Commentary: The old guard in venture reigns supreme

Black founders raised $212 million out of $29 billion this Q2, picking up just 0.71% of the capital allocated to U.S. founders this quarter, according to Crunchbase. In Q2 2022, Black founders raised $602 million out of $62 billion, or 0.97%, of the capital allocated.

In total, Black founders raised around $565 million out of $75 billion in H1 2023, which is 0.75% of all capital raised in the U.S. so far this year. That, too, is a drop from the $1.8 billion out of $144 billion, or 1.25%, that they raised in H1 2022. Overall, funding to Black founders has gone down from previous years, but the overall amount of funding allocated has gone down, too.

This isn’t surprising. Black founders have never raised more than 2% of capital in any given quarter, and the funding to them has been on a steady decline since the first quarter of 2022. Black founders picked up at least a billion in every quarter of 2021, momentum pushed forward by the Black Lives Matter movement in 2020. But quietly, attention has moved elsewhere, and the consistent decline in funding proves the waning investor interest.

There seem to be two different worlds within the venture ecosystem. There is the old guard, the ones who have billions of assets under management, who operate in their bubble and rarely leave. Founders must go to them. Then there is the new guard, the emerging fund managers, many of whom are diverse, who are here to shake up the playbook. The problem is that they don’t have billions of AUM (assets under management), so even though their intentions are good, their checkbooks are dry.

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Ask Sophie: Any tips for F-1 student visa approval amid the rising denial rate?

Sophie Alcorn Contributor

Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

More posts by this contributor

• Ask Sophie: Which US visas are best for international founders?
• Ask Sophie: How realistic are my chances of hiring H-1B candidates at my startup?

Here’s another edition of “Ask Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Ask Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

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Dear Sophie,

I was accepted into a prestigious robotics engineering master’s program in the U.S. that begins in the fall! However, I heard the denial rate for F-1 student visas is increasing. Why? 

How can I increase my chances of being approved?

— Soon-to-Be Student

Dear Soon-to-Be,

Thank you for studying in the States! The U.S. needs and appreciates international students like you. This visa adjudication change will cost billions to the U.S. economy, and it’s a step backward with tech job vacancies growing and the swift rise of several emerging technologies. The United States is in critical need of international students like yourself to support our security and economy to remain competitive throughout this century.

I’ve got lots of tips and strategies for you, but before I dive in, some good news: Earlier this week, the U.S. Citizenship and Immigration Services (USCIS) held an additional random selection round — or lottery — among the H-1B registrations that were submitted but not selected in the March lottery to meet the annual cap of 85,000 H-1B visas. The USCIS has notified the additional 77,609 registrations that were selected. (The USCIS selected 110,791 registrations in March.)

The second selection round could indicate that the number of cap-subject H-1B applications that the USCIS expected to receive by the June 30 deadline fell short of estimates, or, probably less likely, that the agency denied H-1B applications at a higher rate than expected. Decreased petitions would have likely stemmed from a combination of some continuing layoffs as well as the same candidates being entered into the lottery multiple times by separate companies, a change that the American Immigration Lawyers Association has proposed to DHS, which recently issued a brief response.

The F-1 is a great way to learn and grow in the United States. Studying in the U.S. and completing your degree also offers the opportunity to work in your field through F-1 OPT (optional practical training) and STEM OPT, the two-year extension of OPT. Last month, robotics engineering and seven other fields of study, including institutional research and composite materials technology, were added to the STEM Designated Degree Program List, now making you eligible for STEM OPT!

Now, about those declining F-1 approval rates — you’re correct: According to the Cato Institute, the denial rate for F-1 student visas jumped to an “unprecedented” 35% in 2022, compared to the 14% denial rate in all other nonimmigrant (temporary) visa categories, which include the H-1B specialty occupation visa and the O-1A extraordinary ability visa. Before 2021, F-1 student applications had a similar denial rate as other nonimmigrant visa applications. However, in 2021 and 2022, F-1 visas were denied at double the rate of all other nonimmigrant visas.

Students can apply for an F-1 visa only after they have been accepted into an approved university program, so “[t]his means that the U.S. Department of State turned down 220,676 students who would have likely paid roughly $30,000 per year or $6.6 billion per year in tuition and living expenses,” writes David Bier, the author of the Cato Institute report. “Over four years, that number rises to $26.4 billion in lost economic benefits to the United States.”

