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Pry Financials raises $4.2M to make startup accounting more approachable – TechCrunch

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Pry Financials wants to make startup finances approachable for its entire team, not just the people in charge of its accounting spreadsheets. The Y Combinator alum announced today it has raised $4.2 million from Global Founders Capital, Pioneer Fund, NOMO VC, Liquid2 and Hyphen Capital. 

Launched in March, Pry now has more than 200 customers and claims it has grown 35% month-over-month since YC’s Demo Day. It was founded by Alex Sailer, Tiffany Wong, Hayden Jensen and Andy Su. 

Before starting Pry, Su was co-founder of InDinero, another YC alum that started as a “Mint for small businesses” before pivoting to a full-service accounting company. InDinero launched while he was still a student at U.C. Berkeley and Su eventually became responsible for its financial planning.

Pry Financials’ team

He told TechCrunch that most startups can’t afford accounting software like Workday Adaptive Planning. Instead, they sometimes work with outsourced CFO services, but mostly rely on spreadsheets for everything: three-way forecasts, predicting runway, hiring and contractor budgets and investor updates. 

“I was the chief technical officer and over the years, I also took on the finance function, so it was kind of a dual CTO/CFO role. This was 2010 through 2020 and as technology grew, the engineering and product teams got all sorts of new tools every six months or so, whereas the finance team was just stuck in Excel,” he said. 

Started as a side project was Su was still at InDinero, Pry starts at just $50 a month and replaces those spreadsheets with easy-to-understand dashboards for accounting, financial planning and scenario modeling. The dashboards connect to Quickbook, Xero or bank accounts, so numbers are continuously updated.

Pry’s clients typically start using it after they raise seed funding, because “for most first-time founders, that’s the most amount of money you have ever received, so you need to spend more time managing it and reviewing it every month. And you’re spending a lot of time on payroll each month,” Su said. Second-time founders, meanwhile, sign up for Pry because they are sick of Excel spreadsheets. 

“Reviewing a spreadsheet is mind-numbingly hard,” said Su. “If you see a number that’s off, you get this weird formula if you didn’t do it yourself. Then you basically have to write a long email to the financial analyst who wrote it and hope that they get back to you before closing time.” For founders who need to update lenders or investors every month, this means a lot of work. 

Pry makes the process more efficient by turning three-way reports—combinations of balance sheets, profit and loss statements and cashflow—into Financial Report dashboards, and then adding features like hiring plans, financial modeling and scenario planning. 

The scenario planning feature serves as a sandbox, giving startup teams and their investors a way to predict how different situations will impact finances: for example, how much runway they have if they raise a certain amount of funding or adjust product pricing.

Fundraising dashboards created with Pry Financials

Fundraising dashboards created with Pry Financials

“We’re improving upon and trying to make decisions about the company in a collaborative way. The analogy we have is git branching, where you have your main plan, and want to try something like a new revenue model or acquiring a business, but don’t want to mess with your current strategy,” said Su. “What you can do is create a completely new branch with, say, a new pricing strategy. You can make all the changes you want and then switch back to your old branch without worrying about overriding or conflicting with it.” 

Those speculative branches are also continuously updated with the company’s most recent bank account and payroll information, so founders don’t need to recreate them from scratch if they want to revisit a potential scenario later. 

Pry plans to build more complex predictive tools and also integrate industry standards, like statistic and benchmarks, into templates to help founders understand what targets they should set. 

Since Pry is easier to manage than a set of Excel spreadsheets, Su said it’s helped startups spot important things. For example, one founder was able to find a way to save $15,000 by catching a tax issue. Pry also helps everyone at a startup understand its finances’ even if they haven’t worked with accounting spreadsheets before. The platform will add roles and permissions soon, so founders can give or restrict access to different people, like leaders of specific departments. 

Su said Pry does not compete with the accounting services many startups rely on until they can hire a head of finance, but makes it easier for startups to collaborate with them since they can share their dashboards. 

“Usually early on, you can outsource to a CFO firm. That’s the norm in the business and it works pretty well for most companies. You get a part-time CFO to work really hard for a month and get your fundraising structure done,” said Su, adding “we fit into that ecosystem well.” 



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Dispute resolution platform Immediation raises $3.6M AUD to expand in the U.S. – TechCrunch

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The pandemic forced the legal profession to cobble together remote work strategies, often through a combination of video conferencing and emails. Founded in Melbourne, Immediation provides a tailor-made solution with digital courtrooms and mediation tools. It has been adopted by Australian federal courts and New Zealand government agencies, and is now expanding in the United States and European markets after raising $3.6 million AUD (about $2.7 million USD). Investors include Thorney Investment Group and its founder and chair, Alex Waislitz.

