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VCs say Silicon Valley isn’t the gold mine it used to be

In the days leading up to TechCrunch Disrupt SF 2018, The Economist published the cover story, ‘Why Startups Are Leaving Silicon Valley.’

The author outlined reasons why the Valley has “peaked.” Venture capital investors are deploying capital outside the Bay Area more than ever before. High-profile entrepreneurs and investors, Peter Thiel, for example, have left. Rising rents are making it impossible for new blood to make a living, let alone build businesses. And according to a recent survey, 46 percent of Bay Area residents want to get the hell out, an increase from 34 percent two years ago.

Needless to say, the future of Silicon Valley was top of mind on stage at Disrupt.

“It’s hard to make a difference in San Francisco as a single entrepreneur,” said J.D. Vance, the author of ‘Hillbilly Elegy’ and a managing partner at Revolution’s Rise of the Rest Fund, which backs seed-stage companies based outside Silicon Valley. “It’s not as a hard to make a difference as a successful entrepreneur in Columbus, Ohio.”

In conversation with Vance, Revolution CEO Steve Case said he’s noticed a “mega-trend” emerging. Founders from cities like Pittsburgh, Detroit or Portland are opting to stay in their hometowns instead of moving to U.S. innovation hubs like San Francisco.

“The sense that you have to be here or you can’t play is going to start diminishing.”

“We are seeing the beginnings of a slowing of what has been a brain drain the last 20 years,” Case said. “It’s not just watching where the capital flows, it’s watching where the talent flows. And the sense that you have to be here or you can’t play is going to start diminishing.”

J.D. Vance says that most entrepreneurs don’t need to move to Silicon Valley.

Here’s why. #TCDisrupt pic.twitter.com/0mFPeTuHLe

— TechCrunch (@TechCrunch) September 6, 2018

Farewell, San Francisco

“It’s too expensive to live here,” said Aileen Lee, the founder of seed-stage VC firm Cowboy Ventures, amid a conversation with leading venture capitalists Spark Capital general partner Megan Quinn and Benchmark general partner Sarah Tavel .

“I know that there are a lot of people in the Bay Area that are trying to work on that problem and I hope that they are successful,” Lee added. “It’s an amazing place to live and we’ve made it really challenging for people to live here and not worry about making ends meet.”

One of Cowboy’s portfolio companies opted to relocate from Silicon Valley to Colorado when it came time to scale their business. That kind of move would’ve historically been seen as a failure. Today, it may be a sign of strong business acumen.

Quinn said that of all 28 of Spark’s growth-stage portfolio companies, Raleigh, North Carolina-based Pendo has the easiest time recruiting folks locally and from the Bay Area.

She advises her Bay Area-based late-stage companies to open a second office outside of the Valley where lower-cost talent is available.

“We often say go to [flySFO.com], draw a three-hour circle around San Francisco where they have direct flights, find a city that has a university and open up a second office as quickly as possible,” Quinn said.

Still, all three firms invest in a lot of companies based in San Francisco. Of Benchmark’s 10 most recent investments, for example, eight were based in SF, according to Crunchbase.

“I used to believe really strongly if you wanted to build a multi-billion dollar company you had to be based here,” Tavel said. “I’ve stopped giving that soap speech.”

Aileen Lee (Cowboy Ventures), Megan Quinn (Spark Capital), and Sarah Tavel (Benchmark Capital) on whether or not Silicon Valley is on the wane for investors #TCDisrupt pic.twitter.com/SOpn7p0eNQ

— TechCrunch (@TechCrunch) September 5, 2018

Underestimated talent

A lot of Bay Area VCs have been blind to the droves of tech talent located outside the region. Believe it or not, there are great engineers in America’s small- and medium-sized markets too.

At Disrupt, Backstage Capital founder Arlan Hamilton announced the firm would launch an accelerator to further amplify companies led by underestimated founders. The program will have cohorts based in four cities; San Francisco was noticeably absent from that list.

Instead, the firm, which invests in underrepresented founders and recently raised a $36 million fund, will work with companies in Philadelphia, Los Angeles, London and one more city, which will be determined by a public vote. Aniyia Williams, the founder of Tinsel and Black & Brown Founders, will spearhead the Philadelphia effort.

“For us, it’s about closing that wealth gap to address inequity in tech,” Williams said. “There needs to be more active participation from everyone.”

Hamilton added that for her, the tech talent in LA and London is undeniable.

“There is a lot of money and a lot of investors … it reminds me of three years ago in Silicon Valley,” Hamilton said.

Silicon Valley vs. China

Silicon Valley’s demise may not be just as a result of increased costs of living or investors overlooking talent in other geographies. It may be because of heightened competition abroad.

Doug Leone, an early- and growth-stage investor at Sequoia Capital, said at Disrupt that he’s noticed a very different work ethic in China.

Chinese entrepreneurs, he explained, are more ruthless than their American counterparts and they’re putting in a whole lot more hours.

Doug Leone of Sequoia Capital says founders in the US and China both want to change the world, but Chinese founders are a little more desperate (and you see it in the crazy work ethic they have).#TCDisrupt pic.twitter.com/dPxsRTbJoq

— TechCrunch (@TechCrunch) September 6, 2018

“I’ve had dinner in China until after 10 p.m. and people go to work after 10 p.m.,” Leone recalled.

