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Geothermal home heating gets a $30 million boost from Bill Gates’ Breakthrough Energy Ventures

Published February 17, 2021

There’s a low-energy solution to home heating and cooling sitting right underneath most houses, but until recently no one has been able to tap it.

That solution is geothermal energy, using the earth’s own heat to provide temperature-controlled comfort to homeowners is the mission that Kathy Hannun set for herself while working at Google X (the skunkworks division within Google) and it’s been her goal when she spun out her technology as the startup Dandelion Energy.

Her company is now helmed by chief executive Michael Sachse, a former entrepreneur in residence at the venture firm NEA and a longtime executive at the energy management company, Opower, so Hannun can focus on pushing forward the technology she developed.

Helping her advance the geothermal tech is a new $30 million cash infusion from Breakthrough Energy Ventures, the fund backed by Bill Gates and a slew of other billionaires to provide financing that can commercialize the new sustainable technologies needed to help the world respond and adapt to global warming.

In Dandelion’s case that means driving down the cost of installing geothermal systems from over $50,000 to roughly $18,000 to $20,000. The company partnered with Con Edison back in 2019 to offer Westchester homeowners $5,000 off their installations, and that project accounts for some of the 500 homes that are already using Dandelion’s system.

While the number of installations is small, Sachse and Hannun have ambitious goals, as well as some other strategic financial backers that may help them meet their targets.

Chiefly, the U.S. homebuilding giant Lennar is an investor in the company’s latest round and their presence on the cap table could mean big things if Dandelion can get its systems installed in any planned new construction.

“Our goal is to be able to do 10,000 homes per year. When we think about getting to 10,000 homes per year what that requires is for us to expand geographically,” Sachse said. “Lennar, which depending on how you measure it is either the second-largest or the largest homebuilder — they are not just an investor but we are working with them on developing communities.”

For now Dandelion’s technology is only used by folks in very specific situations who could loosely be described as upper middle class.

“We think of our typical customer as someone who is interested in making a sound economic choice. They’re in their 40s or 50s, with a college degree and good credit,” Sachse said. “Living in a home that is 2,000 to 2,500 square feet that is by definition a little bit removed from the traditional urban infrastructure. Upper middle class product in the same way that solar has found traction in homes like that.” 

Currently, the company focuses on the retrofit market and is confining its operations to the Northeast, where there are roughly 5.6 million homes that use fuel oil or propane, where installing a Dandelion system can make economic sense given the current costs for the tech.

“The core target customer is someone who is using fuel oil or propane to heat their home. The reason to target them is because we think the payback for them is most attractive,” Sachse said. “Typically the customers who are investing in a Dandelion system and paying cash are going to see a five to seven-year payback. Customers who are financing are going to see a lower energy bill from day one.”

Dandelion’s innovations touch on three different aspects of making geothermal systems work: the drill, the heat exchanger and the monitoring and management system for the heating and cooling system once it’s installed.

First, the company designed a drill that could give installation operations a smaller footprint. Installers need about seven feet of space to drill down the 300 feet to 500 feet the company needs to access the 55 degree temperatures necessary to create the Dandelion heat loop.

The company then connects that loop to a novel heat exchanger located in a mechanical room of the house. That heat pump is connected to several sensors, allowing the company to integrate with things like the Nest Thermostat to enable homeowners to have more control of the temperature in their homes through their smart phones.

Dandelion Energy heating and cooling system. Image Credits: Dandelion Energy

Dandelion’s system also includes a smart remote monitoring system that collects and stores data. The data is then uploaded about every 10 seconds and is monitored by Dandelion engineers, the company said. This means any potential problems will be caught immediately and a repair man can be sent to the homeowner’s house before the customer is even aware there might be an issue. 

The company’s executives argue that massive adoption of their home heating and cooling systems represent a vital part of any energy transition away from fossil fuels, chiefly because electric heating systems are inefficient.

“If we had a grid that was large enough to support renewable supply electricity and not worry about the efficiency of the electricity demand, we’d be in an amazing spot,” Sachse said. “Realistically to electrify the grid we need to triple our capacity while becoming more efficient. I don’t see how we get there without as part of that journey finding more sustainable ways to heat our homes.”

Geothermal home heating would certainly go a long way toward stabilizing the grid, according to Hannun.

“Already air conditioners that are more efficient are putting enormous strain on the grid. Drives fuel use and transition challenges. The benefits of geothermal because of that connection to the ground is really moving out the demand peak,” she said. “The technology has a lot of benefits that it confers to the grid and help it operate much better. Which is one reason why we’ve seen utilities in New York embrace this technology and really become its champion.”

