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A CEO’s fiduciary duties to their company and its shareholders do not end when they are off the clock — they must always act in good faith. However, navigating the boundaries between a company’s official communications and a personal voice can be difficult in today’s social-media-connected environment.

What a CEO posts on Twitter can raise not only serious reputational issues for themselves and their companies but posting the wrong things at the wrong time can also cause breach of fiduciary duties and may even run afoul of securities laws.

Fiduciary duties can be divided into three buckets: (1) duty of care — CEOs must act in good faith with the care of a reasonable person in a like position with a reasonable belief that their decisions are in furtherance of their company’s best interest; (2) duty of loyalty — CEOs must put the interest of shareholders and the company above their own self-interest; and (3) duty of good faith — CEOs must act with honesty and fairness to shareholders and the company.

There is no denying that Twitter can be leveraged as a powerful tool. Used appropriately, it can fortify the reputation of a company and its CEO, forge stronger consumer relationships and drive business profits. For example, Tim Cook’s habit of tweeting about his interactions with Apple customers demonstrates his customer-service values and effort to connect with consumers, which can potentially lead to a bigger and more loyal following.

Lately, more and more CEOs are communicating their stance on issues that are important to their consumer base to exhibit authenticity, relatability and demonstrate their personal and corporate values through social media. Following last year’s murder of George Floyd and rise of the Black Lives Matter movement, nearly 60% of all S&P 100 tech CEOs, unicorn CEOs, and Fortune 500 CEOs tweeted, “Black Lives Matter.” This was the first time CEOs active on Twitter overwhelmingly voiced their position on racial and social justice issues.

Twitter can also be an opportunity to show transparency in policy. CEOs can use social media to announce new management initiatives, capability expansions and new investments in employees (diversity initiatives, new roles for women, organizational changes) that are positive in tone and speak about the future direction of the company. These can have a positive correlation with stock prices.

It wasn’t that long ago that the world was fixated on Donald Trump’s Twitter posts and their correlation with the stock market. Words have permanence and their impact can be catastrophic. Given their elevated role as a leader and representative of the company and the fiduciary duties they owe, CEOs must watch what they say and when they say it. What it all boils down to is awareness, common sense and the law.

Don’t break the law and stick to the facts

For U.S. publicly traded companies, SEC Regulation Fair Disclosure (Reg FD) says that “an issuer may not disclose material nonpublic information to certain groups, either intentionally or unintentionally, without disclosing the same information to the entire marketplace.” If companies use social media to announce key information, to comply, they must alert investors that social media will be used to disseminate such information.

Regardless of whether it is a public or private company, CEOs are corporate officers and owe fiduciary duties to their companies and their shareholders. Fiduciary duty requires CEOs to act in good faith, apply their best business judgment and to act in the best interest of the company. This is true whether they are in the boardroom or on Twitter.

In this case study, we’ll show how we used research-driven CRO (conversion rate optimization) techniques to increase lead conversion rate by 79% for China Expat Health, a lead generation company.

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

In the image below, the mobile site view on the left, labeled “before,” is the control ( “A” version) while that on the right, labeled “after,” is the optimized page (“B” version). We conducted a split test aka A/B test, directing half of the traffic to each version, and the result attained 95% statistical significance. Read on for a description of the key changes made.

Used a headline with a more compelling value proposition

The headline on the control version is “Health Insurance in China.” If I am an expat looking for health insurance in China, at least I know I am in the right place but I don’t immediately have a reason to choose you. I have to scroll and infer this from multiple elements.

The winning version instantly conveys a compelling value proposition: “Save Up to 32% on Your Health Insurance in China,” accompanied by “evidentials” to support this claim — the number of past customers and a relevant testimonial with a 4.5 star rating (by the way, it is better to use a default static testimonial rather than a moving carousel).

As the famed old-school direct response marketer John Caples taught us, “The reader’s attention is yours only for a single instant. They will not spend their valuable time trying to figure out what you mean.” What was true in Caples’ 1920s heyday is doubly so in the mobile age, when attention spans are shorter than a fruit fly’s!

Lordstown Motors continues to stumble. The beleaguered electric vehicle startup is now being investigated by the Department of Justice, in addition to an ongoing investigation by the Securities and Exchange Commission.

The investigation, first broke by the Wall Street Journal on Friday, is still in its early stages, according to unnamed sources. It is being conducted by the U.S. attorney’s office in Manhattan.

