31 Oct 2020

You can start a venture fund if you’re not rich; here’s how

For years — decades, even — there was little question about whether you could become a venture capitalist if you weren’t comfortable financially. You couldn’t. The people and institutions that invest in venture funds want to know that fund managers have their own “skin in the game,” so they’ve long required a sizable check from the investor’s own pocket before jumping aboard. Think 2% to 3% of the fund’s total assets, which often equates to millions of dollars.

In fact, five years ago, I wrote that the real obstacle to becoming a venture capitalist ties less to gender than to financial inequality. I focused then on women, who are paid less (especially Black and Hispanic women), and who possess less wealth, but the same is true of anyone of lesser means.

Consider that one or two partners trying trying to raise a $50 million debut fund have to come up with $1.5 million. They’ll collect management fees off that $50 million fund — the standard is 2% annually for the fund’s investment period — but they have to use that $1 million per year to pay for everyone’s salaries, along with rent, auditing, legal costs and back-office administration fees. That doesn’t leave much, which is why having something to start with helps.

Thankfully, things are changing, with a growing number of ways that aspiring VCs can jump into the business who can’t write a big check. None of these approaches can guarantee success in raising a fund, but these are paths that other VCs have effectively used in the past when starting out.

1.) Find investors, i.e. limited partners, who are willing to take less than 3% and maybe even less than 1% of the overall fund size being targeted. You’ll likely find fewer investors as that “commit” shrinks. But for example Joanna Rupp, who runs the $1.1 billion private equity portfolio for the University of Chicago’s endowment, suggests that both she and other managers she knows are willing to be flexible based on the “specific situation of the GP.”

Says Rupp, “I think there are industry ‘norms,’ but we haven’t required a [general partner] commitment from younger GPs when we have felt that they don’t have the financial means.”

Bob Standish, founder of the fund administration firm Standish Management, echoes the sentiment, saying that a smaller general partner commitment in exchange for special investor economics is also fairly common. “You might see a reduced management fee for the LP for helping them or reduced carry or both, and that has been done for years.”

2.) Learn more about what are called management fee offsets, which investors in venture funds often determine to be reasonable. These aren’t uncommon, says, Michael Kim of Cendana Capital, a firm that has stakes in dozens of seed stage funds, because they also offer tax advantages (though the IRS has talked about doing away with these).

How does theses work? Say your “commit” was $1 million over 10 years (the standard life of a fund). Instead of trying to come up with $1 million that you presumably don’t have, you can offset up to 80% of that, putting in $200,000 instead but reducing your management fees by that same amount over time so that it’s a wash and you’re still getting credit for the entire $1 million. You’re basically converting fee income into the investment you’re supposed to make.

3.) Use your existing portfolio companies as collateral. Kim has had at least two managers whose brands have come to be highly regarded launch a fund not with a “commit” but rather by bringing to the table stakes in startups they’d funded as angel investors.

In both of these cases, it was a great deal for Kim, who says the companies were quickly marked up. For the fund managers’ part, it meant not having to put more of their own money into the funds.

4.) Make a deal with wealthier friends if you can. When Kim launched his fund of funds to invest in venture managers after working for years as a VC himself, he raised $1 million in working capital from six friends to get it off the ground. The money gave Kim, who had a mortgage at the time and young children, enough runway for two years. Obviously, your friends have to be willing to gamble on you, but sweeteners certainly help, too. In Kim’s case, he gave his friends a percentage of Cendana’s economics in perpetuity.

5.) Get a bank loan. Rupp said she would be uncomfortable if a GP’s commit was being funded through a bank loan for several reasons, including that there’s no guarantee a fund manager will make money on his or her fund, a loan adds risk on top of risk, and because should a manager need liquidity related to that loan, he or she might sell a strongly performing position too early.

That said, loans aren’t uncommon, says Raynard. He says banks with venture capital relationships like Silicon Valley bank and First Republic are typically happy to lend a fund manager a line of credit to help him or her to make capital calls, though he says it does depend on who else is involved with the fund. “As long as it’s a diverse group of LPs,” the banks are comfortable moving forward in exchange for winning over a new fund’s business, he suggests.

