Month: February 2020

According to a report from Bloomberg, the Trump campaign called dibs on some of the most prized ad space online in the days leading up to the 2020 U.S. election.

Starting in early November and continuing onto Election Day itself, the campaign will reportedly command YouTube’s masthead, the space at the very top of the video sharing site’s homepage. YouTube is now the second most popular website globally after the online video platform overtook Facebook in web traffic back in 2018. Bloomberg didn’t report the details of the purchase, but the YouTube masthead space is reported to cost as much as a million dollars a day.

The Trump campaign’s ad buy is likely to rub the president’s many critics the wrong way, but it isn’t unprecedented. In 2012, the Obama campaign bought the same space before Mitt Romney landed the Republican nomination. It’s also not a first for the Trump campaign, which bought banner ads at the top of YouTube last June to send its own message during the first Democratic debate.

Screenshot of the Trump campaign’s June 2019 YouTube ads via NPR/YouTube

In spite of the precedent, 2020 is a very different year for political money flowing to tech companies — one with a great degree of newfound scrutiny. The big tech platforms are still honing their respective rules for political advertising as November inches closer, but the kinks are far from ironed out and the awkward dance between politics and tech continues.

The fluidity of the situation is a boon to campaigns eager to plow massive amounts of cash into tech platforms. Facebook remains under scrutiny for its willingness to accept money for political ads containing misleading claims, even as the company is showered in cash by 2020 campaigns. Most notable among them is the controversial candidacy of multi-billionaire Mike Bloomberg, who spent a whopping $33 million on Facebook alone in the last 30 days. In spite of its contentious political ad policies, much-maligned Facebook offers a surprising degree of transparency around what runs on its platform through its robust political ad library, a tool that arose out of the controversy surrounding the 2016 U.S. election.

On the other end of the spectrum, Twitter opted to ban political ads altogether, and is currently working on a way to label “synthetic or manipulated media” intended to mislead users — an effort that could flag non-paid content by candidates, including a recent debate video doctored by the Bloomberg campaign. Twitter is working through its own policy issues in a relatively public way, embracing trial-and-error rather than carving its rules in stone.

Unlike Twitter, YouTube will continue to run political ads, but did mysteriously remove a batch of 300 Trump campaign ads last year without disclosing what policy the ads had violated. Google also announced that it would limit election ad targeting to a few high-level categories (age, gender and ZIP code), a decision the Trump campaign called the “muzzling of political speech.” In spite of its strong stance on microtargeting, Google’s policies around allowing lies in political ads fall closer to Facebook’s anything-goes approach. Google makes a few exceptions, disallowing “misleading claims about the census process” and “false claims that could significantly undermine participation or trust in an electoral or democratic process,” the latter of which leaves an amphitheater-sized amount of room for interpretation.

In recent years, much of the criticism around political advertising has centered around the practice of microtargeting ads to hyper-specific sets of users, a potent technique made possible by the amount of personal data collected by modern social platforms and a strategy very much back in action in 2020. While Trump’s campaign leveraged that phenomenon to great success in 2016, Trump’s big YouTube ad buy is just one part of an effort to see what sticks, advertising to anybody and everybody in the splashiest spot online in the process.

YouTube declined to confirm to TechCrunch the Trump campaign’s reported ad buy, but noted that the practice of buying the YouTube masthead is “common” during elections.

“In the past, campaigns, PACs, and other political groups have run various types of ads leading up to election day,” the spokesperson said. “All advertisers follow the same process and are welcome to purchase the masthead space as long as their ads comply with our policies.”

Source: Tech Crunch

Today we bring you another edition of “Dear Sophie,” an advice column that answers readers’ questions about immigration for tech.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, Silicon Valley immigration attorney. “Whether you’re in people ops, a founder, or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Dear Readers,

Today I’m sharing answers to the most frequently asked questions following up to the last H-1B Dear Sophie. Fortunately, the government has provided a lot more details over the last few weeks. Additional info about the electronic registration process is available on my H-1B podcast. Enjoy!

Am I limited to sponsoring somebody in the lottery to a maximum of three times?

No, there is no limit to how many times a company can sponsor an individual. A lot of companies tend to do it three times because candidates can often work for you for three years with OPT and STEM OPT, but the law doesn’t set out an upper limit. Also, you can sponsor current F-1 students as well as people who have accepted your offers who are currently outside the United States.

I’m in HR. When can I create my profile for H-1B electronic registration?

