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Tag: funding

  • Student mental health is still suffering–how should we address it?

    Student mental health is still suffering–how should we address it?

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    Key points:

    Between March 2020 and March 2021, K-12 schools in the U.S. saw an unprecedented influx in federal government aid, totaling nearly $190 billion. This funding aimed to help students recover both academically and emotionally from the pandemic. School districts across the country utilized these grants to hire counselors, social workers, psychologists, and other care providers. In theory, this should have been transformative; however, the available workforce wasn’t large enough to meet the demand, and traditionally underserved and rural districts faced the brunt of this shortage.

    Subsequent follow-up funding has been deployed by the federal government in a necessary step to increase the workforce of care providers. As these funding opportunities come to a close, many districts are still left struggling to adequately address their students’ mental health needs.

    According to the CDC, more than one in three high school students experienced poor mental health during the pandemic, but in reality, the rate of U.S. students struggling with these challenges was rising even before COVID. The pandemic’s disruption to students’ schooling and development only exacerbated mental health issues, resulting in worsening anxiety, depression, and behavioral issues. As funds such as ESSER come to a close, schools that were able to increase care teams or introduce new mental well-being initiatives are now facing a funding cliff. The impact of this is predictable: Students will suffer as staff and programs are cut. To address this problem, the U.S. education system must look to alternative solutions.

    Expanding beyond traditional approaches

    Counselors, social workers, and school psychologists are the most impactful front-line resources available for supporting student mental well-being; however, these professionals are saddled with huge caseloads and demands beyond their normal purview. For example, according to a 2020 survey of 7,000 school counselors, many were required to serve as substitute teachers, perform temperature checks, and take on other tasks as a result of the COVID-19 crisis. To improve mental health support to students, we have to expand our narrow perception of what care can look like.

    Looking beyond a traditional western medicine approach, school districts should consider adopting solutions such as peer-to-peer counseling, where students who have been trained can meet to support one another and address personal, social, or emotional challenges. Peer-to-peer counseling empowers students to become stakeholders in their mental health while also providing benefits such as cultural relevance, early intervention, crisis prevention, and social-emotional skill development. This effective strategy is strongly advocated for by California’s Children Trust, which has worked tirelessly over the past few years to make peer-to-peer support reimbursable for California schools through Medi-Cal, the state’s Medicaid program.

    Additionally, utilizing a community-based collaborative care model can further bolster a school system’s mental health resources. This type of approach is not meant to replace the role of trained mental health professionals, but it can provide Multi-Tiered System of Supports (MTSS) Tier 1 and 2 for large student populations. An effective initiative of this kind may look like inviting vetted community leaders to come in and offer culturally-tailored support, a resource that’s frequently lacking in schools. When coupled with other solutions, community-based care approaches can play a central role in improving student mental well-being.

    Embracing technology

    While in-person methods such as professional counseling, peer-to-peer programs, and community-based collaborative care models present a range of benefits, an immediate and ready solution exists for K-12 to effectively close the gaps in its mental health resources: digital mental health products.

    Technology is accessible and readily complements care providers, and dozens of culturally competent and evidence-based products are successfully being utilized in school districts. These digital products can complement in-school care providers with treatment plans and access to telehealth, assessment tools, screening, tracking, and preventative technologies, which provide education, awareness, peer support, and other non-clinical approaches.

    While effective technology solutions exist, the majority of schools face barriers to adopting and utilizing them. Figuring out how to fund product implementation, choosing which products to trust, and understanding exactly what types of student mental health concerns need to be addressed are common obstacles voiced by school systems.

    Proper resource allocation can help ensure a brighter future

    While there are currently several mental health-focused technology products available, investment for these types of innovations is still lacking. With federal funding drying up, large VC-backed companies that haven’t previously worked in the education sector are beginning to enter the scene, and oftentimes, these companies are driven by interests that don’t meet the needs of the students they are meant to be serving.

    The key to supporting school systems, and ultimately students, is to harness the power of culturally-competent and age-appropriate solutions that entrepreneurs with lived experiences are developing while also supporting school systems by helping them identify, adopt, and utilize these transformative products.

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    David Ball

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  • Bringing Industry Innovators to Classrooms with Career Connect by Discovery Education

    Bringing Industry Innovators to Classrooms with Career Connect by Discovery Education

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    Amy Nakamoto

    General Manager, Social Impact, Discovery Education

    Amy is a dynamic executive, expert in strategic leadership, partnerships, sales, fundraising, staff development, and program management. She has a passion for unique solutions to longstanding challenges and has focused this passion predominantly in education.

    Over her professional career, she has launched initiatives, led growth strategies for companies and nonprofits, and managed organizations with the goal of creating stable and creative programs. Further, she has worked with teams and departments to expand upon great programs and policies that positively impact students, schools, and communities.

    Amy firmly believes there is power in translating a community problem or asset to the greater collective society in which we live in order to create change.

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    Amy Nakamoto

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  • Apple cancels its car, Google’s AI goes awry and Bumble stumbles | TechCrunch

    Apple cancels its car, Google’s AI goes awry and Bumble stumbles | TechCrunch

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    Hello, folks, welcome to Week in Review (WiR), TechCrunch’s newsletter covering noteworthy happenings in the tech industry.

    This week, investment firm KKR announced that it would acquire VMware’s end-user computing business from Broadcom for $4 billion. As Ron explains, that business included VMware Workspace One and VMware Horizon — two remote desktop apps that had been part of VMware’s family of products.

    Elsewhere, Mistral, the French AI startup, launched a new model to rival OpenAI’s GPT-4 — and its own cheekily named chatbot dubbed Le Chat. The releases were timed with a Microsoft partnership to provide Mistral models to Microsoft’s Azure customers — and a minority investment ($16 million) from Microsoft in Mistral.

    Lots else happened. We recap it all in this edition of WiR — but first, a reminder to sign up to receive the WiR newsletter in your inbox every Saturday.

    News

    Apple car canceled: Apple has scuttled its secretive, long-running effort to build an autonomous electric car. The company is likely cutting hundreds of employees from the team, and all work on the project has stopped. It joins a list of other projects Apple has scrapped in various stages, including AirPower and a TV (not to be confused with Apple TV).

    Bumble stumbles: Bumble posted weak Q4 results showing a $32 million net loss and $273.6 million in revenue — below Wall Street expectations. To right the ship, CEO Lidiane Jones announced that 30% of Bumble’s workforce, or about 350 employees, would be let go and that Bumble would embark on an app overhaul targeted at reviving growth.

    Google’s AI goes awry: Google has apologized for an embarrassing AI blunder this week: An image-generating model that injected diversity into pictures with a farcical disregard for historical context. While the underlying issue is perfectly understandable, Google blames the model for “becoming” oversensitive.

    Bad look: Matt Mullenweg, CEO of Tumblr owner Automattic, is supposed to be on sabbatical. Instead, he argued with Tumblr users this week over a content moderation decision that sparked accusations of transphobia, Amanda reports.

    Founder forced out: A group of Byju’s investors last Friday voted to remove the edtech group’s founder and chief executive, Byju Raveendran, and separately filed an oppression and management suit against the leadership at the firm to block the recently launched rights issue.

    Funding

    GenAI ebooks: Inkitt, a self-publishing platform using AI to develop bestsellers, has raised $37 million. The startup’s app lets people self-publish stories, and then, using AI and data science, selects what it believes are the most compelling of these to tweak and subsequently distribute and sell.

    Keeping it old school: Lapse has raised $30 million for its smartphone app that has you wait for photos to be “developed” — with no chance of editing and retaking — before sharing them with a select group of friends if you choose.

    Analysis

    Techstars reckoning: Mary Ann interviewed Maëlle Gavet, CEO of the startup accelerator program Techstars, in the wake of changes to its operations that have attracted biting criticism.

    Podcasts

    On Equity, the crew talked through startup news from Microsoft and Mistral AI, Thrasio and Glean — and also covered happenings over at COTU Ventures and Zacua Ventures.

    Meanwhile, Found spotlighted Ariel Kaye, the founder of Parachute, a direct-to-consumer bedding and home goods company.

    And for Chain Reaction, TC pulled from the archives to air an earlier conversation with Jack Lu, CEO and co-founder of Magic Eden, a “community-centric” NFT marketplace.

    Bonus round

    Steeply discounted Mirai: Toyota is offering $40,000 off a 2023 Toyota Mirai Limited, a fuel-cell vehicle that retails for $66,000 — plus $15,000 in free hydrogen over six years. As Tim writes, there’s only one catch: finding the hydrogen to power it.