Let me dive into your questions, starting with the why.

Why is the F-1 denial rate increasing?

The State Department doesn’t specify the reasons for denying an F-1 visa. However, most consular officers deny nonimmigrant visas when you fail to prove in your visa interview that you have nonimmigrant intent, which means you only intend to remain in the U.S. temporarily and eventually plan to return to your home country.

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Meta starts blocking the news in Canada — its latest standoff with publishers

Canadians using Facebook and Instagram should expect to see some gaps in their feeds, starting now.

This week, Meta began blocking Canadian access to links and stories from news publishers — the company’s response to a bill that would require the tech giant to pay outlets for the right to distribute and profit from their content.

“As we’ve always said, the law is based on a fundamentally flawed premise,” Meta policy communications director Andy Stone wrote on Twitter. “And, regrettably, the only way we can reasonably comply is to end news availability in Canada.”

Today we've begun the process of ending news availability in Canada. Changes will roll out over a few weeks.

As we've always said, the law is based on a fundamentally flawed premise. And, regrettably, the only way we can reasonably comply is to end news availability in Canada. https://t.co/OtpxOW1eUp

— Andy Stone (@andymstone) August 1, 2023

In June, Canadian Parliament passed the Online News Act, a law that forces tech platforms to negotiate with publishers in order to establish “fair revenue sharing” over their content. When those agreements don’t come willingly, the law — like its Australian counterpart — allows for mandatory arbitration as a “last resort” — an outcome that isn’t likely to look kindly on the tech half of things.

On Tuesday, Meta announced that it has “begun the process of ending news availability in Canada.” All Facebook and Instagram users in Canada will eventually see the limits on news as the new policy rolls out in the coming weeks. The changes will apply to publishers themselves but also to users who share news and links.

Google plans to follow suit with its own news blackout in search results over the law.

With the legislation, Canadian lawmakers set out to bolster a news industry in decline, as shifts in advertising trends have lopsidedly rewarded online platforms at the expense of the competition. For more than a decade, tech platforms have reaped the benefits of publishers’ original content without having to pay for it, even as the news industry plunges into a disheartening death spiral that leaves it endangered.

Tech companies, content to reap their rewards as the middlemen, have expressed little sympathy for the dying industry. After various experiments and gestures toward funding the news — a fairly transparent effort to stave off global legislation like the new Canadian law — Meta has more recently withdrawn from the conversation altogether. (Columbia’s Tow Center for Digital Journalism tallied up what we know about where Meta’s previous financial contributions to the news industry have gone, as the company does not maintain a public register of that information.)

The era of Meta giving lip service to publishers may be at an end, with the company taking a very adversarial stance in Canada and supposedly backing away from news content in its Twitter clone, Threads. That situation follows a similar standoff in Australia in 2021, when Meta shut off news content in the country to protest the News Media Bargaining Code, which similarly forces tech platforms into compensation talks with publishers. Now two years in, Australia’s own standoff with companies like Meta and Google appears to have been a shot in the arm for local journalism, with $140 million in additional funding circulating each year.

In Meta’s pivot, the company has resorted to disingenuously claiming that it doesn’t benefit from publishers’ content — a laughable statement considering the extent to which news and political content has driven engagement on Facebook.

“We believe that news has a real social value. The problem is that it doesn’t have much of an economic value to Meta,” Rachel Curran, head of public policy for Meta Canada, claimed earlier this year.

Critics of these laws make plenty of reasonable points. For one, the news industry is already overly reliant on social networks to drive traffic and spread stories, a dependence that these pieces of legislation would only worsen. The future of sustainable news likely depends on new solutions altogether — not deepening existing ties to mercurial tech giants. Other critics have pointed out how these forced negotiation frameworks may disproportionately advantage existing large media groups to the detriment of small and independent publishers.

The laws are controversial — and may result in some awkward experiences for social media users — but ultimately the current arrangement disproportionately benefits tech companies, which happen to also be the ones crowing about being wronged this time. Like with the Australian legislation, how things play out in Canada will be a bellwether for future laws obligating social platforms to pay for their content, including one proposal on the table in California that’s on hold until 2024.

