A recurring theme in some of my most enjoyed Monty Python sketches centers on the element of the unexpected.

This came to mind earlier today as we adjusted our editorial schedule to provide comprehensive reporting on DoorDash’s S-1 filing, examining it from several perspectives. Initially, Managing Editor Danny Crichton analyzed the potential financial gains for the company’s founders and its investors. Following that, Alex Wilhelm provided detailed coverage of the IPO announcement for TechCrunch, and subsequently authored an Extra Crunch piece investigating the impact of the COVID-19 pandemic on the home-delivery service’s recent expansion.

Our extensive coverage of DoorDash’s S-1 exemplifies the core purpose of Extra Crunch: to deliver prompt, insightful analysis of present and emerging technology trends, specifically for the benefit of entrepreneurs and those who invest in them. We benefit from having a skilled team, and as demonstrated by today’s reporting, they are both proficient and quick to respond.

The following articles represent a summary of Extra Crunch’s content from the past five days. These complete articles are exclusively available to subscribers, however, you can utilize the discount code ECFriday to receive a 20% reduction on a one- or two-year subscription. Further information can be found here.

Thank you for taking the time to read Extra Crunch this week. I wish you a pleasant weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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Why I left edtech and got into gaming

We often feature content from contributing writers, but this week included two articles presented from a first-person perspective, representing a slight change in our usual format.

In his article, Why I left edtech and got into gaming, Darshan Somashekar detailed the reasoning behind his choice to shift focus from an industry that experienced significant expansion throughout 2020.

His writing offers a distinctive viewpoint on two frequently discussed areas, while also providing insight into a founder and investor’s approach to assessing potential new ventures.

Andy Areitio, who is a partner at the early-stage investment firm TheVentureCity, authored What I wish I’d known about venture capital when I was a founder, a retrospective look at the common “errors” entrepreneurs often commit during the fundraising process.

He notes that “The primary errors – both number one and two – involve securing an inappropriate funding amount and pursuing it at an inopportune moment.” He also points out the risk of concentrating efforts on a single option prematurely, acknowledging his own past experience with this issue.

While guidance on effective business practices is readily available, we prioritize seeking out narratives grounded in concrete data or firsthand accounts, encompassing both achievements and setbacks.

How COVID-19 accelerated DoorDash’s business

DoorDash’s S-1 filing prominently features the impact of the coronavirus pandemic.

The food delivery service reports that a significant portion of the population has increased its reliance on restaurant delivery, with “58% of all adults and 70% of millennials” stating they are now more inclined to order food for delivery compared to two years prior, and that “the COVID-19 pandemic has further sped up these existing patterns.”

Similar to developments in other industries, the pandemic did not create these shifts from scratch; rather, it significantly accelerated pre-existing consumer preferences. The demand for convenience was already benefiting DoorDash, as the company’s gross order volume and revenue were already on a positive trajectory before the pandemic altered daily life.

Alex Wilhelm notes in a recent edition of The Exchange that “It’s up to you to weigh the various considerations and determine if you want to participate in the IPO, but this offering is expected to be substantial.”

 

The Venture Capitalists and Founders Benefiting from DoorDash’s IPO

The release of DoorDash’s S-1 filing occurred unexpectedly, prompting Danny Crichton to analyze the financial gains expected from the country’s leading food delivery service.

Following an assessment of the equity value held by DoorDash’s four original founders, his analysis extended to the investors involved in funding rounds from the seed stage through Series H.

This initial public offering is poised to significantly benefit several growth funds, with each founder also projected to realize substantial profits in the hundreds of millions of dollars.

Despite these considerable returns, the approximately $1.3 billion total represents a reduction in potential earnings for the founders, reflecting the extensive capital raised by the company throughout its history and the resulting dilution of ownership.

 

Fintech Venture Capital Investments are Increasing in Size, Stage, and Cost

During the third quarter of 2020, significant capital flowed from investors into fintech companies at a later stage of development, as detailed by Alex Wilhelm in today’s edition of The Exchange. These substantial investment rounds could indicate a reduction in possibilities for companies in their initial phases.

