Tag: techcrunch include

Posted on

One woman’s mission to build a network of female and non-binary angel investors

Angel investing has traditionally been mostly open to men, who travel in certain circles and have access to certain networks, but Amanda Robson, a principal at Cowboy Ventures, is attempting to change that by building an informal network of women and non-binary folks who have the means to write checks, but for whatever reason have not been able to easily move into this type of investing.

Robson says that when it comes to angel investing, women and non-binary people have been left out. “I had a number of friends who had recently within the past couple of years become VP-level at different companies, and they had an interest in angel investing, and they had the means to at that point, but they didn’t have access,” she said.

That was in contrast to males in a similar position. “They found that a lot of their male counterparts who were also execs or male founders were getting pinged by their VC friends to join in on deals, and they weren’t getting the same treatment,” she said.

Robson says that she found this surprising at first because at her firm, they try to fill the cap table with a diverse set of angels. As she looked around, she found that wasn’t the case at all firms, but it wasn’t always because of a lack of desire to be more diverse. It was also a sourcing problem. They didn’t know where to look.

Amanda Robson, principal at Cowboy Ventures

Amanda Robson, principal at Cowboy Ventures

So if you had one group looking to invest, and another looking for diverse investors, it seemed that something could be done to bridge the gap. “I just found myself in a unique position having been in venture for almost six years and having a bunch of VC relationships because of that, and then also having access to awesome female [and non-binary] founders and operators that I could kind of bridge that gap in a pretty seamless way,” she said.

Her experience is not uncommon. Diana Murakhovskaya, general partner and co-founder at the Houston-based Artemis Fund, told TechCrunch recently that prior to launching the fund in 2019, she and her co-founders attended networking events in the Houston area and noticed a dearth of women. She started hosting dinners to find out why.

“I said, ‘Where are all the women?’ [ … ] And so we started doing these dinners to bring together women and asking them why they’re not investing, what they’re doing. And these were all corporate women [who had the money to invest].” Like Robson, Murakhovskaya found that these women had never been invited to invest, and they started a firm to change that.

Robson took a different approach. She has a day job, but she knew that she could make some introductions when it made sense. “So I’m the conduit between the two [groups]. I have this database with angel investors and other VC relationships and then also deal flow that I see that will come from other angel syndicate groups or deals that Cowboy can’t invest in because we’re conflicted out, and I try to connect those two,” she said.

Robson, on her own, created this database of people, many of whom she knew previously or learned about when she put out a call for female and non-binary angel investors on Twitter. “I chatted with them and got a sense of their background and what they were interested in, if they truly understood the risks and dynamics of angel investing, and added folks that way.”

She said going outside her network would also help create a more diverse database that went beyond people she had known personally. “I also knew that my network would be limited, and the whole point of this is increasing access, so I wanted to be a little bit more public about it so folks who wanted to be angels could see those messages on Twitter and then join in,” she said.

The database includes the names, check sizes they are willing to invest, sectors they want to invest in and previous investments (if any). She says that typical check sizes are between $15,000 and $50K, but she has seen checks as small as $5K or less as she attempts to get more people involved.

“In some cases recently there have been newer female [and] non-binary angel investors who have wanted to write checks that are $5K, some even below, and some founders and VCs have been open to those smaller check amounts because they want to add diversity to the cap table,” she said.

Lisa Wallace, who is co-founder at pay equity startup Assemble, says that she had been an angel for a couple of years when she responded to one of Robson’s tweets. She also found that when her company was raising a seed round, it was difficult to find a diverse group of angels for her cap table. She says that Robson’s network solves both problems.

“I think that there’s actually two parts of the problem. First of all, I’m a diverse angel, and I want to make sure that I [can access] dealflow, selfishly. But on the other side of it, it would have been really easy had Amanda had this when I was raising my round because I would have just pinged her,” Wallace said.

Stella Garber is another angel in Robson’s network who is former CMO at Trello, and started angel investing in 2016. She too came across one of Robson’s tweets and says that it’s always good to find other sources of possible deals as an angel investor.

“It’s really great to see all the different types of deals that come through that channel. There’s been a mix of all types of different industries, mostly early stage I would say. But obviously as an angel, you have to do your own due diligence, but it’s just nice to have that channel to get deals from,” Garber said.

While these two had experience in angel investing, not everyone does, so Robson has also been helping set up workshops to explain what’s involved to those who are expressing interest and want to learn the mechanics of this type of investing.

Robson admits that quite a bit overhead is required to run the network because she is the sole conduit. But she says that it’s the kind of job that is hard to outsource because she has the first-hand knowledge of both firms and angels that the role requires.