Breakthrough Energy Ventures is wholeheartedly on board with Dandelion’s solution.

“Through a combination of technology, data and operations, Dandelion is making geothermal heating and cooling cost-effective for the residential market, and working to solve a critical need for homeowners and our energy ecosystem,” said Carmichael Roberts of Breakthrough Energy Ventures in a statement. “Dandelion’s geothermal heat pumps provide an efficient electric heating and cooling system that lowers the cost of heating and cooling for homeowners, no matter their region or climate. We’re looking forward to working with Dandelion as they look to fully displace fossil fuels from the home’s heating and cooling systems.”

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Zolve raises $15 million for its cross-border neobank aimed at global citizens

Published February 16, 2021

Tens of thousands of students and professionals move out of India each year to pursue higher education and for work. Even after spending months in a new country, they struggle to get a credit card from local banks, and end up paying a premium to access a range of other financial services.

Banks in the U.S., or in most other countries for that matter, rely on local credit scores to determine the worthiness of potential applicants. Even if an individual had a great credit score in India, for instance, that wouldn’t hold any water for banks in a foreign land.

That was the takeaway Raghunandan G, the founder of ride-hailing firm TaxiForSure (sold to local giant Ola), returned to India with after a trip. After months of research and assembling a team, Raghunandan believes he has a solution.

On Wednesday, he announced Zolve, a neobanking platform for individuals moving from India to the U.S. (or the other way around).

The startup works with banks in the U.S. and India to provide consumers access to financial products seamlessly — without paying any premium or coughing up any security deposit.

In an interview with TechCrunch, Raghunandan said the startup underwrites the risks, which has enabled banks in foreign countries to extend their services to Zolve customers. “Consumers can open an account with us and access all banking services as if they are banking with their national bank,” he said.

As part of the announcement, Raghunandan said two-month-old Zolve has raised $15 million in a seed financing round led by Accel and Lightspeed. Blume Ventures and several high-profile angel investors, including Kunal Shah (founder of Cred), Ashish Gupta (formerly the MD of Helion), Greg Kidd (known for his investments in Twitter and Ripple), Rahul Mehta (managing partner at DST Global) and Rahul Kishore (senior managing director of Coatue Capital), also participated in the round. So did Founder Collective (which has backed Airtable and Uber), in what is its first investment in an Indian startup.

Founder Collective barrels forward, closing its fourth and newest fund with $85 million

“Individuals with financial identities in multiple geographies need seamless global financial solutions and we believe the team’s strong identification with the problem will enable them to deliver compelling and innovative financial experiences,” said Bejul Somaia, Lightspeed India Partners, in a statement.

Before starting Zolve, Raghunandan founded TaxiForSure, a ride-hailing firm, that he later sold to Ola for $200 million. Image Credits: Zolve

Raghunandan acknowledged that a handful of other startups are also attempting to solve this challenge, but he said other firms are not making use of a consumer’s credit history from their origin nation. “We are the only one who is looking at this problem in a completely different light. We are not trying to solve the problem at the destination country where consumers face the challenges. We are finding the solution in the home country itself, where the consumers already have a reputation and credit history,” he said.

Once a customer has access to a credit card and other financial services in the new nation, they can quickly broaden their local credit history, something that otherwise takes years, he said.

“The global citizen community is largely underserved in terms of access to financial services and we believe that there is a huge market opportunity for Zolve. Raghu has a proven track record as a founder and we are delighted to partner with him again, on his latest venture. The team’s passion and commitment are commendable and we are positive that Zolve will create tremendous value for this community,” said Anand Daniel, partner at Accel, in a statement.

Headquartered in San Francisco and Bangalore, Zolve offers a range of compelling features even for those who don’t plan to visit a foreign land. If you’re in India, for instance, you can use Zolve to buy shares of companies listed at U.S. exchanges. You can also buy bitcoin and other cryptocurrency from exchanges based in the U.S. or Europe, said Raghunandan.

The startup, which has already amassed more than 5,000 customers, has formed revenue-sharing arrangements with its banking partners. Raghunandan said since Zolve currently onboards customers in India and generates much of its revenue from banking partners in the U.S., it’s already operating on a profitable model.

