Author: azeeadmin

Australian rocket launch startup Gilmour Space Technologies is betting that bigger isn’t always better. The company has developed a small launch vehicle it calls Eris, a 25 meter (82 foot) rocket that can deliver payload of up to 215 kilograms (474 lbs) to sun synchronous orbit. Now, it’s raised a $61 million AUD ($46 million USD) Series C round to take Eris to space next year.

Eris is much smaller than other launch companies’ rockets. Relativity Space’s Terran One has a max payload capacity to LEO of around 1,250 kg (2,756 lbs); even SpaceX’s Falcon 1, its first and smallest orbital rocket, could deliver 450 kg (990 lbs). Gilmour Space is wagering that the lighter payload will result in lower costs for a burgeoning suite of customers looking to send spacecraft to orbit.

The funds will also go toward nearly doubling the company’s workforce, from 70 to 120 employees, and developing a new commercial spaceport at Abbot Point, Queensland. Australian legislators approved construction of the launch site in May. Gilmour Space is also examining a proposed launch site in south Australia to facilitate polar orbit launches.

Adam and James Gilmour, founders of Gilmour Space Image Credits: Gilmour Space Technologies (opens in a new window)

Gilmour Space has already signed agreements with prospective customers for future Eris launches. This includes contracts with two Australian space startups: Space Machines Company, to launch a 35 kg spacecraft on Eris’ inaugural flight, and Fleet Space Technologies, to carry six nanosatellites in 2023. Gilmour Space has also signed an agreement with U.S.-based Momentus, to use its orbital transfer services.

The round was led by Fine Structure Ventures and included contributions from Australian VCs Blackbird and Main Sequence, and Australian pension funds HESTA, Hostplus and NGS Super. Blackbird and Main Sequence are returning investors after leading Gilmour’s Series A and Series B, respectively. This is the largest amount of private equity funding ever raised by a space company in Australia, and brings the company’s total amount raised to $87 million AUD ($66 million USD).

It’s almost go-time for all you early-stage startup founders. That’s right, on July 8-9 thousands of determined entrepreneurs around the world will gather virtually for the best little two-day bootcamp we like to call TC Early Stage 2021: Marketing and Fundraising.

Two days focused on the bottom-line essentials to build your start up the right way. Here we lay out five reasons why you should stop what you’re doing, buy your pass and invest in a conference designed to make your work life a whole lot easier.

1. Learn from leading startup experts

We packed the agenda with incredible subject-matter experts who will offer highly interactive presentations across a range of topics every startup founder needs to know. Listen, engage and learn so you can avoid painful, expensive missteps and move forward without having to reinvent the wheel.

“Vlad Magdalin, founder of Webflow, was very candid about the challenges he faced on his journey to success. You always hear about startups that raise millions of dollars, but you don’t necessarily hear about the ups and downs it takes to get to that point. It’s important for early founders to see that side, too.” — Ashley Barrington, founder of MarketPearl and Early Stage 2020 attendee.

2. Implement advice right out of the gate

Plenty of conferences are long on opinion but short on advice that you can adapt and fold into your business now — when you need it the most. You won’t find that happening at TC Early Stage. Chloe Leaaetoa, the founder of Socicraft, told us she came away for Early Stage 2020 with tips she could implement right away.

“Sequoia Capital’s session, Start with Your Customer, looked at the benefits of storytelling and creating customer personas. I took the idea to my team, and we identified seven different user types for our product, and we’ve implemented storytelling to help onboard new customers. That one session alone has transformed my business.”

3. Expand your network

Big networks offer more opportunities. It’s just that simple. You’ll have plenty of time to expand your networking empire at Early Stage. And, as Ashley Barrington notes, you never know where a chance meeting might lead one day.

“CrunchMatch made it easy to set up short networking sessions with attendees all over the world, and that was a big benefit. I met other early-stage founders to learn what they’re working on, pool resources and connect for potential future opportunities.

4. Improve your pitch deck

Day two features a pitch-off between 10 early-stage founders. They’ll present their pitches and receive invaluable feedback from our panel of esteemed judges. Even if you’re not on that virtual stage pitching your heart out, you’ll learn a lot by tuning in. Take it from Katia Paramonova, founder and CEO of Centrly, who attended Early Stage 2020.

