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XBird Says it Never Applied for PPP Loans. Why Does the SBA Say it Got Millions?
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
Bird, the Santa Monica-based e-scooter unicorn valued at $2.77 billion dollars, is listed in a database of thousands of companies that the Small Business Administration (SBA) made public Monday that received Payroll Protection Program (PPP) loans. According to the SBA, Bird received a loan of between $5 and $10 million in late April to help it retain 341 jobs, which was a month after it laid off 406 employees via Zoom.
But in a statement, Bird said it never applied for the funds and it was trying to determine why it was included on the list. "Bird was erroneously listed as a company that filed for a PPP Loan," the company said.
A senior SBA official told dot.LA that if the lender did not cancel the loan after it was returned, the loan status may not be fully canceled and it would appear in the data. However, Bird said it never returned the loan because it never applied in the first place.
"We did not apply for nor did we receive a PPP Loan," the company said. "We decided as a company not to file an application as we did not want to divert critical funding from small and local businesses."
Bird's founder and CEO, Travis VanderZanden, elaborated on what happened in a tweet Monday afternoon referring to the company's lender; "It looks like Citi started an application while they waited for our decision on whether to formally apply. We discussed internally and told Citi we didn't want to apply via email on April 23rd. They confirmed that the temp app was cancelled that evening and never submitted."'
It looks like Citi started an application while they waited for our decision on whether to formally apply. We disc… https://t.co/K0QLWt1qwx— Travis VanderZanden (@Travis VanderZanden) 1594064013
Hyperloop and Canoo also on the list
Other local companies included in the PPP database included Culver City-based Hyperloop Transportation Technologies, which received a loan in the range of $150,000 to $350,000 to retain 15 jobs and the Torrance electric maker, Canoo, which got a loan just last week of between $5-$10 million to save an undisclosed number of jobs. (dot.LA also received PPP funds of less than $150,000.)
Canoo has raised a billion dollars in venture funding, according to Pitchbook data, and some of have been critical of deep-pocketed venture backed startups taking money from the program.
"There is a money grab going on right now by some venture-backed startups that this program absolutely should exclude," wrote Albert Wenger, a partner at Union Square Ventures (USV), a New York-based early stage VC firm focused on investing in disruptive networks in April. "I urge everyone who is running a venture backed company with a lot of money in the bank and limited COVID-19 impact to think twice about applying for PPP."
Companies such as Sweetgreen and Shake Shack decided to return their loans in April after being criticized for depleting funds from a program meant to help small businesses.
But far from running out of money the PPP program still has some $130 billion left in the bank and on July 4, President Trump signed legislation extending the deadline to apply until August 8, 2020.
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
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LA Tech Week: Female Founders Provide Insights Into Their Startup Journeys
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
Women remain a minority among startup founders. According to Pitchbook, even though women-led startups in the United States received a record $20.8 billion in funding during the first half of 2022, U.S. companies with one or more female founders received less than 20% of total venture funding in 2022. U.S. companies solely led by female founders received less than 2% of the total funding.
The panel, titled Female Founders: Planning, Pivoting, Profiting, was moderated by NYU law professor Shivani Honwad and featured Anjali Kundra, co-founder of bar inventory software Partender; Montré Moore, co-founder of the Black-owned beauty startup AMP Beauty LA; Mia Pokriefka, co-founder and CEO of the interactive social media tool Huxly; and Sunny Wu, founder and CEO of fashion company LE ORA.
The panelists shared their advice and insights on starting and growing a business as a woman. They all acknowledged feeling pressure to not appear weak among peers, especially as a female founder. But this added weight only causes more stress that may lead to burnout.
“The mental health aspect of being a founder should not be overshadowed,” said Kundra, who realized this during the early stages of building her company with her brother..
Growing up in Silicon Valley, Kundra was surrounded by the startup culture where, “everyone is crushing it!” But she said that no one really opened up about the challenges of starting your own company. .
“Once you grow up as a founder in that environment, it's pretty toxic,” Kundra said. “I felt like I really wanted to be open and be able to go to our investors and tell them about challenges because businesses go up and down, markets go up and down and no company is perfect.”