“I do want to get some help to grow it, but I also think that there are limits to how much I can outsource any parts of this because the access piece is super important. I’ve been doing this for four to five months and I’ve only sent 18 deals through, but all of those ended up getting a lot of interest from the group because they’re highly curated.”

She says the ultimate purpose is to build this network of successful angels. “I want to have these rockstar angels who’ve gotten access to amazing deals and have amazing track records. And so that’s really the ultimate goal. And it’s more about that and in making these angels successful than me leading this group.”

Posted on

All Raise launches virtual bootcamp for women and nonbinary founders

More doesn’t necessarily mean better — and that’s a lesson for life and for tech. To focus on the latter, the startup ecosystem is experiencing a boggling influx of capital right now. However, the increase in dollars isn’t being evenly distributed to all founders. For the vast majority of people, especially women and nonbinary entrepreneurs, it’s still hard to raise money — and perhaps even harder than before the pandemic.

All Raise, a nonprofit that has for years worked to advance women and nonbinary folks within tech, has been watching closely the dip in funding for female and nonbinary founders. Per VP of Marketing Caroline Caswell, while pockets of progress do exist, funding for female founders is still “lukewarm.” She noted how in the first half of this year, 1.6% of venture capital went to female founders, down 30% from 2.3% in 2020, which was already a dip from the year prior, per PitchBook.

“The narrative that ‘VC is back?’ ” Caswell said. “It is back for the same people as it was before.”

The misconception that the hot-deal summer is benefitting everyone has given All Raise some urgency to launch a new product for women and nonbinary founders, which it’s announcing today.

The nonprofit is releasing a series of master classes meant to give an inside glimpse at raising first institutional rounds and scaling companies. The material, which includes pre-recorded sessions from All Raise’s in-person Founder Bootcamp, will be free to access for anyone interested.

Instructors include checkwriters such as Cowboy Ventures’ Aileen Lee and Benchmark Capital’s Sarah Tavel, as well as seasoned executives like Figma’s VP of Communications Nairi Hourdajian and Solv Health co-founder and CEO Heather Fernandez. All Raise said that it did not track ethnicity or racial data of its instructors, however it did offer a breakdown of the 400 beta users who tested the master class series.

Users’ self-reported data shows that the largest concentration — 39% — of users are White, while 11% are African-American/Black and 6% are Latinx and Hispanic. Most users don’t identify as white.

There’s constantly a disconnect between tactical content on how to fundraise and true access to capital; tips don’t necessarily lead to a closed check, which leaves some founders skeptical of yet another launch of resources.

That said, Caswell says that the master classes are trying to move beyond the “typical Sandhill Road Medium post” or Twitter threads, and thinks that the explicitness and real-world examples could serve as an empowering tool to founders.

Topics range from basics like how to prepare for your Series A to more nuanced thoughts like the emotions of fundraising, and how to say goodbye to a team. The programming is meant to be a more intimate look at early-stage tech, beyond what you’d find on a Twitter thread, Caswell explains.

All Raise seed curriculum

Image Credits: All Raise

“When it comes to resources and insight for typically underrepresented founders, more is more is more,” she added. Lessons range between three to 60 minutes, and amount to some 15 hours of content.

The structure of All Raise’s master classes looks similar in format to what Y Combinator offers in its free series Startup School, which includes some light content specifically targeted toward female founders. Long-term, it’d be interesting to see how All Raise refreshes material to work more for online learning, as it already has an engaged community that it could easily turn into a living, breathing class that filters through the nonprofit’s other tools.

All Raise CEO Pam Kostka on how the world isn’t ending

Posted on

Bambee founder talks about entrenched fundraising challenges facing Black founders

Allan Jones dropped out of college and spent a decade learning how to run a startup. In 2016, that education resulted in the launch of Los Angeles-based Bambee, which helps small companies by acting as their HR department with the goal of keeping them in compliance with government rules and regulations.

But he found getting funded a challenge in spite of his background. He said that as a Black man, he had to move more carefully in the startup world.

“I think it came as part of the complexities of navigating a mostly white male ecosystem, a mostly straight cis white male ecosystem that either helps you create some skills that make you really effective at the job, or generates so much resentment that it becomes hard to be effective. […] I think that I was always one comment away from the opposite direction [I ended up going],” he explained.

Fortunately, that didn’t happen and he kept on climbing and gaining skills and single-handedly founded his own company, one which has reached Series B and raised $33 million, a significant amount of money for any startup, but particularly for a startup run by a Black founder.

A study published by Crunchbase in February found that VC firms distributed $150 billion in venture funding in 2020. Of that less than 1% or around $1 billion went to Black founders. That highlights just how difficult it has been for him to raise from such a limited pool of money in spite of having a great idea and the business skill and acumen to pull it off.