Founded in 2017 and launched in 2019, Immediation’s users include the Federal Court of Australia, the Victorial Civil and Administrative Tribunal (VCAT), and New Zealand agencies like the Ministry of Justice, Sport New Zealand and Domain Name Commission NZ. The startup says over the past 12 months, its revenue has increased 6x year-over-year and its user growth has jumped 2,000%. Immediation currently has about 40 employees in five countries, and a panel of more than 100 mediators and arbitrators. Its new funding brings Immediation’s total raised to $10 million AUD.

In addition to Australia and New Zealand, Immediation also has users in Southeast Asian markets, and will spend the next 12 months focused on growing in the U.S. and European markets.

Before starting Immediation as a mediation platform (it also now supports law firms, tribunals and resolution bodies), founder and managing director Laura Keily worked for two decades as a corporate lawyer and barrister. She told TechCrunch in an email that she wanted to create an online mediation platform because “I saw firsthand that people were locked out of being able to access justice effectively. The legal system is complex, lengthy and expensive. It’s an old system regimented by ancient rules and processes, which are not scalable and are inefficient.”

Before using Immediation, many of its clients only had the option of face-to-face meetings in a mediation center or courtroom. Immediation launched its platform publicly in September 2019, a few months before the pandemic hit.

“The onset of COVID-19 was a turning point,” Keily said. “As industries were forced to move online overnight, our team pivoted quickly to address the immediate concerns of the legal industry and provide a blueprint for a seamless transition online.”

In 2020, Immediation saw a 2,200% increase in users across more than 2020, including a 500-person hearing over five days for the first ever Willem C. Vis International Arbitration Moot, a moot competition attended by hundreds of law schools.

Immediation founder and managing director Laura Keily

Keily said Immediation was created by lawyers to replicate physical courtrooms, mediation suites, legal client floors and dispute resolution environments. Its tools include the ability to record hearings, share and manage documents, co-draft and execute contracts, enable confidential communication between lawyers and clients during proceedings and set up secure, private rooms for different parties. Judicial officers and mediators retain control participants in a private room, so they can move or remove them as necessary.

Maintaining lawyer-client confidentiality is essential. Immediation built secure chat and party rooms so “client-lawyer teams can communicate in complete confidence with their own team, even when proceedings are in full flight, knowing that no one else, by design, can see those messages or enter the party room,” said Keily.

Immediation also announced today that it has appointed Christine Christian, the chair of Auctus Investment Group and Tamara Credit Partners, as its new chair, and Rachael Neumann and Greg Wildisen to its board. It added Afterpay chair Elena Rubin and Rampersand VC founding partner Jim Cassidy to its advisory board.



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How AI is helping to make breast cancer history – TechCrunch

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Every October for the last four decades, Breast Cancer Awareness Month has helped to raise visibility of the most prevalent cancer on Earth — one that takes almost three-quarters of a million lives every year.

Despite recorded cases stretching back to ancient Egypt, breast cancer was considered an “unspeakable” condition for millennia. Women were expected to suffer in silence and “dignity.”

This stigma fueled academic ignorance, with breast cancer languishing as a relatively unstudied disease until just a few decades ago. For most of the last century, a woman suffering from breast cancer would be offered radiation therapy and/or surgery — often radical surgery, leaving them disfigured for little benefit — while the treatment of other cancers progressed.

Breast cancer mortality barely changed from the 1930s to the 1970s, until a concerted effort by feminist and women’s liberation groups elevated the study and treatment of breast cancer to its rightful position in heavily male-dominated hospitals and research institutions. Treatment transformed in a generation.

In the 1970s, a woman diagnosed with breast cancer had roughly a 40% chance of surviving the next 10 years. Today, that probability has almost doubled, thanks to new drugs, cutting-edge screening methods, and more subtle and effective surgery.

Crucial to this transformation has been an emphasis on early diagnosis. The earlier breast cancer is spotted, the easier it is to treat. Artificial intelligence is playing an increasingly critical role in identifying breast cancer. This year, Britain’s National Health Service (NHS) announced a study of how AI could screen for breast cancer. While intended to augment, not replace, human doctors, this would help to mitigate a shortage of radiographers — 2,000 more are needed to clear the NHS’ backlog in scans caused by the pandemic.

