BlackRock acquires minority stake in SMB 401(k) provider Human Interest

Investment giant BlackRock announced Friday it is taking a minority stake in, and leading a financing round for, venture-backed fintech startup Human Interest.

Terms of the deal were not disclosed.

Human Interest’s digital retirement benefits platform allows users “to launch a retirement plan in minutes and put it on autopilot,” according to the company. It also touts that it has eliminated all 401(k) transaction fees. The startup told TechCrunch previously that it works with “every kind of SMB” — from tech startups to law offices, to dentists to dog walkers, to manufacturing firms, to social justice nonprofits.

The San Francisco–based company has raised a total of $336.7 million in funding since it was founded by Paul Sawaya and Roger Lee in 2015. The Rise Fund, TPG’s global impact investing platform, led a $200 million round for Human Interest in August 2021 that propelled it to unicorn status. Other backers include SoftBank Vision Fund 2, Crosslink Capital, NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital and Susa Ventures, among others. Since the initial closing of that round, Human Interest said in a blog post that it has seen has over 400% growth in the number of customers and revenue. At the time of that raise, execs told TechCrunch that the company was targeting a traditional IPO sometime in 2023, hoping to have “$200 million+ in run-rate revenue before going public.” In August of 2021, it was at “tens of millions of run-rate revenue, and adding millions of new revenue each month, according to execs.

“BlackRock has an amazing team focused on providing high-quality retirement saving and investment options. We are excited to work with BlackRock to find ways to bring retirement within reach of millions of additional workers in the coming years,” said Jeff Schneble, CEO of Human Interest, in a written statement.

“We look forward to helping Human Interest close the access gap,” said Anne Ackerley, head of BlackRock’s Retirement Group, in a statement.

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BlackRock acquires minority stake in SMB 401(k) provider Human Interest by Mary Ann Azevedo originally published on TechCrunch

HBO’s ‘The Last of Us’ is a video game adaptation that’s actually good

This weekend, HBO and HBO Max will premiere the first episode of “The Last of Us,” a post-apocalyptic thriller based on the popular video game. On Sunday, January 15, it will debut on HBO at 9:00 p.m. ET and stream in 4K on HBO Max. The series will have nine episodes in total and follows the plot of the 2013 game where a fungus outbreak turns half of the world’s population into flesh-eating zombies–a.k.a. “clickers.”

Starring “The Mandalorian” actor Pedro Pascal as Joel, and “Game of Thrones” actress Bella Ramsey as Ellie, “The Last of Us” centers around these two characters who, at first, want nothing to do with each other. Joel and his confidante, Tess (played by Anna Torv), are tasked with smuggling Ellie out of the quarantine zone in Boston and across the U.S. As the story progresses, Ellie and Joel’s dynamic shifts as they start to depend on each other.

“The Last of Us” is HBO’s first foray into adapting a video game into a series. But you wouldn’t know it based on the quality. After so many video game adaptation fails, the show will likely be a relief to many “Last of Us” fans. Granted, it was co-written by the game’s creator, Neil Druckmann, so there was little room for it to flop in the first place. HBO’s “The Last of Us” is Druckmann’s love letter addressed to the millions of loyal fans that help keep the decade-long franchise alive.

(“The Last of Us” spoilers ahead.)

On the outside, “The Last of Us” may just seem like another survival story with zombies. However, unlike the stomach-churning gore that’s associated with the genre, the HBO series doesn’t focus on dramatic, long-winded shootouts and shots of the undead being sliced in half. Instead, it focuses on the human relationships between the uninfected as their world turns more uncertain by the minute.

What makes this show so great, in our opinion, is the fact that viewers don’t need to play the game to understand it. Although HBO’s “The Last of Us” is very accurate to the timeline of the game and has Easter eggs sprinkled throughout, there are some key differences that help the story speak to a larger audience.

For instance, the game takes place in 2033, whereas the show is set in 2023. This was done to help viewers “connect a little bit more,” co-creator Craig Mazin said in a CNET interview. “If I’m watching a show in the year 2023 and it takes place in 2043, it’s just a little less real. I thought it might be interesting to just say, ‘Hey, look, in this parallel universe, this is happening right now,’” Mazin added.

Another distinction that we’ve noticed so far is how in-depth the show goes with Joel’s backstory. The beginning cutscene of the video game is only about 15 minutes long, whereas HBO’s “The Last of Us” takes a more drawn-out approach.

The first episode begins with a flashback from 2003, when the initial fungal outbreak occurs. In this scene, Joel appears as a less intense man, sleeping through his alarm and facing simple problems like forgetting to buy pancake mix. Also, Joel’s daughter, Sarah (played by Nico Parker), gets a surprising amount of airtime, with clips of her cooking scrambled eggs, fixing her dad’s watch, and baking cookies with her next-door neighbor. These scenes are unique to the show and give viewers more time to get to know the father-daughter duo, which makes the events that follow that more heart-wrenching.

Image Credits: HBO

After Sarah is killed, the episode then jumps to 2023 when Joel is a smuggler in a quarantine zone guarded by FEDRA (Federal Disaster Response Agency) soldiers, while a militia group led by Marlene (Merle Dandridge) called “The Fireflies” aims to revolt against military oppression and restore government control.

The viewer then meets Ellie, a teen that’s immune to the fungus and is being held captive by The Fireflies. Like in the game, the series will mainly focus on Joel and Ellie’s relationship and how their views on the world differ.

Other characters who have yet to be introduced include Frank (Murray Bartlett), Bill (Nick Offerman), Kathleen (Melanie Lynskey), Florence (Elaine Miles), Riley (Storm Reid), Perry (Jeffrey Pierce) and Henry (Lamar Johnson).

“The Last of Us” will likely do well for HBO Max, despite the streaming service increasing its subscription price earlier this week.

Similar to its other highly anticipated shows like the “Game of Thrones” spinoff, “House of the Dragon,” the company went all out to promote its newest series. For instance, Warner Bros. Discovery hosted a two-hour immersive experience and screening of the first episode in New York City, giving guests an array of “The Last of Us” themed goodies, photo opportunities and more.