“We don’t see that in the U.S. I’m not saying the U.S. founders oughta do that but those are the differences. They are similar in character. They are similar in dreams. They are similar in how they want to change the world. They are ultra-driven … The Chinese founders have a half other gear because I think they are a little more desperate.”

Much of this, however, has been said before and still, somehow, Silicon Valley remained the place to be for investors and startup entrepreneurs.

The reality is, those engaged in tech culture are always anxiously awaiting for the bubble to pop, the market to crash and for “peak Valley” to finally arrive.

Maybe, just maybe, Silicon Valley is forever.

Here’s more of our coverage of Disrupt 2018.

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Uber’s chief diversity officer is coming to TechCrunch Disrupt 2018

At TechCrunch Disrupt 2018, Uber’s Chief Diversity and Inclusion Officer Bo Young Lee will be joining us to talk about the ride-sharing company’s efforts to put detoxify its corporate culture and promote a more inclusive environment for employees.

Lee was hired as the company’s first chief diversity and inclusion officer this past January, after leaving insurance company Marsh LLC where she held a similar role.

Uber has obviously had its fair share of issues with fostering an inclusive culture, they’ve made some public efforts to showcase that the company was making active efforts to promote internal change and they seem to at least be having a more peaceful 2018 than 2017 — in terms of news surrounding the company’s culture. Nevertheless, there has still been plenty of movement surrounding diversity at the company even after Lee’s hire.

In April, the company released its first diversity report under new Uber CEO Dara Khosrowshahi showing some slight improvements with the percentage of female employees (38 percent) at the company, while there was a slight drop in black representation and a bump in Latinx representation.

In June, the company’s Chief Brand Officer Bozoma Saint John left the company, noting in an interview with TechCrunch that Uber had made some improvements but still had work to do. “I’m not saying the corporate culture has righted itself 100 percent,” John said. “Or it’s where it needs to be today. It isn’t. There’s still a lot to be done in that regard.”

In July, the company’s Chief People Officer Liane Hornsey, whom Lee reported to, resigned from the company following a racial discrimination investigation that targeted how the executive was handling complaints.

There’s obviously plenty to talk about in terms of the company’s own diversity efforts, we’re also looking forward to picking Lee’s brain about broader trends around inclusion in the tech industry and where her cautious optimism lies.

Disrupt SF will take place in San Francisco’s Moscone Center West from September 5 to 7. The full agenda is here, and you can still buy tickets right here.

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How Silicon Valley should celebrate Labor Day

Ask any 25-year old engineer what Labor Day means to him or her, and you might get an answer like: it’s the surprise three-day weekend after a summer of vacationing. Or it’s the day everyone barbecues at Dolores Park. Or it’s the annual Tahoe trip where everyone gets to relive college.

Or simply, it’s the day we get off because we all work so hard.

And while founders and employees in startup land certainly work hard, wearing their 80-hour workweeks as a badge of honor, closing deals on conference calls in an air-conditioned WeWork is a far cry from the backbreaking working conditions of the 1880s, the era when Labor Day was born.

For everyone here in Silicon Valley, we should not be celebrating this holiday triumphantly over beers and hot dogs, complacent in the belief that our gravest labor issues are behind us, but instead use this holiday as a moment to reflect on how much further we have to go in making our workplaces and companies more equitable, diverse, inclusive and ethically responsible.

Bloody Beginnings

On September 5th, 1882, 10,000 workers gathered at a “monster labor festival” to protest the 12-hours per day, seven days a week harsh working conditions they faced in order to cobble together a survivable wage. Even children as “young as 5 or 6 toiled in mills, factories and mines across the country.”

This all erupted in a climax in 1894 when the American Railway Union went on a nationwide strike, crippling the nation’s transportation infrastructure, which included trains that delivered postal mail. President Grover Cleveland declared this a federal crime and sent in federal troops to break up the strike, which resulted in one of the bloodiest encounters in labor history, leaving 30 dead and countless injured.

Labor Day was declared a national holiday a few month later in an effort to mend wounds and make peace with a reeling and restless workforce (it also conveniently coincided with President Cleveland’s reelection bid).

The Battle is Not Yet Won

Today in Silicon Valley, this battle for fair working conditions and a living wage seems distant from our reality of nap rooms and lucrative stock grants.  By all accounts, we have made tremendous strides on a number of critical labor issues. While working long hours is still a cause for concern, most of us can admit that we often voluntarily choose to work more than we have to. Our workplace environments are not perfect (i.e. our standing desks may not be perfectly ergonomic), but they are far from life-threatening or hazardous to our health. And while equal wages are still a concern, earning a living wage is not, particularly if the worst case scenario after “failing” at a startup means joining a tech titan and clocking in as a middle manager with a six-figure salary.

Even though the workplace challenges of today are not as grave as life or death, the fight is not yet over. Our workplaces are far from perfect, and the power dynamic between companies and employees is far from equal.