Startups are also using AI to tackle this shortage. Britain’s Kheiron Medical Technologies plans to use AI to screen half a million women for breast cancer. Spain’s the Blue Box is developing a device that can detect breast cancer from urine samples. India’s Niramai is working on a low-cost tool that could help screen large numbers of women in rural and semi-urban areas.

But equally crucial to improving outcomes is identifying patients at high risk of relapsing. Around one in 10 breast cancer patients will relapse after their initial treatment, decreasing their chance of survival.

Identifying them early has historically been difficult, but my team, working with Gustave Roussy, a French cancer hospital, has developed an AI tool that can spot 8 in 10 patients at high risk of relapsing. AI helps to get patients the treatment they need earlier on while also sparing lower-risk patients from frequent, unsettling checkups. Meanwhile, pharmaceutical companies accelerate breast cancer drug trials by recruiting high-risk patients faster.

Patient data privacy can be an understandable roadblock to rapid research. Hospitals are cautious about sending data off-site, and no pharmaceutical company wants to share valuable data with competitors. But AI is helping to solve these issues, allowing for the quicker, safer and cheaper development of new treatments.

Federated learning, a novel form of AI that trains on data from multiple institutions without the data leaving the hospitals, is being used across Europe to give researchers access to essential, yet previously inaccessible, data.

We will also use AI to deepen our understanding of why the most aggressive forms of breast cancer are resistant to certain drugs, helping us to develop new, tailored drugs that discriminate between healthy and tumor cells better than chemotherapy.

While AI’s influence is increasing, equally important to improving outcomes is a recognition that healthcare is a fundamentally human endeavor. No algorithm could ever comfort a patient in their darkest moments, and no machine could ever instill and inspire the resilience that every patient needs in order to beat their disease.

I and every other doctor know that treating disease is as much about understanding the patient as it is about understanding their affliction. Clinician empathy is related to higher patient satisfaction and lower distress, motivating a patient to continue a difficult course of treatment. Thankfully, the AI technology that is increasingly helping breast cancer treatment is designed to augment and empower doctors.

Breast cancer is no longer “unspeakable” for the millions who are diagnosed with it every year. The sea of pink ribbons that herald the start of October signal how far we have come in our battle against one of our oldest foes — one that we are now defeating. We may never fully eradicate breast cancer. But with AI helping to diagnose patients earlier and enabling the rapid development of treatments, it is possible that in a few decades, we may no longer have the need for a Breast Cancer Awareness Month.



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Coinbase, Clubhouse and the inevitable conflict of competition – TechCrunch

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Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

This week, cryptocurrency exchange platform Coinbase announced that it is launching its own NFT platform to take on OpenSea, an existing NFT platform. Some techies aptly pointed out that both Coinbase and OpenSea are backed by Andreessen Horowitz, leading to questions around competitive conflicts that could arise from having a shared investor (it’s unclear if a16z ever sold its shares in Coinbase after it went public).

As we discussed on Equity this week, the idea of having competitive companies within the same portfolio feels uncomfortable. It could impact how open each company is with its investors, and, as we saw with Hinge Health, can cause tension if there’s an overlap in advisers. It’s a fair argument.

But, is it just me, or does competitive conflict sound somewhat inevitable? As venture firms grow, especially an institution like a16z, the idea that no portfolio companies in booming sectors like fintech or crypto overlap in vision feels unrealistic. Clubhouse, another a16z-backed company, was met with an entire wave of competitors after its debut — and I joked then that it’s only a matter of time until one of the firm’s portfolio companies pivots to social audio, too.

In a world of rapid deal-making and booming subsectors, competitive conflict will continue to grow. Imitation holds startups to a higher standard. If a startup can copy your idea, and entirely win based off of that, a shared investor is likely not your problem. Sure, there should be some processes in place to make sure that your board member isn’t sitting in meetings with your closest competitor, but, beyond extreme cases, the line is blurring on what should constitute conflicts.

I’m being harsh, but that’s my first reaction. Your competitor can always eat your lunch, but in the great OpenSea, maybe that just means it’s time to swim a little deeper.

As always, you can find me on Twitter @nmasc_ or listen to me on Equity. This week, I also made a guest appearance on Here & Now to talk about edtech’s evolution!

A fund for, and by, South Asian female entrepreneurs

Image Credits: Bryce Durbin

As a South Asian female, I was amped to see the emerging fund manager world get a new influx of my people this week. Neythri Futures Fund announced that it has closed a $10 million fund with investments from leading South Asian men and women.

Here’s what you need to know: The fund, per founding managing partner Mythili Sankaran, brought together 200 investors, with 90% South Asian women and, here’s the kicker, 70% first-time investors. It was built on AngelList, which has been working on a suite of SaaS tools for venture capitalists.

