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XBlizzard Executive Steps Down After Worker Protests Over 'Frat Boy' Culture
Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.
Video game-maker Activision Blizzard said Tuesday that Blizzard president J. Allen Brack is stepping down. The move comes days after California filed a lawsuit against the company over allegations of sexual harassment, discrimination and income disparity against women employees and employees staged a walkout.
The lawsuit, filed on July 20 by the California Department of Fair Employment and Housing, alleges Activision fostered a pervasive "frat boy" workplace culture where women were subject to constant sexual harassment, lower pay and retaliation.
Two Blizzard executives — Jen Oneal and Mike Ybarra — will replace Brack and will be co-leaders of the company, according to a statement.
Blizzard president J. Allen Brack
"Both are leaders of great character and integrity and are deeply committed to ensuring our workplace is the most inspired, welcoming environment for creative excellence and to upholding our highest game development standards," the statement from Activision Blizzard President and COO Daniel Alegre said.
Brack is leaving the Santa Monica-based company "to pursue new opportunities," the statement said.
The lawsuit alleges women were subjected to "cube crawls" where male employees drink "copious" amounts of alcohol and crawl to various cubicles in the office and "often engage in inappropriate behavior toward female employees," including groping them.
At the time the lawsuit was filed, Activision Blizzard released a statement in response, accusing the state agency that filed the lawsuit of using distorted and false descriptions.
Hundreds of its employees staged a walkout last week to protest the company's toxic workplace culture. Gamers also reacted, calling for a day-long boycott of the company's titles, which include "Call of Duty," "World of Warcraft" and "Overwatch."
The company's initial response, it later admitted, was "tone deaf," but infuriated employees and organizers said it galvanized the workers.
The action comes as the largely white, male tech and gaming industry is facing a reckoning over its lack of diversity.
The Communications Workers of America is behind the Campaign to Organize Digital Employees, which is aimed at unionizing tech and gaming companies and helping workers push back on issues like poor workplace culture. CWA organizer Emma Kinema told dot.LA she wasn't surprised by the allegations in the lawsuit against Activision Blizzard, saying this type of discriminatory culture is "pervasive."
Oneal was the executive vice president of development, while Ybarra was executive vice president and general manager of platform and technology.
"With their many years of industry experience and deep commitment to integrity and inclusivity, I am certain Jen and Mike will lead Blizzard with care, compassion and a dedication to excellence," Alegre wrote.
Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.
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Column: Conference Season Is Here. Are They Worth It?
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.
How To Make The Most Of Conferences
Fall is much more than the season of change or when school’s back in session. It’s the beginning of “conference season,” when hundreds of business conferences pop up worldwide, attracting professionals from all industries. The question is, though: are they worth it—especially for busy startup founders and leaders?
Build Your Network
At a startup, time is your most precious resource so spending it at a conference can feel like a waste of time. However, there is something to be gained for everyone who attends a conference, whether it's learning the latest skills in your field, meeting a new business partner or investor, or solidifying that M&A connection. It’s important to be building these types of relationships far earlier than when you may need them—and conferences are a great place to do that.
Optimize Your Time
At a conference where you only have a few days or even 24 hours to fit everything in, don’t waste your time. Start by looking at the list of speakers and attendees in advance on the conference website. Are there investors, potential customers or partners attending that you would love to speak to? Try to contact them and set up a time to speak one-on-one during the conference, especially so they don’t feel ambushed if you ask during the conference. If you don’t want to schedule meet-ups ahead of time, I recommend reaching out to people and offering to exchange cell numbers so you can text to meet up once you’re on site. A lot of conferences make it easy now with apps where you can connect and schedule a meeting ahead of time. Be willing to make the time, even if it’s just 10 minutes, to try meeting someone in person. This will help you build a more personal connection than one over Zoom.
Additionally, use your meals and drinks strategically. This could be a great moment to get one-on-one time with an important person or group that you want to speak with. The actual content of the conference is important, but in my opinion the hallway chats are even more critical. Nevertheless, if you see a particularly interesting topic for your industry's future, make sure to block off that time as well. You could learn something that could completely change how you do business.
Make An Impression
Something that many people overlook is the advantage of using social media during conference season. I always like to live tweet sessions using the conference hashtag and tagging the right people involved. This is a great way to gain followers, build your profile and stay connected with those who you met at the conference. It also gives people who aren’t at the conference insight into what is going on at the event. Afterward, take the 20 minutes to write a blog post about your experience and post it to LinkedIn. It could be the difference between a lost connection and a long-term relationship.