“Lordstown Motors is committed to cooperating with any regulatory or governmental investigations and inquiries,” a company spokesperson told TechCrunch. “We look forward to closing this chapter so that our new leadership – and entire dedicated team – can focus solely on producing the first and best full-size all-electric pickup truck, the Lordstown Endurance.”

The probe is just the latest in a series of woes for the startup, which recently said it had to cut production volumes for its debut electric pickup, Endurance, by half — from around 2,200 vehicles to 1,000. Just a few weeks after it made that announcement, there followed news of a corporate shakeup: the resignation of founding CEO Steve Burns and CFO Julio Rodriguez. Burns started the company as an offshoot of his previous startup, Workhorse Group.

Lordstown had a strong start, with investments from General Motors that helped it purchase a 6.2-million-square-foot factory from the leading automaker in late 2019. Lordstown made positive headlines last August, when it announced it would go public via a merger with a special purpose acquisition company (SPAC). The deal injected the EV startup with around $675 million in gross proceeds and skyrocketed its market value to $1.6 billion. Less than a year later, Lordstown informed the SEC that it does not have sufficient capital to manufacture Endurance.

Then, in March, the short-seller firm Hindenburg Research released a report disputing the company’s claims that it had booked 100,000 pre-orders for the electric pickup. It wrote that “extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.” The SEC opened its investigation in the wake of these accusations.

The WSJ story is unclear on the scope of the inquiry and the company declined to provide details. TechCrunch will update the story if it learns more.

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Therapy is rapidly becoming a standard part of many people’s lives, but 2020 interrupted that trend by nixing in-person sessions and forcing therapists to migrate their entire practice online — and it turns out that’s not so easy. Frame simplifies it with an all-in-one portal for clients and therapists, unifying the listings, tools and management software that run the countless small businesses making up the industry.

Kendall Bird and Sage Grazer are old friends who happened to be in the right place at the right time — a strange thing to say about anyone anywhere at the start of 2020, but it’s true. The startup’s pitch of bringing your practice entirely online and offering all-online sessions, bookkeeping, scheduling and everything turned out to be exactly what would soon be needed — though as they tell it, it has actually been needed for some time.

Grazer, a therapist herself, experienced firsthand the unexpected difficulties of getting up and running.

“When I started my practice in 2016, I was really passionate about the clinical work, but I was very overwhelmed by setting up a business, marketing, financial stuff,” she said. “So we wanted to help other therapists through that.”

She and Bird happened to reconnect around that time and the two saw an opportunity to improve things.

“We think about therapists as being a one-on-one thing, but they’re really a small business,” said Bird, who formerly worked in marketing at Snapchat, Google and YouTube. “They’re underserved and undersupported as mental health professionals — they don’t have the back-office support that doctors do, and they’re not trained how to run businesses. It just made sense to build a scalable SaaS solution that lets these people work for themselves.”

The therapy industry, like other medical institutions, has two sides: client-facing and practitioner-facing. While there are a handful of services online that combine these, many essentially recruit therapists as contractors. If you want to run your own practice, you’ll likely be using a combination of specialty scheduling, telehealth, billing and other tools made with medical privacy considerations in mind.

“The therapy tools and services landscape is incredibly fragmented — the average therapist is using 5-7 tools, and most of those are not built for therapy,” said Bird.

And then of course there’s Psychology Today: a periodical that straddles the roles of pop psych and industry rag, but whose chief reason for existing for many is its voluminous therapist listings, which dominate search and provide an overwhelming first stop for anyone looking to find one in their area. But for such a personal and consequential decision these brief listings don’t give wary potential clients the impression they’re making an informed choice.

“We wanted an experience that was more approachable, uses language that doesn’t feel overwhelming or pathologizing,” said Grazer. “There are people going to therapy feeling alone and confused, who don’t identify with a disorder or checking a check box.”

Frame eschews the oversimplified “scroll through therapists near your area code” with a short quiz — not a diagnosis or personality test but just a few basic questions — that winnows down your choices to a handful of local and appropriate therapists, with whom you can instantly set up free introductory video calls. If you find someone you like, the rest of the professional relationship takes place on Frame, though of course soon in-person sessions may return.

For those not quite ready to take the plunge, the company organizes livestreamed sessions between volunteers and therapists to show what a full hour of work might look like. (Whatever courage it may take to confront one’s issues in therapy, it surely takes even more to do so with an audience.)