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    Kyle Wiggers

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  • House Approves Another Short-Term Extension To Avoid A Shutdown, Senate Up Next To Vote – KXL

    House Approves Another Short-Term Extension To Avoid A Shutdown, Senate Up Next To Vote – KXL

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    WASHINGTON (AP) — The House has passed another short-term spending measure that would keep one set of federal agencies operating through March 8 and another set through March 22.

    The legislation approved Thursday will allow Congress to avoid a shutdown for parts of the federal government set to kick in Saturday.

    The Senate is expected to vote on the bill later in the day.

    The short-term extension is the fourth in recent months.

    The House GOP leadership is voicing increasing expectation that it’ll be the last before Congress approves a final spending package for the full year that exceeds $1.6 trillion.

    The renewed focus on this year’s spending bills doesn’t include a separate effort to provide military aid to Ukraine and Israel.

    More about:

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    Grant McHill

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  • How To Choose the Right Funding Model for Your Startup | Entrepreneur

    How To Choose the Right Funding Model for Your Startup | Entrepreneur

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    Choosing the right funding approach is a critical decision for launching your startup that can shape the trajectory of your business.

    In this article, we will explore various funding models available to startups and provide insights on how to make informed decisions based on your unique needs and goals.

    Understanding Types of Startup Funding Models

    Bootstrapping

    Bootstrapping involves funding your startup with personal savings, revenue generated by the business, or loans from friends and family. While it offers autonomy and control, it comes with the challenge of limited resources and a potentially slower growth trajectory.

    Angel Investors

    Angel investors are affluent individuals who provide capital for startups in exchange for ownership equity or convertible debt. This funding model not only brings in financial support but often includes mentorship and industry connections.

    Related: 12 Things You Need to Understand about the Silicon Valley Model before Using it in Other Markets

    Using Security

    Some entrepreneurs use security as a means of funding. This can come in multiple forms, including using your property, inventory or other assets as collateral, which can be risky if you cannot repay the finance. Other options include using accounts receivable (or invoice factoring), such as future orders, and borrowing money against these future orders.

    Venture Capital

    Venture capital firms invest larger amounts of money in startups with high growth potential. Venture capital funding is suitable for businesses with scalability, a strong market opportunity, and a capable team. However, it involves giving up a portion of equity and adhering to rigorous growth expectations.

    Crowdfunding

    Crowdfunding platforms like Kickstarter and Indiegogo allow startups to present their ideas to a global audience and collect small contributions from backers.

    Kickstarter alone has facilitated over 500,000 projects, raising more than $6 billion from 18.6 million backers, showcasing the impact of crowdfunding on startup funding.

    This model not only provides capital but also serves as a marketing tool, generating buzz and interest around the startup.

    Related: 12 Key Strategies to a Successful Crowdfunding Campaign

    Bank Loans and Traditional Lending

    Historically, if you need a loan, you would visit your local bank branch and speak to a bank manager. This has changed significantly over the last few decades towards more private institutions which may offer more favourable terms and faster funding.

    Through the likes of Funding Circle, MT Finance, Iwoca and Swoop, new businesses are able to access capital much quicker and raise significant amounts, even as much as £500,000 or £1 million. However, note that you may need to be trading for a minimum period of time, e.g., 6 months or 2 years, and have regular revenue.

    Factors to Consider When Choosing a Funding Model

    • Stage of Your Startup: The stage of your startup plays a crucial role in determining the most suitable funding model. Bootstrapping might be ideal for early-stage ventures, while later stages may benefit from venture capital to fuel rapid growth.
    • Business Model and Industry: The nature of your business and industry can influence the choice of funding. Some high-growth industries may be more attractive to venture capitalists, such as biotechnology, while other new businesses, such as in consumer goods, may find success through crowdfunding or angel investment.
    • Financial Need: Evaluate the specific financial needs of your startup. Consider factors such as initial capital requirements, operating expenses, and potential expansion plans. This assessment will guide you toward a funding model that aligns with your financial goals.
    • Risk Tolerance: Assess your risk tolerance as an entrepreneur. While venture capital might bring substantial funding, it also involves relinquishing control and adhering to aggressive growth targets. Bootstrapping, on the other hand, offers autonomy but requires a higher risk tolerance due to limited resources.
    • Timeframe for Results: Consider the timeframe within which you expect to see results. Venture capital may provide rapid injections of capital for quick scaling, while crowdfunding campaigns might take time to build momentum. Bootstrapping offers a gradual approach but may result in slower growth.

    How To Choose The Right Funding Option For Your Startup

    Thoroughly research each funding model, understanding its advantages, challenges, and success stories within your industry. Networking becomes incredibly important, so take time to consult with industry experts, mentors or advisors who have experience in your field. Their insights can provide valuable perspectives on the most suitable funding model for your startup.

    Also consider a diversified approach by combining multiple funding sources. For instance, a mix of angel investment, crowdfunding and bootstrapping might provide a well-rounded and resilient financial foundation.

    Choosing the right funding model for your startup is a pivotal decision that requires careful consideration of various factors. Whichever method you opt for, aligning the funding model with your startup’s stage, industry financial needs is essential.

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    Kimberly Zhang

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  • Prince William Co. gets $350K grant to help recruit, retain aspiring teachers – WTOP News

    Prince William Co. gets $350K grant to help recruit, retain aspiring teachers – WTOP News

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    Virginia’s Department of Education announced over $1.5 million in “Grow Your Own” grants, created to fund apprenticeship programs that help school divisions recruit and retain teachers.

    Prince William County Public Schools Superintendent LaTanya McDade said the new funding will allow the county to pay for up to 25 apprentices. (WTOP/Scott Gelman)

    After nine years of working as a teaching assistant in a special education classroom, Imani Gray decided it was time to work toward becoming a teacher herself.

    It’s something she always knew she wanted to pursue, but the cost of getting a degree and licensing proved to be a barrier. But then she learned more about a Prince William County partnership with the Virginia Commonwealth University that covers tuition and pays educators to work in a classroom while they finish their coursework. It also pairs aspiring teachers with mentors to help them with day-to-day tasks.

    Anticipating that many aspiring teachers face similar barriers to becoming educators, Virginia’s Department of Education announced over $1.5 million in “Grow Your Own” grants, created to fund apprenticeship programs that help school divisions recruit and retain teachers.

    Prince William County, the state’s second-largest school division, received $350,000 from the state to help pay for its partnership with VCU. The funding, Superintendent LaTanya McDade said, will allow the county to pay for up to 25 apprentices.

    “We’re losing a whole generation of future teachers by not thinking differently,” State Superintendent Lisa Coons said Wednesday, after announcing the grant funding at Leesylvania Elementary School in Woodbridge. “This program and the grant funding allow a low-cost [or] no-cost way to become a teacher, and be honored while doing that.”

    In Prince William County, the partnership with VCU offers undergraduates who already have an associate degree the chance to get their bachelor’s degree paid for while they work in a county school. They get paid to work in the school division during the week, according to Shelby Elliott, admin coordinator for human resources with the school district.

    The students train with a teacher-mentor during the two years of the program, and once they’re finished, they get jobs in county schools that are hard to staff, Elliott said. As part of the program, the teachers stay with Prince William County schools for three years after they’re finished.

    The grant, Elliott said, is helping fund the program for the 18 apprentices that started the program in January. The school division is also recruiting a new cohort of aspiring teachers to start the program in May.

    “This is how every teacher should be trained,” Elliott said. “It serves as a recruitment and a retention [tool]. But, for me, the most important thing is that we’re putting quality educators in front of our students.”

    Since starting the program, Gray, who works at Leesylvania, has been involved in team meetings and crafting lesson plans, among other things. It’s a helpful partnership in the midst of a national teacher shortage.

    “It’s very important that the students see that there is someone who is caring about them enough to come to work every day to teach them,” Gray said.

    Alondra Sorto, another teaching resident at Leesylvania, used to be a substitute. She’s at the school four days each week, working with students one-on-one and supporting them in small group settings.

    “It’s a great opportunity for me,” Sorto said.

    Her mentor, third grade teacher Monica Clabeaux, said she was inspired to work with future educators because of the influence her mentors had on her.

    “This is really beneficial, especially for our need of teachers right now, and strong teachers in the classroom,” Clabeaux said. “This program would build stronger teachers, because they will have two years of experience under their belt before they accept a position.”

    Coons, the state superintendent, said initiatives such as the one in Prince William modernize the approach to recruiting teachers.

    “We’re seeing a national teacher shortage, but there are ways that we are really impacting that and doing things differently that will sustain us for the future,” Coons said.

    Babur Lateef, chairman of Prince William County’s school board, said Coons’ visit “represents a significant step in advancing our mission to provide high-quality education for all students.”

