Tune-up your pitch tomorrow at Pitchers & Pitches

Ready to breathe some life into your 60-second pitch? Turn your internet dial to our next Pitchers & Pitches webinar tomorrow, July 1 at 4 p.m. ET / 1 p.m. PT. It’s free for everyone, and all you need to do is register right here.

Tune in as five early-stage startup founders (all of whom you’ll find exhibiting in Digital Startup Alley during Disrupt 2020) step to the mound to bring the heat. Translation: They’ll deliver their best 60-second elevator pitch to a panel of judges — and benefit from real-time critique, feedback and advice from industry experts who know how to craft a winning pitch.

Judging this session we have pitch-savvy TechCrunch editors, Jordan Crook and Kirsten Korosec, plus two VCs — Matthew Hartman of Betaworks Ventures and Dayna Grayson of Construct Capital. Yes, essential feedback from startup investors — the very people founders need to impress most.

Not only will the five pitching founders come away with a stronger presentation, one of them will walk away with a pretty cool prize. The viewing audience (that would be you) decides who wins a consulting session with cela, a company that connects early-stage startups to accelerators and incubators that can help scale their businesses.

Note: Only companies that purchase a Disrupt Digital Startup Alley Package are eligible to pitch. You’ll still learn valuable tips and strategies — even if you’re not facing the judges. Watch, listen, and apply the expert tips and strategies to power up your pitch — your handshake to the startup world. This is your chance to make it firm and impressive.

Here are the startups we randomly selected to compete tomorrow:

Cognidna – provides DNA insights on cognitive traits, helping parents make more informed educational decisions for their children.

Munch – a digital platform for restaurants designed to create better customer experiences.

Flexlane – an online wholesale marketplace that transforms the way local retailers in Asia buy for their stores.

Bitsensing – aims to design future safety in the era of Autonomous Vehicles.

Evertracker – a neutral platform that provides end-to-end visibility and predictability along global supply chains on an item-level.

Don’t miss this masterclass. Register for Pitches & Pitchers and tune in tomorrow, July 1 at 4 p.m. ET / 1 p.m. PT. If you want a shot at pitching during the Pitchers & Pitches session scheduled on July 22, be sure to buy your Disrupt Digital Startup Alley Package first to be eligible.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

E-scooter firms get the green light to start trials of up to one year on UK streets

In light of COVID-19 and social distancing regulations, the UK has been working on making it easier for people to get from point A to B in cities without resorting to buses and trains or bringing more cars to congested roads, and today that strategy took an interesting leap forward.

The country’s Department for Transportation today announced that it would start allowing e-scooters, by way of e-scooter rental companies, to legally operate across the country initially in a trial phase starting no later than August. Councils and other authorities, including across London and other major cities, are working on putting together trials that could run for as long as 12 months under guidelines provided by the government.

The regulations come into force on July 4, the DfT said, with the first trials expected to begin a week later.

“As we emerge from lockdown, we have a unique opportunity in transport to build back in a greener, more sustainable way that could lead to cleaner air and healthier communities across Great Britain,” said Transport Minister Rachel Maclean in a statement. “E-scooters may offer the potential for convenient, clean and cost-effective travel that may also help ease the burden on the transport network, provide another green alternative to get around and allow for social distancing. The trials will allow us to test whether they do these things.”

There are some restrictions in place: e-scooters will not be able to go faster than 15.5 miles per hour, and they will only be able to use roads and cycle lanes, not sidewalks or other areas reserved for pedestrians. Users will need a drivers license (full or provisional). The scooters themselves will not need to be registered as vehicles but will need insurance. And as with bicycles, users will be recommended — but not required — to wear helmets.

It seems that privately-owned e-scooters will not be included in the rule relaxation, but it’s not clear what steps regulators will take — if any — to avoid the cluttering that we have seen in some cities overrun with too many dock-less scooters crowding sidewalks.

The list of e-scooter hopefuls is long. From the word go, those that are looking to operate in the UK include Bird, Bolt (the ridesharing startup out of Estonia), Tier, Neuron Mobility, Lime, Voi, and Zipp Mobility.

We’re contacting the DfT with our questions and will update this post as we learn more.

Electric scooters will now join the ranks of other shared transportation options that include bikes and e-bikes, as a complement to mass transit and of course walking or using your own non-autonomotive wheels as an alternative to using cars. E-scooters have been seen both as an alternative for short distances (between 1 and 5 miles) but also as a last-mile solution in combination with 

The news today lifts restrictions that had previously been in place that classified e-scooters as motor vehicles and therefore required the e-scooters to be licensed and taxed, and for operators to have licenses to use them.

Those rules also meant that the e-scooters were illegal to use on sidewalks, with the only exception to all that being legal usage across select (and very limited) campuses on private land.

The moves comes on the heels of a consultation in March to pilot e-scooter use in three regions of the UK, along with a number of other initiatives including e-cargo carriers and using drones to transport medical supplies — the aim being to explore in quick order a number of new technologies to expand transportation options available to consumers, as well as essential businesses and the people who work in them.

The bigger trend has seen other cities also looking to relax rules to improve transportation options to people who wish to socially distance but still need to get around urban areas in ways that are quicker than walking. New York City is also expected to unveil its own roadmap for e-scooter pilots in the near future.

The news made official today had been something of a badly-kept secret, specifically among transportation startups whose businesses have been in a holding pattern waiting for the regulator to ease up on restrictions that had been in place.

Just about all of those startups have been sending out alerts to journalists for over a week now with comments on government’s widely-expected announcements.

“We welcome the DfT’s announcement and are excited to be one step closer to the starting the e-scooter trials,” said Zachary Wang, CEO of Neuron Mobility, in a statement. “We are already in discussions with quite a few councils, as no two towns or cities are the same we look forward to partnering with them to safely introduce e-scooters in a way that best suits their individual needs. COVID-19 has led to a fundamental rethink of the way we travel and e-scooters have the potential to radically improve how we get around our towns and cities. We are delighted that people in the UK will soon be able to benefit from shared e-scooters, they will allow people to continue social distancing while also providing a more efficient travel option than gas-guzzling alternatives.”

Some have been waiting for a chance to operate for some time.

“We welcome today’s announcement from the Government as it looks to get cities moving again safely and in an environmentally friendly way,” said Roger Hassan, COO of TIER Mobility, in a statement. “We already have more than 1,000 of our industry leading scooters in our UK warehouse, ready to be deployed and we will be shipping more over very soon. Everyone at TIER is looking forward to working with the Government and with local authorities to make e-scooters in the UK a huge success story.”

While there had been restrictions in place before now, I should point out that they were often badly enforced: in London there have always been some private e-scooter owners zooming around alongside bikes and cars on the roads, and I’ve even stopped at red lights on my bike, with an e-scooter on one side of me, and a policeman on the other, and not a word gets exchanged, just a simple shrug of “what can you do?” So decriminalising, as it has done in other industries, will hopefully mean better oversight, alongside better choice for users.

