Great Retirement Meets Great Reload (Great race… lower those scores please)

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Welcome to Startups Weekly, a fresh look at this week’s startup news and trends. To receive this in your mailbox, subscribe here.

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We love the counternarrative these days.and this week’s pick is an analysis of why lower valuations might actually be good for startups these days.

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Over the past few months, both Stripe and Instacart have updated their internal scores as part of the 409A evaluation process. Startups saw their valuations cut by 28% and 38%, respectively, as a result of valuations. Anita Ramaswami and I looked into 409A and learned about a completely different meaning of “score haircut”.

Here is an excerpt from our article:

Many founders and industry experts view a company that scores a 409A lower than its investor-assigned score as a boon. This is because a low 409A valuation allows companies to grant stock options to their employees at a lower price. Companies can also use the new, lower 409A valuation as a hiring tool, luring potential employees with cheap options and the promise of cashing out at a higher price when the company eventually exits.

Sumukh Sridhara, head of founder products at AngelList, says companies see 409A as “an internal authorization mechanism for providing capital, not how they think we cost less.”

“If these companies had their way, they would claim that their value is 5% of their market value. But they really can’t get away with it,” he said.

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For our full understanding, read the whole story, “WTF is 409A” live on TechCrunch now or read the accompanying TechCrunch+ article, “An Explanation of Stripe’s New and Lower Internal Score”.

Also, if you want to get deeper into this conversation, join Anita Ramaswamy and me on Twitter Space next Tuesday at noon PT, 3:00 pm EST. We’ll have the guests from this part on the microphone, and of course the rhymes of what was cut from the story.

In the rest of this newsletter, we’ll move on to the fintech favorite, robots and software eating into headquarters. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter or subscribe to My blog.

Deal of the week

TomoCredit! Fintech raised $22 million to make credit ratings obsolete. I know, I know this is not the first fintech to try this, but there is something that stands out.

Here’s why it matters, via Mary Ann Azevedo: “Tomo differs from many other loan offers in that it does not rely on FICO scores for guarantee. Rather, it uses a “patented” underwriting algorithm (Tomo Score) to identify “high potential borrowers” without a credit score. The TomoCredit card does not require a credit check, deposit, 0% per annum and commissions.”

A man smashes a bottle of champagne on the edge of a huge credit card, as if launching a boat.

Image credits: Bryce Durbin/TechCrunch

About those robots

TC Robotics has been so wild this week that they have taken the site down (for a few minutes). Seriously though, the event was explosive and featured some of the biggest names in tech innovation. big ups Brian Heater for leading the effort.

Here’s why it’s important: Robotics, unlike many technology sectors, promises a great year for funding and, according to investors focused on this category, has some key recession-proofing characteristics. If you missed an event, don’t be discouraged because we have reviewed each panel so you can read and relive.

Illustration of a robot with a speech bubble in a laptop;  chatbot strategy for marketing

Image credits: Carol Yepes (Opens in a new window) / Getty Images

Software is eating the world and just gobbled up the a16z offices.

Primarily, thanks to hayja for this witty subhead! Second, venture capital firm and investment advisor Andreesin Horowitz announced this week that they will no longer have a single physical headquarters and instead build global outposts.

Here’s why it’s important: The firm prioritizes physical offices around the world over one centralized headquarters. This is not entirely unexpected, given that the pandemic is still ongoing. However, it is useful to track how distributed VCs are adjusting to a remote environment, not just a remote one.

Contrary Capital’s Eric Tarczynski says his firm has worked remotely from the start but recently launched a personal community space in New York for portfolio companies and founders on the firm’s network. Ankur Nagpal of Vibe Capital launched his fund, planning to spend a month in the regions in which he plans to invest. Brianna Kimmel of Worklife Ventures creates an invite-only public space in Los Angeles. Most recently, Index Ventures opened its fourth office in New York, the first new office in more than a decade.

photo of art deco building in miami with pastel gradient tones

Image credits: Arthur Debate (Opens in a new window) / Getty Images

Insert “Pitch Perfect” joke here

First, TechCrunch Live is on a brand new platform and we’ve made it easy to apply for a pitch practice. Investors (and my inbox) can attest to the importance of brevity, savvy, and clarity in presentations, so that’s good to see.

Startups can now apply to participate in Pitch Practice any day, any time. filling out this form. We will select startups 24 hours before this week’s event and notify them by email. If you have been selected to participate in one event, you can also apply to participate in future events. We want companies to submit more than once, using feedback from previous experience. Call it growth without cost.

Seen on TechCrunch

Amazon buys primary care provider One Medical for $3.9 billion.

Andreessen Horowitz gives up physical HQ in exchange for global outposts

SEC Takes Long-Worried Stance On Coinbase Insider Trading

Google encourages employees to act “more entrepreneurially.” Translation: Work harder or else

Tesla dumped 75% of its Bitcoin holdings

Airbnb co-founder Joe Gebbia stepping down as CEO

Seen on TechCrunch+

What does Amazon get for the $3.9 billion it pays for One Medical?

Where should American startups file their patent applications?

Has no one told Europe that the party is over?

Can Medicare Save the Insurance Technology Market?

See you later,

H




Credit: techcrunch.com /

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