Honwad, who advocates for women’s rights, emphasized the value of aligning yourself with people with similar values in the tech ecosystem. “[Those people] can make your life better not just from an investment and money standpoint, but also a personal standpoint, because life happens,” she said.
Moore, who unexpectedly lost one of her co-founders at AMP Beauty, said that entrepreneurs “really have to learn how to adapt to [their] circumstances.”
“She was young, healthy, vibrant and we've been sorority sisters and friends over the past decade,” she said about her co-founder Phyllicia Phillips, who passed away in February. “So it was just one of those moments where you have to take a pause.”
Moore said this experience forced her to ask for help, which many founders hesitate to do. She encouraged the audience to try and share their issues out loud with their teams because there are always people who will offer help. When Moore shared her concerns with her investors, they jumped in to support her in ways she didn’t think was possible.
Kundra said that while it is important to have a support group and listen to mentors, it is very important for entrepreneurs to follow their own thinking and pick and choose what they want to implement within their strategy. “At the end of the day, you really have to own your own decisions,” she said.
Kundra also said that while it is easy to turn to your colleagues and competitors and do what they are doing, you shouldn’t always follow them because every business is different.
“When I was in the heat of it, I kind of became [a part of] this echo chamber and that was really challenging for us,” Kundra added, “but we were able to move beyond it and figure out what worked for us [as a company] and we're still on a journey. You're always going to be figuring it out, so just know you're not alone.”
- "If You Want to Make Money, Invest in Women." ›
- 'We Can’t Let Data Stop Us': Why Funding Inequity Isn't Deterring These Female Founders, VCs ›
- LA's Top VCs Are Watching These 10 Female Founders ›
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
K-beauty Entrepreneur Alicia Yoon On Taking the Leap From Corporate Consultant to Starting Her Skincare Brand
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
On this episode of Behind Her Empire, Peach & Lily founder and CEO Alicia Yoon discusses her journey from being a corporate consultant to establishing her own skincare brand as well as the necessity of having an airtight business model to become successful.
Throughout her life, Yoon suffered from severe eczema and struggled to find effective skincare in the United States that had meaningful results on her sensitive skin. During her high school years in South Korea, she turned to K-beauty brands for help and found the ingredients in those products more suitable to her skin.
In 2012, she founded leading Korean skincare website Peach & Lily as a way to help others take control of their skin problems. Her positive experience with K-beauty formulations inspired her to bring these products to the United States, products with ingredients that were effective but still foreign to Western beauty brands.
Before starting her business, Yoon worked in the corporate sector as a consultant for The Boston Consulting Group and Accenture. Once she realized she wanted to start a business in beauty, she left her role to attend esthetician school in South Korea and study K-beauty alongside trained chemists. She said that passion is absolutely necessary when it comes to starting a business.
“Your head and your heart have to feel 100% passionate and okay with it,” Yoon said. “If you don't love the thing that you're doing, it's really hard to keep waking up and really putting 100% into it and it does take 100% of you.”
Aside from having passion, Yoon believes that entrepreneurs need to take a step back before starting a business and make sure that their business model is completely ironed out so they can achieve long-term success. She said that founders should reevaluate their business models especially “if the cost of goods is just too high to maintain a profitable business.”
She learned the importance of the business model through her first startup, a Korean fashion import firm. Despite winning awards and selling out trunk shows, the business didn’t have much potential for growth, she said.
“There were issues with the business model. It would have been okay as a small cult business,” she said. “While those businesses are great, that's just not what I wanted. I really wanted to go all in with a business where I could really scale it.”
Yoon said that this experience and her time at Harvard Business School gave her the confidence to start Peach & Lily. Being in business school during the financial crisis opened the door to several networking opportunities and allowed her to have open conversations with other founders about their journeys, about what works and what doesn’t, and some of the challenges they had to overcome.
“I think the existential moments lead to more fuel, passion and action,” she said. “It does get hard because there are just going to be moments where you have to wear like 17 different hats.”
Because entrepreneurs play so many different roles in their business, Yoon thinks it can be difficult for them to see the impact that their company can have on its customers. Sometimes, this can make it hard to stay motivated.