On the therapist’s side, Frame is meant to be a one-stop shop. Marketing and telehealth sessions are on there, as noted above, but so are things like scheduling, notes, billing, notifications, and so on, all tailored specifically to the needs of the industry. And while the shift to online services has been a long time coming, the company just happened to drop in just as the need went into overdrive.

“We built it before COVID ever existed — launched in March 2020 and had telehealth as an option, thinking ‘oh, well maybe some people will do this.’ The majority of therapists in America weren’t doing sessions online at the time… but after COVID they all are,” Bird said. “And they’re looking for these tools now because they’re seeing the rewards of running a lot of their business through telehealth.”

Many therapists are finding that after resisting the transition for years, they are encountering all kinds of benefits, explained Grazer. Like other industries, the flexibility inherent to shifting in-person meetings to virtual ones has been freeing and in some cases profitable. The change is here to stay.

The site is in a closed beta limited to a part of California at present, since therapists are limited to operating in-state and there are other regulations to consider, not to mention all the usual struggles of putting together a sprawling professional service. But the $3 million funding round, led by Maven Ventures, will help fill out the product and move the company toward a larger audience. Sugar Capital, Struck Capital, Alpha Edison and January Ventures participated in the raise.

The money is “almost exclusively going to engineering.” The goal is to open up the beta, expand to the rest of California, then move out to other states once they have the infrastructure to do so and have responded to feedback from the initial rollout.

“Sage and I are really aligned in the belief that the best way to make therapy more accessible to America is to support therapists,” said Bird.

Let’s play out this scenario. Your deck is ready and you’re just about to start reaching out. What does conventional wisdom say that you should send? A three-paragraph overview, four bullet points outlining the problem, and three bullet points on how you solve it and why you’re the best. You went through all that work … but who is going to read it? A junior person. Not even a senior VC.

Even if you do end up with a meeting, odds are that your deck didn’t even get read. The biggest lie in venture capital is: “Yes, I read through your deck.” Because those words are immediately followed by, “ … but why don’t you run us through it from the beginning?”

At that point, it’s safe to assume that no one has actually taken the time to read through what you sent, the junior guy thought it would be an interesting meeting considering the fund’s current themes of interest, and no one objected to taking the meeting. But no one has really taken the time to read through your deck.

According to DocSend, the average pitch deck review time over the last 20 weeks is less than three minutes. Let’s break down how much time you’ll be given for a 12-page deck (a very concise deck):

Cover — 5 seconds.Back cover — 5 seconds.All the rest — 2:50.

That also includes time for that critical-to-understand diagram that illustrates and distills your unique system or view of the world. Do you think 25 seconds is long enough to fully comprehend that diagram and connect the dots with your value prop? Not likely.

What should you do about it?

Don’t send cold decks, ever. Instead, you should be video pitching — this is a video walkthrough of your deck, with your face in a camera bubble talking through it and giving added color in a video no longer than six-and-a-half minutes. Your objective for this video: Get in, provide a basis of understanding, and get out with a punchy CTA. Nothing flashy, nothing fancy.

More investors are embracing video pitches (prime example: Ashton Kutcher’s Sound Ventures), and in the age of the Zoom-based pitch meeting, it’s quickly becoming the standard.

The rapid but notable shift is because in video pitching, founders get to showcase the preparedness, commitment and passion VCs are looking for, all while telling their story. None of that is effectively transmitted in a cold pitch deck. Further, it allows you to create a deeper connection even before a meeting ever takes place. In a sense, it allows you and the investor to skip a step in the relationship-building process.

Why you have to do video pitches

Cold decks get blown out of the water when compared with the benefits of the video pitch:

You can connect the dots in an easy-to-digest manner. Instead of simply reading the slides, you’re adding context as you go through them. Basically, you’re doing investors a favor by doing the mental heavy lifting for them.You control the interaction. It’s a recorded video, so you get to pitch with the added benefit of not getting interrupted.People might not give three minutes to skim a PDF, but they will watch a six-and-a-half minute high-relevance video!

Friction is the enemy standing in the way of all that is good in video games, and all that we might be able to achieve in the future.Read More

Shares of Chinese ride-hailing provider Didi are sharply lower this morning after news broke that its domestic regulators are investigating the newly public company. A loose translation of the probe’s official notice indicates that the cybersecurity review is “in order to prevent national data security risks, maintain national security and protect the public interest.”

