Why no one covered your early-stage round

I don’t have an editor for this personal blog, so feel free to send typos to equitypod@techcrunch.com. Thanks! — Alex

Yesterday I tweeted a joke post on TechCrunch about why the publication I write for might not cover your seed round. Based on the somewhat outsized response to the screenshot, I wanted to expand on the concept a bit more. But what I blogged up didn’t survive an encounter with my ur-editor, so I’m posting bits of it here, albeit updated as I am now writing for myself instead of under my employer’s aegis.

Early-stage companies are cool. I dig them. The ability to cover them is part of the reason I came back to TechCrunch after a few years of aping the prodigal son. The publication has long had a bias in favor of writing about the most nascent tech startups. Its continued focus on covering tiny upstart companies is something that sets TechCrunch apart from other publications, I think.

TechCrunch covers lots of early-stage rounds. In the original TechCrunch version of this post I noted that we — examples here, here, and here — often cover demo days, not to mention a good number of individual micro-rounds. But at issue is not that the point that TechCrunch and other pubs don’t cover any small private investments, but that we aren’t covering yours. Or your client’s.

There is an imbalance in the number of early-stage rounds and the number of folks covering them. The imbalance between the number of PR folks and journalists is well-known. Here’s some data saying that it’s 6:1 in favor of PR these days. But I would hazard that the ratio of seed rounds that are put together and would like to be written up versus the number of folks actively writing that sort of post is even more off-kilter.

This means that my inbox is chock-full of notes from interesting founders and investors sharing upcoming early-stage rounds. But I can only get to a few each week, so I mostly have to say no.

But some rounds do get covered, right? Yep, and that’s due in part to the fact that covering startup rounds gets easier the more mature they become. This is because every news item has a weight to it, and the heavier it is the greater the chance that it will be covered.

The size of a round can boost its weight. Having a well-known founder can do the same. Or having an investor aboard with a super-strong track record. You can see how the average seed round can struggle to make an impact from this perspective.

The average weight of startup news has risen over time, as the type of deals that count as startup rounds have themselves stretched over time. Or more simply the startup market has fundamentally changed; the output of the press that covers startups has also changed.

Startups are staying private longer, and raising more money before going public. That means that the number of startups raising big rounds has gone up. And as I do not think that there is more coverage of funding rounds today than in years past, and the big rounds will get covered because they are the most newsy — they carry the most weight — there is less time and attention left for smaller startups and rounds.

If every unicorn went public there would be fewer $100 million rounds, and folks like myself could focus a bit more on seed and other early-stage investments!

As a final caveat to all of this, thinking that super-early startups are worth covering doesn’t mean that all coverage will be positive. And skepticism scales as a startups does. TechCrunch has a bias towards covering startups of all shapes and sizes. That does not mean that we are going to always write nice things.

Indeed, our coverage tends to get a bit starker as company scales. This is because the company in question is growing up (and thus more is expected of it) and because its in-market impact is growing. If a startup has three customers customer and it loses one, that’s not news. That’s a startup looking for product-market fit. But if a startup has 1,000 customers and loses 500, that’s news.

And if a startup has two employees, it’s hard to get nitty-gritty on DEI data. But once it has 15 people, we ask about that. And when a private company reaches 1,000 employees, we’ll ask about progress across its diversity metrics.

In my personal view, the most intelligent startup coverage is the least skeptical when startups are super small, and most skeptical when they are going public. And the skepticism should scale as they do.

Why avoid being caustic towards the tiniest companies? It would be easy to dump on an idea like a podcast search engine, or a small games company that is struggling. But sometimes those wind up giving us companies like Twitter and Slack. And no one knew what was coming from their possibly dismissable concepts.

But by the time a company is raising a Series D and its revenue growth has stalled and its burning cash like it just raised a 2018 Vision Fund round, you bet we’ll point its failures out.

There are myriad exceptions to this general rule. Harassment, abuse, and the like are news regardless of company size. Investor misbehavior is news regardless of what stage they invest it. You get the idea.

