News & Press

Briq, the next building block in tech’s reconstruction of the construction business, raises $3 million

Bassem Hamdy has been in the construction business for a long time.

He spent the last few years at the construction software business Procore, now a $3 billion dollar company developing technology for the construction industry, and now Hamdy is ready to unveil his next act as chief executive and co-founder of Briq, a new software service for the industry.

Hamdy started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to reach its status as a construction industry unicorn. And the company has just raised $3 million in financing to fund its expansion.

“With enough secondaries you can afford to make your own decisions,” Hamdy says. 

His experience in construction dates back to his earliest days. Hailing from a family of construction engineers Hamdy describes himself as a black sheep who went into the financial services industry — but construction kept pulling him back.,

Beginning in the late nineties with CMIC, which was construction enterprise resource planning, and continuing through to Procore, Hamdy has had success after success in the business, but Briq is the culmination of all of that experience, he says. 

“As much as data entry helps people it’s data intelligence software that changes things,” says Hamdy. 

Briq chief executive Bassem Hamdy

The Santa Barbara, Calif.-based company is part of a growing number of Southern California technology startups building businesses to service large swaths of specific industries — specifically real estate and construction.

Already, Procore is a $3 billion behemoth, and ServiceTitan has become a billion dollar company as well, with its software and services for air conditioning and appliance repairmen.

Now Bassem’s Briq, with backing from Eniac Ventures and MetaProp NYC, is hoping to join their ranks.

“Bassem built and helped run the most successful construction software businesses in the world. It is rare and humbling to have an opportunity to help build a company from the ground up with an industry legend,” says Tim Young, Founding General Partner at Eniac Ventures . “The technology Bassem and his team are building will do something the industry has never seen before: break down data silos to leverage information in real time. Bassem has built and run the most successful construction software businesses in the world, and his knowledge of the construction space and the data space is second to none.”

The company, formerly called Brickschain, uses a combination of a blockchain based immutable ledger and machine learning tools to provide strategic insights into buildings and project developments.

Briq’s software can predict things like the success of individual projects, where demand for new projects is likely to occur and how to connect data around construction processes.

Briq has two main offerings, according to Hamdy. ProjectIQ, which monitors and manages individual projects and workflows — providing data around different vendors involved in a construction project; and MarketIQ, which provides market intelligence around where potential projects are likely to occur and which projects will be met with the most demand and success.

Joining Hamdy in the creation of Briq is Ron Goldschmidt, an experienced developer of quantitative-based trading strategies for several businesses. Hamdy, a former Wall Streeter himself has long realized the power of data in the construction business. And with the new tools at his disposal — including the blockchain based ledger system that forms the backbone of Briq’s project management software, Hamdy thinks he has developed the next big evolution in technology for the industry.

Briq already counts Webcore, a major contractor and developer, as one of its clients along with Kobayashi, Probuild, Hunter Roberts OEG, and Gartner Builders. In all, the company has contracts with nearly twelve different developers and contractors.

All of the insights that Briq can provide through its immutable ledger can add up to big savings for developers. Hamdy estimates that there’s roughly $1 trillion in waste in the construction industry.

Briq relies on IBM’s Hyperledger for its blockchain backbone and through that, the company has a window into all of the decisions made on a project. That ledger forms the scaffolding on which Briq can build out its projections and models of how much a building will cost, and how could conceivably made on a project.

“Construction and infrastructure are integral to society, but the decision-making process behind how, when, where, and why we build is no longer working,” said Briq Co-Founder & CEO Bassem Hamdy, in a statement. “We aren’t just solving a construction problem, we are solving a societal problem. If we are to meet the infrastructure needs of both the developed and developing world, we must improve our decision-making and analysis around the data we have. We are thrilled to have the support of Eniac Ventures as we enter the next phase of our journey.”

 

 

Twitter co-founder Ev Williams to step down from the company’s board

Ev Wiliams, a co-founder of Twitter and the social media business’s former chief executive officer, is stepping down from its board of directors effective at the end of the month, according to documents submitted to the U.S. Securities and Exchange Commission on Friday, first reported by CNBC.

In a series of tweets, Williams addressed the news.