“The pitch deck teardown session was great. VCs reviewed my deck and gave specific, actionable advice. Watching them provide comments on other decks was helpful, too. We’re incorporating the feedback and when we start fundraising, the improved slides will make it easier for VCs to understand our value proposition.”

5. Connect with your community

Every TechCrunch event, whether it’s TC Early Stage, Disrupt or TC Sessions, strives to provide a sense of community. Why? Because you may go faster alone, but you’ll go further together. Commune, commiserate and celebrate with your tribe of early-stage founders.

“TechCrunch does this thing of connecting total strangers to create a genuinely supportive community. We’re all trying to do the same thing, which is bring our idea to life and make it a reality. I loved that unexpected benefit.” — Jessica McLean, director of marketing and communications at Infinite-Compute.

Buy your pass and join your community at TC Early Stage 2021: Marketing and Fundraising on July 8-9. We can’t wait to welcome you!

Is your company interested in sponsoring or exhibiting at Early Stage 2021 – Marketing & Fundraising? Contact our sponsorship sales team by filling out this form.

Over the past year, there has been a surge of newly formed digital banks aimed at specific demographics. The banks in nearly all cases are trying to meet the needs of certain populations that they believe are feeling left out or underserved by traditional financial institutions.

The latest such neobank to emerge is New York-based Daylight, which describes itself as the first LGBTQ+ digital banking platform in the United States. (There is a digital bank in Brazil with a similar mission called Pride Bank).

Founded by LGBTQ+ entrepreneurs Rob Curtis (CEO), Billie Simmons, a trans woman (COO) and Paul Barnes Hoggett (CTO), Daylight is announcing today that it has secured $5 million in a seed funding round. Kapor Capital and Precursor Capital co-led the round, which included participation from Anthemis Group, Clocktower and Citibank.

Daylight says its mission is to “build a more equitable financial life for LGBTQ+ folks and their chosen families.” The company’s services are targeted toward LGBTQ+ people, their families, and allies — or as Dayilght describes it, “values-based consumers who want to support the queer community.”

The startup, which was founded in 2020, plans to use its new capital mostly to expand its flagship product and lifestyle services, which are designed to improve financial equality and inclusion for the estimated 30-million-plus Americans who identify as LGBTQ+. It also plans to build out a LGBTQ+ business marketplace and a platform that offers discounts and rewards when members shop at merchants whose actions support the queer community.

In an interview with TechCrunch Curtis explained why he believes Daylight is uniquely positioned to help the population deal with challenges such as higher debt accumulation to factors such as pre-existing conditions, lower insurance levels, HIV management needs and [gender] transition costs. At the same time, many members of the community also have lower income levels due to “continued workplace discrimination.”

“LGBT people engage with money really differently and there’s a multitude of reasons for that,” Curtis said. “We spend about the same proportion of our income on discretionary spend, but we’re about 20% less likely to have a savings account, 20% less likely to own investments like stocks, or a quarter less likely to own a mutual fund. And we estimate that only about 30% of our community has any estate planning in place.”

Also, life in general tends to be more costly for LGBTQ+ persons, Curtis believes.

“It is expensive to be a queer person,” he said. “Not only do we find that when we come out to our parents, 40% of us no longer have financial support for things like college and those transitions from childhood into adulthood. We end up with 50% more college debt. We also have increased sexual health costs and some have gender affirming surgery that they need to pay for.”

“By the time we get to our 30s, we will be told ‘you can have one of the following three things: gender affirming surgery, a home deposit or a child,’ ” Curtis added. And, on top of that, having a child is generally more expensive for this population because people either have to adopt or hire a surrogate.

Kapor Capital Partner Brian Dixon believes that the fact that Daylight’s founders have personally experienced problems within the traditional banking industry gives them the necessary insight to help others in the LGBTQ+ community.

One of those problems include friction associated with names on issued cards, which leads to customers being outed as trans. The population also faces a lack of adequate financing products, Dixon believes, for things such as surrogacy, IVF, adoption, transition support and mental health.