More money, less problems: 

ClassPass has stepped off the treadmill and onto a new track

Image Credits: Dan Bruins

ClassPass was acquired by Mindbody in an all-stock deal that actually got half of TC staff really excited. ClassPass, for those who don’t know, helps fill workout classes with consumers, while Mindbody provides the software that helps fitness centers and boutique shops better run their business.

Here’s what to know: It felt sensical and smart, two words that should be associated with acquisitions.

By combining forces, the Mindbody/ClassPass entity has the opportunity for huge growth. ClassPass studios that are not using a booking software — Lanman says it’s about one-third of the studios on ClassPass — will now have the chance to sign up with Mindbody.

Mindbody’s consumer-facing business will have the chance to double down on their experience by signing up for a ClassPass subscription and get access to those studios. And, of course, gyms and studios that use Mindbody for à la carte bookings could be upsold to ClassPass, as well. — Jordan Crook

When M&A goes away:

A tale of two travel stories

Image Credits: Hey Darlin / Getty Images

This week on Equity, the TechCrunch team looked at how two travel-focused startups have pivoted and rebounded their way through the pandemic. While one startup chose to focus on flexible living, another decided to go the fintech route.

Here’s what to know: TripActions went from $0 in revenue to $7.25 billion in valuation. How? Well, as Mary Ann reports, TripActions leaned into the very nascent fintech product that it launched a month before the pandemic hit, giving it growth and a way to support customers through expense management. The news reminds us all that every startup, eventually, is a fintech company.

Fintech & friends:

Around TC

This week, I’m going to convince you that one of the best, free ways to build a better venture-backed business is … TechCrunch Live. The weekly event, put together by some of the best internal folks at the publication, connects founders and the investors who finance them in a chill chat.

TC interviews investors on their thought process when writing checks, pushing for specifics and reverse engineering their biggest deals to date. Then, in the latter half of each episode, founders in the audience are encouraged to jump on our virtual stage and pitch their products, receiving live feedback from our esteemed duos.

This past week, we had Chime founder and CEO Chris Britt with Menlo Ventures partner Shawn Carolan. In the past, we’ve had Poshmark CEO Manish Chandra, Mayfield’s Navin Chaddha, Planet FWD’s Julia Collins and Cleo Capital’s Sarah Kunst.

TechCrunch Live is free for anyone who would like to attend live, so come hang every Wednesday at 3 p.m. EDT/noon PDT.

Across the week

Seen on TechCrunch

How Los Angeles is preparing for the air taxi takeoff

SoWork just convinced investors (and Tinder) that virtual co-working is here to stay

Reddit hires former Google Cloud exec as its first chief product officer

How to sell clothes online and actually make money

Coinbase is launching its own NFT platform to take on OpenSea

Seen on TechCrunch+

Inside Plaid’s plans to build a new, global finance network

Selling into the enterprise: How Slack and other startups get it wrong

NerdWallet’s IPO filing reveals high-margin content business, accelerating marketing spend

Founders should use predictive modeling to fundraise smarter

How my company is winning the war for engineering talent

Talk soon,

N



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Does the NFT craze actually matter? – TechCrunch

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Hello friends, and welcome back to Week in Review!

Last week, we talked about Apple’s subscription addiction. This week, I’m diving deep into whether there’s actually any meaning to pull out of the NFT mania of 2021.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny


Image via OpenSea

the big thing

The NFT market is still defying reason, but then again that’s kind of its thing. But one thing I’m especially unsure about lately as I see JPGs continue to sell for millions of dollars is… does any of this actually matter?

I’ve spent a lot of time over the last year grappling with the NFT market, at times I’ve lost sleep over it. As a reporter frequently covering this market, I don’t own or trade the little images myself, but that hasn’t stopped me from obsessing over the fluctuations in their prices and scouring Discords trying to follow the trends. I’ve tuned into countless Twitter Spaces and lurked subreddits trying to understand it all. I’ve also done my best to keep most of that out of this newsletter — it’s a weird niche interest that’s especially niche at the moment — but as Bitcoin flirts with a new all-time-high and the NFT mania persists, just consider this a timely update.

So, in the past month, investors have continued dropping billions upon billions of dollars on NFTs. OpenSea has seen more than $3 billion in transaction volume in the past 30 days, and that number is actually way down quite a bit from August, showcasing just how much off-peak money continues to flow into NFTs.