Meta’s vision for Threads is more mega-mall than public square

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This California agency wants to know what happens to all that connected car data

The troves of data collected by today’s modern connected cars has long been viewed as a cash cow — a yet untapped opportunity that could boost profits for automakers. Now one California agency wants to know exactly how that data might be used.

The California Privacy Protection Agency announced plans this week to review the data privacy practices of automakers that make and sell connected vehicles embedded with all kinds of data-mining features, from cameras and location sharing to web-based entertainment and smartphone integration.

“Modern vehicles are effectively connected computers on wheels. They’re able to collect a wealth of information via built-in apps, sensors, and cameras, which can monitor people both inside and near the vehicle,” CPPA executive director Ashkan Soltani said in a statement. The aim, Soltani said, is “to understand how these companies are complying with California law when they collect and use consumers’ data.”

The CPPA’s review is a first in the United States, where automakers have enjoyed a more lax data privacy environment compared to Europe. But that could soon change, at least in states that have passed data privacy laws like California, Connecticut, Colorado, Utah and soon Virginia.

So far, California is the first to conduct a review of how automakers use connected car data, an action that aligns with the state’s lead in data privacy laws. The Agency is conducting this review under the California Consumer Privacy Act, a law adopted in 2018 that gives individuals in the state the right to know the personal information collected about them by businesses, the right to delete that information and the right to stop its sale or sharing.

Privacy advocates have raised concerns about the downside of connected cars for years because these vehicles often automatically gather consumers’ locations, personal preferences, and other details about their daily lives. Those concerns have grown as automakers have stepped up their software game in a bid to catch up with Tesla.

Today, a new 2023 model year vehicle likely has an infotainment system with an array of third-party apps as well as cameras, including one facing the driver as part of its advanced driver assistance system. A growing number of vehicles have “Google built-in,” software based on the company’s Android operating system that has been adapted for automotive and integrates all of Google’s app directly into the vehicle.

The agency said California has more than 35 million vehicles registered in the state. That’s not counting the millions more registered in other states that are on California roads. This saturation of connected cars has implications even for individuals who don’t own the vehicle, including ride-hailing customers and even pedestrians.

Internet-connected vehicles produce huge amounts of data when driven, data which is then shared with manufacturers and held for years under privacy policies that allow vast and near-unrestricted use of the data they collect. Manufacturers can share or sell that information with data brokers, which when combined with web browsing and phone data can be used to profile users for targeted advertising.

Collecting huge amounts of vehicle data also makes it obtainable by law enforcement agencies, which can demand vehicle data from in-car entertainment systems, collected by car manufacturers, and used for tracking and surveillance.

Google noted in a statement provided to TechCrunch that it does not have access to any vehicle data unless automakers choose to license Google products.

“In all instances data is used in accordance with our Terms of Service and Privacy Policy,” the company said, providing a link to that policy. “Drivers also have the option to change privacy settings for Google apps and services at any time. This extends to what is shared with third parties.”

GM pointed TechCrunch to its policy as well, noting that it is committed to protecting customers’ personal information.

“GM takes data privacy seriously and is committed to safeguarding personal information,” the company said in an emailed statement. “For every GM vehicle, the vehicle owner must accept GM’s User Terms and Privacy Statement to use these products and services. These documents detail our data practices and are available online for consumers to review.”

California’s Privacy Act: What you need to know now

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Tinder to launch a ‘high-end’ membership this fall amid product refresh

Tinder is preparing to launch a new “high-end” membership later this fall as well as a product refresh aimed at better catering to Gen Z users, according to parent company Match Group, as part of its Q2 2023 earnings release on Tuesday.

The new Tinder membership was confirmed earlier this year by Tinder CPO Mark Van Ryswyk, who had then dubbed the $500-per-month offering “Tinder Vault” in an interview with Fast Company. As inspiration for the new product, Van Ryswyk cited learnings from Match Group’s July 2022 acquisition of another high-end dating app, The League, which could cost users up to $1,000 per week.

The exec said that indicated there’s a market for daters who are willing to pay for quality matches and experiences that lead them into new relationships. But he indicated the product would rely on technology, not human matchmakers.

Match Group acquires members-only dating app The League for ~$30M

The company shared today it expects the initial pricing for the new membership to be “substantially higher” than Tinder’s current offerings, given the extra benefits it entails. In addition, the product will have limited availability making it a more exclusive offering. Further details weren’t available in the company’s shareholder letter but may come up during the Q&A in tomorrow’s call with investors.