    Other school districts, including Chesterfield, Dinwiddie, Essex, Henrico, Petersburg City, Prince George County, Surry County, and Waynesboro Public Schools, are also receiving some of the grant funding.

    Get breaking news and daily headlines delivered to your email inbox by signing up here.

    © 2024 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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    Scott Gelman

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  • Semron wants to replace chip transistors with ‘memcapacitors’ | TechCrunch

    Semron wants to replace chip transistors with ‘memcapacitors’ | TechCrunch

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    A new Germany-based startup, Semron, is developing what it describes as “3D-scaled” chips to run AI models locally on smartphones, earbuds, VR headsets and other mobile devices

    Co-created by Kai-Uwe Demasius and Aron Kirschen, engineering graduates from the Dresden University of Technology, Semron’s chips use electrical fields to perform calculations instead of electrical currents — the medium of conventional processors. This enables the chips to achieve higher energy efficiency while keeping the fabrication costs to produce them down, Kirschen claims.

    “Due to an expected shortage in AI compute resources, many companies with a business model that rely on access to such capabilities risk their existence — for example, large startups that train their own models,” Kirschen told TechCrunch in an email interview. “The unique features of our technology will enable us to hit the price point of today’s chips for consumer electronics devices even though our chips are capable of running advanced AI, which others are not.”

    Semron’s chips — for which Demasius and Kirschen filed an initial patent in 2016, four years before they founded Semron — tap a somewhat unusual component known as a “memcapacitor,” or a capacitor with memory, to run computations. The majority of computer chips are made of transistors, which unlike capacitors can’t store energy; they merely act like “on/off” switches, either letting an electric current through or stopping it.

    Semron’s memcapacitors, made out of conventional semiconductor materials, work by exploiting a principle known in chemistry as charge shielding. The memcapacitors control an electric field between a top electrode and bottom electrode via a “shielding layer.” The shielding layer, in turn, is controlled by the chip’s memory, which can store the different “weights” of an AI model. (Weights essentially act like knobs in a model, manipulating and fine-tuning its performance as it trains on and processes data.)

    The electric field approach minimizes the movement of electrons at the chip level, reducing energy usage — and heat. Semron aims to leverage the heat-reducing properties of the electric field to place as as many as hundreds of layers of memscapacitors on a single chip — greatly increasing compute capacity.

    A schematic showing Semron’s 3D AI chip design.

    “We use this property as an enabler to deploy several hundred times the compute resources on a fixed silicon area,” Kirschen added. “Think of it like hundreds of chips in one package.”

    In a 2021 study published in the journal Nature Electronics, researchers at Semron and the Max Planck Institute of Microstructure Physics successfully trained a computer vision model at energy efficiencies of over 3,500 TOPS/W — 35 to 300 times higher than existing techniques. TOPS/W is a bit of a vague metric, but the takeaway is that memcapacitors can lead to dramatic energy consumption reductions while training AI models.

    Now, it’s early days for Semron, which Kirschen says is in the “pre-product” stage and has “negligible” revenue to show for it. Often the toughest part of ramping up a chip startup is mass manufacturing and attaining a meaningful customer base — albeit not necessarily in that order.

    Making matters more difficult for Semron is the fact that it has stiff competition in custom chip ventures like Kneron, EnCharge and Tenstorrent, which have collectively raised tens of millions of dollars in venture capital. EnCharge, like Semron, is designing computer chips that use capacitors rather than transistors, but using a different substrate architecture.

    Semron, however — which has an 11-person workforce that it’s planning to grow by around 25 people by the end of the year — has managed to attract funding from investors including Join Capital, SquareOne, OTB Ventures and Onsight Ventures. To date, the startup has raised 10 million euro (~$10.81 million).

    Said SquareOne partner Georg Stockinger via email:

    “Computing resources will become the ‘oil’ of the 21st century. With infrastructure-hungry large language models conquering the world and Moore’s law reaching the limits of physics, a massive bottleneck in computing resources will shape the years to come. Insufficient access to computing infrastructure will greatly slow down productivity and competitiveness both of companies and entire nation-states. Semron will be a key element in solving this problem by providing a revolutionary new chip that is inherently specialized on computing AI models. It breaks with the traditional transistor-based computing paradigm and reduces costs and energy consumption for a given computing task by at least 20x.”

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    Kyle Wiggers

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  • AC Ventures closes its new $210M Indonesia-focused fund | TechCrunch

    AC Ventures closes its new $210M Indonesia-focused fund | TechCrunch

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    In the middle of a long funding winter, AC Ventures’ latest news will give Southeast Asian startups hope.

    The Jakarta, Indonesia–based venture firm announced today it has raised $210 million, finishing the final close on its fifth fund, called ACV Fund V. Limited partners include the World’s Bank’s IFC and investors from the United States, the Middle East and North Asia. More than 50% of the fund came from returning LPs and institutional capital makes up over 90% of its total.

    AC Ventures has already started investing from Fund V in startups like Indonesian electric vehicle maker MAKA Motors and sustainable farming startup Koltiva. The firm now has over $500 million in assets under management across its five funds. Fund V will add around 25 companies to AC Ventures’ current portfolio of 120 startups. Its check size will range between $2 million and $5 million but depends on investment opportunities. For example, startups that are growing quickly and align with AC Ventures’ impact goals might get a check of around $20 million to $30 million.

    When asked what raising Fund V was like during the ongoing funding slowing down, co-founder and managing partner Adrian Li tells TechCrunch “2023 was a challenging time for venture and technology businesses in the context of fundraising, perhaps one of the toughest in the past decade.” On the other hand, AC Ventures found new and returning limited partners who saw the same upside in Indonesia and Southeast Asia as it oes.

    “Our limited partners share a firm belief that challenging times often yield the best investment opportunities,” Li says. “We have strong confidence that our latest fund will prove to be one of the best vintages, thanks to Indonesia’s ongoing, long-term demographic trends and robust economic fundamentals.” He adds that over the past year, the AC Ventures team has met more high-quality teams that prioritize profitability and are available for investment at good valuations than in the past.

    AC Ventures invests across Southeast Asia, but Indonesia is at the top of its investment strategy because the country represents 40% of the region’s economy. Jakarta’s economy is expected to grow to $360 billion by 2030 and the country has pro-investment policies, including initiatives and reforms to make its digital economy stronger. AC Ventures co-founder and managing partner Michael Soerijadji says Indonesia’s economic growth is driven in large part by private consumption, plus manufacturing, services and exports.

    For Fund V, Li said the firm is especially interested in fintech, e-commerce, health tech, MSME enablement and climate. The team is also excited by startups that address consumers in areas like online retail, consumer services and consumption upgrades as digital adoption continues to grow.

    “We believe there’s substantial business potential that can tap into these changing patterns and offer unique, value-driven solutions to Indonesian consumers which can not only displace incumbents but drive new markets as well,” Li says.

    AC Ventures works with its startups by supporting their business development and strategic partnerships, giving them advice on finding talent, government relations, financial planning and fundraising. It also advises them on marketing, PR and ESG.

    One of AC Ventures’ priorities is investing in firms that have high environmental and social impacts. It says that its third fund, Fund III, had an overall impact ratio of +37% as measured by Finland’s The Upright Project, putting it above the Nasdaq Small Cap Index average of +29%. Managing partner Helen Wong says that when AC Ventures looks at startups, it runs baseline assessments across four areas: environment, health, society and knowledge.

    It also strongly encourages gender parity. Fifty percent of its leadership are women, and in its portfolio, 41% of C-level leaders are also women. Wong says AC Ventures is a signatory of the UN’s Women’s Empowerment Principles and IFC’s Invest2Equal program. It encourages its companies to take an inclusive approach to hiring and developing leadership and has hosted events with LPs like IFC to facilitate networking and mentorship for female founders.

    “Showcasing the success stories of female-led startups in our portfolio is another key aspect,” she says. “It sets powerful examples for others to follow.”

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    Catherine Shu

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  • The looming threat that could worsen the digital divide

    The looming threat that could worsen the digital divide

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    Key points:

    In an era where technology plays a pivotal role in education, the expiration of the E-rate program’s Emergency Connectivity Fund (ECF) funding poses a significant threat to underserved schools and libraries. This funding, which was crucial in bridging the digital divide, now stands at a crossroads, potentially leaving many educational institutions grappling with outdated technology and hindering access to the digital resources necessary for effective learning.

    While the stakes are high and a potential crisis may be looming, there are several solutions to mitigate the impact on underserved areas as we transition to a post-ECF era.

    The role of ECF funding in schools and libraries

    For context, the E-rate program, established in 1996 as part of the Telecommunications Act, aimed to ensure affordable access to modern telecommunications and information services for schools and libraries. Over the years, the ECF component of E-rate emerged as a lifeline for schools and libraries, particularly in economically disadvantaged communities. This fund addressed the digital divide by providing financial support for broadband connectivity, Wi-Fi hotspots, and connected devices such as laptops and tablets.