R&D tax credits are due July 15th. Neo.tax wants to help startups apply, and raised $3M to do it

All founders love “free” money, but with the global pandemic going on, the necessity of free money has taken on a whole new meaning this year. First, there was the scramble to secure PPP loans a few weeks back for U.S.-based startups, and then the second wave of PPP loans when Congress offered a second tranche of funding. Two weeks ago, I covered a company called MainStreet, which is helping startups apply for local economic development credits which cities offer to businesses relocating to their regions.

Free money for startups? It’s possible with MainStreet’s platform for economic development incentives

In the same vein, Neo.tax wants to help startups secure R&D research credits from the federal government — which tend to be fairly easy to acquire for most software-based startups given the current IRS rules for what qualifies as “research.”

The free money is good, but what sets this startup apart is its ambitious vision to bring machine learning to company accounting — making it easier to track expenses and ultimately save on costs.

It’s a vision that has attracted top seed investors to the startup. Neo.tax announced today that it raised $3 million in seed funding from Andy McLoughlin at Uncork Capital and Mike Maples at Floodgate, with Michael Ma at Liquid2 and Deena Shakir at Lux Capital participating. The round closed last week.

Neo.tax was founded by Firas Abuzaid, who spent the past few years focused on a PhD in computer science from Stanford, where he conducted research in machine learning. He’s joined by Ahmad Ibrahim, who most recently was at Intuit launching small business accounting products; Stephen Yarbrough, who was head of tax at Kruze Consulting, a popular consultancy for startups on accounting and financial issues; and Leonardo De La Rocha, who was creative director of Facebook Ads for nearly five years.

Neo.tax’s Stephen Yarbrough, Firas Abuzaid, and Ahmad Ibrahim. Photos via Neo.tax

Or in short, a perfect quad of folks to tackle small business accounting issues.

Neo.tax wants to automate everything about accounting, and that requires careful application of ML techniques to an absolutely byzantine problem. Abuzaid explained that AI is in some ways a perfect fit for these challenges. “There’s a very clearly defined data model, there’s a large set of constraints that are also clearly defined. There’s an obvious objective function, and there’s a finite search space,” he said. “But if you wanted to develop a machine-learning-based solution to automate this, you have to make sure you collect the right data, and you have to make sure that you can handle all of the numerous edge cases that are going to pop up in the 80,000 page U.S. tax code.“

That’s where Neo.tax’s approach comes in. The software product is designed to ingest data about accounting, payroll, and other financial functions within an organization and starts to categorize and pattern match transactions in a bid to take out much of the drudgery of modern-day accounting.

One insight is that rather than creating a single model for all small businesses, Neo.tax tries to match similar businesses with each other, specializing its AI system to the particular client using it. “For example, let’s train a model that can target early-stage startups and then another model that can target Shopify businesses, another one that can target restaurants using Clover, or pizzerias or nail salons, or ice cream parlors,” Abuzaid said. “The idea here is that you can specialize to a particular domain and train a cascade of models that handle these different, individual subdomains that makes it a much more scalable solution.”

While Neo.tax has a big vision long-term to make accounting effortless, it wanted to find a beachhead that would allow it to work with small businesses and start to solve their problems for them. The team eventually settled on the R&D tax credit.

“That data from the R&D credit basically gives us the beginnings of the training data for building tax automation,” Ibrahim explained. “Automating tax vertical-by-vertical basically allows us to be this data layer for small businesses, and you can build lots of really great products and services on top of that data layer.“

So it’s a big long-term vision, with a focused upfront product to get there that launched about two months ago.

For startups that make less than $5 million in revenue (i.e. all early-stage startups), the R&D tax credit offers up to a quarter million dollars per year in refunds from the government for startups who either apply by July 15th (the new tax date this year due to the novel coronavirus) or who apply for an extension.

Neo.tax will take a 5% cut of the tax value generated from its product, which it will only take when the refund is actually received from the government. In this way, the team believes that it is better incentive-aligned with founders and business owners than traditional accounting firms, which charge professional services fees up front and often take a higher percentage of the rebate.

Ibrahim said that the company made about $100,000 in revenue in its first month after launch.

The startup is entering what has become a quickly crowded field led by the likes of Pilot, which has raised tens of millions of dollars from prominent investors to use a human and AI hybrid approach to bookkeeping. Pilot was last valued at $355 million when it announced its round in April 2019, although it has almost certainly raised more funding in the interim.

Index Ventures, Stripe back bookkeeping service Pilot with $40M

Ultimately, Neo.tax is betting that a deeper technical infrastructure and a hyper-focus on artificial intelligence will allow it to catchup and compete with both Pilot and incumbent accounting firms, given the speed and ease of accounting and tax preparation when everything is automated.

Small Business Loan Requirements – and How to Meet Them

Reeling from these tough economic times, you may be considering a loan for your business for the first time.

How do you get a small business loan? Should you apply to an online lender? Try to get a loan through a bank? Go through the Small Business Administration (SBA) for financing?

Many loan requirements are the same for the application process. Lenders and the SBA have specific conditions you must meet in order to get a loan. But with some loans and lenders, there is a protection program to ensure that you are safe.

An SBA loan may have special requirements that differ from the requirements of traditional loans. Every lender uses certain evaluations to determine your ability to repay.

Lenders look at bank statements, assets in the business, financial statements, debt service coverage ratio, and personal and business credit score (present and history). Lenders also want you to have a sound business plan.

Get Your Ducks in a Row

Did you ever change the business name, physical address, or phone number? Are these changes on past bank statements, tax forms, incorporation papers, utility bills, and websites?

In other words, Joanie’s Pet Sitting is not the same as Joanie’s Pet Sitting LLC. Joanie’s Pet Sitting, Virginia Beach is not the same as Joanie’s Pet Sitting, Norfolk.

If a business name, address, or phone number changes, the change should be made on every license and document related to the business. You can’t rewrite former financial records. But you can include documentation that supports the business history. You can include a letter of explanation as well.

The main concern of a lender is to determine your ability to repay the loan. Here’s a look at the key pieces of the loan application puzzle.

Top 8 Small Business Loan Requirements

Here are the top 8 small business loan requirements and how to qualify for a loan:

Personal Credit Score

Your personal credit score carries a lot of weight in the business loan application process. For many types of business loans, when you as the owner of the business sign on the dotted line, you are guaranteeing payment of the loan.

This is especially true with fledgling small businesses that are still building a history of tax returns. Don’t worry if your business is relatively new. You may still get a loan if you have an excellent personal credit score and all the business owners have good credit scores. If your business has multiple owners, the lender may want to see a credit score from each. The loan amount will be closely tied to those scores.

