When Equidate, a venture-backed secondaries marketplace based in San Francisco, closed its most recent round of funding with $50 million four months ago, it was hardly a surprising bet on the part of its backers. As startups linger ever longer as private companies, more people are looking to lock up shares wherever they can find them.
Investors have plenty of platforms from which to choose. In addition to Equidate, other companies that match investors with “pre-IPO” company shares include EquityZen, SharesPost, and Seedrs. Still, individual investors have mostly been relegated to choosing this or that company on a piecemeal basis as shares have become available. Among few exceptions to this rule include investors in venture funds like 137 Ventures, whose express aim is creating a portfolio of secondary shares that have been acquired from earlier investors, founders, and employees, or in Industry Ventures, which has been buying up later-stage secondary shares since its founding in 2000. (Investing in SoftBank’s Vision Fund, which is piecing together a portfolio of unicorn companies, might be another option for people with enough access, though it comes with certain strings attached.
No wonder Equidate thinks there’s a better way, And with the financial wind at its back, it just began testing out its theory. How? By spinning off a new asset management business whose sole purpose is to acquire shares in the “top” private companies that are currently valued at more than a billion dollars but that still trade privately.
It isn’t going to buy 5 or 20 or 100 stakes. Instead, the portfolio will maintain positions in exactly 30 companies, and these will be adjusted on a quarterly basis, led by the person leading this new spin-off: Ziad Makkawi, a longtime investment advisor who recently spent two years as CEO of Qatar First Bank.
As Equidate founder and President Sohail Prasad see it, his company is already spending time learning an awful lot about Palantir and Stripe and WeWork and Pinterest. It tracks bid and ask activity, along with how pricing and valuations are reflected by both new transactions and time decay. To underscore how much data is coursing through Equidate, he says that company now sees $1 billion in transaction volume on its platform annually.
After a point, he and the rest of Equidate’s management concluded that it made sense to create an index to track the health of these companies in a way that makes it easier to understand their performance relative to their peers (it rolled this out yesterday). It also decided to create a product around the index. Enter its new fund and accompanying asset management firm.
“We’re excited,” says Prasad. “This is going to let people buy for the first time a basket of all of these companies, which are vetted and that are already in their growth stages and in, really, in previous years, would have been public already.”
It’s easy to see other investors getting excited about a kind of exchange traded fund filled with unicorns, too. But first things first. The new fund is still being raised, sounds like. It’s looking to close with between $50 million and $100 million in capital. It’s also worth noting that although SEC Chairman Jay Clayton has said he’d like the agency to allow more retail investors a shot at companies that have been out of their reach, Equidate’s new spin-off, Equiam, will still only accept checks from accredited investors, and they need to invest at least $250,000 .
There’s also the prickly question of whether the companies that investors want most are accessible to Equiam. Unsurprisingly, Prasad, argues that it’s not an issue. “Because we’ll be a larger fund, we’ll be able to buy blocks of preferred stock where traditionally a person might not have access. We do have access at this scale.”
As for what Equiam is charging in management fees, the fund is “incredibly low cost,” says Prasad. Investors will have to decide whether they agree, but those who write the fund a $1 million or bigger check will pay a 1.5 percent management fee. Investors who come in at between $250,000 and $1 million will pay a 2.5 percent management fee.
If you’re curious about to learn more, you can learn more by checking out Equiam’s site here.
Source: TechCrunch
Who’s got the best price on these wire-free earbuds?
Source: CNET
The turmoil continues at facial recognition startup Kairos . Last night, Kairos founder Brian Brackeen filed a counter lawsuit against Kairos and its interim CEO Melissa Doval that seeks $10 million in damages.
Kairos is a facial recognition startup that has become well-known for its stance to never sell to law enforcement. At Disrupt SF 2018, Brackeen showed his technology and spoke on a panel about the hazards of facial recognition and algorithmic bias.
This countersuit comes after Kairos terminated Brackeen from his role as chief executive officer, citing Brackeen misled shareholders and potential investors, misappropriated corporate funds, did not report to the board of directors and created a divisive atmosphere. Kairos followed that up with a lawsuit, alleging theft and breach of fiduciary duties — among other things.
In a countersuit, Brackeen now “seeks to hold Kairos and Doval accountable for intentionally destroying his reputation and livelihood through fraudulent conduct, the publication of malicious falsehoods, and the commission of illegal corporate acts.” The suit also alleges Kairos refused to pay him the compensation to which he was entitled.
