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XGeorge Floyd Update: Disney Will Donate $5M to Social Justice Groups; a16z Announces Diversity Fund

Here are the latest headlines regarding how the protests around the killing of George Floyd are impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest updates.
Today:
- Disney will donate $5M to Social Justice Groups
- Blck VC group launches 'We Won't Wait' campaign
- a16z VC firm launches fund to target diverse founders
- Snap stops promoting Trump's account in its Discover feature
Disney will donate $5M to Social Justice Groups
ABC's TV sitcom Blackish aired two "monumental and timely episodes" this week.
The Walt Disney company announced Wednesday that it will donate $5 million to nonprofit groups fighting for social justice, starting with a $2 million donation to the NAACP.
"The killing of George Floyd has forced our nation to once again confront the long history of injustice that black people in America have suffered, and it is critical that we stand together, speak out and do everything in our power to ensure that acts of racism and violence are never tolerated," said Disney chief Bob Chapek in a statement. "This $5 million pledge will continue to support the efforts of nonprofit organizations such as the NAACP that have worked tirelessly to ensure equality and justice."
In a statement, the company pointed to its previous social justice initiatives, including providing "millions of dollars in grants to help students from underrepresented groups make the dream of higher education a reality, including $2.5 million to the United Negro College Fund." Disney also noted that it matches employee donations to "eligible organizations" and that on Tuesday it re-aired two "monumental and timely episodes" of Black-ish on its ABC television networks before a primetime special titled "America in Pain: What Comes Next?"
In its quarterly earnings released last month, Disney reported nearly $40 billion in revenue in the six months to March 28, 2020. Net income over the same period was down 68% from the year prior, however, as most of the company's business units have been battered by the coronavirus pandemic.
— Sam Blake
Blck VC group launches 'We Won't Wait' campaign
Venture capital has fueled billions of dollars in wealth but it has largely excluded black Americans. Only 1% of venture-funded startup founders are black and more than 80% of venture firms don't have a single black investor.
Blck VC, a group of young black investors and entrepreneurs are calling on the venture capitalist community to diversify their ranks and support the black community. Declaring Thursday, June 4th, a day of action, the group launched a campaign called "We Won't Wait." Read more >>
— Rachel Uranga
a16z VC firm launches fund to target diverse founders
Ben and Felicia Horowitz will match up to an additional $5,000,000 total in any other donations.
One of Silicon Valley's most prominent venture capital firms announced Wednesday it is launching a new fund designed for entrepreneurs who have the talent, drive and ideas to build great businesses, but lack the background and resources to do so.
In a blog post, the firm says it has been working on the fund for six months. However, the timing of the news this week is fortunate for an industry with a serious diversity problem.
a16z plans to fund a small group of founders in the first year, then expand after that. The initial capital will come from $2.2 million in donations from partners. Ben and Felicia Horowitz will match up to an additional $5 from other donations as well. The firm will invest in exchange for equity in the business, but all returns will stay in the fund to finance future entrepreneurs, which aims to back products from underserved communities that also have an "interesting model, niche market, and/or a little traction to indicate the promise and potential."
"We're venture capitalists, not activists," the firm said in its post. "Entrepreneurship hasn't been accessible to everyone, but the fact remains that being an entrepreneur is one of the most powerful ways to own your own future, to increase mobility across time and place, to invent new ways of doing things, and to forge a new system. As we emerge from this tragic moment, let's build.
dot.LA co-founder and executive chairman Spencer Rascoff is a board partner at a16z.
— Ben Bergman
Snap removes Trump's account from its Discover feature
Snap has decided to no longer feature President Donald Trump's account on its Discover platform, where users can watch curated videos.
The Santa Monica-based company issued a statement Wednesday:
"We are not currently promoting the President's content on Snapchat's Discover platform. We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover. Racial violence and injustice have no place in our society and we stand together with all who seek peace, love, equality, and justice in America."
A Snap spokesperson said the company made the decision over the weekend. On Sunday, Snap CEO Even Spiegel wrote to his employees, condemning racial injustice. Read more >>
— Sam Blake
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A Lawsuit Blames ‘Defective’ TikTok Algorithm for Children’s Deaths
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.
Social media companies are often accused of hosting harmful content, but it’s very hard to successfully sue them. A federal law known as Section 230 largely protects the platforms from legal responsibility for hate speech, slander and misinformation created by its users.
But a new lawsuit blaming TikTok for the deaths of two children is taking a different approach. Rather than accuse the company of failing to moderate content, the complaint claims TikTok is a dangerous and defective product.
The suit, filed last week in Los Angeles County Superior Court, takes aim at the video sharing app’s recommendation algorithm, alleging that it served up videos depicting the deadly “Blackout Challenge,” in which people choke themselves to achieve a euphoric feeling. Two children—8-year-old Lalani Erika Walton and 9-year-old Arriani Jaileen Arroyo—died last year after allegedly trying the "blackout challenge," the suit said.