All of that money has gone to some colorful places. One of the bigger success stories of the past month has been the platform CrypToadz which investors dumped $100 million into. They look like this. In the past couple weeks, a brand new project called MekaVerse saw $130 million in transaction volume. They’re a bit prettier, but would you spend more than $8,000 on one? The platform Cryptoslam (where I pulled most of the data I reference here) is tracking 163 platforms which did more than $1 million in volume in the past 30 days, a number which doesn’t even account for individual artists selling their work on platforms like OpenSea.

Now, there are two incredibly different segments of NFT communities out there, larger-scale NFT projects like Axie Infinity and NBA Top Shot with tens and hundreds of thousands of users and smaller-scale NFT projects like CryptoPunks and Art Blocks with just a few hundred or thousand owners. Larger-scale projects can represent more traditional gaming titles with more complex in-game economies while smaller-scale projects simply look more like fine art markets teamed with exclusive social clubs. Some smaller-scale projects have the ambition to eventually become larger-scale ones, but many have capped the number of NFTs in their projects and are designed to be exclusive.

In the past 30 days, Axie Infinity did more than $500 million in sales spread across nearly 2 million transactions and over 350,000 buyers. On the flip side, CryptoPunks did $200 million in sales during that same time frame across 484 transactions and 309 buyers.

Generally, when I’m talking about some of these big sales from smaller-scale projects with friends of mine, the first thing they mention is how this is probably all just money laundering. While I’d certainly imagine some of that is happening, that’s ultimately a much more boring explanation than my best guess of what’s really going on, which is that a group of several thousand investors have separately rationalized irrational investing. They just happen to have chosen to do so through buying pixel art and drawings of animals.

While some investors might suggest that a handful of the earliest NFTs hold intrinsic value as historic objects, there are plenty of brand new NFT projects earning ten-million dollar valuations on day one with low amounts of effort and imagination.

It’s seemingly the result of momentum from awe-struck retail investors entering a market filled with massive amounts of wealth being generated and re-invested by Ethereum millionaires who can massively overpay for deals while pushing the implied value of the objects, the projects, the entire NFT market and the price of Ethereum up concurrently. Most of these investors are also people who have held onto Ethereum through its waves and have grown fundamentally averse to cashing out, meaning they’re less likely to sell the NFTs they buy unless they’re just trying to buy another more expensive NFT or have been made an offer too good to refuse. As a result, many high-value smaller-scale projects stay liquid on the low-end while fewer sales of the rarer items underpin the massive valuations of the projects and those occasional big buys keep pushing prices higher.

All of this babbling of mine is to say, what’s happening here is strange. It’s also an incredibly large amount of noise mostly coming from a few thousand buyers.

But when most investors talk about mainstream adoption and future use cases, they’re looking at the creation of more larger-scale projects like Axie and Top Shot which embody many of the technical bells and whistles of crypto economics in more user-friendly packages that can reach the mainstream. NFTs as a concept for driving more complex virtual economies is, indeed, really fascinating, but I don’t think there are as many takeaways to draw from billions of dollars flowing into digital art and these smaller-scale projects like CrypToadz as many crypto investors and venture capitalists are trying to convince themselves.

Only three NFT platforms out there had more than 10,000 active unique buyers in their community in the past 30 days, and while the successes of platforms like Axie Infinity are definitely worth dissecting, it also seems clear we’re in the midst of a speculative frenzy and it’s not a very easy time to draw sober conclusions about what all this madness means for the future of the web.


Ali Balikci / Anadolu Agency

other things

Here are a few stories this week that I think you should take a closer look at:

Apple probably won’t be supporting alternate App Store payments anytime soon
Apple did their best to convince the press and public that the court’s decision in its legal fight with Epic Games was an outright win for Apple, but over the weekend they quietly announced that weeks later they’re appealing the decision and asking the courts to put the ordered changes to allow alternative payments inside iOS apps on hold.

Apple put on a cool demeanor after this ruling, but it’s apparent that there are billions on the line for Apple if this order stands. Therefore delaying its rollout means billions of dollars that aren’t going to other payment providers or staying in developer coffers. Epic had already appealed the decision as well, hoping to try for a more favorable ruling, but it’s clear that anyone hoping for a speedy resolution will be disappointed — as is often the case in corporate law.

Nintendo reshapes its SaaS ambitions
Nintendo has been and probably always will be a bit of an odd big company. They’ve been resistant to new trends in gaming and when they embrace them, they don’t necessarily do a great job capitalizing on them, and yet their mountain of beloved IP allows them chance after chance to get things right. This week, they announced more details on their new annual membership called Nintendo Switch Online+ which, for $50 per year will give gamers a deeper array of content. That’s a good deal more than the standard $20 per year for the regular Nintendo Switch Online subscription, but beyond expanded virtual console support for an unannounced array of N64 games, it’s not clear what exactly the sell is for consumers.