Jones got his start at the age of 20 at a startup called Helio, which targeted the youth market for multimedia services on mobile phones. It was eventually acquired by Virgin Mobile. He went on to run product at a couple of companies before landing as CMO at ZipRecruiter in 2013. He left that position after three years to launch Bambee in 2016.

In spite of all that experience, he felt that as a gay Black man in Silicon Valley that he was continually saddled with the label of ‘the kid with potential’, and not always taken as seriously as his straight white counterparts. “And I don’t think those intentions necessarily were bad, I think it was quite the opposite, which actually makes them almost worse because they were entrenched in a bias of how to characterize [my abilities].”

Blendoor data lets you know if companies are living up to diversity pledges

Jones launched Bambee, a startup that is going after SMBs with fewer than 500 employees, most of which are operating without an HR department, and could be out of compliance with federal mandates because they don’t have anyone in charge who is aware of the rules.

“Bambee aims to put an HR manager in every American small business. We’ve done so by building a model that allows you to hire one on our platform for $99 a month. So you pay us a flat fee and you get access to our platform and your own dedicated HR professional. […] She acts as your human resource manager and your human resource arm for your company. And our platform helps keep those companies compliant,” Jones explained.

Jones says that while he might not encounter direct bias as he builds his business, there is an unconscious bias that investing in Bambee could be riskier than investing in someone who fits the prototypical startup founder mold, and this is especially true in early-stage investing when investors are essentially betting on the entrepreneur.

“They take bets that they deem as a bit safer — entrepreneurs that look like a certain profile — white cis-gender males that come from Stanford and Harvard that match the profile of confidence and they have kind of built in an anti-bias determination around, so they automatically get the benefit of the doubt to those pedigrees, and those profiles,” Jones said.

He says that means that Black founders have to work that much harder to overcome those biases. Today Bambee has some decent metrics to show investors with revenue reaching tens of millions, growing 300% year over year with thousands of customers across all 50 states, according to Jones. With 100 employees, he plans to double that number by the end of this year.

Even with that, he says there are still barriers to entry he has to deal with. Even if it’s harder for investors to ignore the company’s numbers, he still sees a tendency to accentuate the negative.

“Building a great company with the deficit in belief in you that starts so early on in the venture process, the [obstacles] that you have to [overcome] to get here. It seems impossible with less than 1% of venture capital dollars going to Black founders, and it isn’t because Black founders don’t exist, it’s because the belief in us is not there at scale,” he said.

As Jones continues to build the company, he has learned to look for investors who believe in him and his vision for the company. If he senses that negativity from a potential investor, he moves on because he wants to work with people who want to help build the company and believe in it as much as he does. He says this won’t change when he goes to raise his C round, a stage few Black entrepreneurs reach.

“Is it going to be easier for me going forward? I don’t think so. I think the type of bias that I have to combat based on the class of entrepreneur I’m becoming, it starts to shift and change, and I’ve seen that in every round and I’m prepared for it in my Series C, as well.”

He says that the progress he’s made in the company and his belief in the business will help him find the right partners to continue on that journey, just as he has in previous rounds.

“We will navigate this […] and I think we’ll build a really great business, and ultimately the partners we discover along this journey will be the exact right ones who we were meant to.”

Why a startup with $10M in annual revenue took 18 months to get VC funding

 

 

 

Posted on

Darryl Finkton Jr. closes $200M to go from asset management to poverty eradication

Darryl Finkton Jr. is a man on a mission.

He believes there’s enough money in the world to help put an end to poverty. But only if it’s distributed differently than it is today.

Earlier this year, the investor left a career in asset management to launch a $1 billion venture fund aimed at eradicating poverty. It’s an ambitious goal, but Finkton Jr. has a plan. And now he’s raised $200 million as an initial close to help execute that plan.

Finkton aims to raise $1 billion with the fund to provide venture capital to entrepreneurs from disadvantaged and underrepresented backgrounds who are working to solve the pressing problems facing their communities. He is managing the fund, and has invested $500,000 of his own capital to launch it.

Finkton grew up in housing projects in Indianapolis, Indiana, and went to Harvard to study neurobiology. He then attended Oxford as a Rhodes Scholar and got involved in economic development before founding a VC firm focused on health tech investments. Most recently, Finkton worked as a partner at a hedge fund.

But his upbringing was never far from his mind, and Finkton knew that he wanted to do more to help people who didn’t have the same opportunities or access as others.

“In my household, we often struggled to make ends meet and put food on the table. More family members than I care to count have died from the dire circumstances that extreme poverty creates,” Finkton recalls. “Although I was able to overcome obstacles and ultimately graduated from both Harvard and Oxford, I remain intimately aware of the countless difficulties one faces when your next meal is not promised.”