6.) Consider the merits of so-called front loading. This is a technique with which “more creating LPs can sometimes get comfortable,” says Kim. It’s also how investor Chris Sacca, now a billionaire, got started when he first turned to fund management. How does it work? Say a fund manager is getting paid a 2.5% management fee over the life of a 10-year fund. Over that decade, that amounts to 25% of the fund. Typically, management fees decline over time, to 2% and even slightly lower because you are typically no longer actively managing it but rather managing out the bets you’ve made in the first few years.

Some beginning managers blend that management fee — say it’s 20% over the fund’s duration — and pay themselves a higher percentage — say 5% for each of its first three years — until by the end of the fund’s life, the manager is receiving no management fee for it at all.

Without carry, that could mean no income if you aren’t yet seeing profits from your investments. But presumably — especially given pacing in recent years — you, the general partner, have raised another fund by the time that happens so have resources coming in from that second fund.

These are just a few of the ways to get started. There are other paths to take, too, notes Lo Toney of Plexo Capital — which, like Cendana Capital — has stakes in many venture funds. Just one of these is to structure to use a self-directed IRA to finance that GP “commit.” Another is to sell a portion of the management company or to sell a greater percentage of future profits and to use those proceeds, though VCs Charles Hudson of Precursor Ventures and Eva Ho of Fika Ventures avoided that path and suggested that first-time managers do the same if they can.

Either way, suggests Toney, a former partner with the Alphabet’s venture arm, GV, it’s important to know  one’s options but keep in mind, too, that what you start with may ultimately prove irrelevant.

Said Toney via email this week: “I have not seen any data on the front end of a VC’s career that wealth indicates future success.”

31 Oct 2020

TikTok stars got a judge to block Trump’s TikTok ban

TikTok has won another battle in its fight against the Trump administration’s ban of its video-sharing app in the U.S. — or, more accurately in this case, the TikTok community won a battle. On Friday, a federal judge in Pennsylvania has issued an injunction that blocked the restrictions that would have otherwise blocked TikTok from operating in the U.S. on November 12.

This particular lawsuit was not led by TikTok itself, but rather a group of TikTok creators who use the app to engage with their million-plus followers.

According to the court documents, plaintiff Douglas Marland has 2.7 million followers on the app; Alec Chambers has 1.8 million followers; and Cosette Rinab has 2.3 million followers. The creators argued – successfully as it turns out — that they would lose access to their followers in the event of a ban, as well as the “professional opportunities afforded by TikTok.” In other words, they’d lose their brand sponsorships — meaning, their income.

This is not the first time that the U.S. courts have sided with TikTok to block the Trump administration’s proposed ban over the Chinese-owned video sharing app. Last month, a D.C. judge blocked the ban that would have removed the app from being listed in U.S. app stores run by Apple and Google.

That ruling had not, however, stopped the Nov. 12 ban that would have blocked companies from providing internet hosting services that would have allowed TikTok to continue to operate in the U.S.

The Trump administration had moved to block the TikTok app from operating in the U.S. due to its Chinese parent company, ByteDance, claiming it was a national security threat. The core argument from the judge in this ruling was the “Government’s own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical.”

That hypothetical risk was unable to be stated by the Government, the Judge argued, to be such a risk that it outweighed the public interest. The interest, in this case, was the over 100 million users of TikTok and the creators like Marland, Chambers and Rinab that utilized it to spread “informational materials,” which allowed the Judge to rule that the ban would shut down a platform for expressive activity.

“We are deeply moved by the outpouring of support from our creators, who have worked to protect their rights to expression, their careers, and to help small businesses, particularly during the pandemic,” said Vanessa Pappas, Interim Global Head of TikTok, in a statement. “We stand behind our community as they share their voices, and we are committed to continuing to provide a home for them to do so,” she added.

The TikTok community coming to the rescue on this one aspect of the overall TikTok picture just elevates this whole story. Though the company has been relatively quiet through this whole process, Pappas has thanked the community several times for its outpouring of support. Though there were some initial waves of ‘grief’ on the app with creators frantically recommending people follow them on other platforms, that has morphed over time into more of a ‘let’s band together’ vibe. This activity coalesced around a big swell in voting advocacy on the platform, where many creators are too young to actually participate but view voting messaging as their way to participate.

TikTok has remained active in the product department through the whole mess, shipping elections guides and trying to ban Qanon conspiracy spread. Even as Pakistan banned and then un-banned the app.