Some lenders may require the business to be operational for a minimum of 2 years. If the business has 2 or more years behind it, lenders may look at a business credit score. That score comes from a business credit bureau, such as Dun & Bradstreet.

Action to take: Before applying, business owners should check their personal credit score to make sure all the information is correct. Get credit scores from each owner. Clear up any inaccuracies. Some credit report monitoring services have suggestions for improving your score, and you may be able to bump your score up a bit if you have time. In borderline cases, it could be enough to net you a better interest rate or other terms.

Work to improve your credit score. Schedule payments to make sure you make them on time, reduce your debt, open a business credit card and keep you utilization of available credit low.

Bank Statements and Ratings

What do lenders look for when they examine your bank records? Lenders look at seasonal fluctuations in income, debt to income ratio (see below), and tax obligations.

When you’re borrowing from a bank, the bank will assign a rating. The rating is the total amount of borrowing capacity you have from that bank.

The date you opened a business bank account is used as the start date for your business. The longer your business has been established, the more likely you are to qualify for a loan.

There are contributing factors to favorable bank ratings. Ideally, your average daily balance should be above $10,000 for 3 months. Manage your bank accounts to keep the average daily balance as high as possible. Avoid overdrawing your account, and set up overdraft protection.

It’s not enough to just have the money sitting there. Your business should be generating a steady volume of regular deposits.

You also should have a bank reference, who is the person you work with at the bank. In other words, a person who will vouch for you as bank officials consider your loan.

Revenue/Balance Sheet

Of course, revenue is important. A business must make money to stay afloat, and pay the requested loan.

But revenue is just one of the important numbers that help businesses get loans. Revenue is part of a balance sheet.

The balance sheet includes assets, liability and owner equity. The assets of businesses are subtracted from the liabilities of businesses. The calculated amount of owner equity is added to that number. That number is an estimate of what the business is worth. That number must be reasonable in comparison to the loan amount sought.

Action to take: Chip away at the amount of liability every chance you get. It’s a lot like paying off a credit card. Just paying interest keeps you treading water. Applying even a small amount of money monthly to principal debt will show a positive change and attention to the health of the business.

Debt-to-Income Ratio / Cash Flow

Think of the balance sheet as a snapshot of your business. The debt-to-income ratio, or cash flow, is a monthly snapshot.

Each month, after expenses are paid, how much money is left? This number shows the lender how much of a loan payment you may be able to handle monthly.

Lenders may also do a comparison of accounts receivable to accounts payable. You won’t be able to “pick your best month” as an example. The lender will do that comparison the month you are asking for a business loan.

What’s the number that a lender wants to see for a debt service coverage ratio? A lender typically wants to arrive at a calculation that is less than 1.25 or 1.35 times your expenses. That calculation of expenses will include the payments you’d be making on the loan you are seeking.

How does the lender get to that debt service coverage ratio number? Typically, the lender divides the annual net operating income by the total principal and interest of all debt obligations.

Here are the highlights of what a lender will analyze: gross margin, cash flow, debt to equity ratio, accounts payable, accounts receivable and earnings (before interest, taxes, depreciation and amortization).

Lenders prefer to see financial statements that have been audited by a certified public accountant. You can have financials reviewed by a CPA – which is faster and cheaper – but some lenders require audited financials. Find out what the lender requires.

Action to take: Accounts receivable will only include goods or services that have already been invoiced. Make sure you are invoicing promptly. And of course, make sure you are paying your bills promptly. Proving that you are up to date with sending out bills and paying bills shows the lender that you have a good process in place for money management.

2+ Years in Business

For a Small Business Administration lump-sum loan, your business has to have been running for 2 years. There are SBA loans that don’t have that requirement, such as many of the line-of-credit loans and the SBA microloans.

To get a business loan from the SBA, you’ll need to present tax returns for the past two years that prove the existence of the business.

Action to take: Organize your tax returns. Put them on a disc or into another format that is easy to provide to a lender. Provide a business credit report. Provide the applicant’s credit report and get copies of the credit scores of all owners.

Type of Industry

To get an SBA loan, businesses must meet the requirements according to the SBA’s definitions of small business. Those definitions vary by type of industry.

The SBA definition of small business is two-part: by the number of employees or by the average annual receipts (gross income).

The gross income is averaged over 3 to 5 years. If the business hasn’t been around for more than a year, the gross income is calculated by the average weekly income times 52.

The number of employees is calculated as the average number of employees per pay period. This includes part-time employees. The average is calculated using a 12-month period.

For a look at the SBA requirements under the type of industry, go to www.sba.gov/document/support–table-size-standards. It’s an interesting read and may make you realize just how big or small some small businesses are.

For example, a cheese manufacturer can have up to 1,250 employees, and be considered, well, small cheese. A flower or nursery stock wholesaler may have no more than 100 employees.

Businesses can make a lot of money and still be considered small. For example, a home health company can have yearly revenue of up to $16.5 million. A baked goods store can make up to $8 million.

Action to take: If you think your business is too big for a small business loan, think again. Check the Type of Industry chart to learn the requirements. You may be pleasantly surprised to find out you can apply for a small business loan. Get familiar with the numbers for employees by the type of business. Since part-timers are also counted, you might be getting close to going over the requirements. To qualify for an SBA loan – with better rates and longer payback terms – you may consider combining part-time positions to full time.

Collateral or Assets

Not all lenders require that you put up collateral to get a loan for business use. But for those lenders that do, you may have to list assets on your loan application.

Lenders like to see assets that they can easily use (seize) if needed to cover your loan obligation if you fail to repay.

Assets include business real estate, inventory and business equipment. It’s important to know that collateral can also include funds from accounts receivable. That can include monies that have been invoiced but haven’t yet been paid to the business.

If you can’t pay the loan, the lender can seize the assets. For real estate and equipment loans, a UCC (Uniform Commercial Code) statement may be filed to claim accounts receivable and other collateral.

If you don’t have sufficient assets, a lender may require personal guarantees. This is not a good option. This type of loan backing puts your personal assets at risk as well as the assets of the company.

Action to take: Yikes! Imagining a future where you lose business real estate and inventory may give you pause as you list those items on your loan application. Scary stuff. But it’s a given that those who are confident enough to start and operate a business have already demonstrated determination and boldness. Taking out a business loan is a risk, but growth doesn’t come without risk.

Business Plan

Lenders don’t often ask to see a business plan from those seeking loans for businesses. But adding information about the plan to your application may make your business stand out from others looking for a loan.

It’s like adding a brilliant cover letter to your resume. Of course, the application information includes bank statements, information about the owner’s (or owners’) credit score.

You may also include information about the nuts and bolts of your company. Let the lender know what you do and how you make money.

