Category: TECHNOLOGY
Virgin Galactic Strikes Deals to Expand Fleet
The company has agreed to open a spaceship assembly in Arizona and signed a deal with a Boeing unit for two new planes. …read more
Elon Musk pushes for the Twitter trial to start next year
With Twitter pressing for a quick trial, Elon Musk’s lawyers are making a case to slow things down.
In the lawsuit Twitter filed against its would-be owner, the company argued that it would only need four days to prove that the court should require Musk to follow through with his agreement to buy it for $44 billion. Twitter took the SpaceX and Tesla CEO to task in the lawsuit, not just for trying to back out of the deal but for dragging the social network through the mud in the process.
Twitter, likely tired of being in limbo as the drama drags on, requested that the trial be expedited with a start date as soon as September.
Musk’s legal team pushed back on Friday, claiming that the case will require “forensic review and analysis” of a deep pool of data, referring to his argument that Twitter undercounts its number of spam and otherwise fake accounts. Bloomberg reported the new filing from Musk’s legal team.
Team Musk is aiming for a February 13, 2023, trial date, which Bloomberg describes as “an extremely rapid schedule for a case of this enormous magnitude.”
“Twitter’s sudden request for warp speed after two months of foot-dragging and obfuscation is its latest tactic to shroud the truth about spam accounts long enough to railroad defendants into closing,” Musk’s legal team wrote. The filing argues that an analysis of Twitter’s bot population will be time-intensive but that the process is “fundamental” to determining how much Twitter is worth.
We’ll know more about the timeline of the trial on July 19, when a judge will evaluate if the case should be expedited.
https://techcrunch.com/2022/07/15/elon-musk-twitter-lawsuit-timeline-february/
Daily Crunch: After developers complain, Microsoft clarifies new policy on open source monetization
Every founder is searching for ways to conserve cash at the moment, but a laser focus on saving money instead of creating efficiencies will only delay the inevitable.
In July 2022, investors will not back companies that can’t demonstrate proficiency in five basic KPIs, according to Kraig Swensrud, founder and CEO of Qualified.
“We’re not going back to the sugar high of the past decade anytime soon, but with integrity, strong leadership and operational efficiency, we can not only survive, but thrive.”
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.
Time to do the Friday dance! We’ve mentioned our virtual TC Sessions: Robotics event a few times, but we’ve got some good news for events fans. Hang on to your blockchains and sharpen those crypto wallets — we’re doing a TechCrunch Sessions: Crypto in November as well! Happy weekend! See y’all on Monday. — Christine and Haje
The TechCrunch Top 3
- Words mean everything: Microsoft came under fire recently by developers due to the way it worded a new policy banning profiting off of open source software, and while the company clawed back that policy, Paul provides a look at what all this will mean.
- No snakes and frozen statues hereChristine writes about Medusa’s $8 million seed round to take on Shopify with its open source e-commerce tool for small businesses to grow their business beyond the basic API implementations provided by marketplaces.
- B-O-A-R-D: No, it’s not today’s Wordle answer — we checked — but fans of the game will be delighted to know that the popular guess-the-word computer game is being turned into a board game, Ivan writes.
Startups and VC
“We have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” OpenSea CEO Devin Finzer said, as Lucas reports.
The question bouncing around Alex’s mind this morning is why venture investments are slowing when so much capital has been raised by VCs to invest? (Read about it on TC+, our subscription product.)
NGL and Sendit’s apps are problematic, Sarah writes, because they’ve been using misleading tactics to trick their young users into thinking they were receiving engagement from friends when they were not.
Kick off the weekend by bopping along to this wildly dark and weirdly threatening EDM track from Rüfüs Du Sol, as you skim the best of the rest:
- Hi, is that Nothing? Brian just posted his review of the Nothing Phone (1), sharing that it’s “a refreshing change of pace in a smartphone market that has lost much of its sense of fun.”
- Hi, WYD: The race is on, with a number of startups racing to build a crypto-native, consumer-friendly messaging platforms for web3, reports Connie.
- Shields up: With her new startup, Granitt, Runa Sandvik aims to help at-risk people, like journalists and activists but also politicians, lawyers, refugees and human rights defenders, from threats they face doing their work, Zack reports.
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You get a credit card, you get a credit card: Stori offers credit cards to underserved populations …read more
https://techcrunch.com/2022/07/15/microsoft-clarifies-new-policy-on-open-source-monetization/
Cryptominers defend gigawatt-scale energy usage called out by Congress
Citing “disturbing” levels of power used by cryptocurrency miners, a group of Democrats led by Sen. Elizabeth Warren is urging the Environmental Protection Agency and the Department of Energy to crack down on the controversial industry.
The letter, signed by four senators and two representatives, calls on regulators to compel cryptominers to disclose their carbon emissions and energy use. Environmentalists have long raised concerns about Bitcoin and other power-hungry, proof-of-stake tokens — and globally, cryptocurrencies are estimated to consume more energy than entire countries, such as Venezuela and Finland.
