Trump promotes Michael Kratsios to US Chief Technology Officer

More than two years into the Trump administration, the long vacant post of U.S. Chief Technology Officer will be filled. Bloomberg first reported that today Trump is elevating Michael Kratsios, current deputy U.S. CTO, to the nation’s top tech position. Prior to his experience within the Trump administration, Kratsios served as chief of staff at Peter Thiel’s investment firm Thiel Capital and as chief financial officer at another Thiel project, the hedge fund Clarium Capital.

The U.S. CTO role was created during the Obama years and three CTOs have served to date, the last of which was former Googler Megan Smith, known for leading early acquisitions at Google before her move to

The CTO position advises the president on tech issues, works to shape tech policy and importantly serves as a link to the private sector. In contrast with his predecessors, Kratsios brings a distinct venture capital-colored perspective to the role, which sits within the White House Office of Science and Technology Policy.

Tech regulation in Europe will only get tougher

European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.



To fund Y Combinator’s top startups, VCs scoop them before Demo Day

Hundreds gathered this week at San Francisco’s Pier 48 to see the more than 200 companies in Y Combinator’s Winter 2019 cohort present their two-minute pitches. The audience of venture capitalists, who collectively manage hundreds of billions of dollars, noted their favorites. The very best investors, however, had already had their pick of the litter.

What many don’t realize about the Demo Day tradition is that pitching isn’t a requirement; in fact, some YC graduates skip out on their stage opportunity altogether. Why? Because they’ve already raised capital or are in the final stages of closing a deal.

ZeroDown, Overview.AI and Catch are among the startups in YC’s W19 batch that forwent Demo Day this week, having already pocketed venture capital. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised a round upwards of $10 million at a $75 million valuation, sources tell TechCrunch. ZeroDown hasn’t responded to requests for comment, nor has its rumored lead investor: Goodwater Capital.

Without requiring a down payment, ZeroDown purchases homes outright for customers and helps them work toward ownership with monthly payments determined by their income. The business was founded by Zenefits co-founder and former chief technology officer Laks Srini, former Zenefits chief operating officer Abhijeet Dwivedi and Hari Viswanathan, a former Zenefits staff engineer.

The founders’ experience building Zenefits, despite its shortcomings, helped ZeroDown garner significant buzz ahead of Demo Day. Sources tell TechCrunch the startup had actually raised a small seed round ahead of YC from former YC president Sam Altman, who recently stepped down from the role to focus on OpenAI, an AI research organization. Altman is said to have encouraged ZeroDown to complete the respected Silicon Valley accelerator program, which, if nothing else, grants its companies a priceless network with which no other incubator or accelerator can compete.

Overview .AI’s founders’ resumes are impressive, too. Russell Nibbelink and Christopher Van Dyke were previously engineers at Salesforce and Tesla, respectively. An industrial automation startup, Overview is developing a smart camera capable of learning a machine’s routine to detect deviations, crashes or anomalies. TechCrunch hasn’t been able to get in touch with Overview’s team or pinpoint the size of its seed round, though sources confirm it skipped Demo Day because of a deal.

Catch, for its part, closed a $5.1 million seed round co-led by Khosla Ventures, NYCA Partners and Steve Jang prior to Demo Day. Instead of pitching their health insurance platform at the big event, Catch published a blog post announcing its first feature, The Catch Health Explorer.

“This is only the first glimpse of what we’re building this year,” Catch wrote in the blog post. “In a few months, we’ll be bringing end-to-end health insurance enrollment for individual plans into Catch to provide the best health insurance enrollment experience in the country.”

TechCrunch has more details on the healthtech startup’s funding, which included participation from Kleiner Perkins, the Urban Innovation Fund and the Graduate Fund.

Four more startups, Truora, Middesk, Glide and FlockJay had deals in the final stages when they walked onto the Demo Day stage, deciding to make their pitches rather than skip the big finale. Sources tell TechCrunch that renowned venture capital firm Accel invested in both Truora and Middesk, among other YC W19 graduates. Truora offers fast, reliable and affordable background checks for the Latin America market, while Middesk does due diligence for businesses to help them conduct risk and compliance assessments on customers.

