? So there’s also some pipeline tracking work that can be done there that is really important.

On increasing the number of Black partners at traditionally white VC firms versus encouraging Black VCs to start their own firms:

There are two approaches.

The first is the idea that these very large, predominantly white firms control a very large amount of the assets that are distributed in venture capital; $80 billion+ a year, and I’m sure a very large portion of that comes from the top 10 firms. So, it’s very difficult to parallel the amount of dollars being invested by the largest firms by starting up a brand new fund.

I also think it’s really important to have these Black-led VC firms that invest, without being beholden to any GPs above them. They have a very valuable perspective. We need both.

We need Black investors starting their own fund, starting their own firms, and investing in founders they believe in, whether they’re Black or not or brown or not. We also need people at the largest funds, making sure that the very, very large amount of wealth creation and job creation is being implemented and invested in a way that reflects the diversity of our country and reflects the perspectives of Black investors.

On separate funds dedicated to investing in underrepresented entrepreneurs, like the ones from SoftBank and a16z:

We always used to hear and still do sometimes hear the term ‘pipeline issue,’ which has always been a euphemism in the past to say that there’s not enough Black talent out there, which is just not true. There is a pipeline issue and it’s that these firms don’t have diverse pipelines because they don’t have diverse personal networks, and they haven’t tried to build out their networks. They tend to invest in people like them, and they tend to talk to people that look like them. That is the pipeline. I don’t know how these firms will change.

You mentioned SoftBank. There are a couple of funds right now dedicated to investing in underrepresented entrepreneurs, and I think any dollars put towards Black founders is a good thing. I’m having a hard time understanding the need for a separate fund to invest in diverse founders. If you have not been investing in diverse founders, how will a separate pile of money change anything? I don’t know. So you have to look at it and ask what is the issue? Why haven’t you been investing in diverse founders?

Do you think they don’t have good enough companies? That they don’t have enough good talent? They don’t have enough experience? I know none of those things are true. The approach I recommend is, above everything, change your pipeline. If it’s not working, change it. Go out there and meet founders, meet investors who are investing in diverse companies in a way that you haven’t. There are firms out there that are doing that. And if you feel like you can’t do that right away, then how about bringing in diverse scouts and giving them the money to invest? There are plenty of great Black founders, CEOs, investors, angel investors who would be wonderful scouts who can invest on a firm’s behalf and really put those dollars out there. That will instantaneously change things.

If you feel like you can’t do that, put your money into the funds that are actually doing it right now. Precursor is a great example. There are quite a few other funds that have been able to find incredible, diverse talent. Backstage Capital is another. There are quite a few of them. If you can’t do any of those things, I mean, I don’t know. I don’t think you’re trying.

On recommendations for aspiring Black investors who feel disillusioned or locked out of the VC community:

Don’t stop trying. You will not always get a response, but send cold emails, try to find the connections, a friend-of-a-friend in your network, and try to build up a network in venture. I know it’s difficult, but keep trying. I also recommend working with entrepreneurs to learn what that aspect of the job is like that will help you build up a skill set. So if there are any entrepreneurs around you, ask how you can work on a project with them, or interview them. There are a lot of accelerators and incubators that will offer opportunities for you to shadow or intern with them. That’s a really good approach and there can be more jobs on that side.

Truthfully, a lot of the jobs in venture go to somebody who comes from investment banking. That’s not the only approach, but being in the investment banking system or the startup ecosystem are helpful ways to get around venture capitalists that are a bit more accessible than the venture industry itself. It is a challenging road. The best approach for you is just trying to expand your network and putting your feet to the ground and
being proactive about it.

On firms that are waking up to this issue and want to make changes but are scared of coming off as opportunistic or performative:

Performative allyism is a problem.

You’re saying something that you don’t live. That is the only problem with all of this. If you live it, it’s not performative. It’s actual, if you genuinely believe what you say, what you put on social media, what you talk about. If you want to start recruiting in diverse ways, that won’t look opportunistic or performative. You will look enlightened. And maybe that’s a dramatic turn, but it’ll look like you finally understand. I don’t think any firm should be afraid to take action, especially on diversifying their networks.

Now, where you come into a risky space is when you start to think about the dollars you invest and the hiring you do as an act of, you know, good PR, or as an act of charity. There are incredible Black entrepreneurs out there and you should be investing in them because they will improve your portfolio. They will introduce you to even better investors. They will give you better opportunities to improve your funds. You should invest in hiring black investors because they will expand your network, they will provide you opportunities to think about problems in a different way. They will provide a different perspective and a different opinion, and they will be some of your best investors and investments. If you are hiring them, and you are not giving them the power to invest dollars, if you’re not giving them the opportunity to speak up and share their voice, that is performative. That is not helpful. It will not change lives, it will not change racism, it will not change the shape of this industry, and it will not make your portfolio and your firm better.