In one example, Brackeen alleges Kairos, under the leadership of board chairperson Stephen O’Hara, did not pay him a salary for 34 weeks in order for Kairos to have a better cash flow.
“We’ve come to expect this behavior on his behalf,” Doval said in an email to TechCrunch. “We stand firmly with our original complaint and the courts will rule in our favor once they are presented with the evidence for the case. Our fiduciary duty is to our stakeholders, and we remain dedicated to doing right by them.”
The lawsuit alleges O’Hara also did not share Brackeen’s commitment to ensuring Kairos’ technology did not contribute to racial bias and other social injustices. It also alleges O’Hara pressured Brackeen to retract his promise to never sell the technology to law enforcement. That clash, the lawsuit alleges, resulted in O’Hara seeking to push Brackeen out of the company. O’Hara, in an email to TechCrunch, denies those claims.
“Of note, as far as I know as chairman of the board, we are not trying to sell this to law enforcement and have no plans to do so until such time we can insure [sic] any biases of facial recognition are solved and all privacy issues addressed,” O’Hara wrote. “Frankly, we are focused on much more attractive opportunities now.”
In the coming weeks, Kairos will hold a meeting of the shareholders, where Brackeen hopes they will vote to remove the board and reinstate him as CEO. That meeting was supposed to happen last week, but has since been rescheduled. Brackeen says he’s currently trying to get enough shareholders on his side to force a vote. In the last week, however, the company presented an offering to shareholders that was fully subscribed.
“Meanwhile, thanks to a vote of support from all classes of shareholders this past week, Kairos under Melissa Doval is focused on building its business behind its new on-premise product,” O’Hara wrote. In a follow-up email, O’Hara said, “Shareholders voted to approve the Rights offering which was fully subscribed, and included ratification of the Board and Ms. Doval.”
That offering valued the company at $1.5 million — a significant drop from Kairos’ previous $120 million valuation. That means shareholders were able to purchase 43,366,780 shares at a price of just $0.01153 per share.
“Though the emergency nature of this offering and the Company’s precarious financial position have led the Company to offer common stock in this offering at a price well below that received in prior fundraising transactions, the structure of the offering as a rights offering to all existing investors in the Company will allow the Company to raise needed capital without subjecting participating investors to dilution of their ownership stakes in the Company,” the memo, obtained by TechCrunch, states.
One of the conditions of that offering is to reconstitute the Kairos board of directors as a three-person board that consists of O’Hara, Kairos Director Mike Gardner and Doval.
The point of this offering is to raise $500,019 in “emergency capital” to be able to pay its employees and continue operating into 2019. As O’Hara noted, the offering was fully subscribed.
Thanks to this current legal situation, which Brackeen refers to as a “cram down,” his ownership in the company has decreased by 90 percent, which “shows a disrespect for founders.”
Kairos is pretty cash-strapped right now. Even with the emergency capital in place, Kairos is only set up to be able to operate through Q1 2019, “by the end of which management believes that revenue growth through sales either will enable the Company to become financially self-sustaining or will place the Company on a more sound financial footing that allows it to conduct further capital-raising,” the memo states.
Meanwhile, however, Brackeen says he has been able to raise $3.5 million in venture funding, and is targeting a total of $5 million. This funding, he hopes, will be successful in convincing shareholders to vote to replace the board. Brackeen raised this funding from Beyond Capital Markets, an impact investment fund.
But convincing them to invest given the current state of Kairos was quite the feat, Brackeen said.
“It’s like riding a bike backwards with one arm — and blind,” he told me.
The lesson for founders, Brackeen told me, is “when you’re taking those first investments and you’re really excited, you need to have callouts for the founder versus the current CEO.”
He added that “angel groups shouldn’t have that kind of power too late in a company’s lifecycle.” Additionally, once founders are starting to raise a Series A, “you need to make sure your lawyers are not meeting them halfway on docs and not necessarily playing nice.”
Source: TechCrunch
Looking for the dictation, speech-to-text, and voice control options in Windows 10? Here’s how to set up speech-to-text in Windows 10 and use it to go hands-free in a variety of different tasks and applications within Windows.
The post Learn how to easily set up speech-to-text in Windows 10 appeared first on Digital Trends.
Source: Digital trends
Google trails Amazon and Microsoft in the business of renting computing power to other businesses.
Source: Wired
The only sure things in this life, according to Ben Franklin, are death and taxes. And a new startup called Visor has just raised $9 million in financing to make one of them as painless as possible.
