Author: azeeadmin

Well, it was only a matter of time.

Advertising giant Facebook announced Wednesday that they’re going to begin testing advertising inside virtual reality titles on its Oculus platform soon. The first roll-out is limited enough, with Facebook testing ads inside a single gaming shooter title: Blaston from Resolution Games. They are interestingly not rolling this out with a first-party title, though I’m sure integration with Oculus Studio titles is inevitable.

“For now, this is a test with a few apps—once we see how this test goes and incorporate feedback from developers and the community, we’ll provide more details on when ads may become more broadly available across the Oculus Platform and in the Oculus mobile app,” a company blog post reads.

Users will be able to mute, hide or see information on why they are being served an ad in its current form.

It’s an unsurprising development for a platform that Facebook has long been bankrolling with little regard for current revenues, nevertheless Facebook liekly realizes that there are going to be plenty of privacy questions and addressed some of them head-on. The biggest admission is that Facebook says they will not be using any data stored locally on the Oculus headset, including images from the device’s cameras to target ads. They also say, somewhat less emphatically, that “have no plans to use movement data to target ads.”

Facebook is likely realizing that they probably should’ve published a blog post years ago declaring that they were indeed not using smartphone microphones to monitor conversations and target ads (mainly because they have access to better personal information via adtech data partners anyway, but I digress) before those narratives took off. Facebook specifically notes they don’t use audio conversations on the headset for ad targeting.

Virtual reality has been a labor of future-minded thinking for Facebook since the beginning, they’ve spent billions bankrolling the ecosystem and this move seems to signal that they believe they’ve wandered over some sort of adoption hump and are nearing the time to start more aggressively monetizing.

Growth leaders used to build key relationships across a company while working together in a real-life office. Those relationships could carry over through the pandemic, but let’s say you’re a new company and you’re remote-first.

How do you build this complex collaboration from scratch?

Growth marketer and investor Susan Su tells us that the solution is not just more software tools. In the interview below, she says that after the pandemic, startup founders will need to develop a mentality that places growth at the center of company strategy.

Consultants and agencies can be great additions to this effort, especially if they have previously solved the types of problems you face. (In fact, TechCrunch is asking founders who have worked with growth marketers to share a recommendation in this survey. We’ll use your answers to find more experts to interview.)

Su is currently the head of portfolio strategy for Sound Ventures, previously a growth leader at Stripe and the first hire at Reforge. She also shared a few thoughts on market opportunities after the pandemic in the full interview below. E-commerce is mainstream for good, she says, even as we all try to step away from screens more often. However, many social and mobile sectors are mature, and it’s going to be even harder for startups to compete as real-world activities absorb more time.

Don’t forget: Susan Su will also appear at our Early Stage virtual event on July 8 (and answer questions directly).

How are you seeing startups manage changes in user engagement as more people exit pandemic lockdowns and adjust their daily lives?

As we exit the pandemic, I expect that we’ll see a natural and obvious spike in some consumer activity that will roll up to midsized businesses and enterprises. Just like with the onset of the pandemic, we’ll see uneven results across sectors:

E-commerce boomed during the pandemic but was really an augmentation of an already-accelerating trend towards digital commerce and streamlined logistics. I don’t think we backtrack from e-commerce because habit formation around online shopping has been building for years; we would be backtracking to an age long before 2020, and that’s not going to happen.

New social-mobile experiences also boomed during the pandemic, but there’s still a valid question around whether 15 months or so is enough time to become part of the ingrained infrastructure of daily life. We are living in an age of mature platforms, so every new service is stealing time away from an existing service. As with pre-pandemic growth, their success rests upon fast-accumulating network effects and great, sticky core product experience. Now that we have parks, friends and dinners out calling to us again, it’s a real test of how compelling some of these new value propositions really are, and whether they can continue to demonstrate their relevance in a more hybridized online-offline world.