In Summary
So, is it worth it? For the actual conference content: maybe. For the networking opportunities: Absolutely. A conference could be one of the few times you can connect with trailblazers in your industry. While some conferences are pricey and can feel like a waste of time, attending them can be a great business investment. If you plan correctly, you could change the direction of your company for the better. Don’t be afraid to reach out to the people you meet there because many if not all conference attendees are open to help.
The dot.LA Summit
If you’re reading this on dot.LA, you’ll probably be interested in the upcoming dot.LA Summit. The summit focuses on the L.A. tech and startup ecosystem, inviting hundreds of the top founders and investors. There will be speakers such as Julia Boorstin from CNBC, Alex Israel from Metropolis Technologies and Brian Lee from BAM Ventures. Plus, there will be a pitch competition for the newer founders looking to impress financers in the L.A. area. Sign up for the 3rd annual dot.LA Summit on October 20th and 21st here.- Nominate Leaders for dot.LA's Startup Awards! - dot.LA ›
- Join Us at dot.LA's 2022 LA Tech and Startup Summit - 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.
Venture Deals in LA Rebound Slightly in Q3, but VCs Remain Cautious
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and 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 @Samsonamore.
As the rest of the United States remains in a slowdown for venture capital investing, Los Angeles is slowly rebounding from a previous quarter slump but remains far off the record-breaking year it saw in 2021.
Analysts at PitchBook Data Inc. and the National Venture Capital Association found that nationwide, investors are still skittish, investing in fewer deals and cutting smaller checks. Total money invested in the U.S. in the third quarter reached a nine-quarter low of $43 billion, and deal counts also fell across all sectors, down 20% from the first quarter of this year, according to PitchBook’s most recent Venture Monitor report for the months of July through September.
Companies that target sales are seeing exit activity fall, too. PitchBook noted that 2022’s exit activity has been “lethargic,” and reported the combined value of company sales so far this year is on pace to fall below $100 billion for the first time since 2016. Of all the exit revenue generated so far this year across the country, PitchBook found that almost 50% of that value came from acquisitions.
Only 59 public listings have happened so far this year, compared to a record 303 VC-backed companies that went public last year. PitchBook reported only five companies went public through traditional IPOs in this third quarter.
In Los Angeles, however, there might be some light at the end of the tunnel for investors and startup founders. The number of deals conducted in the third quarter totaled 321, and the overall deal value was $7.1 billion. That’s up roughly 39% from the previous quarter, which saw VCs invest a combined $4.8 billion in L.A. startups across 278 deals.
“I think a lot of capital is on the sidelines,” said Tarek Waked, founding partner of West Hollywood-based Type One Ventures. “Things are slowing down, people are spending less. [Limited partners] are being more risk-averse with their money.”
Nonetheless, according to PitchBook, L.A. saw some of the highest valued deals last quarter. Its average deal size was around $15 million, slightly behind the Bay Area, but more than other key metro areas like New York or Boston.
But not everyone is feeling the momentum. Los Angeles' women founders have had a tough year so far. PitchBook recently began tracking capital raised by companies with all-female founding teams and found they only raised a combined $1.9 billion so far since 2019, far behind New York and the Bay Area, where female founders raised $4.9 billion and $5.5 billion, respectively. PitchBook reported that “amid economic downturn, female-founded companies are receiving less capital.”
“The VC slowdown narrative that has been pervasive in the market this year has finally materialized in the data, with nearly every metric aside from fundraising falling sharply in Q3,” PitchBook CEO John Gabbert said in a statement Thursday. “The VC ecosystem, however, has shown remarkable resilience in the face of continued economic headwinds, raising record levels of capital and closing an unexpectedly high number of deals.”
This so-called downturn might just be a correction, or regression to the norm, after 2021’s record highs.
“In many ways, 2021 was an outlier year, and the VC market is now returning to pre-pandemic levels and long-term trends of steady growth,” Gabbert added.
Anna Barber, partner at Santa Monica-based VC M13, said she agreed that last year's boom in activity was outside the norm. "I think the venture market of 2021 was the anomaly and we'll see venture activity return to a measured pace given all the money sitting on the sidelines right now," Barber told dot.LA. She added that M13 expects residential property tech companies in particular to be in for a rough ride given rising interest rates which could cause a slump in home sales, but noted some industries M13 is targeting as potential growth sectors include financial services, identity management, ecommerce, and Web3 consumer technology and developer tools and platforms. (Disclosure: M13 is an investor in dot.LA).