    ECF funding has played a pivotal role in transforming underserved schools and libraries into tech-savvy hubs of learning. It enabled these institutions to acquire up-to-date technology, offering students and community members access to a wealth of information and educational resources. This funding helped level the playing field, especially during the COVID-19 pandemic, ensuring that students from all backgrounds had equal opportunities to excel when digital education was the only option to continue learning.

    The expiration threat

    Now, with the expiration of ECF funding, it brings with it myriad challenges, primarily centered around the potential exacerbation of the digital divide. Without continued financial support, schools and libraries may struggle to maintain or upgrade their technological infrastructure. This could result in a regression to outdated systems, hindering the ability of students and community members to engage in new and evolving educational needs.

    Concern also has been raised about the potential lack of access to technology becoming a far-reaching consequence for underserved communities. If educational opportunities become limited, students’ ability to develop essential digital skills necessary for success in the workforce may be hindered. Moreover, the potential digital divide is likely to extend beyond the classroom, affecting adults who rely on these institutions for access to online job searches, healthcare information, and government services. The long-lasting effects could perpetuate a cycle of poverty and limit the socio-economic growth of these communities.

    Solutions to bridge the gap

    To address the impending digital crisis, several solutions can be explored. Advocacy for the extension or renewal of ECF funding is a critical step. Policymakers must recognize the fundamental role that technology plays in education and prioritize continued support for underserved areas. Additionally, partnerships between private and public sectors can contribute to sustainable funding models that ensure ongoing access to technology for these institutions.

    Another innovative approach involves the recycling and upcycling of technology. Instead of disposing of outdated devices, schools and libraries can explore programs that refurbish and repurpose technology. Technology trade-in partners can be a valuable resource and help schools put funds back into budgets to cover the cost of new technology purchases. They are able to conduct a comprehensive assessment of a school’s device inventory, taking into account the age, condition, and compatibility with the latest software to give a clear understanding of the potential value if upcycled. That means devices that still have useful life are refurbished and put into the hands of individuals and organizations who might not otherwise be able to afford the technology.

    Sustainability also is an important consideration and technology trade-in partners can develop sustainable technology plans for schools and libraires. These plans help organizations determine the right devices to purchase, when to sell them at the optimal point in their useful life, and how to reinvest those funds into new technology. The right decisions at each step in the process can put significant money back into budgets and keep the best technology in the hands of schools and libraires. Ensuring that the digital divide is closed, and students continue to elevate their education.

    Additionally, these initiatives also can be designed to engage students, teaching them about the importance of sustainability while providing hands-on experience in refurbishing electronic devices.

    The expiration of ECF funding poses a substantial threat to the strides made in narrowing the digital divide in underserved schools and libraries. It is imperative that stakeholders recognize the vital role technology plays in education and community development. Advocacy for continued funding and utilizing technology trade-in partners are essential components of a comprehensive strategy to ensure that these institutions continue to thrive in the digital age. By addressing these potential challenges head-on, we can work toward a future where all students, regardless of their economic background, have equal access to technology and educational opportunities.

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    Diamond McKenna, Co-Founder, Diamond Assets

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  • Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

    Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

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    Distressed-debt giant Oaktree Capital sees big opportunities in credit unfolding over the next few years as a wall of debt comes due.

    Oaktree’s incoming co-chief executives Armen Panossian, head of performing credit, and Bob O’Leary, portfolio manager for global opportunities, see a roughly $13 trillion market that will be ripe for the picking.

    Within that realm is high-yield bonds, BBB-rated bonds, leveraged loans and private credit — four areas of the market that have only mushroomed from their nearly $3 trillion size right before the 2007-2008 global financial crisis.

    “Clearly, the most acute area of risk right now is commercial real estate,” the co-CEOs said in a Wednesday client note. “That’s because the maturity wall is already upon us and it’s not going to abate for several years.”

    More than $1 trillion of commercial real-estate loans are set to come due in 2024 and 2025, according to the Mortgage Bankers Association.

    A retreat in the benchmark 10-year Treasury yield
    BX:TMUBMUSD10Y,
    to about 4.1% on Wednesday from a 5% peak in October, has provided some relief even though many borrowers likely will still struggle to refinance.

    Related: Commercial real estate a top threat to financial system in 2024, U.S. regulators say

    “There’s a need for capital, especially for office properties where there are vacancies, rental growth hasn’t materialized, or the rate of borrowing has gone up materially over the last three years. This capital may or may not be readily available, and for certain types of office properties, it absolutely isn’t available,” the Oaktree team said.

    With that backdrop, the firm expects to dust off its playbook from the financial crisis and acquire portfolios of commercial real-estate loans from banks, but also plans to participate in “credit-risk transfer” deals that help lenders reduce exposure.

    Oaktree also sees opportunities brewing in private credit, as well as in high-yield and leveraged loans, where “several hundred” of the estimated 1,500 companies that have issued such debt are likely “to be just fine” even if defaults rise, they said.

    Another area to watch will be the roughly $26 trillion Treasury market, where Oaktree has some concerns “about where the 10-year Treasury yield goes from here” — given not only the U.S. budget deficit and the deluge of supply that investors face, but also how foreign buyers, once the “largest owners in prior years, may be tapped out.”

    Related: Here are two reasons why the 10-year Treasury yield is back above 4%

    U.S. stocks
    SPX

    DJIA

    COMP
    fell Wednesday after strong retail-sales data for December pointed to a resilient U.S. economy, despite the Federal Reserve having kept its policy rate at a 22-year high since July.

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  • Experts predicted dozens of colleges would close in 2023 – and they were right – The Hechinger Report

    Experts predicted dozens of colleges would close in 2023 – and they were right – The Hechinger Report

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    Editor’s note: This story led off this week’s Higher Education newsletter, which is delivered free to subscribers’ inboxes every other Thursday with trends and top stories about higher education. 

    Though college enrollment seems to be stabilizing after the pandemic disruptions, predictions for the next 15 years are grim. Colleges will be hurt financially by fewer tuition-paying students, and many will have to merge with other institutions or make significant changes to the way they operate if they want to keep their doors open.

    At least 30 colleges closed their only or final campus in the first 10 months of 2023, including 14 nonprofit colleges and 16 for-profit colleges, according to an analysis of federal data by the State Higher Education Executive Officers Association, or SHEEO. Among nonprofits, this came on the heels of 2022, when 23 of them closed, along with 25 for-profit institutions. Before 2022, the greatest number of nonprofit colleges that closed in a single year was 13. 

    Over the past two decades, far more for-profit colleges closed each year than nonprofits. An average of nine nonprofit colleges closed each year, compared to an average of 47 for-profit colleges. 

    This time last year, experts predicted we’d see another wave of college closures, mostly institutions that were struggling before the pandemic and were kept afloat by Covid-era funding. Since then, keeping their doors open has become unrealistic for these colleges, many of which are regional private colleges. 

    “It’s not corruption, it’s not financial misappropriation of funds, it’s just that they can’t rebound enrollment.”

    Rachel Burns, a senior policy analyst at SHEEO. 

    For many, the situation has been made worse by the enrollment declines during the pandemic. 

    “It’s not corruption, it’s not financial misappropriation of funds, it’s just that they can’t rebound enrollment,” said Rachel Burns, a senior policy analyst at SHEEO. 

    Data from the National Student Clearinghouse shows that undergraduate enrollment has stabilized and even slightly increased for the first time since the pandemic, but a continuing decline in birth rates means that fewer high school seniors will be graduating after 2025, so these colleges will face even greater enrollment challenges in the years to come.

    Hundreds of colleges are expected to see significant enrollment declines in the coming years, according to David Attis, managing director of research at the education consulting company EAB. Among the reasons, he said, are declining birthrates, smaller shares of students choosing college, and college-going students veering toward larger and more selective institutions.

    By 2030, 449 colleges are expected to see a 25 percent decline in enrollment and 182 colleges are expected to see a 50 percent decline, according to an EAB analysis of federal enrollment data. By 2035, those numbers are expected to rise to 534 colleges expecting a 25 percent decline and 227 colleges expecting a 50 percent decline; by 2040, a total of 566 colleges are expected to see a 25 percent decline and 247 are expected to see a 50 percent decline, according to  EAB’s analysis. 

    These are predictions, of course, and they certainly don’t ensure that all those colleges will close. But with these drops in enrollment expected to continue, colleges need to plan now and make significant changes in order to survive, Attis said.

    “Imagine if you lose half your students – that is a threat to your continued existence.”