So earlier this year, he left his job as a hedge fund partner to promote the adoption of a universal basic income to end poverty in the U.S. with the help of venture dollars via his EPMT (End Poverty. Make Trillions.) fund.

All fund profits will be reinvested into helping the country’s poorest communities, he said.

This summer, he plans to lead a 60-day tour of several dozen cities, towns and Native American reservations with “the poorest ZIP codes in America” with the goal of drumming up support for a universal basic income at the federal poverty guidelines (UBI@FPG).  (He also intends to create a documentary of the process).

In addition to supporting state and local efforts, Finkton is also pushing for federal legislation guaranteeing a universal basic income at or above the federal poverty guidelines.

So far, the EPMT fund has invested in 15 companies, including Elpidatec, a telehealth platform aimed at treating opioid addiction; Commissary Club, a job site and social network for people with criminal records; Snowball Wealth, which offers free student loan planning to help people tackle debt; and Maia Life Sciences, which is working to develop evidence-based, culturally informed group interventions for underrepresented and vulnerable populations.

Finkton believes that the U.S. is spending “trillions” on perpetuating the poverty cycle through various programs such as welfare. Instead, he wants to empower people in poverty to work their way out.

Venture capital LPs are the missing link to solving Silicon Valley’s diversity problem

“These programs treat the symptoms of poverty, not the root cause — which is not having money,” he told TechCrunch.

Finkton maintains that a universal basic income at the federal poverty guidelines (UBI@FPG) can end financial poverty.

“The economic costs of childhood poverty alone are $1 trillion a year. If we provide UBI@FPG to every American and simply tax back that income for those already well above the federal poverty guideline, the net cost for eradicating poverty drops to below $200 billion,” Finkton maintains. “That is an annual return of $800 billion. Over 10 years, UBI@FPG would generate a return of over $8 trillion, save 1.7 million lives, and lift 34 million Americans out of poverty.”

There are some who may argue that lower-income populations will just use any money they get to buy drugs or alcohol.

Finkton believes it’s the opposite.

“We’ve done a lot of pilots and when someone is so poor, they can’t afford food, clothing or shelter, that’s the first thing they do, when they get money,” he told TechCrunch. “These communities often use drugs as a way to cope,” he said. “Once you give them hope and opportunity, they’re not as depressed and there’s actually less alcohol, drug and tobacco use.”

Chad Doe, founder and CEO of EPMT portfolio company Maia Life Sciences, tells TechCrunch that his biotech startup aims to initially investigate the potential of psychedelics to help people with substance abuse issues via facilitated group clinical trials. The ultimate goal of the three-year-old Los Angeles-based company is to receive FDA approval so that people with addictions, globally, can have more options. Those clinical trials, he said, will be conducted by mostly women of color and include participants that are not mostly white or of European descent.

In many cases, he said, trial participants and investigators “are not representative of the real world.”

Doe also believes that more money is spent on surveillance, policing and punishment tactics that disproportionately target and impact people of color, low-income people and non-citizens rather than toward actually helping them emerge from their situations.

“The War on Drugs is really a war on the poor,” he said. “At Maia, we’re placing women and underserved populations at the center of the research and development to find effective treatments for substance use disorders.”

This $250 million growth fund will divert half its profits to historically black colleges and universities

Posted on

As companies prioritize diversity, startups are trying to productize diverse hiring

When the iconic American power tools company Stanley Black & Decker began looking for ways to improve the pipeline of diverse candidates that the company was reviewing for potential roles, it turned to an Israeli-based startup called Talenya for help.

The company wasn’t alone in looking to startups for support in new hiring initiatives. Last year’s social reckoning that occurred in the wake of nationwide protests against systemic racism triggered by the murder of George Floyd pushed companies around the country to reassess their own role in perpetuating inequality.

As part of that assessment, companies came to the realization that the hiring tools they’d been using to simplify the process of recruiting, cultivating and promoting talent weren’t capturing the broadest and most capable applicants.

“If we want to claim that it’s a pipeline issue, we would first have to claim that we’ve hired what is available in the pipeline,” Uber Chief Diversity Officer Bo Young Lee told TechCrunch. “It’s not a pipeline issue as much as it is a recruiting process challenge.”

Examining the ‘pipeline problem’

That’s where tools like Talenya, Textio, TalVista, WayUp, Handshake, The Mom Project, Flockjay, Kanarys, JumpStart and SeekOut have come in. All told, these companies have raised more than $200 million in financing over the past few years to increase diversity and inclusion and help solve tech’s diversity problem.