That said, the pandemic was an enormous constraint on human society and [the] economy, and these kinds of constraints often breed innovation that doesn’t go away. We will evolve, but we can never go back. It sounds cheesy but it’s true.

Some aspects of the pandemic, like remote work, appear to have radically changed certain industries. How will these societal changes impact how the typical startup thinks about growth?

Growth will always be growth — that is, a process of iterative experimentation to identify and solve customer problems, and then scale those solutions in order to reach and convert bigger and bigger audiences. Platform changes like iOS 14 or Facebook’s periodic algorithm adjustments will have a bigger impact in the near term on the technical functioning of growth, and these aren’t specifically pandemic-related.

One area to watch is how growth teams are built and operated. Growth is a horizontal function that touches many different parts of the org, including product, engineering, marketing, comms and design. Many startup teams have already been working with collaboration tools even while they sat in the same office, but growth is about more than just using tools. The most effective growth leaders succeed by building relationships across the organization; it’s like the fable of Stone Soup — you’re creating this meal that will feed everyone, but you also need each person to bring a pinch of salt, or a dash of pepper, or one carrot, and that requires socialization and relationship-building. I’ll be very interested to see how new growth leaders onboard remote-only teams and what approaches they take to this “networking” need within the function.

From the days of growth hacking on social platforms, growth marketing is now an established part of the world. But it’s not necessarily the main expertise of a startup founder, even if it needs to be. So, how should they think about addressing growth marketing in 2021? What are the essentials they should do in their roles?

Every founder needs to have a growth mentality. They don’t need to memorize all the right buttons to push in an ads dashboard, but they need to be familiar and comfortable with the core work of gap-finding. That said, founders are by definition entrepreneurial — their company exists because they saw an opportunity that no one else did, and this is the fundamental work of growth as well.

Founders will fail if they adopt a mentality that someone else can or should do it for them. The founder’s job is to supply ambition and opinions, and then magnetize high-quality talent to come and pull the levers and bring their creative vision to life. There are many people who can do growth marketing — that is, they know how the platforms work, they understand the rules and the playbooks. But there are very few who can come up with truly visionary strategies that change the game altogether — those people become founders, and those companies become household names. So for a founder, I’d say the most important growth work is to continue to know your market and customer better than anyone else in the whole world, have an opinion about what’s missing, and work to bring the best talent to come in alongside you and be a thought partner, not just a button pusher.

With limited resources, how should early-stage companies think about what to focus on?

This is going to depend on the goals of your company. Are you planning to raise money and need to demonstrate certain KPIs? Are you bootstrapping and need to keep the lights on? Resources should always be allocated to the most strategic purposes, with the longest-term view you can afford. For some companies, this could mean forgoing revenue to focus on viral or word-of-mouth-driven user acquisition to demonstrate to future investors that there’s something special here. For other companies, perhaps in lower volume categories like enterprise, it’s about bringing a few strategic logos into the family as a signal to later customers and other stakeholders, including future employees and investors.

One thing that early-stage companies should always be focused on is building a top-shelf employer brand. You will only ever be as good as the talent you attract to your company, and interestingly growth can actually play a role in this. The best designers, engineers and product people are often flowing towards the companies that have the best growth. In that way, it’s a highly strategic role and function.

What do startups continue to get wrong?

You can’t truly outsource growth or any other core function; you can’t tack on customer acquisition after product development. At the end of the day, if you really think about it, all a company is, is a customer-acquisition engine. This needs to be core; wake up every day and think about growth, not just to hit revenue or user KPIs, but to build the company that the best people are clamoring to work at. It’s not about finding someone sufficient to solve your near-term problems; it’s about framing problems in a way that’s so compelling to the most creative, hardest working people so that they can’t get it out of their heads. Go for talent moonshots, and figure out how to close them. The rest will fall in line from there.

When should a founder feel comfortable getting help from an outside expert or agency?