India’s BharatPe valued at $900 million in new $108 million fundraise

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Krisp nearly triples fundraise with $9M expansion after blockbuster 2020

Published February 16, 2021

Krisp, a startup that uses machine learning to remove background noise from audio in real time, has raised $9M as an extension of its $5M A round announced last summer. The extra money followed big traction in 2020 for the Armenian company, which grew its customers and revenue by more than an order of magnitude.

TechCrunch first covered Krisp when it was just emerging from UC Berkeley’s Skydeck accelerator, and co-founder Davit Baghdasaryan was relatively freshly out of his previous role at Twilio. The company’s pitch when I chatted with them in the shared office back then was simple and remains the core of what they offer: isolation of the human voice from any background noise (including other voices) so that audio contains only the former.

It probably comes as no surprise, then, that the company appears to have benefited immensely from the shift to virtual meetings and other trends accelerated by the pandemic. To be specific, Baghdasaryan told me that 2020 brought the company a 20x increase in active users, a 23x increase in enterprise accounts and 13x improvement of annual recurring revenue.

The rise in virtual meetings — often in noisy places like, you know, homes — has led to significant uptake across multiple industries. Krisp now has more than 1,200 enterprise customers, Baghdasaryan said: banks, HR platforms, law firms, call centers — anyone who benefits from having a clear voice on the line (“I guess any company qualifies,” he added). Enterprise-oriented controls like provisioning and central administration have been added to make it easier to integrate.

Illustration of six people using a video chat app.

Image Credits: Krisp

B2B revenue recently eclipsed B2C; the latter was likely popularized by Krisp’s inclusion as an option in popular gaming (and increasingly beyond) chat app Discord, though of course users of a free app being given a bonus product for free aren’t always big converters to “pro” tiers of a product.

But the company hasn’t been standing still, either. While it began with a simple feature set (turning background noise on and off, basically) Krisp has made many upgrades to both its product and infrastructure.

Noise cancellation for high-fidelity voice channels makes the software useful for podcasters and streamers, and acoustic correction (removing room echos) simplifies those setups quite a bit as well. Considering the amount of people doing this and the fact that they’re often willing to pay, this could be a significant source of income.

The company plans to add cross-service call recording and analysis; since it sits between the system’s sound drivers and the application, Krisp can easily save the audio and other useful metadata (How often did person A talk versus person B? What office locations are noisiest?). And the addition of voice cancellation — other people’s voices, that is — could be a huge benefit for people who work, or anticipate returning to work, in crowded offices and call centers.

Part of Krisp’s allure is the ability to run locally and securely on many platforms with very low overhead. But companies with machine learning-based products can stagnate quickly if they don’t improve their infrastructure or build more efficient training flows — Lengoo, for instance, is taking on giants in the translation industry with better training as more or less its main advantage.

With AI translation service that rivals professionals, Lengoo attracts new $20M round

Krisp has been optimizing and reoptimizing its algorithms to run efficiently on both Intel and ARM architectures, and decided to roll out its own servers for training its models instead of renting from the usual suspects.

“AWS, Azure and Google Cloud turned out to be too expensive,” Baghdasaryan said. “We have invested in building a data center with Nvidia’s latest A100s in them. This will make our experimentation faster, which is crucial for ML companies.”

Baghdasaryan was also emphatic in his satisfaction with the team in Armenia, where he and his co-founder Arto Minasyan are from, and where the company has focused its hiring, including the 25-strong research team. “By the end of 2021 it will be a 45-member team, all in Armenia,” he said. “We are super happy with the math, physics and engineering talent pool there.”

The funding amounts to $14 million if you combine the two disparate parts of the A round, the latter of which was agreed to just three months after the first. That’s a lot of money, of course, but may seem relatively modest for a company with a thousand enterprise customers and revenue growing by more than 2,000% year over year.

Baghdasaryan said they just weren’t ready to take on a whole B round, with all that involves. They do plan a new fundraise later this year when they’ve reached $15 million ARR, a goal that seems perfectly reasonable given their current charts.

Of course startups with this kind of growth tend to get snapped up by larger concerns, but despite a few offers Baghdasaryan says he’s in it for the long haul — and a multibillion dollar market.

The rush to embrace the new virtual work economy may have spurred Krisp’s growth spurt, but it’s clear that neither the company nor the environment that let it thrive are going anywhere.