Also, include information about how the loan fits into your plans for the business. Let the lender know how you place the spend the proceeds of the loan. Provide realistic financial projections for future growth

If applicable, include market information and details on the status of your business niche. Describe how demand for your products and services is growing. Make projections to predict future growth.

Action to take: As you prepare to apply for the business loan, gather the paperwork needed to document your business plan. Include bank statements, information about personal credit/credit score and business expenses. These are the black and white proof of your ability on paper to pay the loan.

Add the missing piece to make your application for a business loan stand out from others. The average person on a lender review team may have no knowledge of what your business is.

For example, let’s use a business that makes something called a Skid Plate. Piece of metal that goes under a car, huh? Would a lender want to grant a business loan for a company expansion? What if the lender knew that the Skid Plate was a patented new product, in huge demand in the race car industry, primarily NASCAR?

By adding an explanatory description of the business, you will be more likely to get a business loan.

FAQs About Qualifying for a Loan

Let’s review some quick facts about the application process for business loans.

Who Can Apply for a Small Business Loan?

Any small business can apply for a loan. You should be making a profit and have a good credit score. You should not be involved in any default action by any entity, including the US government. People in the loan business don’t like that kind of stuff.

If the business owner is going for a loan through the SBA, the requirements are different. The SBA requires that your business operates within the United States and has been operating for a minimum of 2 years. If you can’t meet those qualifications, don’t bother going through the application process.

Are Small Business Loans Hard to Get?

The business loans are not hard to get if the company has owners with good personal credit and has been making money.

If you or any of the company owners (20% ownership or more) have a bad credit score, you have little chance of getting loans through the SBA. The SBA won’t give loans to a businesses which aren’t making money. A startup entity may try for a microloan.

You may find although you were stressed out about how to land a business loan, the process was easy. If you’re already running a company, you’re good with paperwork. Or you’ve hired somebody who’s good with paperwork!

One of the main requirements for getting loans is being organized. Get your paperwork stuff together and go for it. Today you have more options than ever for getting business loans.

For more information see the Small Business Credit Survey¹.

What Documentation Must I Provide?

Lenders require documentation for business loans and it varies by the type of loan. At a minimum, you will need to provide income tax returns, your credit score, bank account information, a business financial statement, and personal identification such as a driver’s license. For more information about loan paperwork, go to Business Loan Documents to Provide.

What is the Minimum Credit Score for a Small Business Loan?

Most lenders require a minimum credit score of 600-680 for a small business loan. That’s a minimum requirement for business loans from most lenders.

People who get a business loan from an online lender may be able to get around that qualification. Online lenders considering loans often value business revenue more highly. Do some shopping, as the loan amount is typically smaller with varying interest rates.

How Much Can I Borrow on a Business Loan?

The amount of money lenders award is directly connected to how much you can afford. It won’t be how much you think you can afford. It will be how much the lender determines you can afford.

That’s a good thing. A reputable lender has your back and doesn’t want you to fail.

Summing Up

It’s no shame to need a loan for your business. In fact, obtaining a loan for future expansions or growth is a standard part of nearly every business plan.

Getting a loan to expand the business is not a one time venture in a business plan. Often business owners take out and pay off a series of loans during the course of doing business. You can use the loans to finance purchases, such as real estate, equipment or fleet vehicles.

Business owners historically have borrowed about $600 billion each year, according to a study by the SBA. Typically about 40% of small company owners borrow money each year. And that doesn’t mean that business owners are landing huge loans.

The average size of a business loan, since 2016, has been about $600,000. But many of those applying for a loan borrow much less. More than half of the business applied for loans of less than $100,000.

It’s important to understand what lenders are reviewing when you apply for a loan. Understanding what’s important to get a loan will help you improve your chances, now and in the future.

Although additional paperwork is required for an SBA loan, you may be pleased to find that it is easier to qualify for one of their options. In fact, business owners often get SBA loans after being turned down for a traditional loan.

Yes, it can take some time to complete the application and get the loan. On the plus side, terms range from five to twenty-five years for paying off the loan. Loan interest rates are priced according to risk, which is also standard practice with conventional commercial loans.

No matter what type of business you have, it stands to reason that someday you’ll need a loan for improvements and growth. Take steps now that will help you qualify for a small business loan.

Information Sources

¹ Fed Small Business. “Small Business Credit Survey“

Image: Depositphotos.com

This article, "Small Business Loan Requirements – and How to Meet Them" was first published on Small Business Trends

67% of Companies Expect Work From Home to Be Permanent or Long-Lasting

About two-thirds of businesses that have adopted remote work policies as a result of COVID-19 plan to keep at least some of those policies in place long-term or permanently, according to a recent study.

The pandemic has forced more businesses than ever to rapidly adopt a work from home model. And though some may have struggled to adjust at first, many are now reaping the benefits of such policies — and that may lead to a permanent shift in working conditions across industries.

Work from Home Permanently Survey

Moe Vela, Chief Transparency Officer of TransparentBusiness, a remote workforce management solution, said in a phone interview with Small Business Trends, “This is truly an unprecedented situation that has led businesses to have no choice but to adopt a remote workforce model. But then what companies are seeing is that it works. Everybody wins with a remote workforce model.”

For small businesses, the benefits are numerous. You get to save money on office space, equipment, supplies, and utilities by allowing employees to work remotely. You can also enjoy improved morale and productivity by giving your team the flexibility to set their own schedule, while still keeping them on task using remote workforce management tools.

Remote work also opens up the talent pool wider than ever for small businesses. Instead of only looking at candidates in your immediate area who have the ability to travel to and from an office each day, you can consider pretty much everyone. That includes single moms who couldn’t otherwise work outside the home, people with disabilities and mobility challenges, those who can’t drive or afford transportation, and people who live outside your geographic area.

Not only does this lead to a more diverse workforce, but it also gives businesses access to more talent than ever.

Then there are the employees, many of whom appreciate the flexibility of their new schedules and the ability to save time on their daily commute. In fact, 98% of remote workers in Buffer’s annual State of Remote Work Survey said they would like to continue working remotely.

So with more and more people getting a taste of remote work, there may be an even larger call for businesses to adopt these policies to attract top talent. Vela even believes that remote work opportunities may become a part of many companies’ benefits packages going forward.

Ready for Remote Work?

Of course, remote work currently is mainly suited for information and computer based workers. Other businesses may not have the ability to support a remote workforce at the moment. And others still may want to slowly transition to fully remote work by letting employees work from home part time or just letting certain people telecommute.

Vela says that employees at these companies that aren’t fully on board with remote work just yet shouldn’t be afraid to speak up — just be prepared to back up your requests.

He says, “For employees who want the ability to continue working remotely, don’t be afraid to ask your employer, respectfully and gratefully of course. Just be prepared to show them that you’ve been effective. Give them evidence that you can be productive so they have no excuse or reason to not let you do it.”