Anytime. Agencies are great. They are an extension of your talent, and the best agencies aren’t selling you — they have to be sold on your problem because they have their pick of companies just like yours. That’s the agency or outside expert you want to work with, because they’ll have a priceless perspective from the other best-in-class founders and teams they’ve worked with that they can bring to your challenge. Any agency can run Facebook ads (it’s not rocket science), but you want to find the team that’s solved the gnarliest problems for your hero companies. Then you’ll get not just an ads manager, but a teacher.

Facebook today introduced a new set of tools aimed at helping Facebook Group administrators get a better handle on their online communities and, potentially, help keep conversations from going off the rails. Among the more interesting new tools is a machine learning-powered feature that alerts admins to potentially unhealthy conversations taking place in their group. Another lets the admin slow down the pace of a heated conversation, by limiting how often group members can post.

Facebook Groups are today are significant reason why people continue to use the social network. Today, there are “tens of millions” of groups, that are managed by over 70 million active admins and moderators worldwide, Facebook says.

The company for years has been working to roll out better tools for these group owners, who often get overwhelmed by the administrative responsibilities that come with running an online community at scale. As a result, many admins give up the job and leave groups to run somewhat unmanaged — thus allowing them to turn into breeding grounds for misinformation, spam and abuse.

Facebook last fall tried to address this problem by rolling out new group policies to crack down on groups without an active admin, among other things. Of course, the company’s preference would be to keep groups running and growing by making them easier to operate.

That’s where today’s new set of features come in.

A new dashboard called Admin Home will centralize admin tools, settings and features in one place, as well as present “pro tips” that suggest other helpful tools tailored to the group’s needs.

Image Credits: Facebook

Another new Admin Assist feature will allow admins to automatically moderate comments in their groups by setting up criteria that can restrict comments and posts more proactively, instead of forcing admins to go back after the fact and delete them, which can be problematic — especially after a discussion has been underway and members are invested in the conversation.

For example, admins can now restrict people from posting if they haven’t had a Facebook account for very long or if they had recently violated the group’s rules. Admins can also automatically decline posts that contain specific promotional content (perhaps MLM links! Hooray!) and then share feedback with the author of the post automatically about why those posts aren’t allowed.

Admins can also take advantage of suggested preset criteria from Facebook to help with limiting spam and managing conflict.

Image Credits: Facebook

One notable update is a new moderation alert type dubbed “conflict alerts.” This feature, currently in testing, will notify admins when a potentially contentious or unhealthy conversation is taking place in the group, Facebook says. This would allow an admin to quickly take an action — like turning off comments, limiting who could comment, removing a post, or however else they would want to approach the situation.

Conflict alerts are powered by machine learning, Facebook explains. Its machine learning model looks at multiple signals, including reply time and comment volume to determine if engagement between users has or might lead to negative interactions, the company says.

This is sort of like an automated expansion on the Keyword Alerts feature many admins already use to look for certain topics that lead to contentious conversations.

Image Credits: Facebook

A related feature, also new, would allow admins to also limit how often specific members could comment, or how often comments could be added to posts admins select.

When enabled, members can leave 1 comment every 5 minutes. The idea here is that forcing users to pause and consider their words amid a heated debate could lead to more civilized conversations. We’ve seen this concept enacted on other social networks, as well — such as with Twitter’s nudges to read articles before retweeting, or those that flag potentially harmful replies, giving you a chance to re-edit your post.

Image Credits: Facebook

Facebook, however, has largely embraced engagement on its platform, even when it’s not leading to positive interactions or experiences. Though small, this particular feature is an admission that building a healthy online community means sometimes people shouldn’t be able to immediately react and comment with whatever thought first popped into their head.

Additionally, Facebook is testing tools that allow admins to temporarily limit activity from certain group members.

If used, admins will be able to determine how many posts (between 1 and 9 posts) per day a given member may share, and for how long that limit should be in effect for (every 12 hours, 24 hours, 3 days, 7 days, 14 days, or 28 days). Admins will also be able to determine how many comments (between 1 and 30 comments, in 5 comment increments) per hour a given member may share, and for how long that limit should be in effect (also every 12 hours, 24 hours, 3 days, 7 days, 14 days, or 28 days).

