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XWatch: Why Are Tech Markets Booming While the Economy Reels?
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Why is the stock market up if the economy is getting crushed? With so many people out of work, how is it that the market is soaring, by some estimates, to its highest point ever?
Spencer Rascoff, executive chairman at dot.LA, spoke with senior tech-focused executives at investment firm Evercore to discuss what's behind the trends. John Scuorzo, Evercore's senior managing director joined Zaheed Kajani, senior managing director at Evercore to break down Wall Street's perspective on what's happening in the current tech capital markets.
The two say there are several factors contributing to Wall Street's optimism. First, the enormous stimulus coming from governments.
"I think that the biggest and probably the most important driver of this is just the massive stimulus that all the central banks globally have put into the economy," Kajani said. "There is somewhere where this money has to go. If you've got more money chasing fewer assets, that drives price up."
Copy of dot.LA Strategy Session: Wall Street's Perspective
Also contributing, the two said, are several other factors, including low interest rates, international investment, and optimism for what cutbacks and introduction of new technology will mean for many companies' future profits.
"People generally have an allocation towards equities and bonds," said Kajani. "And because the rates are so low, your bonds just don't give you the same return. And that's driven even more capital into the equity markets."
That's been true overseas as well, where investors are looking for safe places to put their money, and the U.S. market appears like a good bet.
"If you have capital in Europe, or in Asia, which other market do you feel is the most stable in the safest market?" Kajani said, "And so, many people who follow the market closely often see the futures up every morning when you wake up. A lot of that money is coming from overseas capital that's entering the U.S. market."
Companies who have made cuts and had to incorporate new technology into their workflow as part after the lockdowns, may also be finding themselves becoming more productive as a result, even with a (temporary or permanent) reduction in staff.
"I think a lot of companies have realized they're being as productive with fewer people and using technology," Kajani said. "I think that actually may increase profits."
All that together, along with optimism that a vaccine will eventually solve many of the problems the world is currently facing, is helping to create the frenzy that the world is seeing on Wall Street, the two said.
Scourzo said that Evercore's projections point in that direction as well.
"Our data suggests that we exited the recession in May, and we're back to an expansionary period, though the cut was deep," he said. "We think we think we're moving in the right direction with the economy only, we estimate, 35% reopened,"
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About the Speakers
John Scuorzo , Senior Managing Director of Evercore
John Scuorzo is a senior managing director and the Head of Technology Equity Capital Markets at Evercore, with responsibility for the origination and execution of equity and equity-linked transactions for the firm's global technology clients.
Mr. Scuorzo has been a trusted advisor to technology companies for nearly 20 years, most recently as managing director with Citigroup, where he ran its technology equity capital markets business.
Mr. Scuorzo has been at the forefront of the evolution of capital formation for most of his career and is recognized as one of the most experienced and innovative capital markets professionals in the Technology sector. Mr. Scuorzo has advised hundreds of leading companies across the globe, including Alibaba, Broadcom, CoStar, Despegar, Dynatrace, Facebook, Fastly, Globant, GoDaddy, GoPro, Grubhub, Guidewire, Microsoft, Ping Identity, Paypal, Palo Alto Networks, Pinterest, Presidio, Sailpoint, Slack, The Trade Desk, Uber, Upwork, Roku, Vmware, Wayfair and Zillow.
Mr. Scuorzo graduated from Georgetown University with a B.S. in business administration with a major in finance.
Zaheed Kajani, Senior Managing Director of Evercore
Zaheed Kajani is a senior managing director in the firm's technology corporate advisory business and leads the global internet and digital media practice. Zaheed was most recently a managing director and global head of internet and digital media at Citi. With almost two decades of experience, Zaheed has advised on over a 100 transactions in the sector. He has worked with companies raising private capital, public capital through IPOs, follow-ons and converts, as well as M&A.
Zaheed has an M.B.A. from UCLA's Anderson School of Management, a J.D. from UC Berkeley's School of Law and a B.A. in political science from U.C. Berkeley.
Spencer Rascoff, Executive Chairman of dot.LA
Spencer Rascoff, Executive Chairman of dot.LA
Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at TripAdvisor. In the fall of 2019 Spencer was a visiting executive professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' best seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.
- Founders and Investors Do Not Share Wall Street's Optimism - dot.LA ›
- Tech Markets Boom While Economy Reels - dot.LA ›
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
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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.
- LA Tech Updates: Artie Closes $10M Seed Round; FaZe Clan Has a ... ›
- FaZe Clan Announces Immersive Pop-Up Shop - 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.
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.