“Part of our diversity, inclusion and belonging strategy focuses on having a diverse pipeline to ensure incoming talent better reflects the markets and communities we serve. To accelerate our progress, we started using Talenya’s AI software in 2020 to help increase the candidate pool of women and people of color,” said Suzan Morno-Wade, EVP and chief human resources officer at Xerox, another company using Talenya’s software, in a statement.

It seems that women and people of color use fewer keywords and are less effusive when they describe themselves in profiles or on job applications, according to a recent study published by Talenya.

That’s why startups like Talenya and Textio try to highlight how to improve the screening process for candidates by using broader language in both the text of the job description (Textio) and in the filters used to select qualified candidates (Talenya).

“Keyword search is highly discriminatory to everyone,” said Talenya chief executive and co-founder Gal Almog. “Minorities and women tend to put 20% to 30% less skills on their profiles. That applies not only to women and to minorities. We added an algorithm that can predict and add missing skills.”

In some ways, that functionality seems a lot like tools on offer from companies like SeekOut, the recruiting startup that just landed a whopping $65 million round from investors including Tiger Global, Madrona Group and Mayfield.

Meet SeekOut, a profitable diverse hiring startup that just raised $65M

“The focus on diversity hiring and our unique approach to finding the talent and offering blind hiring features has super charged the adoption,” chief executive Anoop Gupta said in an interview earlier this year. That same toolkit is something that Talenya pitches its own customers.

Meanwhile, businesses like WayUp are attempting to give employers a window into how the funnel narrows after the screening process. The company’s new tool provides an assessment for how diverse applicant pools are slowly winnowed down to a group of candidates that is far less diverse through the testing process.

WayUp co-founder and chief executive Liz Wessel said that the pool of applicants often narrows significantly after a battery of technical assessment and programming tests.

“Similar to the SATs, many technical assessments have high correlation to socioeconomics status,” Wessel told TechCrunch.

While some startups focus on the hiring process itself, other companies are taking approaches to diversify-specific jobs or to try to recruit from particular talent pools to help increase diversity in the tech industry.

That’s the mission that companies like Flockjay and The Mom Project have set for themselves.

“Most people don’t even know that a job in tech sales is even a possibility,” Shaan Hathiramani, the founder and chief executive of Flockjay, a company offering a tech sales training curriculum to the masses, said earlier this year.

Want a job in tech? Flockjay pitches its sales training service as an on-ramp to tech careers

Hathiramani said his startup could be an on-ramp to the tech industry for legions of workers who have the skill sets to work in tech, but lack the network to see themselves in the business. Just like coding bootcamps have enabled thousands to get jobs as programmers in the tech business, Flockjay helps talented people who had never considered a job in tech get into the industry.

It’s a way for non-coders to leverage soft-skills they’d developed in other industries, including retail and food services, to jump into the higher paid world of tech companies. And it’s a way for those tech companies to find a more diverse pool of workers who can bring different skill sets and perspectives to the table.

A few hundred students have gone through the program so far, Hathiramani said, and the goal is to train 1,000 people over the course of 2021. The average income of a student before they go through Flockjay’s training program is $30,000 to $35,000 typically, Hathiramani said.

Upon graduation, those students can expect to make between $75,000 and $85,000, he said.

It’s obvious that tech needs to “do better” on inclusion, and The Mom Project — a Chicago startup that focuses on connecting women, including parents, with jobs from organizations specifically open to employing people who meet that profile — is one company tackling an aspect of the problem that’s become acute in the pandemic.

“Sixty percent of the job losses in the pandemic have been women, and the statistics have been even worse for women of color,” said Mom Project chief executive Allison Robinson. “It’s like a canary in the coal mine.”

While The Mom Project doesn’t have any tools today to surface candidates that meet more diverse profiles on that front, Robinson told TechCrunch that they are considering it and how to approach that in a way that works.

The Mom Project raises $25M for its job site aimed at working mothers

Ultimately these are considerations that matter for companies of any size, according to Bain Capital Ventures managing director, Sarah Smith.

“No matter what, it’s important that from day one [that] you have an eye on how to build an inclusive culture, where in an ideal world, even that first person you’re bringing onto the team could walk in and feel fairly welcomed. And… you really want people to bring their best selves and they bring their perspectives and their ideas,” Smith told the audience at TechCrunch’s Early Stage Conference. “I think it’s pretty common that a team might grow to like four or five from within the network, including the founders, [but] I think once you get to like number six, if you don’t have some type of gender or racial diversity yet… it’s gonna start to get really tough.”

On the diversity front, 2020 may prove a tipping point

 

Posted on

Black Innovation Alliance, Village Capital team up to support founders of color

Black Innovation Alliance and Village Capital today announced Resource, a national initiative aimed at boosting the efforts of entrepreneur support organizations (ESOs) led by, and focused on, founders of color.