The study that found two thirds of companies are considering adopting long-term remote work policies was performed by 451 Research, a unit of S&P Global Market Intelligence. The organization polled 575 decision makers across industries. It also found that 80 percent of organizations have expanded work from home policies due to COVID-19.

Work from Home Trend Growing

This is just one in a long line of recent studies that has found the business community trending toward remote work. And major companies like Square and Twitter have announced remote work policies that will continue post-COVID-19. So it seems clear that even once businesses are widely able to reopen, the workforce may look entirely different — and not necessarily in a bad way.

READ MORE: 

• Small Business News

Image: Depositphotos.com

This article, "67% of Companies Expect Work From Home to Be Permanent or Long-Lasting" was first published on Small Business Trends

Société Générale is acquiring freelancer challenger bank Shine

Société Générale is acquiring French startup Shine. Terms of the deal are undisclosed. According to a source, Shine is getting acquired for around €100 million in an all-cash deal (around $112.6 million).

The startup had previously raised €10.8 million ($12.2 million) in total from Daphni, Kima Ventures, XAnge and various business angels.

If you’re not familiar with Shine, the startup has been building a challenger bank for freelancers and small companies in France. It lets you create a business account, get a debit card and take care of some of the most boring administrative tasks.

For instance, Shine helps you incorporate your company and also lets you create invoices directly from the app. You can send a link to your client, you get a notification when your client opens the invoice and they can view your Shine IBAN directly on the invoice.

And because the invoicing tool is integrated with your business bank account, your invoices are automatically marked as paid in the app.

When it comes to receipts, you can also open a card transaction and attach a receipt to that transaction. This way, all accounting information remains in the same app. If you’re working with an accountant, you can set up an automatic export of receipts, invoices and transactions once per month.

But the best feature of Shine is that it helps you stay on top of paperwork. You receive notifications to remind you that you should pay your taxes, you can see how much money will be left once you paid your taxes and more.

And it’s been working well with 70,000 freelancers and very small companies using Shine for their bank account. But Shine is built on top of Treezor, a banking-as-a-service company that provides financial services and debit cards to other fintech companies. At this scale, it would make sense for Shine to build its own infrastructure.

Shine has taken a different decision and is joining Société Générale, which also happens to be the company that acquired Treezor a few years ago.

Shine will operate independently from Société Générale and will still accept new customers — the two co-founders are staying at the helm of Shine. But the two companies have plans to cross-promote their respective offerings.

Société Générale could offer Shine to its business customers. And as freelancers start working with other people and turn their small independent business into a full-fledged company, Shine could also tell its customers to choose Société Générale for their business bank account.

Shine will also take advantage of Société Générale’s banking license and products. As a Shine customer, you could image getting a credit line from Société Générale. Having a banking giant behind you could greatly improve Shine’s offering. Now, let’s see if Société Générale manages to boost the potential of Shine.

Google acquires smart glasses company North, whose Focals 2.0 won’t ship

Google confirmed today via blog post that it has acquired Canadian smart glasses company North, which began life as human interface hardware startup Thalmic Labs in 2012. The company didn’t reveal any details about the acquisition, which was first reported to be happening by The Globe and Mail, last week. The blog post is authored by Google’s SVP of Devices & Services Rick Osterloh, which cites North’s “strong technology foundation” as a key driver behind the deal.

Osterloh also emphasizes Google’s existing work in building “ambient computing,” which is to say computing that fades into the background of a user’s life, as the strategic reasoning behind the acquisition. North will join Google’s existing team in the Kitchener-Waterloo area, where North is already based, and it will aid with the company’s “hardware efforts and ambient computing future,” according to Osterloh.

In a separate blog post, North’s co-founders Stephen Lake, Matthew Bailey and Aaron Grant discuss their perspective on the acquisition. They say the deal makes sense because it will help “significantly advance our shared vision,” but go on to noted that this will mean winding down support for Focals 1.0, the first-generation smart glasses product that North released last year, and cancelling any plans to ship Focals 2.0, the second-generation version that the company had been teasing and preparing to release over the last several months.

Focals received significant media attention following their release, and provided the most consumer-friendly wearable glasses computing interface ever launched. They closely resembled regular optical glasses, albeit with larger arms to house the active computing components, and projected a transparent display overlay onto one frame which showed things like messages and navigation directions.

Around the Focals 1.0 debut, North co-founder and CEO Stephen Lake told me that the company had originally begun developing its debut product, the Myo gesture control armband, to create a way to interact naturally with the ambient smart computing platforms of the future. Myo read electrical pulses generated by the body when you move your arm and translated that into computer input. After realizing that devices it was designed to work with, including VR headsets and wearable computers like Google Glass, weren’t far enough along for its novel control paradigm to take off, they shifted to addressing the root of the problem with Focals.

Focals had some major limitations, however, including initially requiring that anyone wanting to purchase them go into a physical location for fitting, and then return for adjustments once they were ready. They were also quite expensive, and didn’t support the full range of prescriptions needed by many existing glasses-wearers. Software limitations, including limited access to Apple’s iMessage platform, also hampered the experience for Apple mobile device users.

North (and Myo before it) always employed talented and remarkable mechanical electronics engineers sources from the nearby University of Waterloo, but its ideas typically failed to attract the kind of consumer interest that would’ve been required for sustained independent operation. The company had raised nearly $200 million in funding since its founding; as mentioned, no word on the total amount Google paid, but it doesn’t seem likely to have been a blockbuster exit.

In an email to North customers, the company also said it would be refunding the full amount paid for any Focals purchases – likely to defray any complaints about the end of software support, which occurs relatively soon on July 31, 2020.

RIOS comes out of stealth to announce $5M in funding for ‘industry-agnostic’ robotics

Bay Area-based robotics startup RIOS is coming out of stealth today to announce $5 million in funding. The round is being led by Valley Capital Partners and Morpheus Ventures, with participation from a long list of investors, including Grit Ventures, Motus Ventures, MicroVentures, Alumni Ventures Group, Fuji Corporation and NGK Spark Plug Co.

The move comes during a time of increased interest in factory automation. A number of different startups have received massive funding of late, including Berkshire Grey’s massive $263 million raise in January. RIOS’s raise is considerably smaller, of course, but the young company has more to prove.

Even so, investors are clearly eyeing automation with great interest amid an ongoing global pandemic that has both screeched many industries to a halt and led many to look to alternative production elements that remove the human element of virus transmission.

RIOS was founded in 2018, as a spin-out of Stanford University, with help from a number of Xerox PARC engineers. The startup has operated in stealth for the past year and a half while testing its technologies with a select group of partners.

The company’s first product is DX-1, a robot designed for a variety of industrial tasks, including static bin picking and conveyor belt operations. The system is powered by the company’s AI stack, including a perception system and a variety of tactile sensors mounted on the robotic hand.