    David Attis, managing director of research at the education consulting company EAB.

    “Imagine if you lose half your students – that is a threat to your continued existence,” Attis said. “You’ll have to make some pretty dramatic changes. It’s not just a ‘We’ll cut a few academic programs,’ or ‘We’ll trim our administrative staff a little bit.’ That requires a real reorientation of your whole strategy.”

    Many colleges face the decision to merge with another institution or close down entirely, Attis said. And if they wait too long to find a college to merge with, they really won’t have a choice. 

    “If you wait until you’re on the verge of closure, you’re not a particularly attractive partner,” Attis said. “But if you’re not on the verge of closure, then you’re not as motivated to find that partner.”

    Attis said that he’s been surprised to hear from several leaders of regional colleges – both private and public – that they are in talks about mergers. 

    “Whether they’ve pursued them or not, they’ve either made a call or gotten a call,” Attis said. “They’re thinking about it in a way I hadn’t heard in the past.” 

    This story about college closures was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter. Listen to our higher education podcast.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Olivia Sanchez

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  • Giga ML wants to help companies deploy LLMs offline | TechCrunch

    Giga ML wants to help companies deploy LLMs offline | TechCrunch

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    AI is all the rage — particularly text-generating AI, also known as large language models (think models along the lines of ChatGPT). In one recent survey of ~1,000 enterprise organizations, 67.2% say that they see adopting large language models (LLMs) as a top priority by early 2024.

    But barriers stand in the way. According to the same survey, a lack of customization and flexibility, paired with the inability to preserve company knowledge and IP, were — and are — preventing many businesses from deploying LLMs into production.

    That got Varun Vummadi and Esha Manideep Dinne thinking: What might a solution to the enterprise LLM adoption challenge look like? In search of one, they founded Giga ML, a startup building a platform that lets companies deploy LLMs on-premise — ostensibly cutting costs and preserving privacy in the process.

    “Data privacy and customizing LLMs are some of the biggest challenges faced by enterprises when adopting LLMs to solve problems,” Vummadi told TechCrunch in an email interview. “Giga ML addresses both of these challenges.”

    Giga ML offers its own set of LLMs, the “X1 series,” for tasks like generating code and answering common customer questions (e.g. “When can I expect my order to arrive?”). The startup claims the models, built atop Meta’s Llama 2, outperform popular LLMs on certain benchmarks, particularly the MT-Bench test set for dialogs. But it’s tough to say how X1 compares qualitatively; this reporter tried Giga ML’s online demo but ran into technical issues. (The app timed out no matter what prompt I typed.)

    Even if Giga ML’s models are superior in some aspects, though, can they really make a splash in the ocean of open source, offline LLMs?

    In talking to Vummadi, I got the sense that Giga ML isn’t so much trying to create the best-performing LLMs out there but instead building tools to allow businesses to fine-tune LLMs locally without having to rely on third-party resources and platforms.

    “Giga ML’s mission is to help enterprises safely and efficiently deploy LLMs on their own on-premises infrastructure or virtual private cloud,” Vummadi said. “Giga ML simplifies the process of training, fine-tuning and running LLMs by taking care of it through an easy-to-use API, eliminating any associated hassle.”

    Vummadi emphasized the privacy advantages of running models offline — advantages likely to be persuasive for some businesses.

    Predibase, the low-code AI dev platform, found that less than a quarter of enterprises are comfortable using commercial LLMs because of concerns over sharing sensitive or proprietary data with vendors. Nearly 77% of respondents to the survey said that they either don’t use or don’t plan to use commercial LLMs beyond prototypes in production — citing issues relating to privacy, cost and lack of customization.

    “IT managers at the C-suite level find Giga ML’s offerings valuable because of the secure on-premise deployment of LLMs, customizable models tailored to their specific use case and fast inference, which ensures data compliance and maximum efficiency,” Vummadi said. 

    Giga ML, which has raised ~$3.74 million in VC funding to date from Nexus Venture Partners, Y Combinator, Liquid 2 Ventures, 8vdx and several others, plans in the near term to grow its two-person team and ramp up product R&D. A portion of the capital is going toward supporting Giga ML’s customer base, as well, Vummadi said, which currently includes unnamed “enterprise” companies in finance and healthcare.

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    Kyle Wiggers

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  • Venture Capital 101: A Comprehensive Guide for Startups Seeking Investment | Entrepreneur

    Venture Capital 101: A Comprehensive Guide for Startups Seeking Investment | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Every day, dozens of startups go through the Vibranium.VC funnel; some don’t pass the first scoring, while others move to the next stage towards potential investment. Drawing from my entrepreneurial background, I can confidently say that advice I received in the past from professionals in specific fields helped me be well-prepared and aware of the nuances that come along with the entrepreneurial journey.

    Advice for startup founders is crucial at the beginning of their journey as it provides invaluable insights and guidance from experienced individuals who have navigated similar paths. This advice can help founders avoid common pitfalls, refine their strategies, and make informed decisions, ultimately increasing their chances of success. The early-stage startup founders are often filled with uncertainties, and seeking advice from business role models can offer clarity and direction to set a solid foundation for the entrepreneurial journey.

    Related: Why Investors With an Entrepreneurial Past Are Crucial to Startup Success

    Secure your runway

    Begin your search for investments at least six months before your funds run out, ensuring your runway remains at 6-8 months. If you are raising seed, anticipate that this funding will sustain your runway for two years. Approximately a year or 1,5 years, you can move towards the Series A fundraising process. This timeline implies that you should attain Series A metrics within one and a half years, providing a six-month buffer while concluding the round with the next-level investors.

    Series A financing refers to an investment in a startup after it has shown progress in building its business model and demonstrates the potential to grow and generate revenue. It often refers to the first round of venture money a firm raises after seed round and angel investors.

    A healthy runway, representing the number of months a startup can operate before running out of cash, demonstrates financial stability and responsible financial management. Investors are more likely to be interested in companies that clearly understand their financial standing and can sustain operations over the mid to long term.

    A longer runway enhances your negotiating position: It reduces the urgency for immediate funding, giving the startup more negotiating power when discussing valuation, terms, and other aspects of the investment deal. This can result in more favorable terms for the startup.

    Additionally, a sufficient runway provides the startup with ample time during fundraising. This time is essential for due diligence procedures, negotiations, and other steps involved in securing investment. It allows both the startup and investors to thoroughly evaluate the opportunity without the pressure of an imminent cash shortage.

    Be prepared for a lengthy fundraising process

    As you initiate active fundraising, the second point is to prepare for an extended fundraising process from 3 to 6 months at best (sometimes even more). This is particularly crucial in the early stages, considering all due diligence procedures, negotiation processes, and other factors. The size of the funding round can influence the timeline: larger funding rounds often involve more extensive due diligence, negotiations, and legal processes, potentially extending the duration. For example, one of our longer deals took almost five months, while the shortest one was sealed after one month.

    Negotiating the terms of the investment, including valuation and other deal terms, can take time. The back-and-forth negotiations between the startup and investors contribute to the overall duration. And don’t forget about legal processes: finalizing legal agreements and paperwork can add time to the timeline.

    Related: 3 Alternatives to Venture Capital Funding for Startups

    Create a database of investors

    Build a database of 100 or more warm contacts with investors. Initiate conversations with them and strive to convert these interactions into closed deals. Have as many contacts as necessary to achieve the crucial milestones for the next round.

    Having a database of investors is a strategic asset for startups. It streamlines communication, facilitates relationship-building, and allows startups to make informed decisions throughout the fundraising process and beyond.

    The database is also crucial when it comes to your pitch. By understanding different investors’ preferences and investment histories, startups can tailor their pitches more effectively. This personalized approach increases the likelihood of capturing investor interest and aligning with their investment thesis.

    Related: Why Strategic Venture Capital is Thriving in a Founder’s Market

    Transparency is everything

    Be transparent, avoid fabrications, and don’t lie. We all know “Fake it till you make it ” cases, which have made investors more cautious about startups. Transparency is a way for startups to demonstrate accountability and lower the risk of investment for VCs. By providing clear and accurate information, startups show they take responsibility for their actions and decisions, reinforcing a sense of trust. Be truthful because, trust me, distorted information will surface during the Due Diligence process and can become a deal breaker. This could lead to losing investors, and more importantly, it will discourage them from engaging with you.

    Always remember that transparency is not just about sharing information; it’s about fostering a culture of openness, trust, and accountability.

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    Zamir Shukho

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  • Sam Altman's OpenAI to be second-most valuable U.S. startup behind Elon Musk's SpaceX based on early-talks funding round

    Sam Altman's OpenAI to be second-most valuable U.S. startup behind Elon Musk's SpaceX based on early-talks funding round

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    OpenAI is in early discussions to raise a fresh round of funding at a valuation at or above $100 billion, people with knowledge of the matter said, a deal that would cement the ChatGPT maker as one of the world’s most valuable startups.