On January 15, HBO Max is also launchingThe Last of Us Podcast,” hosted by Troy Baker, the voice actor who plays Joel in the game. Druckmann and Mazin will also be featured in episodes as they discuss how they made the show and other behind-the-scenes stories. Each episode will be released every Sunday in tandem with the show.

HBO’s ‘The Last of Us’ is a video game adaptation that’s actually good by Lauren Forristal originally published on TechCrunch

Deconstructing ‘The Twitter Files’

The bombast with which the so-called Twitter Files have been released is incongruous with the mundanity of their content. Even so, as the circus folds up the big top and the barkers return to their Substacks, it is worth a thorough retrospective to put these breathlessly delivered, revelation-flavored products in context.

That few large news outlets have opted to report much of the information in these threads has been attributed to complaisance, partisanship, complicity with government interference, or various species of corruption. The banal truth is that, if other newsrooms are anything like our own, they read each as a matter of diligence, and simply found nothing new or interesting to report, or what little there was contaminated by the dubious circumstances of their presentation.

What’s important to understand at the outset — and what the authors make clear from the start — is that no one involved in the selection and analysis of the internal communications appears to have any familiarity with (let alone expertise in) how social media and tech platforms are moderated or run. This is not said in order to poison the well — it matters because this lack of familiarity is in great part the reason these stories were published to begin with, and it explains the editorial slant they are given.

In each Twitter Files thread, we see unfounded assumptions, insinuations, and personal interpretations given equal weight as facts, more or less establishing these as opinion pieces rather than factual reporting. That alone will have spiked a great deal of coverage, as however salacious the theory, little of what is actually provided satisfies editorial standards in many a newsroom.

It must also be obvious by now that this ostensible act of transparency was conducted with a definite goal: to discredit the previous moderation and management teams, and advance a narrative of systematic anti-conservative activity at Twitter. This has resulted, both deliberately and by neglect of basic best practices, in harassment and targeting of individuals.

Plainly this is all orchestrated by Elon Musk, whose spite is equally plain in the wake of his botched purchase of the platform — an event that has been catastrophic to his wealth and reputation. But catastrophe loves company, and he seems insistent that all receive a portion of his ruin.

That said, given the natural curiosity of our readership on these matters, I thought it may be of interest to catalogue the claims in one place, as well as what rendered most of them unreportable, despite occasionally containing notable information.

Part 1: “Handled”

Claim: “An incredible story” of how “connected actors” had accounts deleted and stories suppressed, with a clear left-leaning bias

The inaugural thread unambiguously and repeatedly shows working moderators grappling honestly with difficult decisions.

It also shows the inbox of a content moderation response team: not a dark and secret back channel but an official means for governments (the U.S. and others), individuals, companies, law enforcement and anyone else with special insight or purpose to communicate with the company’s dedicated department. There are no surreptitious “connected actors,” this is essentially customer service. The assertion that there were “more channels, more ways to complain, open to the left” is completely unsupported.

The question of First Amendment violations is a massive red herring, aided by Musk, who publicly aired his misinterpretation of it in the replies. As the thread notes, “there’s no evidence – that I’ve seen – of any government involvement in the laptop story.” Government requests, as documented and discussed publicly for years, are routine. Private requests, like the Biden campaign flagging non-consensually shared nude images of Hunter Biden as violations of Twitter’s terms of service, are routine.

Here as in other threads, the source documents themselves may well be of interest, but are not reliable as presented and do not demonstrate the claims stated. And it must be recorded here how slapdash the redaction and presentation of the information was, giving a sense of carelessness and overhaste to these supposedly momentous reports.

Part 2: “Secret”

Claim: “Secret blacklists” and “shadow bans” were common at Twitter

The second thread is an exercise in fear, uncertainty, and doubt that depicts the tools of a functioning social media moderation team as those of a secret speech-controlling elite. Flags and moderation functions are not public by design, as some of the information is proprietary to Twitter, personally identifiable to the account, or the type of thing to be taken advantage of by malicious actors, who would redline behavior if they knew exactly how the system worked.

By the definition applied here, much of what goes on in any company is “secret.” Google, Facebook, Microsoft, Sony, Amazon — any company that maintains and monitors large numbers of users and communications has a “secret” system like this. It was nice to peek behind the curtain, which was why I did report it in that context; I would have done the same if one of those other companies’ non-public moderation practices had been exposed.

But in keeping with the intended narrative, the thread only shows examples of moderation actions that affect a handful of conservative fringe accounts. We can’t know if and how these tools were used in other circumstances, such as putting a left-leaning account on a “trends blacklist,” because that data is withheld — “secret,” as Weiss would no doubt put it. It would be irresponsible to draw conclusions based on such purposefully manipulated data.

The thread also does a bit of prestidigitation in the matter of “shadow banning,” which Twitter publicly denies doing according to its own, also public definition. Weiss redefines the term as something Twitter does do (industry-standard moderation practices) and concludes that the company has lied retroactively. The disingenuous presentation discourages coverage.

Part 3: “Interaction”

Claim: “Decisions by high-ranking executives to violate their own policies” in the ban of Donald Trump, and “ongoing, documented interaction with federal agencies

The deliberations of a social media moderation team put in the unprecedented situation of deciding whether and how to suspend a sitting president’s account (and how to adjust policies going forward) are interesting in a fundamental way; however, the way this information is presented is again too suspect for any reporter to trust and report. With no access to the original chat logs, it is impossible to say whether the conversations here are accurately represented or, as is far more likely given how the narrative in which they are couched, selectively shown (though in fairness, the process by which these logs were given to the authors is not entirely in their control). What little we are privy to is not particularly notable.

The “interaction” with federal agencies is also given a FUD treatment. As noted above, law enforcement and governments are of necessity in constant contact with every social media company — indeed, with all of tech and much of commerce and industry in general. It really is part of their job, and yes, there are agents and specialists designated for social media and tech duty, just as there are some detailed to shipping, manufacturing, finance, etc. Whatever one’s opinion on this practice (and let me just say, I am no bootlicker myself), it surely isn’t news. The attempt to transmute these “interactions” into “intimidation” or “obligation” is not successful.