You can access my.uscis.gov starting February 24, 2020 at 10 a.m. (EST) to create your profile for the electronic registration process. However, employers will not be able to create registrations for your employees and candidates until March 1st at noon.

I’m working with a lawyer; which category should I select for my my.uscis.gov profile?

This is counterintuitive. If you’re working with an attorney, on the Account Type screen, don’t select the box for “I am an applicant, petitioner, or requestor.” Instead, select the “I am an H-1B registrant” box.

When can I actually register my employees and people who accepted our job offers?

The initial registration period starts March 1, 2020 and is supposed to run through March 20, 2020. USCIS will announce the actual end date of the initial registration period on its website. If not enough people register (unlikely), USCIS can decide to re-open registrations.

How do I add my lawyer to the my.uscis.gov account?

Your attorney will provide a “representative passcode” that you need to enter. This will take you to the G-28 page where you can accept your representative. Talk to your attorney about whether they prefer that you have USCIS send notices to you or their firm.

How many people can I register?

You can enter up to 250 people in one batch and you can review them before you submit.

What if I make a mistake when registering somebody?

You should be able to delete entries even after having submitted them. The website will warn you if there is missing information, but cannot warn you about inaccurate information.

Can I register the same person more than once?

No, don’t do it. It’s against the rules and you will forfeit this person’s opportunity to get an H-1B.

When are we supposed to file full I-129 petitions with all the supporting documents?

For each of your selected candidates, you will receive a selection notice listing the 90-day filing window deadline and the physical mailing address to send the petition package. Therefore, most petitions will be submitted April through June.

What if we electronically register somebody in good faith but we can’t go through with the petition?

USCIS is trusting your company to act in good faith. Make sure that for any candidate you electronically register, they have accepted a position with your company and you actually intend to follow through with hiring them. However, there is currently no requirement to notify USCIS if you won’t be following through with filing the full petition for a selected registration.

Can a current student be included in the “Master’s cap?”

The advanced degree exemption to the H-1B lottery is for candidates who have received master’s degrees and PhDs from U.S. universities. They have a higher chance of lottery selection. Under the new electronic registration system, you have to prove eligibility at the time of filing the physical petition, not at the time of electronic registration. So if somebody is graduating in May or June, you check the Master’s cap box for them in March. However, it’s safest to wait to get their proof of graduation before submitting the full I-129 package.

What are the chances?

Last year, there were more than 200,000 petitions. There are 65,000 available H-1Bs plus 20,000 for the Master’s cap. Just how many petitions will be filed with the new electronic registration system remains to be seen.

Will premium processing continue to be available?

I don’t know, my crystal ball isn’t giving me information on this one right now. 😉

Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here.

Have a story to share about how you navigated immigration to build your dreams? Apply to guest on Sophie’s podcast about immigration law for tech startups.

Future “Dear Sophie” columns will be accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.

Source: Tech Crunch

Tyler Haney, the founder and chief executive of activewear label Outdoor Voices, has stepped down, according to the Business of Fashion.

We’ve reached out to Haney directly, as well as board members from the venture firms that have backed the company, including General Catalyst and Forerunner Ventures, and we hope to update this story accordingly.

According to BoF, the transition follows a previously unreported capital injection from Outdoor Voices’ investors at a lower valuation than previous rounds. It says the company tried raising new funding late last year but “had difficulty.”

It cites mismanagement as one overriding reason that Nike and Under Armour veteran Pamela Catlett joined the company a year ago as president but left months later.

Retail legend Mickey Drexler, formerly of J.Crew fame — who was named chairman of Outdoor Voices’ board in the summer of 2017 as part of a $9 million convertible debt round led by Drexler’s family office — also resigned his position last year, though he maintained a director’s seat.

According to BoF, operational challenges aside, Outdoor Voices has had trouble replicating the kind of excitement that met its earliest offerings, including flattering, color-blocked athleisure wear, like leggings, sports bras, tees and tanks.

The company has since rolled out an exercise dress that has gained traction with some consumers, but newer offerings meant to extend the brand’s reach, including solidly colored hoodies and terrycloth jogging pants that are less distinguishable from other offerings in the market, have apparently failed to boost sales.

Indeed, according to the BoF report, the brand was losing up to $2 million per month last year on annual sales of around $40 million.