“Many neobanks do not provide a truly unique banking experience that will result in a mass exodus from traditional banks,” Dixon said. “Daylight has an opportunity to be the outlier, especially given their focus on community. Daylight’s unique features include a seamless card issuance process that allows trans and non-binary customers to order a card in their preferred name, book sessions with expert LGBTQ+ financial coaches, get peer-to-peer advice from their digital community and earn rewards that are meaningful to the LGBT+ community.”

Daylight will offer features such as a checking account, the ability for members to get paid two days early, free ATMs and “no hidden fees,” according to Curtis.

“I think that payday early is really important because we know that there are high rates of credit card declines for folks who are buying hormones,” he said.

Another feature the Daylight platform offers is personalized recommendations to members which alert them when they’re spending money with merchants that support anti-LGBTQ+ politicians and initiatives, a practice known as “rainbow washing.” It will also offer alternative merchants that it says are “more aligned with the community’s values.”

“LGBTQ+ consumers, and those that support them, are very intentional about where they spend, but it’s difficult for an individual to know whether they’re spending in line with their values, or inadvertently shopping with brands that engages in rainbow washing while funding politicians and projects that work against our interests,” Curtis said.

Daylight is currently in beta but already has “thousands and thousands” of customers on its wait list, said Curtis, who estimates that it will have 10,000 customers by the time it launches in October.

Other digital banks targeting specific demographics that have raised funding over the past year include Fair, a multilingual digital bank and financial services platform that recently launched to the public after raising $20 million in 40 days earlier this year. Others that have emerged include Greenwood, First Boulevard and Cheese.

Mandolin just marked its first birthday earlier this month, and yet the Indianapolis-based startup is already announcing a $12 million Series A. That’s a quick follow up to the $5 million seed it raised in early October of last year. Turns out the global pandemic is a pretty fortuitious time to launch and grow a concert streaming platform.

The oversubscribed round was co-led by 645 Ventures and Foundry Group and featured additional funding from existing investors like High Alpha and TIME Ventures (Marc Benioff).

The big question, of course, is what happens to a company like Mandolin when the world starts opening back up? Sure concert livestreams got a massive boost as fans and artists alike were seeking an outlet as touring ground to a halt. But what now that venues are starting to reopen.

“As artists return to performing in sold out venues, Live+ will undoubtedly become a can’t-live-without digital complement that amplifies live shows,” CEO Mary Kay Huse said in a release. “Our new round of financing will support us in driving innovation of our core solution, delivering new digital offerings, and reinforcing our routes to market, so that every show is Live+.”

Image Credits: Mandolin

Granted, that’s…pretty abstract. But the simple answer is the company has been looking toward enhancing the in-person event as well, ahead of an inevitable reopening. Essentially the company wants to build a companion app for shows.

Here’s what Huse told Variety last week, “I would love it if we could see upwards of 50% of in-person attendees experiencing something digitally while in the venue, as early as before the end of the year. It’s just creating a compelling content that makes them want to do it.”

The company will also continue to focus on streaming, which may see a hit, but certainly isn’t going away, post-pandemic. The news also sees 645 Managing Partner Nnamdi Okike joining the company’s board.

“During COVID-19, livestreaming has been a game-changer for fans who want to experience their favorite artists, and for artists and venues who want to bring exciting live events for their fans,” Okike said. “Mandolin provides the best technology platform to enable these experiences, and they’re also scaling a company to meet the needs of this fast-growing category.”

The American IPO market is hot for many companies, but surprisingly cool for others. The gap between the two cohorts of private companies looking to list is becoming notable.

When Chinese ride-hailing giant Didi first set an IPO price range, The Exchange was curious about why the company felt so inexpensive. Compared to its American comps, shares in Didi simply felt underpriced at its proposed valuation interval. Recently, Didi stuck to its initial expectations by pricing at $14 per share, the upper end of its range, but no higher.

This week also brought a lackluster float for Chinese grocery-delivery company DingDong, which cut its IPO raise but only managed a flat American debut. Another China-based online grocery delivery service that went public domestically last week, Missfresh, is doing even worse.