“We believe that there is a fundamental flaw in the design of the algorithm that directs these children to this horrific thing,” Matthew Bergman, the lawyer for the children's families, told dot.LA. Bergman is the founding attorney for the Social Media Victims Law Center, a self-described legal resource for parents of children harmed by social media.
Section 230 has long been an obstacle for social media’s opponents. "You can't sue Facebook. You have no recourse,” U.S. Sen. Richard Blumenthal, a Democrat from Connecticut, said last year after Facebook whistleblower Frances Haugen detailed Instagram’s toxic effect on young girls. The federal law’s defenders contend that Section 230 is what allows websites like YouTube and Craigslist to host user-generated content. It would be infeasible for companies to block all the objectionable posts from their massive user bases, the argument goes.
The strategy of bypassing that debate altogether by focusing on apps’ designs and features has gained steam lately. In May, an appellate panel ruled that Santa Monica-based Snap can’t dodge a lawsuit alleging that a Snapchat speed filter—which superimposed users’ speeds on top of photos and videos—played a role in a deadly car crash at 113 mph. The judges said Section 230 didn’t apply to the case because the lawsuit did not seek to hold Snap liable as a publisher.
Similarly, California lawmakers are advancing a bill that would leave social media companies open to lawsuits alleging their apps have addicted children. Proponents of the bill take issue with product features such as likes, comments and push notifications that grab users’ attention, with the ultimate goal of showing them ads.
“A product liability claim is separate and distinct from suing a company for posting third party content or publishing third party content, which we know has been unfruitful in many ways, for many years, as a vehicle to hold these companies accountable,” Bergman said.
Representatives for Culver City-based TikTok did not return a request for comment. In a previous statement about another TikTok user’s death, a company spokesperson noted the “disturbing” blackout challenge predates TikTok, pointing to a 2008 warning from the Centers for Disease Control and Prevention about deadly choking games. The spokesperson claimed the challenge “has never been a TikTok trend.” The app currently doesn’t produce any search results for “blackout challenge” or a related hashtag.
It’s too early to tell whether product liability claims will be more successful against social media companies. “We're realistic here. This is a long fight,” Bergman said. In the meantime, his suit against TikTok takes pains to note what it is not about: the users posting the dangerous challenge videos.
“Plaintiffs are not alleging that TikTok is liable for what third parties said or did [on the platform],” the suit said. “but for what TikTok did or did not do.”
- Banning Snapchat Drug Sales Is 'Top Priority,' Snap Says - dot.LA ›
- TikTok Blamed For Girl's Death in 'Blackout Challenge' Suit - dot.LA ›
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.
TikTok Abandons Live Shopping Plans for the US
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.
TikTok’s live ecommerce initiative won’t be expanding to the United States or throughout Europe.
TikTok Shop, which the Culver City-based video sharing app launched in the UK last year, utilized QVC-style live streams for companies and influencers to sell products. But internal issues and poor sales led many influencers to drop out of the program. TikTok was reportedly planning to launch TikTok Shop in the US, Germany, France, Italy and Spain throughout the year, but changed course following the program’s lack of success.
“The market just isn’t there yet,” a TikTok employee told The Financial Times. “General consumer awareness and adoption are still low and nascent.”
In June, FT reported that a number of employees on TikTok’s ecommerce team quit over the London office’s workplace culture—an issue that has also hit its Los Angelesheadquarters. TikTok’s decision to forgo live shopping in the U.S. may also be influenced by the market downturn that has already hit its Santa Monica-based social media competitor, Snapchat.
TikTok offered subsidies and cash incentives to influencers who sold products through the app, but few users actually bought items through the program. It is still available in Thailand, Malaysia, Vietnam and Indonesia—where live shopping is more popular. Western markets have struggled to replicate the phenomenon that has transformed China’s ecommerce platforms.
But shopping on TikTok isn’t a lost cause, as the company is still testing a Shop tab—akin to Instagram’s—in Indonesia. Influencers on the app have impacted book, beauty and apparel sales, which leaves the potential for TikTok to capitalize on its users’ impact.
Several users have taken to the app to complain about TikTok Shop, with user @toriesarentfunny likening the program to a pyramid scheme.
“What makes this so insidious is that TikTok is not waiting for you to decide if you need a water bottle and go online and buy it,” the same user said in another video. “They are incentivizing creators that you like and trust and watch regularly and therefore will be exposed to regularly to sell you stuff that you do not want or need.”
- TikTok Announces New Way For Creators to Earn Money - dot.LA ›
- YouTube, TikTok Amp Up Creator Monetization Race - 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.
Long Beach Accelerator Set to Welcome Fourth Group of New Companies
Long Beach has a long history of innovation. It’s one of the densest aerospace hubs on the West Coast. There’s a vital port there, and the city is home to several tech industries—including health care, space tech and cybersecurity. That, along with its colleges and universities, have made Long Beach an enticing destination for entrepreneurs.