The motivation behind the project is straightforward. ESOs “face record demand, declining resources and are chronically underestimated, underappreciated and underfunded,” the organizations say.

Resource aims to give local accelerators and incubators support in the form of training and community.

Resource’s “ESO Accelerator” will train startup ecosystem leaders on how to build a more financially sustainable organization, as well as help connect them to potential funders. It also will provide milestone-based financial support tied to organizational development.

Resource also plans to build a national community of practice among ESO leaders of color and their funders to share best practices and “develop stronger capital and mentorship pathways” for Black, Latinx and Indigenous founders across the U.S.

Village Capital, says CEO Allie Burns, supports and invest in entrepreneurs “who have been historically sitting in historical blind spots of investors, whether that’s by the problems they’re trying to solve, the geography they’re located in or demographic factors that we have seen lead to capital being concentrated in very few people, places and problems.” Village Capital has worked with more than 100 other ESOs to help grow companies with founders from all backgrounds over the past five years.

The goal with Resource is to help ensure that incubators and accelerators focused on supporting people of color have the resources they need to flourish, she added.

“We want to make sure that those accelerators and other ESOs have the financial, social and human capital to keep their doors open and grow,” Burns said.

Black Innovation Alliance Executive Director Kelly Burton points out that these Black-led organizations are often the first line of support for Black entrepreneurs yet reap few benefits from their success over time.

“They receive very little support and very little funding,” she said. “It’s almost like they do all the heavy lifting, they plant seeds and do all the cultivation but they don’t really get to benefit once that founder and that startup has really taken off. This is an opportunity for us to stabilize these organizations to help them build their own capacities and capabilities so that that organization can be sustainable.”

Resource is supported by a national coalition of funders committed to supporting entrepreneurs of color. The initial coalition includes Moody’s, The Sorenson Impact Foundation, Travelers and UBS.

In related news, on Tuesday we covered New Jersey Governor Phil Murphy’s proposal for a $10 million allocation in the state budget to create a seed fund for Black and Latinx startups.

New Jersey announces $10M seed fund aimed at Black and Latinx founders

In that piece, we noted that there are a number of organizations out there that are committed to funding diverse founders.

In February, several national and Chicago-based organizations banded together to support early-stage Black and Latinx tech entrepreneurs through a new program dubbed TechRise. The nonprofit P33 launched the program in partnership with Verizon and 1871, a private business incubator and technology hub, among others, with the goals “of narrowing the wealth gap in Chicago, generating thousands of tech-related jobs and giving $5 million in grant funding to Black and Latino entrepreneurs,” according to the Chicago Sun Times. (Disclosure: Verizon is TechCrunch’s parent company).

Also in Austin, DivInc is a nonprofit pre-accelerator that holds 12-week programs for underrepresented tech founders. Founded in 2016 by former Dell executive Preston James, the organization aims to “empower people of color and women entrepreneurs and help them build successful high-growth businesses by providing them with access to education, mentorship and vital networks.”

On the diversity front, 2020 may prove a tipping point

Posted on

GSV Ventures doubles assets managed with new fund focused on global edtech

GSV Ventures, co-founded by Deborah Quazzo and Michael Cohn, has raised $180 million in its second fund, exclusively focused on backing edtech startups across the globe. The startup now manages $277 million in cumulative assets, inclusive of its debut fund that was closed in 2016.

The new fund will let GSV invest in 13 core holdings, with an average check size of $15 million. The firm reserves up to $20 million per position for follow-on capital. It will invest in seed, Series A and late growth-stage opportunities.

While edtech was certainly spotlighted by the pandemic’s impact on the adoption of remote education, GSV Ventures is a case study in what happens when you invest in a category before it has generalist eyes on it. The first fund had three of its largest positions in Coursera, which is planning to go public this year; Course Hero, which was valued at $1.1 billion last year; and ClassDojo, which finally hit profitability after spending eight years focusing on customer growth instead of monetization.

The firm was also an early believer in Nearpod, which exited for $650 million in an all-cash deal in February 2021. Quazzo, who contributed her angel portfolio into the fund, says that this gives the firm 10 exits under its belt to date.

Edtech valuations aren’t skyrocketing, but investors see more exit opportunities

GSV Ventures began around the same time as other exclusively-edtech funds launched, such as Reach Capital, Learn Capital and Owl Ventures. These funds have all closed new capital in the wake of the coronavirus, with $165 million, $132 million and $585 million, respectively.

The biggest change between GSV Ventures’ debut fund and Fund II is the opportunity that Quazzo seeds internationally. Fund 1 only had one investment outside the United States, and Fund II already has holdings in Capetown, Croatia, Jordan, as well as, Quazzo confirms, six incoming investments split between Indonesia and India.