Interestingly, they’re launching the service with free access to a major update for Animal Crossing: New Horizons. It’s a play that only works when you’re Nintendo and the penetration of your first-party titles is so incredibly high among device-owners (and especially likely subscribers). Nintendo has sold more than 3.4 million copies of the new Animal Crossing title globally.

Microsoft pulls LinkedIn from China
It’s been a particularly turbulent time for tech companies across China as government regulators crack down and the outlook clouds for big platforms there. This week, Microsoft announced that it’s pulling LinkedIn out of China, detailing that LinkedIn was now “facing a significantly more challenging operating environment and greater compliance requirements in China.” LinkedIn didn’t have a huge presence in China so this won’t make major waves, but as other American tech giants are forced to make major adjustments to their China strategy, this marks yet another datapoint in the cooling of relations between China and the West.

The LinkedIn’s of the world don’t hold much sway in China, the most curious bit of this is how this regulatory upswing eventually affects Apple which does hold plenty of influence. While officials probably aren’t keen to jam them up, the past year has shown that China’s regulators have plenty of surprises up their sleeves.


Stack of woolen checked blankets

Image Credits: Manuta / Getty Images

added things

Some of my favorite reads from our newly-renamed TechCrunch+ subscription service this week:

Inside Plaid
“…Visa and Plaid might have chosen to go their own ways in the end, but the year wasn’t a total loss for the data connectivity startup: Plaid claims its customer count grew 60% in 2020, and company execs say it has had similar growth so far this year….”

Founders should use predictive modeling to fundraise smarter
“More capital is flooding into growth equity at earlier stages, and it’s happening faster than ever before. But even with the rampant enthusiasm for pouring bigger equity checks into startups, founders are now in a unique place in time where they can think differently about how to capitalize their companies….

How one startup boosted productivity with ‘get s*** done’ day
“…To improve our productivity, we introduced a Getting Shit Done Day (GSDD): Our employees define clear-cut goals and receive specific, usually non-trivial, tasks with little to no communication involved (we encourage our employees to avoid social media on this day, but we are not looking over their shoulder). The goal of GSDD is to increase the amount of time we spend in deep work by minimizing distractions for one day every other week…”


Thanks for reading, and again, if you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny

Lucas Matney



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Missouri governor threatens to prosecute local journalist for finding exposed state data – TechCrunch

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To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for October 15, 2021! Happy Friday to you and yours; I am proud of us all for making it through a week that was more than hectic. Up top, discounts end on our space event in very short order. And with no further ado, let’s get into the news! – Alex

The TechCrunch Top 3

  • Missouri governor conflates journalism, hacking: The United States is a large nation with many smart and many less-smart people. A story from the latter category ended up in our wheelhouse when a state governor decided that a journalist pointing out security flaws in an official website was malicious hacking. Perhaps stories like this are why so many Gen Z folks are doomers?
  • Instacart shoppers are going on strike: Try to recall a time when some section of the Instacart workforce was happy and not either about to strike or on strike. It’s hard, yeah? This Saturday, “some Instacart shoppers will go on strike, protesting the company’s low pay and lack of communication with its laborers,” TechCrunch reports. Let’s see if this particular piece of the larger Striketober saga ends up with worker-friendly results.
  • Apple yanks Quran app after Chinese regulators ask: The day after Microsoft announced that it was going to pull LinkedIn’s main service from China after failing to reconcile that country’s government and its own views, Apple appears to have complied with a Chinese state request to remove “Quran Majeed, a popular app for reading the Islamic religious text and other prayer-related information” from the Chinese app store. This isn’t a small act, given the Chinese state’s abuse of Muslims inside its borders.

Startups/VC

Let’s take our time today in the world of startups, it being Friday and all.

First up, we have a great piece from Rebecca Bellan digging into a host of startups that are helping emerging middle classes around the world get places. This list includes, and I quote, “Swvl, Treepz, Jatri, SafeBoda, Urbvan, Chalo and Buser,” among others. If you are into the transportation tech beat, it’s a great read.

Next up, Andy Stinnes, a general partner at Cloud Apps Capital Partners, wrote an essay for the blog today discussing that while the present-day venture capital bull market (more here) is a general good for founders, “closer inspection reveals that these trends are a lot more nuanced and apply very unequally across the funding continuum from seed to the late stage.” If you are looking to raise capital, it’s worth your time.