The BoF story doesn’t mention the company’s brick-and-mortar locations and how they factor into the company’s narrative. But certainly, as with a growing number of direct-to-consumer brands that have been encouraged by their backers to open real-world locations, they’ve become a major cost center for the outfit. Outdoor Voices now has 11 locations around the U.S., including in Austin, LA, Soho in New York, Boston, Nashville, Chicago and Washington, D.C.

Even with (at least) $64 million in funding that Outdoor Voices has raised from investors over the years, it’s also going head-to-head with very powerful, very entrenched and endurably popular brands, including Nike and Adidas. While Outdoor Voices is still in the fight, the shoe and apparel giants have vanquished plenty of upstarts over the years.

What happens next to Haney — a former track athlete from Boulder who first launched the business with a Parsons School of Design classmate — isn’t yet clear. Still, she isn’t going far, reportedly. BoF says she still owns 10% of Outdoor Voices and will remain engaged with the company in some capacity.

Featured above, left to right, Emily Weiss of Glossier and Tyler Haney of Outdoor Voices at a 2017 Disrupt event.

Source: Tech Crunch

Hot Wheels will ship you a Cybertruck long before Tesla is likely to make any deliveries on their electric retro-future wheeled trapezoid: The toy maker just unveiled two different RC Cybertruck models, including a 1:64 scale model at just $20, and a much larger 1:10 scale version for $400.

These are available to pre-order now, but like most of Tesla’s cars, just because they’re introduced doesn’t mean you can go out and buy one immediately. They’re set to ship in time for the holidays, however, with a December 15, 2020 estimated availability date, according to the Hot Wheels website.

These look like very faithful representations of the Cybertruck that Tesla unveiled at a special event back in November, and the large version includes a “reusable cracked window vinyl sticker” that you can use to recreate the onstage flub that happened at the actual reveal. You’ll have to supply your own large metal medicine ball.

Other features of the 1:10 scale Cybertruck include functioning headlights and taillights, all-wheel drive, true to form “Chill” and “Sport” modes, a removable tonneau cover, a working telescopic tailgate and more.

The smaller and much more affordable version is just three inches long, which is basically what you’d expect from a traditional Hot Wheels mini model, and it can achieve an “up to 500mph scale speed,” which someone who is better than me at math can figure out what that translates to.

These are available to people in the U.S. and Canada, but I expect them to be pretty hot sellers based on the general fervor and interest around all things Cybertruck to date.

Source: Tech Crunch

A few days ago, Andreessen Horowitz’s Martin Casado and Matt Bornstein published an interesting piece digging into the world of artificial intelligence (AI) startups, and, more specifically, how those companies perform as businesses. Core to the argument presented is that while founders and investors are wagering “that AI businesses will resemble traditional software companies,” the well-known venture firm is “not so sure.”

Given that TechCrunch cares a lot about startup business fundamentals, the notion that one oft-discussed and well-funded category of venture-backed startup might sport materially less attractive economics than we expected captured our attention.

The Andreessen Horowitz (a16z) perspective is straightforward, arguing that AI-focused companies have lesser gross margins than software companies due to cloud compute and human-input costs, endure issues stemming from “edge-cases” and enjoy less product differentiation from competing companies when compared to software concerns. Today, we’re drilling into the gross margin point, as it’s something inherently numerical that we can get other, informed market participants to weigh in on.

If a16z is correct about AI startups having slimmer gross margins than SaaS companies, they should — all other things held equal — be worth less per dollar of revenue generated; or in simpler terms, they should trade at a revenue multiple discount to SaaS companies, leaving the latter category of technology company still atop the valuation hierarchy.

This matters, given the amount of capital that AI-focused startups have raised.

Is a16z correct about AI gross margins? I wanted to find out. So this week I spoke to a number of investors from firms that have made AI-focused bets to get a handle on their views. Read the full a16z piece, mind. It’s interesting and worth your time.

Today we’re hearing from Rohit Sharma of True Ventures, Jeremy Kaufmann of Scale Venture Partners, Nick Washburn of Intel Capital and Ben Blume of Atomico. We’ll start with a digest of their responses to our questions, with their unedited notes at the end.

AI economics and optimism

We asked our group of venture investors (selected with the help of research from TechCrunch’s Arman Tabatabai) three questions. The first dealt with margins themselves, the second dealt with resulting valuations and, finally, we asked about their current optimism interval regarding AI-focused companies.

