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Startups net more than capital with NBA players as investors

Posted by on Jun 1, 2019 in Alexa, Andre Iguodala, Basketball, Carmelo Anthony, Column, Dan Porter, david stern, Facebook, Golden State Warriors, Google, Kevin Durant, Messenger, national basketball association, NBA, overtime, player, SMS, Snap, Snapchat, snaptravel, Social Media, Spark Capital, Startups, stephen curry, TC, Telstra Ventures, toronto, twitch | 0 comments

If you’re a big basketball fan like me, you’ll be glued to the TV watching the Golden State Warriors take on the Toronto Raptors in the NBA finals. (You might be surprised who I’m rooting for.)

In honor of the big games, we took a shot at breaking down investment activities of the players off the court. Last fall, we did a story highlighting some of the sport’s more prolific investors. In this piece, we’ll take a deeper dive into just what having an NBA player as a backer can do for a startup beyond the capital involved. But first, here’s a chart of some startups funded by NBA players, both former and current.

 

In February, we covered how digital sports media startup Overtime had raised $23 million in a Series B round of funding led by Spark Capital. Former NBA Commissioner David Stern was an early investor and advisor in the company (putting money in the company’s seed round). Golden State Warriors player Kevin Durant invested as part of the company’s Series A in early 2018 via his busy investment vehicle, Thirty Five Ventures. And then, Carmelo Anthony invested (via his Melo7 Tech II fund) earlier this year. Other NBA-related investors include Baron DavisAndre Iguodala and Victor Oladipo, and other non-NBA backers include Andreessen Horowitz and Greycroft.

I talked to Overtime’s CEO, 27-year-old Zack Weiner, about how the involvement of so many NBA players came about. I also wondered what they brought to the table beyond their cash. But before we get there, let me explain a little more about what Overtime does.

Founded in late 2016 by Dan Porter and Weiner, the Brooklyn company has raised a total of $35.3 million. The pair founded the company after observing “how larger, legacy media companies, such as ESPN, were struggling” with attracting the younger viewer who was tuning into the TV less and less “and consuming sports in a fundamentally different way.”

So they created Overtime, which features about 25 to 30 sports-related shows across several platforms (which include YouTube, Snapchat, Instagram, Facebook, TikTok, Twitter and Twitch) aimed at millennials and the Gen Z generation. Weiner estimates the company’s programs get more than 600 million video views every month.

In terms of attracting NBA investors, Weiner told me each situation was a little different, but with one common theme: “All of them were fans of Overtime before we even met them…They saw what we were doing as the new wave of sports media and wanted to get involved. We didn’t have to have 10 meetings for them to understand what we were doing. This is the world they live and breathe.”

So how is having NBA players as investors helping the company grow? Well, for one, they can open a lot of doors, noted Weiner.

“NBA players are very powerful people and investors,” he said. “They’ve helped us make connections in music, fashion and all things tangential to sports. Some have created content with us.”

In addition, their social clout has helped with exposure. Their posting or commenting on Instagram gives the company credibility, Weiner said.

“Also just, in general, getting their perspectives and opinions,” he added. “A lot of our content is based on working with athletes, so they understand what athletes want and are interested in being a part of.”

It’s not just sports-related startups that are attracting the interest of NBA players. I also talked with Hussein Fazal, the CEO of SnapTravel, which recently closed a $21.2 million Series A that included participation from Telstra Ventures and Golden State Warriors point guard Stephen Curry.

Founded in 2016, Toronto-based SnapTravel offers online hotel booking services over SMS, Facebook Messenger, Alexa, Google Home and Slack. It’s driven more than $100 million in sales, according to Fazal, and is seeing its revenue grow about 35% quarter over quarter.

Like Weiner, Fazal told me that Curry’s being active on social media about SnapTravel helped draw positive attention and “add a lot of legitimacy” to his company.

“If you’re an end-consumer about to spend $1,000 on a hotel booking, you might be a little hesitant about trusting a newer brand like ours,” he said. “But if they go to our home page and see our investors, that holds some weight in the eyes of the public, and helps show we’re not a fly-by-night company.”

Another way Curry’s involvement has helped SnapTravel is in terms of the recruitment and retainment of employees. Curry once spent hours at the office, meeting with employees and doing a Q&A.

“It was really cool,” Fazal said. “And it helps us stand out from other startups when hiring.”

Regardless of who wins the series, it’s clear that startups with NBA investors on their team have a competitive advantage. (Still, Go Raptors!)


Source: The Tech Crunch

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The lobbying is fast and furious as gig companies seek relief from pro-labor Supreme Court ruling

Posted by on Aug 24, 2018 in bernie sanders, Business, California, carsharing, Column, Contractor, DoorDash, economy, employment, Federal government, founder, Governor, health insurance, jerry brown, law firms, Lyft, overtime, Personnel, president, real-time, San Francisco, Speaker, TaskRabbit, Uber | 0 comments

For four years, Edhuar Arellano has left his house at 7 a.m. on weekdays to drive customers around the Bay Area for Lyft and Uber . Most days, he doesn’t get home to Santa Clara until 11 p.m. On weekends, he delivers pizzas to make ends meet.

Like a lot of drivers plugging in to ride-hailing apps for work, he likes the flexibility the gig economy has offered. But given the choice, Arellano says he wishes he could just become an employee. That would get him paid vacation, benefits, overtime, his own health insurance and perhaps more say over his working conditions.