The plan is to charge a monthly fee for the robotic system that includes a variety of services, including programming, maintenance, monitoring and regular updates.

The Venture Collective launches with a new bet on pre-seed investing

Venture capital has a long way to go when it comes to investing in underrepresented founders in a meaningful way. But according to The Venture Collective’s Cat Hernandez, the issue is too complex to solve by just cutting checks and spending time with entrepreneurs.

“You have to be maniacally focused on solutions,” Hernandez said.

So, Hernandez has teamed up with a number of operators-turned-investors to tackle tech’s diversity problem from a creative angle.

The Venture Collective, based in London and New York, launches today to make access to capital more equal. Fair warning: its experimental structure is knotty, as TVC is part investment vehicle and part management company. But it’s a creative strategy in a deserving sector that tech struggles to make progress within.

The team is stacked with a variety of experience: Founding partner Nick Shekerdemian is a former YC startup founder who launched a diversity recruitment platform, and his co-founder, Gina Kirch, was one of his investors, as well as a former director at BlackRock. Other partners include former Primary Venture Partners investor Cat Hernandez and Elliot Richmond, who invests out of the United Kingdom and previously worked at Moelis & Company.

The team was finalized during COVID-19.

TVC’s funding model has two customer bases: startup founders and family offices.

For startups, the business will invest a $100,000 check into one company per month, with the flexibility to do more. TVC intends to reserve between $1 to $5 million for follow-on rounds.

For family offices, TVC charges an annual fee to serve as intel for what they think are lucrative pre-seed deals in the Valley. If a family office or someone within its network wants to invest, TVC will ultimately deploy an allocated amount of capital. It hopes that total capital commitments will increase over time. 

While TVC says the structure model is in stealth, it is reasonable to compare the structures of these family office investments to the structures of special purpose vehicles. SPVs are investment vehicles that exist outside a fund’s capital allotment and are more spur of the moment, versus traditionally syndicated.

The biggest difference is that SPV structure is centered around deals, but TVC’s structure is centered around a capital allotment, deployed into multiple deals. They essentially act as middlemen between promising startups and family offices.

It’s good news for family offices, as they often take the role of institutional investors, which are decade-long relationships. The problem with lengthy bets is that what was hot in 2010 might not be hot in 2020. TVC’s model lets LPs deploy capital in their interest areas on a year by year basis. So an LP who is newly bullish on remote work (for some wild reason) could get their hands in early deals instead of waiting for the AR/VR fund they invested in years ago to make that move.

Putting all these pieces together, TVC gets more funds by:

• traditional equity raise
• annual fee to provide information to its network
• family office checks
• portfolio exits

Because of all of these mechanisms, TVC’s total “fund size” will change depending on the week. It’s a unique example of how first-time fund managers are tackling investing in a volatile landscape.

Today TVC launches with an undisclosed amount of equity-based financing. The company declined to share total assets under management.

So a big factor in TVC’s success is if it can convince both founders and family offices that its perspective is worth the set up. TVC’s flexibility can be a blessing, but it also can be risky and unreliable in case family offices pull out. Or if there is an extended recession, for example.

As a sweetener, the company says that it will donate two-thirds of partner time to helping portfolio companies.

But how does this fit into diversity? It all goes back to TVC’s goal to make access to capital more equal.

According to the team, pre-seed to Series A is where most companies fail, but the very funds that back pre-seed are also the most strapped for resources (small fund sizes, fixed management fees). Thus, firms have to selectively pick the companies they think are outliers and spend time with those companies on a more regular basis. This disproportionately impacts underrepresented founders, who might have a slower start due to lack of access to resources.

TVC thinks its strategy will help grow the number of startups that are venture-backable by heavily supporting them through this time, without competing and driving up valuations for only a few outliers.

The company defined underrepresented founders through diversity, geography, age and social background. When asked if they will publicly disclose diversity metrics, TVC said “it wants to be thoughtful about how we hold our investments accountable in the long-term and we are balancing that with a desire to not be prescriptive.”

“We believe that part of our job as early investors is to ensure that this intent is top of mind as the business scales. That can come in many forms — tracking/reporting on diversity metrics being one of them. At its core, this isn’t about window dressing,” the firm told TechCrunch. Generally, TVC is focused on helping more people get funding, and pointed toward financial optionality as the “flywheel we’re playing for.”

In terms of sourcing, TVC is partnering with tech-focused groups in New York and London and will identify talent at the university and college level. It also said it will build relationships with underrepresented operators “at the most prominent tech companies” and co-invest with diversity-focused founders.

TVC also launched a group called “The Collective” that includes diverse founders, operators and investors, who will help as a deal flow channel.

How first-time fund managers are de-risking

Fivetran snares $100M Series C on $1.2B valuation for data connectivity solution

A big problem for companies these days is finding ways to connect to various data sources to their data repositories, and Fivetran is a startup with a solution to solve that very problem. No surprise then that even during a pandemic, the company announced today that it has raised $100 million Series C on a $1.2 billion valuation.

The company didn’t mess around with top flight firms Andreessen Horowitz and General Catalyst leading the investment with participation from existing investors CEAS Investments and Matrix Partners. Today’s money brings the total raised so far to $163 million, according to the company.

Martin Cassado from a16z described the company succinctly in a blog post he wrote after its $44 million Series B in September 2019, which his firm also participated in. “Fivetran is a SaaS service that connects to the critical data sources in an organization, pulls and processes all the data, and then dumps it into a warehouse (e.g., Snowflake, BigQuery or RedShift) for SQL access and further transformations, if needed. If data is the new oil, then Fivetran is the pipes that get it from the source to the refinery,” he wrote.

Writing in a blog post today announcing the new funding, CEO George Fraser added that in spite of current conditions, the company has continued to add customers. “Despite recent economic uncertainty, Fivetran has continued to grow rapidly as customers see the opportunity to reduce their total cost of ownership by adopting our product in place of highly customized, in-house ETL pipelines that require constant maintenance,” he wrote.

In fact, the company reports 75% customer growth over the prior 12 months. It now has over 1100 customers, which is a pretty good benchmark for a Series C company. Customers include Databricks, DocuSign, Forever 21, Square, Udacity and Urban Outfitters, crossing a variety of verticals.

Fivetran hopes to continue to build new data connectors as it expands the reach of its product and to push into new markets, even in the midst of today’s economic climate. With $100 million in the bank, it should have enough runway to ride this out, while expanding where it makes sense.

Fivetran hauls in $44M Series B as data pipeline business booms

Join GGV’s Hans Tung and Jeff Richards for a live chat today at 3:30 EDT/12:30 PDT

The good ship Extra Crunch Live sails along today, bringing two noted venture capitalists aboard to discuss the world’s investing patterns, their own deals and much more.