 

 

 

30 Oct 2020

Cough-scrutinizing AI shows major promise as an early warning system for COVID-19

Asymptomatic spread of COVID-19 is a huge contributor to the pandemic, but of course if there are no symptoms, how can anyone tell they should isolate or get a test? MIT research has found that hidden in the sound of coughs is a pattern that subtly, but reliably, marks a person as likely to be in the early stages of infection. It could make for a much-needed early warning system for the virus.

The sound of one’s cough can be very revealing, as doctors have known for many years. AI models have been built to detect conditions like pneumonia, asthma, and even neuromuscular diseases, all of which alter how a person coughs in different ways.

Before the pandemic, researcher Brian Subirana had shown that coughs may even help predict Alzheimer’s — mirroring results from IBM research published just a week ago. More recently, Subirana thought if the AI was capable of telling so much from so little, perhaps COVID-19 might be something it could suss out as well. In fact, he isn’t the first to think so.

He and his team set up a site where people could contribute coughs, and ended up assembling “the largest research cough dataset that we know of.” Thousands of samples were used to train up the AI model, which they document in an open access IEEE journal.

The model seems to have detected subtle patterns in vocal strength, sentiment, lung and respiratory performance, and muscular degradation, to the point where it was able to identify 100 percent of coughs by asymptomatic COVID-19 carriers and 98.5 percent of symptomatic ones, with a specificity of 83 and 94 percent respectively, meaning it doesn’t have large numbers of false positives or negatives.

“We think this shows that the way you produce sound, changes when you have COVID, even if you’re asymptomatic,” said Subirana of the surprising finding. However he cautioned that although the system was good at detecting non-healthy coughs, it should not be used as a diagnosis tool for people with symptoms but unsure of the underlying cause.

I asked Subirana for a bit more clarity on this point.

“The tool is detecting features that allow it to discriminate the subjects that have COVID from the ones that don’t,” he wrote in an email. “Previous research has shown you can pick up other conditions too. One could design a system that would discriminate between many conditions but our focus was on picking out COVID from the rest.”

For the statistics-minded out there, the incredibly high success rate may raise some red flags. Machine learning models are great at a lot of things, but 100 percent isn’t a number you see a lot, and when you do you start thinking of other ways it might have been produced by accident. No doubt the findings will need to be proven on other datasets and verified by other researchers, but it’s also possible that there’s simply a reliable tell in COVID-induced coughs that a computer listening system can hear quite easily.

The team is collaborating with several hospitals to build a more diverse dataset, but is also working with a private company to put together an app to distribute the tool for wider use, if it can get FDA approval.

30 Oct 2020

Apple acknowledges AirPods Pro issues, will replace those that crackle and rattle

Are your AirPods Pro earbuds making weird noises? You’re not imagining it — and you’re not the only one.

Just a few months after Apple started shipping AirPods Pro, some users started noticing that one or both of their earbuds were rattling or crackling. The noises would reportedly get worse whenever the user moved, and would sometimes only develop after months of use.

Apple didn’t say too much about it at first, but would usually replace crackling earbuds if you took the time to hit up support. A few folks here at TechCrunch have had the rattle rear its head on our own AirPods Pro buds… only to have it pop up again in the replacements.

It seems the problem has become widespread enough for an official acknowledgement: today Apple launched an “AirPods Pro Service Program” (as first pointed out by Mark Gurman) specifically for swapping out crackling buds.

A newly published support page outlines the potential symptoms, both of which suggest the issue has to do with the noise cancellation system:

  • Crackling or static sounds that increase in loud environments, with exercise or while talking on the phone
  • Active Noise Cancellation not working as expected, such as a loss of bass sound, or an increase in background sounds, such as street or airplane noise

Apple notes that only units made before October 2020 are affected, suggesting they’ve fixed the issue in units now coming off the line. The support page repeatedly says faulty units will be “replaced” rather than “repaired” — so for the most part, it sounds like turnaround should be pretty quick.

30 Oct 2020

Daily Crunch: Under Armour is selling MyFitnessPal

Under Armour gives up on one of its big acquisitions, Uber Eats faces complaints over its free delivery policy for Black restaurants and Facebook takes another step to limit QAnon-related content. This is your Daily Crunch for October 30, 2020.