“We need to accept whatever they want,” said the 55-year-old father of two grown children. “I can’t control anything.”

That quandary is behind a ferocious battle quietly playing out in the state Capitol in the final days of the legislative session, which ends August 31. Lobbyists for ridesharing companies and the California Chamber of Commerce are scrambling to delay until next year (and the next governor’s administration) a far-reaching California Supreme Court decision that could grant Arellano’s wish — and, businesses fear, undermine the entire gig economy.

The April ruling, involving the nationwide delivery company Dynamex Operations West Inc. and its contract drivers, established a new test for enforcement of California wage laws, and made it much harder for companies in California to claim that independent contractors are not actually employees.

Though the ruling only applies to California, the state’s labor force is so huge that it has already had national impact. Shortly after the decision, U.S. Senator Bernie Sanders of Vermont introduced a bill to make a version of California’s new rule the federal standard, a move that only added urgency to employers’ calls for state lawmakers to hit the pause button on implementing the ruling.

“Businesses are very concerned. The key is who’s going to be sued here in the near future,” said Allan Zaremberg, president of the California Chamber, which represents 50,000 businesses.

They should be, says labor leader Caitlin Vega, who has been similarly lobbying Capitol Democrats to refrain from meddling and let the Supreme Court decision move forward.

“Companies have made so much money already at the expense of workers,” Vega, the legislative director of the California Labor Federation, said Tuesday during a harried break between Capitol meetings. “We really see the Dynamex decision as core to rebuilding the middle class.”

State and federal labor laws give employees a wide range of worker protections, from overtime pay and minimum wages to the right to unionize. But those rights don’t extend to independent contractors, whose ranks have grown dramatically in the gig economy.

Apps such as Uber, TaskRabbit and DoorDash, which match customers and services online and in real time, have given workers an unprecedented ability to freelance but they also have blurred traditional employer-employee relationships and, labor advocates say, invited exploitation.

Some 2 million people, from Lyft drivers to construction workers, consider themselves independent contractors in California. In 2017, according to the Bureau of Labor Statistics, about one in 14 workers was an independent contractor nationally.

If state lawmakers don’t rewrite the law or stall its implementation for a few months, as businesses want — which the Legislature can legally do, though the clock is ticking — the Dynamex decision will subject businesses in California to a standard that is tougher than the federal government’s or most states’.

Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:

  • A) Free from the company’s control when they’re on the job;
  • B) Doing work that falls outside the company’s normal business;
  • C) And operating an independent business or trade beyond the job for which they were hired.

That’s a high bar for the many companies whose bottom lines have depended on large numbers of contractors to deliver a particular service. According to the business lobby, in the months since the Dynamex decision, law firms have received 1,200 demands for arbitration and 17 class action lawsuits.

Last month, business leaders sent a letter to members of Gov. Jerry Brown’s administration, warning that the new test would “decimate businesses,” and urging the governor and Legislature to suspend and then limit the court’s ruling to only workers involved in the Dynamex case. The letter also asked that the decision not apply to other contractors for the next two years.

Not all those contractors are in tech, Chamber head Zaremberg points out. Emergency room doctors and accountants, for example, could also be impacted. Emergency hospitals and trauma centers contract their doctors through medical groups, and doctors generally work at a combination of hospitals and community clinics.

Photo: shapecharge / iStock / Getty Images Plus

Dr. Aimee Mullen, president of the California chapter of American College of Emergency Physicians, confirms that ER docs are among those uncertain about their contractor status.

“A lot of our members use that model. It’s choice. They like flexibility. They like working at multiple hospitals,” Mullen said.

The California Labor Federation’s Vega contends that, disruptive though it may be, the Dynamex ruling is the right one, particularly on worker exploitation. The core group affected tends to be low-income and immigrant workers, she said.

“The Dynamex decision was a victory for working people — truck drivers who are cheated out of wages, warehouse workers forced to risk their health and gig economy workers who want to be treated with dignity and respect,” Vega wrote in a Sacramento Bee op-ed.

Some workers see room for hybrid solutions. Edward Escobar, a San Francisco ride-hail driver of four years and founder of the Alliance for Independent Workers, a group formed by drivers three years ago, says he has seen a big decrease in how much these companies compensate drivers without a commensurate increase in control over working conditions.

Escobar believes gig companies are trying to have it both ways, and should give their workers either true independence or full employment. His proposal: Let workers choose their own classification, with wage and benefit protection for those who choose to be employees, and more control for contractors over which rides to take and what prices to set.

“These tech titans have been taking advantage of these gray areas,” Escobar said.

Assembly Speaker Anthony Rendon, a Paramount Democrat, said earlier this month that while the Legislature is eager to delve into workforce issues, leaders do not have adequate time to act on it before the session ends next week.

“The Dynamex​ decision strikes at the core of what the future of work looks like in our society,” Rendon said in a statement. “From the decline of union membership to court rulings like the Janus decision, we’ve seen the continual erosion of workers’ rights. If the Legislature is to take action, we must do so thoughtfully with that in mind. That will not happen in the last three weeks of the legislative session.”

Nor are the stakes likely to be lowered for workers like Arellano.

“If I don’t work, I have no money,” said the Lyft and Uber driver. “Everything is so expensive in Santa Clara and the Bay Area.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.


Source: The Tech Crunch

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