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Notable Health seeks to improve COVID-19 vaccine administration through intelligent automation

Published February 16, 2021

Efficient and cost-effective vaccine distribution remains one of the biggest challenges of 2021, so it’s no surprise that startup Notable Health wants to use their automation platform to help. Initially started to address the nearly $250 billion annual administrative costs in healthcare, Notable Health launched in 2017 to use automation to replace time-consuming and repetitive simple tasks in health industry admin. In early January of this year, they announced plans to use that technology as a way to help manage vaccine distribution.

“As a physician, I saw firsthand that with any patient encounter, there are 90 steps or touch points that need to occur,” said Notable Health Medical Director Muthu Alagappan in an interview. “It’s our hypothesis that the vast majority of those points can be automated.”

Notable Health’s core technology is a platform that uses robotic process automation (RPA), natural language processing (NLP) and machine learning to find eligible patients for the COVID-19 vaccine. Combined with data provided by hospital systems’ electronic health records, the platform helps those qualified to receive the vaccine set up appointments and guides them to other relevant educational resources.

“By leveraging intelligent automation to identify, outreach, educate and triage patients, health systems can develop efficient and equitable vaccine distribution workflows,” said Notable Health strategic advisor and Biden Transition COVID-19 Advisory Board Member Dr. Ezekiel Emanuel, in a press release.

Making vaccine appointments has been especially difficult for older Americans, many of whom have reportedly struggled with navigating scheduling websites. Alagappan sees that as a design problem. “Technology often gets a bad reputation, because it’s hampered by the many bad technology experiences that are out there,” he said.

Robotic process automation platform UiPath raises $750M at $35B valuation

Instead, he thinks Notable Health has kept the user in mind through a more simplified approach, asking users only for basic and easy-to-remember information through a text message link. “It’s that emphasis on user-centric design that I think has allowed us to still have really good engagement rates even with older populations,” he said.

While the startup’s platform will likely help hospitals and health systems develop a more efficient approach to vaccinations, its use of RPA and NLP holds promise for future optimization in healthcare. Leaders of similar technology in other industries have already gone on to have multibillion dollar valuations and continue to attract investors’ interest.

Artificial intelligence is expected to grow in healthcare over the next several years, but Alagappan argues that combining that with other, more readily available intelligent technologies is also an important step toward improved care. “When we say intelligent automation, we’re really referring to the marriage of two concepts: artificial intelligence — which is knowing what to do — and robotic process automation — which is knowing how to do it,” he said. That dual approach is what he says allows Notable Health to bypass administrative bottlenecks in healthcare, instructing bots to carry out those tasks in an efficient and adaptable way.

So far, Notable Health has worked with several hospital systems across multiple states in using their platform for vaccine distribution and scheduling, and are now using the platform to reach out to tens of thousands of patients per day.

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We’re talking startup sales with Zoom CRO Ryan Azus at TechCrunch Early Stage

Published February 16, 2021

TechCrunch is excited to announce that Zoom chief revenue officer (CRO) Ryan Azus is joining us at TechCrunch Early Stage on April 1.

Azus has worked at Cisco, RingCentral and most recently Zoom. In his previous roles he held a number of sales titles, including his final role at RingCentral where he was its executive vice president of global sales and services.

Zoom needs little introduction, having crossed over from enterprise software success story to consumer phenomenon during the COVID-19 pandemic, during which time companies, groups, individuals and families leaned on the video chat provider to stay in touch.

Remote work helps Zoom grow 169% in one year, posting $328.2M in Q1 revenue

Azus has been at the helm of Zoom’s money engine since mid-2019, which means that he has sat atop it during one of the most impressive periods of sales growth at any software company — ever.

So we’re glad that he’ll be at TC Early Stage this year, where we’ll pepper him with questions. Bring your own, of course, as we’ll be reserving around half our time for audience Q&A.

But the TechCrunch crew has a plethora of things we want to chat about too, including the importance of bottom-up sales during the pandemic, especially in contrast to the more traditional sales bullpen model that many startups have historically used; how to balance self-service sales and human-powered sales at a tech company that presents both options to customers, and their relative strength in 2021; changes to sales incentive metrics at Zoom over time from which startups might be able to learn; and how to maintain order and culture in a quickly scaling, remote sales organization.

We’re also curious how Zoom managed to adapt to the pandemic itself, like how long it took the company to reach full-strength from a sales perspective as it moved to remote work and customers that were also out of the office. The simple answer is that his company simply used more of its own product, but there’s more to the story that we want to hear.

Announcing the TC Early Stage Pitch-Off

Often at TechCrunch events we round up a cadre of executives from well-known technology companies and then hammer them for news. Early Stage is a bit different, focusing instead on extracting knowledge, tips and what-pitfalls-to-avoid from tech folks interested in helping startups do more, more quickly.