Summarizing: There aren’t that many people covering startup rounds; many startup rounds are now huge, and thus consume much coverage oxygen; there are lots and lots of early-stage rounds; most don’t get covered and I don’t really see that changing. But that doesn’t mean that your round isn’t super cool. — Hugs, Alex

Whacking startup valuations is bipartisan!

This was going to go on TechCrunch, but then it got killed, so I'm putting it here!

Today Senator Hawley, infamous for his role in the recent insurrection in the American capital, is making news today by proposing a way to limit technology company acquisitions.

The proposed amendment, shared on Twitter by TechCrunch alum and present-day Washington Post technology policy reporter extraordinaire Cat Zakrzewski, is blunt. Its text indicates that Senator Hawley wants to "restore competition in digital markets by imposing a presumptive prohibition on all mergers and acquisitions by companies that operate dominant online platforms."

Aside from a repetition of the point, and regular legal faff associated with normal Congressional lawmaking, that's all it says. You can read the full text here.

It appears that Senator Hawley wants to block all M&A activity by major tech shops -- though, of course, how you define "dominant online platform" is frighteningly flexible -- of other companies.

This is not the Senator’s first foray into tech policy. He is also skeptical of key planks of Internet policy like Section 230 of the Communications Decency Act, which prevents platforms from being liable for content that users post, and provides them with the ability to police what is posted on their services.

The impact of his latest proposal, if enacted, would be the limitation of the purchase of startups by the largest tech companies, a key exit route for many upstart firms. The impact of that would be a decline in M&A activity the startup landscape, harming the exit potential of a great number of startups, especially those in verticals with strong incumbent competition.

In turn, the scenario would lower the potential value of many startups, harming their ability to attract capital, scale, and grow their private-market valuations.

Aside from being possibly good for the SPAC market, it's hard to tell who this idea is for, except perhaps for the Senator himself. Senator Hawley is mad about purported censorship of his ideas by tech companies amongst others, something that you can read him discussing in newspapers like the NY Post, and hear him discuss on the Fox network where he's a regular guest, and, of course, on his Twitter account. Or on the Senate floor. Or via any number of other outlets. He’s mad.

The Senator also proposed a bill in 2019 that would block "a large social media company from moderating information on its platform from a politically biased standpoint," which was a terrible idea, as "no Nazis" is a politically biased viewpoint, and a good one at that.

Regardless, Senator Hawley is not alone in coming up with big-tech targeting laws that could wind up harming the startups fighting to take on the larger companies.

Just last year TechCrunch covered a proposal from Senator Elizabeth Warren and Congresswoman Alexandria Ocasio-Cortez called the "Pandemic Anti-Monopoly Act." As we wrote at the time, it "would enact a moratorium on mergers and acquisitions from companies with more than $100 million in revenue, financial institutions with a market capitalization of more than $100 million, private equity companies, hedge funds and companies that private equity companies or hedge funds have a majority-ownership stake in."

The bill would have had an impact on startup valuations for similar reasons as the new Hawley concept. Though, in this case, I would argue that the $100 million in revenue threshold would prove even more punitive than Senator Hawley's own bar for being barred from making M&A transactions.

I don't particularly care what happens to startup valuations, not really. I do own some stock in my former employer Crunchbase, which is a private company that could exit to a bigger company. Whatever.

But what does matter in Senator Hawley's latest push to get attention is that it underscores how bipartisan not liking big tech companies is amongst American political leaders today. Dislike that, by hoping to limit them getting larger through inorganic growth, could wind up cutting the worth of the smaller tech companies that want to take their spot one day.

Of course, any startup that is bought by a big tech company fails to take it on by definition. But I do wonder if the impact of a Hawley-like law would, instead of really harming the biggest tech companies, instead merely make it harder to fund the smaller firms that might challenge them in time.

Who knows! But it is impressive that America's leading industry has managed to earn such opponents on both sides of the American democracy-fascism political divide.

The best books I read in 2020

Reading kept me sane during the pandemic. Here are some favorites.

This post is only loosely edited. Please send corrections to danny@techcrunch.com. Thanks!

Musical taste is highly varied, and personal. So are books, making reading something that we all do differently. This makes recommendations tricky, if you’d like to write a books list that might appeal broadly.