Extra Crunch members can join the conversation with Hans Tung and Jeff Richards from GGV Capital at 3:30 p.m. EDT/12:30 p.m. PDT/7:30 p.m. GMT.

We’ll collect audience questions as we go, so buy an Extra Crunch trial now so you can participate. Of course, TechCrunch has a list of its own queries — GGV Capital invests globally, which means it has eyes and ears in a number of different markets. We’ll dig into how different markets are faring: Is China’s VC scene as slow as it seems? Is Europe bouncing back as we’ve been hearing? And what’s the current temperature here in the United States for Series A through C rounds?

With the stock market back to form, exits are hot again, which gives us a new set of topics to explore, including how GGV views M&A appetite today from a price perspective, and whether any of their later-stage companies are looking more closely at the IPO market.

TechCrunch’s Extra Crunch Live series has featured guests like investor and entrepreneur Mark Cuban, BLCK VC’s Sydney Sykes and Inspired Capital’s Alexa von Tobel, with more to come.

There are other pressing matters: The COVID-19 pandemic is re-accelerating domestically even as it abates abroad. And GGV spoke out against racism during the early days of protests after the killing of George Floyd, so we’ll ask about the venture capital industry and if its efforts to diversify itself will make more material progress this time.

Extra Crunch subscribers, hit the jump and add the event to your calendar. Zoom links and the rest of the goodies are down there as well. (We’ll also stream live on YouTube). If you aren’t an Extra Crunch subscriber, you can get a cheap trial here.

All set? Great. We’ll see you in a few hours.

Details

As Uber hunts for a deal, can Postmates leverage an IPO?

It’s been a busy last 24 hours or so for on-demand delivery company Postmates. According to reporting, the company is reviving its IPO plans, possibly selling to Uber, or perhaps looking to go public with the help of a special purpose acquisition vehicle, also known as a SPAC.

For Postmates, a company caught somewhere between DoorDash’s cash-fueled rise and Uber’s ability to lose hundreds of millions on its Uber Eats delivery service every quarter, multiples options are likely welcome.

Postmates first filed to go public in early 2019, but its IPO failed to materialize. The company was also reported to be pursuing a sale in 2019 after it had filed to go public. An M&A exit also failed to appear.

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The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.

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But 2020 is very different from 2019. With GrubHub’s bidding war behind us, Uber appears hungry for more volume, and the IPO market is surprisingly hot given the global pandemic. Postmates may have a number of viable options in front of it, instead of a continued grind as a private company.

The IPO market

So what to do?

Despite some blips, if Postmates has managed anything like revenue growth acceleration because people have been staying home and ordering more food and other goods, the company’s IPO story could prove attractive. And if so, the firm could perhaps best what a cash-burning company can afford to part with in an M&A transaction by going public.

Let’s check the tape. It’s a commonly known fact that the public markets have favored technology companies this year, especially software companies. For many venture-backed companies, this is great news. For Postmates, it’s a slightly different equation, as its margins won’t match those of software companies, nor will its revenue recur in a similar fashion.

But, there are IPOs from this year that we can point to featuring companies that also do not feature strong margins or recurring revenue that did great. So, there is an IPO path for venture-backed startups and unicorns to go public even if they are not software entities.

Vroom

Hunters raises $15M Series A for its threat-hunting platform

Hunters, a Tel Aviv-based cybersecurity startup that helps enterprises defend themselves from intruders and analyze attacks, today announced that it has raised a $15 million Series A funding round from Microsoft’s M12 and U.S. Venture Partners. Seed investors YL Ventures and Blumberg Captial also participated in this round, as well as new investor Okta Ventures, the venture arm of identity provider Okta. With this, Hunters has now raised a total of $20.4 million.

The company’s SaaS platform basically automates the threat-hunting processes, which has traditionally been a manual process. The general idea here is to take as much data from an enterprise’s various networking and security tools to detect stealth attacks.

“Hunters is basically this layer, a cognitive layer or connective tissue that you put on top of your telemetry stack,” Hunters co-founder and CEO Uri May told me. “So you have your [endpoint detection and response], your firewalls, cloud, production environment sensors — and all of those are shooting telemetry and detections all over the organization, generating huge amounts of data. And, basically, our place in the world depends on our ability to generate that delta. So without being able to find things that you can’t see with a single point solution or without really expediting response procedures and workflows by correlating things in a nontrivial way, we don’t have any excuse to exist. But we got pretty good at those — at showing that delta — and we onboarded customers — nice logos — and that was a very strong validation.”

Image Credits: Hunters

Hunters’ first customer was actually data management service Snowflake, which functioned as the company’s design partner. In addition to being a customer, Snowflake now also features Hunters in its partner marketplace, as does security service CrowdStrike. May also noted that Crowdstrike is a good example for the kind of customer Hunters is going after.

“Not necessarily Global 2000 or Fortune 500. It’s really high-end mid-market organizations, not necessarily tens of thousand employees, but billions of dollars in revenues, a lot of value at risk, born to the cloud, super mature tech stack, not necessarily a big security operation center, but definitely CISO and a team of security engineers and analysts, and they’re looking for the solution, that on-top solution that can make sense of a lot of the data and give them the confidence and also give them results in terms of cybersecurity, posture and their detection and response capabilities.”

Microsoft already has a large security development center in Israel and so it’s no surprise that Hunters appeared on the company’s radar. Hunters also spent some time proactively looking at the Microsoft ecosystem, May told me, but the company’s VCs also made some introductions. All of this culminated in a number of meetings at the Tel Aviv CyberTech conference in January and the RSA Conference in San Francisco in February, just before the coronavirus pandemic essentially shut down travel.

Hunters says it will use the new funding to build out its go-to-market capabilities in the U.S. and expand its R&D team in Israel. As for the product itself, the company will look to broaden its product integration and machine learning capabilities to help it generate better attack stories. May also noted that it plans to give its users capabilities to customize the system for their needs by allowing them to develop their own signals and detections to augment the company’s default tools. This, May argued, will allow the company to go after higher-end enterprise customers that already have threat-hunting teams but that are looking to automate more of the process. With that, it will also look to partner with other security firms to leverage its system to provide better services to their customers as well.

Israel’s maturing cybersecurity startup ecosystem

86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup

New research is finding Americans like social distance services like curbside pickup. And they want them to continue even after the pandemic is over.

The State of Local Business survey from Podium reports that 84% of respondents have used tech-enables services like contactless payments too. The vast majority (86%) expect they will continue.

Small Business Continues Pandemic Shopping Experience

Over half of the consumers polled said they stayed away from local businesses that don’t have these services. There’s a big shift local SMBs need to pay attention to among women and people over 60 too.