“I’m very lucky to have served on the board for 12 years (ever since there was a board),” he wrote. “It’s been overwhelmingly interesting, educational—and, at times, challenging… Thank you, and for starting this crazy company with me—and continuing to make it better and better. And to my fellow board members, new and old—some of the most thoughtful people I’ve ever known.”

Wiliams, the founder and CEO of online publishing platform Medium and co-founder and partner at Obvious Ventures, served as Twitter’s chief executive from 2008 to 2010 following Jack Dorsey’s, Twitter’s current CEO, original stint as CEO. Williams was succeeded by Dick Costolo, who after a five-year stint at the helm, relinquished the throne back to Dorsey.

Twitter’s board of directors includes Bret Taylor, president and chief product officer at Salesforce; Debra Lee, president and CEO of BET Networks; and executive chairman Omid Kordestani.

Twitter’s stock closed up 3 percent Friday, trading at nearly $32 a piece for a market cap of north of $24 billion.

Latchel wants to make maintenance easier for landlords and property managers

Relationships between landlords and their tenants don’t need to be fraught ones. With Y Combinator -backed Latchel, landlords and property managers can access a 24/7 maintenance service that takes requests from tenants and deploys the right professional to fix the things that need fixing.

At first we thought of doing a high-tech property management system,” Latchel founder Ethan Lieber told TechCrunch. “As we looked more into it and talked to other property management companies, maintenance kept coming up as a problem. So we decided to focus on maintenance.”

Latchel has a bunch (of handypeople — all vetted and with at least two years of experience –in its network that it relies on for work inside buildings. In some cases, however, larger property management groups already have people they like to work with. At that point, Latchel simply takes over the relationship and coordinates between the handypeople and residents. In the event Latchel’s on-demand team of vetted handypeople cannot troubleshoot the issue, Latchel deploys one of the 3K+ contractors on its platform.

“It’s such a hard industry to get positive reviews from tenants in,” Lieber said. “You’re basically talking about someone in an emergency situation — not getting heat, the toilet is overflowing, etcetera. If you’re not handling it well, it exacerbates. If you can communicate the right things to the right people at the right time, it absolves that exacerbation.”

Still, the real estate space is unique and hard to acquire customers, Lieber said. Right now, while Latchel does support larger property managers, it’s focused on the DIY landlords — the ones who may be managing buildings in their “spare” time or as a second job. In order to support the growth of DIY landlord customers, Latchel is looking to build its contractor network. Part of its sell to contractors is the constant stream of work that results from Latchel’s relationships with property managers and landlords.

In March 2018, Latchel was running its service on 2,000 units. Today, Latchel supports 27,500 units across 50 cities in the U.S. and has been adding about 4,000 to 5,000 new units a month. That averages out to about 250 units per customer, Lieber said. Looking into next month, Latchel wants to add an additional 6,000 units. The month after, it wants to add an additional 9,000.

The cost of Latchel depends on the service level and the number of units. If a landlord or property manager just want basic services (tenant calls, coordination of emergency work) for after-hours coverage, Latchel charges a $25 account fee and then 80 cents per unit per month.

Currently, Latchel is conducting a beta test with properties that have fewer than 10 units to guarantee a maximum price of services per unit, Lieber said. If Latchel is unable to negotiate a good enough price for the contractor, Latchel will reimburse customers for any costs over the guaranteed max price.

Since launching its full-service solution last March, Latchel says its average tenant review is 4.7 out of 5 stars. In all, Latchel says it has reduced the amount of time spent on maintenance to 15 minutes per day for property management companies with 100 units or fewer.

Elon Musk finally hosted meme review with the co-creator of Rick and Morty

Tesla and SpaceX CEO Elon Musk has been teasing — and his fanbase has been making pleas — to host a meme review. And after tweeted hints, meme review has arrived via YouTube star PewDiePie.

Musk tweeted last month a photo and a question “Host meme review?”

On Friday, Musk and Justin Roiland, one of the creators of Adult Swim’s Rick and Morty, appeared on YouTuber PewDiePie’s show for a meme review.

During the segment, Musk and Roiland rate various memes, like the one pictured below, The pair provide commentary and funny quips.

It looks like Musk and Roiland’s appearance has helped push PewDiePie above T-Series, an Indian music company on YouTube that has had the most subscribers.  PewDiePie now has about a 20,000 subscriber lead.