A Presidential election following several marked by attempts (successful or not) at interference by foreign adversaries is of natural interest to the FBI, among other authorities, and a weekly check-in seems the bare minimum to keep each other informed of potential influence campaigns, trends in cybersecurity, relevant intelligence, and so on. Let us not forget that Twitter amounts to essential communications infrastructure for every government agency at this point; monitoring it is an important but quite ordinary matter. It would be far more surprising and worth investigating if this contact didn’t exist.

Part 4: “Policy”

Claim: Twitter changes its policies in order to ban Trump, and “expresses no concern for the free speech or democracy implications

The discussion documented here is only partial, but it seems to show, as before, the team grappling with evolving circumstances and figuring out in real time how the company should respond. In one quoted chat message, former head of trust and safety Yoel Roth puts it quite clearly: “Policy is one part of the system of how Twitter works… we ran into the world changing faster than we were able to either adapt the product or the policy.”

As a private company running its own fast-moving social platform, obviously Twitter changes its policies regularly, and also makes exceptions to them at its discretion; in fact had made them before in favor of Trump. This was a notable exception, of course, but also the result of extensive internal discussion — which acknowledges both the ad hoc nature of the actions and policies, and their gravity as well. It seems strange for this thread to say no discussion was had when one is clearly shown here and in the next thread. (Perhaps it’s a matter of opinion what “expressing concern” looks like.)

All of this was also widely, widely discussed and reported by pretty much everyone in the world at the time.

Part 5: “Unprecedented”

Claim: Twitter’s choice to ban Trump goes against previous decisions and is part of a pattern of politically biased censorship

Again, reading the actual discussions of dozens of people throughout the company — not “a handful” as it is characterized — in an unprecedented situation is interesting, but difficult to report on given the lack of context and editorialized presentation. These internal debates are more or less what anyone would expect, and hope, of a company trying to figure out how to handle this.

The chat logs do offer a note of specificity long after the fact, but the (by this point obligatory) attempt to cast it as an elite group making directed choices to “influence the public discourse and democracy” is again unsupported, and also contradictory with the notion, elsewhere advanced, that this group was being controlled by the FBI and other government agencies.

Part 6: “Subsidiary”

Claim: The FBI has infiltrated Twitter and exerts “constant and pervasive” influence

“The #TwitterFiles show something new: agencies like the FBI and DHS regularly sending social media content to Twitter through multiple entry points, pre-flagged for moderation.”

It may be new to some, but as noted above, this is quite an ordinary and well-documented practice: for law enforcement, and political parties, and government agencies, and private companies, etc., to call content or accounts to the attention of a platform’s moderation team. It has been done for a long time, and in fact much of it is publicly declared by major tech companies in their regular Transparency Reports, which list government requests and orders, what they pertained to, and how many resulted in some kind of action, or provoked a challenge or request for a warrant. Notably the thread actually shows this kind of pushback happening.

This type of form email can be found in every platform’s moderation team inbox. Incidentally, the description of so prosaic a greeting as “Hello Twitter Contacts, FBI San Francisco is notifying you of the below accounts…” as having a “master-canine quality” is a real puzzler. I’m genuinely unsure who is meant to be the master and who the canine.

There is of course room for debate on how much the government (among other entities) can or should request, legally, procedurally, and ethically speaking. As is the revolving door of high-level corporate and lobbyist positions and government officials. Fortunately for us, just such a debate has been ongoing for two decades. It surely must have bemused many reporters in this space that a topic discussed so widely and for so long is being treated as new or controversial.

Part 7: “Discredited”

Claim: A conspiracy orchestrated by the FBI and intelligence community to preemptively discredit the Hunter Biden laptop story

Even if anyone at any newsroom thought it was worth re-(re-)litigating the laptop story, which was discussed ad nauseam at the time, the way information is presented in this thread is dangerously disingenuous.

The sleight of hand occurs in drawing connections between things with no actual connection — conspiracy theory “logic.” For instance, two facts: One, the FBI was aware of the laptop, and had collected it; two, the FBI sent some documents to Twitter just before the NY Post published its story. These are presented as if clearly linked.

But as the other threads made clear, these FBI document drops were quite a regular occurrence, as often as weekly (in fact later threads complain information was shared too frequently). And there is no evidence the FBI considered the laptop a specific “hack-and-leak” threat, let alone expressed that to parties like Twitter (the general be-on-lookout months earlier is weak tea). Not only is the significance of either fact unsupported individually, but they are connected in the thread in an unsupported way.

This type of suggestive free association occurs repeatedly. And magically, an elaborate “influence operation” uniting the FBI, IC, a think tank, and a few other villains is assembled, like a corkboard with pins and yarn criss-crossing it. (Never mind that subsequent threads show they could barely organize a cross-agency conference call.) Under even the slightest scrutiny this vast conspiracy evaporates, and what is left is clearly a loose collection of people talking about potential cyberthreats in a tense election season.

Few newsrooms would approve of presenting such feats of conjecture as fact, if any reporter even considered using such flimflam as the basis of their own article.

Part 8: “Covert”

Claim: Twitter “directly assisted the U.S. military’s influence operations”

This claim is actually true — or was. We clocked the roll-up of this U.S. influence operation back in August, but this was still a thread that we read with interest.

Every government performs propaganda operations here and there, with various degrees of success and secrecy (both low in this case); it’s table stakes in intelligence. We see networks of fake accounts rolled up frequently, though understandably the ones that are given the most press are foreign operations intending to influence U.S. discourse; these grew so numerous that Facebook started bundling them into roundups and we left off covering all but the most notable, since they were clearly rationing them for positive news cycles.

In this case, an ask was made to give a number of officially military-associated propaganda accounts slightly privileged status (immunity from spam reports, for instance). Twitter agreed, but later the military removed the association disclosure from the accounts, rendering them “covert,” though possiobly the word overstates the case. This angered Twitter, but either they felt they could not renege on their deal with the Pentagon, or, given how small and ineffective these accounts clearly were, decided it didn’t really matter much one way or the other. (In retrospect, given the bad PR, they probably wish they had hammered it. But hindsight is 20/20, as most of the Twitter Files demonstrate.)