Contactless Services

A full 55% of women appreciated pickup, curbside and contactless services. That’s a big difference from the 43% of men who responded in the same way. The numbers for people over 60 might be the biggest surprise. Only 3% considered these services before the pandemic. Once it hit that number grew to 41%.

Eric Rea, co-founder and CEO at Podium, says what was once an option has become the only way to sell goods and services during COVID 19.

“While previously just a nice way to do business, offering options like contactless payments, texting and curbside pickup have become the only way for local businesses to operate,” he said in a press release.   “There has been steady movement towards digital transformation among local businesses in recent years. That accelerated over the past few months. Consumers have become accustomed to the new forms of communications and services. There’s no going back.”

New Customers

Social distancing measures actually helped local businesses get new customers. The survey reports that 57% said services like contactless payments and curbside pickup were behind them making a purchase from local business for the first time.

The research also points to some other interesting trends small businesses need to pay attention to. Like the fact that since the pandemic, there’s a trend towards Americans texting with businesses. In fact 41% said the pandemic made them more interested in communicating this way.

Texting

Texting is the favored way to communicate, according to the research. Only 23% of respondents favored calling and emailing only ranked with 18%. Using a website chat was far third at 15 percent.

The breakdown of the social distancing services Americans like best is:

• A full 80% preferred curbside pickup. Even after pandemic restrictions are eased.
• Grocery delivery was popular was 79% of respondents.
• Contactless payment options was a close third with a 78% positive rating

The survey also highlighted a few red flags that small businesses need to watch for. Twenty nine percent had a bad curbside pickup experience. That shows businesses need to be organized.

Unorganized?

In fact, 49% of the respondents who complained said the service was unorganized. A slightly  lower number (42%) complained it was slow. Another group reported a lack of coordinating communication options.

The national online survey was conducted in May. One thousand Americans aged 18 and over were polled. Podium is a messaging platform designed for customers. It has headquarters in Lehi, Utah. It serves over 55,000 local businesses in Australia, Canada and the United States.

READ MORE: 

• Small Business News

Image: Depositphotos.com

This article, "86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup" was first published on Small Business Trends

13 Boston-focused venture capitalists talk green shoots and startup recovery

Welcome back to the second half of our two-part Boston investor survey.

Catching you up, TechCrunch reached out to a host of Boston-area venture capitalists to get their take on the current state of their market, and what they think might be coming up in the future. More VCs than we initially anticipated got back to us, so we broke the survey into two pieces so that there was enough room to include everyone.

Today, in contrast, we’re looking a little further ahead: Are they seeing green shoots? When is a recovery likely to begin? What’s making them feel hopeful in this tenuous era? Here’s who took part:

• Lily Lyman, Underscore VC
• Rudina Seseri, Glasswing Ventures
• Jamie Goldstein, Pillar VC
• The Victress Capital team (Lori Cashman, Suzanne Norris, Kate Castle, Madeline Keulen, Molly Sellers)
• Rob Go, NextView Ventures
• Bill Geary, Flare Capital
• Michael Greeley, Flare Capital
• Jeff Bussgang, Flybridge Ventures
• Neeraj Agrawal, Battery Ventures

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Boston VC’s vision of tomorrow

Recovery is going to be slow, but most importantly, the comeback is not going to look like one, sole aha moment for any startup or entrepreneur. After poring through dozens of responses, we distilled that Boston-focused VCs think that recovery will favor Boston-area companies to some degree, as the areas they are working on, or the problems that they are working to solve, will still matter after COVID-19.

On the slowness of recovery, NextView’s Rob Go provided TechCrunch with the most vivid prognostication, saying that “while it’s difficult to predict” when the post-COVID recovery will begin, he anticipates “a swoosh-shaped recovery is more likely” than anything V-shaped. “The recovery is likely to be painfully slow,” the VC added.

It’s perhaps unsurprising then that green shoots and fruitful deals are thinner on the ground in Boston today than its startup community probably would have hoped. Momentum through dollars or deals will lead to more sustained recovery. Flare Capital’s Michael Greeley said that it is “still too early” to see green shoots, while other VCs noted that, on a sector-by-sector basis, there are some positive signs that give hope.

Glasswing is an AI-focused fund, making the following comment from its Rudina Seseri interesting, if niche. On the question of green shoots, Seseri said that her firm has “been surprised by the number of companies that are leveraging AI to drive automation, cost savings, optimization and higher performance.” The result of that surprise has been that “over the last five months these companies have beaten their pre-COVID budgets and forecasts for growth.”

The other side of that coin is startup areas that touch on travel or food. It’s hard to find recovery there, for obvious reasons.

The Victress Capital team put the dynamic well: “We’ve also been encouraged by the increased pace in innovation that we’ve seen across sectors where innovation has been slow in the past. From edtech to telehealth to food and beverage and more, we are seeing nimble entrepreneurs pivot or change their businesses to respond to the needs of today.”

Our broadest takeaway is that VC firms have not fully written off any sectors given today’s turbulence. The future, largely according to Boston-focused VCs, is startups that are important after the world opens again and focus on the next generation of businesses. It means that investments might look a bit like a risky game of hopscotch. They’re all trying to land on the deal that accounts for the next generation of businesses.

With that, let’s get into full questions and answers.

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Lily Lyman, Underscore VC

When do you expect a startup recovery to begin?

“Recovery” is hard to speak to. We’ve been evaluating different phases of behavior and how that will affect the economy and the startup ecosystem. We have been thinking in terms of (1) lockdown opening up (summer 2020); (2) period of remaining social distancing behavior, likely with intermittent periods of lockdowns (into spring 2021); and (3) new normal (spring/summer 2021). But this changes and we are constantly reassessing it. For startups, we remain believers that great companies with great leadership can not only survive but find ways to thrive in this new environment.

Are you seeing green shoots regarding revenue growth, retention or other momentum that you didn’t expect a few weeks ago?

Again, it varies by industry. We have seen a surge in demand for players in the cloud infrastructure space such as CloudZero or for remote collaboration software (an investment not yet announced).

Tell us about the most interesting, Boston-based company you’ve invested in recently.

We are really excited about Popcart and how they are positioned as the world rapidly migrates to e-commerce. The founding team is a pair of engineer leaders from Endeca. Popcart offers consumers price and availability transparency across retail platforms (Amazon, Target, Walmart, etc.). The cross-platform capabilities are particularly unique. When COVID-19 hit, the team quickly created the Supply Finder to help consumers find goods that are in short supply and ensure they are protected against price gouging.

What is a moment that has given you hope in the past 30 days? This can be professional, personal or a mix of the two.

I’m inspired by the great leadership I’ve seen our founders display. They’ve made hard decisions with imperfect information and managed a difficult time with both empathy and conviction.

I’m also appreciating the humanizing reality that working from home and operating in uncertainty brings that unites people. My hope is that pieces of this uniting and empathy will persist.