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I first covered Launch House in Oct 2020, when the co-founders described a strong focus on inclusion when creating hacker homes. A co-founder said then, “I wouldn’t say we’re the next Y Combinator, but the next YC would look something like that.” The company soon went onto raise venture funding for its vision of what a next-generation entrepreneurial ecosystem looks like, combining remote work’s benefits with the rising mindshare around “community.” It won over investment dollars from Andreessen Horowitz, Lightship, CAA co-founder Michael Ovitz, Electric Ant’s Chris Ovitz, 6th Man Ventures’ Mike Dudas and other angels.
Now, a Vox investigation this past week highlighted specific allegations around harassment, sexual assault and misuse of power at Launch House. The response has been complex. The irony with the “build in public” mindset is that, when allegations and scrutiny surface, privacy — or at least opacity — is back in vogue.
As DailyTech reports, some existing investors in the startup and its venture fund have issued public statements supporting the alleged victims and denouncing the alleged behavior described by Vox in its article about Launch House. Launch House, meanwhile, confirmed to DailyTech via a spokesperson that it is launching an independent, third-party investigation through a retained law firm.
Days after the investigation went live, Launch House held a town hall with some members of their community. Co-founder Michael Houck said that the startup “dropped the ball on responding to this quickly enough [and] with enough compassion … that isn’t reflective of the values that we’ve built this community on from day one and that we care about.”
“Put more simply, we absolutely should have met with you all sooner than today,” Houck added, “What I can say now is that we’re ready to speak and we have a plan.” The conversation focused on three topics: what Launch House says it has done in the past, what it will do in the future and how it plans to build back trust with female founders in their cohorts.
The Vox investigation, Launch House’s response both publicly and privately, as well as the community’s either outrage or silence over surfaced allegations is a reminder that community isn’t a buzzword. It’s a challenge. Some people may look at LH as a caricature of the “community-based VC-backed startup” trend, but this offers a real look at what happens when these “buzzy trends” meet a bull market, in a remote world, with limited checks and balances.
For the full story of key details in the private town hall, read my story: “Launch House holds private town hall, says investigation is underway.” For the investor and community reaction, read my story with Rebecca Szkutak, “Launch House’s community reacts to misconduct and harassment allegations.”
In the rest of this newsletter, we’re talking about Y Combinator’s paranoia, fund manager shifts and a follow-up on one of the pandemic startups admitting it’s wrong. Make sure to read the whole thing as I’ve snuck in a TC+ discount code, especially for Startups Weekly readers, in the post.
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Y Combinator is still paranoid
Y Combinator’s Michael Seibel, managing partner and head of the accelerator, is one of the most influential people in startups. He joined Equity to chat about the point of demo day, diversity challenges and competition.
Here’s why it’s important: Given the fact that YC doesn’t do a ton of press anymore, the interview clarified some misconceptions. More on DailyTech+ tomorrow, but in the meantime, here’s how he described the utility of demo days.
It’s hard for me to generalize on demo days. There’s a lot of different demo days out in the world, and I don’t really know how they work.
I would say YC’s Demo Day has two functions. The first is the obvious one, which is: present the companies and drive leads. The second is as a forcing function to the founders, right? Just [as] YC doesn’t necessarily need an application deadline. In fact, we read applications all year ‘round. But as a forcing function to [say] “Hey, there’s this date that we want to accomplish this thing by and it’s important,” [it] really, really helps the founders get up to top speed faster, as opposed to a more generalized system.
I would say [Demo Day] also helps the investors. If I’m an investor, and I’m talking to a company, and I know that they’re going to be raising [at] Demo Day in a week, I might make my decision a little faster. So one of the things we tell founders who go through YC is [that] different companies will leverage Demo Day differently. And that’s OK. It’s a tool and your job is to use it as best you can for your company.
Image Credits: Bryce Durbin
Figma exits
Adobe snapped up Figma for $20 billion, reminding us that M&A can, indeed, happen in 2022. As TC’s Ingrid Lunden reports:
The idea now will be to create a seamless connection between these and Figma, essentially building it out as the native platform to bring them all together. Adobe, of course, already had something like this, in the form of AdobeXD. It’s not clear what will happen when this deal closes. Indeed, whether all this will raise the attention of antitrust authorities will be worth watching: Adobe is already dominant in so many of the tools that are used, and now it will be the dominant player as well in the platform to bring in and provision all of these tools.
Here’s why it’s important: Massive acquisitions have a way with ripple effects. In this case, Adobe just joined forces with one of its biggest rivals in digital design. Figma will soon no longer be a private company and thus not have to share its specific financials, and Figma employees, assumedly, are going to be a whole new generation of angel investors. There are also a lot of investors who won out due to this exit; a homogenous bunch, another notes.
Image Credits: Firn (opens in a new window) / Getty Images
The follow-up
I’m experimenting with a new section in Startups Weekly, where each week we follow up with an old story or trend to see what’s changed since our first look. This week, we’re returning to look at Maven, a creator economy meets edtech play that has raised $25 million over two years.
Here’s what’s new: The live-learning platform announced a pivot this week. Instead of creating courses taught by creators, it is focusing on courses taught by experts. It’s another example of, when it comes to executing on community – this time in a learning sense – it can be challenging to execute. I appreciated the transparency of what they did wrong, and what’s new for the future.
“We had the hypothesis that a creator with a big audience will have a great course and be able to fill it and we were surprised that this hypothesis was wrong,” Kao said in an interview with DailyTech. “Just because somebody is a creator doesn’t mean that they will run a successful course. Instead, we were seeing tons of smaller instructors who were subject matter experts in their field and didn’t necessarily have big audiences, who wanted to put in the hustle and put in the effort … doing really well on the platform.”
Image Credits: Tim Robberts / Getty Images
Wait for it. See it? Yep, I’m excited too. And while we’re on the topic of housekeeping, some more notes:
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Seen on DailyTech
Codi lands $16 million, led by a16z, to prove that we never really actually liked co-working
Why this consumer investor is switching VC firms after making partner last year
Most fintechs partner with banks. Varo became one, and says it’s paying off
Twilio lays off 11% of its staff as it aims for profitability in 2023
Uber investigating cybersecurity incident after hacker breaches its internal network
Seen on DailyTech+
Now that the Ethereum Merge is behind us, what’s next?
Pitch Deck Teardown: Helu.io’s $9.8M Series A deck
VC fundraising gets weird as autumn nears
Have you marked down your portfolio yet? You are running out of time to hide
And that’s this week’s startup diary.