Azus won’t be coming alone. Bucky Moore from Kleiner will be in the house, along with Neal Sales-Griffin (a managing director at Techstars) and Eghosa Omoigui (a managing general partner at EchoVC Partners). The list goes on, as you can see here. (We’re also having a big pitch-off, so make sure to come to both days of the event.)

TC Early Stage continues TechCrunch’s recent spate of virtual events, so no matter where you are, you can tune in and learn. Register today to take advantage of early-bird pricing, don’t forget to bring your best questions, and we’ll see you in early April!

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Live video shopping startup Talkshoplive raises $3M

Published February 16, 2021

Talkshoplive is a startup that’s worked with stars like Paul McCartney and Garth Brooks, as well as small businesses, to host shopping-focused live videos. Today, it’s announcing that it has raised $3 million in seed funding from Spero Ventures.

CEO Bryan Moore founded the company with his sister Tina in 2018. Moore previously led social media efforts at Twentieth Television (previously known as Twentieth Century Fox) and CBS Television, and he said he was inspired to launch Talkshoplive by the rise of livestreamed shopping experiences in China.

At the same time, Moore said it wasn’t enough to just copy what worked in China: “Small businesses are different here, talent is different, the needs are different.” One of the keys, in his view, is to focus on helping creators and businesses meet their customers where those customers already are — which he also suggested differentiates Talkshoplive from competing services as well.

For one thing, the startup does not require consumers to download any additional apps in order to watch its videos. Instead, it’s created a video player that works on the Talkshoplive website, on the websites of its partners and anywhere else that videos can be embedded. And wherever those videos are played, they also include a one-click buy button.

Bambuser raises $45M after shifting focus to live video shopping

Moore said Talkshoplive started out with a focus in books and music, working with famous names like Matthew McConaughey, Alicia Keys and Dolly Parton, as well as the aforementioned Brooks and McCartney. For example, Brooks used Talkshoplive to exceed more than 1 million vinyl pre-sales for his “Legacy Collection” box set in 2019.

On the book side, Talkshoplive has worked with publishers including Harper Collins, Penguin Random House, Simon & Schuster and Macmillan. Moore claimed the platform is driving three to nine times the sales an author would see on other e-commerce sites.

At the same time, he emphasized that the startup is also working with more than 3,500 small businesses, and he said that when a small business owner is broadcasting on Talkshoplive, “You’re creating your own microfandom by being able to tell the story … You’re making yourself a brand story, even as a small business.”

He added, “When you’re able to help people move $25,000 in a show — for a small business, that’s a huge deal.”

Why e-commerce startups aren’t raising more funding during this historic boom

In this sense, Moore said he sees Talkshoplive as a continuation of his previous work in social media, all connected by the question, “How are you creating human connection in a digital landscape?” The “ultimate goal,” he added, is to turn the platform into a “digital Main Street” for businesses everywhere.

More recently, Talkshoplive has been moving into other categories like food and beauty, and Moore said he’s excited to work with Spero founding partner Shripriya Mahesh (previously an executive at eBay and First Look Media) to “continually evolve our product and create these tools that help us scale faster — and also help benefit these businesses.”

“From the moment we met the Talkshoplive team, we were impressed with their focus on enabling SMB’s with a new, creative, innovative way to build their businesses,” Mahesh said in a statement. “Talkshoplive also innovates on the marketplace model with a way for buyers to truly engage with the sellers, get to know them, and experience shopping in a whole new way. We are incredibly excited by the community that is taking shape at Talkshoplive and are thrilled to be working with Bryan, Tina, and the TSL team as they grow their community and the marketplace.”

‘Headless’ e-commerce platform Fabric raises $43M

 

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Investors are missing out on Black founders

Published February 16, 2021
Craig J. Lewis
Contributor

Craig J. Lewis is the founder and CEO of Gig Wage, a simplified fintech payroll platform built for contract workers.

I’m a Black man in America — that’s hard. Black founders, and uniquely Black founders in tech, are facing insurmountable odds.

As the recipients of less than 1% of venture capital raise, institutionalized systems are visibly at play. Within almost 10 years of my entrepreneurial journey, I have encountered just as many setbacks and failures as I have successes.

However, I have pressed forward despite the disparities that often plague the Black entrepreneurial community. From imbalances in fundraising to minimal capital and access, Black brilliance and its cloak of resilience continues to rise.