In tech, we face a myriad of issues that need grassroots, employee-driven movements to effect change. Each of the following issues has complexities and nuances that deserve an article of its own, but I’ve tried to summarize them briefly: 

  1. Equal pay for equal work – while gender wage gaps are better in tech than other industries (4% average in tech vs. 20% average across other industries), the discrepancy in wages for women in technical roles is twice the average for other roles in tech.
  2. Diversity – research shows that diverse teams perform better, yet 76% of technical jobs are still held by men, and only 5% of tech workers are Black or Latino. The more alarming statistic in a recent Atlassian survey is that more than 40% of respondents felt that their company’s diversity programs needed no further improvement.
  3. Inclusion – an inclusive workplace should be a basic fundamental right, but harassment and discrimination still exist. A survey by Women Who Tech found that 53 percent of women working in tech companies reported experiencing harassment (most frequently in the form of sexism, offensive slurs, and sexual harassment) compared to 16 percent of men.
  4. Outsourced / 1099 employees – while corporate employees at companies like Amazon are enjoying the benefits of a ballooning stock, the reality is much bleaker for warehouse workers who are on the fringes of the corporate empire. A new book by undercover journalist James Bloodworth found that Amazon workers in a UK warehouse “use bottles instead of the actual toilet, which is located too far away.” A separate survey conducted found that 55% of these workers suffer from depression, and 80% said they would not work at Amazon again.Similarly, Foxconn is under fire once again for unfair pay practices, adding to the growing list of concerns including suicide, underage workers, and onsite accidents. The company is the largest electronics manufacturer in the world, and builds products for Amazon, Apple, and a host of other tech companies.
  5. Corporate Citizenship & Ethics – while Silicon Valley may be a bubble, the products created here are not. As we’ve seen with Facebook and the Cambridge Analytica breach, these products impact millions of lives. The general uncertainty and uneasiness around the implications of automation and AI also spark difficult conversations about job displacement for entire swaths of the global population (22.7M by 2025 in the US alone, according to Forrester).

Thus, the reversal in sentiment against Silicon Valley this past year is sending a message that should resonate loud and clear — the products we build and the industries we disrupt here in the Valley have real consequences for workers that need to be taken seriously.

Laboring toward a better future

To solve these problems, employees in Silicon Valley needs to find a way to organize. However, there are many reasons why traditional union structures may not be the answer.

The first is simply that traditional unions and tech don’t get along. Specifically, the AFL-CIO, one of the largest unions in America, has taken a hard stance against the libertarian ethos of the Valley, drawing a bright line dividing the tech elite from the working class. In a recent speech about how technology is changing work, the President of the AFL-CIO did not mince words when he said that the “events of the last few years should have made clear that the alternative to a just society is not the libertarian paradise of Silicon Valley billionaires. It is a racist and authoritarian nightmare.”

But perhaps the biggest difference between what an organized labor movement would look like in Silicon Valley and that of traditional organized labor is that it would be a fight not to advance the interest of the majority, but to protect the minority. In the 1880s, poor working conditions and substandard pay affected nearly everyone — men, women, and children. Unions were the vehicles of change for the majority.

But today, for the average male 25-year old engineer, promoting diversity and inclusion or speaking out about improper treatment of offshore employees is unlikely to affect his pay, desirability in the job market, or working conditions. He will still enjoy the privileges of being fawned over as a scarce resource in a competitive job market. But the person delivering the on-demand service he’s building won’t. His female coworker with an oppressive boss won’t. This is why it is ever more important that we wake up and not only become allies or partners, but champions of the causes that affect our less-privileged fellow coworkers, and the people that our companies and products touch.

So this Labor Day, enjoy your beer and hot dog, but take a moment to remember the individuals who fought and bled on this day to bring about a better workplace for all. And on Tuesday, be ready to challenge your coworkers on how we can continue that fight to build more diverse, inclusive, and ethically responsible companies for the future. 

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Cleo Capital sets $10M target to fund female entrepreneurs

Sarah Kunst has filed to raise $10 million for her debut venture capital fund, Cleo Capital. According to Axios, the firm will give cash to female entrepreneurs who will act as scouts. 

Scouts look for viable early-stage startups for firms to invest in and then receive a cut of the profits on the investments. Kunst, pictured above, is a scout for Sequoia; it’s unclear if that will change now that she’s running her own firm. She’s also the founder of ProDay, a fitness tech startup that had raised at least $500,000 from angel investors, including Arielle Zuckerberg, but folded earlier this year.

We’ve reached out to Kunst for comment.

Cleo isn’t the only female-focused fund with which Kunst is involved. She joined Bumble as a senior adviser in February, and earlier this month, the popular dating app announced the launch of a VC fund targeting early-stage startups with women at the helm. Kunst is co-leading fund strategy alongside Bumble’s COO, Sarah Jones Simmer.

It’s no surprise Kunst is working to deploy capital to the next generation of female-founded companies. She’s been actively championing female and minority founders at least for the last several years and was one of the most vocal in the industry during tech’s #MeToo moment.

She spoke to The New York Times last year about her experience with 500 Startups founder Dave McClure, who sent her inappropriate messages on Facebook in 2014. McClure followed up with a public apology in the form of a Medium post titled “I’m a creep. I’m sorry,” and shortly after resigned from the accelerator. 