Source: Tech Crunch

SpaceX founder Elon Musk has been sharing a number of updates about his company’s progress on Starship this week. Along with footage of the assembly process of the current “SN1” prototype of Starship, he explained on Twitter some of the other considerations and strategies the company is working with as it works on the new spacecraft and tries to fly it to space this year.

Musk said that SpaceX is iterating at a much faster pace with Starship than it has recently with Falcon, as Falcon’s design more or less stabilized once it started working consistently. He noted that the ability to progress with the design toward having a production vehicle is dependent on the number of interactions of the prototypes of the spacecraft, multiplied by the progress achieved between each version.

That’s been the way that SpaceX has worked in the past, and one of the key reasons it’s been able to upend the traditional rocket launch industry. It moves fast, iterating as it goes and making changes based on failures quickly, whereas the industry has largely focused on more stop/start development cycles where things are mostly fixed with brief periods of intense focus on improvement between long-lived vehicle generations.

Starship presents the company’s biggest challenge yet when it comes to this model, if only because of the scale of the rocket. Starship is by far SpaceX’s largest rocket, and building a number of them quickly is actually a significant challenge just from a mechanical perspective, especially when you factor in the considerable changes between generations, and the eventual addition of the very large Super Heavy rocket booster.

On top of the scale of the spacecraft, there’s also the nature of the vehicle, which SpaceX aims to make fully reusable — with quick turnaround between each flight. It’s fairly easy (relatively speaking, of course) to build a spacecraft that only really needs to work once; it’s another thing entirely to build one that you want to reuse tens or even hundreds of times.

Last year, Musk had said at the unveiling of the first completed full-scale prototype of the Starship that they’d aim to have an orbital flight in as few as six months’ time. It’s increasingly looking like that was yet another extremely optimistic timeline from the SpaceX founder, and SN1 is still aiming to complete a high-altitude suborbital flight before future versions actually make the trip to space. Musk suggested SN3, SN4 or SN5 could be the one to take that trip, according to Ars Technica’s Eric Berger.

Berger also reports that SpaceX is considering one of three options for actually launching the orbital Starship prototype, which will be powered by six of the company’s Raptor engines. These will include either flying from Boca Chica, Texas (this is most likely), where the spacecraft are being built, or from Florida, where SpaceX maintains a launch facility for its Falcon rockets, or as a third option, from a sea-based floating launch platform.

SpaceX will need to increase the rate at which it is building, testing and flying these prototypes if it aims to make 2020 for an orbital flight, but it’s also hiring up to help it speed up production. Earlier this year Musk sent out a call for job applicants to staff up additional production shifts for round-the-clock operations, and SpaceX hosted a job fair for interested applicants at its Texas site earlier this month.

Source: Tech Crunch

If you’ve been following cryptocurrency news for the past few months, there’s one word that keeps coming back — DeFi, also known as decentralized finance. As the name suggests, DeFi aims to bridge the gap between decentralized blockchains and financial services.

The original purpose of bitcoin hasn’t changed; it’s a crypto asset that lets users transfer money digitally without any bank in the middle. During the early days of bitcoin, people claimed that the blockchain could replace banks altogether.

But retail banks provide a ton of services beyond payments. If you have a bank account, it’s unlikely that you only use it to store, receive and send money. You may have a credit card, a savings account, a loan, some shares, etc.

That’s why developers have been looking at ways to port financial services to blockchains that support smart contracts. Some blockchains, such as Ethereum, EOS or Tezos, let you add a script to a transaction. The script is executed when some conditions are met.

And this is a key element of DeFi — the financial product shouldn’t be managed by a central server. Everything happens on the blockchain. If you want to read the fine print of your financial product, you can look at the code on the blockchain directly.

Source: Tech Crunch

French cloud-hosting company Scaleway is updating its lineup of dedicated servers and giving it a new name. Dedicated servers might not be the hot new thing, but many customers still rely on dedicated servers for predictable performances and pricing.

Scaleway originally started as Online.net as the hosting and data center division of Iliad. Its original dedicated servers were an instant hit back in 2005. You could rent your own server for €30 per month, with 1GB of RAM, unlimited 100Mbps bandwidth and 160GB of storage.

This sounds ridiculously underpowered today, but Dedibox has remained a well-known name when it comes to dedicated servers. More recently, Online .net launched a public cloud offering under the Scaleway brand with cloud instances, object storage, block storage, managed databases, etc.