Finally, Glide, which allows users to quickly and easily create well-designed mobile apps from Google Sheets pages, landed support from First Round Capital, and FlockJay, the operator an online sales academy that teaches job seekers from underrepresented backgrounds the skills and training they need to pursue a career in tech sales, secured investment from Lightspeed Venture Partners, according to sources familiar with the deal.

Pre-Demo Day M&A

Raising ahead of Demo Day isn’t a new phenomenon. Companies, thanks to the invaluable YC network, increase their chances at raising, as well as their valuation, the moment they enroll in the accelerator. They can begin chatting with VCs when they see fit, and they’re encouraged to mingle with YC alumni, a process that can result in pre-Demo Day acquisitions.

This year, Elph, a blockchain infrastructure startup, was bought by Brex, a buzzworthy fintech unicorn that itself graduated from YC only two years ago. The deal closed just one week before Demo Day. Brex’s head of engineering, Cosmin Nicolaescu, tells TechCrunch the Elph five-person team — including co-founders Ritik Malhotra and Tanooj Luthra, who previously founded the Box-acquired startup Steem — were being eyed by several larger companies as Brex negotiated the deal.

“For me, it was important to get them before batch day because that opens the floodgates,” Nicolaescu told TechCrunch. “The reason why I really liked them is they are very entrepreneurial, which aligns with what we want to do. Each of our products is really like its own business.”

Of course, Brex offers a credit card for startups and has no plans to dabble with blockchain or cryptocurrency. The Elph team, rather, will bring their infrastructure security know-how to Brex, helping the $1.1 billion company build its next product, a credit card for large enterprises. Brex declined to disclose the terms of its acquisition.

Hunting for the best deals

Y Combinator partners Michael Seibel and Dalton Caldwell, and moderator Josh Constine, speak onstage during TechCrunch Disrupt SF 2018. (Photo by Kimberly White/Getty Images)

Ultimately, it’s up to startups to determine the cost at which they’ll give up equity. YC companies raise capital under the SAFE model, or a simple agreement for future equity, a form of fundraising invented by YC. Basically, an investor makes a cash investment in a YC startup, then receives company stock at a later date, typically upon a Series A or post-seed deal. YC made the switch from investing in startups on a pre-money safe basis to a post-money safe in 2018 to make cap table math easier for founders.

Michael Seibel, the chief executive officer of YC, says the accelerator works with each startup to develop a personalized fundraising plan. The businesses that raise at valuations north of $10 million, he explained, do so because of high demand.

“Each company decides on the amount of money they want to raise, the valuation they want to raise at, and when they want to start fundraising,” Seibel told TechCrunch via email. “YC is only an advisor and does not dictate how our companies operate. The vast majority of companies complete fundraising in the 1 to 2 months after Demo Day. According to our data, there is little correlation between the companies who are most in demand on Demo Day and ones who go on to become extremely successful. Our advice to founders is not to over optimize the fundraising process.”

Though Seibel says the majority raise in the months following Demo Day, it seems the very best investors know to be proactive about reviewing and investing in the batch before the big event.

Khosla Ventures, like other top VC firms, meets with YC companies as early as possible, partner Kristina Simmons tells TechCrunch, even scheduling interviews with companies in the period between when a startup is accepted to YC to before they actually begin the program. Another Khosla partner, Evan Moore, echoed Seibel’s statement, claiming there isn’t a correlation between the future unicorns and those that raise capital ahead of Demo Day. Moore is a co-founder of DoorDash, a YC graduate now worth $7.1 billion. DoorDash closed its first round of capital in the weeks following Demo Day.

“I think a lot of the activity before demo day is driven by investor FOMO,” Moore wrote in an email to TechCrunch. “I’ve had investors ask me how to get into a company without even knowing what the company does! I mostly see this as a side effect of a good thing: YC has helped tip the scale toward founders by creating an environment where investors compete. This dynamic isn’t what many investors are used to, so every batch some complain about valuations and how easy the founders have it, but making it easier for ambitious entrepreneurs to get funding and pursue their vision is a good thing for the economy.”