Along these same lines of building healthier communities, a new member summary feature will give admins an overview of each member’s activity on their group, allowing them to see how many times they’ve posted and commented, have had posts removed, or have been muted.

Image Credits: Facebook

Facebook doesn’t say how admins are to use this new tool, but one could imagine admins taking advantage of the detailed summary to do the occasional cleanup of their member base by removing bad actors who continually disrupt discussions. They could also use it to locate and elevate regulator contributors without violations to moderator roles, perhaps.

Admins will also be able to tag their group rules in comment sections, disallow certain post types (e.g. Polls or Events), and submit an appeal to Facebook to re-review decisions related to group violations, if in error.

Image Credits: Facebook

Of particular interest, though a bit buried amid the slew of other news, is the return of Chats, which was previously announced.

Facebook had abruptly removed Chat functionality back in 2019, possibly due to spam, some had speculated. (Facebook said it was product infrastructure.) As before, Chats can have up to 250 people, including active members and those who opted into notifications from the chats. Once this limit is reached, other members will not be able to engage with that specific chat room until existing active participants either leave the chat or opt out of notifications.

Now, Facebook group members can start, find and engage in Chats with others within Facebook Groups instead of using Messenger. Admins and moderators can also have their own chats.

Notably, this change follows on the heels of growth from messaging-based social networks, like IRL, a new unicorn (due to its $1.17B valuation), as well as the growth seen by other messaging apps, like Telegram, Signal and other alternative social networks.

Image Credits: Facebook

Along with this large set of new features, Facebook also made changes to some existing features, based on feedback from admins.

It’s now testing pinned comments and introduced a new “admin announcement” post type that notifies group members of the important news (if notifications are being received for that group).

Plus, admins will be able to share feedback when they decline group members.

Image Credits: Facebook

The changes are rolling out across Facebook Groups globally in the coming weeks.

Few people are more closely tapped into the innovations in the transportation space than investors. They’re paying close attention to what startups and tech companies are doing to develop and commercialize autonomous vehicle technology, electrification, micromobility, robotics and so much more.

Clara Brenner, co-founder and managing partner of Urban Innovation Fund; Quin Garcia, the managing director of AutoTech Ventures; and Rachel Holt, co-founder and general partner of Construct Capital talked (and debated) about how the pandemic affected the venture world and deal flow; why AutoTech Ventures was hesitant to invest in micromobility; on how to incentivize micromobility; and, of course, their take on the rise of mergers with special purpose acquisition companies as a route to going public. They also shared their thoughts on the most overlooked opportunities they are interested in within the transportation space.

How the COVID-19 pandemic shaped VC

The COVID-19 pandemic turned the world upside down, and VC was no exception. Holt and Garcia explained some of the effects they saw on startups — both new and existing — over the past year.

Holt: There was enough dislocation in transportation, and in some other areas, that happened through COVID, that it’s just the time when, whether it’s buyers or cities or others are just evaluating what the new world order should look like. And I think that just creates a lot of opportunity. … When you have a shock to the system like COVID, it creates just an opportunity for everyone, whether it’s inside companies, whether it’s founders, or whether it’s cities and governments and other entities to take a step back and say, OK, what do we want the next five years to look like? (Timestamp: 4:18, 4:55)

Google announced today it’s updating and expanding its digital safety and citizenship curriculum called Be Internet Awesome, which is aimed at helping school-aged children learn to navigate the internet responsibly. First introduced four years ago, the curriculum now reaches 30 countries and millions of kids, says Google. In the update rolling out today, Google has added nearly a dozen more lessons for parents and educators that tackle areas like online gaming, search engines, video consumption, online empathy, cyberbullying and more.