With just those few data points, you’d be hard-pressed to be particularly bullish about U.S.-listed IPOs. Why go public in the United States if you are going to be underpriced and then trade poorly? The answer is that while many Chinese companies are seemingly struggling to find the demand that they expect for their shares on American exchanges, domestic companies are seeing some opposite results.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

We’re talking tech companies here, I should add; The Exchange doesn’t track IPO results for commodities diggers and biotech labs. It’s a big world. We have to focus.

There are contrary data points to our general thesis. Nio’s recent share price appreciation could be construed as such. But if we parse recent IPO news from SentinelOne and Xometry in contrast to what we’ve seen from Chinese tech companies’ own paths to the American public markets, there really does seem to be a gap forming.

Uneven ground

Didi’s IPO price of $14 per share values the company at around $67 billion on a non-diluted basis, and as high as $70 billion if we counted more shares in its market cap calculations. As we previously calculated, with around $6.5 billion in total Q1 2021 revenue and positive net income, the company is trading at a stiff multiples discount to Uber.

Indeed, Uber’s trailing price/sales ratio is north of 8x. If we valued Didi’s revenues from the last twelve months at the same price, it would be worth nearly $179 billion. It’s not. And that’s the gap that we want to stress.

That a few other Chinese tech IPOs listed in the United States underperformed in the last week is contrasted by a blizzard of positive IPO results from domestic companies from just this week:

Instagram is building its own version of Twitter’s Super Follow with a feature that would allow online creators to publish “exclusive” content to their Instagram Stories that’s only available to their fans — access that would likely come with a subscription payment of some kind. Instagram confirmed the screenshots of the feature recently circulated across social media are from an internal prototype that’s now in development, but not yet being publicly tested. The company declined to share any specific details about its plans, saying the company is not at a place to talk about this project just yet.

Image Credits: Exclusive Story in development via Alessandro Paluzzi

The screenshots, however, convey a lot of about Instagram’s thinking as they show a way that creators could publish what are being called “Exclusive Stories” to their account, which are designated with a different color (currently purple). When other Instagram users come across the Exclusive Stories, they’ll be shown a message that says that “only members” can view this content. The Stories cannot be screenshot either, it appears, and they can be shared as Highlights. A new prompt encourages creators to “save this to a Highlight for your Fans,” explaining that, by doing so, “fans always have something to see when they join.”

The Exclusive Stories feature was uncovered by reverse engineer Alessandro Paluzzi, who often finds unreleased features in the code of mobile apps. Over the past week, he’s published a series screenshots to an ongoing Twitter thread about his findings.

Image Credits: Instagram Exclusive Story Highlight feature in development via Alessandro Paluzzi (opens in a new window)

Exclusive Stories are only one part of Instagram’s broader plans for expanded creator monetization tools.

The company has been slowly revealing more details about its efforts in this space, with Instagram Head Adam Mosseri first telling The Information in May that the company was “exploring” subscriptions along with other new features, like NFTs.

Paluzzi also recently found references to the NFT feature, Collectibles, which shows how digital collectibles could appear on a creator’s Instagram profile in a new tab.

Image Credits: Instagram NFT feature in development via Alessandro Paluzzi (opens in a new window)

Image Credits: Alessandro Paluzzi (opens in a new window)

Instagram, so far, hasn’t made a public announcement about these specific product developments, instead choosing to speak at a high-level about its plans around things like subscriptions and tips.

For example, during Instagram’s Creator Week in early June — an event that could have served as an ideal place to offer a first glimpse at some of these ideas — Mosseri talked more generally about the sort of creator tools Instagram was interested in building, without saying which were actually in active development.

“We need to create, if we want to be the best platform for creators long term, a whole suite of things, or tools, that creators can use to help do what they do,” he said, explaining that Instagram was also working on more creative tools and safety features for creators, as well as tools that could help creators make a living.

“I think it’s super important that we create a whole suite of different tools, because what you might use and what would be relevant for you as a creator might be very different than an athlete or a writer,” he said.