    Investors potentially involved in the fundraising round have been included in preliminary discussions, according to the people, who asked not to be identified to discuss private matters. Details like the terms, valuation and timing of the funding round haven’t yet been finalized and could still change, the people said.

    If the funding round happens as planned, it would make the artificial intelligence darling the second-most valuable startup in the US, behind only Elon Musk’s Space Exploration Technologies Corp., according to data from CBInsights.

    OpenAI declined to comment.

    The company is set to complete a separate tender offer in early January, which would allow employees to sell their shares at a valuation of $86 billion, Bloomberg previously reported. That is being led by Thrive Capital and saw more demand from investors than there was availability, people familiar with the matter have said.

    OpenAI’s rocketing valuation mirrors the AI frenzy it kicked off one year ago after releasing ChatGPT, a chatbot capable of composing eerily human sentences and even poetry in response to simple prompts. The company became Silicon Valley’s hottest startup, raising $13 billion to date from Microsoft Corp., and spurred a new appreciation for the promise of AI that changed the tech industry landscape within a few months.

    Amazon.com Inc. and Alphabet Inc. have since poured billions into OpenAI-rival Anthropic. Salesforce Inc. led an investment into Hugging Face that valued it at $4.5 billion, and Nvidia Corp., which makes many of the semiconductors that power AI tasks, said earlier this month it made more than two dozen investments in 2023.

    OpenAI has also held discussions to raise funding for a new chip venture with Abu Dhabi-based G42, according to people with knowledge of the matter.

    The startup has discussed raising between $8 billion and $10 billion from G42, said one of the people, all of whom requested anonymity to discuss confidential information. It’s unclear whether the chips venture and wider company funding efforts are related.

    OpenAI Chief Executive Officer Sam Altman had been seeking capital for the chipmaking project, code-named Tigris. The goal is to produce semiconductors that can compete with those from Nvidia, which currently dominates the AI chip market, Bloomberg News reported last month.

    In October, G42 announced a partnership with OpenAI “to deliver cutting-edge AI solutions to the UAE and regional markets.” No financial details were provided. The firm, founded in 2018, is led by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and chair of the Abu Dhabi Investment Authority.

    OpenAI’s future looked briefly uncertain after its board suddenly fired Altman earlier last month. At the time, some investors considered writing their stakes down to zero. But after five days of leadership tumult, Altman was brought back and a new board was named. The company has aimed to signal to customers that it’s refocusing on its products following the upheaval.

    — With assistance from Hannah Miller

    Subscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up for free.

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    Gillian Tan, Edward Ludlow, Shirin Ghaffary, Bloomberg

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  • ESSER Funds help bring ClassVR to Schools in the Saint Louis Public Schools District

    ESSER Funds help bring ClassVR to Schools in the Saint Louis Public Schools District

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    Chicago — Several schools in the Saint Louis Public Schools (SLPS) district have signed on to bring the immersive power of virtual reality technology to students this school year with ClassVR, from Avantis Education. So far, 17 of the schools in the district have leveraged federal ESSER funding to purchase the award-winning AR/VR headsets, which include thousands of pieces of VR and AR content to support all subject areas. Implementation is planned for later this school year.

    Douglas Combs from Haddock Education Technologies coordinated the purchases following an ESSER showcase for SLPS principals and teachers. “When schools come to us asking about the benefits of AR and VR technology in the classroom, we know ClassVR will provide them with what they want,” said Combs. “At SLPS, school leaders were seeking something cool and exciting to engage students in the content they were learning in class. ClassVR is the perfect fit.”

    ClassVR is an all-in-one VR/AR headset designed specifically for K-12 schools. Used by more than 1 million students in 100,000 classrooms around the world, it includes all hardware, software, training, support and implementation services needed for teachers to deploy AR/VR in their classrooms. ClassVR gives teachers access to thousands of VR and AR resources and content to enhance lessons and engage students more deeply in what they are learning. Students can virtually experience walking with polar bears, swimming with sharks, or traveling back in time to see what it was like in a World War I trench. New for the 2023-24 school year, Avantis aligned 400+ lessons in ClassVR to U.S. State Standards in science, social studies and English language arts, providing added value and convenience for teachers.

    ClassVR qualifies for ESSER funds because it helps teachers support student academic achievement and address learning loss.

    “School and district leaders are increasingly looking to new and emerging technologies to help them support student learning and AR/VR is a big part of these conversations,” said Avantis Education’s Chief Executive Officer, Huw Williams. “ESSER funding is making these technologies even more accessible for schools and we are looking forward to being able to bring the power of virtual reality into even more classrooms, both in St. Louis and across the country.”

    To learn more about ClassVR, visit http://www.classvr.com.

    About Avantis

    Avantis Education, the creators of ClassVR, provides simple classroom technology used by more than a million students in over 90 countries.

    The world’s first virtual reality technology designed just for education provides everything a school needs to seamlessly implement VR technology in any classroom, all at an affordable price. To learn more visit www.avantiseducation.com and www.classvr.com.

    eSchool News Staff
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    ESchool News Staff

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  • How Small Business Owners Can Level Up Their Negotiation Tactics With Venture Capitalists | Entrepreneur

    How Small Business Owners Can Level Up Their Negotiation Tactics With Venture Capitalists | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When small business owners are looking to secure investment from venture capitalists (VCs), they have to understand the accurate valuation of their business before they enter into negotiations. Otherwise, they end up asking for too much, and investors won’t buy in, or they give away too much as a concession for getting financial backing. You don’t need to let either of those unfortunate scenarios happen to you.

    Instead of guessing and hoping, you must be prepared to negotiate based on honest and accurate information. Even if your business is very small or you’re new to the business world, you don’t need to be intimidated when working with venture capitalists. Understanding your company’s strengths and knowing how to address its weaknesses can take you a long way toward success.

    Choosing the right venture capital opportunities

    One important negotiating tip is to make sure you’re choosing negotiations with the right people. In other words, be selective about your opportunities. You don’t want to send a mass email to many VCs, hoping someone will take interest. If you do that and get replies, it could be that they’re trying to take advantage and think that you’re desperate. Instead, target only a handful of venture capitalists who are a good fit for your needs and have helped companies like yours before.

    Study your options for venture capital and the people who typically support businesses like yours. Look for VCs who work within your industry or who are focused on helping small businesses that are similar in size to what you have. When you find the right people, negotiating with them becomes much easier because you understand one another and have more common interests and goals. Then, you can both see the value of working with one another.

    Related: 8 Key Factors VCs Consider When Evaluating Startup Opportunities

    Options for venture capital you should consider

    It’s essential to consider more than one option or offer if you can. It’s not just the VCs you work with that matters, but also what they give you. Getting additional money to grow your business is essential, but there are other aspects of business development. There are many different ways that a venture capitalist could bring further and ongoing value to your company.

    If there are other areas where your business needs support, don’t be afraid to ask. Some VCs may have connections, offer mentorship or provide additional value beyond cash. Consider these options and if they can help your business succeed. If they’re better than an influx of money only, they might be suitable for your needs. Ideally, you can get cash and other perks, but that depends on the person you’re working with and what they’re willing to offer.

    Focus on post-investment processes

    Before making any deal for venture capital, make sure you’re clear on the decision-making processes that will occur post-investment and what level of control you’ll retain. In other words, you only want to agree to work with a VC that will buy your business out and take it over if that’s what you’re specifically looking for. Getting your questions answered in this area is extremely important.

    You should negotiate this area carefully because too many small business owners get caught up in the idea of earning money to help their business, and they agree to conditions that only benefit them in the short run. Some need to read the contract carefully, or they aren’t willing to ask for more because they fear losing what’s offered. That is your business, so make sure you know what trade-offs you’re agreeing to.

    Remember that value-add is part of the equation

    While the financial backing venture capitalists can bring is highly important, there is a value-added beyond that capital. Working with the right venture capitalists brings you additional opportunities that could be even more significant than the money they’ll invest. When negotiating with a VC, ensure you know what matters to you and why your business is worth investing in. That can help you get a “yes” from the right investor.

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    Avi Weisfogel

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  • Clearlake and Insight reach $4.4B deal to take software maker Alteryx private | TechCrunch

    Clearlake and Insight reach $4.4B deal to take software maker Alteryx private | TechCrunch

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    Alteryx, an Irvine, California-based software company developing data science and analytics products, today announced that it’s agreed to be acquired by private equity firms Clearlake Capital Group and Insight Partners in a deal worth $4.4 billion.

