Funding Friday: Americas Food Fund

As we continue to make our way through this pandemic, I keep coming back to the question of how do we help those in the most need right now. Last week it was our health care responders on the front lines, the week before it was workers in the hospitality industry who are now out of work.

This week, I’m drawn to this huge GoFundMe campaign that Apple, Laurene Powell Jobs, and Leonardo DiCaprio launched yesterday to raise money for World Central Kitchen and Feeding America, two large charities who run food programs for the poor and dislocated.

When things go wrong, it is always those with the least who suffer the most. So I am helping this campaign get to its $15mm goal. If you want to join me, you can do so here.

#Current Affairs#hacking philanthropy

The SoundCloud Stimulus Plan

As Billboard is reporting this morning, our portfolio company SoundCloud is putting up $15mm to support its creator community in this difficult time for musicians.

Musicians can’t tour right now. That’s a huge part of their earnings. Many are turning to live streaming and I hope that will turn into real money for them. But regardless, everything that supports musicians right now will help.

SoundCloud is investing an additional $10mm in its Repost Select artist services platform to get money into the hands of artists now. They are also making $5mm of Promote On SoundCloud inventory free to artists.

And SoundCloud has made it one-click simple for artists to connect to Kickstarter, Patreon, Bandcamp, and PayPal so their fands can provide direct support.

And last but not least, SoundCloud has relaunched its Repost by SoundCloud offering that makes it simple for its artist community to get plays (and get paid) across all of the major streaming services.

All of this will help the SoundCloud artist community make more money online while their in-person business is offline. And that is a really great thing.

#Current Affairs#Music

An Emergency Response Startup Story

My friend Matt Blumberg, who ran USV’s former portfolio company Return Path for twenty years before selling it last spring, got a call from Colorado’s Governor Polis two and half weeks ago asking him to fly out and be the founding leader of an innovation startup to help Colorado’s Covid 19 response. A large part of Return Path’s organization has always been in Boulder so Matt is well known out there.

Matt said yes and spent fourteen days getting it off the ground and hiring his replacement before flying back to the NY metro area last weekend.

He took notes throughout the entire two week experience and is sharing them on his blog, called Only Once.

Here are Days Zero and One

Here are Days One Two and Three

Here are Days Four Five and Six

Matt will post the rest of the days over the course of the next week.

You can subscribe to his blog and get the posts via email.

I asked Matt to send me the entire thing yesterday and read it last night.

It is fascinating reading and I think all of you who start and lead companies will think so too.

#Current Affairs

Drones - A Socially Distant Way To Get Work Done

If you have a roof that needs to be inspected but you don’t want people crawling all over your house right now, if you have mission-critical infrastructure that needs to have its regular inspection done but you don’t want third parties in your environment right now, if you want to have your facade inspected but don’t want to be putting up a sidewalk shed and all of that, then you might want to use a Drone mission to get that work done.

Our portfolio company Dronebase is in that business and has been doing “socially distant” missions for over five years. Over the last three weeks, as much of the US and Europe have shut down with work from home orders, Dronebase has been able to deliver on that vast majority of its missions and is very much open for business.

One of Dronebase’s smaller customer sectors is media, but they do regularly fly missions for news organizations and here is some imagery of New Orleans that they captured recently for Reuters (video link, image below):

Here is some from Santa Monica, where I just was socially distant biking this morning (video link, image below):

#drones

Startups and SBA Loans

Last week Congress passed the CARES Act which provides a vast array of financial relief provisions to people and businesses in the US.

Congress is providing relief to small businesses via a forgivable loan program administered by the Small Business Administration (SBA). The SBA has long been in the business of making small business loans, but the loans under the CARE Act are very different. Here are the primary provisions of these CARE Act loans (cut and paste courtesy of my friends at KE Law):

  • Loan Program Eligibility.  Any business concern (including franchises) as well as non-for-profit organizations, with no more than 500 employees are eligible to receive a single loan under this Act.  The maximum amount of the loan is the lesser of (1) $10M, and (2) 2.5 times the monthly payroll costs determined over a specific testing period.  No personal guarantees or collateral will be required for loan eligibility under this Act.
  • Loan Proceeds Usage.  Loan proceeds can be used for payroll and other compensation costs, health benefits, insurance premiums, mortgage interest, rent, utilities and interest on other outstanding debt.
  • Loan Forgiveness.  Perhaps the most important element of the Loan Program is its loan forgiveness element.  Pursuant to the Act, borrowers under this Act will be forgiven a specific sum equal to the sum of (1) certain payroll costs, (2) mortgage interest payments, (3) rent, and (4) utility payments that were incurred during an 8-week period beginning on the loan borrowing date.
  • Forgiveness Penalties.  Given the intent of the Act to save American jobs and salaries, the amount of the foregoing loan forgiveness will be reduced by certain factors.  These factors include a reduction in the average number of full-time employees as well as substantially reduction (beyond 25%) in employees’ salaries.
  • Other Terms.  The maximum loan term under the Act will be 10 years (for amounts that were borrowed that are not subject to loan forgiveness), and the maximum interest rate is 4%.  The first payment on any loan under this Act will be for at least six (6) months, but not longer than a year.
  • How to Apply.  Eligible business should seek competent counsel immediately to work on the application, as the loans will begin to be available likely by the middle of April 2020.  Required information for the application will include payroll documentation, tax filings, unemployment insurance filings, proof of payment of payroll taxes, mortgage applications and the like.

So this sounds great for startups, right?