“And so, largely, [the creator monetization tools] fall into three categories. One is commerce — so either we can do more to help with branded content; we can do more with affiliate marketing…we can do more with merch,” he explained. “The second is ways for users to actually pay creators directly — so whether it is gated content or subscriptions or tips, like badges, or other user payment-type products. I think there’s a lot to do there. I love those because those give creators a direct relationship with their fans — which I think is probably more sustainable and more predictable over the long run,” Mosseri said.

The third area is focused on revenue share, as with IGTV long-form video and short-form video, like Reels, he added.

Image Credits: Instagram Exclusive Story feature in development via Alessandro Paluzzi (opens in a new window)

Instagram isn’t the only large social platform moving forward with creator monetization efforts.

The membership model, popularized by platforms like OnlyFans and Patreon, has been more recently making its way to a number of mainstream social networks as the creator economy has become better established.

Twitter, for example, first announced its own take on creator subscriptions, with the unveiling of its plans for the Super Follow feature during an Analyst Day event in February. Last week, it began rolling out applications for Super Follows and Ticked Spaces — the latter, a competitor to Clubhouse’s audio social networking rooms.

Meanwhile, Facebook just yesterday launched its Substack newsletter competitor, Bulletin, which offers a way for creators to sell premium subscriptions and access member-only groups and live audio rooms. Even Spotify has launched an audio chat room and Clubhouse rival, Greenroom, which it also plans to eventually monetize.

Though the new screenshots offer a deeper look into Instagram’s product plans on this front, we should caution that an in-development feature is not necessarily representative of what a feature will look like at launch or how it will ultimately behave. It’s also not a definitive promise of a public launch — though, in this case, it would be hard to see Instagram scrapping its plans for exclusive, member-only content given its broader interest in serving creators, where such a feature is essentially part of a baseline offering.

It used to be a heavily traveled two-way street in corporate America: CEOs joined other companies’ boards to broaden their experiences, expand their influence, or simply because it felt good. Boards sought out CEOs because of the knowledge they bring and their unique ability to interact with the company CEO as an equal.

But the number of sitting CEOs on outside boards keeps shrinking. As the CEO role has become more difficult and demanding, greater numbers of chief executives are shying away from external board roles and many boards now limit their own CEOs’ board assignments as well.

The pandemic accelerated the trend, according to a report by management consulting firm Korn Ferry, citing “evidence that the unprecedented demands posed by the pandemic led many CEO directors to resign from outside boards to focus on their own organizations.” Fewer than half of CEOs now serve on an outside board, the report said.

At the same time, many corporations are feeling pressure to bring more gender and racial diversity to their boards and are making membership available to a broader array of candidates than in the past.

Is the decrease in CEO board participation a positive or negative? Interestingly, it’s both.

Here are four benefits of CEOs serving on boards:

Advising another company can make for a better CEO. CEOs who opt out of corporate board directorships out of fear of overextending themselves — and boards who restrict their own CEOs’ board assignments for the same reason — miss a key point: Time on a board usually makes them a better leader.

I’m on two outside boards. An inside view of another company’s challenges and opportunities, its peaks and valleys, what strategies worked and didn’t, has revealed insights I’ve ended up applying at my own company. Being on the other side of the table has even helped me better understand how to communicate with my company’s board.

Serving on a board can prevent myopia. Because of digital disruption, businesses must move at an unprecedented pace to stay competitive. Job No. 1 for all CEOs is to act on this reality every day inside their companies. But drawing exclusively from their own company’s experience can blind a leader to broader perspectives in the outside world. A board stint is a great way to ensure they’re getting those.

Board memberships can make CEOs more empathetic. There’s a lot of talk these days about the need for heightened empathy in the C-suite, and with good reason: The global health crisis, racial injustice and other extraordinary stressors demand that senior executives possess what McKinsey described as four qualities “to manage in crisis and shepherd their organization into a post-crisis next normal” — awareness, vulnerability, empathy and compassion.

In these times, it’s critically important for a CEO to cultivate as wide a frame of reference as possible, and involvement with another company through a board directorship accomplishes that.

Helping another company does broader good. If a CEO has the wherewithal beyond their own company responsibilities to bring value to another firm’s board, that’s a positive for the world at large. A rising tide lifts all boats, after all.