    Clearlake and Insight reportedly beat out Symphony Technology Group, another private equity firm, which Reuters reported several days ago had been vying for Alteryx.

    The Clearlake-Insight deal, which includes debt, values Alteryx’s equity at around $3.46 billion, reports Reuters — a 29.1% premium over the company’s closing share price on Friday. It’s expected to close in the first half of 2024 subject to customary closing conditions and approvals.

    The immediate impact on Alteryx’s ~2,900 employees isn’t clear.

    “In addition to delivering significant and certain cash value to our stockholders, this transaction will provide increased working capital and industry expertise — and the flexibility as a private company,” Alteryx CEO Mark Anderson said in a statement. “Over the past several years, we’ve executed a comprehensive transformation strategy to enhance our go-to-market capabilities and establish a strong cloud and AI innovation roadmap. We’re excited to partner with Clearlake and Insight for the next stage of Alteryx’s journey.”

    SRC, the predecessor to Alteryx, was co-founded in 1997 by Dean Stoecker, Olivia Duane Adams and Ned Harding and initially focused on creating data engines for demographic-based mapping and reporting. In 2006, SRC released the software app Alteryx as a platform for building analytical processes and services. By 2011, SRC had changed its name to Alteryx, which by then had become its core product. 

    After raising tens of millions of dollars from VC firms including Toba Capital, Insight, Sapphire Ventures, ICONIQ Capital and Meritech Capital Partners, Alteryx went public on the NYSE in 2017.

    More recently, Alteryx transitioned to a subscription-focused business model — and greatly expanded its AI-powered feature offerings — as part of a strategy to tap into growing demand for data analytics services. According to the analyst firm Research and Markets, the big data analytics market could be worth $105.08 billion by 2027, up from $37.34 billion in 2018.

    Alteryx now counts more than 8,300 companies as its customers, including Coca-Cola, Vodafone, Walmart and Ford. In its coverage of the deal today, SiliconAngle notes that Alteryx generated $232 million in sales last fiscal quarter, up 8% from the same time a year ago, and that its annualized recurring revenue grew nearly three times as fast in the same time frame, jumping roughly 21% to $914 million.

    “When we founded Alteryx in 1997, we did so with a vision for the future of data science and analytics. Today, Alteryx stands out as an industry leader with a differentiated platform that scales data democratization in a governed manner,” Stoecker said. “Our agreement with Clearlake and Insight validates the strength of our business and the value of Alteryx’s capabilities and innovation.”

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    Kyle Wiggers

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  • Fed could be the Grinch who 'stole' cash earning 5%. What a Powell pivot means for investors.

    Fed could be the Grinch who 'stole' cash earning 5%. What a Powell pivot means for investors.

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    Yields on 3-month
    BX:TMUBMUSD03M
    and 6-month
    BX:TMUBMUSD06M
    Treasury bills have been seeing yields north of 5% since March when Silicon Valley Bank’s collapse ignited fears of a broader instability in the U.S. banking sector from rapid-fire Fed rate hikes.

    Six months later, the Fed, in its final meeting of the year, opted to keep its policy rate unchanged at 5.25% to 5.5%, a 22-year high, but Powell also finally signaled that enough was likely enough, and that a policy pivot to interest rate cuts was likely next year.

    Importantly, the central bank chair also said he doesn’t want to make the mistake of keeping borrowing costs too high for too long. Powell’s comments helped lift the Dow Jones Industrial Average
    DJIA
    above 37,000 for the first time ever on Wednesday, while the blue-chip index on Friday scored a third record close in a row.

    “People were really shocked by Powell’s comments,” said Robert Tipp, chief investment strategist, at PGIM Fixed Income. Rather than dampen rate-cut exuberance building in markets, Powell instead opened the door to rate cuts by midyear, he said.

    New York Fed President John Williams on Friday tried to temper speculation about rate cuts, but as Tipp argued, Williams also affirmed the central bank’s new “dot plot” reflecting a path to lower rates.

    “Eventually, you end up with a lower fed-funds rate,” Tipp said in an interview. The risk is that cuts come suddenly, and can erase 5% yields on T-bills, money-market funds and other “cash-like” investments in the blink of an eye.

    Swift pace of Fed cuts

    When the Fed cut rates in the past 30 years it has been swift about it, often bringing them down quickly.

    Fed rate-cutting cycles since the ’90s trace the sharp pullback also seen in 3-month T-bill rates, as shown below. They fell to about 1% from 6.5% after the early 2000 dot-com stock bust. They also dropped to almost zero from 5% in the teeth of the global financial crisis in 2008, and raced back down to a bottom during the COVID crisis in 2020.

    Rates on 3-month Treasury bills dropped suddenly in past Fed rate-cutting cycles


    FRED data

    “I don’t think we are moving, in any way, back to a zero interest-rate world,” said Tim Horan, chief investment officer fixed income at Chilton Trust. “We are going to still be in a world where real interest rates matter.”

    Burt Horan also said the market has reacted to Powell’s pivot signal by “partying on,” pointing to stocks that were back to record territory and benchmark 10-year Treasury yield’s
    BX:TMUBMUSD10Y
    that has dropped from a 5% peak in October to 3.927% Friday, the lowest yield in about five months.

    “The question now, in my mind,” Horan said, is how does the Fed orchestrate a pivot to rate cuts if financial conditions continue to loosen meanwhile.

    “When they begin, the are going to continue with rate cuts,” said Horan, a former Fed staffer. With that, he expects the Fed to remain very cautious before pulling the trigger on the first cut of the cycle.

    “What we are witnessing,” he said, “is a repositioning for that.”

    Pivoting on the pivot

    The most recent data for money-market funds shows a shift, even if temporary, out of “cash-like” assets.

    The rush into money-market funds, which continued to attract record levels of assets this year after the failure of Silicon Valley Bank, fell in the past week by about $11.6 billion to roughly $5.9 trillion through Dec. 13, according to the Investment Company Institute.

    Investors also pulled about $2.6 billion out of short and intermediate government and Treasury fixed income exchange-traded funds in the past week, according to the latest LSEG Lipper data.

    Tipp at PGIM Fixed Income said he expects to see another “ping pong” year in long-term yields, akin to the volatility of 2023, with the 10-year yield likely to hinge on economic data, and what it means for the Fed as it works on the last leg of getting inflation down to its 2% annual target.

    “The big driver in bonds is going to be the yield,” Tipp said. “If you are extending duration in bonds, you have a lot more assurance of earning an income stream over people who stay in cash.”

    Molly McGown, U.S. rates strategist at TD Securities, said that economic data will continue to be a driving force in signaling if the Fed’s first rate cut of this cycle happens sooner or later.

    With that backdrop, she expects next Friday’s reading of the personal-consumption expenditures price index, or PCE, for November to be a focus for markets, especially with Wall Street likely to be more sparsely staffed in the final week before the Christmas holiday.

    The PCE is the Fed’s preferred inflation gauge, and it eased to a 3% annual rate in October from 3.4% a month before, but still sits above the Fed’s 2% annual target.

    “Our view is that the Fed will hold rates at these levels in first half of 2024, before starting cutting rates in second half and 2025,” said Sid Vaidya, U.S. Wealth Chief Investment Strategist at TD Wealth.

    U.S. housing data due on Monday, Tuesday and Wednesday of next week also will be a focus for investors, particularly with 30-year fixed mortgage rate falling below 7% for the first time since August.

    The major U.S. stock indexes logged a seventh straight week of gains. The Dow advanced 2.9% for the week, while the S&P 500
    SPX
    gained 2.5%, ending 1.6% away from its Jan. 3, 2022 record close, according to Dow Jones Market Data.

    The Nasdaq Composite Index
    COMP
    advanced 2.9% for the week and the small-cap Russell 2000 index
    RUT
    outperformed, gaining 5.6% for the week.

    Read: Russell 2000 on pace for best month versus S&P 500 in nearly 3 years

    Year Ahead: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

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  • 'Smidcap' companies are becoming a big deal. Here's a look at some of the best.

    'Smidcap' companies are becoming a big deal. Here's a look at some of the best.

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    The stocks of long-neglected small companies are finally showing signs of life as the market rally broadens. But these tiny companies still remain vastly undervalued. So, they are one of the best buys in the stock market right now.

    Small- and medium-cap companies, or smidcaps, have not been this cheap since the Great Financial Crisis 15 years ago. “Smidcaps relative to large caps look very attractive,” says says portfolio manager Aram Green, at the ClearBridge Select Fund LBFIX, which specializes in this space.  “Over the long term you will be rewarded.” 