I don’t. Because reading is so very individual, all I can do is tell you what brought me delight and a burning need to read the next page, chapter, or installment in a series.

The list below skews heavily towards science-fiction, and fantasy. There’s a simple reason for that. I live on Earth, and often would rather be somewhere else for a little while. Books are my spaceship, my magic ring — my ticket away.

But not everything listed below fits into those two niches. So, I hope you find something for yourself; a book to treasure as this new, more hopeful year begins.

Hugs, love, and may we keep discovering new stories in 2021. (Here’s nearly everything I read this year, for a more varied list.)

The Inheritance Trilogy

[here] N. K. Jemisin is a goddamn mastermind. Her Broken Earth series shattered me in 2019. The Inheritance Trilogy might be even better. Pantheonic gods, the morality and mortality of power, and what redemption might look like in a world of pain? Not to mention a genesis story of beauty. So good.

The Obsidian Tower + The Once and Future Witches

[here] and [here] I’ve put these into the same recommendation bucket as they are both so fucking good, and each features a female protagonist/female protagonists in a world of magic. Past those similarities there’s very little the two share. You will enjoy both journeys immensely. Read them.

Enemy at the Gates + The Guns of August

[here] and [here] I am breaking a rule and including a book here that I have not finished. I read Enemy at the Gates this year, a history of the battle for Stalingrad in World War II, which was a depressing experience.

If you’ve seen the movie, you have some idea of the horror of that particular period of combat. The book makes it plain that the movie was hugely sanitized. Reality was infinitely worse. The book is incredibly well-reported, and full of details that make the terror of that siege feel human in a painful way. In a way that will make you rethink war movies, and indeed any glamorization of war.

The Guns of August is a prelude of sorts to the Enemy at the Gates. I am about 100 pages from finishing it (it’s the current book I’m reading with my Dad in our little two person book club; we read the Federalist Papers earlier in 2020 after slogging through Democracy in America and some other stuff in 2019.) But if you want to understand the political, social, and philosophical climate that led to World War I, it’s a must read.

Barbara W. Tuchman, the book’s author, is a brilliant journalist with a knack for making complex issues fit neatly into chapters that build sequentially. It’s bonkers good. And she’s funny, which helps get you through the history.

Is it short? No. Is it a quick read? Yes.

The Three Body Problem trilogy + The Redemption of Time

[here] and [here] I got to mention these books in a TechCrunch post, so I’ll be brief here: Read the Three Body Problem trilogy. And then when you’ve sat down for a day or two, read The Redemption of Time, a book that started off as a work of fanfic, but has become canon to some degree with the blessing of Cixin Liu, the original series’ author.

Each section of the final book in the Three Body trilogy is a triumph of imagination. Cixin Liu is goddamn amazing, leading me to read some of his other work this year. (More below.)

Code + Radium Girls + Hidden Figures

[here] and [here] and [here] I am in a book club in which I am the only man, which has been a huge treat as the books picked by the group have led to areas of history that I would have otherwise missed.

In 2020 we read Code Girls, Radium Girls, and Hidden Figures among other books. I’ve selected these three to highlight as they are each brilliantly reported and written, and also because they detail the huge — and overlooked, underpaid, and underappreciated — work that women did in the background of the stories that we grew up hearing.

I read lots about naval warfare in the Second World War when growing up, for example. But I read nothing about the army of women who stepped into code-breaking jobs that made victory possible during those fights.

And I read lots about military aircraft while a child, but I read nothing about how the dials were be painted with night-friendly luminous, radium paint, leading to mass-death for myriad of female laborers who were then treated as disposable by corporate America, even as their bodies decayed in plain sight.

And Hidden Figures will walk you through the hallways of NACA and NASA, and the war that brilliant Black women had to fight to just get a semblance of fair treatment for exceptional work.

These books are all American stories. They show at once our failures as a nation, and, to some degree, our progress. Books to chew on and think over.

The Poppy War trilogy

[here] Fuck. I’ve only read the first two books of this trilogy but am goddamned hype to read the final book, which just came out.

