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Tag Archives: entrepreneurship
Spiritual Coaches Are on the Rise
As more and more Americans call themselves spiritual but not religious, spiritual coaches give us a glimpse of the allure and the hazards of 21st-century D.I.Y. religion.
How a Trash-Talking Crypto Bro Caused a $40 Billion Crash
Do Kwon, a South Korean entrepreneur, hyped the Luna and TerraUSD cryptocurrencies. Their failures have devastated some traders, though not the investment firms that cashed out early.
Fear and Loathing Return to Tech Start-Ups
Workers are dumping their stock, companies are cutting costs, and layoffs abound as troubling economic forces hit tech start-ups.
Bolt Built $11 Billion Payments Business With Inflated Metrics and Eager Investors
The start-up has had a meteoric rise, thanks to its charismatic co-founder, Ryan Breslow. But he sometimes stretched the truth to get there.
For Tens of Millions of Americans, the Good Times Are Right Now
Their houses are piggy banks, their retirement accounts are up and their bosses are eager to please. When the boom ends, everything will change.
How Elon Musk Winged It With Twitter, and Everything Else
To a degree unseen in any other mogul, the world’s richest man acts on impulse and the belief that he is absolutely right.
Legal Marijuana Sales Expected to Start Within Weeks in New Jersey
A state commission has granted seven medical-marijuana companies permission to start selling cannabis to all adults at dispensaries.
‘La French Tech’ Arrives Under Macron, but Proves No Panacea
The president has brought innovation, jobs and growth. Still, resentments fester on the eve of the presidential election.
Online Brands Try a Traditional Marketing Strategy: Physical Stores
As digital advertising costs rise, more direct-to-consumer retailers are opening shops, leasing turnkey options or securing short-term spaces in other stores.
New Yorkers With Marijuana Convictions Will Get First Retail Licenses
Officials intend to reserve the first 100 or more retail licenses to sell marijuana in New York for people who have been convicted of related offenses, or their relatives.
Elizabeth Holmes’s Ex-Boyfriend Set to Go on Trial in Theranos Case
Jury selection was set to start today in Sunny Balwani’s fraud trial, which will establish just how much he knew about the blood-testing start-up Theranos and Ms. Holmes’s actions.
Hollywood Bets Big on the Bad Entrepreneur
With limited series like “The Dropout,” “WeCrashed” and “Super Pumped,” the culture is saturated with ripped-from-the-headlines tales of self-immolating moguls.
You Quit Your Job, but You Still Need a Retirement Plan
Millions of American workers said goodbye to their bosses last year. If you’re one, don’t lose sight of your savings and investment goals.
Female Entrepreneurs Who Confront a Particular Kind of Troll
Food companies founded by Asian American women find social media engagement with customers helps their growth, but they also face racist and sexist comments.
Friends With Benefits: The Social Club That Runs On Crypto and Vibes
Friends With Benefits is a V.I.P. lounge for crypto’s creative class. Is it empty hype or the future of friendship?
Anonymity in Crypto Raises Alarm
Investors give money to pseudonymous developers. Venture capitalists back founders without learning their real names. What happens when they need to know?
In Detroit, a Bet That Healthy Restaurants Can Help the City
For years, a coalition of groups has supported food businesses, seeing them as critical to the city’s continuing recovery. The pandemic has put its accomplishments to the test.
A Spotlight on Tech’s Invisible Start-ups
A new how-to guide aims to support the start-ups that are chugging along and doing just fine.
In Defense of Venture Capitalism
Silicon Valley’s big investors are not like the rest of us.
Tech Start-Ups Reach a New Peak of Froth
There’s more money and more bubbly behavior. Investors insist it’s rational.
What It Was Like on the Elizabeth Holmes Jury for 18 Weeks
Away from the media frenzy, jurors dealt with the trial’s disruption to their lives and had little idea of the case’s implications.
Sara Menker and Gro Intelligence Are Tackling Global Hunger
The Ethiopian entrepreneur Sara Menker founded Gro Intelligence, which uses artificial intelligence to forecast global agricultural trends and battle food insecurity.