    Green is worth listening to because he is one of the better fund managers in the smidcap arena. ClearBridge Select beats both its midcap growth category and Morningstar U.S. midcap growth index over the past five- and 10 years, says Morningstar Direct. This is no easy feat, in a mutual fund world where so many funds lag their benchmarks. 

    The timing for smidcap outperformance seems about right, since these stocks do well coming out of recessions. Technically, we have not recently had a recession. But there was an economic slowdown in the first half of the year, and the U.S. did have an earnings recession earlier this year. So that may count. 

    To get smidcap exposure, consider the funds of outperforming managers like Green, and if you want to throw in some individual stocks, Green is a great guide on how to find the best names in this space. 

    I recently caught up with him to see what we can learn about analyzing smidcaps. Below are four tactics that contribute to his fund’s outperformance, with nine company examples to consider.  

    1. Look for an entrepreneurial mindset: Green’s background gives him an edge in investing. He’s an entrepreneur who co-founded a software company called iCollege in 1997. It was bought out by BlackBoard in 2001. He knows how to understand innovative trends, identify a good idea, secure capital and quickly ramp up a business. This experience gives him a “private market mindset” that helps him pick stocks to this day. 

    “Founder-run companies regularly outperform.”

    Green looks for managers with an entrepreneurial mindset. You can glean this from company calls and filings, but it helps a lot to meet management — something most individual investors cannot do. But Green offers a shortcut, one which I regularly use, as well. Look for companies that are run by founders. This will give you exposure to managers with entrepreneurial spirit. 

    Here, Green cites the marketing software company HubSpot
    HUBS,
    +0.79%    ,
    a 1.9% fund position as of the end of the third quarter. It was founded by Massachusetts Institute of Technology college buddies Brian Halligan and Dharmesh Shah. They’re on the company’s board, and Shah is chief technology officer. 

    Academic studies confirm founder-run companies regularly outperform. My guess is this is because many founders never lose the entrepreneurial spirit, no matter how easy it would be to quit and sip Mai Tai’s on a beach after making a bundle.  

    In the private market, Green cites Databricks, a data management and analytics company with an AI angle. This competitor of Snowflake
    SNOW,
    -0.92%
    is likely to go public in 2024. If you feel like an outsider because you lack access to private market investing, note that Green says he typically buys more exposure to private companies on the initial public offering (IPO), and then in the market.  “We like to spend time with them when they are private so we can pounce when they are public,” Green says.

    2. Look for organic growth: When companies make acquisitions their stocks often decline, and for good reason. Managers make mistakes in acquisitions because they overestimate “synergies.” Or they get wrapped up in ego-enhancing empire building. 

    “We favor entrepreneurial management teams that do not make a lot of acquisitions to grow, but use their resources to develop new products to keep extending the runway,” says Green. 

    Here, he cites ServiceNow
    NOW,
    +2.62%    ,
    which has grown by “extending the runway” with new offerings developed internally. It started off supporting information technology service desks, and has expanded into operations management of servers and security, onboarding employees, data analytics, and software that powers 911 emergency call systems. Green obviously thinks there is a lot more upside to come, given that this is an overweight position, at 4.6% of the portfolio (the fund’s biggest holding).

    Green also puts the “Amazon.com of Latin America” MercadoLibre
    MELI,
    +0.17%
    in this category, because it continues to expand geographically and in areas such as logistics and payment systems. “They have really morphed into a fintech company,” Green says. He puts HubSpot and the marketing software company Klaviyo
    KVYO,
    -5.73%
    in this category, too. 

    3. Look for differentiated business models: Green likes companies with offerings that are special and different. That means they’ll take market share, and face minimal competition. They’ll also enjoy pricing power. “This leads to high margins. You don’t have someone beating you up on price,” he says. 

    Green cites the decking company Trex
    TREX,
    +0.10%    ,
    which offers composite decking and railing made from recycled materials. This gives it an eco-friendly allure. Compared to wood, composite material lasts longer and requires less maintenance. It costs more up front but less over the long term. Says Green: “The alternative decking market has taken about 20% of the market and that can get to 50%.”

    Of course, entrepreneurs notice success, and try to imitate it. That’s a risk here. But Trex has an edge in its understanding of how to make the composite material. It has a strong brand. And it is building relationships with big-box retailers Home Depot and Lowe’s. These qualities may keep competitors at bay. 

    4. Put some ballast in your portfolio: Green likes to keep the fund’s portfolio balanced by sector, size, and business dynamic. So the portfolio includes the food distributor Performance Food Group
    PFGC,
    -1.69%    .
    The company is posting mid-single digit sale growth, expanding market share and paying down debt. Energy drinks company Monster
    MNST,
    -0.85%
    also offers ballast. Monster’s popular product line up helps the company to take share and enjoy pricing power, Green says.

    It’s admittedly unusual to see a food companies in a portfolio loaded with high-growth tech innovators. But for Green, it’s all part of the game plan. “Rapid growth, disrupting businesses are not going to work year in year out. There are times they fall out of favor, like 2022. So, having that balance is important because it keeps you invested in the equity market.” 

    In other words, keeping some ballast means you’re less likely to get shaken out by sharp declines in high-growth and high-beta tech innovators when trouble strikes the market.

    Michael Brush is a columnist for MarketWatch. At the time of publication, he owned AMZN, TSLA and MELI. Brush has suggested AMZN, TSLA, NOW, MELI, HD and LOW in his stock newsletter, Brush Up on Stocks. Follow him on X @mbrushstocks

    More: Nvidia, Disney and Tesla are among 2023’s buzziest stocks. Can they continue to sizzle in 2024?

    Also read: Presidential election years like 2024 are usually winners for U.S. stocks

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  • San Isidro Independent School District Leverages GEAR UP Grants to bring ClassVR to Students

    San Isidro Independent School District Leverages GEAR UP Grants to bring ClassVR to Students

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    Chicago — The San Isidro Independent School District in Texas is embracing the immersive power of virtual reality technology through implementation of the award-winning ClassVR VR/AR headsets in its middle and high school classrooms. The district leveraged federal GEAR UP Pathways to the Future grant funding to purchase ClassVR, which includes thousands of pieces of VR and AR content to support all subject areas. San Isidro ISD is among 13 school districts in Texas Region One Educational Services Center’s service area to have signed on with ClassVR using GEAR UP Pathways to the Future grants.

    “The GEAR UP program has been great for bringing technology and training to our district,” said Cristobal Vela, GEAR UP facilitator for San Isidro ISD. “ClassVR provides an excellent opportunity to have students experience places that they otherwise would never be able to visit.”

    English teachers, for example, are using ClassVR to immerse students in scenes from author John Steinbeck’s “Of Mice and Men.” Social studies teachers are using it to take students on virtual field trips to big cities such as Times Square in New York City. In sixth and seventh grade science classes, students are using ClassVR to virtually go inside of an atom to see how it’s constructed.

    The GEAR UP grant program is designed to increase the number of low-income students who are prepared to enter and succeed in postsecondary education by providing services for high-poverty middle and high schools. San Isidro ISD serves a rural community in southern Texas where 95% of students are Hispanic/Latino and 100% qualify for free or reduced-price lunch.

    ClassVR is an all-in-one VR/AR headset designed specifically for K-12 schools. Used by more than 1 million students in 100,000 classrooms worldwide, it includes all hardware, software, tools, training, support and implementation services needed for teachers to deploy AR/VR in their classrooms. ClassVR’s content hub, Eduverse, gives teachers access to thousands of VR and AR resources and content to enhance lessons and engage students more deeply in what they are learning. Students can virtually experience walking with polar bears, swimming with sharks, or traveling back in time to see what it was like in a World War I trench.

    New for the 2023-24 school year, Avantis aligned 400+ lessons in ClassVR to U.S. state standards in science, social studies and English language arts, providing added value and convenience for teachers.

    In addition to qualifying for GEAR UP grants, ClassVR also qualifies for ESSER funds because it helps teachers support student academic achievement and address learning loss.

    “Utilizing grant funding for ClassVR is really a great way to support equity in schools because it gives students access to cutting-edge technology, and allows those who might not have had opportunities to travel, to experience different places through the power of virtual reality,” said Avantis Education’s Chief Executive Officer Huw Williams. “GEAR UP grants offer a great opportunity to bring technologies like ClassVR into schools to help enhance lessons and support academic success in secondary school and beyond.”

    To learn more about ClassVR, visit http://www.classvr.com.

    About Avantis

    Avantis Education, the creators of ClassVR, provides simple classroom technology used by more than a million students in over 90 countries.

    The world’s first virtual reality technology designed just for education provides everything a school needs to seamlessly implement VR technology in any classroom, all at an affordable price. To learn more visit www.avantiseducation.com and www.classvr.com.

    eSchool News Staff
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