Now, as a CEO who has ambitiously raised nearly $13 million for my current venture, against the odds, I posit that it is not the Black founders who are missing out the most — it is the investors who are at a loss, not comprehending that they have underestimated the power of these founders’ Black brilliance.

Black founders need to own their resiliency and leverage the power that has resulted from their unique experiences.

When you think about the intersection of venture capital and technology, and specifically how it works — it is being led from an engineering perspective. Developers and coders historically go to specific schools and colleges, entering a funnel that guides them to success.

Historically, many Black students (more so Black male students), are influenced by sports as a vehicle to higher education and not necessarily the institutions recognized for technological prowess.

Their parents and community encourage athleticism because that is the only thing they know — as an institutionalized mindset reinforced over time. Unless they are guided into the accepted foundations for technology, or get into a Cal Berkeley, Stanford or Harvard, where many of the technology companies are built, they are immediately funneled outside of the “circle,” which sets the first of many ongoing obstacles for a Black tech founder.

I offer, however, that these “obstacles” are not in fact barriers but the crucial catalyst for these founders’ superpowers.

Admittedly, there were no entrepreneurs in my family. I did not have access to information about the best colleges. Despite having great grades and graduating with honors, I was completely unaware of how valuable an Ivy League education could be.

As a star basketball player, with my skills and grades, I could have played and graduated from somewhere like Yale, Brown, Columbia or even a school like Southern Methodist University where I was offered a full scholarship. But because of the lack of knowledge that I could actually do so and benefit from being inside the Ivy League “circle,” I didn’t.

I was in college from 2000 to 2004. A lot of great companies were started at elite schools during that period. It is this institutional blocking of information from myself and many other Black students that molded our overall perspective and created our glass ceilings.

Breaking through that glass ceiling, overcoming these odds to press forward relentlessly, with unyielding focus, and to hold conversations with the types of investors I have had to sit in front of, with the type of company that I have built, takes a different level of brilliance that only the Black experience can provide. For 2021 and beyond, Black founders need to not only recognize, but unlock that power as they look to fundraise and catapult their tech companies to success. It would be smart, and incredibly beneficial for investors, venture capitalists and the entire entrepreneurial ecosystem to take heed.

For Black founders, a paradigm shift is evident, but it can only manifest if implemented in these five ways.

Black founders: Forget what you think works in fundraising

Black founders and specifically Black tech founders are fed a monotonous script of how to raise money “the right way,” in light of disparaging statistics highlighting a lack of funding — so much that there is a robotic approach to the process. They try to become this cookie-cutter entrepreneur that is designed to raise money from investors, with their playbook and by their rules.

Black founders capitulate and conform to what society has dictated as appropriate fundraising, often glorifying the investor with the fate of their startup in their hands, without realizing that they hold the negotiating power. Their playbook hasn’t won us any games. As of today, own your power.

Become an irresistible force: Leverage your expertise

Set the playbook aside and lean more into your expertise and uniqueness.

Years ago, Mark Cuban delivered a keynote address at Dallas Startup Week that chronicled his road to success. One of his main points was to “Know your business, and know your business cold.” It was so simple, yet so impactful.

Early on in my career, I learned about venture capital from my experiences working for a startup. While I did not know the area in depth, I referenced what little knowledge I had as I raised for my own company years later. Although I was limited in my dealings with venture capitalists, I was confident in my background and expertise (at that time as a payroll technology sales professional) to truly stake my claim and seat at the table.

So while they may have sold a company for $7 billion or have $35 billion AUM (assets under management), I knew that they were not as well-versed in payroll or payroll technology than I was. It was this tenacious mindset that made me look at investors, rather than up to them, thereby positioning us on equal footing.

Connect in the common goal of brilliance

As a Black founder in tech, I have encountered many injustices — from networking to fundraising to the game of business as a whole. Even among those sitting at the table, there is a plethora of worldviews, political preferences, religious propensities and more that create a melting pot of divisiveness. However, recognizing that the common thread between all of the players in the game is the desire to be part of the brilliant business opportunity at hand is what will ultimately prevail.

It served me well not to overindex whether the venture capitalists liked me or on our differences. Locking in on the ambition of my entrepreneurial spirit and focusing on my brilliance — my Black brilliance — made them want to invest in me. Simplistically, investors want to give their money to founders who will make them money — passionately and ambitiously. Be you and find the investor that appreciates you.