As Beijing Takes Control, Chinese Tech Companies Lose Jobs and Hope
The crackdown is killing the entrepreneurial drive that made China a tech power and destroying jobs that used to attract the country’s brightest.
Jury in Holmes Trial Set to Deliberate for Fourth Day
A jury of eight men and four women deliberated for three days last week with no verdict in the case of the Theranos founder.
Jury in Elizabeth Holmes’s Fraud Trial Set to Begin Deliberations
The trial, which has stretched nearly four months, has come to represent a critical moment for the tech industry and its culture of overly optimistic salesmanship.
The New Get-Rich-Faster Job in Silicon Valley: Crypto Start-Ups
Tech executives and engineers are quitting Google, Meta, Amazon and other large companies for what they say is a once-in-generation opportunity with crypto.
Elizabeth Holmes Trial: Closing Arguments Are Set to Begin
Prosecutors said Ms. Holmes, the Theranos founder, deliberately chose to lie instead of letting the start-up fail.
Battling for Bolivia’s Lithium That’s Vital to Electric Cars
Chinese and Russian industrial giants seek to tap mineral deposits vital to electric cars. A Texas entrepreneur has his own strategy: the long game.
Black Women Make Waves in Hair Care
A new crop of businesses is claiming a growing share of a billion-dollar industry.
Elizabeth Holmes Rests Her Case in Fraud Trial
Lawyers must now agree on a set of jury instructions before closing arguments begin on Dec. 16.
Prosecutors Push Elizabeth Holmes of Theranos to Take Responsibility
Under cross-examination, the founder of the failed blood testing start-up defended herself but admitted that she had made mistakes.
Elizabeth Holmes Testimony: Updates From Day 4
Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, took the stand for a fourth day on Monday.
Where Will We Be in 20 Years?
Looking at demographic data can help us assess the opportunities and challenges of the coming decades.
Jake Wood Was Once a Warrior, Then a Nonprofit Leader. Now He’s an Entrepreneur.
Jake Wood was a Marine sniper in Iraq and Afghanistan. Now he works in the philanthropic sector and is “leading with love.”
Elizabeth Holmes Points Fingers at Others and Says She Was a Believer
In her most substantial day of testimony, Ms. Holmes, the founder of the failed blood testing start-up Theranos, painted herself as someone whose best intentions were misinterpreted.
How Elizabeth Holmes Soured the Media on Silicon Valley
Testimony in the fraud trial of Ms. Holmes, the founder of the blood testing start-up Theranos, shows how much coverage of the tech industry has changed over the years.
Why Crypto.com Is Putting Its Name on the Staples Center
What’s Crypto.com, which is paying $700 million for the naming rights to the sports venue?
Ukraine Wants to Be the Crypto Capital of the World
It has to be somewhere. Why not Ukraine?
Starting a Business With Your 401(k)? Be Careful.
As an aspiring entrepreneur, you may have a good idea, but tread lightly before using retirement savings as capital.
Yemenis in Brooklyn Reclaim High-End Coffee
Second-generation Yemeni entrepreneurs in Brooklyn want to reclaim their role as the purveyors of the original specialty coffee.
Elizabeth Holmes Trial Exposes Investors’ Lack of Due Diligence
Start-up investors have often suspended skepticism while chasing a hot deal. The trial of Ms. Holmes, the founder of Theranos, has put that behavior under the spotlight.
Inside the Courtroom With Theranos’s Elizabeth Holmes
Behind the closed doors are whispers, gestures and a daily rhythm, plus two court artists, numbered tickets and some true-crime fans.
The Future Farmers of France Are Tech Savvy, and Want Weekends Off
An unconventional school wants to attract a new crowd to French agriculture, and help farms earn a profit.
Extra Crunch roundup: Adtech investing, Intuit buys Mailchimp, ideal customer profiles
Major gains in online advertising have boosted valuations for adtech startups since the pandemic began, but one insider says investors are missing the party.
“Adtech is having a moment,” writes industry veteran Casey Saran.