To observe a U.S. operation to influence discourse abroad is interesting, and it does (and did) prompt legitimate questions of how closely tech companies should work with the Defense Department and intelligence community. Ultimately we felt that peeling back this layer of the onion was laudable but further coverage on our part was superfluous.

Part 9: “Doorman”

Claim: The FBI was the funnel for a “vast program of social media surveillance and censorship” across government agencies

Here we see the government’s haphazard approach to communicating with tech, with multiple agencies and cross-agency task forces overdoing it in various ways (primarily too much email). The number of accounts being flagged by law enforcement and government was already high and rising; Twitter complained and worked hard to triage and prioritize as government requests competed with press, user flags, and others for limited moderation attention.

It can’t be that surprising that the government would be overzealous in its efforts to tamp down on misinformation after years of asserting and soliciting opinions on how it might affect elections. Thousands of reports sounds like a lot, but count the number of police departments, state elections authorities, federal task forces, and so on, then imagine each of them finding a handful of problematic accounts or tweets each day. They add up quite quickly; it’s a big (and troubled) country, and there’s only one Twitter. Other platforms were experiencing similar overloads and government communications.

That these requests were channeled through two primary channels, the FBI San Francisco office and the Foreign Influence Task Force, for flagging domestic and international issues respectively, is presented as ominous but feels simply practical. The alternative, hundreds of sources independently contacting Twitter, is infeasible.

Even if we were to credit some of the accusations, it’s hard to draw conclusions because the context (beyond even “the year 2020”) is exceptional. The period before and after the 2020 election was absolutely rife with misinformation and other social media issues. Meanwhile every government agency even tangentially related to elections was likewise overwhelmed and working overtime. It’s not clear what is meant to be shown beyond an admittedly bloated bureaucracy in action.

Part 10: “Rigged”

Claim: “Twitter rigged the COVID debate” by “censoring,” “discrediting” and “suppressing” information and users according to government preferences

The words used above — rig, censor, discredit, suppress — are strong. But they are not accurate, and the author, apparently a professional quibbler, applies a sort of malicious hindsight to a handful of borderline cases.

The allegation here is that Twitter’s moderation team chose to use CDC recommendations as the basis for its COVID-related misinformation policy. This is neither new nor controversial, and not really even a sensible complaint. It is the role of that agency to stud, justify, document, and promulgate best practices in health emergencies. What other authority should Twitter have sought for such a policy? None is suggested. Indeed no realistic alternative exists. It was a public health and misinformation emergency and clear lines needed to be drawn — fast, and rooted in some kind of authority — in order that moderation could occur at all. Twitter used the CDC in its capacity as expert agency in drawing some of those lines.

It is stated in the thread categorically that “information that challenged that view… was subject to moderation, and even suppression.” Sure, sometimes. And sometimes things that should have been removed weren’t. Moderation is messy and 2020 was messiness epitomized. Mistakes were inevitable, as Twitter made clear at the outset; it’s trivial to go back and find a few among the decisions in their millions. It’s also pointless and subjective, and feels a bit spiteful.

All the thread offers is a “what if” the bar for debate had been moved an arbitrary amount in the direction the author prefers. But it conflates that notion with the idea that, because the bar was not placed correctly in his opinion (one of his quibbles is with masks, it seems germane to note here), that open debate was “censored.” We have seen censorship and this is not it.

Part 11: “Workload”

Claim: Federal agencies leveraged and then overwhelmed channels for reporting accounts

This thread was, like the earlier one, interesting in that the documents quoted show exactly the kind of improvised, scattershot approach expected by a disorganized government in response to the growing disinfo and state-sponsored digital influence ecosystem.

Twitter gave them the same inch they gave everyone else — a line to the moderation team — but the feds took a mile, and then weren’t sure what to do with it. The result was more noise and less signal, until Twitter had to tell them to get their act together and decide on a few reliable points of contact (our scary “funnels” from earlier) and documentation methods. It’s always grimly entertaining to see the government flail like this, but such logistical squabbles don’t seem worth reporting. Keep in mind this was also in the spring and summer of 2020, when all hell was breaking loose in pretty much every way.

As for the repeated assertion that Twitter was paid off by the feds, those are statutorily required consultation fees the FBI incurred through its requests for investigation (Mike Masnick’s reluctant reality checks on this and other contentions have been invaluable).

One note on the “narrative” side: The thread notes an “astonishing variety of requests” for account suspensions from officials. But only one is actually cited: Democratic Senator Adam Schiff’s office “asks Twitter to ban journalist Paul Sperry.” The request (denied) is, if you read it, actually flagging “many” accounts harassing a staffer (whose name is imperfectly redacted) and pushing QAnon conspiracy theories. Of the two named, one was already being suspended and the other was shortly after for other reasons. The choice and framing of this single example is telling. I would have liked to hear more of this “astonishing variety.”

Part 12: “Russian”

Claim: The intelligence community infiltrated Twitter’s moderation process after politicians perceived the company’s response to alleged Russian bot networks as inadequate

In this first place, this all happened a long time ago, and is mostly just internal emails about some news cycles where politicians were saying Twitter hadn’t done enough to prevent Russian election interference. It’s not really clear what story all these snippets are meant to tell.

Second, I remember writing about this back in 2018, and the thread is pretty misleading. Although the thread quotes estimates of accounts found from two to a couple dozen, their investigation as summarized here puts the number closer to 50,000.

He also says these searches were “based on the same data that later inspired panic headlines,” for instance mine. But that’s not true. Facebook was reporting impressions from 80,000 posts placed by suspected Russian disinformation accounts. Twitter was looking independently for such activity in its own data.

Conflating them isn’t just wrong, it’s misleading and kind of weird. Again, it’s not really clear what’s being claimed here, and really important context and events are excluded from the account.

Last, and least supported, was the big claim that Twitter “let the ‘USIC’ into its moderation process.” As noted above many times, government entities were already in the process, making requests on a regular basis as they have for a long time and on every platform. The change flagged here is that “any user identified by the U.S. intelligence community as a state-sponsored entity conducting cyber operations against targets associated with U.S. or other elections” can’t buy ads. Considering the fallout from Twitter and Facebook taking money from accounts later linked to state-sponsored propaganda, this seems… smart. Open to abuse by the government, sure, but it’s hardly unique in that respect.