Moving along, our own Taylor Hatmaker did yeoman’s work digging into Core, a metaverse environment where she wandered around, finding the landscape to be both great-looking and “seamless.” If you want a peek into what could be the future of gaming and social interaction, this is for you.

And, before we get to the rest of our startup rundown, I wrote an imaginary interview with a made-up CEO concerning a fictional IPO. For more context, head here.

  • SoundCloud lands Pandora partnership, new radio station: As Spotify grew to become a music behemoth, SoundCloud stuck closer to the underground. And it survived, which some didn’t expect. Today, the upstart music service announced a deal with Pandora that could help bring it a bit more audience.
  • Clubhouse adds “music mode”: Sticking to a musical theme for another measure or two, Clubhouse has built out a way for musicians to better stream their music live on the service. So, I suppose Clubhouse can now also be coffeehouse?
  • And, finally, Spot AI leaves stealth with its security cam search tool: Flush with $22 million and freshly denuded of its “stealth” tag, Spot AI is out in the public view today, which is fitting as its core product deals with security cameras and how they are ingested. The company “reads” footage from the devices, allowing the video itself to be searchable. Which is cool, if vaguely creepy.

Bringing it in-house: What to look for when hiring a general counsel

Experienced lawyers may be drawn away from big firms to join a startup as general counsel for a variety of reasons, LinkSquares’ chief legal officer Tim Parilla writes in a guest column.

“For some, it’s an attempt to find a better work-life balance (whoops!), while others are eager to build and manage their own team or see it as an opportunity to work for a mission-driven company,” he writes.

For founders, it’s an opportunity to snag a seasoned professional who can build in-depth knowledge of your business — rather than relying on a generic (and costly) outside law firm.

Parilla offers detailed tips on what startup leaders should look for in an in-house counsel (as well as a few things that would indicate a lawyer is not fit for your business).

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

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VC Lab introduces free fund formation documents to make startup investing cheaper and easier – TechCrunch

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There may be plenty of funding for some startups these days. But plenty of companies will tell you otherwise. VC Lab, an accelerator for venture capital firms, wants to create investors who will back the rest of the world.

A basic hurdle to this goal is the standard paperwork you need to set up a new fund. It currently requires specialized lawyers whose time can cost more than $100,000 per fund formation.

Today, VC Lab is providing a set of freely available boilerplate documents intended to streamline the process, save everyone time and money and make fund governance structures more accessible.

“We have general partners launching funds from all around the world,” co-founder Adeo Ressi explains. “The last cohort enrolled venture investors from 62 different countries, including Central Asia, Africa, and every other place you can imagine.”

Legal costs are the last thing they need.

“The new managers who are getting into venture are coming in with a passion for change — the funds often have a very focused thesis, and they tend to be smaller in size. They really want to help the companies they work with to succeed at any cost. They don’t need 200 to 400 pages of legal agreements governing every small decision that they make. They need lean and light, easy-to-use agreements.”

The package, which VC Lab is calling Cornerstone, is a short 33 pages that include a term sheet, a subscription agreement and an LPA (and this user guide). Similar fund formation documents regularly run into the hundreds of pages.

“There’s been widespread recognition that fund formation docs are ridiculously complex and in need of an overhaul,” says Hans Kim, a longtime startup lawyer in Silicon Valley who co-authored the new package. “I’ve had numerous founder clients who made money and want to put their capital to good use through investing. But if they get more serious than personal angel investing, you refer them to a fund formation lawyer. Then they see the price and have to think twice.”

Improvements include a streamlined list of definitions, simplified sections on management fees and triggers for limited operator mode, according to co-author Rich Gora of Gora LLC. The current document includes details for domiciling the firm in the United States with plans for other popular locations like Canada, the Netherlands and Singapore coming soon.

As a fund formation lawyer who works with a wide variety of investors, he says the goal is to help businesspeople work out business issues in plain terms. Once the parties have talked through what they want to agree to, they can take the product to an expert like himself to finalize.

“Over the last 10 months,” he says about the writing process, “we looked at every single industry LP agreement we could find. We took concepts that would be 20 lines and distilled them into three. The concepts are there but the lawyer verbiage is gone.”

Ressi estimates that the new documents can cut legal costs in half or more, depending on factors like how many LPs you bring in. There’s also a shortage of lawyers with fund formation expertise, he notes. Providing standard documents will speed this process up and help the global venture capital ecosystem develop faster.