Scaleway has become the main brand of the company, as cloud hosting probably has a brighter future than dedicated servers. Its dedicated server lineup is now called Scaleway Dedibox. This isn’t just a name change, as Scaleway wants to integrate its dedicated servers with its public cloud offering. You could use a dedicated server combined with a load balancer and cloud instances when you get a lot of traffic. Or you could use Scaleway’s managed database service combined with a dedicated server.

There are more than a hundred different configurations with dedicated servers starting at €8.99 per month, with 4GB of RAM, 1TB of storage and a 1GHz Intel CPU. But you can also rent a server with 384GB of RAM and 4TB of NVMe storage with an Intel Xeon Gold CPU for €439.99 per month.

Overall, Scaleway is running 100,000 servers, with customers in 150 different countries. Scaleway also offers bare metal cloud instances as an alternative to dedicated servers.

Source: Tech Crunch

A bold mission by the Japan Aerospace Exploration Agency (JAXA) to Mars’ two moons, including a lander component for one of them, is all set to enter the development phase after the plan was submitted to the Japanese government’s science ministry this week.

Dubbed the “Martian Moons Exploration” (MMX) mission, the goal is to launch the probe in 2024, using the new H-3 rocket being developed by Mitsubishi Heavy Industries, which is expected to launch for the first time sometime later in 2020. The probe will survey and observe both Phobos and Deimos, the two moons that orbit the Red Planet, which are both smaller and more irregularly shaped than Earth’s Moon.

The MMX lander will park on Phobos, while the probe studies the two space-based bodies from a distance. This is the first-ever mission that seeks to land a spacecraft on one of the moons of Mars, and it’ll include a rover that is being developed by JAXA in partnership with teams at German space agency DLR and French space agency CNES.

The mission will include an ambitious plan to actually collect a sample of the surface of Phobos and return it to Earth for study — which will mean a round-trip for the MMX spacecraft that should see it make its terrestrial return by 2029.

NASA is also planning a Mars-sample return mission, which would aim to bring back a sample from the Red Planet itself using the Mars 2020 six-wheel rover that it’s planning to launch later this year.

Both of these missions could be crucial stepping stones for eventual human exploration and colonization of Mars. It’s possible that Phobos could act as an eventual staging ground for Mars missions, as its lower gravity makes it an easier body from which to depart for eventual astronauts. And Mars is obviously the ultimate goal for NASA’s Artemis program, which seeks to first establish a more permanent human scientific presence on the Moon before heading to the Red Planet.

Source: Tech Crunch

Like most investors, I am a little too obsessed with unicorns.

But not just the Silicon Valley kind. As the mother of a five-year-old daughter, my interests also veer in a pink, sparkly direction. So it should not be all that surprising that I recently found myself in a dusty corner of the internet where die-hard unicorn fans go to spread their wings.

It was there, deep in the My Little Pony forums, that one question stopped me in my tracks: “is a male alicorn possible in the future?¹”

An alicorn, for those uninitiated to the mythological particulars, is the rare winged, female version of a traditional unicorn.

My Little Pony popularized the term, and the fan forum on which user “Green Precision” asked his question back in 2015 had some interesting answers to the particulars of this philosophical dilemma.

Shadow Stallion responded immediately, “I don’t think a male Alicorn will be possible in the future. Not because its [sic] not wanted or because its [sic] not genetically possible…but generally when male characters are introduced to a show where female characters are prominent, things get ugly.”

Malinter posited, “they probably do but given the female-to-male ratio of Equestria² they are probably exceptionally rare. The real problem for a male alicorn is not that they exist but where is their place in the world? …Our male alicorn has some pretty big hoof prints to fill in while at the same time not make a trainwreck of established lore.”

Wind Chaser went straight from unconscious bias to conscious bias in their response: “aesthetically a male alicorn just wouldn’t look right, because their bodies are already naturally larger than females, thus the wings would cause an imbalance to the design.”

But it wasn’t all bad news.

“Until it’s proven otherwise, it’s safe to say that something like a male alicorn is possible,” responded Geek0zoid. Crysahis agreed. “Overall yes, I believe there could be a male alicorn it may just take a while to actually happen!”

It doesn’t take a PhD in philosophy from Stanford or the one lone female investing partner at Sequoia³ to posit that these same conversations were probably happening all over Sandhill Road in December of 2009, as male VCs discussed whether female unicorns could actually happen⁴.

As we move into 2020, though, we’re about to see a pink, winged stampede.