Well not so fast.

The law as written requires “affiliates” to aggregate their employees into a total and that must be below the 500 employee threshold in order to qualify for these loans. And most of the lawyers that I have talked to over the last few days read the affiliate provision in the CARES Act such that any venture capital-backed startup would need to affiliate with all of the other startups that are backed by the same venture capital firm or other kind of investor.

There are many folks in startup land (lawyers, investors, CEOs, lobbyists, etc) who are working with Congress and the SBA to address this issue. Many of the largest employers in small businesses in the US are backed at some level by investors who back many startups, including angels, seed funds, VC firms, and corporate investors.

From what I can tell, based on some work but not exhaustive work, this was not intentional on the part of Congress and there seems to be a willingness to figure this out.

If you are planning on accessing these loans, I recommend talking to a lawyer who is well versed in venture capital and startup law and make sure you are looking carefully at the affiliate provision. And if you have a relationship with your elected officials in Washington, you might want to reach out to them and explain that the Cares Act affiliate rules are problematic.

It is my hope that this “bug” in the law will get fixed over the next week or so. It may be possible for the SBA to address this issue without the need for any more work by Congress and that would be ideal in my view.

#VC & Technology

Video Of The Week: The Bill Gates TED Interview

Earlier this week Chris Anderson, who runs TED, hosted a 45min conversation with Bill Gates. I heard a lot about it in the last few days (it has already had 1.2mm views) and this morning the Gotham Gal and I watched it over our morning coffee.

What I like about this conversation is that Bill provides a lot of information and helpful context in a very calm, serious, and helpful way. It made me more comfortable just watching it. And we can all use some comfort right now.

If you do watch this, please make sure to stick around to the last six minutes or fast forward to it. It has such a hopeful ending. Bill is a long term optimist about science and technology, as am I, and the talk ends in a discussion around that.

#Current Affairs

Funding Friday: Helping Healthcare Workers

As the coronavirus pandemic spreads across the US, the people who are stepping up the most to meet this challenge are our country’s healthcare workers. We should do everything we can to help make sure they can work safely during this crisis.

So today I am highlighting two fundraisers for protective equipment for these health care workers. Both are on GoFundMe (which happens to be a USV portfolio company but that is just a coincidence here). I have given to both of them.

A Million Masks For NYC – This one was started by a bunch of folks in the NYC tech sector and has raised from individuals (like me) and NYC tech companies. You can give here.

Frontline Responders Fund – This is a $10mm campaign started by Edward Norton and the logistics company Flexport to fund supplying “masks, gowns, gloves and other critical supplies to protect medical professionals in hospitals across the world.” You can give here.

#crowdfunding#Current Affairs

Buying Bitcoin In Your IRA - The Alto IRA

I wrote about the idea of buying Bitcoin in your IRA last year. I got a lot of responses to that post and one of them was from the founder of Alto IRA.

I set up an Alto IRA, moved my old IRA over to it, and waited. When they had an alpha version of the crypto service up and running, I bought some Bitcoin in my Alto IRA via their Coinbase integration.

Now that service is fully battle-tested and ready for everyone.

Here are the details of the Alto Crypto IRA. If you are interested in buying crypto in your IRA, they have a slick Coinbase integration that worked great for me and should work well for you too.

#crypto

OnCoins

If you are a crypto enthusiast like me, how do you stay on top of the daily crypto news cycle? There is crypto twitter, but that’s not for the faint of heart. If you hang out there, you know what I mean. You can read the news at Coindesk, Cointelegraph, and the other leading crypto news sites. I do both of these things as well as participate in a number of chat groups where we trade links. It gets the job done, but it’s a lot of work.

Enter OnCoins, a crypto news aggregator by our friend William Mougayar. It looks like this:

You will find the format familiar if you use Techmeme to follow the tech sector news. It’s a great format, efficient, clean, fast, and it lets you go deep when you want to.

William told me that he has used some technology and some tricks to make this work a bit differently than Techmeme and he has more planned.

You can get OnCoins by email once a day if you prefer that format. Sign up here if you are interested.

Well done William. I look forward to getting my daily email and staying on top of the fast-moving crypto sector.

#crypto

Firefox Better Web (with Scroll)

Ad blockers are hugely popular. Close to 800mm people around the world use them to avoid intrusive ads and data collection. I do not use an ad-blocker but I completely understand why one would choose to do so.

And yet much of the media business is supported by advertising. There are a growing number of subscription-based media services, but many people cannot or won’t pay for content and the vast majority of content consumed on the web is advertising supported.

So USV has long felt that a subscription-based ad blocker would make a lot of sense. Ad-supported publications could opt-in to get a piece of the subscription revenue and agree to block ads to the subscribers who have the ad blocker.

And that is why we invested in our portfolio company Scroll which makes exactly that.

And today, Scroll and Firefox are launching Firefox Better Web, which is a service inside of Firefox ($2.50 a month to start and $5 a month in time).

I downloaded the latest version of Firefox this morning and signed up. It went like this:

I signed up by giving my email address and entering my payment credentials.

And then I added the Scroll browser extension and was good to go.

I visited SB Nation and got an ad-free experience.

Which compares to this experience in my Chrome browser without Scroll (Scroll works on Chrome too)

The partnership between Firefox and Scroll makes a ton of sense. Firefox has long been committed to privacy and making the web work better for its users. If you use Firefox try the Better Web service. And if you use Chrome or another browser, you can get Scroll and experience more or less the same thing there too.

#Web/Tech