This year, given the number of recent changes at YC — namely the size of its latest batch — there was added pressure on the accelerator to showcase its best group yet. And while some did tell TechCrunch they were especially impressed with the lineup, others indeed expressed frustration with valuations.

Many YC startups are fundraising at valuations at or higher than $10 million. For context, that’s actually perfectly in line with the median seed-stage valuation in 2018. According to PitchBook, U.S. startups raised seed rounds at a median post-valuation of $10 million last year; so far this year, companies are raising seed rounds at a slightly higher post-valuation of $11 million. With that said, many of the startups in YC’s cohorts are not as mature as the average seed-stage company. Per PitchBook, a company can be several years of age before it secures its seed round.

Nonetheless, pricey deals can come as a disappointment to the seed investors who find themselves at YC every year but because their reputations aren’t as lofty as say, Accel, aren’t able to book pre-Demo Day meetings with YC’s top of class.

The question is who is Y Combinator serving? And the answer is founders, not investors. YC is under no obligation to serve up deals of a certain valuation nor is it responsible for which investors gain access to its best companies at what time. After all, startups are raking in larger and larger rounds, earlier in their lifespans; shouldn’t YC, a microcosm for the Silicon Valley startup ecosystem, advise their startups to charge the best investors the going rate?

Gig workers need health & benefits — Catch is their safety net

One of the hottest Y Combinator startups just raised a big seed round to clean up the mess created by Uber, Postmates, and the gig economy. Catch sells health insurance, retirement savings plans, and tax withholding directly to freelancers, contractors, or anyone uncovered. By building and curating simplified benefits services, Catch can offer a safety net for the future of work.

“In order to stay competitive as a society, we need to address inequality and volatility. We think Catch is the first step to offering alternatives to the mandate that benefits can only come from an employer or the government” writes Catch co-founder and COO Kristen Tyrrell. Her co-founder and CEO Andrew Ambrosino, a former Kleiner Perkins design fellow, stumbled onto the problem as he struggled to juggle all the paperwork and programs companies typically hire an HR manager to handle. “Setting up a benefits plan was a pain. You had to be come an expert in the space, and even once you were, executing and getting the stuff you needed was pretty difficult.” Catch does all this annoying but essential work for you.

Now Catch is getting its first press after piloting its product with tens of thousands of users. TechCrunch caught wind of its highly competitive seed round closing, and Catch confirms it’s raised $5.1 million at a $20.5 million post-money valuation co-led by Khosla Ventures, NYCA Partners and Kindred Ventures. This follow-up to its $1 million pre-seed will fuel its expansion into full heath insurance enrollment, life insurance, and more.

“Benefits, as a system built and provided by employers, created the mid-century middle class. In the post-war economic boom, companies offering benefits in the form of health insurance and pensions enabled familial stability that led to expansive growth and prosperity” recalls Tyrrell, who was formerly the director of product at student debt repayment benefits startup “Emboldened by private-sector growth (and apparent self-sufficiency), the 1970s and 80s saw a massive shift in financial risk management from the government to employers. The public safety net contracted in favor of privatized solutions. As technological advances progressed, employers and employees continued to redefine what work looked like. The bureaucratic and inflexible benefits system was unable to keep up. The private safety net crumbled.”

That problem has ballooned in recent years with the advent of the on-demand economy where millions become Uber drivers, Instacart shoppers, DoorDash deliverers, and TaskRabbits. Meanwhile, the destigmatization of remote work and digital nomadism has turned more people into permanent freelancers and contractors, or full-time employees without benefits. “A new class of worker emerged: one with volatile, complex income streams and limited access to second-order financial products like automated savings, individual retirement plans, and independent health insurance. We entered the new millennium with rot under the surface of new opportunity from the proliferation of the internet” Tyrrell declares. “The last 15 years are borrowed time for the unconventional proletariat. It is time to come to terms and design a safety net that is personal, portable, modern, and flexible. That’s why we built Catch.”