On the progress that’s been made in the past several years:

One great example is Elliott Robinson. He’s on our founding BLCK VC board, and now a GP at Bessemer. He is very well listened to in the VC community, not just in the Black VC community. I think that is a sign of progress. He has check-writing power.

I also like to see the movement of white allies stepping down from boards to make space for Black advisors to be on an independent board. That’s hugely important. It’s an important trend to keep continuing because board seats are an incredible source of influence and wealth and are very important to diversify.

I also am excited to see the groundswell of support from white allies from tech company employees, standing up and saying, ‘we just want to stand for your policies, we won’t stand for policies that don’t promote Black investors or Black employees at the same rate as their white counterparts, and we won’t stand for policies that support initiatives that promote institutional racism.’ I think that is all very empowering. Oh, I’m curious to see how this movement keeps going. I’m very hopeful. I think there is a tension and there’s action, and there is an excitement that I’ve never seen. I think we just need to try and keep moving that forward.

Following, you’ll find a list of resources for anti-racist education in the tech and VC industry and more broadly. This list is by no means comprehensive but is a great place to start.

On bias in tech:

Race After Technology: Abolitionist Tools for the New Jim Code by Ruha BenjaminTechnology and the Logic of American Racism by Sarah E. ChinnHow I’m fighting bias in algorithms by Joy BuolamwiniAlgorithms of Oppression by Safiya Umoja NobleBits & Prejudice: Finding Problems and Solutions of Bias in Technology by Ahmed Alshamary

Tech orgs focused on racial equality:

DigitalUndividedCode2040TechEquity CollaborativeKapor CenterOurCollectiveBlack Girls CODE

Reading List:

The 1619 Project by The New York TimesHow to Be an Anti-Racist by Ibram X. KendiSo You Want To Talk About Race by Ijeoma OluoThe Bluest Eye by Toni MorrisonThe Origin of Others by Toni MorrisonThe New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle AlexanderWhite Rage: The Unspoken Truth of Our Racial Divide by Carol AndersonBetween the World and Me by Ta-Nehisi Coates

Movies:

Selma, Ava DuVernayJust Mercy, Destin Daniel Cretton13th, Ava DuVernayAmerican Son, Kenny LeonFruitvale Station, Ryan CooglerIf Beale Street Could Talk, Barry JenkinsI Am Not Your Negro, Raoul PeckClemency, Chinonye ChukwuThe Black Power Mixtape: 1967 – 1975, Göran OlssonDo The Right Thing, Spike LeeThe Last Black Man In San Francisco, Joe TalbotGet Out, Jordan Peele

TV Shows:

Dear White People, Justin SimienWhen They See Us, Ava DuVernayRest In Power: The Trayvon Martin Story, Shawn Carter

Facebook is reportedly getting into the venture capital game, but for young entrepreneurs working in social media, ignoring or deleting that particular friend request could be the right call.

According to a report in Axios, the company is building up a corporate fund under the auspices of its “New Product Experimentation” team, which launched last year. The company posted a job opening looking for a “head of investments” for the new division and now has new job openings in the group for two “founder” positions in New York City and Menlo Park, California. 

Axios reported that the role would “manage a multimillion dollar fund that invests in leading private companies alongside top venture capital firms and angel investors,” according to a now-deleted post. The new hire will join Shabih Rizvi, a former partner at the Alphabet-backed corporate venture firm, Gradient Ventures, who began his career in venture at KPCB.

While Facebook said that the new investment arm would complement the work that the company already does to support startups through accelerators and hackathons, investors at some of Silicon Valley’s venture capital firms were skeptical. Perhaps with good reason, since the group that houses Facebook’s new investment team is hiring its own “founders” and has already developed a few apps that could compete with existing startups.

“[Money] of last resort,” one investor wrote in a text. Another said it would be a way for Facebook to spot potential acquisitions early enough to avoid triggering antitrust concerns, which may be good for Facebook, but bad for startups. “[Facebook] can’t buy 100 million-user apps any more,” this investor wrote in a direct message. “It needs to buy them closer to 10 million.”

Are you an early stage founder? Then listen up, because we created TC Early Stage just for you. This two-day virtual conference takes place on July 21-22. We’ll provide the details below, but first things first. Early bird tickets cost just $199 for early-stage founders, but this sweet deal flies south on June 26 at 11:59 p.m. (PDT). Avoid the price hike. Buy your ticket now and save $50.

TechCrunch Early Stage sprouted roots in Extra Crunch, our subscription-based editorial content that offers founders extensive analysis and advice on essential topics. Think about Early Stage along the lines of an accelerated accelerator for early founders — only with more experts across a bigger range of the startup ecosystem.