“And while much of the oxygen has been soaked up by large legacy companies hitting the public market, there have been smaller deals that indicate a hunger for better creative adtech.”
Saran shares five reasons “why VCs should consider ratcheting up their investment into adtech startups building the next generation of creative tools.”
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
On Wednesday, September 22 at 9:05 a.m PT, I’m moderating “The Path for Underrepresented Entrepreneurs,” a panel discussion at Disrupt 2021.
Our conversation will examine some of the unique challenges facing founders from historically marginalized groups, the strategies they used along the way, and the disruptive changes we need to consider if we want to see fundamental change.
I’ll be speaking with:
- Hana Mohan, founder & CEO, MagicBell
- Leslie Feinzaig, founder & CEO, Female Founders Alliance
- Stephen Bailey, co-founder & CEO, ExecOnline
I hope you’ll attend; we’ll take audience questions after our discussion concludes. Thanks very much for reading Extra Crunch this week, and have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
5 things you need to win your first customer
Image Credits: AndrewLilley (opens in a new window) / Getty Images
Congratulations on shipping your product, but how much do you know about your target customers?
Companies that haven’t created an ideal customer profile and performed a SWOT analysis are making big bets on guesswork and intuition. Sometimes that works out, but more frequently, it leads to tears.
In a guest post that walks readers through the fundamentals of creating customer personas that map to your company’s goals, Grammarly product marketing lead Bryan Dsouza shares five basic requirements for customer acquisition.
“Understanding and executing on these things can guarantee you that first customer win, provided you do them well and with sincerity,” he says.
“Your investors will also see the fruits of your labor and be comforted knowing their dollars are at good work.”
4 ways to leverage ROAS to triple lead generation
Image Credits: joshblake (opens in a new window) / Getty Images
In school, it’s highly unethical to copy someone else’s work and pass it off as your own. In business, however, it is expected.
Xiaoyun TU, global director of demand generation at Brightpearl, wrote a comprehensive guide for how to use the key metric of return on advertising spend (ROAS) to triple your company’s lead generation.
“A ‘good’ ROAS score is different for each company and campaign,” she says. “If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.”
3 strategies to make adopting new HR tech easier for hiring managers
Image Credits: porcorex (opens in a new window) / Getty Images
Most of us prefer to trust our instincts instead of letting automated tools help us make decisions, particularly when it comes to hiring. But that’s not smart.
If your startup relies on an ad hoc hiring process, you’re probably not tracking candidates properly, there’s likely little consistency regarding how they’re treated, and bias can play a major role in who gets hired.
It’s fine to be skeptical of automated hiring tools — but not ignorant.
What could stop the startup boom?
Image Credits: Nigel Sussman (opens in a new window)
In yesterday’s edition of The Exchange, Anna Heim and Alex Wilhelm speculated about the conditions that could combine to cool off a hot startup market currently fueled by low interest rates and a sweeping digital transformation.
“From where we stand, the factors underpinning the startup fundraising boom appear solid and unlikely to unwind overnight. Still, no golden period shines forever, and even today’s luster will eventually tarnish.”
Intuit’s $12B Mailchimp acquisition is about expanding its small business focus
Image Credits: Smith Collection/Gado / Getty Images
Before news broke this week that Intuit was acquiring Mailchimp for $12 billion, the ’80s-born fintech giant’s biggest buy was spending $7.1 billion last year for Credit Karma.
In the last few years, Mailchimp “has been expanding upon its core email marketing functionality” with offerings like web design and CRM, writes enterprise reporter Ron Miller.
The industry watchers he interviewed said the move signals Intuit’s interest in acquiring and serving more SMB customers with a variety of tools:
- Laurie McCabe, co-founder and partner, SMB Group
- Brent Leary, founder and principal analyst, CRM Essentials
- Holger Mueller, analyst, Constellation Research
Forge’s SPAC deal is a bet on unicorn illiquidity
Image Credits: Nigel Sussman (opens in a new window)
“One of my favorite long-term issues with the late-stage startup market is that it is far better at creating value than it is at finding an exit point for that accreted value,” Alex Wilhelm writes for The Exchange. “More simply, the startup market is excellent at creating unicorns but somewhat poor at taking them public.”