The big story: Under Armour is selling MyFitnessPal

Five years after Under Armour acquired MyFitnessPal for $475 million, it’s selling the diet- and exercise-tracking app to investment firm Francisco Partners for $345 million. It’s also shutting down the Endomondo platform, which it acquired at the same time.

Under Armour says it’s making these moves so that it can focus its brand on its “target consumer – the Focused Performer.” However, the diminished price suggested there may be more going on here, perhaps the business likely suffering as companies like Peloton and Apple (with its upcoming Fitness+ service) hog the spotlight in the casual fitness category.

It’s also worth noting that Under Armour isn’t completely giving up on digital products — it will continue operating the MapMyFitness platform, including MapMyRun and MapMyRide.

The tech giants

Uber Eats faces discrimination allegations over free delivery from Black-owned restaurants — Uber says it has received more than 8,500 demands for arbitration as a result of it ditching delivery fees for some Black-owned restaurants via Uber Eats.

Facebook is limiting distribution of ‘save our children’ hashtag over QAnon ties — Over the past several months, these terms have provided a kind of innocuous cover for the popular online conspiracy theory.

Reliance Jio Platforms tops 400M subscribers, explores expanding services outside of India — The Facebook- and Google-backed telecom operator said its finances have improved, despite the pandemic.

Startups, funding and venture capital

Daimler invests in lidar company Luminar in push to bring autonomous trucks to highways — Luminar will also become a publicly traded company through its merger with special purpose acquisition company Gores Metropoulos.

Nestlé acquires healthy meal startup Freshly for up to $1.5B — Founded in 2015, Freshly is a New York City-based startup that delivers healthy meals to your home in weekly orders, which can then be prepared in a few minutes via microwave or oven.

B8ta remains bullish on IRL shopping with new acquisition — B8ta offers shelf space to unique digital products.

Advice and analysis from Extra Crunch

New GV partner Terri Burns has a simple investment thesis: Gen Z — Burns is the firm’s youngest partner and the first Black woman to hold the role.

Is the Great 2020 Tech Rally slowing? — What happens if COVID-19, unrest and hyped valuations collide?

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Teachers are leaving schools. Will they come to startups next? — Teacher departures are a loss for public schools, but an opportunity for startups racing to win a share of the changing teacher economy.

Big tech’s ‘blackbox’ algorithms face regulatory oversight under EU plan — Major internet platforms will be required to open up their algorithms to regulatory oversight under proposals European lawmakers are set to introduce next month.

AOL founder Steve Case, involved early in Section 230, says it’s time to change it — “Having more of a dialogue between the innovators and the policymakers is actually going to be critical in this internet third wave,” Case told us.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

30 Oct 2020

iPhones can now tell blind users where and how far away people are

Apple has packed an interesting new accessibility feature into the latest beta of iOS: a system that detects the presence of and distance to people in the view of the iPhone’s camera, so blind users can social distance effectively, among many other things.

The feature emerged from Apple’s ARKit, for which the company developed “people occlusion,” which detects people’s shapes and lets virtual items pass in front of and behind them. The accessibility team realized that this, combined with the accurate distance measurements provided by the lidar units on the iPhone 12 Pro and Pro Max, could be an extremely useful tool for anyone with a visual impairment.

Of course during the pandemic one immediately thinks of the idea of keeping six feet away from other people. But knowing where others are and how far away is a basic visual task that we use all the time to plan where we walk, which line we get in at the store, whether to cross the street, and so on.

The new feature, which will be part of the Magnifier app, uses the lidar and wide-angle camera of the Pro and Pro Max, giving feedback to the user in a variety of ways.

The lidar in the iPhone 12 Pro shows up in this infrared video. Each dot reports back the precise distance of what it reflects off of.

First, it tells the user whether there are people in view at all. If someone is there, it will then say how far away the closest person is in feet or meters, updating regularly as they approach or move further away. The sound corresponds in stereo to the direction the person is in the camera’s view.

Second, it allows the user to set tones corresponding to certain distances. For example, if they set the distance at six feet, they’ll hear one tone if a person is more than six feet away, another if they’re inside that range. After all, not everyone wants a constant feed of exact distances if all they care about is staying two paces away.

The third feature, perhaps extra useful for folks who have both visual and hearing impairments, is a haptic pulse that goes faster as a person gets closer.