Just look at the recent trends. In 2019, more female-funded unicorns were born than ever before.⁵ And things are only looking up. (I’m looking at you, ClassPass!)

Public opinion agrees. Alongside TruePublic, where I am an advisor and angel investor, I ran a study asking if people believed we would see more female-led unicorns in the 2020s.⁶ At the time of this article, 68% of the 6,500 respondents said they believed we would see more, with 30% of women responding “many more” (as opposed to only 16% of men). Only 4% of women, but 9% of men, responded “no, not a chance.”⁷

Kaben Clauson, founder and CEO, says “to represent Gen Z, Millennials and Gen X, TruePublic needs a weighted sample of roughly one thousand Americans to represent that population of the USA.” This particular study already has 6,500 respondents, making it statistically significant.

In fact, female-founded and female co-founded companies are actually over-indexing for unicorn status despite a lack of investment dollars.

Shelby Porges, co-founder of The Billion Dollar Fund for Women, explains: “Recent tracking has shown that female-founded companies represent 4% of all unicorns. That’s astonishing considering that in the past couple of years, they have gotten only slightly more than 2% of all venture funding.” Porges, whose group has mobilized more than 80 venture funds to pledge to invest over a billion dollars into women-founded companies, continues, “It demonstrates why we say, ‘when you invest in women, you’re in good company.’ ”

Here are the three reasons I believe a herd of winged female unicorns (OK, alicorns) is coming down the pipeline in the 2020s:

1. Women invest in women at 3x the rate of men

New data reveals that women invest in women at nearly three times the rate that men do and with the (slow) rise in the number of female investing partners at VCV firms, we are poised to see more and more gender-balanced founding teams getting funding.⁸ Like one male GP at one of the world’s top VC funds said to me when discussing one of the few female partners at his firm, “she always brings us parenting companies.” It might be cringe-worthy if TechCrunch hadn’t declared 2020 “a big year for online childcare” and that same female partner weren’t about to make a big chunk of cash thanks to all the upcoming parenting alicorns she was smartly funding.

Sophia Bendz, a partner at Atomico who also leads the Atomico Angel Program, said, “I’m confident we’ll see more female unicorns in the next decade because there’s a growing wave of ambitious female founders building incredible products and services. There are also more women in VC now and I’ve seen first-hand the impact having female investment partners can have on increasing the amount of investment into female-led companies. The data shows that women invest in women at three times the rate as male investment partners.”

My study at TruePublic coincided with these findings. When asked if a female investor was more likely to invest in a female entrepreneur, 64% of people responded affirmatively (64% of these individuals were women and 63% were men).⁹

Jomayra Herrera agrees. An investor at Cowboy Ventures (which thanks to Aileen Lee coined the term “unicorn” in the first place), and a volunteer with AllRaise, a nonprofit promoting women in VC, she says: “As the venture industry continues to diversify, especially as it relates to gender and race/ethnicity, I am optimistic that we will see more female-led and people of color-led unicorns over the next decade. We know that diverse teams not only function better, but they are able to see areas of opportunities that more homogenous teams might miss. I think the next generation of investors are more likely to question conventional wisdom, forms of pattern recognition that may lead to bias, and other structural barriers that have historically left out promising entrepreneurs.”

Camila Farani is a well-known investor in Brazil. As founder of G2 Capital, former president of Gavea Angels and a personality on Brazil’s “Shark Tank,” she says “having diverse points of view at the table makes the decision clearer and more certain. People who think differently than you and have other visions of the market, sometimes can show you what you can’t see by yourself.”

She also reminds us not to forget the impact that angel investors can have. “The investments market is still made up mostly of men, but this landscape is changing gradually. It is interesting to see that angel investing is being the most common choice for women who want to make their first investments.”

This trend of investing more in women isn’t just limited to female investors. Susana Robles has spent two decades leading the charge to invest in women in Latin America and alongside Marta Cruz of NXTP Labs is co-founder of WeXchange, a platform that connects women entrepreneurs from Latin America and the Caribbean with mentors and investors.

As Robles says, “I think the world is finally waking up to the fact that there is serious research proving that startups with women co-founders win in all aspects: profitability, as well as greater social and environmental awareness. Investors should want to have this triple win.” She continues, “women tend to return money to investors faster than men, and at the same time, they obtain higher returns. Women are in charge of 64% of all global purchasing decisions on products and services, so having women on C-level positions increases the chance that a startup [will] be highly attractive to a massive market and become a unicorn.”