That’s good news for Forge Global, a technology startup that operates a market for secondary transactions in private companies, with Alex dubbing its plans to go public via a SPAC combination “perfectly reasonable.”
Dear Sophie: Should I apply for citizenship if I have a conviction?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
At Burning Man a few years ago, I was arrested and charged with a misdemeanor for smoking marijuana in public (in my car) and driving under the influence.
I currently have a green card and want to apply for U.S. citizenship next year.
Can I? If so, how should I handle my criminal record?
— Remorseful About the Reefer
Atlanta’s sundry startups join in global VC funding boom
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm and Anna Heim continued their tour of U.S. cities after hitting up Chicago and Boston in recent weeks.
This time, they dug into Atlanta’s booming startup scene, which is seeing record capital inflows.
“The picture that forms is one of a city enjoying a rising tide of venture activity, boosted by some local dynamics that may have helped some of its earlier-stage companies scale for cheaper than they might have in other markets,” they write.
The Elizabeth Holmes Trial Is a Wake-Up Call for Sexism in Tech
In tech, brash male founders are allowed to overpromise and underdeliver, time and again. Not so much for women.
The Sexism That Led to the Elizabeth Holmes Trial
In tech, brash male founders are allowed to overpromise and underdeliver, time and again. Not so much for women.
Index Ventures launches web-app to help founders calculate employee stock options
The ability to offer stock options is utterly essential to startups. They convince talented people to join when the startup is unlikely to be capable of matching the high salaries that larger, established tech firms can offer.
However, it’s a complex business developing a competitive stock option plan. Luckily, London-based VC Index Ventures today launches both a handy web app to calculate all this, plus new research into how startups are compensating their key hires across Europe and the US.
OptionPlan Seed, is a web-app for seed-stage founders designing ESOPs (Employee Stock Ownership Plans). The web app is based on Index’s analysis of seed-stage option grants, drawing on data from over 1,000 startups.
The web app covers a variety of roles; 6 different levels of allocation benchmarks; calculates potential financial upside for each team member (including tax); and adjusts according to policy frameworks in the US, Canada, Israel, Australia, and 20 European countries.
It also builds on the OptionPlan for Series A companies that Index launched a few years ago.
As part of its research for the new tool, Index said it found that almost all seed-stage employees receive stock options. However, while this reaches 97% of technical hires at seed-stage startups and 80% of junior non-technical hires for startups in the US, in Europe only 75% of technical hires receive options, dropping to 60% for junior non-technical hires.
That said, Index found stock option grant sizes are increasing, particularly among startups “with a lot of technical DNA, and weighted towards the Bay Area”. In less tech-heavy sectors such as e-commerce or content, grant sizes have not shifted much. Meanwhile, grants are still larger overall as seed valuations have grown in the last few years.
Index found the ESOP size is increasing at seed stage, following a faster rate of hiring, and larger grants per employee. Index recommends an ESOP size at seed stage is set at 12.5% or 15%, rather than the more traditional 10% in order to retain and attract staff.
The research also found seed fundraise sizes and valuations have doubled, while valuations have risen by 2.5x, in Europe and the US.
Additionally, salaries at seed have “risen dramatically” with average salaries rising in excess of 60%. Senior tech roles at seed-stage startups in the US now earn an average $185,000 salary, a 68% increase over 3 years, and can rise to over $220,000. But in Europe, the biggest salary increases have been for junior roles, both technical and non-technical.
That said, Index found that “Europe’s technical talent continues to have a compensation gap” with seed-stage technical employees in Europe still being paid 40-50% less on average than their US counterparts. Indeed, Index found this gap had actually widened since 2018, “despite a narrowing of the gap for non-technical roles”.
Index also found variations in salaries across Europe are “much wider than the US”, reflecting high-cost hubs like London, versus lower-cost cities like Bucharest or Warsaw.