The company says it had commissioned the University of New Hampshire’s Crimes Against Children Research Center to evaluate its existing program, which had last received a significant update back in 2019, when it added lessons that focused on teaching kids to spot disinformation and fake news.

The review found that program did help children in areas like dealing with cyberbullying, online civility and website safety, but recommended improvements in other areas.

Google then partnered with online safety experts like Committee for Children and The Net Safety Collaborative to revise its teaching materials. As a result, it now has lessons tailored to specific age groups and grade levels, and has expanded its array of subjects and set of family resources.

The new lessons include guidance around online gaming, search engines and video consumption, as well as social-emotional learning lessons aimed at helping students address cyberbullying and online harassment.

For example, some of the new lessons discuss search media literacy — meaning, learning how to use search engines like Google’s and evaluating the links and results it returns, as a part of an update to the program’s existing media literacy materials.

Other lessons address issues like practicing empathy online, showing kindness, as well as what to do when you see something upsetting or inappropriate, including cyberbullying.

Concepts related to online gaming are weaved into the new lessons, too, as, today, kids have a lot of their social interactions in online games which often feature ways to interact with other players in real-time and chat.

Here, kids are presented with ideas related to being able to verify an online gamer’s identity — are they really another kid, for example?  The materials also explain what sort of private information should not be shared with people online.

Image Credits: Google

Among the new family resources, the updated curriculum now points parents to the recently launched online hub, families.google, which offers a number of tips and information about tools to help families manage their tech usage.

For example, Google updated its Family Link app that lets parents set controls around what apps can be used and when, and view activity reports on screen time usage. It also rolled out parental control features on YouTube earlier this year, aimed at families with tweens and teens who are too old for a YouTube Kids account, but still too young for an entirely unsupervised experience.

Google says the updated curriculum is available today to parents, families, teachers and educators, via the Be Internet Awesome website.

Multiple suspects believed to be linked to the Clop ransomware gang have been detained in Ukraine after a joint operation from law enforcement agencies in Ukraine, South Korea, and the United States.

The Cyber Police Department of the National Police of Ukraine confirmed that six arrests were made after searches at 21 residences in  the capital Kyiv and nearby regions. While it’s unclear whether the defendants are affiliates or core developers of the ransomware operation, they are accused of running a “double extortion” scheme, in which victims who refuse to pay the ransom are threatened with the leak of data stolen from their networks prior to their files being encrypted.

“It was established that six defendants carried out attacks of malicious software such as ‘ransomware’ on the servers of American and [South] Korean companies,” alleged Ukraine’s national police force in a statement.

The police also seized equipment from the alleged Clop ransomware gang,  said to behind total financial damages of about $500 million. This includes computer equipment, several cars — including a Tesla and Mercedes, and 5 million Ukrainian Hryvnia (around $185,000) in cash. The authorities also claim to have successfully shut down the server infrastructure used by the gang members to launch previous attacks.

“Together, law enforcement has managed to shut down the infrastructure from which the virus spreads and block channels for legalizing criminally acquired cryptocurrencies,” the statement added.

These attacks first began in February 2019, when the group attacked four Korean companies and encrypted 810 internal services and personal computers. Since, Clop — often styled as “Cl0p” — has been linked to a number of high-profile ransomware attacks. These include the breach of U.S. pharmaceutical giant ExecuPharm in April 2020 and the attack on South Korean e-commerce giant E-Land in November that forced the retailer to close almost half of its stores.

Clop is also linked to the ransomware attack and data breach at Accellion, which saw hackers exploit flaws in the IT provider’s File Transfer Appliance (FTA) software to steal data from dozens of its customers. Victims of this breach include Singaporean telecom Singtel, law firm Jones Day, grocery store chain Kroger, and cybersecurity firm Qualys.

At the time of writing, the dark web portal that Clop uses to share stolen data is still up and running, although it hasn’t been updated for several weeks. However, law enforcement typically replaces the targets’ website with their own logo in the event of a successful takedown, which suggests that members of the gang could still be active.