It also extends to the LPs in the funds. “I also think many investors in funds (mostly DFIs [development finance institutions] but not exclusively) have become more vocal in stating that they don’t want any more to invest in teams led by an all-white, all-male cast who choose startups with all-white, all-male founders.” Jennifer Neundorfer is the co-founder of Jane VC and an investor in Kinside, a parenting app that just raised a $3 million seed round. When describing her fund’s rationale for focusing on female founders, she drops the mic: “we’re going to invest in an under-looked asset class that is overperforming.” Boom.

2. Female founders are creating new billion-dollar markets

Another reason we’ll see more female-founded “alicorns” in the 2020s has everything to do with the new markets that female founders are creating. Hunter Walk of Homebrew was one of the initial seed investors in Winnie, an online marketplace for childcare that recently raised a $9 million Series A. At the time, he saw something that others investors didn’t. Winnie co-founder Sara Mauskopf explains, “Four years ago when we started Winnie, parenting and especially child care were not hot investment areas. This has been changing. It certainly helps that more investors are women and are in the thick of their child-bearing and rearing years.”

Part of what Walk says he recognized was the clear founder-market fit displayed by Mauskopf and her co-founder Annie Halsall. As Mauskopf says, “With Winnie, we saw an opportunity to solve the child-care crisis that other founders either did not recognize or did not care to solve. While everyone else was starting crypto and scooter companies, we were building the first-ever tech platform for $57 billion child care industry. Lack of access to quality child care disproportionately impacts women, so it shouldn’t be surprising that it took a female led team to capitalize on this opportunity.” Expanding on the concept of founder-market fit, Walk says, “I love to come away thinking, these are the absolute right founders to build this business.”¹⁰

Bendz, the Atomico partner who specializes in femtech and is also an avid angel investor, agrees. “Often I meet founders that you can tell are at the right place at the right time with the right mindset and the right team. It’s almost like all of the experiences they have had prior to launching a company have been preparing them to create that business at that time. These are the kind of founders who I know are in it for the long haul, and who are going to weather the ups and downs.” As a woman who uses the products and services she invests in, Bendz is also an example of investor-market fit, which I believe will open new markets in the decades to come.

Something else investors like Walk and Bendz believe in? Outsized opportunities. And the potential for outsized opportunities are especially ripe in untapped markets. The rise of femtech is yet another example of how the intuitive success of the concept of founder-market fit ultimately needed more female founders for certain markets to blossom. As Bendz explains, “Throughout a woman’s life there are many big events that have a big impact on our overall health — from childbirth to menopause. I know all women are tired of poor or non-existent solutions for women surrounding those life events, and that’s why we are seeing so many companies launching to better serve women’s needs. When you think about the fact that women have only had the right to vote and educate themselves for 100 years, it’s mind-blowing how long the world was operating with only 50% of the population in control. That’s reflected in the products and services we as a society have funded.”

Women’s consumer products are another area. Ornella Moraes is one of four female co-founders of Brazilian-led Sousmile, which recently raised a $6 million USD Series A led by Kaszek Ventures. “Our brand is a woman,” Moraes says of her dental beauty startup that retails throughout São Paulo. And so are the leaders of the company. At Sousmile, there are four female co-founders and two male co-founders. “More dentists in the world are women than men, so it’s been critical for our team to have more female founders,” she says. In this way, the rise of female founders and co-founders can completely change markets. “We believe this will fundamentally create a different type of product,” says Walk.

3. Emerging markets will take the lead

Finally, certain emerging markets pose a particular opportunity for female founders by over-indexing for both large IPOs and female founders. 2017 was the first year that more of the largest IPOs in the internet sector globally came from emerging markets. Nazar Yasin, founder of Rise Capital, which invests in emerging markets, says “This trend isn’t going away.” After all, most GDP growth comes from emerging markets, where most global internet users live. As he explains, “the future of market capitalization growth in the internet sector globally belongs to emerging markets.” And yet this type of innovation takes resilience. “If you’re a startup in one of these markets, it’s like trying to grow a plant in the desert.”¹¹ In an environment that demands more daily resilience, there is a different appetite for risk and innovation. (I call this resilience innovation.)