The final meme, which pictures what appears to be a dead deer at the bottom of a pool, is what pushes Musk over the edge when he asks, “Jeez is that true? What, that actually happened? Oh my god,” as he bursts into fits of uncomfortable laughter.

You can watch the whole episode that PewDiePie uploaded on February 22 or skip to about minute 13 for Musk and Roiland.

 

Apple confirms its plans to close retail stores in the patent troll-favored Eastern District of Texas

Apple has confirmed its plans to close retail stores in the Eastern District of Texas – a move that will allow the company to better protect itself from patent infringement lawsuits, according to Apple news sites 9to5Mac and MacRumors which broke the news of the stores’ closures. Apple says that the impacted retail employees will be offered new jobs with the company as a result of these changes.

The company will shut down its Apple Willow Bend store in Plano, Texas as well as its Apple Stonebriar store in Frisco, Texas, MacRumors reported, and Apple confirmed. These stores will permanently close up shop on Friday, April 12. Customers in the region will instead be served by a new Apple store located at the Galleria Dallas Shopping Mall, which is expected to open April 13.

Apple did not comment on the stores’ dates of closure or the new store’s opening.

However, it’s common for Apple to leave little downtown during retail stores transitions – though most closures are related to renovations or other reasons that aren’t about trying to escape patent lawsuits.

The Eastern District of Texas had become a popular place for patent trolls to file their lawsuits, though a more recent Supreme Court ruling has attempted to crack down on the practice. The court ruled that patent holders could no longer choose where to file.

Apple has had to make big payouts to patent trolls in recent years: $625.6 million to patent holding firm VirnetX in 2016 over protocol patents; VirnetX won $368 million from Apple in 2013; and more recently $502.6 million over four communication patents.

VirnetX tends to be referred to as a “patent troll” because it makes most of its revenue by suing tech companies. In addition to Apple, it sued Microsoft over patents in Skype and has been in litigation with Cisco. Its cases and subsequent wins are often held up as another example of how patent law in the U.S. is in need of reform.

The Apple store closures could have had a notable impact on area jobs, had Apple not offered new positions to its retail staff.

Apple today employs 1,000 people in the Dallas-Fort Worth area, which has been an increase of 33 percent in the past five years.

The company also recently invested almost $30 million in its Dallas area stores.

Outside the metro, Apple is also investing in Texas with its $1 billion for the new campus in Austin, which will accommodate an additional 5,000 employees on top of the 6,200 already in the area.

A rep for Apple confirmed the stores’ closures in a statement, but wouldn’t comment on the company’s reasoning:

“We’re making a major investment in our stores in Texas, including significant upgrades to NorthPark Center, Southlake and Knox Street. With a new Dallas store coming to the Dallas Galleria this April, we’ve made the decision to consolidate stores and close Apple Stonebriar and Apple Willow Bend. All employees from those stores will be offered positions at the new Dallas store or other Apple locations.”

 

Report: Zoom, the video conferencing company, may be a public company as early as April

The video conferencing company Zoom is aiming to file a public S-1 by the end of March, according to a new report in Business Insider that adds the company could go public as soon as April.

Business Insider reported last month that Zoom had filed confidentially with the SEC to go public, just months after Reuters reported that the San Jose-based company had chosen the investment bank Morgan Stanley to lead its eventual IPO.

Zoom was valued at $1 billion when it raised it last funding in 2017 in the form of a $100 million check from Sequoia Capital. Reuters sources however said they expect the company to be valued at several billion dollars at the IPO.

The company, founded in 2011, has raised $145 million altogether, including from Emergence Capital and Horizons Ventures. Its earliest backers include Qualcomm Ventures, Yahoo founder Jerry Yang, WebEx founder Subrah Iyar, and former Cisco SVP and General Counsel Dan Scheinman, who has been an active angel investor in recent years.

We had a chance to sit down with CEO Eric Yuan last year at a small industry event hosted by the venture firm NextWorld Capital. He talked about coming to the United States as a student from China and applying for a U.S. visa nine times over the course of two years before finally receiving it and arriving in Silicon Valley in 1997. We also talked about his experience as the 10th employee of WebEx, and his frustration that the company’s code remained stubbornly unchanged after it was sold for $3.2 billion to Cisco in 2007.