“The Cl0p operation has been used to disrupt and extort organizations globally in a variety of sectors including telecommunications, pharmaceuticals, oil and gas, aerospace, and technology,” said John Hultquist, vice president of analysis at Mandiant’s threat intelligence unit. “The actor FIN11 has been strongly associated with this operation, which has included both ransomware and extortion, but it is unclear if the arrests included FIN11 actors or others who may also be associated with the operation.”

Hultquist said the efforts of the Ukrainian police “are a reminder that the country is a strong partner for the U.S. in the fight against cybercrime and authorities there are making the effort to deny criminals a safe harbor.”

The alleged perpetrators face up to eight years in prison on charges of unauthorized interference in the work of computers, automated systems, computer networks, or telecommunications networks and laundering property obtained by criminal means.

News of the arrests comes as international law enforcement turns up the heat on ransomware gangs. Last week, the U.S. Department of Justice announced that it had seized most of the ransom paid to members of DarkSide by Colonial Pipeline.

Diversity, equity and inclusion (DEI) initiatives are often thought to be an issue that can be solved by intuition by some segment of the HR team. However, in reality, it needs to come from a data-driven approach that encompasses the entire workforce.

The primary aspect that companies usually look to, in terms of treating employees fairly, is remuneration. However, having the conversation and agreeing on the need for equality doesn’t mean it will be achieved on an organizational scale.

In a recent survey from Mercer that included data from more than 1,000 companies in 54 countries, 81% agreed that it was important to have a plan for advancing gender equality, but just 42% actually had one in place. This points toward a tokenism attitude indicating companies are happy to talk around the issue without addressing it directly.

Despite the fact that women make up roughly half of all college-educated workers in the United States, they are underrepresented in positions of power — just 8% of Fortune 500 companies are led by women, and, incredibly, just 1% by women of color. Furthermore, the last U.S. census revealed that women who are employed full time are paid on average 17% less than men.

While there have been steps to ensure equal pay, such as Canada’s Pay Equity Act, which states that men and women in the public sector should be paid equally, it does not cover the private sector. Given that the Institute for Women’s Policy Research estimates that equal pay will not be reached until 2059, there is still plenty of work to be done.

Particular attention should be paid to addressing inequities in the areas of attracting and hiring candidates, integration, performance assessment, compensation and promotion. Companies need to think about initiatives that are supported by objective tools to drive progress, identify problems and strategize solutions. This is where data can be a great tool to provide insight into DEI: by highlighting shortcomings and areas where there is bias.

Start with data collection

The first step is to create a data set so that tangible metrics can be utilized and turned into actionable decisions. To do this, diversity and inclusion officers need to be given the opportunity to weed out bias.

Obviously, the data would drive decisions on areas such as compensation. But far too often, director-level discussions don’t involve the talent acquisition team. To eradicate the pay gap and ensure compensation is equalized on individual merit, this needs to change. Line managers and talent acquisition teams have the best knowledge of their staff and are well placed to procure the right information to help senior managers make equitable decisions.

General Motors Co. has yet again upped the amount it says it will spend on electric and autonomous vehicle investments, saying Wednesday that it would spend $35 billion through 2025 – an $8 billion increase from its previous plan announced in November 2020.

The company has set a target to bring 30 new EVs to the global market 30 by 2025 and to transition to all-zero-emission by 2035. With the new investment, GM said it will add new electric commercial trucks to its North American plan, as well as build additional U.S. assembly capacity for electric SUVs.

Beyond building out a large portfolio of new electric models, the automaker has taken a multi-pronged approach in its quest to lead the EV revolution: it is also investing in two new battery cell plants under its joint venture with LG Chem, dubbed Ultium Cells LLC; and it’s poured funding into Cruise, its autonomous driving arm that it purchased for majority-ownership in 2016.

The news was announced one day after Cruise said it had tapped a $5 billion line of credit from the OEM’s financial arm as it prepares for commercialization of its Origin electric and autonomous vehicle. Commercial production of the Origin is anticipated to begin in 2023.