Get in front of as many investors as you can

Black founders are not getting in front of enough investors. Systemically, the venture capital landscape has marginalized this community and has failed to expand their network for inclusiveness. Currently, ethnic minorities are severely underrepresented in the venture capital industry. Eighty percent of investment partners are white, with only a staggering 3% being Black or African-American.

Regardless, Black entrepreneurs must press forward and still show up. The sheer number of people that entrepreneurs must face during the fundraising process is astronomical, so one must not be swayed by the disillusionment of opportunity.

Realistically speaking, it takes a long time to raise money. Period. I have talked to thousands of potential investors to raise nearly $13 million for my current company. If you are a Black founder, it is going to take you longer to fundraise and you are going to have to get in front of more people. So I ask, “Do you have enough oxygen in the tank to withstand the obstacles, for a long enough period of time, to attract the venture capital that you need?” The wealth gap says no.

When I first started Gig Wage, the number one question I received from investors is, “How much runway do you have?” I would answer, “Until I get to where I need to get.” They would then rephrase, “How much money do you have in the bank? How long is your wife going to let you do this?” I would reply, “It does not matter how much money I have in the bank because I’m going to keep going until this happens.”

Discriminatively, there was this unspoken expectation that I lacked the financial wherewithal and stamina to withstand the fundraising process, and at times it was extremely discouraging — because to be honest, when I looked in the bank account, I realistically had about nine to 12 months of runway.

The reason Black people raise less than 1% of venture capital is because the racism weaved into the fabric of American society bleeds over into the entrepreneurial ecosystem. Despite it all, I took thousands of meetings. I was willing to endure with an ambitious conviction that I was going to win. Again, this is Black brilliance.

Own your resiliency, own your power 

As a Black man, I have personally endured challenges to build resiliency — mirroring similar realities of other Black men in America. Whether it was dealing with the police or witnessing men in my family struggle with drugs, violence, poverty or the like — I often think, “Why would I be intimidated by an investor meeting or a term sheet?” The construct of America has dealt me much worse.

Black founders need to own their resiliency and leverage the power that has resulted from their unique experiences. The victory mentality that ensues thereafter is the type of mindset that venture capitalists should want to invest in, and if they do not, they are undoubtedly missing out.

The unyielding focus of “The world is stacked against me but I’m not going to quit. I’m going to pivot. I’m going to be resourceful. I’m going to figure it out — even if I’m scared,” is a person you need to invest in. It is not necessarily that they have a groundbreaking business idea, but culturally, Black people have a passion and a perspective that is unmatched, with limitless possibilities that venture capitalists are overlooking.

So for 2021 and well beyond, Black founders, and those especially in tech, need to shift their respective paradigms, own their place within the entrepreneurial space, take back their power and continue to operate at the utmost in Black brilliance. It is the investors, not the founders, that are missing out. Be bold. Be courageous. Be audacious.

As for me, the best thing that I can do right now is to continue to drive the conversation, illuminate the disparities and be as successful for Black entrepreneurs, Black professionals and the world at large as possible. I am owning my power and I’m committed to epitomizing and evangelizing Black brilliance.

This public spreadsheet lists Black founders who have raised VC, and the investors backing them

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Just two weeks left to score early-bird passes for TC Early Stage

Published February 16, 2021

Tackling the learning curve that comes with building a startup is not for the faint of heart. So many questions, so little time to search out reliable, actionable advice. Enter TechCrunch Early Stage 2021 — two distinct, virtual bootcamps designed specifically for early-stage founders and open to entrepreneurs and startup enthusiasts.

Budget-friendly tips: TC Early Stage part one takes place April 1-2, and you have two weeks left to score the early-bird price and save up to $100. Founder passes cost $199 and Innovator passes (for investors and other startup fans) cost $299. The early-bird deadline ends at 11:59 p.m. (PST) on February 27. Buy a dual-event pass to learn and save even more (TC Early Stage — Marketing and Fundraising runs July 8-9). The TC Early Stage April and July bootcamps feature different speakers, topics and content.

At TC Early Stage, you’ll take part in interactive sessions and learn from the leading experts and investors who span the range of the startup ecosystem — operations, product lifecycle, fundraising and recruiting for starters. Here are just two examples of the people ready to help you move your startup dreams forward.

Learn from folks like Alexa von Tobel as she leads a discussion on Finance for Founders. Got questions about raising Series A funding? Don’t miss Bucky Moore of Kleiner Perkins as he breaks down that complicated topic.