Venture capital funding for fintech in both Europe and North America is potentially on track to reach an all-time high in 2020. However, the question arises whether this influx of large, late-stage funding could negatively impact the ability of new fintech startups to launch and grow.

 

Accelerator Programs Adapt to Changes Brought on by the Pandemic

Devin Coldewey spoke with the heads of three startup accelerator programs to understand how they have been adjusting their operations in recent months:

• David Brown, founder and CEO of Techstars
• Cyril Ebersweiler, founder of HAX and venture partner at SOSV
• Daniela Fernandez, founder of Ocean Solutions Accelerator

The programs have all transitioned to a virtual format in response to travel restrictions, stay-at-home directives, and general uncertainty. However, accelerators are fundamentally intensive programs created to immerse founders in a learning environment and encourage direct, candid feedback.

Despite this rapid change in delivery, the rigorous, bootcamp-style approach remains a core component, as Devin reports.

Fernandez noted that eliminating commuting time in urban areas allows founders to dedicate more time to workshops, mentor connections, pitch refinement, and other crucial activities. She also highlighted the increased flexibility and sense of calm this provides.

Ebersweiler observed that participants seem to be more engaged and offer more feedback in a virtual setting, which he described as a surprising phenomenon.

Greylock’s Asheem Chandna on ‘shifting left’ in cybersecurity and the future of enterprise startups

During a recent conversation with Greylock partner Asheem Chandna, Managing Editor Danny Crichton began by exploring the growing popularity of no-code platforms and the current landscape of early-stage enterprise startups, which then led to a discussion regarding the “shift left” approach to security:

Chandna explained that organizations are currently focused on accelerating their software release cycles while simultaneously enhancing the security of their applications.

He noted a strong and increasing focus on improving software security, leading to the adoption of the shift left principle – integrating security measures directly into the software development process.

 

Square and PayPal earnings bring good (and bad) news for fintech startups

Those who didn't read Wednesday's edition of The Exchange will find that Alex analyzed the financial reports of both PayPal and Square to forecast potential outcomes for a number of fintech startups that are currently preparing to launch.

He utilized recent data from Square and PayPal regarding share buybacks, credit card activity, and overall consumer spending patterns as an indicator, aiming to “determine what insights can be gained and to which highly valued private companies these findings may be relevant.”

 

Discrepancies within California’s trade secret regulations concerning customer lists are generating ambiguity

Within the state of California, agreements restricting competition are generally unenforceable, and a judicial decision has established that lists of customer contacts do not qualify as trade secrets.

Nevertheless, this does not automatically grant sales professionals who change employment the freedom to immediately begin contacting their previous clients upon starting their new position.

Prior to leaving a current role – or recruiting a salesperson who has already transitioned – it is important to review this summary of California’s regulations pertaining to trade secrets.

According to Nick Saenz, a partner at Lewis & Llewellyn LLP specializing in employment and trade secret matters, a previous employer can substantially impede a departing salesperson’s professional advancement even in the absence of legal action.

How will edtech companies fare as investor sentiment shifts?

The announcement of a promising COVID-19 vaccine coincided with a decrease in the stock values of three prominent publicly listed edtech businesses. Specifically, 2U, Chegg, and Kahoot experienced drops in price of approximately 20%, 10%, and 9% respectively, following the news.

Is the boost edtech received during the COVID-19 pandemic beginning to fade, or was the recent market adjustment a response to a perception that edtech has been excessively promoted in recent times?

 

Dear Sophie: What does a Biden win for tech immigration?

How will the election results impact U.S. immigration policies and potential changes to the immigration system?

I work in the technology sector in San Francisco and have numerous colleagues and acquaintances who are immigrant entrepreneurs, as well as many international team members within my organization. What developments might we anticipate?

— Awaiting News in Albany