Part 13: “Jabs”

Claim: Pfizer board member and former FDA commissioner colluded with Twitter to silence COVID vaccine skeptics and bolster profits

This thread seems to concern a “misleading” label on a single tweet by one guy who claimed “there’s no science justification for #vax proof if a person has prior infection.” Scott Gottlieb, formerly FDA head and now on the Pfizer board, flagged the tweet to a third party (another of those funnels), who flagged it to Twitter, which evaluated it and labeled it. A second tweet sent the same way was not actioned.

Neither the scale nor the nature of these events are notable.

It must also be mentioned that this thread is authored by Alex Berenson, whom The Atlantic gave the dubious distinction of being “The Pandemic’s Wrongest Man.” Berenson, losing no time in joining the other authors in this golden opportunity to plug a freshly minted newsletter, says he too is a target: “Gottlieb’s action was part of a larger conspiracy that included the Biden White House and Andrew Slavitt, working publicly and privately to pressure Twitter until it had no choice but to ban me. I will have more to say about my own case and will be suing the White House, Slavitt, Gottlieb, and Pfizer shortly.”

This, I think, speaks for itself.

Part Etc…

Further installments in the series may appear (indeed one did, on “The Russiagate Lies,” while I was editing this piece), and like the above they will be covered on their merits. But let the above also serve as a counterweight to allegations that the press was predisposed to dismiss the Twitter Files outright. Though skepticism is a necessary characteristic of the trade, new information like that forming the core of these threads is always welcomed.

But the promise of the project has largely been squandered by the way that new information has been selectively and purposefully presented. Furthermore, the delta between the claims and the evidence for those claims has only widened as Musk has ventured increasingly far afield for willing participants.

In the past such sensitive data dumps have been collaborated on by multiple outlets and legal experts, who examine, redact, investigate, and ultimately publish the files themselves. Many journalists, including those of us at TechCrunch, would have valued the opportunity to pore over the data to see how it confirms, contradicts or expands any of the claims above or stories already reported. Until that happens, honest skepticism and concern over amplifying misinformation or a billionaire’s vendetta take precedence over repeating the unsupported and, frankly, increasingly outlandish theories given the Musk seal of approval.

But even his imprimatur is fleeting. In a tweet promoting Berenson’s thread, Elon Musk wrote: “Some conspiracies are actually true.”

Image Credits: TechCrunch / Twitter

And some aren’t. He deleted the tweet soon after.

Deconstructing ‘The Twitter Files’ by Devin Coldewey originally published on TechCrunch

The mixed messaging of mixed reality

I vividly remember my first Vive experience. It was many CESes ago. I was managing a different site. Budgets were tight and I had the most on-the-ground experience, so I went solo. I had a different kind of fire back then, writing 100 stories over five days and walking every possible inch of the show floor — even the areas that devolve into row after row of knockoffs cribbed from the consumer electronics flavor of the day.

A day in, I met with HTC and slipped the headset on. The din of humanity melted away. I was underwater. It was quiet, serene — meditative, even. It was dark inside there. Rays and other fish swam by, silhouetted against a navy blue backdrop. Next came the largest animal to ever exist on this planet, purring and singing serenely. A blue whale’s eye is surprisingly small in proportion to the rest of its massive form. It’s roughly the size of a grapefruit or softball. It blinked a few times, attempting to determine what it was seeing.

When the demo ended, I was reluctant to take the thing off and reenter the throng. For me, this feeling is the height of virtual reality. Quietude. I paid the stupid premium to watch the new Avatar in 3D and all the other trappings. The fight scenes were fun, but I’d have been perfectly content if the whole thing had been hyper-intelligent space whales and moody adolescent Na’vi learning to swim.

It doesn’t have to be underwater, of course. I’ve played around with a few different planet simulators that made me feel similarly at peace for a few, fleeting moments. In the years since, I’ve become far more disciplined in my meditation practice, and I can say that these sorts of VR demos are the closet tech has come to offering a shortcut to the sensation of a good sit.

All of this, I’m sure, says far more about me than VR. People gravitate to different experiences. Chatting with HTC’s global head of Product, Shen Ye, at the show, I mentioned another VR demo for work. The company was using some kind of Olympics-style game package. One of the attendees asked if they had Office Simulator. Said he liked to use that as a baseline for testing headsets.

I’ve always been fascinated by this, the use of expensive, powerful technology to do the most mundane things imaginable. Ye suggested the appeal was the ability to mess things up. It’s a freedom to do something most of us wouldn’t do in our normal, non-virtual lives. Think Grand Theft Auto, only you’re intentionally knocking over a cup full of pencils. Far be it for me to judge how other folks get their kicks.

I made a point of trying the big headsets at this year’s show — specifically the Magic Leap 2, Meta Quest Pro, Vive XR Elite and PSVR2. It was a valuable exercise, in terms of comparing and contrasting technologies, and also offered some insight into the different approaches. When you put on the PSVR2, for example, it’s instantly clear why gaming has long been so central to the virtual reality pitch. Horizon Call of the Mountain is a terrific way to get to know the tech.

The demo starts as a bag is pulled off your head. You find yourself in the rear of a three-person canoe, as it’s explained to you that you’ve recently been sprung from jail to help with a mission. I’m generally not a fan of lengthy setups, but here it makes sense. You need to get your bearings and take some time to enjoy the scenery as a menagerie of robot animals live their lives among the foliage. One of the two characters in front of you paddles slowly, so as to avoid detection from more sinister creatures. Naturally, you’re detected and all hell breaks loose. There’s a quick blackout, you get submerged and then the gameplay really starts.

One downside to VR is all of those uncanny aspects of the virtual human form are on full display, as your entire field of view is occupied by the game. But the scenery is gorgeous. After climbing the side of a cliff, the Sony rep running the demo taps you on your shoulder and reminds you to take it all in. When you eventually take the headset off, you find yourself in a similar position as the whale demo, inside a packed convention center, only this time, passersby have been watching you flail around for 30 minutes.