The war for talent is now global, with the compensation gap for technical hires narrowing to 20-25% compared to the US.
Index’s conclusion is that “ambitious seed founders in Europe should raise the bar in terms of who they hire, particularly in technical roles” as well as aiming for more experienced and higher-caliber candidates, larger fundraises to be competitive on salaries.
As UK Gov reaches out to tech, investors threaten to ‘pull capital’ over M&A regulator over-reach
UK competition regulators are spooking tech investors in the country with an implied threat to clamp down on startup M&A, according to a new survey of the industry.
As the UK’s Chancellor of the Exchequer engaged with the tech industry at a ‘Chatham House’ style event today, the Coalition for a Digital Economy (Coadec) think-tank released a survey of over 50 key investors which found startup investors are prepared to pull capital over the prospect of the Competition and Markets Authority’s (CMA) new Digital Markets Unit (DMU) becoming a “whole-economy regulator by accident”. Investors are concerned after the CMA recommended the DMU be given ‘expanded powers’ regarding its investigations of M&A deals.
Controversy has been stirring up around the DMU, as the prospect of it blocking tech startup acquisitions – especially by US firms, sometimes on the grounds of national security – has gradually risen.
In the Coadec survey, half of investors said they would significantly reduce the amount they invested in UK startups if the ability to exit was restricted, and a further 22.5% said they would stop investing in UK startups completely under a stricter regulatory environment.
Furthermore, 60% of investors surveyed said they felt UK regulators only had a “basic understanding” of the startup market, and 22.2% felt regulators didn’t understand the tech startup market at all.
Coadec said its conservative estimates showed that the UK Government’s DMU proposals could create a £2.2bn drop in venture capital going into the UK, potentially reducing UK economic growth by £770m.
Commenting on the report, Dom Hallas, Executive Director of Coadec, said: “Startups thrive in competitive markets. But nurturing an ecosystem means knowing where to intervene and when not to. The data shows that not only is there a risk that the current proposals could miss some bad behavior in some areas like B2B markets whilst creating unnecessary barriers in others like M&A. Just as crucially, there’s frankly not a lot of faith in the regulators proposing them either.”
The survey results emerged just as Chancellor Rishi Sunak convened the “Treasury Connect” conference in London today which brought together some of the CEOs of the UK’s biggest tech firms and VCs in a ‘listening process’ designed to reach out to the industry.
However, at a press conference after the event, Sunak pushed back on the survey results, citing research by Professor Jason Furman, Chair, of the Digital Competition Expert Panel, which has found that “not a single acquisition” had been blocked by the DMU, and there are “no false positives” in decision making to date. Sunak said the “system looks at this in order to get the balance right.”
In addition, a statement from the Treasury, out today, said more than one-fifth of people in the UK’s biggest cities are now employed in the tech sector, which also saw £11.2 billion invested last year, setting a new investment record, it claimed.
Sunak also said the Future Fund, which backed UK-based tech firms with convertible loans during the pandemic, handed UK taxpayers with stakes in more than 150 high-growth firms.
These include Vaccitech PLC, which co-invented the COVID-19 vaccine with the University of Oxford and is better known as the AstraZeneca vaccine which went to 170 countries worldwide. The Future fund also invested in Century Tech, an EdTEch startup that uses AI to personalize learning for children.
The UK government’s £375 million ‘Future Fund: Breakthrough’ initiative continued from July this year, aiming at high-growth, R&D-intensive companies.
Coadec’s survey also found 70% of investors felt UK regulators “only thought about large incumbent firms” when designing competition rules, rather than startups or future innovation.
However, the survey found London was still rated as highly as California as an attractive destination for startups and investors.
Rezilion raises $30M help security operations teams with tools to automate their busywork
Security operations teams face a daunting task these days, fending off malicious hackers and their increasingly sophisticated approaches to cracking into networks. That also represents a gap in the market: building tools to help those security teams do their jobs. Today, an Israeli startup called Rezilion that is doing just that — building automation tools for DevSecOps, the area of IT that addresses the needs of security teams and the technical work that they need to do in their jobs — is announcing $30 million in funding.