Catch co-founders Andrew Ambrosino and Kristen Tyrrell

Currently Catch offers the following services, each with their own way of earning the startup revenue:

  • Health Explorer lets users compare plans from insurers and calculate subsidies, while Catch serves as a broker collecting a fee from insurance providers
  • Retirement Savings gives users a Catch robo-advisor compatible with IRA and Roth IRA, while Catch earns the industry standard 1 basis point on saved assets
  • Tax Withholding provides an FDIC-insured Catch account that automatically saves what you’ll need to pay taxes later, while Catch earns interest on the funds
  • Time Off Savings similarly lets you automatically squirrel away money to finance ‘paid’ time off, while Catch earns interest

These and the rest of Catch’s services are curated through its Guide. You answer a few questions about what benefits you have and need, connect your bank account, choose what programs you want, and get push notifications whenever Catch needs your decisions or approvals. It’s designed to minimize busy work so if you have a child, you can add them to all your programs with a click instead of slogging through reconfiguring them all one at a time. That simplicity has ignited explosive growth for Catch, with the balances it holds for tax withholding, time off, and retirement balances up 300% in each of the last three months.

In 2019 it plans to add Catch-branded student loan refinancing, vision and dental enrollment plus payments via existing providers, life insurance through a partner such as Ladder or Ethos, and full health insurance enrollment plus subsidies and premium payments via existing insurance companies like Blue Shield and Oscar. And in 2020 it’s hoping to build out its own blended retirement savings solution and income smoothing tools.

If any of this sounds boring, that’s kind of the point. Instead of sorting through this mind-numbing stuff unassisted, Catch holds your hand. Its benefits Guide is available on the web today and it’s beta testing iOS and Android apps that will launch soon. Catch is focused on direct-to-consumer sales because “We’ve seen too many startups waste time on channels/partnerships before they know people truly want their product and get lost along the way” Tyrrell writes. Eventually it wants to set up integrations directly into where users get paid.

Catch’s biggest competition is people haphazardly managing benefits with Excel spreadsheets and a mishmash of and solutions for specific programs. 21 percent of Americans have saved $0 for retirement, which you could see as either a challenge to scaling Catch or a massive greenfield opportunity., one of its direct competitors, charges a subscription price that has driven users to Catch. And automated advisors like Betterment and Wealthfront accounts don’t work so well for gig workers with lots of income volatility.

So do the founders think the gig economy, with its suppression of benefits, helps or hinders our species? “We believe the story is complex, but overall, the existing state of the gig economy is hurting society. Without better systems to provide support for freelance/contract workers, we are making people more precarious and less likely to succeed financially.”

When I ask what keeps the founders up at night, Tyrrell admits “The safety net is not built for individuals. It’s built to be distributed through HR departments and employers. We are very worried that the products we offer aren’t on equal footing with group/company products.” For example, there’s a $6,000/year IRA limit for individuals while the corporate equivalent 401k limit is $19,000, and health insurance is much cheaper for groups than individuals.

To surmount those humps, Catch assembled a huge list of angel investors who’ve built a range of financial services including Nerdwallet founder Jake Gibson, Earnest founders Louis Beryl and Ben Hutchinson, ANDCO (acquired by Fiverr) founder Leif Abraham, Totem founder Neal Khosla, Commuter Club fonder Petko Plachkov, Playable (acquired by Stripe) founder Tad Milbourn, and Synapse founder Bruno Faviero. It also brough on a wide range of venture funds to open doors for it. Those include Urban Innovation Fund, Kleiner Perkins, Y Combinator, Tempo Ventures, Prehype, Loup Ventures, Indicator Ventures, Ground Up Ventures, and Graduate Fund.

Hopefully the fact that there are three lead investors and so many more in the round won’t mean that none feel truly accountable to oversee the company. With 80 million Americans lacking employer-sponsored benefits and 27 million without health insurance and median job tenure down to 2.8 years for people ages 25 to 34 leading to more gaps between jobs, our workforce is vulnerable. Catch can’t operate like a traditional software startup with leniency for screw-ups. If it can move cautiously and fix things, it could earn labor’s trust and become a fundamental piece of the welfare stack.