Kunst spoke at TechCrunch Disrupt last year a few months after The New York Times piece was published. On a panel focused on diversity in tech, she called out tech founders for a lack of diverse hiring practices: “I do this crazy thing that is hiring people that aren’t just white dudes. It works really great — you guys should try it,” she said.

In 2017, only 11.3 percent of partners at VC firms were women, according to PitchBook data. Female founders, meanwhile, raised just 2.2 percent of all venture funding.

On the bright side, it looks like more women are fundraising on the other side of the table. Women-run VC firms have gathered nearly $2.5 billion so far this year, putting them on pace to surpass last year’s decade high of $3.2 billion. That includes Cowboy Ventures’ $95 million fundraise and Aspect Ventures’ $181 million sophomore vehicle. Cowboy is led by Aileen Lee, a former partner at Kleiner Perkins, while Aspect is co-led by former Draper Fisher Jurvetson managing director Jennifer Fonstad and former Accel partner Theresia Gouw.

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Apple emoji will soon include people with curly hair, white hair and superpowers

In honor of World Emoji Day (yes, that’s a thing), Apple is previewing some of its upcoming emoji. Later this year, Apple’s emoji set will feature people with a variety of hairstyles and colors, including curly hair, red hair and white hair. What you’re about to see are simply Apple’s take on emoji that were previously approved by the Unicode Consortium’s emoji subcommittee.

Folks with curly hair, rejoice!

Let’s hear it for the redheads

 

Like white on rice

 

No hair? No problem

Other fun emoji include a freezing face, peacock, mango, lobster, nazar amulet, superheroes and kangaroo.

Back in March, Apple proposed new emojis to represent people with disabilities in Unicode’s next batch of emoji. Then in May, Unicode announced some of the draft candidates for its next emoji release in Q1 2019 to include some of Apple’s proposed emoji, which featured a guide dog, an ear with a hearing aid and more. If you want to hear more about what goes into emoji approval, be sure to check out this interview with Jeremy Burge, vice-chair of the Unicode Emoji Subcommittee.

 

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Fastly raises another $40 million before an IPO

Last round before the IPO. That’s how Fastly frames its new $40 million Series F round. It means that the company has raised $219 million over the past few years.

The funding round was led by Deutsche Telekom Capital Partners with participation from Sozo Ventures, Swisscom Ventures, and existing investors.

Fastly operates a content delivery network to speed up web requests. Let’s say you type nytimes.com in your browser. In the early days of the internet, your computer would send a request to one of The New York Times’ servers in a data center. The server would receive the request and send back the page to the reader.

But the web has grown immensely, and this kind of architecture is no longer sustainable. The New York Times use Fastly to cache its homepage, media and articles on Fastly’s servers. This way, when somebody types nytimes.com, Fastly already has the webpage on its servers and can send it directly. For some customers, it can represent as much as 90 percent of requests.

Scale and availability are one of the benefits of using a content delivery network. But speed is also another one. Even though the web is a digital platform, it’s very physical by nature. When you load a page on a server on the other side of the world, it’s going to take hundreds of milliseconds to get the page. Over time, this latency adds up and it feels like a sluggish experience.

Fastly has data centers and servers all around the world so that you can load content in less than 20 or 30 milliseconds. This is particularly important for Stripe or Ticketmaster as response time can greatly influence an e-commerce purchase.

Fastly’s platform also provides additional benefits, such as DDoS mitigation and web application firewall. One of the main challenges for the platform is being able to cache content as quickly as possible. Users upload photos and videos all the time, so it should be on Fastly’s servers within seconds.

The company has tripled its customer base over the past three years. It had a $100 million revenue run rate in 2017. Customers now include Reddit, GitHub, Stripe, Ticketmaster and Pinterest.

There are now 400 employees working for Fastly. It’s worth noting that women represent 42 percent of the executive team, and 65 percent of the engineering leads are women, people of color or LGBTQ (or the intersection of those categories). And if you haven’t read all the diversity reports from tech companies, those are great numbers.

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Gaming leans into diversity at E3, but not hard

To say the gaming community is not known for its friendliness to women and minority groups is something of an understatement. But we’re starting to see developers abandon the usual excuses of tradition, demographics and, the most absurd of all, “realism,” in favor of making gaming more inclusive. Kind of.

This has been an ongoing theme for years, of course. But it feels like this year it was a little less self-congratulatory and a little more self-motivated.

The fun started early, well ahead of E3, with the apparently devastatingly diverse front lines in Battlefield V, which takes place during World War II. The predictable objections as to “historical accuracy” appeared — unironic, despite the utter lack of historical accuracy in pretty much any of these games. The way the war was fought, the locations and situations, the weapons and vehicles have all been liberally massaged to turn the worst thing in history into a fun multiplayer game.

But it was EA’s chief creative officer, Patrick Soderlund, who made the headlines with a searing riposte in an interview with Gamasutra. Citing the historical record of women and people of color in the war, he called out the peanut gallery as both incorrect and irrelevant.

What’s the most unrealistic part about Battlefield V? It ain’t her.

“These are people who are uneducated,” he said. “They don’t understand that this is a plausible scenario, and listen: this is a game.”

