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The United States is experiencing a period of political stalemate, but activity at the state and local levels is actively shaping the regulatory landscape for technology companies. Propositions addressing a wide range of issues, from consumer practices and employment standards to specific chemical compounds, were put to a vote nationwide. The outcomes of these votes offer insight into potential future developments in numerous other locations.

A prime illustration of this trend is California’s Proposition 22, which was approved by voters and establishes new guidelines allowing companies such as Uber and Lyft to maintain their current operating model with drivers classified as independent contractors. Prior state legislation and subsequent legal challenges had sought to mandate the classification of many drivers as full-time employees. Megan Rose Dickey provides further details on the implications of this result:

Following the vote, the companies directly impacted saw increases in their stock values, and Uber is already planning to implement the successful campaign strategy internationally.

The 2020 US presidential election was the most technologically advanced in history; however, we will not delve deeply into it due to the limited number of relevant angles for startups. Nevertheless, if your organization is developing user policies related to political matters, consider this pre-election analysis by Taylor Hatmaker regarding the changes Facebook and Twitter have made to their policies since 2016.

Additional noteworthy items from our election coverage concerning startups:

Measures to legalize cannabis are poised to pass in five states

Portland, Maine has approved a referendum prohibiting the use of facial surveillance technology

Voters in Massachusetts have passed a right-to-repair measure, granting them unprecedented access to data from their vehicles

Calm’s engaging CNN advertising campaign significantly boosted the meditation app’s ranking in the App Store

VotingWorks, a nonprofit organization supported by Y Combinator, aims to restore confidence in election systems through the use of open-source technology

Separate from the election, another governmental development this week that may be pertinent to your startup is the SEC’s decision to allow companies to raise up to $5 million annually through equity crowdfunding, an increase from the previous limit of $1.07 million. Lucas Matney provides more information in Extra Crunch.

The next billion-dollar e-commerce company will be a B2B marketplace

Transactions between businesses present a greater level of intricacy when contrasted with consumer-focused commerce, encompassing elements like four distinct standard payment approaches, advanced financial instruments, volume purchasing discounts, agreed-upon contract pricing, delivery timelines, insurance provisions, and adherence to regulatory standards. Merritt Hummer from Bain Capital Ventures details these aspects in a comprehensive article for Extra Crunch:

Rather than relying on commission-based revenue from gross merchandise value, similar to Apple’s App Store model, thriving new businesses must explore alternative revenue streams. These could involve leveraging data insights, integrating financial services, implementing focused advertising campaigns, offering private-label merchandise, charging subscription fees, or collecting sampling fees. The following excerpt from Hummer elaborates on the latter:

How to Launch a Venture Capital Fund Without Significant Existing Wealth

The traditional obstacles to participating in venture capital are diminishing as investment in this area increases and the potential of technology continues to expand. It is increasingly feasible to establish your own fund even if you don't possess substantial personal wealth – however, numerous challenges will still need to be addressed. Connie Loizos interviewed limited partners and venture capitalists who are employing innovative strategies for TechCrunch this week:

Her reporting details several helpful suggestions, including:

Natasha Mascarenhas examines the factors driving the recent wave of acquisitions in this industry for Extra Crunch this week, noting how educational technology has transitioned from being a helpful addition to an essential component of learning during the pandemic. Further details regarding Course Hero’s purchase of Symbolab from a few weeks ago are also provided.

Regarding TechCrunch

Discover strategies for securing initial funding with TMV’s Soraya Darabi on November 10th.

There’s only a single week remaining to obtain early-bird tickets for TC Sessions: Space 2020.

Tim Ellis from Relativity Space will be participating in TC Sessions: Space 2020.

Across the week

TechCrunch:

China has delayed the massive initial public offering of Ant Group following a private meeting with Jack Ma.

Research indicates that cities offering ride-hailing options experience reduced instances of sexual assault.

The Mixtape podcast features a discussion on maintaining wellness during challenging times.

Residents of Florida may shortly observe jet-propelled ‘flying taxis’ in operation.

A UK report highlights the significant funding disparity encountered by founders from diverse backgrounds.

Extra Crunch:

Here are three recommendations for software-as-a-service (SaaS) entrepreneurs aiming to reach $1 million in annual recurring revenue.

A detailed look at the initial public offering documentation submitted by fintech company Upstart.

Four key observations regarding venture capital investment in the fintech sector during the third quarter of 2020.

An analysis of whether the market for fintech Series A funding is genuinely strong or simply receiving excessive attention.

Strategies for adopting a data-focused system to ensure employee compensation is just, fair, and clear.

#EquityPod: Fortnite is actually a SaaS company

From Alex Wilhelm:

Greetings and welcome to Equity, TechCrunch’s podcast dedicated to venture capital (now available on Twitter!), where we analyze the financial details behind current events.

It’s been a busy week here in the United States, with the election results still being finalized and a complete lack of stress among the population. Regardless, the Equity team – Danny, Natasha, Alex, and Chris – convened to discuss the latest developments in the startup and venture capital landscape:

• Initially, we covered several breaking news stories, including a lawsuit initiated by the U.S. government attempting to prevent the substantial Plaid-Visa acquisition. Additionally, reports indicated that Airbnb intends to submit its public S-1 filing early next week, signaling its IPO is proceeding.
• Our discussion then shifted to the gaming industry, prompted by an article examining the venture capital strategies involved in the creation and sale of video games. While our team held differing viewpoints, they unanimously agreed on the exceptional quality of Doom 3 before continuing.
• We then addressed Ant Group and the circumstances surrounding the postponement of its IPO. Fortunately, with Danny’s expertise, we were well-equipped to navigate this complex situation. It’s a complicated matter, to say the least.
• California’s Proposition 22 was approved, enabling companies like Uber, Instacart, and Lyft to continue classifying their gig workers as independent contractors rather than employees. Consequently, Uber and Lyft’s stock prices increased, while organizations representing gig workers affirmed that their advocacy efforts will continue.
• Natasha reported on a series of filings made by venture capital firms on Election Day. These included filings for Precursor Ventures Fund III, Hustle Fund II, and Insight Partner’s inaugural Opportunity Fund.
• Finally, despite the extended election period, the public markets are experiencing a rally. Could this lead to a surge in IPOs?
• And, remarkably, we managed to complete an entire episode without mentioning Maricopa County. Best wishes to everyone!

Equity is released every Monday at 7:00 a.m. PDT and on Thursday afternoons as quickly as possible, so be sure to subscribe on Apple Podcasts, Overcast, Spotify and other podcast platforms.