Perhaps the easiest example of emerging market innovation fueled by resilience is fintech. Emerging markets and their often unstable economies boast a much higher number of frustratingly unbanked individuals. This brings about innovation. Hanna Schiuma, the Brazilian-born fintech founder of ElasBank, where I am an angel investor and advisor, explains how ubiquitous such fintech innovation is becoming.

“Soon all finance will be tailor-made and fintech will be common ground because all financial services will be technology-intensive.” She also argues that the nature of such an innovation allows the industry to become more innovative, and thus inclusive, which is exactly what is happening with her own women’s bank, launching in 2020. “That means great opportunities to better serve women’s financial needs to offer dedicated products, and to gather female talent to build those products from a diverse and innovative perspective.” Ultimately, “resilience is key for us to build that pool of talent and open the doors for gender balance and financial inclusion.”

Furthermore, data shows Africa and Latin America both beat global averages for percentages of startup female founders. Laura Stebbing is co-CEO of accelerateHER, a global community of leaders addressing the under-representation of women in tech through action. Raised in Southern Africa, Stebbing is passionate about Africa’s rise as a hub of female entrepreneurship.

“Africa has both the highest proportion of women founders at 26% [Latam comes in second]¹² and a $42 billion funding gap. There’s clearly no lack of talent across Africa’s 54 countries, so for the investors, corporate executives, policy makers and established founders that aren’t moved by the moral arguments for gender parity, notice the enormous business opportunity. We will start to see a higher volume of resilient, scalable companies emerge as leaders build more diverse networks and ecosystems that support women to unlock their entrepreneurial potential.” Nathan Lustig, founder of Magma Partners, a VC firm in Latin America which invests in female founders above the regional average, explains, “investing in and empowering resilient women entrepreneurs is just good business, and is one of the biggest investment opportunities, especially in emerging markets.”

I believe Latin American can have an edge. I am a Silicon Valley-born investor now living in “Silicon Aires,” where I have been thrilled to see exciting numbers of female founders in Latin America. Susana Robles agrees, and says the reason is in part due to the nature of a committed ecosystem to support one another. “It’s the sheer need that forces you to collaborate.” An ecosystem like Silicon Valley doesn’t have the same need to do so. Of Latin America, Robles says, “In 10 years, we will have created a much more collaborative market than the developed ones.” And that collaboration is leading to great female founders. 2019, in fact, saw more funding going to female co-founders in Latin America than in Europe or the USA.¹³

This will lead to future alicorns. Ann Williams, COO of Creditas, a Brazilian fintech currently closing in on its own unicorn status, says “the conversion funnel for unicorns works just like any other selection process. We fill the top with a bunch of great women in supporting roles in emerging market startups, these women take their experiences and found rocking new companies. A percentage of these will convert to scaleups raising Series C and D rounds with valuations at $1 billion or higher. And voila! we get women-led unicorns.” She continues, “the odds are with us and I am sure the talent is too!”

Juliane Butty, startup head at Platzi and former regional manager of Seedstars, one of the leading accelerators and investors fostering female entrepreneurship in emerging markets, joins Williams. “We have definitely seen the rise of female founders and investors in emerging markets in the last decade. One supports the other. And we know that success breeds success.”

Perhaps My Little Pony fan Malinter said it best when he suggested how a male version of the alicorn could finally emerge in such a female-dominated space: “The simplest way they could probably add one in would be to make said alicorn the ruler of a neighboring nation.” In the same way, emerging markets may just hold the key for female unicorns.

No matter the region, Robles says “if we keep opening doors to women entrepreneurs who are as ambitious as men in growing their companies, we’ll begin to see many more unicorns with gender diversified teams.” Hanna Schiuma, the Elasbank founder who just might be building the next female-founded unicorn, agrees. “The alicorns are coming. And we’re ready to fly.”

²Equestria is of course where the My Little Ponies and their assorted unicorns, alicorns and friends all live.
³Go Jess Lee!
⁴Yes, Aileen Lee of Cowboy VC first invented the term in her 2013 TechCrunch piece, but we’re in a unicorn-fueled time machine, people.
⁸“Do Female Investors Support Female Entrepreneurs? An Empirical Analysis of Angel Investor Behavior,” Seth C. Oranburg, Duquesne University School of Law, Pittsburgh PA, USA and Mark Geiger, Duquesne University School of Business, Pittsburgh PA, USA
¹²Forthcoming research from TechCrunch/Crunchbase
¹³Forthcoming research from TechCrunch/Crunchbase

Source: Tech Crunch