A game, he added, intended to surface stories that have been hitherto relatively seldom told, including the roles of those groups.

“This is something that the development team pushed. And we don’t take any flak. We stand up for the cause, because I think those people who don’t understand it, well, you have two choices: either accept it or don’t buy the game. I’m fine with either or. It’s just not OK.”

Then E3 got started. As a pleasant early surprise, Gears of War 5 has you playing a female protagonist in what has long been a mainstay of grizzled space-marine mandom, and your companion is a black guy. Of course you have the new Tomb Raider, a solid franchise with an increasingly strong, well-written female lead.

In Assassin’s Creed Odyssey, Ubisoft went so far as to twist the lore of the series to accommodate the player’s choice of character: Alexios or Kassandra, between whom there are no real differences — including romance options, a quietly provocative decision.

The Last of Us Part Two has a badass young woman as its protagonist, defending herself with shocking brutality in a post-apocalyptic hellscape. (Yet you can be sure it’s the kiss shared with a girl on the dance floor that will generate more controversy.)

Nintendo offered a variety of customization in the new Smash Bros. for Switch, with male and female options for all kinds of characters, including Pikachu. Even Cuphead has a playable lady in it now.

Elsewhere we saw diversity on display in something as simple as having men and women of all races represented as pirate captains, commanders of futuristic forces, medieval knights (a nice Joan of Arc feel from For Honor’s trailer) and futuristic jet pilots. (My favorite outfit was in Control, by the way.)

What it felt like to me, though, was not that these companies were fulfilling some kind of diversity quota — that bogeyman so often invoked by critics — but rather the simple acknowledgement that the world of games should resemble the world of gamers.

Of course, when you pull back a little bit, it becomes extremely clear that the majority of games are still very much dominated by the garden variety grizzled white male protagonist. But that’s fine. We have a similar problem in film, TV and other fiction as well, right? Moving on from outdated ideas of race and gender in the world of media is an ongoing concern and it won’t happen all at once.

But at least at this E3 we’re seeing indications that developers and publishers are moving in the right direction.

As for the people playing — well, that’s a different story. Whatever the flexibility of your choices in the latest crop of AAA games, female gamers and people of color will still be ruthlessly harassed, abused and otherwise targeted. Developers can’t change the bigoted minds of toxic players — but they can ban them. Here’s hoping that side of things is getting equal attention.

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The startup community must defend merit-based immigration

Bobby Franklin
Contributor

Bobby Franklin is the president and chief executive of the National Venture Capital Association and previously served as an executive vice president for the CTIA – The Wireless Association.

The Trump administration just moved to kill a key tool to support immigrant entrepreneurs, and the startup community must make our voice heard to save it.

Supported by Republicans and Democrats, the International Entrepreneur Rule (IER) operates like a startup visa and allows foreign-born founders to launch new businesses in the U.S., rather than overseas. IER is in place after the National Venture Capital Association (which I lead) successfully sued the Department of Homeland Security when it unlawfully delayed the program last year. But now, the administration is taking new steps to end the rule before it has a chance to bring new companies and innovation to our country.

Why would the administration do something so obviously counter-productive? That’s the question those of us who understand the importance of immigrant entrepreneurship keep asking. The track-record of foreign-born founders is staggering.

Studies show that immigrants have started more than half of America’s privately-held startups valued at $1 billion or more, and 43 percent of Fortune 500 companies were founded or co-founded by an immigrant or the child of an immigrant. A 2013 NVCA study found that one-third of all venture-backed companies that went public from 2006 to 2012 had at least one immigrant founder.

Specific to IER, one study found that the rule will create more than 300,000 jobs over 10 years, although I believe this is on the low end because a single entrepreneur could create a startup with tremendous growth or even an entirely new industry. IER is tailored to attract founders who are positioned to launch the next generation of great American companies and would unleash fresh entrepreneurial energy and dynamism that we desperately need in the economy.

The Trump administration’s hostility toward IER is also puzzling considering President Trump’s previous statements on immigration. During the State of the Union address, the president emphasized the need for a “merit-based immigration system — one that admits people who are skilled, who want to work, who will contribute to our society, and who will love and respect our country.”

Photo courtesy of Flickr/jvoves

It’s almost like he was describing IER without naming it. After all, we are talking about a program where a successful applicant must create a new high-growth enterprise that will in turn employ Americans and contribute to our nation’s technological and scientific advancement.

Furthermore, the applicant’s status in the United States is completely tied to the startup company and would be unable to remain in our country if the enterprise fails. There is nothing more merit-based than that, and yet the administration is saying no to the new jobs that come when young companies scale and grow.

The administration’s rejection of IER comes at a particularly troubling time for American entrepreneurial standing. Twenty years ago, U.S. startups received 90 percent of global venture capital, but that number has precipitously dropped to 54 percent last year.

Policymakers must understand that U.S. startup dominance is being challenged every day, and the top entrepreneurs now have a world of choices when it comes to where to launch their high-growth company. Other countries are copying the American blueprint for startup activity and making their countries more attractive for new company creation.