It’s within this environment that the Long Beach Accelerator sprouted in 2019 and has grown since. To date, the accelerator has cycled 20 companies through its four-month program, helping them raise a total of over $12 million.
On July 5, the program will welcome its fourth cohort of startups from around the world, participating in a hybrid combo of virtual and in-person sessions. Each cohort includes between five to 10 companies.
Long Beach, along with Cal State University, Long Beach’s Institute for Innovation and Entrepreneurship and capital provider Sunstone Management, are all partners in this public-private model of startup investment. The accelerator itself operates as a nonprofit.
Long Beach Accelerator Managing Director Andrea White-Kjoss
The city provides help with some funding, covering the costs for some low- to moderate income Long Beach-based founders whose companies are accepted into the accelerator.
The organization's partnership with CSULB enables it to help founders move from idea stage to execution at the institute, and then advance to business growth via the accelerator.
Sunstone Management, a private capital management and investment firm, provides funding for the incoming cohorts. The firm's venture capital fund typically invests $100,000 in the startups as soon as they join the accelerator and takes a 6% equity stake in return.
Sunstone had also been providing some follow-on funding on a case-by-case basis. It upped the ante earlier this year by promising an additional $500,000 to current cohort and alumni.
“It's a model that brings enormous resources to the table for our portfolio companies, as well as for economic development, acting as a growth engine for the region,” managing director Andrea White-Kjoss told dot.LA.
A serial entrepreneur who has served as CFO at several companies, White-Kjoss came aboard as the founding managing director in July 2020. Before that, she co-founded seed-stage funding platform ExtraVallis, based in Rancho Santa Fe, and founded Mobis Transportation, which was the product of a public-private partnership with the city of Long Beach.
She also happens to be a 17-year resident of the city.
“So I know intimately how attractive this city is to tech entrepreneurs, from the high-tech industries, to the culture and lifestyle, to the world-class workforce and institutions,” she said. “When you bring all of that together...the opportunity to build a tech accelerator, and more than that really, a tech ecosystem here in Long Beach, was natural and irresistible.”
The accelerator was originally intended to be in-person, but quickly had to pivot to remote sessions during the pandemic. It remains virtual, for the most part, “which has turned out to be a huge source of strength,” White-Kjoss said.
That’s because the founders come from all over the world. There’s no geographic restrictions on who’s accepted and no need to burden founders with moving to Long Beach to participate.
White-Kjoss said the move has fostered diversity, and enabled the accelerator to draw on an international network of mentors, instructors, advisors and investors.
They—along with the accelerator’s staff of three facilitators — get to know the companies and their founders “deeply” and provide individualized assistance, including building strategic partnerships with potential customers and/or marketing partners.
There is still an in-person aspect to the accelerator. All cohort founders fly into Long Beach for about two weeks during the program. While there, they attend in-person workshops and networking events. They also participate in a Demo Day, with investors present. This helps the companies get additional seed funding for continued growth once they graduate.
So far, five graduating startups have received acquisition offers—but none have taken them.
White-Kjoss said that’s because those founders “felt they had much further to take their companies, at least in some degree, due to the empowerment of the tools, resources and networks provided by the accelerator.”
Bump's Success
One success is Los Angeles-based Bump. Since graduating from the Long Beach Accelerator, Bump has raised more than $5 million, co-founder and CEO James Jones told dot.LA.
It’s currently participating in another accelerator, Snap’s in-house Yellow Accelerator, which is now a co-lead investor in Bump, along with Sunstone.
The company is working on an AI-fueled fintech platform for the creator economy, which hasn’t yet launched. It would help creators track revenue from multiple sources, monitor expenses, access credit and manage their crypto and non-fungible tokens (NFTs).
The company has started a waitlist, for access to its credit and financial management tools. Once the services are available users would pay about $400 per year.
The company also plans to integrate micro-advances into its platform, designed to enable creators to stay in full control of their finances and keep 100% of the rights to their work.
Jones said that participating in the Long Beach Accelerator’s very first cohort was a “great springboard” for the company.
Specifically, sessions on customer personas and discovering addressable markets, as well as mentor meetings were “invaluable,” he added.
Meet the Startups In the Long Beach Accelerator's Latest Cohort:
Apsy: Creating the first true fully AI platform to build affordable elegant custom apps.
Crumbraise, Inc.: Fundraising made easy for creators, clubs & causes.
Educational Vision Technologies, Inc.: Automated video editing and content curation using A.I. to make online learning accessible, efficient and engaging.
Gift Pass App Inc.: Streamlining experiences around digital gifting & payments.
The Girls Co LLC: We are a women's health company that is currently focused on a solution to alleviate period cramp pain.
Intellitech Spa Inc.: Intellitech is a realtime telematics, predictive maintenance and driver behavior monitoring platform.
Kwema: Kwema provides an easy to scale Smart Badge Reel Duress Service that reduces incident response time without escalating the situation.
Pathloom, Inc.: Outdoor trip planning made easy!
Rotender: The world's fastest and most reliable bar.
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