He wasn’t alone, clearly. When Yuan struck out on his own to found Zoom, fully 45 employees from WebEx joined him, a decision for which they’re likely thankful now. Financial rewards aside, Yuan was ranked at the top of Glassdoor’s annual list of best-rated CEOs last year.

We’ll be able to take a deeper dive into the health of Zoom once its reported S-1 is made public. In the meantime, you can check out our chat here.

Fortnite goes big on esports for 2019 with $100 million prize pool

Epic Games, maker of the ultra popular Battle Royale game Fortnite, is putting up another $100 million in prize cash for competitive tournaments in 2019.

The company made waves in the esports world last year, announcing $100 million prize pool for the 2018 competitive year, dwarfing every other competitive title in one fell swoop.

This year, a significant portion of the $100 million will be awarded to participants of the first-ever Fortnite World Cup. Each of the 200 players who qualify and compete will walk away with at least $50,000, with the winner taking home $3 million.

The Fortnite World Cup will take place July 26 – 28 in New York City, offering $30 million total in prizes. One-hundred of the top solo players will be invited, along with the top 50 duos teams.

So how do you get in on this?

Fortnite is holding weekly open online qualifiers, each worth $1 million, from April 13th to June 16th. Eligible players who consistently place well will have a shot at being one of those top 200 players.

This announcement comes at an interesting time for Fortnite. While the game still reigns supreme in terms of popularity, other Battle Royale games are picking up traction. Apex Legends (an EA and Respawn title), in particular, is growing in popularity. Several of the top Twitch streamers, including Ninja, Shroud, Timthetatman, High Distortion and Annemunition have started playing more Apex and participated in the first Apex Legends Twitch Rivals tournament.

Keeping the attention of these streamers is surely a priority for Fortnite, and for a game that pulls in some $300 million a month in in-game purchases, spending $100 million a year is a small price to pay.

Pinstagram? Instagram code reveals Public Collections feature

Instagram is threatening to attack Pinterest just as it files to go public the same way the Facebook-owned app did to Snapchat. Code buried in Instagram for Android shows the company has prototyped an option to create public “Collections” to which multiple users can contribute. Instagram launched private Collections two years ago to let you Save and organize your favorite feed posts. But by allowing users to make Collections public, Instagram would become a direct competitor to Pinterest.

Instagram public Collections could spark a new medium of content curation. People could use the feature to bundle together their favorite memes, travel destinations, fashion items, or art. That could cut down on unconsented content stealing that’s caused backlash against meme “curators” like F*ckJerry by giving an alternative to screenshotting and reposting other people’s stuff. Instead of just representing yourself with your own content, you could express your identity through the things you love — even if you didn’t photograph them yourself. And if that sounds familiar, you’ll understand why this could be problematic for Pinterest’s upcoming $12 billion IPO.

The “Make Collection Public” option was discovered by frequent TechCrunch tipster and reverse engineering specialist Jane Machun Wong. It’s not available to the public, but from the Instagram for Android code, she was able to generate a screenshot of the prototype. It shows the ability to toggle on public visibility for a Collection, and tag contributors who can also add to the Collection. Previously, Collections was always a private, solo feature for organizing your bookmarks gathered through the Instagaram Save feature Instagram launched in late 2016.

Instagram told TechCrunch “we’re not testing this” which is its standard response to press inquiries about products that aren’t available to any public users, but that are in internal development. It could be a while until Instagram does start experimenting publicly with the feature and longer before a launch, and the company could always scrap the option. But it’s a sensible way to give users more to do and share on Instagram, and the prototype gives insight into the app’s strategy. Facebook launched its own Pinterest -style shareable Sets in 2017 and launched sharable Collections in December.

Currently there’s nothing in the Instagram code about users being able to follow each other’s Collections, but that would seem like a logical and powerful next step. Instagrammers can already follow hashtags to see new posts with them routed to their feed. Offering a similar way to follow Collections could turn people into star curators rather than star creators without the need to rip off anyone’s content. Speaking of infuencers, Wong also spotted Instagram prototyping IGTV picture-in-picture so you could keep watching a long-form video after closing the app and navigating the rest of your phone.