One way they’re doing this is by taking advantage of our intransigence on immigration policy and then welcoming foreign-born founders to their shores. The idea of a startup visa was first proposed in the U.S., and while we still don’t have one, countries like Canada, France and Singapore have copied the idea and are reaping the benefits.

Rejection of IER is also incongruent with the Trump administration’s goal of American leadership on critical technologies like artificial intelligence, robotics, machine-learning and new drug discovery.

If we are to lead in these areas, the world’s top entrepreneurs must be here in the U.S., rather than overseas where they will compete with us. Rather than pushing entrepreneurs away, the administration should be fighting to attract top talent. That’s the only way the U.S. will be the innovation leader going forward.

Despite the overwhelming arguments in favor of IER, the Department of Homeland Security is moving forward to rescind the program before it truly gets off the ground. This is a setback to be sure, but so was the first DHS delay, and we beat the administration that go around. We’re going to keep fighting, but we can’t do it alone.

How can you help? The best way to do your part is by engaging in the public comment period that is open now and closes on June 28. Visit fwd.us/ier and share your perspective on why the International Entrepreneur Rule is needed. Everyone’s voice is valued in the process.

Tell your personal stories of immigrant entrepreneurs who have impacted our country, how IER will help maintain U.S. competitiveness or how IER will create American jobs. Together, we can win, and by doing so help our country remain the best place on the planet to launch a new company that provides a better way of life.

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Meet the speakers at The Europas, and get your ticket free (July 3, London)

Excited to announce that this year’s The Europas Unconference & Awards is shaping up! Our half day Unconference kicks off on 3 July, 2018 at The Brewery in the heart of London’s “Tech City” area, followed by our startup awards dinner and fantastic party and celebration of European startups!

The event is run in partnership with TechCrunch, the official media partner. Attendees, nominees and winners will get deep discounts to TechCrunch Disrupt in Berlin, later this year.
The Europas Awards are based on voting by expert judges and the industry itself. But key to the daytime is all the speakers and invited guests. There’s no “off-limits speaker room” at The Europas, so attendees can mingle easily with VIPs and speakers.

What exactly is an Unconference? We’re dispensing with the lectures and going straight to the deep-dives, where you’ll get a front row seat with Europe’s leading investors, founders and thought leaders to discuss and debate the most urgent issues, challenges and opportunities. Up close and personal! And, crucially, a few feet away from handing over a business card. The Unconference is focused into zones including AI, Fintech, Mobility, Startups, Society, and Enterprise and Crypto / Blockchain.

We’ve confirmed 10 new speakers including:


Eileen Burbidge, Passion Capital


Carlos Eduardo Espinal, Seedcamp


Richard Muirhead, Fabric Ventures


Sitar Teli, Connect Ventures


Nancy Fechnay, Blockchain Technologist + Angel


George McDonaugh, KR1


Candice Lo, Blossom Capital


Scott Sage, Crane Venture Partners


Andrei Brasoveanu, Accel


Tina Baker, Jag Shaw Baker

How To Get Your Ticket For FREE

We’d love for you to ask your friends to join us at The Europas – and we’ve got a special way to thank you for sharing.

Your friend will enjoy a 15% discount off the price of their ticket with your code, and you’ll get 15% off the price of YOUR ticket.

That’s right, we will refund you 15% off the cost of your ticket automatically when your friend purchases a Europas ticket.

So you can grab tickets here.

Vote for your Favourite Startups

Public Voting is still humming along. Please remember to vote for your favourite startups!

Awards by category:

Hottest Media/Entertainment Startup

Hottest E-commerce/Retail Startup

Hottest Education Startup

Hottest Startup Accelerator

Hottest Marketing/AdTech Startup

Hottest Games Startup

Hottest Mobile Startup

Hottest FinTech Startup

Hottest Enterprise, SaaS or B2B Startup

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Hottest Platform Economy / Marketplace

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Hall Of Fame Award – Awarded to a long-term player in Europe

The Europas Grand Prix Award (to be decided from winners)

The Awards celebrates the most forward thinking and innovative tech & blockchain startups across over some 30+ categories.

Startups can apply for an award or be nominated by anyone, including our judges. It is free to enter or be nominated.

What is The Europas?

Instead of thousands and thousands of people, think of a great summer event with 1,000 of the most interesting and useful people in the industry, including key investors and leading entrepreneurs.

• No secret VIP rooms, which means you get to interact with the Speakers

• Key Founders and investors speaking; featured attendees invited to just network

• Expert speeches, discussions, and Q&A directly from the main stage

• Intimate “breakout” sessions with key players on vertical topics

• The opportunity to meet almost everyone in those small groups, super-charging your networking

• Journalists from major tech titles, newspapers and business broadcasters

• A parallel Founders-only track geared towards fund-raising and hyper-networking

• A stunning awards dinner and party which honors both the hottest startups and the leading lights in the European startup scene

• All on one day to maximise your time in London. And it’s PROBABLY sunny!