Magic Leap represents the opposite end of the spectrum with its mixed reality offering. The company’s financial struggles have been well documented. That’s resulted in two key things: First, the company just sold a majority share to Saudi Arabia. Second, it pivoted. Short term, there appears to be a lot more money to be made in enterprise. A lot of corporations have deep pockets, and these headsets are just way, way too prohibitively expensive for 99% of consumers.

Pricing is going to be a big issue for the foreseeable future. If there’s a sweet spot between expensive enough to be good and cheap enough to be affordable, it’s thus far been elusive. Magic Leap hasn’t struggled because it’s an inferior product. The demos I got at CES were, frankly, incredible. In one, a 3D scan of the human brain emerges, pointing the way toward use in medical settings. In another, a mountain pops up. In the foreground, a wildfire advances. Tiny helicopters circle around in the air above.

While the mixed reality experience isn’t as intentionally isolating as VR, it’s still easy to get lost in. It clicks quickly. It really does feel like the future. The efficacy of the technology in the field is, perhaps, another question entirely. Remember how Microsoft’s massive military HoloLens contract bellyflopped, in part, due to the fact that light bleed on a soldier’s face could potentially be seen by the other side?

That’s a dramatic example, of course, but there’s a lot of work to be done across the board to make these kinds of systems truly valuable to business. Still, of the three MR headsets I tried, Magic Leap really was the standout. It’s also more than double the price of HTC and Meta’s systems.

Ye described the battle for pricing as a “race to the bottom” in our conversation. I certainly agree that the prevalence of bad AR/VR/MR systems is probably a net setback for the industry. Sure, things like Google Cardboard were very accessible, but is a bad VR experience better than no experience at all, when it comes to moving the industry forward?

“The giants that are really trying to disrupt are on this race to the bottom, making cheap headsets that they’re losing money,” Ye says. “At the end of the day, what’s the cost of your personal data? We’re not a social media company. Our business model doesn’t rely on advertising revenue, so it’s not something we’re doing. We want to build good hardware.”

The “personal data” bit here is, of course, a potshot at companies, like Meta, which are in the data monetizing game. Is using your personal information to subsidize access worth it? Depends on the person, I suppose. Plenty of people have given up more for less in the social media arena.

One thing all parties seem to agree on is that Apple’s inevitable entry in the space — if successful — will be a net positive. Rising tide, ships, etc. It would, certainly, be validation for a technology that’s felt like the next big thing for decades. The inevitable next question then, is: Will there be enough room for everyone?

The mixed messaging of mixed reality by Brian Heater originally published on TechCrunch

“We rolled a 1”: D&D publisher addresses backlash over controversial license

After a week of silence amid intense backlash, Dungeons & Dragons publisher Wizards of the Coast (WoTC) has finally addressed its community’s concerns about changes to the open gaming license.

The open gaming license (OGL) has existed since 2000 and has made it possible for a diverse ecosystem of third-party creators to publish virtual tabletop software, expansion books and more. Many of these creators can make a living thanks to the OGL. But over the last week, a new version of the OGL leaked after WoTC sent it to some top creators. Over 66,000 Dungeons & Dragons fans signed an open letter under the name #OpenDnD ahead of an expected announcement, and waves of users deleted their subscriptions to D&D Beyond, WoTC’s online platform. Now, WoTC admitted that “it’s clear from the reaction that we rolled a 1.” Or, in non-Dungeons and Dragons speak, they screwed up.

“We wanted to ensure that the OGL is for the content creator, the homebrewer, the aspiring designer, our players, and the community — not major corporations to use for their own commercial and promotional purpose,” the company wrote in a statement.

But fans have critiqued this language, since WoTC — a subsidiary of Hasbro — is a “major corporation” in itself. Hasbro earned $1.68 billion in revenue during the third quarter of 2022.

TechCrunch spoke to content creators who had received the unpublished OGL update from WoTC. The terms of this updated OGL would force any creator making more than $50,000 to report earnings to WoTC. Creators earning over $750,000 in gross revenue would have to pay a 25% royalty. The latter creators are the closest thing that third-party Dungeons & Dragons content has to “major corporations” — but gross revenue is not a reflection of profit, so to refer to these companies in that way is a misnomer.

Mage Hand Press editor-in-chief Mike Holik, who organized the #OpenDnD letter, says his business would be impacted by this 25% royalty. As he told TechCrunch, most Kickstarters that raise that amount of money are not even making a 25% profit, since most of the money raised is going to fulfilling orders, printing books and paying collaborators.

“A Kickstarter involves many small products, so your profit margins actually go down, because really, you’re going to offer people some dice, and some adventures, and a box set, and all of those individual things end up cutting into your profit margins pretty significantly,” Holik said. “Kickstarters don’t walk away with 80% of their money and profit. None of that is legitimate. I don’t know where they’re getting that 25% number beyond … they’re trying to squish competition completely.”

The fan community also worried about whether WoTC would be allowed to publish and profit off of third-party work without credit to the original creator. Noah Downs, a partner at Premack Rogers and Dungeons & Dragons livestreamer, told TechCrunch that there was a clause in the document that granted WoTC a perpetual, royalty-free sublicense to all third-party content created under the OGL.

Now, WoTC appears to be walking back both the royalty clause and the perpetual license.

“What [the next OGL] will not contain is any royalty structure. It also will not include the license back provision that some people were afraid was a means for us to steal work. That thought never crossed our minds,” WoTC wrote in a statement. “Under any new OGL, you will own the content you create. We won’t.” WoTC claims that it included this language in the leaked version of the OGL to prevent creators from being able to “incorrectly allege” that WoTC stole their work.

Through out the document, WoTC refers to the document that certain creators received as a draft — however, creators who received the document told TechCrunch that it was sent to them with the intention of getting them to sign off on it. The backlash against these terms was so severe that other tabletop roleplaying game (TTRPG) publishers took action.