With more than 50 presentations from which to choose, you’ll get your burning questions answered by people who know the score. We’re talking actionable, how-to advice on crucial topics that every early stage founder needs to know — legal, investing, marketing, tech development, recruiting, pitching and a bunch more.

Here’s another reason to get your ticket sooner rather than later. We limit each breakout session to 100 people, and sign-up is on a first come, first serve basis. But don’t fret about missing something essential. Videos of all the sessions will be available on demand after the event.

Ready for a taste of what you can expect to experience at Early Stage? Check out these examples and be sure to check out the agenda here to find out which sessions you want to attend.

When it comes to fundraising, timing is everything — There are some shockingly common timing mistakes founders make that can turn an otherwise successful fundraise into a failure. Jake Saper, partner at Emergence, will discuss how to avoid them and how to sequence efforts from the time you close your seed to ensure you find the right partner (at the right price!) for Series A and beyond.Growth marketing: Minimum viable email — Love it or hate it, email is here to stay. But understanding where it fits into the conversion funnel, and how to maximize its impact can be arduous. Learn from Sound Ventures partner Susan Su how to optimize open rates, deliverability, unsubscribes and conversions for consumer and enterprise products alike.Think like a PM for VC pitch success — Your pitch deck is not just a reflection of your business, it’s a product unto itself. Your startup’s success, and avoiding the end of your runway, depends on the conversion rate of that product. Hear from Lo Toney, Plexo Capital founding partner, about how thinking like a PM when crafting your pitch deck can produce outstanding results.

TC Early Stage takes place on July 21-22. Want to keep some money in your pocket and score a seat at your choice of breakout sessions? Buy your early bird ticket now. Prices go up on June 26.

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

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Joshua Posamentier was recorded in April 2020....

___

Faction CEO Luke Norris has executed a tremendously effective Bootstrap First, Raise Money Later strategy from Colorado. Sramana Mitra: Let’s start at the very beginning of your journey. Where are...

___

Pipo Saude, a Brazilian provider of healthcare services for businesses and their employees, has raised $4.6 million in a new round of funding to expand its footprint in Brazil.

“The company’s platform offers recommendations for the healthcare products that fit the team, enabling businesses to improve the quality of life of their employees,” said chief executive and co-founder, Manoela Ribas Mitchell. “We go all the way to the end beneficiaries.”

Pipo Saude helps companies price their insurance appropriately and bring down the medical loss ratio that companies suffer. Medical inflation in Brazil may be worse than in the U.S., with prices rising at around 20% per year.

Like the U.S., people in Brazil often default to hospitals and urgent care facilities when they’re sick or injured; that “urgent care culture,” as Mitchell calls it, drives up the cost for providers and employers. “We try to move the needle toward preventive care and specialist doctors,” Mitchell said.

Backing the company with a $4.6 million round are two of Latin America’s top investment firms — Monashees and Kaszek Ventures . OneVC, the San Francisco-based investment firm that also invests in Latin American tech companies, also participated in the round.

Pipo Saude makes money off of commissions and has a few corollaries in companies like Zenefits (in its earliest days), Amino or the Canadian care benefit management company, Mitchell said.

The company currently has about 30 employees on staff, and some of the new cash will be used to scale the business.

For co-founders Mitchell, Vinicius Correa and Thiago Torres, the healthcare market was an obvious choice when they looked to start their own company. Torres and Mitchell had known each other as students at the University of São Paulo, where they both studied economics. Mitchell and Torres both pursued careers in private equity, where Mitchell worked at Temasek and then at Actis, focusing on healthcare, while Torres also went to Agavia Investimentos.

Correa worked in startups, initially as an employee at Nubank, where he met Mitchell through a mutual friend.

While healthcare may be a tough knot to unravel — especially for a startup — the size of the Brazilian market alone is enormous. “We’re talking about a $50 billion revenue pool,” says Mitchell. “If we want to build a very robust product we have to focus on Brazil for quite a while.”

The unicorns are still at it, Vision Fund 2 or no Vision Fund 2.

This week, Instacart announced that it has raised fresh capital at a valuation north of $13 billion. And, on the tail of that news item, DoorDash is looking to add more cash at a valuation that could stretch to a pre-money valuation that exceeds $15 billion, according to The Wall Street Journal.

Both announcements make it plain that late-stage unicorns are still able to attract huge sums despite a putatively uncertain, if recently excitable IPO market.

It’s an interesting state of affairs, as the prices that super-late-stage unicorns are able to charge private investors push their valuations so high that only the largest and richest companies might be able to afford buying them. The result could be a closed M&A window that leaves only an exit hatch marked “IPO.”

Amazon, for example, paid around $13.7 billion for Whole Foods, a chain of U.S. grocery stores that the technology giant also uses as distribution points for parcel delivery. Instacart, the grocery delivery service, is now worth $13.7 billion as well.

As the private company’s final investors won’t want to merely break even on their investment, Instacart