Yoon to recharges herself by calling her support group: her friends and family whom she calls her “personal cheerleaders.” When she is having doubts about her work, she says they help remind her of her goals and why she started her business.
Customer reviews also help her stay motivated. Peach & Lily has an email listserv that allows customers to send reviews and comments to the company. Yoon feels the power of her work when she reads reviews that state how her products have changed her customers’ skins or how amazing her customers feel after using Peach & Lily products.
In a little more than ten years, Peach & Lily is on track to become the number five skincare brand at Ulta Beauty.
“I would literally turn on amped up music and I would get so emotional being like, wow, we're actually helping people,” Yoon said. “This is why I'm doing this.”
dot.LA Reporter Decerry Donato contributed to this post.
This podcast is produced by Behind Her Empire. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.
Hear more of the Behind Her Empire podcast. Subscribe on Stitcher, Apple Podcasts, Spotify, iHeart Radioor wherever you get your podcasts.
- Behind Her Empire: Salt & Straw Founder Kim Malek On Overcoming The Fear of Starting a Business ›
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Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
LA Tech Week: Local Climate Investors Assess and Vet Green Startups
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
In a region known for being a national trailblazer when it comes to climate policies, there’s no shortage of green energy startups in L.A. looking for funding. There’s also a plethora of investors and incubators, which means founders looking for cash flow should be extra specific about their value proposition when they pitch to cut through the noise. At least that was the message coming from the panelists at the UCLA Anderson School of Management on Tuesday.
LA Tech Week’s panel on the Future of Climate Tech: Advancements, Challenges, and Opportunities, hosted by UCLA’s business school, discussed a number of ongoing issues in the green tech industry, including how the 2024 presidential election could affect funding for climate initiatives.
David Jassby, associate director of UCLA Institute for Carbon Management, said he has been writing educational grants to fund graduate students’ research since Obama’s presidency. “In terms of the university, the research topics and the research dollars have not really changed, which is, to me, really encouraging,” Jassby said, noting that federal workers are eager to issue grants for cutting-edge climate research, regardless of political affiliation.
But there was more on the table than just climate politics. The panelists were particularly eager to advise the room, which was packed with students, founders and other investors, about how to get their green startups funded.
Zora Chung, chief financial officer of Rejoule, a battery diagnostics startup, said that she regularly speaks with engineers and has often noticed that they can get too bogged down in the science rather than focusing on pitching the product and its use case. To that end, she noted that it is crucial for startups to be clear about the value of the product and who it will serve. “Defining the value proposition isn't as simple as just seeing what it is. It actually needs to be very specific to who you think is your core customer service,” Chung said. Instead of comparing their startup to another, Chung believes it is more important for founders to focus on fundamentals like the goals of the service and its audience.
In climate tech and other science-heavy industries, making a clear pitch is even more crucial. Frank Bryan, founder of venture capital firm Halftone Investment Partners, said green tech startups have to “tell a business story.”
Bryan said that those who are deeply involved in the research and development aspects of the product often forget to think about who the customers are, why they might purchase the product and how much they’re willing to pay. By answering these questions in a pitch, entrepreneurs can show investors that their startup is in a phase poised for growth, that “you’re not just a chemical process, you've actually developed this into a real plan that is going to result in a financial return, which is ultimately what I'm trying to get at,” Bryan said.
Shomik Dutta, co-founder and managing partner of climate venture fund Overture VC, said that he prefers to “invest in painkillers rather than vitamins,” i.e. in startups that aim to solve climate issues rather than those who deceive the public by using eco-friendly marketing labels.
The issue of waste management and recycling particularly excited several of the panelists. Bryan is currently working with a company that recycles plastic waste from the air bag industry. “Everything that's made in the world has waste streams that are either emitted [by a] landfill or its heat. Those can be converted, they can be shredded and liquefied and cracked and into hydrogen, carbon dioxide or carbon,” Bryan said.
Although the U.S. is still grappling with disposal strategies of hazardous waste produced by industrial mining, many states are supportive of innovation in this area, Jassby said. According to the Environmental Protection Agency, the country generates hundreds of millions tons of waste every year; less than a third of this waste is recycled or composted. In other words, Jassby said, “recycling of waste is tremendous.”
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.