Paizo is the publisher of Pathfinder, a popular game covered under WoTC’s original OGL. Paizo’s owner and presidents were leaders at Wizards of the Coast at the time that the OGL was originally published in 2000, and wrote in a statement yesterday that the company was prepared to go to court over the idea that WoTC could suddenly revoke the OGL license from existing projects. Along with other publishers like Kobold Press, Chaosium and Legendary Games, Paizo announced it would release its own Open RPG Creative License (ORC).

“We have no interest whatsoever in Wizards’ new OGL. Instead, we have a plan that we believe will irrevocably and unquestionably keep alive the spirit of the Open Game License,” Paizo’s statement says. The license has not yet been published.

Dungeons & Dragons content creators are still cautious about how changes to the OGL will impact the community, even if it seems like WoTC might make some concessions.

“Ultimately, the collective action of the signatures on the open letter and unsubscribing from D&D Beyond made a difference. We have seen that all they care about is profit, and we are hitting their bottom line,” said Eric Silver, game master of Dungeons & Dragons podcast Join the Party. He told TechCrunch that WoTC’s response on Friday is “just a PR statement.”

“Until we see what they release in clear language, we can’t let our foot off the gas pedal,” Silver said. “The corporate playbook is wait it out until the people get bored; we can’t and we won’t.”

“We rolled a 1”: D&D publisher addresses backlash over controversial license by Amanda Silberling originally published on TechCrunch

TechCrunch+ roundup: 2022 stock options report, pivot to SaaS, crypto investor survey

We spend a lot of time praising tech investors and entrepreneurs for their risk appetite. But why don’t we put startup workers on the same pedestal?

Who’s taking on more risk: A Stanford grad who leveraged their network to raise a seed round or an immigrant worker who relocates to an expensive city for a startup job?

In its latest yearly report, Secfi, which helps workers manage equity, found that 24% of the companies on its platform reduced their valuations last year.

“For people working at those startups, that means some (in some cases, all) of their employee stock options spent 2022 underwater,” writes Secfi CEO Frederik Mijnhardt.

Considering how central equity is to attracting tech talent, “underwater stock options have the potential to negatively impact hiring and retention across the startup ecosystem,” he writes.

Investors won’t stop pushing for down rounds anytime soon and more layoffs are coming. Here’s some candid advice for late-stage startup workers:

Full TechCrunch+ articles are only available to members.
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription.

Hoping for the best is not a strategy, and your employers will say whatever they need to keep you focused and productive. If or when you get laid off, there’s a chance that a TechCrunch reporter will find out before you do.

If you’ve been nurturing an idea for a company, put together a pitch deck and start reaching out now to investors. They will be more receptive than you think.

That’s no hot take.

Yesterday, Monique Woodard tweeted that she’s launched Cake Ventures Fund I, “a $17M seed and pre-seed fund.” Similarly, Axios reports that Social Capital is shifting the focus of its new fund to early-stage deals.

Expect other VC firms to follow suit; despite the maverick myth of the tech investor, herd mentality dominates.

Raising enough funds to build your MVP and strive for product-market fit might sound risky, but is it any more precarious than working at a late-stage startup in Q1 2023?

Thanks for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

You’re not going to grow into your 2021 valuation

Image Credits: nfsphoto (opens in a new window) / Getty Images

Many, if not most, founders who are attached to their 2021 valuations are living in a fantasy, according to Jeremy Abelson and Jacob Sonnenberg of Irving Investors.

For this TC+ post, they worked out “the simple math behind how long it will take companies to price their IPO at a flat round to their previous 2021 valuations.”

Companies with 75% YoY growth “can entertain the discussion,” but “if you are growing sub-30%, there is a strong chance that growing into your 2021 valuation is impossible.”

Why Africa had no unicorns last year despite record fundraising haul

Image Credits: Getty Images

Unicorns are becoming an endangered species in Africa’s startup ecosystem, reports Tage Kene-Okafor.

Although funding in the region increased slightly in 2022, “no unicorns popped up throughout the year, compared to five in 2021,” he writes.

“So what happened in Africa in 2022 that made it so … weird?”

Predictions for the longevity industry in 2023

Image Credits: Myron Jay Dorf (opens in a new window) / Getty Images

A silver tsunami is approaching.

“By 2030, the 50-plus market is projected to swell to 132 million people, who are projected to spend an average of $108 billion every year on tech products,” according to Abby Miller Levy, managing partner and founding president of Primetime Partners.

Services like telemedicine and preventative care are just two aspects of the market: Longevity tech also encompasses retirement planning and other services targeted at older adults.

“We see incredible founder momentum, untapped areas to build new businesses and a window to an increasingly tech-accessible, rapidly growing consumer market.”

Some investors are (cautiously) implementing ChatGPT in their workflows

Image Credits: Mary Ne (opens in a new window) / Getty Images

Can AI turn out polite pitch rejection letters, automate aspects of due diligence or draft accurate market maps?

Some investors are already evaluating ways to fold ChatGPT “into their workflows to do their jobs better, smarter and maybe even cheaper,” report Natasha Mascarenhas, Christine Hall and Kyle Wiggers.

They interviewed several VCs to learn more about potential use cases, some early experiments and the tech’s limitations when it comes to nuance and tone.

“It’s not automating the important conversations we have with journalists,” said Brianne Kimmel, founder of Worklife Ventures, “but I think it’s sufficient for things that are pretty straightforward.”

How we pivoted our deep tech startup to become a SaaS company

Image Credits: Thomas Winz (opens in a new window) / Getty Images

Soon after launching iOS location app Burbn, its developers realized that users were mostly interested in its photo-sharing features.

After making a data-driven pivot, they retooled and rebranded their app, which we now know as Instagram.

ECM PCB Stator Technology was formed to build next-generation electric motors, but after studying the market more closely, CEO Brian Casey determined that a SaaS model offered clear advantages.

“The market forces, customer needs and opportunities that existed for your venture at first raise and launch will almost certainly change down the road,” says Casey.

