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XGroundswell Raises $15 Million Seed Round to Bring Charitable Giving to the Masses
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
A decorated Marine who led troops through combat in Iraq and Afghanistan for four years and went on to build a successful nonprofit that deployed military veterans to disaster relief, CEO Jake Wood wants corporate America to give back.
Wood said he was inspired to become an entrepreneur because his time in the armed forces taught him to “embrace the suck.” After witnessing humanitarian disasters on a global scale firsthand, he became determined to lead companies that could lead social change.
His answer was El Segundo-based startup Groundswell, a Google-backed app that gives employees a way to offer charitable giving as part of their benefits package.
“All the data suggests that millennial and Gen Z talent, they want to work for companies that have alignment with their values,” Wood said. “What better way for a company to demonstrate that by saying, our values are your values meaning, what what you value we're willing to invest in -- versus saying, we're going to choose the issues that are important for us to address and solve, which is how corporate philanthropy traditionally has been done.”
Wood served in the Marine Corps as a decorated sniper before founding Team Rubicon, a nonprofit that deploys military veterans to help with disaster relief, in 2010. The company raised over $300 million in the 12 years Wood led it, and grew to over 150,000 volunteers worldwide.
Wood stepped down from his job as CEO of Team Rubicon in this year to launch Groundswell, a company he felt could do as much good as Rubicon.
“I didn’t want to be an entrepreneur again if it meant, like, shipping cat food faster,” he recently told the New York Times.
His new venture couldn’t be farther from that. Backed by GV (previously known as Google Ventures), Human Ventures, Marina del Rey-based Moonshots Capital, Felicis Ventures and Core Innovation Capital, the company raised a $15 million seed round. Groundswell will use its sizable seed round to hire new engineers and product staff as it get its app ready to debut in the first quarter of 2022.
Wood wouldn’t disclose what companies are signed up to already use the platform, but he said there is a range, from Fortune 500 firms down to hedge funds and venture- backed companies that are “red-hot” and about to go public.
He argued that beyond just doing good, companies also stand to gain from offering philanthropic benefits because they could help keep employees happy.
“Companies are scrambling to win in the talent war and that means that they're constantly trying to reinvent their benefits packages,” Wood said, noting that COVID-19 “exacerbated” the trend.
“Most people would be surprised to learn that more American households contribute to charity every year than they contribute to a 401K,” Wood said. “We think that charitable giving can just as easily become a non-negotiable element (of the compensation package) alongside it.”
Groundswell sells to employers, who use it to allocate tax-deductible funds for their employees to donate to a registered 501(c)(3) charity of their choice. Wood told dot.LA that one selling point for potential workers to use the program is they can donate pre-taxed income.
“By rolling out a platform like Groundswell, a company can first just give that money into the account for the employee to give away, which means that it's never counted as income for that employee, yet they still get the benefit of directing where that contribution goes,” Wood said. “The company takes a full tax write off for that contribution to the employee.”
Wood said the pandemic prompted an acceleration in companies rethinking their (as he called it) corporate social responsibility departments, and re-evaluating how they give back. Usually companies that offer charitable giving reserve the right to restrict employee donations to a specific set of nonprofits, but Groundswell would let workers send money wherever they choose.
Editor's Note: This story was updated to reflect GV's name.
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
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Activision Buys Game Studio Proletariat To Expand ‘World of Warcraft’ Staff
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Activision Blizzard intends to acquire Proletariat, a Boston-based game studio that developed the wizard-themed battle royale game “Spellbreak.”
VentureBeat first reported that the Santa Monica-based publisher was exploring a purchase, noting its ongoing mission to expand the staff working on Blizzard’s hit massively multiplayer online game “World of Warcraft,” which launched in 2004.
Proletariat’s team of roughly 100 people will be merged into Activision’s “World of Warcraft” team to work on its upcoming expansion game. Though there’s no release date as yet for the title, “World of Warcraft: Dragonflight” is expected to debut before the end of this year.
Activision did not immediately return a request for comment. Financial terms of the deal were not available.
This Proletariat deal is Activision's latest push to consolidate its family tree by folding its subsidiary companies in under the Blizzard banner. More than 15 years after it bought out New York-based game developer Vicarious Visions, Activision merged the business into its own last year, ensuring that the studio wouldn’t work on anything but Blizzard titles.