"Many VCs, including us, have been focused for the past few months on our own portfolio and ensuring our companies are well-positioned and well-capitalized. But no one should expect a massive rush of VC funding all of a sudden," Barber cautioned. "What's more likely to happen is that deployment timelines will be extended... Meaning VCs will take slightly longer to invest the capital they currently have rather than going back to the market to raise more when the market is challenging."
Even if they aren’t doling out checks at the same generous rate in the past, VCs still continue to raise funds at a rapid pace. So far this year, VC fundraising nationwide already surpasses last year’s record high – PitchBook found that VC funds set a new annual high of roughly $151 billion raised throughout 2022, compared to $147 billion raised throughout all of 2021.
"I agree that there is a lot of VC money that has been raised and needs to be deployed," said Minnie Ingersoll, partner at Los Angeles-based TenOneTen Ventures. "Personally, I think that as valuations come down and we get back to 'normal' multiples, then this should be a great time to be deploying capital."
According to Waked, some investors seem to be trying to wait out the storm, because markets have been subject to so much volatility in the past year. But he expects that to rebound soon, adding that, “once that uncertainty is quelled, I think you're going to see an uptick.”
While the overall venture community might be hitting a speed bump, Waked said that in his specific areas of investment, including space and deep technology, investment isn’t showing signs of slowing down.
“I'm not blind to the state of the world and the market,” he noted. “But I think as a VC, you're ultimately an optimist… You're investing in the potential upside, not the potential downside.”
Ingersoll said the slowdown seems to be hitting later stage companies in particular.
"We have not seen a slowdown in our pipeline or in our pace of deployment, but I see it and hear about it from later stage companies -- both in our portfolio and outside our portfolio," Ingersoll told dot.LA. "In the growth stages it's more obvious which are the breakout companies and most of the really good growth companies raised in 2021. Also, if a company has plenty of runway, then they wouldn't choose to go to market to raise now."
Ingersoll predicted that more layoffs could hit tech in the near future; she added, "another round is coming and so there is going to be more pain before we get back to the go-go days. That said, entrepreneurship continues to be a bright spot in our country and a less tight labor market may enable more startup growth as we know that times of change and turbulence do lead to innovation."
This story has been updated to reflect additional comment from M13.
- Here Are Los Angeles' Top Venture Capitalists - dot.LA ›
- LA's Top Venture Capitalists of 2022 - dot.LA ›
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and 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 @Samsonamore.
The venture market is in the midst of a slowdown — which makes it an odd time to launch a new VC arm. But that’s exactly what the financial wellness coaching company Financial Finesse is doing. The company this week launched Financial Finesse Ventures, which focuses on “socially responsible” fintech. Think of it as the polar opposite of the shady trading apps and questionable crypto firms that reigned supreme in 2021.
In an interview with dot.LA, founder and CEO Liz Davidson says the company’s new fund will look for fintech startups that make a social impact and are transparent with fees and data practices.
“There are some technologies out there that are transformative and have the potential to put a lot of money back in consumer’s wallets and get them to use that money responsibly, so they’re achieving financial freedom much faster,” Davidson told dot.LA.
She contrasted these startups with predatory practices that have emerged in fintech, like high-interest personal loans, trading apps and even employee benefits like payday loans that don’t operate in the best interest of workers.
“All these things may be good for the companies that the VCs are funding because they’re revenue generators, but they’re not good for the consumer or employee. And so, I think it’s just an inherent conflict that happens when you’re under pressure to generate returns for investors really quickly,” said Davidson.
Financial Finesse Ventures has already picked its first early-stage company, which it plans to announce in November. It’s currently in talks with a number of different startups, and plans to pick more in the future. For now, Financial Finesse will be the sole investor in the fund and plans to take a slow approach to tapping new companies.
“We’re looking at a relatively slow rollout for two reasons," Davidson told dot.LA. "Number one, we want to know that we’re doing this right and that we’re getting this model down right. We’re incubating these companies and we know there’s a lot to learn, and we don’t want to go too fast."
The second reason?
"To make sure that we’re pacing ourselves from an investment perspective,” said Davidson. In other words, it’s trying not to jump the gun. “We’re not at a place where we’ve pulled the trigger on any one [...startup] besides the one that we’re launching. But we’ll see how those discussions evolve.”