The company also noted Tinder would roll out an “important” product refresh in the second half of the year with a focus on better catering to its core Gen Z audience. This refresh will include features like prompts, quizzes, and conversation starters, as well as leverage AI to surface the right content to the right people.

“While the core Swipe feature will remain central to the Tinder experience, the changes are meant to make the app more dynamic and engaging,” Tinder’s shareholder letter reads. “We expect these features to begin rolling out in select markets later this month.”

In the quarter, Match Group generated revenue of $830 million, up 4% year-over-year, and forecast next quarter’s revenue of $875-885 million, citing Tinder’s return to growth. The company had been expected to report $811.4 million in revenue, according to FactSet.

Tinder was responsible for $475 million in direct revenue in Q2, up 6% year-over-year, which the company attributed to its strategic decision to focus the first half of the year on optimizations and a new marketing campaign, “It Starts with a Swipe,” that translated into “revenue acceleration and improved user growth,” it said.

Image Credits: Match

The campaign helped in terms of new user signups and in encouraging lapsed users, including women, to rejoin.

The company also referenced new U.S. pricing optimizations introduced at the end of Q1 and uplift from popular weekly subscription packages as aiding in Tinder’s growth.

The downside of the pricing optimizations at Tinder was a decline in payers, which dropped 4% year-over-year to 10.5 million, as conversions decreased. Match Group payers overall declined 5% year-over-year to 15.6 million.

Among other earnings highlights, Hinge was cited as one of the top three dating apps by downloads in 14 markets globally. The app also pulled in $90 million in revenue in the quarter, up 35% year-over-year, with 1.2 million payers.

The company also reported operating income of $215 million, representing an operating margin of 26%. Adjusted operating income was $301 million, representing a margin of 36%.

Match Group’s earnings call will be hosted on Wednesday, 8:30 AM ET.

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Privateer wants to create a “data ride-sharing economy” for space

Privateer Space is launching a new module for satellite operators called Pono, which the company says will help make space data available at scale and at a far lower cost than it is today.

The first Pono prototype will launch on a D-Orbit space tug in late 2023. Based on the data it receives from this first prototype in orbit, the company will launch a second, iteratively designed Pono module in mid-2024 before making it fully available to customers early the following year.

When Privateer emerged from stealth in 2021, led by Alex Fielding and Steve Wozniak, the company characterized its main mission as space situational awareness: creating the “Google Maps of space,” for satellite mission planning and even orbital debris tracking. The company’s first product, Wayfinder, offers such tracking for spacecraft and other objects in space.

But combined with Pono, Privateer is now looking to build a marketplace for data, where customers can “ride-share” on satellites and task them to collect data on whatever region of Earth is of interest. In a statement, Wozniak said that this is akin to when GPS technology became widely available.

“Building a data ride-sharing economy in and from space, paired with our on-orbit AI, enables Privateer to give away the safety, sustainability, and optimization technology that helps earn satellite operators more customers while giving a global user base a way to access space that traditionally has been reserved for large governments only,” he said. “This is similar to when GPS technology became available to the masses and we expect it to have a similar impact.”

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Trump's PAC Pays Melania's Stylist $108,000 For 'Strategy Consulting'

Apparently, fancy ball gowns for Trump's wife are all part of his grand strategy to stay out of prison. Good luck with that.

One thing Trump, or at least the people he hires are good at is creative accounting. They have to be.

Source: Daily Beast

The leadership political action committee founded by Donald Trump paid a mind-blowing $108,000 to Melania Trump’s stylist in the first six months of 2023 for “strategy consulting,” FEC filings show. The disclosures from Save America PAC—which also showed tens of millions of dollars being spent on the indicted former president’s legal expenses—do not divulge the nature of Hervé Pierre Braillard’s supposed consulting. But the French-American designer, who made the gown Melania wore to her husband’s inaugural ball in 2017, also received at least $132,000 from the PAC in 2022, according to Fox News. “Mr. Pierre is a world-renowned artist,” Melania’s office said in an August 2022 statement. “His work extends to many different fields, not just fashion design. His expertise is utilized for special projects and events.”

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