Instagram lets users Save posts which can then be organized into Collections

Public Collections could fuel Instagram’s commerce strategy that Mark Zuckerberg recently said would be a big part of the roadmap. Instagram already has a personalized Shopping feed in Explore, and The Verge’s Casey Newton reported last year that Instagram was working on a dedicated shopping app. It’s easy to imagine fashionistas, magazines, and brands sharing Collections of their favorite buyable items.

It’s worth remembering that Instagram launched its copycat of Snapchat Stories just six months before Snap went public. As we predicted, that reduced Snapchat’s growth rate by 88 percent. Two years later, Snapchat isn’t growing at all, and its share price is at just a third of its peak. With over 1 billion monthly and 500 million daily users, Instagram is four times the size of Pinterest. Instagram loyalists might find it’s easier to use the ‘good enough’ public Collections feature where they already have a social graph than try to build a following from scratch on Pinterest.

Sebastian Thrun initiates aggressive plan to transform Udacity

“I’m a fighter. I believe in our people, I believe in our mission, and I believe that it should exist and must exist.”

Sebastian Thrun is talking animatedly about Udacity, the $1 billion online education startup that he co-founded nearly eight years ago. His tone is buoyant and hopeful. He’s encouraged, he says over an occasionally crackly phone call, about the progress the company has made in such a short time. There’s even a new interim COO, former HP and GE executive Lalit Singh, who joined just days ago to help Thrun execute this newly formed strategy.

That wasn’t the case four weeks ago.

In a lengthy email, obtained by TechCrunch, Thrun lobbed an impassioned missive to the entire company, which specializes in “nanodegrees” on a range of technical subjects that include AI, deep learning, digital marketing, VR and computer vision.

It was, at times, raw, personal and heartfelt, with Thrun accepting blame for missteps or admitting he was sleeping less than four hours a night; in other spots the email felt like a pep talk delivered by a coach, encouraging his team by noting their spirit and tenacity. There were moments when he exhibited frustration for the company’s timidness, declaring “our plans are ridden of fear, of trepidation, we truly suck!” And moments just as conciliatory, where he noted that “I know every one of you wants to double down on student success. I love this about us.”

Thrun has sent spirited emails before. Insiders say it’s not uncommon and that as a mission-driven guy he often calls on employees to take risks and be creative. But this one stood out for its underlying message.

If there was a theme in the email, it was an existential one: We must act, and act now or face annihilation.

“It was a rallying cry, to be honest,” Thrun told TechCrunch. “When I wrote this email, I really wanted to wake up people to the fact that our trajectory was not long-term tenable.”

“I can tell you that I woke up the troops, that is absolutely sure,” he said later. “Whether my strategy is sound, only time can tell.”

Udacity founder Sebastian Thrun speaks onstage during TechCrunch Disrupt SF 2017 at Pier 48 on September 19, 2017 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)

Thrun said the past month has been transformative for the company. “It was a tough moment when I had to look at the business, look at the financials, look at the people in the company,” Thrun said, adding, “And the people in the company are amazing. I really believe in them, and I believe that they’re all behind the mission.”

A tough year

Part of Udacity’s struggles were borne out of its last funding round in 2015, when it raised $105 million and became a unicorn. That round and the valuation set high expectations for growth and revenue.

But the company started hitting those targets and 2017 became a breakout year.

After a booming 2017 — with revenue growing 100 percent year-over-year thanks to some popular programs like its self-driving car and deep learning nanodegrees and the culmination of a previous turnaround plan architected by former CMO Shernaz Daver — the following year fizzled. Its consumer business began to shrink, and while the production quality of its educational videos increased, the volume slowed.

“In 2018, we didn’t have a single a blockbuster,” Thrun said. “There’s nothing you can point to and say, ‘Wow, Udacity had a blockbuster.’ “

By comparison, the self-driving car engineering nanodegree not only was a hit, it produced a successful new company. Udacity vice president Oliver Cameron spun out an autonomous vehicle company called Voyage.

Udacity CEO Vishal Makhijani left in October and Thrun stepped in. He took over as chief executive and the head of content on an interim basis. Thrun, who founded X, Google’s moonshot factory, is also CEO of Kitty Hawk Corp., a flying-car startup.

His first impression upon his return was a company that had grown too quickly and was burdened by its own self-inflicted red tape. Staff reductions soon followed. About 130 people were laid off and other open positions were left vacant, Thrun said.