Last is a visual feature for people who need a little help discerning the world around them, an arrow that points to the detected person on the screen. Blindness is a spectrum, after all, and any number of vision problems could make a person want a bit of help in that regard.

The system requires a decent image on the wide-angle camera, so it won’t work in pitch darkness. And while the restriction of the feature to the high end of the iPhone line reduces the reach somewhat, the constantly increasing utility of such a device as a sort of vision prosthetic likely makes the investment in the hardware more palatable to people who need it.

This is far from the first tool like this — many phones and dedicated devices have features for finding objects and people, but it’s not often that it comes baked in as a standard feature.

People detection should be available to iPhone 12 Pro and Pro Max running the iOS 14.2 release candidate that was just made available today. Details will presumably appear soon on Apple’s dedicated iPhone accessibility site.

30 Oct 2020

Q3 earnings find Apple and Google looking to the future for hardware rebounds

“5G is a once-in-a-decade kind of opportunity,” Tim Cook told the media during the Q&A portion of Apple’s Q3 earnings call. “And we could not be more excited to hit the market exactly when we did.”

The truth of the matter is its timing was a mixed bag. Apple was, by some accounts, late to 5G. By the time the company finally announced that it was adding the technology across its lineup of iPhone 12 variants, much of its competition had already beat the company to the punch. Of course, that’s not a huge surprise. Apple’s strategy is rarely a rush to be first.

5G networks are only really starting to come into their own now. Even today, there are still wide swaths of users who will have to default to an LTE connection the majority of the time they use their handsets. The arrival of 5G on the iPhone was really as much about future-proofing this year’s models as anything. Consumers are holding onto phones longer, and in the three or four years before it’s time for another upgrade, the 5G maps will look very different.

Clearly, the new iPhone didn’t hit the market exactly when Apple had hoped; the pandemic saw to that. Manufacturing bottlenecks in Asia delayed the iPhone 12’s launch by a month. That’s going to have an impact on the bottom line of your quarterly earnings. The company saw a 20% drop for the quarter, year-over-year. That’s hugely significant, causing the company’s stock to drop more than 4% in extended trading.

Apple’s diverse portfolio helped curb some of those revenue slides. While the pandemic has generally had a profound impact on consumer spending on “non-essentials,” changing where and how we work has helped bolster Mac and iPad sales, which were up 28 and 46% respectively, year-over-year. It wasn’t enough to completely stop the iPhone stumble, but it certainly brings the importance of a diverse hardware portfolio into sharp relief.

China was a big issue for the company this time around — and the lack of a new, 5G-enabled iPhone was a big contributor. In greater China (including Taiwan and Hong Kong), the company saw a 28% drop in sales. There are a number of reasons to be hopeful about iPhone sales in Q4, however.

As I noted this morning, smartphone shipments were down almost across the board in China for Q3, per new figures from Canalys. Much of that can be chalked up to Huawei’s ongoing issues with the U.S. government. Long the dominant manufacturer in mainland China, the company has been hamstrung by, among other things, a ban on access to Android and other U.S.-made technologies. Apple’s numbers remained relatively steady compared to the competition and Huawei’s issues could present a big hole in the market. With 5G on its side, this next quarter could prove a banner year for the company.

30 Oct 2020

Google reveals a new Windows zero-day bug it says is under active attack

Google has dropped details of a previously undisclosed vulnerability in Windows, which it says hackers are actively exploiting. As a result, Google gave Microsoft just a week to fix the vulnerability. That deadline came and went, and Google published details of the vulnerability this afternoon.

The vulnerability has no name but is labeled CVE-2020-17087, and affects at least Windows 7 and Windows 10.

Google’s Project Zero, the elite group of security bug hunters which made the discovery, said the bug allows an attacker to escalate their level of user access in Windows. Attackers are using the Windows vulnerability in conjunction with a separate bug in Chrome, which Google disclosed and fixed last week. This new bug allows an attacker to escape Chrome’s sandbox, normally isolated from other apps, and run malware on the operating system.

In a tweet, Project Zero’s technical lead Ben Hawkes said Microsoft plans to issue a patch on November 10.

Microsoft didn’t independently confirm this date when asked, but said in a statement: “Microsoft has a customer commitment to investigate reported security issues and update impacted devices to protect customers. While we work to meet all researchers’ deadlines for disclosures, including short-term deadlines like in this scenario, developing a security update is a balance between timeliness and quality, and our ultimate goal is to help ensure maximum customer protection with minimal customer disruption.”