How to develop a brand identity system (like Intercom)

[Editor’s note: This is the first of a series of articles that we’re writing about branding for startups. It’s part of our latest initiative to find the best brand designers and agencies in the world who work with early-stage companies — nominate a talented brand designer you’ve worked with.]  

When designer Ryan Hubbard joined Intercom, a SaaS unicorn that makes customer engagement tools, he knew that he would be working at the forefront of brand design. The company’s leadership empowered its Intercom Brand Studio to help Intercom stand out in an increasingly crowded field.

“I always look to figure out what is possible or push expectations,” Hubbard says. “There’s a more traditional view on brand design — the idea that people are there to create order and make rules. And that’s valid, but it’s not how I look at it.”

Now a senior designer at Medium, Hubbard has a lot more to say on how startups should approach branding to make a memorable impression.  

The essential principle of branding

“The one thing you should probably have buttoned up prior to investing in brand is some kind of clear point of view about who you are as a company and what makes you different,” says Hubbard.

While the elements of a brand are primarily visual, brand identity is based on foundational values and attitudes that define a company.

That’s why it’s essential to start with your company’s unique story. Those who approach branding as an exercise in defining and expressing their core ideas will find it much easier to create a striking and memorable brand.

Intercom has a compelling origin story about friends in Dublin longing for online customer service to mimic the welcoming atmosphere of the coffee shop where they liked to work. Accordingly, Intercom’s brand focuses on values like approachability, personality, warmth, and helpfulness.

Those values translate into the brand’s visual language: a smile-like logo, joyful colors, quirky illustration.

“You could start with, ‘What is the story you’re telling?’” says Hubbard. “The stronger and better you can be with your story, that’s a really strong foundation for a good brand.”

How to define your look and feel

The basic elements of visual branding include logo, language, colors, imagery, and typography. A strong brand is one that can be distilled down to the most basic elements and still be recognizable. Even a single word written a particular way can convey volumes.

“There’s a lot you can communicate with just typography,” says Hubbard. “The best identity systems I’ve seen – not just in tech – are all brands that are really strong with typography.”

Free-flowing creativity is key in experimenting with these elements. You’ll be holding on tight to your brand identity as you refine your story and identify your values. But it’s important to be open to all kinds of creative expression when you start designing.

“Don’t be too precious with exactly how you want everything to look,” advises Hubbard. “You can’t have a predetermined direction in your mind when you’re going into it.”

Get ideas and images out onto the page quickly. Then identify which draft elements light a spark and develop them. It will soon become obvious which connect most strongly.

How to deploy your branding

Once you have a brand identity system in hand, the next step is deploying it consistently. Your brand must be consistent across touch points, both inside and outside the organization.

But don’t mistake consistency for rigidity. If your brand is built on ideas and not just on a simple collection of visual elements, you can be consistent and creative. Allow your brand to have a life of its own, anchored by its core values and principles.

“It’s really easy to create a brand system that gives you no flexibility for expression, so you wind up putting the same thing over there over and over again,” says Hubbard. “If you don’t give yourself any room to do new exciting things with your brand, you’ll get stagnant and forgotten.”

That’s a death knell for any company, but a strong brand identity system will keep your brand at the forefront of customers’ minds.

Help us find the best startup brand designers and agencies in the world — nominate a talented brand designer you’ve worked with.

Why it’s no surprise that pro rata rights don’t mean what they used to

Yesterday, renowned investor Fred WIlson of Union Square Ventures observed in blog post that fewer founders in today’s go-go market have been honoring what are called pro rata rights, or the right of an earlier investor in a company to maintain the percentage that he or she (or their venture firm) owns as that company matures and takes on more funding.