Guggenheim Investments is leading the round with JVP and Kindred Capital also contributing. Rezilion said that unnamed executives from Google, Microsoft, CrowdStrike, IBM, Cisco, PayPal, JP Morgan Chase, Nasdaq, eBay, Symantec, RedHat, RSA and Tenable are also in the round. Previously, the company had raised $8 million.
Rezilion’s funding is coming on the back of strong initial growth for the startup in its first two years of operations.
Its customer base is made up of some of the world’s biggest companies, including two of the “Fortune 10” (the top 10 of the Fortune 500). CEO Liran Tancman, who co-founded Rezilion with CTO Shlomi Boutnaru, said that one of those two is one of the world’s biggest software companies, and the other is a major connected device vendor, but he declined to say which. (For the record, the top 10 includes Amazon, Apple, Alphabet/Google, Walmart and CVS.)
Tancman and Boutnaru had previously co-founded another security startup, CyActive, which was acquired by PayPal in 2015; the pair worked there together until leaving to start Rezilion.
There are a lot of tools out in the market now to help automate different aspects of developer and security operations. Rezilion focuses on a specific part of DevSecOps: large businesses have over the years put in place a lot of processes that they need to follow to try to triage and make the most thorough efforts possible to detect security threats. Today, that might involve inspecting every single suspicious piece of activity to determine what the implications might be.
The problem is that with the volume of information coming in, taking the time to inspect and understand each piece of suspicious activity can put enormous strain on an organization: it’s time-consuming, and as it turns out, not the best use of that time because of the signal to noise ratio involved. Typically, each vulnerability can take 6-9 hours to properly investigate, Tancman said. “But usually about 70-80% of them are not exploitable,” meaning they may be bad for some, but not for this particular organization and the code it’s using today. That represents a very inefficient use of the security team’s time and energy.
“Eight of out ten patches tend to be a waste of time,” Tancman said of the approach that is typically made today. He believes that as its AI continues to grow and its knowledge and solution becomes more sophisticated, “it might soon be 9 out of 10.”
Rezilion has built a taxonomy and an AI-based system that essentially does that inspection work as a human would do: it spots any new, or suspicious, code, figures out what it is trying to do, and runs it against a company’s existing code and systems to see how and if it might actually be a threat to it or create further problems down the line. If it’s all good, it essentially whitelists the code. If not, it flags it to the team.
The stickiness of the product has come out of how Tancman and Boutnaru understand large enterprises, especially those heavy with technology stacks, operate these days in what has become a very challenging environment for cybersecurity teams.
“They are using us to accelerate their delivery processes while staying safe,” Tancman said. “They have strict compliance departments and have to adhere to certain standards,” in terms of the protocols they take around security work, he added. “They want to leverage DevOps to release that.”
He said Rezilion has generally won over customers in large part for simply understanding that culture and process and helping them work better within that: “Companies become users of our product because we showed them that, at a fraction of the effort, they can be more secure.” This has special resonance in the world of tech, although financial services, and other verticals that essentially leverage technology as a significant foundation for how they operate, are also among the startup’s user base.
Down the line, Rezilion plans to add remediation and mitigation into the mix to further extend what it can do with its automation tools, which is part of where the funding will be going, too, Boutnaru said. But he doesn’t believe it will ever replace the human in the equation altogether.
“It will just focus them on the places where you need more human thinking,” he said. “We’re just removing the need for tedious work.”
In that grand tradition of enterprise automation, then, it will be interesting to watch which other automation-centric platforms might make a move into security alongside the other automation they are building. For now, Rezilion is forging out an interesting enough area for itself to get investors interested.
“Rezilion’s product suite is a game changer for security teams,” said Rusty Parks, senior MD of Guggenheim Investments, in a statement. “It creates a win-win, allowing companies to speed innovative products and features to market while enhancing their security posture. We believe Rezilion has created a truly compelling value proposition for security teams, one that greatly increases return on time while thoroughly protecting one’s core infrastructure.”