GM also manufactures hydrogen fuel cells under its HYDROTEC joint initiative with Honda. It confirmed Wednesday that it will launch the third-generation HYDROTEC cells by mid-decade. The automaker has partnership agreements with heavy truck developer Navistar and Liebherr-Aerospace, which is developing hydrogen fuel cell power systems for aircraft.

The company also said yesterday it would supply fuel cells and EV batteries to Wabtec Corportation, a Pittsburgh-based company developing the world’s first battery locomotive.

“GM is targeting annual global EV sales of more than 1 million by 2025, and we are increasing our investment to scale faster because we see momentum building in the United States for electrification, along with customer demand for our product portfolio,” CEO Mary Barra said in a statement Wednesday.

Ford announced a similar increase in EV investment last month, when it said it would invest $30 billion by 2025, up from $22 billion by 2023.

HBCUvc, a non-profit organization that wants to diversify the world of venture by rooting itself in historically Black colleges and universities, nearly shut down last year. Founder Hadiyah Mujhid met with her team, an entirely Black and Latinx staff, and warned them that they only had two months left before she would have to shut down the three-year operation.

One week after that conversation, George Floyd, a 46-year old Black man, was unjustly murdered by police in Minneapolis. His death prompted global Black Lives Matter protests and a nationwide reckoning with racism. In tech, it led to a rush of venture firms publicly pledging to back more Black founders, trying to make up for a history of inequality in allocation of dollars.

The wave of support resulted in HBCUvc landing its biggest one-day unsolicited donation that it ever saw, $40,000. In the year since, the non-profit was able to double its budget and team, and tripled its impact by launching programs in Baltimore, Alabama, and Chicago

And now, HBCUvc has raised a debut capital arm that will invest non-dilutive capital in Black, Indigenous, and Latinx early-stage entrepreneurs. The $1 million fund was raised from a group of philanthropic investors including the Mark Cuban Foundation, the John D. and Catherine T. MacArthur Foundation and Google for Startups.

“It’s a very weird feeling to know that all of this, and the impetus for all this was because off unjustly murder,” Mujhid says, about one year later. “It sounds cold, but [my advisors] say that sometimes it takes a tragedy to spark a shift in how we think and do things. And so [I’m] recognizing this as an extra opportunity to shift the industry.”

HBCUvc staff.

Teaching capital

The investment vehicle, dubbed the Venture Capital Lab Fund, is different from a traditional venture capital fund. Because it offers non-dilutive financing, HBCUvc does not take equity from a startup that it invests in. The checks aren’t donations either, Mujhid said, because the funding goes to for-profit entrepreneurs and the non-profit does not get a tax-write off for it.

Instead, Mujhid thinks the best way to describe the Venture Capital Lab Fund is “teaching capital.” Similar to how teaching hospitals give aspiring doctors a way to practice and learn their craft before formally entering the field, the fund wants to do that for aspiring investors.

The fund will give HBCUvcs some 230 venture fellows, all from underrepresented bbackgrounds, check-writing experience. Fellows are invited to identify an entrepreneur, write an investment memo, and submit to the HBCUvc investment committee, a board of partners as well as alumni community members.

“This is an opportunity to give as many of our fellows who go through our program, an opportunity to work to develop a track record right now,” she said.

While the fund has no specific number of checks that it plans to write, around half the capital will be allocated to founders who are tied to historically Black colleges and universities.

“Entrepreneurs that we see within our community are kind of eager to accept funding and sometimes they’re going into deals too early, and sometimes they’re taking funding and giving up equity way too soon,” Mujhid said. “This could be an opportunity to take funding, without giving away equity.”

The checks are meant to replace the “angel round” with an average size of $5,000 for student founders, and $10,000 for non-student founders.