Yesterday, regulators ordered Didi to stop registering new users during the investigation.

The move comes amid a larger reset of relations between China’s burgeoning technology sector and its autocratic government. Other fallouts from the campaign included the effective silencing of Jack Ma, the embarrassing cancellation of the Ant IPO and a crackdown on data collection from technology companies more broadly.

The Exchange explores startups, markets and money.
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China is not the only nation grappling with its technology sector; India has made consistent noise in recent months regarding tech firms inside its borders, for example. And there is effort inside the U.S. Congress to put some cap on Big Tech’s scale and power, though of the trio, the United States appears the least likely to take a real swipe at technology companies’ market influence.

That Didi has run afoul of China’s regulatory bodies is not a surprise; it’s a well-known tech company in the country with lots of consumer data. Similar data-rich tech shops in the country have come under increased scrutiny as well.

But to see Didi get taken to task mere days after its U.S. debut puts a bad taste in our mouths.

The way that this saga reads from the cynical perspective is that the Chinese Communist Party was willing to let the company go public in the United States, allowing it to raise billions of dollars from foreign sources. And that the ruling party was then content to leave them holding a midsized bag by announcing its cybersecurity probe.

Hanlon’s Razor is at play in this situation, naturally.

Didi has not published a new SEC filing since June 30, and, as of the time of writing, its investor relations page is devoid of any information regarding today’s news.

While going public, it’s worth noting that Didi did warn investors that it faces a host of risks relating to its status as a Chinese company, namely its government, and as a Chinese company going public in the United States. Observe the following risk factors that it shared while going public (emphasis added) that dealt with the company’s business operations:

Our business is subject to numerous legal and regulatory risks that could have an adverse impact on our business and future prospects.Our business is subject to a variety of laws, regulations, rules, policies and other obligations regarding privacy, data protection and information security. Any losses, unauthorized access or releases of confidential information or personal data could subject us to significant reputational, financial, legal and operational consequences.

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

Danny, Natasha, and Alex were on deck this week, with Grace on the recording and edit. But, if you want to hear more about Robinhood, this is not the episode for you. If you want to learn more about the consumer fintech company’s IPO filing this is the episode you want. Basically, Robinhood filed after we had wrapped taping, so we had to do a special pod for the news.

So, this is the everything-but-Robinhood episode. And here’s what’s inside of it:

Startup and investor tensions at Bessemer and Hinge Health. Natasha has the latest.Didi’s IPO, and what’s going on with Chinese IPOs more generally. Also SentinelOne’s expensive and notable debut.And then all things Duolingo, including TechCrunch’s overview and more in-depth look.From the venture capital side of things, Zipline raised $250 million, Daylight raised $5 million, Articulate raised $1.5 billion, Acceleprise rebranded to Forum Ventures, and Peanut put together a micro-fund.We closed with Neeva, Brave, and other alternative search tools. Alex has a piece coming on the subject, once he gets around to finishing it.

A four-episode week! With only Grace handling production! She’s amazing.

 

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Edtech startup Microverse has tapped new venture funding in its quest to help train students across the globe to code through its online school that requires zero upfront cost, instead relying on an income-share agreement that kicks in when students find a job.

The startup tells TechCrunch it has closed a $12.5 million Series A led by Northzone with additional participation from General Catalyst, All Iron Ventures and a host of angel investors. We last covered the company after it had closed a bout of seed funding from General Catalyst and Y Combinator; this latest round brings the startup’s total funding to just under $16 million.

The company’s vision has seen added pandemic-era traction as larger tech companies have embraced remote work that spans geographic boundaries and time zones. Microverse has now brought English-speaking students from over 188 countries through its program.

Since we last chatted, CEO Ariel Camus says the startup has landed some 300 early graduates in positions at tech companies including Microsoft, VMWare and Huawei. The company says its has above a 95% employment rate for its students within six months of graduation so far, pushing past one of the bigger issues that income-share-agreement-based schools have had stateside — getting graduates employed.