For example, I’m a board member at a company that once was strictly a manufacturer of home standby generators. It’s now digital savvy, with Wi-Fi-equipped generators providing a number of services on users’ smartphones. This means they also needs a strong cybersecurity strategy, my area of expertise. I take satisfaction in believing my guidance is benefiting the company, its shareholders and its customers.

So what’s good about the drop in CEO board assignments? That’s easy: more opportunity for non-CEOs and other traditionally underrepresented groups, including women and people of color, to join corporate boards.

“In a little-noticed but remarkable shift, many firms are skipping the corner suite and looking elsewhere for directors,” Korn Ferry reported. “Recent data shows that nearly two-thirds of the more than 400 director seats filled last year were taken by someone other than a CEO. Experts say since both the pandemic and the racial-equality protests of last year, companies are determined to create boards with more diverse faces and more specific skill sets.”

Equilar’s most recent Gender Diversity Index found that at the end of Q1 2021, 24.3% of all board seats in the Russell 3000 were occupied by women, up from 15% at the end of 2016. “The path toward equal representation of men and women in public company boardrooms seemed to go nowhere for decades, but there has been a significant clearing in recent years,” the report said. (Nevertheless, Equilar cautions that boards won’t hit gender parity until 2032.)

And many of these non-CEO board members are doing an excellent job. According to a survey by Stanford University’s Rock Center for Corporate Governance, 79% of board members feel that, in practice, active CEOs are no better than non-CEO board members. A CEO may bring cachet to the board, but many non-CEOs contribute real work as a director, the study said.

Increased diversity on boards isn’t just an excellent development by itself; board experience positions members well for future leadership roles and thus can act as a proxy to get more women and people of color into corner offices.

Making board membership accessible to a wider range of candidates beyond typically white male CEOs — they still account for almost 90% of Fortune 500 CEOs — offers hope that diversity in the business leader ranks will keep rising.

All things considered, I think this potential outweighs the negatives of more CEOs staying out of outside companies’ board rooms.

Board tensions at Hinge Health, a San Francisco-based digital health unicorn, have caused Bessemer Venture Partners to switch up its board director seat, replacing the original investor at the chair with a different one. Hinge Health co-founder and CEO Daniel Perez says BVP’s original board seat went to the partner who led the his company’s Series C round. The investor was recused from the board because they did not notify Perez of a new investment that the founder sees as competitive with Hinge — New York-based Clearing.

The scenario alarmed Perez, who has requested that the investor go unnamed, given the confidential information to which his board of directors is privy.

“You don’t develop a great reputation with entrepreneurs if you invest in competitive situations, particularly without giving them a heads up.” Adds Perez, “Some investors have a strong moral compass, some do not.” The partner that left Hinge Health’s board has not taken a board seat at Clearing.

A spokesperson from Bessemer declined to comment on the event because the firm does not “publicly discuss the mechanics of private Board dynamics.”

There hasn’t been a complete break between Bessemer and Hinge Health, a now six-year-old company that was valued at $3 billion during its last round of funding in January. Initially describing the situation as a firing, Perez said that the company “separated ways” with the original partner. Elliott Robinson, a growth equity partner with Bessemer, was moved from board observer to board director at Hinge Health. The switch enables Bessemer to maintain visibility into its investment, while at the same time, letting Hinge Health make a statement to the firm and future investors about how it views transparency.

The tiff points to the increasingly nuanced tension around competition between startups, as deal velocity and volume reach all-time highs. While founders expect certain standards of conduct from investors, including that they notify them of investments in directly competitive startups, investors may be feeling more pressure to make faster decisions that clash with the founders they’ve already backed, while having different definitions of competition from their portfolios.

Defining competition

Hinge Health is a digital health startup in the musculoskeletal (MSK) space that sells its care to insurers, self-insured employers and health plans. Clearing, meanwhile, brands itself as a solution to chronic pain, which is a symptom of underlying MSK conditions. The latter is going direct-to-consumer with its service, ignoring insurance carriers altogether. The venn diagram of the two companies thus overlaps vaguely, but looks different both from a product and go to market strategy.