A wave of new investment vehicles for Black, and underrepresented founders, has been growing in recent weeks. Google for Startups announced today that it is launching a $5 million Black Founders fund that will offer $100,000 in non-dilutive funding to 50 Black founders from within its program and community. Last week, Screendoor launched as a $50 million fund-of-funds to back underrepresented, emerging investors. And last month, Collab Capital closed its $50 million debut fund that will be invested solely in Black founders.

“There are a lot of organizations right now that are starting funds [with] the primary goal of supporting founders,” Mujhid said. “And that’s a goal of ours, but we’re hoping to have a ripple effect of training and really providing onramps for the next best in-class investors…and in order to do that, they have to have a training vehicle.”

One unexpected challenge to that progress, she says, is the return to in-person work as the pandemic fades away.

In-person is out 

“When we were working with partners pre-COVID, investors would say that [they] need someone who’s based in San Francisco,” she said. “And we’d say, good luck because most of our demographic isn’t really here.” In contrast, going online opened up programming for the non-profit because it removed geographic barriers. It recently onboarded its largest intern class to date: 45 interns working at 40 venture capital firms across America.

Now, as firms open back up, she’s worried about the recreation of geographic barriers, and if they will negatively affect opportunities for underrepresented folks who want to get experience in the industry. The non-profit has begun advocacy work on educating tech professionals on how racial barriers intertwine with geographic barriers. Part of HBCUvc’s push will be around asking companies to rethink their policies as they open up, specifically by holding true to their commitment of diversity.

Despite this, remote work came with its own equity issues. Funding for female founders dropped to 2017 levels as many check-writers turned to existent, largely male and white, networks while investing remotely. According to Crunchbase data, U.S companies raised nearly $150 billion in venture capital, and of that, only 1%, or $1 billion, of that total went to African-American or Black startup founders.

And the pledges that investors made? While HBCUvc was able to “shift the trajectory of its programming” thanks to an outpour of support, Mujhid thinks that a lot of the initial buzz around backing Black founders was “unfortunately, a knee jerk reaction.”

“I was seeing our name everywhere,” she said, describing the series of memos and tweets that firms began putting out to show their commitment to diversity. Half the mentions came from people that HBCUvc had never talked to before. “You are riding this tragedy out and you are trading on our name unethically,” she said. Some of the interest turned into partnerships, some of it didn’t.

As they built out new programs based on an increased budget, a concern of Mujhid’s, then and now, was what it looks like if people shift priorities, or fall off their commitments. But for now, she feels like they are riding a fortunate wave, one that has the potential to make Black founders and investors a sturdy part of tech’s dollars and deals.

Joining us on stage as a judge for TechCrunch Disrupt 2021‘s Startup Battlefield will be Yasmin Razavi, general partner at Spark Capital. Her engineering background and fintech chops should make for incisive questions for the founders presenting.

Razavi invests in growth-stage enterprise, fintech and developer companies, but her background is until fairly recently an engineering-focused one. She grew up in Tehran, studied engineering at the University of Toronto and got her MBA at Harvard Business School.

A stint at McKinsey eventually led to being a product manager at Snap, where she built the tech behind the app’s monetization stack. In 2017 she joined Spark, and since then has led investments in Marqueta, Deel, Rapyd, Niantic, Capitolis and Earnin.

We recently had Razavi at Disrupt as a panelist, and of course if you’re an Extra Crunch subscriber you can watch the whole thing here.

“Ultimately anyone who wants to be a shareholder or investor in your business wants to understand the unit economics of your business,” she said during the  panel. “For me, there’s all sorts of fancy metrics being thrown around; ultimately they all come down to what is the unit economics, and what is the payback I can expect when I invest in growth?”

Razavi’s philosophy is go to market and out-execute the competition, then capitalize on that success. Why anyone would want to do the opposite is hard to say, but the point is to move quickly and decisively as early as possible so that making money later is a natural consequence rather than a scramble.

Catch her on the Disrupt stage and grab your ticket to Disrupt 2021 now!