But it’s unclear who the attackers are or their motives. Google’s director of threat intelligence Shane Huntley said that the attacks were “targeted” and not related to the U.S. election.

A Microsoft spokesperson also added that the reported attack is “very limited and targeted in nature, and we have seen no evidence to indicate widespread usage.”

It’s the latest in a list of major flaws affecting Windows this year. Microsoft said in January that the National Security Agency helped find a cryptographic bug in Windows 10, though there was no evidence of exploitation. But in June and September, Homeland Security issued alerts over two “critical” Windows bugs — one which had the ability to spread across the internet, and the other could have gained complete access to an entire Windows network.

Updated with comment from Microsoft.

30 Oct 2020

Facebook hits pause on algorithmic recommendations for political and social issue groups

With just days to go before the U.S. election, Facebook quietly suspended one of its most worrisome features.

During Wednesday’s Senate hearing Senator Ed Markey asked Facebook CEO Mark Zuckerberg about reports that his company has long known its group recommendations push people toward more extreme content. Zuckerberg responded that the company had actually disabled that feature for certain groups — a fact Facebook had not previously announced.

“Senator, we have taken the step of stopping recommendations in groups for all political content or social issue groups as a precaution for this,” Zuckerberg told Markey.

TechCrunch reached out to Facebook with questions about what kind of groups would be affected and how long the recommendations would be suspended at the time but did not receive an immediate response. Facebook first confirmed the change to BuzzFeed News on Friday.

“This is a measure we put in place in the lead up to Election Day,” Facebook spokesperson Liz Bourgeois told TechCrunch in an email. “We will assess when to lift them afterwards, but they are temporary.”

The cautionary step will disable recommendations for political and social issue groups as well as any new groups that are created during the window of time. Facebook declined to provide additional details about the kinds of groups that will and won’t be affected by the change or what went into the decision.

Researchers who focus on extremism have long been concerned that algorithmic recommendations on social networks push people toward more extreme content. Facebook has been aware of this phenomenon since at least 2016, when an internal presentation on extremism in Germany observed that “64% of all extremist group joins are due to our recommendation tools.”

In Facebook’s case, recommendations can usher users with extreme views and violent ideas into social groups where they can organize and amplify dangerous ideologies. Before being banned by the social network, the violent far-right group the Proud Boys relied on Facebook groups for its relatively sophisticated national recruitment operation. Members of the group that plotted to kidnap Michigan Governor Gretchen Whitmer also used Facebook Groups to organize, according to an FBI affidavit.

While it sounds like Facebook’s decision to toggle some group recommendations off is temporary, the company has made an unprecedented flurry of choices to limit dangerous content in recent months, possibly in fear that the 2020 election will again plunge it into political controversy. Over the last three months alone, Facebook has cracked down on QAnon, militias, and language used by the Trump campaign that could result in voter intimidation — all surprising postures considering its longstanding inaction and deep fear of decisions that could make be perceived as partisan.

After years of relative inaction, the company now appears to be taking some of the extremism it has long incubated seriously, though the coming days are likely to put its new set of protective policies to the test.

 

30 Oct 2020

Dear Sophie: Would a Trump win abolish the H-1B visa lottery?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“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, a 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.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

I heard the randomness of the H-1B lottery is going away. What will this mean for our startup’s ability to get an H-1B visa for one of our co-founders?

— Curious in Cupertino

Dear Curious:

Lots going on in immigration this week (as usual!). First, good news for green card applicants: the November 2020 Visa Bulletin did not change from October, when the dates for filing for Adjustment of Status sped up significantly for individuals born in India and China.

About the H-1B lottery: The Department of Homeland Security (DHS), which oversees U.S. Citizenship and Immigration Services (USCIS), this week proposed a rule that ends the random H-1B lottery; instead, USCIS will determine who can apply for an H-1B visa based on the highest salary. DHS says this change will “incentivize employers to offer higher wages.”

The number of H-1B visas issued each year is capped at 85,000. Currently, when demand for H-1Bs outstrips the annual supply, which has been the case since 2013, USCIS uses an electronic random lottery to determine who can apply for an H-1B. For the first time this year, sponsoring companies electronically registered each H-1B candidate for the lottery in March.