'This is Critical': Two LA Funds Focusing on Diversity Get an Infusion from PayPal

PayPal Holdings, Inc. announced Thursday it will be transferring money to two L.A. firms as part of a $50 million commitment to eight early-stage, Black and Latinx-led venture capital funds.

Slauson & Co., the new fund from PledgeLA chairman Austin Clements focused on people of color, women and LGBTQ+ entrepreneurs; and VamosVentures, the Latinx consumer-focused, early-stage fund founded by Marcos Gonzalez, are both receiving undisclosed investment amounts.


"For a small fund, this is critical," Gonzalez told dot.LA. "Welcoming PayPal into the VamosVentures family will provide insight and resources in a variety of ways. For example, deal referrals, input on diligence of companies we're looking at in the fintech space, and possible business development support for our portfolio. More broadly, we expect to benefit from more general insight on trends and connections to folks in the ecosystem that we might not otherwise be able to access."

Gonzalez said he thinks it is significant that Los Angeles is the only city where PayPal chose to invest in more than one fund.

"I think it shows that L.A. can be an epicenter for early-stage activity around diverse managers, founders and consumers," Gonzalez said. "More specifically, L.A. is a Latino city and we're working to increase the Latinx communities participation in the tech and VC ecosystem."

PayPal booth at LeWeb | Robert Scoble | Flickr

Just 2% of VC investment partners in L.A. identify as African American or Latino, according to PledgeLA. Nationally, a 2018 Deloitte study found 80% of investment partners at U.S. venture firms were white; 3% were Black and 3% were Latino. Just 4% of VC employees are black, according to a 2018 survey by the National Venture Capital Association (NVCA), an industry trade group.

Because of the insular nature of how startups get funded – with a big emphasis on existing networks and warm introductions - the lack of diversity has major trickle down effects on which founders get capital.

In an effort to help solve the whiteness problem, VC's like Clements have gone out on their own to start new funds, but raising a first time fund is never easy and has been a "herculean task" this year, according to the NVCA. That's why the PayPal investment comes as welcome news.

"Through our investments, we hope to be a catalyst for positive change for people who face historic disparities in access to capital and opportunity," Clements said in a prepared statement.

While PayPal will be what Clements calls the "inaugural investor" in Slauson & Co., VamosVentures is further along, having already raised $25 million with two months left of fundraising to go, according to Gonzalez.

PayPal said it would also invest in Chingona Ventures, Fearless Fund, Harlem Capital, Precursor Ventures, Zeal Capital Partners, and one additional fund as part of the company's commitment to invest $530 million to support Black-owned businesses, strengthen underrepresented minority communities and fight for racial equity and economic equality.

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Today:

  • Fidelity Seeking to Unload Bird Shares at a Loss
  • Warner Bros.' 2021 Films Will Be Released in Theaters, HBO Max Simultaneously
  • Plug-In South LA Opens New Accelerator Cohort for 2021

    Fidelity Reportedly Seeks To Unload Bird Shares at a Loss 

    Escooter Unicorn Bird Seeks to Unload Santa Monica HQ upload.wikimedia.org

    Fidelity Investments is attempting to unload some of its shares in Bird Rides Inc. at a loss, according to a report published Wednesday night by Business Insider.

    The move comes after dot.LA reported in October that the mutual fund giant has marked down the value of its Bird investment by 17% since the beginning of the year.


    As a private company, Bird does not have to share its financials. Nor do the venture funds that hold most of its shares. However, Fidelity is required to account for shares at their fair market value so it provides a rare glimpse into the company's health.

    But a source close to the matter said the sale should not be seen as any indication of Bird's financial performance. The shares represent less than ten percent of Fidelity's position and the intended sale is the result of a new portfolio manager taking over who does not want to invest in pre-IPO companies, the source said.

    Neither Bird nor Fidelity would respond to dot.LA's request for comment.

    Bird became the fastest company in history to reach unicorn status in 2018 and achieved a $2 billion valuation less than a year later. But as the pandemic hit, it abruptly laid off 406 employees via a Zoom call and was forced to remove its fleet from city streets just as it was gearing up for its normally lucrative summer season.

    dot.LA reported in October the company put its Santa Monica offices up for sublease less than a year after completing a costly renovation.