Certainly, Clearing CEO Avi Dorfman, previously the co-founder of Compass, does not consider the two direct competitors. Asked by TechCrunch about potential overlap for a recent piece on personalized healthcare in TechCrunch, Dorfman pointed to Bessemer’s stake in both companies as evidence that the two are taking very different tacks and targeting different end customers.

Of course, early-stage companies can evolve quickly, and even if the two aren’t competing squarely today, Hinge and Clearing have enough in common — Clearing is “competitively spirited,” says Perez — that Perez was surprised that Bessemer wouldn’t at least broach the conversation about Clearing with him.

“I think the best practice is that the investor asks the existing company how they feel about the conflict, and if they think it’ll be competitive,” says Perez via email. “Baseline, you always have to have a conversation. I’ve had 3-4 of those conversations with investors, and we understand the parameters, is there meaningful conflict, and how to ensure confidential information isn’t shared.”

No doubt plenty of founders might agree. To protect themselves, venture firms never include language in the term sheets that promises they’ll never invest in competing companies, but there has traditionally been a tacit understanding between founders and the investors who back them that the investor will avoid backing a similar company at all costs.

Andreessen Horowitz somewhat famously missed out on owning more of Instagram after also investing in a company that later veered into Instagram’s business and deciding that it needed to pick one or the other. As Marc Andreessen told TechCrunch at the time, in 2010: “This kind of stuff happens all the time. Entrepreneurs are like heat-seeking-missiles; they gravitate towards good opportunities . . . It’s less of a choice against Kevin [Systrom] and Instagram as it was we were just very excited about working with Dalton [Caldwell],” who co-founded the now-defunct Instagram rival and is today a partner with Y Combinator.

More recently, Sequoia gave away its $21 million stake in a payments company, Finix, after resolving that its early-stage investment in the company competed too directly with Stripe, among its most valuable portfolio companies.

As more and more deals get funded and faster, the possibility for competitive overlap is growing – along with the scenarios that can be considered conflicting in the first place. What happens when a startup pivots into a different market than the one that it sold its investors on, and is suddenly competitive with a portfolio company? Can a Sequoia India partner back a company that is directly competing with a Sequoia India company? Is it okay for there to be competing investments within the same firm as long as different partners are sitting on the board? While founders may deserve transparency, there has to be some sort of reasonable boundaries on what they consider competitive, as well as an understanding that not all firms make promises to avoid conflicts.

Legitimizing unspoken rules

Tania Shah, a startup lawyer and the founder of The Know Legal, often works with founders who are raising seed rounds and has to educate them on the “unspoken rule” of obligations around confidentiality and loyalty. Essentially, she explains the obligations of a passive investor versus a board member who has more access to confidential information along with voting power. Part of what she teaches is that VCs tend not to sign NDAs — even while she pushes her clients to ask for these — so founders need to be as certain as possible that they are taking money from the right sources.

“I think the role of attorneys right now is also to be teachers,” says Shah.

In the meantime, there is no shortage of horror stories. Nabeel Alamgir, CEO and founder of Lunchbox, for example, struggled to raise his first institutional check for his restaurant tech startup. He eventually found an investor who had connections to restaurants in New York City who Alamgir wanted to land, so Alamgir shared everything about Lunchbox, from its financials to its product integration road map and go-to-market strategy. The investor eventually ghosted Alamgir. Within four months, claims Alamgir, that same investor’s portfolio company launched a product that directly mimicked Lunchbox.

In February, a similar situation appeared to play out when insurtech company Sure claimed that venture firm IA Capital Group, its Series A investor, had used privileged information to launch a similar company called Boost. (IA Capital told TC at the time that the firm didn’t realize there was a potential conflict until Boost was “already well underway.” Sure has since filed a related lawsuit against Boost.)

Hinge Health’s Perez say that this conversation around competing interests and conflict has grown in the past year in his conversations with investors. After all, VCs have  ballooning funds to invest and  LP expectations to meet – and it may become impractical at some point for these same investors to fully back away from compelling bets in booming industries.