Ready for an awesome plot twist? We’re adding an exciting opportunity on day two of both TC Early Stage bootcamps — the TC Early Stage Pitch-Off. Ten early-stage startups will get to pitch live to a global audience of investors, press and tech industry leaders. That kind of exposure can change a startup’s trajectory in the best possible way.

You’ll find all the Pitch-off details here — how it works, who qualifies to compete, what competitors receive and the prizes in store for the ultimate winner. Or cut to the chase and apply for the April 2 pitch-off here before the clock hits 11:59 p.m. PST on February 21.

Whether you’re competing or watching, Katia Paramonova, founder and CEO of Centrly (who attended Early Stage 2020), says a pitch critique shows you ways to strengthen your pitch deck:

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.

TC Early Stage Operations & Fundraising takes place on April 1-2. Don’t miss this opportunity to learn the essentials of building a stronger startup. And don’t miss out on early-bird savings. Buy your pass (remember, you’ll save more and learn twice as much with a dual-event pass) before 11:59 p.m. PST on February 27.

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

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Onboard says it can help SaaS companies bring their new customers up to speed faster and better

Published February 16, 2021

While companies have embraced the offerings of software-as-a-service companies with growing vigor, getting those new offerings to work in a seamless way from the outset isn’t so easy, with some business customers feeling forgotten as soon as the digital ink dries.

Enter Onboard, a 10-month-old startup that aims to help SaaS businesses delight those new customers instead of turning them off.

The company was co-founded by CEO Jeff Epstein, who previously launched the referral marketing and affiliate marketing software company Ambassador, which sold in 2018, eight years after it was founded.

Terms of the sale to West Corporation — now Intrado — were never disclosed, but Epstein says it was a “good outcome” for shareholders. (Ambassador was sold again last month to a small Seattle company.)

As for how Onboard works, Epstein makes the process sound straightforward. “You determine the variables of your customer segment, because different plan types might mean that companies need to do something different.” (They could use an API or some code snippet, for example.) After that, Onboard works with the SaaS company to create a global task list with requirements it has hopefully gleaned from the sales process, and helps it create a kind of dynamic, drop-down task list with assignees and due dates and alerts and notifications.

It’s largely a self-service product that makes accountability more transparent, ultimately, though Epstein describes the onboarding process as a “shared responsibility” between his company and its customers. He also says his nascent startup is already working on building out a more sophisticated notification layer with automated nudges that are helpful yet not obnoxious.

The five-person company is not charging its dozens of beta customers right now. It wants to get the product right before it shifts into revenue gear, says Epstein. The plan eventually is to charge the types of customers it is chasing — mid-size companies — hundreds of dollars of month, plus a per-person-per-month fee. (“We don’t plan on being enterprise-y in any way,” says Epstein of the company’s plan to eschew long contracts.)

Onboard is not without competitors. On the contrary, a lot of upstarts have sprung up around this problematic slice of the enterprise universe. That it’s an aggravating period for many new customers was brought to Epstein’s attention by one of his co-founders, William Stevenson, who spent four years as Ambassador’s VP of customer success, where, like a lot of people in his position at other companies, he was trying to make do with a less-than-ideal patchwork of offerings, sometimes from Monday or Asana or Basecamp or Google Docs.

It was the same problem that Jonathon Triest of Ludlow Ventures — whose firm quietly led a $1.25 million seed round for Onboard in late summer, joined by Zelkova Ventures and Detroit Venture Partners — says he knows well.

Image Credits: Onboard

“Over and over again, throughout our portfolio, especially in B2B SaaS sales,” Ludlow’s portfolio companies have been “forced to piece together solutions or use tools not made for them,” Triest says.

The question is whether Onboard can gain a foothold faster than some of its other rivals, and unsurprisingly, Epstein believes his team has what it takes to get started. (A third founder, Matt Majewski, more recently left Ambassador to help the company gain momentum.)

Epstein’s resume is helping, too, he says. As a founder in Detroit who sold a company, he’s known to local investors, and then some. (“We were able to be a big fish in a small pond,” he says.)

Epstein also says that investors realize there’s “an opportunity generally in the space,” adding that “partners [from venture firms] have been calling — not associates — and they are coming through third-party connections on LinkedIn in some cases.”

He has “obviously raised a bit of money” in the past, Epstein says, but he hasn’t seen anything quite like this before. “It’s weird,” he adds, “but cool.”

5 VCs on the future of Michigan’s startup ecosystem

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