6 crypto investors talk about DeFi and the road ahead for adoption in 2023

Image Credits: Flavio Coelho (opens in a new window) / Getty Images

Jacquelyn Melinek surveyed several crypto investors to learn more about what they’re looking for and how they’re advising their portfolio companies in Q1 2023:

Michael Anderson, co-founder, Framework Ventures
Alex Marinier, founder and general partner, New Form Capital
Samantha Lewis, principal, Mercury
Paul Veradittakit, general partner, Pantera Capital
David Gan, founder and general partner, OP Crypto
Mike Giampapa, general partner, Galaxy Ventures

Dear Sophie: Any tips for presenting a strong H-1B case? What if I’m not selected?

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m currently on regular OPT. My employer will sponsor me in the H-1B lottery in March.

Can you share any tips for presenting a strong H-1B case if I’m selected? If I’m not selected, then what?

— Proficient and Pragmatic

TechCrunch+ roundup: 2022 stock options report, pivot to SaaS, crypto investor survey by Walter Thompson originally published on TechCrunch

4 tips to find the funding that fits your business

The facts are clear: Startups are finding funding increasingly difficult to secure, and even unicorns appear cornered, with many lacking both capital and a clear exit.

But equity rounds aren’t the only way for a company to raise money — alternative and other non-dilutive financing options are often overlooked. Taking on debt might be the right solution when you’re focused on growth and can see clear ROI from the capital you deploy.

Not all capital providers are equal, so seeking financing isn’t just about securing capital. It’s a matter of finding the right source of funding that matches both your business and your roadmap.

Here are four things you should consider:

Does this match my needs?

It’s easy to take for granted, but securing financing begins with a business plan. Don’t seek funding until you have a clear plan for how you’ll use it. For example, do you need capital to fund growth or for your day-to-day operations? The answer should influence not only the amount of capital you seek, but the type of funding partner you look for as well.

Start with a concrete plan and make sure it aligns with the structure of your financing:

Match repayment terms to your expected use of the debt.
Balance working capital needs with growth capital needs.

It’s understandable to hope for a one-and-done financing process that sets the next round far down the line, but that may be costlier than you realize in the long run.

Your term of repayment must be long enough so you can deploy the capital and see the returns. If it’s not, you may end up making loan payments with the principal.

Say, for example, you secure funding to enter a new market. You plan to expand your sales team to support the move and develop the cash flow necessary to pay back the loan. The problem here is, the new hire will take months to ramp up.

If there’s not enough delta between when you start ramping up and when you begin repayments, you’ll be paying back the loan before your new salesperson can bring in revenue to allow you to see ROI on the amount you borrowed.

Another issue to keep in mind: If you’re financing operations instead of growth, working capital requirements may reduce the amount you can deploy.

Let’s say you finance your ad spending and plan to deploy $200,000 over the next four months. But payments on the MCA loan you secured to fund that spending will eat into your revenue, and the loan will be further limited by a minimum cash covenant of $100,000. The result? You secured $200,000 in financing but can only deploy half of it.

With $100,000 of your financing kept in a cash account, only half the loan will be used to drive operations, which means you’re not likely to meet your growth target. What’s worse, as you’re only able to deploy half of the loan, your cost of capital is effectively double what you’d planned for.

Is this the right amount for me at this time?

The second consideration is balancing how much capital you need to act on your near-term goals against what you can reasonably expect to secure. If the funding amount you can get is not enough to move the needle, it might not be worth the effort required.

4 tips to find the funding that fits your business by Ram Iyer originally published on TechCrunch

You’re not going to grow into your 2021 valuation

We often hear companies claim: “We will grow into our valuation from 2021.”

That statement is in reference to their expectations of when they’ll price their IPO, or with regards to a future private round. They are implying that they will wait to go public until they can price an IPO higher than or at least at the same valuation as their last funding round. This further implies that the company is opposed to down rounds or publicizing a decrease in their valuation.

Interestingly, these companies claim they can do that — as if growing into one’s 2021 valuation is easy and can happen in the near term.

We always attempt to do the math every time we hear a company make this statement (again, we hear it frequently). In most cases, pricing an IPO at a company’s 2021 valuation is more than a few years away (assuming perfect execution), and in some cases, we don’t think it will ever happen.

Our chart of the quarter depicts the math behind how long it will take companies to price their IPO so they can match their previous valuations:

Image Credits: Irving Investors

Using the chart

If you are growing slower than 30%, there is a strong chance that you will never be able to match your 2021 valuation.

The layout of the chart is meant to give every company the ability to map itself to the grid using a few metrics. The data will then tell you how long it will take a company to achieve the valuation necessary to price an IPO and match their valuation from 2021. The data ranges are generalized, but they are wide enough to be applicable to nearly every company.

Companies need three inputs to use the chart:

Their own public company comparables group (guidance given below);
How much that comparable group has sold off this year / CY2022 (guidance given below);
Projection of your growth rate.

Step 1

Start with your last round valuation (we mark it at “$100.00”);
Select the comparable group stock performance discount that is closest to your comparable group’s 2022 sell-off:

You’re not going to grow into your 2021 valuation by Ram Iyer originally published on TechCrunch

Does it ever make more sense to raise a structured round over taking a valuation cut?

Venture capital funding continued its slump through the end of 2022, and there aren’t any real signs things are going to pick back up for a while. That means more doom and gloom ahead for startups looking to fundraise.

Many startups that tried to avoid raising a regular round in 2022 — or turned to an alternative to hold them over — will find themselves in a tough cash position this year and will have to try to raise.

In the process of securing the funds they need, they may have to raise a down round — which consists of raising at a lower valuation than their last — or take on a deal riddled with legal terms and structure meant to provide downside protection to investors.

A lot of startup founders won’t have a choice as to which deal they’d rather take, but some will, and there are some things to keep in mind when deciding which one might be the better fit.

Multiple investors have recently taken to Twitter and news outlets to express that companies are better off taking a down round and seeing their valuation cut than adding a bunch of structure and investor preferences to a deal. Although founders only get so much choice here.

While, of course, we aren’t looking to provide any actual legal advice here, this recent focus on down rounds did get me thinking: Is that better than a structured round every time? Also, even if investors are touting down rounds, is there any downside? I asked some lawyers to get a better idea.

Does it ever make more sense to raise a structured round over taking a valuation cut? by Rebecca Szkutak originally published on TechCrunch

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