In the U.S., just seven firms have built more than 1.045 gigawatts of capacity for cryptomining purposes, the report states. “This is enough capacity to power all the residences in Houston, Texas.” The mining farms highlighted in the report are run by Stronghold, Greenidge, Bit Digital, Bitfury, Bitdeer, Marathon and Riot.
Though the crypto winter of 2022 might incentivize some miners to scale back operations, the lawmakers argue the industry at large is poised to grow rapidly and “is likely to be problematic for energy and emissions.” Still, they caution that “little is known about the full scope of cryptomining activity.” Hence their call for more data.
In response to the lawmakers, the companies downplayed the industry as a source of planet-cooking emissions. Nevertheless, they highlighted their individual efforts to curtail emissions and tap into renewable sources.
Marathon pointed to its work “with energy companies to build clean, green, renewable energy resources (e.g., solar and wind) that might not otherwise be built.” However, most of the energy tapped by Marathon currently comes from a coal-burning plant in Hardin, Montana.
Along similar lines, Riot argued that “Bitcoin mining drives more demand for renewable energy than the typical U.S. energy consumer” and spotlighted its use of hydroelectricity in upstate New York. Riot’s operations in Rockdale, Texas, however, feature nearly seven times the capacity and draw power from the state grid. Texas generated most of its energy from nonrenewable sources last year (51% from natural gas and 13.4% from coal).
Speaking of coal, Stronghold told lawmakers that it is “actively working to remediate coal refuse piles and converting coal refuse into energy.” Coal mining waste is an environmental nightmare, and cleaning it up is a good idea. Burning coal waste, on the other hand, still yields harmful emissions, though scrubbers can lessen the worst effects.
Blockfusion and Bitdeer, meanwhile, pointed to their use of software to minimize strain on energy grids.
Though the letter casts a critical eye on crypto, the majority of near-term emissions cuts in the U.S. need to come from the power and transportation sectors in order for the U.S. to reach its 2030 net emissions goal, according to researchers at the Electric Power Research Institute. In …read more
Are convertible notes the right way to fund your startup?
If an early-stage startup is ready to raise money but its valuation hasn’t been established yet, a convertible note can serve as a good fundraising option.
A convertible note is a debt instrument that typically converts into equity at a later date. Investors who invest in a note are effectively loaning money to the startup, but instead of getting their investment back as dollars with interest, they get it back in the form of equity once a valuation is assigned at a later fundraising round.
This approach has a number of advantages for both the company and investors. Convertible notes allow companies to delay being valued until an equity funding round, extending the time they have to build a product and flesh it out. And for investors, while riskier than the traditional funding route, convertible notes give them an opportunity to get more equity for their money than if they wait until Series A.
How to tell if convertible notes are a good fit for your startup
One advantage to convertible notes that founders shouldn’t overlook is that they typically don’t come with any control or board seats.
Convertible notes work best for early-stage companies, especially pre-revenue startups. That could mean a company that has a solid proof of concept — a product that’s proven to work on the current scale or a medical device in the early stages of applying for FDA approval.
In both cases, the companies are building their value, and the dollars they raise with a convertible note help them scale. The end result is that when they’re ready for an equity financing round, they’re already at a higher pre-money valuation than they would be otherwise.
When funding a company with a convertible note, investors look for massive upside potential. The best-case scenario is when the company ends up having a substantially higher-than-anticipated valuation by the time it gets to Series A.
Convertible notes typically include a valuation cap so that early investors don’t lose out if the company’s value skyrockets before a Series A. When the note converts, investors get more equity at the price of the valuation cap, and they share the benefits of the company’s increased value.
What kind of investors use convertible notes?
https://techcrunch.com/2022/07/15/are-convertible-notes-the-right-way-to-fund-your-startup/
Senate Plans Vote Focused on Semiconductor Portion of China Bill
Talks on broader competitiveness legislation have stalled as administration urges quick action. Commerce Secretary Gina Raimondo says lawmakers “absolutely have to focus on the chips investments.” …read more
Nucleus Genomics lands new funding from Alexis Ohanian to help people assess specific disease risks
Nucleus Genomics, a genetic testing company focused on calculating a patient’s risk of certain diseases, is adding $14 million to their initial seed funding round. With this round the company has raised, in total, $17.5 million.
This “seed plus” funding round was led by Alexis Ohanian’s 776. Ohanian is joining investors like Founders Fund, Adrian Aoun (CEO at Forward Health), Brent Saunders (former CEO at Allergan), Matteo Franceschetti (CEO at Eight Sleep) and others. Nucleus originally announced a $3.5 million seed round back in December of 2021.
Typically, Nucleus users will upload their own genetic results previously obtained by an at-home testing company like 23andMe or Ancestry. Then Nucleus will calculate polygenic risk scores, which is a measure that provides a genetic predisposition for a potential condition, and provide information about said risk on their platform. Customers also have the option of ordering their own genetic testing kit provided by the company.