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That’s just the beginning. There’s more to come…

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Interested in sponsoring the Europas or hosting a table at the awards? Or purchasing a table for 10 or 12 guest or a half table for 5 guests? Get in touch with:
Petra Johansson
Petra@theeuropas.com
Phone: +44 (0) 20 3239 9325

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Bail reform has a complex relationship with tech

On any given day in the United States, more than 450,000 people are behind bars awaiting their constitutionally mandated fair trial. None of them have been convicted of a crime — they’ve been accused of committing a crime, but no formal ruling of guilt or innocence has been made. That means these hundreds of thousands of people are incarcerated simply because they don’t have the financial means to post bail. 

Bail was originally designed to incentivize people to show up for their court dates, but it has since evolved into a system that separates the financially well-off from the poor. It requires arrested individuals to pay money in order to get out of jail while they await trial. For those who can’t afford bail, they wind up having to sit in jail, which means they may be at risk of missing rent payments, losing their jobs and failing to meet other responsibilities. 

Money bail is all too often a common condition to secure release from jail while a case is in progress. Cash bail systems result in leaving many people incarcerated, even though they haven’t been convicted of a crime. 

The cash bail system in the United States is one of the greatest injustices in the criminal justice system, ACLU Deputy National Political Director Udi Ofer tells TechCrunch. Bail reform, Ofer says, is a “key way to achieve” the goals of challenging racial disparities in the criminal justice system and ending mass incarceration. 

As we explored in “The other pipeline,” the criminal justice system in the United States is deeply rooted in racism and a history of oppression. Black and Latino people comprise about 1.5 million of the total 2.2 million people incarcerated in the U.S. adult correctional system, or 67 percent of the prison population, while making up just 37 percent of the total U.S. population, according to the Sentencing Project.

With a criminal justice system that disproportionately affects people of color, it’s no wonder why the cash bail system does the same. For one, people of color are 25 percent more likely than white people to be denied the option of bail, according to a pre-trial study by Dr. Traci Schlesinger. And for the black people who are given the option to pay bail, the amount is 35 percent higher on average than bail for white men, according to a 2010 study.

The national felony bail median is $10,000. For those who can’t afford it, they have to rely on bail bond agencies, which charge a non-refundable fee to pay the required bail amount on the person’s behalf. The bail bond companies, which are backed by insurance companies, collect between $1.4 billion and $2.4 billion a year, according to the ACLU and Color of Change.

And if bail bond companies are out of reach, those who are sitting in jail awaiting trial are more likely to be convicted of the crime they were charged with. The non-felony conviction rate rose from 50 percent to 92 percent for those jailed pre-trial, according to a study by the New York City Criminal Justice Agency. Along the way, leading up to the trial, some prosecutors incentivize people to plead guilty to the charges even if they’re innocent.

“It’s time to end our nation’s system of cash bail that lets the size of your wallet determine whether you are granted freedom or stay locked up in jail,” Ofer says. “Money should never decide a person’s freedom yet that’s exactly what happens every day in the United States.”

Pre-trial detention is also costly to local cities, counties and taxpayers. It costs about $38 million a day to keep these largely nonviolent people behind bars, according to the Pretrial Justice Institute. Annually, that comes out to about $14 billion to jail unconvicted people.

“The only people benefiting from bail is the for-profit bail industry,” Ofer said. “If we’re ever going to end mass incarceration in the United States, then we need to end cash bail.”

Bail reform is coming

Across the nation, bail reform has made its way into a handful of states. New Jersey’s bail reform law took effect last January; since then, its daily jail population has dropped 17.2 percent, and courts have imposed cash bail on just 33 defendants out of 33,400, according to the ACLU.

The ACLU itself is working on bail reform in 38 states, including California, where Ofer says he is optimistic reform will happen this year. Right now, a pre-trial release bill, Senate Bill 10, is up for consideration in the Assembly. The bill argues California should ensure people awaiting trial are not incarcerated simply because they can’t afford to pay bail. The bill also advocates for counties to establish pre-trial services agencies to better determine if people are fit to be released.

The bill, introduced by Senators Bob Hertzberg and others, is backed by the ACLU and Essie Justice Group, an Oakland-based organization that advocates for actual justice in the criminal justice system.

“Today we have a system that allows for people to be released pre-trial if they have enough money to afford their bail,” Essie Justice Group founder Gina Clayton tells TechCrunch. “Everyone else is required to sit inside of a cage without any way out.”

Essie Justice Group works mostly with and for women who have incarcerated loved ones. Often, the only way out for people is help from family or a plea deal, Clayton says.

“When we see people making the bail, we see that women are going into tremendous debt and are also beholden to an industry that has time and time again been cited and known to practice in quite an incredibly despicable way in terms of coercing and harassing their customers,” Clayton says. “When we think about who are the people who know about what’s going on with bail, it’s black and brown women in this country.”

For the past two years, Essie Justice Group held an action around Mother’s Day, with the goal of bailing moms out of jail or immigration detention. Last year’s action led to release of 30 women.

Photo via Essie Justice Group

Can tech help?

The short the answer is maybe. Earlier this month, Google banned ads for bail bonds services, which Clayton says is the largest step any corporation has taken on behalf of people who have loved ones in jail. But while tech can help in some ways, Clayton has some concerns with additional for-profit entities entering the criminal justice system.