Udacity now has 350 full-time employees and another 200 full-time contractors. The company also has about 1,000 people contracted as graders or reviewers.

An emphasis, when I rejoined, was to cut complexity and focus the company on the things that are working,” he said. 

One area where Udacity seemed to excel had also created an impediment. The quality of Udacity’s video production resulted in Hollywood-quality programming, Thrun said. But that created a bottleneck in the amount of educational content Udacity could produce.

Udacity’s content makers — a staff of about 140 people — released nearly 10 nanodegrees in 2018. Today, as a result of cuts, only 40 content creators remain. That smaller team completed about five nanodegrees in the first quarter of 2019, Thrun said.

Last year, it took between 10 to 12 people, and more than $1 million, to build one nanodegree, Thrun said. “Now it’s less than 10 percent of that.”

The company was able to accomplish this, he said, by changing its whole approach to video with taping, edits and student assessments happening in real time.

Udacity, under Thrun’s direction, has also doubled down on a technical mentorship program that will now match every new student with a mentor. Udacity has hired about 278 mentors who will work between 15 and 20 hours a week on a contract basis. The company is targeting about 349 mentors in all.

Students are also assigned a cohort that is required to meet (virtually) once a week.

Thrun described the new mentor program as the biggest change in service in the entire history of Udacity. “And we literally did this in two weeks,” he said. 

The strategy has met with some resistance. Some employees wanted to test the mentorship program on one cohort, or group of students, and expand from there. Even since these recent changes, some employees have expressed doubts that it will be enough, according to unnamed sources connected to or within the company.

Even Thrun admits that the “fruit remains to be seen,” although he’s confident that they’ve landed on the right approach, and one that will boost student graduation rates and eventually make the company profitable.

“If you give any student a personalized mentor that fights for them, and that’s the language I usually use, then we can bring our graduation rate, which is at about 34 percent to 60 percent or so,” he said. “And for online institutions 34 percent is high. But we have programs in that graduate more than 90 percent of our students.”

Udacity doesn’t share exact numbers on post-graduation hiring rates. But the company did say thousands of Udacity alumni have been hired by companies like Google, AT&T, Nvidia and others in the U.S., Europe, India and China.

In the U.S. and Canada, graduates with new jobs reported an annual salary increase of 38 percent, a Udacity spokesperson shared.

Indeed, Udacity has had some successes despite its many challenges.

Bright spots

Udacity has continued to increase revenue, although at a slower rate than the previous year-over-year time period. Udacity said it generated $90 million in revenue in 2018, a 25 percent year-over-year increase from 2017.

Udacity had informally offered enterprise programs to clients like AT&T. But in September, the company made enterprise a dedicated product and hired a VP of sales to bring in new customers.

Udacity has added 20 new enterprise clients from the banking, insurance, telecom and retail sectors, according to the company. There are now 70 enterprise customers globally that send employees through Udacity programs to gain new skills.

It continues to expand its career services and launched 12 free courses, built in collaboration with Google, with nearly 100,000 enrollments. It has also funded more than 1.1 million new partial and full scholarships to its programs for students across North America, Europe, the Middle East and Asia. About 21% of all Udacity Nanodegree students in the Grow with Google program in Europe have received job offers, according to Google.

The company also has a new initiative in the Middle East, where it teaches almost a million young Arab people how to code, Thrun said, an accomplishment he says is core to his mission.

Udacity isn’t profitable yet on an EBITDA basis, Thrun shared, but the “unit economics per students, and on a gross margin basis, are good.”

Now, it comes down to whether Thrun’s push to become faster, more efficient and nimble, all while investing in student services and its enterprise product, will be enough to right the ship.

“I really believe if you can get to the point that students come to us and we bend over backwards to ensure their success, we will be a company that has a really good chance of lasting for a lifetime,” he said. 

And if it doesn’t work, then we’ll adjust, like any other company. We can always shift.”

Verified Expert Lawyer: José Ancer

José Ancer is first of all a startup lawyer, with a client portfolio of startups of various stages based around Texas and other similar ecosystems outside of Silicon Valley. He’s also the CTO of Egan Nelson LLP, a boutique firm, where he actively is also building automation software to help the firm compete against larger firms. He also writes on his blog “Silicon Hills Lawyer” publicly and pointedly about his profession — and often takes shots at certain practices common among startup law firms, including Silicon Valley firms. You can get a sense of what’s in the full interview via these excerpts.