Unlike Nectome, Visor won’t kill anyone, but it may ring the death knell for the high-end tax advisors that most Americans can’t even access to get help filing and paying their taxes. It’s like having a personalized accountant for the cost of a high-end do-it-yourself tax-prep service.
The $9 million Visor raised came from the venture capital firm Defy, with participation from Unusual Ventures, SVB Capital and existing investors like Obvious Ventures, Fika Ventures and Boxgroup, which had put a previous $6.5 million into the company.
The idea for the company had been percolating for co-founder and chief executive Gernot Zacke since he settled in the U.S.
Growing up in Sweden, Zacke was exposed to a much different process for paying taxes. “The experience of filing taxes in Sweden is that you receive a message from the government that stated how much you made and how much you were withholding. That’s it,” said Zacke. “Taxes should be as easy as ordering a cab.”
That’s the service that Visor aims to provide.
“If you think about the market there are two ways to get your taxes done. There’s the DIY space and then there are other online services but it requires the tax payer to fill out the forms and it leaves the tax payer with a little bit of anxiety,” said Zacke. “We’re delivering the CPA experience through the convenience of a web app and a mobile app.”
On average, Americans spend about 13 hours each year dealing with taxes, and the average American doesn’t have the benefits of a professional advisor who can help optimize the process. That’s what Visor wants to provide.
“You provide the same amount of information you provide to a CPA or TurboTax… we make sure that that information is filed securely on AWS and shared between the docs and the backend,” said Zacke.
The target customers for Zacke’s services are folks who have had a change to their tax situation — whether moving, buying a home or any other life event; or folks who have had a CPA and don’t want to pay the higher fees, he said.
Visor currently has an operations team of around 34 people split between San Francisco and Atlanta.
For Zacke, the pain point he’s solving with the Visor service is very real. A former employee of the European investment firm Atomico, Zacke bounced between the U.S. and Europe — eventually running U.S. investments for the firm before leaving to launch Visor.
Other co-founders and senior executives hail from the tax advisory world, and from employee benefits outsourcing services company Zenefits, along with former Venmo and Square developers.
“Taxpayers spend $20 billion a year to get their taxes prepared and are stuck between spending hours filling out DIY tax software and hiring an expensive CPA,” said Zacke, in a statement. “
Source: TechCrunch
In the latest set of holiday sales, Lenovo is heavily discounting its fifth-generation ThinkPad X1 Carbon and other popular Windows laptops and 2-in-1s for the holiday shopping season.
The post Save $900 on the ThinkPad X1 Carbon and more with Lenovo’s Cyber Monday sales appeared first on Digital Trends.
Source: Digital trends
Nvidia’s delay in announcing a ship date for its GeForce RTX 2060 GPU could be due to a burst in the cryptocurrency mining bubble. Executives blamed the crypto hangover for an oversupply of inventory on existing GTX 1060 cards,
The post Crypto hangover could take blame for Nvidia’s potential GeForce RTX 2060 delay appeared first on Digital Trends.
Source: Digital trends
When WarnerMedia announced last month that it would be shutting down its streaming service FilmStruck, the team at the Criterion Collection said it would be looking for a new digital home. Today, Criterion announced that it will be building that home itself — namely, launching a streaming service called The Criterion Channel.
The company remains best known for its beautifully restored and packaged DVDs and Blu-rays of classic art-house films, but it’s also moved into streaming, first by offering selections from its film library on Hulu, and then by creating its own channel within the larger FilmStruck service.
In a blog post, Criterion described The Criterion Channel as “picking up where the old service left off, programming director spotlights and actor retrospectives featuring major Hollywood and international classics and hard-to-find discoveries from around the world, complete with special features like commentaries, behind-the-scenes footage, and original documentaries.”
The plan is to launch in the spring of 2019, at a price of $10.99 per month or $100 per year. However, Criterion is already looking for “charter subscribers” to sign up now — in exchange for supporting Criterion (and presumably offsetting the technical costs), those subscribers will get a discounted rate and other perks.
“We need everyone who was a FilmStruck subscriber or who’s been tweeting and signing petitions and writing letters to come out and to sign up for the new service,” the company says.
As for FilmStruck, a number of high-profile filmmakers have reportedly reached out to Warner Bros. executives in the hopes of saving the service. It sounds, however, like WarnerMedia already has plans for a more comprehensive service that will encompass aspects of FilmStruck — in fact, Criterion says its library will also be available on the WarnerMedia service when it launches.
Source: TechCrunch
The platinum-iridium cylinder has been scrapped, and the kilogram will now be determined by the Planck constant.
Source: Wired