    Bird has maintained the pandemic has been a positive as riders prefer scooters over crowded buses and subways. It says it is seeing riders take longer trips than they did before the pandemic.

    Last month, Bloomberg reported Bird is looking to go public via a blank-check company. Bird said it had no plans to go public "this year," which did not exactly rule out a SPAC sometime in the near future.

    ​Plug-In South LA Opens New Accelerator Cohort for 2021

    Plug In South LA's Accelerator Program is returning in 2021. The outfit is looking for 10 Black and Latinx founders who have proof of product-market fit and traction. The organization, founded in 2015 by Derek Smith, aims to build a network for Black and Latinx founders in South Los Angeles.

    Last year was the inaugural accelerator program funded by Verizon, Silicon Valley Bank and Nike. The 2019 cohort hosted five startups including Spooler, a tech-based clothing design startup that credits the program with helping to increase revenue two fold since March. During the program, the company received a contract to launch a Sesame Street active wear product line.

    The last day to apply for the program is Dec. 9

    Warner Bros.’ 2021 Films Will Be Released in Theaters, HBO Max Simultaneously

    Warner Bros. will be streaming all its 2021 theatrical releases on HBO Max in a blow to already struggling theater chains as the pandemic continues to reshape Hollywood.

    The AT&T-owned studio's 17-film slate, including "Godzilla vs. Kong," "Mortal Kombat," "The Suicide Squad" and "Matrix 4," will be available on the streaming platform exclusively for one month, starting when they are released in theaters and then will disappear from the platform.The move comes shortly after the company announced it would bring its expected blockbuster "Wonder Woman 1984" directly to HBO Max.


    "We're living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group," said Ann Sarnoff, chair and CEO of WarnerMedia Studios and Networks Group, in a statement released on Thursday. "No one wants films back on the big screen more than we do. We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021."

    Sarnoff said the model is a temporary one, but the decision will reverberate across an industry that has taken away screening exclusivity from theaters and reshaped how studios function.

    "With this unique one-year plan, we can support our partners in exhibition with a steady pipeline of world-class films, while also giving moviegoers who may not have access to theaters or aren't quite ready to go back to the movies the chance to see our amazing 2021 films," Sarnoff said. "We see it as a win-win for film lovers and exhibitors."

    AT&T's decision to favor its streaming service over theaters comes in response to the pandemic, but it also aligns with CEO John Stankey's public comments that he wants to center his company's strategy around streaming. It's part of a broader blueprint meant to goose AT&T's broadband business, which led the company to acquire Time Warner in 2018 for $85 billion. Comcast, AT&T's chief broadband rival, is pursuing a similar game plan with its own streaming service, Peacock, which falls under its subsidiary NBCUniversal.

    AT&T last month announced layoffs at WarnerMedia to focus the company around HBO Max. Elsewhere, Disney — which logged nearly 74 million paid subscribers to its Disney Plus streaming service last quarter — has refocused on that format. It's another example of a shift toward streaming that was already underway but which has been accelerated by the pandemic.

    CrowdStrike shares surged more than 13% Thursday after the Sunnyvale-based cybersecurity company once again reported blockbuster earnings. The stock is now up 184% this year, eclipsing the 38% gain for the rest of the Nasdaq.

    CrowdStrike's blistering performance is a big win for March Capital, the Santa Monica venture firm focusing on enterprise software founded by Jim Armstrong, Jamie Montgomery, Gregory Milken and Sumant Mandal in 2014.

    Read more Show less

    Warner Bros. will be streaming all its 2021 theatrical releases on HBO Max in a blow to already struggling theater chains as the pandemic continues to reshape Hollywood.

    The AT&T-owned studio's 17-film slate, including "Godzilla vs. Kong," "Mortal Kombat," "The Suicide Squad" and "Matrix 4," will be available on the streaming platform exclusively for one month, starting when they are released in theaters and then will disappear from the platform.The move comes shortly after the company announced it would bring its expected blockbuster "Wonder Woman 1984" directly to HBO Max.

    Read more Show less
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