If a company isn’t doing well, investors aren’t necessarily interested in maintaining the same ownership percentage they once enjoyed in a company, but when it’s clearly breaking away from the pack, it means a lot. If an investor’s 10 percent take becomes a three percent stake over a startup’s subsequent rounds of funding and that startup sells for a billion dollars, that’s a difference of $70 million dollars, which is the size of many institutional seed-stage funds.

Still, while it’s easy to understand Wilson’s frustration, especially given that pro rata rights are legally provisioned to investors that are making a sizable investment (what’s called a “major investor threshold”), the answer probably isn’t to put more teeth into these agreements, as Wilson posits may be necessary. The solution seemingly, based on conversations we’ve had with founders and VCs in the past, is to be a better VC.

That isn’t easy to do in a world where trillions of dollars are sloshing around, much of it finding its way into startups. The more startups a venture firm supports, the harder it is for venture investors to log meaningful time with founding teams. Add to this the fact that venture firms have been raising new funds faster than ever over the last five years, and that means even less time spent with founding teams who were assured that their investors will “roll up their sleeves,” then don’t.

We aren’t accusing Wilson of this specifically, by the way. We also don’t doubt there are  founders who forget how much their early investors supported them when late-stage investors dangle before them a new deal that diminishes those early VCs’ stakes. But even several years ago, investors told us — including on stage — that they’d begun missing out on pro rata opportunities because sometimes they just weren’t paying enough attention. They were distracted by their other portfolio companies. And the industry has only grown more crowded, with startups and capital and new and old relationships, since.

“That interpersonal component is huge,” as a startup attorney told us during that same discussion. “When you have these competing dynamics of: new investor needs to own X percentage of the company, previous lead investors want to have something, a bunch of smaller investors want to have something — the entrepreneur is trying to deal all of these constituencies. In the end, they need to go to bat for you,” but they’re far more likely to do it if you’ve truly been a partner to them, no matter what a document says.

Put another way, if a founder isn’t talking to a venture investor about his or her next round of funding, that’s not good. But it probably also shows how far apart the two sides really were in the first place.

How to save the third wave of technology from itself

As The New York Times recently profiled, new startups are arising to solve the housing crisis. These startups disrupt what ex-AOL CEO Steve Case calls the “Third Wave,” industries with large social impact. Think: housing, healthcare and finance.

To survive, these companies need to ensure compliance with regulations early on, because mistakes here can have large social consequences. To help new entrants survive in these industries, two closely related technologies — legal technology (“legaltech”) and regulation technology (“regtech”) — help companies navigate rules embedded in text, such as contracts or regulations. Without them, incumbents, who have the most resources to hire lawyers to navigate these rules, are set up to dominate in the Third Wave.

Third Wave startups must tread carefully. Unaudited prefabricated housing designs might mean the use of subpar safety measures and tenant deaths during an earthquake. Oversights in financial transactions, for instance, may unintentionally facilitate money laundering. Privacy violations in healthcare data could lead to an unfair increase in insurance premiums for affected individuals.

To mitigate these social harms, regulations can be complex. In finance, for instance, the new Markets in Financial Instruments Directive has 30,000 pages. To comply, banks can spend $1 billion a year (often 20 percent of their operational budget). Citigroup reportedly hired 30,000 lawyers, auditors and compliance officers in 2014.

For startups, ignorance is no longer a viable strategy. In just the past three years, fintech startups have suffered more than $200 million (almost 5 percent of the total venture dollars invested over that same period) in regulatory fines: 50 percent involving consumer mistreatment and 25 percent involving privacy violations. Zenefits fired 17 percent of its staff, including its CEO, after violating insurance brokerage laws. LendingClub paused operations and cut 10 percent of its workforce after violating state usury and unfair dealing laws.

Companies cannot — and should not — avoid their regulatory and social responsibilities.

Uber — once infamous for its “do first, ask for forgiveness later” strategies — now engages with regulators directly, by building partnerships and applying for permits. VCs, such as Evan Burfield in Regulatory Hacking, argue that these strategies are critical for the next wave of startups.