Polygenic risk scores have been scrutinized for their potential bias. In a study published in the National Library of Medicine, close to 80% of participants in genetic studies (and the base of evaluation) have been from European descent, and does not account for demographic differences, like race.
“In genetics, they’re so European biased, so when we actually build models we want to make sure the models work for everyone, not just the United States, or anything out there,” said founder and CEO Kian Sadeghi.
Although Nucleus allows users to upload their genetic info obtained by a third-party, Sadeghi said there is “no need for a formal partnership” with those companies.
Up to now the company has been “focused on assessing risk,” but funds from this round will be used to grow their current team across different areas. Additionally, the company will be establishing their own genetic testing infrastructure and buying testing kits in bulk.
Sadeghi added, he wants (and will allow) users to be in the most control of their data.
When a user signs up on the platform they are asked how they would like their data to be shared, if even, in addition to providing the option, if users would like, to provide data to research groups to “advance research and medicine” according to the company.
“Nucleus believes very much in kind of a foundational data ownership and control,” Sadeghi said. “We are built in our DNA, so to speak, on maximal data ownership, and data control. You decide if your data is shared, and if so with who, when and how.”
However, the company has yet to launch mainstream and it is unclear how this will look for users on the company’s platform.
The company suggested in an interview with TechCrunch there would be a possibility they expand into an international market, and for Sadeghi he said it aligns with the vision he’s had since day one.
“When we say human genome and every smartphone, we’re not kidding,” Sadeghi said. “We really see a world beyond just the boundaries of the United States where people can engage and interact and …read more
EU Privacy Regulators Are Scrutinizing Data Flows to Russia
Regulators are monitoring legal changes in Russia and how they could affect any data being moved through from the EU, according to the European Data Protection Board, the umbrella group of authorities from the bloc. …read more
TechCrunch+ roundup: Save your equity, LatAm crypto survey, where the runway ends
As I’ve written previously, I decline most guest columns we receive, particularly ones that explain basic best practices. Rules are made to be broken, however.
This 10-point guide to managing layoffs with empathy and respect can help inexperienced managers find their way through the worst part of running a startup: letting people go.
“People will remember this day for the rest of their lives,” says Nolan Church, co-founder and CEO of Continuum, previously chief people officer at Carta and head of talent at DoorDash.
“They can remember it one of two ways: Either you surprised them with bad news and treated them like cattle, or you did all you could to look out for them and help them navigate to the next chapter.”
Money doesn’t need to be protected from sudden vibrations or direct sunlight, so the term “dry powder” strikes me as a poor metaphor for the mounds of cash investors were dropping on startups just a few months ago.
“What’s crazy to me is that some of these companies are still in the seed stage backed by very large firms who dabbled at this stage,” said Elizabeth Yin, a general partner and co-founder at pre-seed-focused Hustle Fund.
“An extra $200,000 or $500,000 wouldn’t make a dent in a billion-dollar fund even if it went horribly.”
Rebecca Szkutak interviewed Yin and Kirby Winfield, founding general partner at pre-seed-focused Ascend, about the sudden, urgent funding requests they’ve recently received from founders with short runways.
Full TechCrunch+ articles are only available to members.
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription.
“I had one cross my desk yesterday where a brand-name VC led the seed, which they are now calling a pre-seed,” Winfield told TechCrunch.
“I know this company. I know they raised a pre-seed and a seed round and are now coming back around and saying, it was pre-seed and now we are raising a seed.”
With more investors content to wait things out, a traditional three-month fundraising timeline might stretch on for six. Or even longer.
As a result, founders are stuck with potentially unwelcome options, such as marking down their valuations and/or accepting flat and down rounds.
On Monday, we’ll run columns with practical advice for exploring both of those scenarios. In the meantime, have a great weekend, and thanks very much for reading.
Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist
10 steps for managing layoffs respectfully
Image Credits: MirageC (opens in a new window) / Getty Images
As I’ve written previously, I decline most guest columns we receive, particularly ones that explain basic best practices. Rules are made to be broken, however.
This 10-point guide to managing layoffs with empathy and respect can help inexperienced managers find their way through the worst part of running a startup: letting people go.
“People will remember this day for the rest of their lives,” says Nolan Church, co-founder and CEO of Continuum, previously chief people officer at Carta and head of talent at DoorDash.
“They can remember it one of two ways: Either you surprised them with bad news and treated them like cattle, or you did all you could to look out for them and help them navigate to the next chapter.”
Here’s how to protect your equity if you get laid off
Image Credits: Colin Anderson Productions pty ltd (opens in a new window) / Getty Images
Take note, startup workers: The same people who welcomed you aboard …read more
Silicon Valley Bets on New Transport
As Silicon Valley moves forward with measures to ease traffic and housing woes, real-estate developers expect big technology companies to expand their workplaces. …read more