The deal could also have implications for workers at Activision who have looked to unionize. One subsidiary of Activision, Wisconsin-based Raven Software, cast a majority vote to establish its Game Workers Alliance—backed by the nationwide Communications Workers of America union—in May.
Until recently, Activision has remained largely anti-union in the face of its employees organizing—but it could soon not have much of a say in the matter once it finalizes its $69 billion sale to Microsoft, which said publicly it would maintain a “neutral approach” and wouldn’t stand in the way if more employees at Activision expressed interest in unionizing after the deal closes.
Each individual studio under the Activision umbrella would need to have a majority vote in favor of unionizing to join the GWA. Now, Proletariat’s workforce—which, somewhat ironically given its name, isn’t unionized—is another that could make such a decision leading up to the Microsoft deal’s expected closing in 2023.
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Snap Officially Launching ‘Snapchat Plus’ Subscription Tier
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.
Snap is officially launching Snapchat Plus, a paid subscription plan on Santa Monica-based social media company’s flagship app.
Snap is now the latest media company to tack a “plus” to the end of its name—announcing Wednesday that the new service will provide users with “exclusive, experimental and pre-release features” for the price of $3.99 a month. The first features available to paying subscribers include the ability to customize the style of app’s icon, pin a “BFF” to the top of their chat history and see which users have rewatched a story, according to The Verge.
The new product arrives after Snap confirmed reports earlier this month that it was testing Snapchat Plus—though the version that it has rolled out does not incorporate the rumored feature that would allow subscribers to view a friend’s whereabouts over the previous 24 hours.
Snapchat Plus will initially be available to users in the U.S., Canada, U.K., France, Germany, Australia, New Zealand, Saudi Arabia and the United Arab Emirates. While certain features will remain exclusive to Plus users, others will eventually be released across Snapchat’s entire user base, Snap senior vice president of product Jacob Andreou told The Verge. (Disclosure: Snap is an investor in dot.LA.)
The subscription tier introduces a new potential revenue stream for Snap, which experienced a “challenging” first quarter marked by disruptions to its core digital advertising market. However, Andreou told The Verge that the product is not expected to be a “material new revenue source” for the company. He also disputed that Snap was responding to its recent economic headwinds, noting that Snap had been exploring a paid offering since 2016.
Despite charging users, Snapchat Plus does not include the option to turn off ads. “Ads are going to be at the core of our business model for the long term,” Andreou said.
Snap is not the first popular social media platform to venture into subscriptions: Both Twitter and Tumblr rolled out paid tiers last year, albeit with mixedresults.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.
Bling Capital’s Kyle Lui On How Small Funds Can Better Support Young Founders
On this episode of the LA Venture podcast, Bling Capital’s Kyle Lui talks about why he moved earlier stage in his investing and how investors can best support founders.
Lui joined his friend—and first angel investor—Ben Ling as a general partner at Bling Capital, which focuses on pre-seed and seed-stage funding rounds. The desire to work in earlier funding stages alongside someone he knew well drew him away from his role as a partner at multi-billion-dollar venture firm DCM, where he was part of the team that invested in Musical.ly, now known as TikTok.
Bling primarily focuses on entrepreneurs looking to raise around $1 million to $3 million who are often early in their careers as founders. Lui said Bling evaluates companies on characteristics that go beyond whether they like the founder or feel that the market looks good. Instead, he said they take a hard look at the available company data, and quickly respond.
“And we send it back to them and say, ‘Okay, this is what's working, what's not working’,” Lui said. “And then create the playbook for them on how to find product market fit and get to like, ‘These are the milestones you actually need to hit’.”
When considering companies, Lui said Bling looks at the founder, the market, the company’s current traction and differentiation while asking the founder the questions they would expect to get at Series A and Series B funding rounds.
“One thing that I really admire about what [Ling’s] built with Bling is the consistency and the processes and playbooks— everything from the way that we evaluate deals to the way that we work with our portfolio companies,” Lui said. “Everything is kind of around playbooks and operationalizing things and also iterating to do those processes better.”
As part of its work to support founders, Bling maintains an extensive product council, which connects tech executives with the founders in Bling’s portfolio. Bling also has created numerous self-serve resources for founders so they can easily tap into the fund’s network and shared knowledge.
“We have a bunch of playbooks that we introduce to companies around how to hire efficiently, how to negotiate with counterparties, how to think about the founding team, business development…We just have these different things that we start to train our entrepreneurs on,” Lui said.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
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