“There are very important businesses being built in these markets with missions to democratize and improve the delivery of learning at scale to all people,” Quazzo tells TechCrunch. To date, GSV Ventures’ portfolio has 37% female founders and 43% people of color.

While there was a four-year gap between Fund I and Fund II, GSV’s ability to back edtech startups with an ambitious trajectory hasn’t gone unnoticed. Its third fund, already mid-raise, will have its first close in the next few months.

13 investors say lifelong learning is taking edtech mainstream

Posted on

GSV Ventures doubles assets managed with new fund focused on global edtech

GSV Ventures, co-founded by Deborah Quazzo and Michael Cohn, has raised $180 million in its second fund, exclusively focused on backing edtech startups across the globe. The startup now manages $277 million in cumulative assets, inclusive of its debut fund that was closed in 2016.

The new fund will let GSV invest in 13 core holdings, with an average check size of $15 million. The firm reserves up to $20 million per position for follow-on capital. It will invest in seed, Series A and late growth-stage opportunities.

While edtech was certainly spotlighted by the pandemic’s impact on the adoption of remote education, GSV Ventures is a case study in what happens when you invest in a category before it has generalist eyes on it. The first fund had three of its largest positions in Coursera, which is planning to go public this year; Course Hero, which was valued at $1.1 billion last year; and ClassDojo, which finally hit profitability after spending eight years focusing on customer growth instead of monetization.

The firm was also an early believer in Nearpod, which exited for $650 million in an all-cash deal in February 2021. Quazzo, who contributed her angel portfolio into the fund, says that this gives the firm 10 exits under its belt to date.

Edtech valuations aren’t skyrocketing, but investors see more exit opportunities

GSV Ventures began around the same time as other exclusively-edtech funds launched, such as Reach Capital, Learn Capital and Owl Ventures. These funds have all closed new capital in the wake of the coronavirus, with $165 million, $132 million and $585 million, respectively.

The biggest change between GSV Ventures’ debut fund and Fund II is the opportunity that Quazzo seeds internationally. Fund 1 only had one investment outside the United States, and Fund II already has holdings in Capetown, Croatia, Jordan, as well as, Quazzo confirms, six incoming investments split between Indonesia and India.

“There are very important businesses being built in these markets with missions to democratize and improve the delivery of learning at scale to all people,” Quazzo tells TechCrunch. To date, GSV Ventures’ portfolio has 37% female founders and 43% people of color.

While there was a four-year gap between Fund I and Fund II, GSV’s ability to back edtech startups with an ambitious trajectory hasn’t gone unnoticed. Its third fund, already mid-raise, will have its first close in the next few months.

13 investors say lifelong learning is taking edtech mainstream

Posted on

Fintech startup Finix closes on $3M in Black and Latinx investor-led SPV

Many founders talk about their desire for a more diverse investor base. Richie Serna took that desire and made it a reality.

Serna, who founded payments infrastructure startup Finix in 2016, had raised more than $95 million in venture funding from the likes of Lightspeed Venture Partners, American Express Ventures, Homebrew, Precursor Ventures, Insight Partners, Bain Capital Ventures, Visa and Activant Capital.

The San Francisco-based fintech last raised $30 million in an extension of its Series B round last August. At the time, Finix — which says its mission is to make every company a payments company — said it had seen its transaction volume more than quadruple from Q2 2019 to Q2 2020.

But Serna, a first-generation Mexican-American who was the first in his family to go to college (Harvard), wanted to broaden his company’s cap table even further. So he created a special purpose vehicle (SPV) that ultimately raised an additional $3 million and brought more than 80 “traditionally marginalized” investors onto Finix’s cap table. 

“This is very personal for me as a founder of color — making sure we have a diverse representation of people in our investor base,” Serna said.

Finix CEO and founder Richie Serna – Image courtesy of Finix

The effort, Serna added, was more than just diversifying his company’s cap table. It was also an initiative aimed at giving Black and Latinx investors access to an opportunity they may not have otherwise had. Indeed, the numbers are dismal. A recent NVCA-Deloitte Human Capital Survey found that 80% of investment partners at VC firms are white, and just 3% are Black and 3% are Hispanic/Latinx.

“This is about helping historically underrepresented groups build track records and get attribution for the work to help them start their careers and hopefully one day start their own fund,” Serna told TechCrunch. “So this is just one way that we at Finix can construct a rewrite of the story about the lack of diversity in Silicon Valley.”

It’s also not a one-time thing. Moving forward, in all subsequent rounds, Finix will be allocating 10% of each round to Black and Latinx investors.

Jewel Burks Solomon, managing partner of Collab Capital and head of Google for Startups, U.S. said the opportunity to invest in “a high growth company like Finix at a time that is typically reserved for a very select group of highly connected (usually white) investors is a big deal.”