Microverse does have notably less generous terms than counterparts like Lambda School when it comes to when students begin loan repayment, the terms of both are actually quite different, as noted in my previous article:

While Lambda School’s ISA terms require students to pay 17% of their monthly salary for 24 months once they begin earning above $50,000 annually — up to a maximum of $30,000, Microverse requires that graduates pay 15% of their salary once they begin making more than just $1,000 per month, though there is no cap on time, so students continue payments until they have repaid $15,000 in full. In both startups’ cases, students only repay if they are employed in a field related to what they studied, but with Microverse, ISAs never expire, so if you ever enter a job adjacent to your area of study, you are on the hook for repayments. Lambda School’s ISA taps out after five years of deferred repayments.

The startup has made efforts to streamline their online program since launch to ensure that students are being set up to succeed in the full-time, 10-month program. Part of Microverse’s efforts have included condensing lesson segments into shorter time frames to ensure students aren’t starting the program unless they have enough free time to commit. Camus says the startup is receiving thousands of applications per month, of which only a fraction are accepted in an effort to ensure that the small startup isn’t overcommitting itself early on. The startup estimates it will usher 1,000 students through its program this year.

The startup has big plans for the future, including working more closely with tech companies to ensure that students have easier access to job placement once they graduate.

“We have data now that the day we launch a partner program — which we haven’t done yet but we will eventually — it opens up the market by 5x,” Camus tells TechCrunch. “To get 10,000 students per year in a world where 90% of the world’s population doesn’t have access to higher education — it’s not going to be that hard, to be honest, I’m not too worried.”

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Last week was a good one for edtech in Europe.

GoStudent became Europe’s first edtech unicorn (IPO’d companies aside), raising its third round in 12 months and the biggest ever in the sector in Europe. Brighteye Ventures’ analysis showed that VC investments in European edtech had breached $1 billion in a calendar year for the first time, even without GoStudent’s mega-round, with six months left to go.

Edtech deal flow in 2021 looks set to match or even outpace 2020 levels, per the report: At $9.4 million, average deal size is triple 2020 levels; seven companies have raised $50 million in five different markets; and the U.K. has more than three times as many deals as the next individual market.

It’s interesting that we are not seeing enormous increases in deal count. The $1.05-billion mark in the report is spread across 111 transactions — there were 237 in 2020, so we could expect a similar total this year. More funding and stable deal count of course means that we are seeing significant increases in deal size.

We can draw a few conclusions from this. We can construe that companies created last year and in previous years matured significantly during the pandemic due to increased demand. Moreover, this rapid natural selection process provided insights on verticals and possible winners.

Lastly, it seems generalist investors are recognizing that edtech investments can reap outsized returns, similar to sectors like deep tech, health tech and fintech.

This is contributing to larger early rounds than we have seen in previous years — investors can’t pick the winner, but they can slant the playing field instead. We therefore expect to see a surge in the number of pre-seed, seed and Series A rounds in the second half of 2021, as companies founded during the pandemic begin to raise meaningful funding.

Another reason that edtech is being taken seriously by generalist investors is that the true size of the market (and the extent of digitization to come) is becoming more conceivable.

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This afternoon Robinhood filed to go public. TechCrunch’s first look at its results can be found here. Now that we’ve done a first dig, we can take the time to dive into the company’s filing more deeply.

Robinhood’s IPO has long been anticipated not only because there are billions of dollars in capital riding on its impending liquidity, but also because the company became something of a poster child for the savings and investing boom that 2020 saw and the COVID-19 pandemic helped engender.

The consumer trading service’s products became so popular and enmeshed in popular culture thanks to both the “stonks” movement and the larger GameStop brouhaha, that the company’s public offering carries much more weight than that of a more regular venture-backed entity. Robinhood has fans, haters, and many an observer in Congress.

Regardless of all that, today we are digging into the company’s business and financial results. So, if you want to better understand how Robinhood makes money, and how profitable or not it really is, this is for you.

We will start with a more in-depth look at growth and profitability, pivot to learning about the company’s revenue makeup, discuss a risk factor or two, and close on its decision to offer some of its own shares to its users. Let’s go!

Inside Robinhood’s growth engine

Before we get into the how of Robinhood’s growth, let’s discuss how big the company has become.

The fintech unicorn’s revenue grew from $277.5 million in 2019 to $958.8 million in 2020, which works out to growth of around 245%. Robinhood expanded even more quickly in the first quarter of 2021, scaling from year-ago revenue of $127.6 million to $522.2 million, a gain of around 309%.

Those are numbers that we frankly do not see often amongst companies going public; 300% growth is a pre-Series A metric, usually.