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XStockpile Cash and Slash Costs: Top VCs Warn Coronavirus is a 'Black Swan' Event
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.

The most prominent venture capitalist in Los Angeles is sounding the alarm bells over coronavirus, warning it is likely to be a "black swan" event.
"If this is a black swan, you must shore up cash now," said Mark Suster, managing partner at Upfront Ventures. "If it's not a black swan event the worst case scenario is you were overly conservative."
Suster first made the pronouncement in a deck for a presentation he was set to give next week at the SaaStr conference in the Bay Area, the largest annual gathering of software as a service companies. But ironically, organizers decided Thursday to postpone the event so Suster shared the slides on social media and expanded on his views in a telephone interview with dot.LA Friday.
"We've been telling our companies to cut their burn rates, pad their balance sheets and not to be precious about valuation," Suster told dot.LA. "Survival is way more important."
Suster thinks COVID-19 could end being the most significant event of his investing lifetime because of the high degree of uncertainty and its lasting impact of up to 18 months.
"I think this is going to be harder than 9/11," said Suster. "9/11 was a shock to the system, but it was a one time event and then it was done."
Suster emphasizes that no one knows how COVID-19 will turn out, and he does not want to sound alarmist. But if the uncertainty continues he expects investors to stop writing checks, just as they did after the DotCom Bust and the Great Recession. The problem is he has no idea how long investing will be halted.
"That could be one month, three months, or 18 months," he said. For now at least, Suster says Upfront is still trying to proceed as normally as possible.
"We just wired money to a company this morning," he said.
If there is any silver lining it is that investors could be more inclined to put money into venture capital as interest rates go even lower and that venture firms like Upfront are sitting on records amounts of cash they have to put to work.
"It's not like they're not going to turn around and say 'we've decided to send all this money back," Suster said. "They will deploy it. They may choose to go more slowly for a period of time."
At Upfront's Santa Monica office, employees are still coming into the office but the firm implemented a no-handshake policy last week and has gotten rid of communal cheese and meat trays. Suster and his team are still trying to meet with as many founders and investors as possible, but it's getting more difficult.
"The number of people now in other states canceling meetings and saying they've implemented a no in-person meeting policy has shocked me," he said.
Suster is not alone is calling coronavirus a black swan event. Sequoia Capital, one of Silicon's Valley's leading venture capital firms, told investors Thursday that companies should revise sales forecasts, stockpile cash, and cut costs, perhaps by laying off workers.
"This might be a time to evaluate critically whether you can do more with less and raise productivity," the firm wrote. "We suggest you question every assumption about your business."
The firm said some of its companies have already reported sharply falling growth rates between December and February and disruption in the supply chain means hardware, direct-to-consumer, and retailing companies may need to go elsewhere to be able to make their products.
"It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained," the firm wrote." It will take even longer for the global economy to recover its footing. Some of you may experience softening demand; some of you may face supply challenges."
Founders & business leaders: We sent this note to Sequoia founders/CEOs to provide guidance on how to ensure the health of their business while dealing with the consequences of the coronavirus. We hope it's helpful to you during these turbulent times. https://t.co/SRuqVGT8vD
— Sequoia (@sequoia) March 5, 2020
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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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This Week in ‘Raises’: Improvado Hauls $22M, Clearlake Launches $14B Fund
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
This week in “Raises”: A pair of Web3 platforms for gamers landed funding, as did a Manhattan Beach medical startup looking to bolster primary care via nurse practitioners. Meanwhile, a Santa Monica-based investment firm launched its seventh fund with more than $14 billion in dry powder.
Venture Capital
Improvado, a marketing data aggregation platform, raised $22 million in a Series A funding round led by Updata Partners.
Web3 gaming platform FreshCut raised $15 million in funding led by Galaxy Interactive, Animoca Brands and Republic Crypto.
Medical startup Greater Good Health raised $10 million in a funding round led by LRVHealth.
Joystick, a Web3 platform for gamers and creators, raised $8 million in seed funding.
Open source data protection company CipherMode Labs raised $6.7 million in seed funding led by Innovation Endeavors .
Mobile phone charging network ChargeFUZE raised $5 million in seed funding led by Beverly Pacific, TR Ventures, VA2, Jason Goldberg and Al Weiss.
Polygon, a startup aiming to better diagnose children with learning disabilities, raised $4.2 million in seed and pre-seed funding led by Spark Capital and Pear VC.
Pique, a virtual women's sexual health clinic, raised $4 million in a seed funding round led by Maveron.
Psudo, a sneaker startup that utilizes recycled water bottles and 3D sublimation printing to create its shoes, raised $3 million in a seed funding round led by SternAegis Ventures.
Funds
Santa Monica-based investment firm Clearlake Capital Group raised $14.1 billion for its seventh flagship fund.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Kristin Snyder (kristinsnyder@dot.la).Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
LA Tech ‘Moves’: New Head of Originals at Snap, New President at FaZe Clan
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
“Moves”, our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
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FaZe Clan brought on Zach Katz as the gaming and media company’s new president and chief operating officer. Katz was previously the chief executive officer of the music tech investment fund Raised in Space Enterprises.
TikTok brand factory LINK Agency promoted Dustin Poteet to chief creative officer. Poteet was previously creative director at the firm.
Livestream shopping platform Talkshoplive hired Tradesy co-founder John Hall as its chief technology officer. Universal Music Group Nashville's former vice president of digital marketing, Tony Grotticelli, also joins the company as vice president of marketing.
Anjuli Millan will take over as head of original content at Snap after three years of overseeing production for the division.
Tech and media company Blavity hired Nikki Crump as general manager of agency. Crump joins the company from Burrell Communications Group.
O'Neil Digital Solutions, which provides customer communications and experience management for the health care industry, hired Eric Ramsey as national account sales executive. Ramsey joins from T/O Printing.
Investment firm Cresset Partners named Tammy Funasaki as managing director of business development. Funasaki previously served as head of investor relations for Breakwater Management.
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Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Snapchat’s New Controls Could Let Parents See Their Kids’ Friend Lists
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Snapchat is preparing to roll out enhanced parental controls that would allow parents to see who their teenagers are chatting with on the social media app, according to screenshots of the upcoming feature.
Snap’s parental controls.
Courtesy of Watchful.
Snapchat is planning to introduce Family Center, which would allow parents to see who their children are friends with on the app and who they’ve messaged within the last seven days, according to screenshots provided by Watchful, a product intelligence company. Parents would also be able help their kids report abuse or harassment.
The parental controls are still subject to change before finally launching publicly, as the Family Center screenshots—which were first reported by TechCrunch—reflect features that are still under development.
Santa Monica-based Snap and other social media giants have faced mounting criticism for not doing more to protect their younger users—some of whom have been bullied, sold deadly drugs and sexually exploited on their platforms. State attorneys general have urged Snap and Culver City-based TikTok to strengthen their parental controls, with both companies’ apps especially popular among teens.
A Snap spokesperson declined to comment on Friday. Previously, Snap representatives have told dot.LA that the company is developing tools that will provide parents with more insight into how their children are engaging on Snapchat and allow them to report troubling content.
Yet Snap’s approach to parental controls could still give teens some privacy, as parents wouldn’t be able to read the actual content of their kids’ conversations, according to TechCrunch. (The Family Center screenshots seen by dot.LA do not detail whether parents can see those conversations).
In addition, teenage users would first have to accept an invitation from their parents to join the in-app Family Center before those parents can begin monitoring their social media activity, TechCrunch reported.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.