VC Lab was formed within the Founder Institute, a global startup accelerator that has already made similar contributions to the startup ecosystem. Nearly nine years ago it helped develop the concept of convertible equity, a precursor to the SAFE note, which removes the debt elements from convertible notes.

“We believe that all the bottlenecks need to be done away with,” Ressi says about startup investing. “Then, there will be an explosion of new VCs and new LPs all around the world who are entering the asset class. That will create a real positive change for humanity because, no matter where you are in the world, you can pursue an idea to make the world a better place and find the resources you need to make it a reality. Unfortunately, this is not true today.”



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Founded by ex-Braintree and PayPal execs, Pagos raises $10M to offer API-driven payment intelligence – TechCrunch

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Pagos, a payment intelligence infrastructure startup founded by former Braintree and PayPal execs, has raised $10 million in seed funding.

Started earlier this year, the remote-first Pagos is building a data “platform” and API-driven micro-services that it says can integrate with any payment stack. The end goal is to drive better performance and “optimization” of a business’ existing payments infrastructure.

The concept was born out of the founding team’s experience at their previous companies. CEO Klas Bäck and CPO Albert Drouart held senior leadership positions at Braintree/Venmo and PayPal over the last eight to nine years (Braintree/Venmo was acquired by PayPal). The pair also worked together at payment processor Netgiro (later sold to Digital River). Daniel Blomberg, the company’s CTO, has launched seven startups (and sold five) over the last two decades.

(Side note: Bäck and Blomberg grew up in the same small town in the Swedish countryside but have both lived abroad — in different places — over the past two decades).

“The challenge we saw pretty much for every one of our customers was that they didn’t have enough knowledge, not enough data and not enough tools to be able to execute a strategy around payment processing or know how to optimize it,” said Bäck, who led Braintree’s international operations from inception and worked for PayPal after its acquisition of the startup. “This means they are a lot slower and they have a much harder time doing all the things they need to do and producing the results they want.”

In real terms, this can lead to higher operating costs, lost revenue and “unnecessary friction, making execution of business strategy a lot harder than it should be,” added Bäck.

So the remote-first Pagos set out to build a SaaS platform with what it describes as API-driven micro-services to help companies optimize their payment processing and execution of it. 

“We want to give them the insight and the data they need to answer — ‘what does it mean? How can I do better? How can I execute faster?”, Bäck said. “We want to give them those tools in an easy to consume way.”

It was enough to win over Underscore VC and Point72 Ventures — who co-led Pagos’ seed round — as well as angels including former Venmo GM and current Accel investor Amit Jhawar; Bill Ready, Google’s president of commerce & payments; Billy Chen, VP of financial partnerships at Finix and former director of payments at Uber; and Rich LaBarca, GM of Dynamics 365 Customer Insights at Microsoft.

In the short term, Pagos is offering services such as “immediate” payment data visualizations, automatic notifications on payment trends or problems and up-to-date bank identification number (BIN) details to manage customers and track costs. Looking ahead, the company is planning to offer network tokenization and account updater services.

“Midsize to large companies are getting reasonable traction on sales online or via their mobile app. Once they start hitting meaningful numbers, their payment infrastructure is holding them back,”  Bäck told TechCrunch. “We want to help them scale, and execute more with less resources.”

Since day one, the company has been working with customers on a global scale, from 50-person companies to others that are selling billions of dollars of products and services online.

The company plans to use its new capital mostly to scale its 20-person team, particularly engineers, noted Bäck.

Image Credits: Pagos

Its investors are, naturally, bullish.

Chris Gardner, partner at Boston-based Underscore VC, told TechCrunch that he was drawn to Pagos because its team spent decades working with its target customers, “making them uniquely qualified to serve them.”

“But their potential market is every e-commerce merchant in the world — and there are millions of them,” he wrote via e-mail. “Those are two potent ingredients in a winning recipe.”

In his view, the Pagos offering is unique in both the capabilities of their services and the delivery model to customers. Over time, the team plans on delivering more than a dozen individual micro services that solve specific payment optimization challenges — all accessible via APIs. 

“And since there is no such thing as ‘one size fits all,’” he said, “they are available completely unbundled, free to try and individually priced when used at scale.”

Dave Matter, operating partner of Point72 Ventures, believes that as commerce becomes increasingly digitized, merchants’ payment stacks have become more complex and difficult to manage.

“Pagos is led by two of the most accomplished payments product experts in the business, and their relationships, domain expertise and firsthand experience with these pain points is incredibly valuable,” he said in a written statement.



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