“There are definitely tech solutions that I’m very against,” Clayton said, but declined to comment on which ones in particular. “I will say that my energy around this doesn’t come from an imagined place. I’m seeing it happen. One of the things we’re seeing is companies who are interested in bail reform because they see another opportunity to make money off of families. Like, ‘let this person out, but have them, at a cost, check in with people I hire to do this fancy but expensive drug testing three times a week, pay for an ankle shackle or bracelet and GPS monitoring.’ I think the companies that are making money off of those types of things are the ones we need to be wary of.”

There is, however, one for-profit company that immediately jumped to Clayton’s mind as being one doing actual good in the criminal justice space. That company is Uptrust, which provides text message reminders to people regarding court dates.

“I think that is a really great addition to the landscape,” Clayton says. “The reason I’m a proponent of theirs is because I understand their politics and I know what they won’t do, which is take it a step further or get involved with getting incentivized to add on bells and whistles that look less like freedom for people but more revenue for them.”

Uptrust, founded by Jacob Sills and Elijah Gwynm, aims to help people make their court dates. While the movies like to depict flight risks and people skipping town ahead of their court dates, failure to appear in court often comes down to a lack of transportation, work conflicts, not receiving a reminder, childcare or poor time management, Sills tells TechCrunch.

That’s where the idea came to humanize the system a bit more, by enabling public defenders to more easily connect with their clients. Uptrust is two-way in nature and reminds people on behalf of the public defender about court dates. Clients can also communicate any issues they may have about making it to court.

“If the public defender knows the client has an issue, they can usually get court moved,” Sills says. “But if they don’t have the information, they’re not going to lie on behalf of clients.”

Because public defenders don’t make much money, Uptrust doesn’t charge very much, Sills says.

“But they really care about the client and one of the things we saw with this was we needed to change the whole front end of the system to be less adversarial and more human,” Sills says.

In addition to text reminders, Uptrust enables public defenders to assist with other needs clients may have.

“A lot of stuff around bail reform is around risk assessment rather than need assessment,” Sills tells me. “But we saw a lot of these individuals have needs, like helps with rides, child care or reminders.”

Public defenders who are invested in the care of their clients can remind them via Uptrust to do things like ask for time off work or schedule child care.

For the end-user, the client, Uptrust is all text-based. For the public defenders, Uptrust offers a software solution that integrates into their case management systems.

Since launching in the summer of 2016 in California’s Contra Costa County, the court appearance rate improved from 80 percent to 95 percent, Sills says. To date, Uptrust has supported 20,000 people with a five percent FTA rate.

“As we improve product, if we can get [the FTA rate] down to 3 percent, you really can start taking that data and pushing forth major policy change,” Sills says.

Uptrust’s goal is to shift from risk assessment to needs assessment and ensure people are supported throughout their interactions with the criminal justice system.

“Our view is in terms of bail reform, we need to make sure there’s not a proliferation of things like ankle monitors and whatnot,” Sills says. “For us, success is really being a subcontractor to the community as well as working with the government. I think there’s a huge risk in bail reform as it relates to technology because people see it as a big business opportunity, If a company replaces the government, they may not have the community’s best interest in mind. So it’s important to keep in mind they have the community’s best interest in mind.”

Similar to Uptrust, a tech organization called Appolition works by operating within the confines of the system. Appolition, founded by Dr. Kortney Ryan Zieger, enables people to funnel their spare change into the National Bail Out fund. As of April, Appolition has facilitated over $130,000 to go toward bail relief. Ziegler was not available for comment for this story.

Promise, on the other hand, aims to provide an alternative to the cash bail system. In March, Promise raised a $3 million round led by First Round Capital with participation from from Jay-Z’s Roc Nation.

The idea is to offer counties and local governments an alternative approach to holding people behind bars simply because they can’t afford bail. With Promise, case managers can monitor compliance with court orders and better keep tabs on people via the app. GPS monitoring is also an option, albeit a controversial one.

Let’s say you get arrested and end up having a bail hearing. Instead of asking you to pay bail, the public defender could suggest a pre-trial release with Promise. From there, Promise would work with the public defender and your case manager to determine your care plan.

“It’s clear that our values are about keeping people out of jail,” Promise CEO Phaedra Ellis-Lamkins told me on an episode of CTRL+T. “Like, we’re running a company but we fundamentally believe that not just it’s more cost effective but that it’s the right thing to do.”

Instead of a county jail paying $190 per day per person, Ellis-Lamkins said, Promise charges some counties just $17 per person per day. In some cases, Promise charges even less per person.

It’s that for-profit model that worries Clayton.

“Whenever you bring in the for-profit ethos in a criminal justice space, I think we need to be careful,” Clayton says.

She didn’t explicitly call out any companies. In fact, she said she doesn’t feel ready to make a judgment on Promise just yet. But she has a general concern of tech solutions that “dazzle and distract system actors who we really need to hold accountable and see operate in more systemic, holistic ways.”

Solutions, Clayton says, look like social safety nets like hospitals and clinics instead of jails.

“If we want to really move ourselves away from this path we’ve been on,” Clayton says, “which is towards normalizing state control of people then we should be really careful that our system that once looked like slavery to Jim Crow to mass incarceration doesn’t then become tech surveillance of all people.”

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