Some books demand perfect heroes. That the leading character can’t make mistakes, a bit like some sort of meta-Harry Potter. R. F. Kuang’s Poppy War series lacks that sin.

Instead, Rin, your new best friend after 17 pages of the first book, is all too human, precisely as she isn’t. Which makes for a molten conflagration of death, war, and unfairness.

That the books have echoes of historical Chinese-Japanese war and war crimes, as well as a deep echo of European and American imperialism (especially in the second book) makes it all the more engrossing.

Fuck! So good!

Chinese sci-fi more broadly

[here] and [here] Citing the Three Body Problem trilogy is hugely cliche, even if it is worth the praise. So, to broaden the recommendation pool a bit, you should read Broken Stars, a collection of Chinese science-fiction that is fascinating. And then read Ball Lightning by Cixin Liu because it’s fucking good fun.

An Unkindness of Ghosts

[here] Rivers Solomon is a genius. It’s hard to describe this book, but it explores racism in space, and the ability of our species to treat one another as less than human no matter where we are.

I won’t spoil it any more, but this is a must read.

The Locked Tomb trilogy

[here] I was pretty unsure going into Gideon the Ninth, the first book in the Locked Tomb series. I am not really into death-magic as a general concept as it always feels overly dramatic and gobbish. But, Tamsyn Muir is amazing, and the book was nothing like what I expected. At all.

I read the first book, and am ripping through the second at about as fast a clip as I can. It’s what I am reading when I finish not editing this post. It’s so inventive and interesting and confusing and huge and funny and sad and more. I have only one friend who has read these books. Please become my second so that we can talk about them.

Every year that goes by I discover new music and new books and that helps keep me going when life otherwise seems to repetitive to break free from its own patterns. Without books, 2020 would have been a hell of a lot worse.

Four years ago

An election, getting back together, and fear

I am distracted and working, so this piece isn’t very well written. I don’t care! - Alex

Just about four years ago, it was becoming clear that Hillary Clinton was losing the election. On a day when most expected the former Secretary of State and Senator to win the 2016 plebiscite, Donald Trump was pulling ahead.

It was a confusing moment, given how the race had largely looked during the campaigns.

That world-inverting afternoon, however, had a seemingly-small but huge impact on my life, beyond how the election wound up being won or how I felt about its result: During the election confusion, Liza called me.

I was in Sunnyvale at the time, spending election day in a hammock in my sister’s backyard, preparing mentally to eat a huge plate of nachos once the results came in. (I spent a lot of time at my sister’s house in 2016, dropping by for a bunch of weekends after my mid-year rehab jaunt.)

As the votes piled up, and the tallies looked increasingly poor for the Democratic candidate, Liza rang.

At the time we had just gotten back into touch, agreeing to only speak once each month. My goal was to avoid falling in love with her again, so keeping the communication low after our multi-year comms break felt intelligent.

But, Liza, surprised at the election results that were starting to look worse, called outside of our agree-upon cadence because she knew I spent too much time on Twitter, and thus might know what was going on.

I answered, of course, and that call changed my life. We never really stopped talking. After Election Day, 2016, we’ve spoken every day since. We got back together a month later, got engaged a year later, got married two and a half years later.

That early November day was bad for the country, but it was amazingly good for me, pushing Liza and I back into each other’s lives because we didn’t want to spend it apart. And then we didn’t want to spend any other days apart.

Here’s to this election going a bit differently, though. Hugs.

2020 is getting harder

I meant to write about being distracted, but then I got distracted

Yesterday I set out to write a short blog about how, in this current moment, I’m falling apart a little bit. It’s hard to focus this close to the election, especially while the nation is in turmoil.

It’s hard to do work when everything just seems so loud.

But, we’re all trying to do as much as we can, so I wanted to write about how I was holding up under the pressure. What else is a personal blog for? And after a call with a friend I even had an intro mentally mapped out for the post.

Instead, at the end of the day, I only had this pile of shit:

Yoof, that’s fucking awful.

Regardless, everyone I talk to lately is having a hard time. Everyone is struggling to focus. No one is at 100%.

So let’s be kind to ourselves and each other. We can’t do everything, and we cannot do more than our best. Hugs.

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