“I’ve gone through a bunch of business cycles, and so I’m seeing this business cycle where there’s a lot of deal flow,” Perez said. In his case, “We’re not going to carve out a whole field of medicine and say that you can’t play at all in this field,” But at minimum, he says, VCs and their founders have to communicate as clearly as possible about what’s happening out there right now. Says Perez, “You have to have a conversation.”

Microsoft’s customer security chief says as many as one-third of all government demands that the company receives for customer data are issued with secrecy clauses that prevents it from disclosing the search to the subject of the warrant.

The figure was disclosed in testimony by Microsoft’s Tom Burt ahead of a House Judiciary Committee on Wednesday, as lawmakers weigh a legislative response to efforts by the Justice Department under the Trump administration to secretly obtain call and email records as part of an investigation into the leaks of classified information to reporters at The New York Times, The Washington Post, and CNN.

Burt said that such secrecy orders “have unfortunately become commonplace,” and that Microsoft regularly receives “boilerplate secrecy orders unsupported by any meaningful legal or factual analysis.”

In his testimony, Burt said that since 2016 Microsoft received between 2,400 to 3,500 secrecy orders each year, or 7-10 a day. Microsoft said in its transparency report that it received close to 11,200 legal orders from U.S. authorities last year.

By comparison, the U.S. courts approved 2,395 warrants with secrecy clauses a decade ago in 2010, which Burt said is fewer than the number of secrecy orders Microsoft alone received in any of the past five years.

“These are just the demands that Microsoft, just one cloud service provider, received. Multiply those numbers by every technology company that holds or processes data, and you may get a sense of the scope of the government’s overuse of secret surveillance,” Burt’s testimony says. “We are not suggesting that secrecy orders should only be obtained through some impossible standard. We simply ask that it be a meaningful one.”

Much of the controversy over secrecy orders came of late when secrecy orders served on Apple, Google, and Microsoft expired in recent weeks, allowing the companies to disclose to the news agencies that the Justice Department under the Trump administration had sought to obtain their records by demanding the data from the tech companies that host the data.

President Biden pledged to stop the collection of journalists’ phone and email records, while also dropping some secrecy provisions. But lawmakers are likely to note that legislative change would be needed to codify policy into law.

Microsoft’s Burt said the company will “do everything it can to prevent the misuse of secrecy orders.” The software and cloud giant also sued the Justice Department in 2016 to challenge the constitutionality of gag orders.

No, it’s not April Fool’s Day. But Twitter’s entire account has been taken over by NFTs. As its new header reads: “I’ve stopped moisturizing because tweeting about NFTs is keeping me young now.”

If that’s true, the Twitter bird is going to look like a little baby duckling by the end of the day. This morning, Twitter posted, “140 free NFTs for 140 of you, besties,” nodding to Twitter’s initial 140 character limit.

In retrospect, we should’ve expected this after Twitter co-founder and CEO Jack Dorsey sold his first tweet as an NFT earlier this year through a website called Valuables by Cent, which is unaffiliated with Twitter, yet gives people the option to mint and sell NFTs of tweets. Even Mark Cuban, who has been investing in the NFT space, sold a tweet on Valuables for 0.56 ETH, or $953 at the time. Dorsey’s NFT sold for 1630 ETH, which was worth about $2.9 million at the time of sale. He donated the proceeds to GiveDirectly to aid the COVID-19 response in Africa, but NFTs are still often criticized for their negative environmental impact — others worry that the NFT market could just be a flash in the pan. But with major platforms like Twitter making NFTs, the fad might not be over just yet — or, Twitter could be testing the waters to gauge how its userbase reacts to an impromptu, free NFT drop before expanding its offerings in the space.

Image Credits: Twitter

The catch with today’s Twitter NFT drop is that nobody can buy them — Twitter users can reply to the tweet for the chance to get one of 7 NFTs, which were minted on Rarible, an NFT marketplace, in editions of 20, which makes 140 NFTs total.

According to Twitter, there have been over 29 million tweets on the platform about NFTs. What’s next for NFTs on Twitter? We’re not sure. But with Twitter’s rapid development of new features like Spaces, Super Follows, Twitter Blue, and more, it’s possible that this won’t be the last we hear about Twitter’s foray into crypto-powered collectibles.