On not being “owned” by VCs and repeat players

“José has a depth of expertise in startup/company formation/funding issues and is very founder-friendly. He was able to guide us through our seed stage while staying efficient and keeping the billing reasonable.” Mary Haskett, Austin, Texas, CEO, Blink Identity

“I believe, and our clients would confirm, that independence from the VC/repeat player community, combined with deep knowledge of startup financing and high-stakes corporate governance (board issues), allows us to say things, do things, and even write things (on my blog) that the startup community absolutely needs to see and hear, but that “captive” lawyers have been unwilling to offer because of the very real risk of retaliation from influential money players who refer them business. I’ve become a bit of a bête noire of lawyers who’ve built their practices by flouting conflicts of interest and working as company counsel despite being “owned” by VCs across the table.”

On early-stage and being “right-sized”

“I wrote a blog post called ‘The Problem With Chasing Whales.’ It talks about this problem of entrepreneurs hiring law firms that are overkill for what they’re building. We’ve had a lot of clients switch to us from the marquee law firm names, and while the largest complaint is cost — our rates are hundreds of dollars an hour lower because we keep our overhead very lean, while still having top-tier lawyers and lean infrastructure for scalability — another common complaint is responsiveness. You’ve got a million dollar convertible note deal that you need to get done, and to you and your employees, that deal is the world, but the BigLaw lawyer you’re working with has IPOs and unicorn deals pushing your deal to the back of the line. It’s a real problem. Our target profile client exits under $300M in a private deal; which is a type of startup that we think has been very underserved by the traditional hyper-growth oriented law firms in the market.”

On legal technology and automation

“I spend a lot of time talking to legal tech entrepreneurs, because efficiency via legal tech has always been a core value proposition of our firm. As I’ve reviewed and contemplated various tools, one thing I’ve always come back to is this unavoidable tension between flexibility and automation. Software, even cutting edge machine learning, can only handle a minimal level of variation before it breaks down and becomes more hassle (and cost) than it’s worth… Some firms have opted to lean very heavily on the fast automation and standardization side, and accept the rigidity that it inevitably introduces into their workflows… We’ve consciously gone a different direction… Our clients tend to think that constraining the advice startups get by boxing it into inflexible software (and pricing) is not only a penny-wise, pound-foolish confusion of priorities; it’s also exactly the kind of approach that benefits investors at the expense of one-shot common stockholders.”

Below, you’ll find the rest of the founder reviews, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey we have open and our own research. If you’re a founder trying to navigate the early-stage legal landmines, be sure to check out our ongoing series lawyer interviews, plus in-depth articles like this checklist of what you need to get done on the corporate side in your first years as a company.


The Interview

Eric Eldon: You’re pretty outspoken about the state of startup law these days. Break it down for me: what is Egan Nelson doing differently from the other law firms out there?

José Ancer: If you look at the startup legal market, everyone knows the marquee, high priced firms. They represent Facebook, Uber, Palantir, Apple, etc. But when you pay those firms $700 an hour, as an example, 25% ballpark is going to compensation for the lawyers doing the main work. 75% is paying for other stuff. So then the question obviously becomes, how much of that other stuff is really necessary?

Our view is that there’s this segment of the startup market, and I call them non-unicorns, that is far more serious and scaled than what a tiny firm or solo lawyer can handle, but for whom BigLaw is completely overkill. We see these companies a lot more in places like Austin, Denver, Seattle, New York, etc., and it’s why our focus is on those markets. 

If you look at our lawyers’ credentials, you’ll see a whole lot of Stanford, Yale, Harvard, etc., as well as marquee firm alumni. What you won’t find at our firm is ludicrously expensive office space, cute events that have nothing to do with legal counsel, or armies of staff that don’t deliver real value to the end-service for clients.

Our legal talent is paid very well, but our overhead infrastructure is designed for companies that sell as a private company for under $300 million, or perhaps operate indefinitely as profitable companies. These are “startups” that might be derisively labeled as “doubles” or “singles” in parts of Silicon Valley, but we think have been substantially underserved by the market.

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