This work requires not only perseverance but also tremendous resources. Large companies, such as J.P. Morgan or even Uber, have the most money and staff to navigate an increasingly complex regulatory landscape. Because of this, they are in the best position to shape the future and the Third Wave.

Legaltech and regtech can change this trend. These technologies use anything from data analytics to decision trees to help companies navigate rules embedded in text, such as regulations and contracts. Since technology is scalable in ways that hiring 30,000 lawyers is not, small innovators can better compete in a big company’s game.

In one example, Fenergo transformed a highly manual document review for Know Your Customer (KYC) regulations using text analysis and rule logic, speeding up the process by 37 percent.

Other related startups are reducing the costs associated with complying with corporate contracts (such as Ironclad), bankruptcy (such as UpSolve), zoning requirements generally (such as Envelope and Symbium) and for accessory dwelling units (such as Cover), permitting processes (such as and energy standards (such as Cove Tool).

Because of this environment, analysts are bullish about these technologies. In 2018, nearly $1 billion has been invested in legaltech. Spend on regtech in finance alone is estimated to rise from $10 billion in 2017 to $76 billion in 2022 (a 700 percent increase in five years). For comparison, spend on the sharing economy is estimated to rise from $18 billion in 2017 to $40 billion in 2022.

In the Third Wave, companies cannot — and should not — avoid their regulatory and social responsibilities. If the scandals of Uber and Facebook are any indication, when a company violates laws or loses its integrity, the public and the stock market respond in kind. Journalistic coverage of breaches and unethical data practices has captured public attention. Waves of data regulation have passed across major jurisdictions, such as China, California and Brazil.

Embracing legaltech and regtech can plant long-term competitive advantages. Adopting technology that automates data protection, for instance, can create better customer experiences. By safely analyzing more data, even smaller companies can quickly generate insights and build programs that provide value to their customers.

Technology can empower companies both large and small to embrace the mitigation of social harms and the promotion of positive impact.

Startup executives should take notice.

Introducing the Extra Crunch Stage at Disrupt SF 2019

Every year we dig deep to make the next TechCrunch Disrupt bigger, bolder and better than before. Disrupt San Francisco 2019, on October 2-4, is no exception. One of the many upgrades we’re proud to announce is the Extra Crunch Stage.

Hold up a second — need a ticket to Disrupt SF 2019? Get one at the super early-bird price before the price increases.

OK, moving on. We’re upgrading last year’s Next Stage to the Extra Crunch Stage — named in honor of TC’s recently launched subscription product. Designed for our most engaged readers, this extra crunchy layer of subscription content goes deep on entrepreneurial and startup topics like inclusion and diversity, hiring practices, legal and product decisions, as well as mental health and wellness in high-performance businesses.

So, how does this translate to the Extra Crunch Stage at Disrupt SF? The programming here will still feature fireside chats and panel discussions focused on topics crucial to founder and investor success. But you can also see and hear plenty of how-to content, and gain practical, actionable insights from the folks who have been out in the trenches getting deals done.

Anyone with an Innovator, Founder or Investor pass can access this delicious insider content found on the Extra Crunch Stage, plus all the speakers, panelists and startup founders who will grace the Main Stage (think Startup Battlefield), the Showcase Stage (in Startup Alley) and the Q&A Stage (where you ask and experts answer).

What else can you expect at Disrupt SF 2019? World-class networking and nearly infinite opportunities. Connecting with people is great — connecting with the right people is even better. Cue CrunchMatch, Disrupt’s free business match-making service, available to all attendees. The platform helps you find and connect with people based on specific mutual criteria, goals and interests. Whether you want to network with founders, investors, technologists, researchers or software engineers, CrunchMatch combines curation and automation to help you make the most of your limited time.

Disrupt SF 2019 takes place October 2-4 at Moscone North Convention Center. Come and experience the new Extra Crunch stage and all the other opportunities, events and connections that could make your startup dreams come true. Those super early-bird tickets won’t last long, so get yours today.

Is your company interested in sponsoring or exhibiting at Disrupt SF? Contact our sponsorship sales team by filling out this form.