“Access is the primary determinant of wealth creation,” Atlanta, Ga.-based Solomon added. “So creating an opportunity for access to folks who might not otherwise have it is game-changing.”

For Tiffani Ashley Bell, founder and executive director of The Human Utility (and now Finix investor), the SPV gives “talented, knowledgeable investors and operators from diverse backgrounds — especially Black and Latinx people — who have traditionally been excluded from investing early in rocket ship startups” a chance to be able to do so. 

While fundraising, Finix was also looking to fill senior executive positions. Through the process, the company was able to find a few who came with a breadth of experience to help the company advance on its long-term goals — including the possibility of going public one day.

Fiona Taylor, who helped steer Solar City’s IPO and acquisition by Tesla and most recently served as Marqeta’s SVP of operations, is COO. CTO Ramana Satyavarapu was a founding member of Microsoft Office 365, the head of engineering for Google Play Search, led software infrastructure engineering at Uber, and was most recently the head of data platforms & products at Two Sigma, a quantitative hedge fund. 

Today, Finix has about 100 employees, 50% of whom Serna says he’s never met in person due to the pandemic and remote work. The company plans to double its headcount over the next year.

On whether the new hires mean that an IPO is in Finix’s future, Serna replied: “We always like to think that we’re not just building for the next year, we’re building for the future. And I think if you look at the group that we’ve brought together, it’s pretty clear in terms of the direction that we’re trying to head as an organization.”

In looking ahead, Serna said he’s also excited about the potential of the SPV to add diversity to his company’s cap table.

“Black investors and other Latinx entrepreneurs were the first people to believe in me and back Finix,” he added. “I’m honored to pay it forward by creating the SPV, and I hope other founders are inspired to do the same.”

Payments services company Finix adds $30 million to its Series B

Posted on

Google fires top AI ethics researcher Margaret Mitchell

Google has fired Margaret Mitchell, the founder and former co-lead of the company’s ethical AI team. Mitchell announced the news via a tweet.

Google confirmed Mitchell’s firing in a statement to TechCrunch; Google said:

After conducting a review of this manager’s conduct, we confirmed that there were multiple violations of our code of conduct, as well as of our security policies, which included the exfiltration of confidential business-sensitive documents and private data of other employees.

In January, Google revoked corporate access from AI ethicist Margaret Mitchell for reportedly using automated scripts to find examples of mistreatment of Dr. Timnit Gebru, according to Axios. Gebru says she was fired from Google while Google has maintained that she resigned.

Earlier this month, Mitchell published the email she said she sent to Google’s press team the day her corporate email access was cut off. The email spoke about Gebru’s firing and how it appeared to be “fueled by the same underpinnings of racism and sexism that our AI systems, when in the wrong hands, tend to soak up.”

Mitchell’s letter, which you can read in full here, details the different ideas and structures at play that led to Dr. Gebru’s departure from Google. Mitchell argues what happened to Gebru “appears to stem from the same lack of foresight that is at the core of modern technology, and so itself serves as an example of the problem.”

Mitchell adds:

The firing seems to have been fueled by the same underpinnings of racism and sexism that our AI systems, when in the wrong hands, tend to soak up. How Dr. Gebru was fired is not okay, what was said about it is not okay, and the environment leading up to it was — and is — not okay. Every moment where Jeff Dean and Megan Kacholia do not take responsibility for their actions is another moment where the company as a whole stands by silently as if to intentionally send the horrifying message that Dr. Gebru deserves to be treated this way. Treated as if she were inferior to her peers. Caricatured as irrational (and worse). Her research writing publicly defined as below the bar.  Her scholarship publicly declared to be insufficient. For the record: Dr. Gebru has been treated completely inappropriately, with intense disrespect, and she deserves an apology. 

The letter went on to discuss the ethical artificial intelligence approach to developing technology, how Mitchell came to lead and then co-lead the ethical AI team with Gebru and what ultimately happened. Within the next year, Mitchell said she wanted “those of us in positions of privilege and power” to come to terms with “the discomfort of being part of an unjust system that devalued one of the world’s leading scientists, and keep something like this from ever happening again.”

Mitchell’s firing comes shortly after Google announced the appointment of Dr. Marian Croak to lead its responsible artificial intelligence division. When we reached out to Google yesterday the company did not have a comment on Mitchell’s fate.

Google has a new responsible AI lead

Earlier today, Google internally announced the results of its investigation of Gebru’s exit, according to Axios. The company did not reveal what it found, but said it would implement some new policies to enhance diversity and inclusion at Google.

TechCrunch has reached out to Mitchell and will update this story if we hear back.