There's always something happening to OpenAI's board

Mary Ann was off this week, and Kirsten took the lead with Becca Szkutak and Rebecca Bellan in the co-host seats. This episode is packed with deals, antitrust musings, AI and more, so let's get into it! For our first deal of the week, one of the many lawsuits Musk faces after firing 6,000 Twitter employees after his 2022 takeover was dismissed. The result may be good news for Musk, but it doesn’t eliminate Musk’s legal troubles. Musk is facing at least one other lawsuit from CEO Parag Agrawal, who along with three other former Twitter Inc. executives are seeking $128 million in severance payments from X Corp. Next up, Rebecca broke down Microsoft’s decision to leave its observer seat on OpenAI’s board, after which the AI company will no longer host observers. The legacy tech giant said it has seen enough progress being made at OpenAI and is “confident in its direction,” but we’re not exactly buying that Microsoft would give up such a coveted spot so easily. We suspect that the decision was fueled by ongoing antitrust scrutiny of Big Tech’s influence over emerging AI players. After that, Becca talked about Duolingo’s deal to buy Hobbes, a Detroit-based animation and motion design studio. Hobbes is a company that Duolingo has worked with for years on several features, including Duolingo Music, so it’s interesting to see the acquisition happen at this stage. Maybe Hobbes was having money trouble and needed a lifeline? Either way, Duolingo is calling this an acqui-hire deal. While Hobbes isn't an AI company, we make a prediction that we'll see similar acquisitions of smaller AI startups as larger companies scoop up the AI startups they're already working with. We’ve been noticing a few stories lately that investigate what happens when a company’s founder or owner dies. Today, Rebecca went over the story of Unseen Capital, whose founder Kayode Owens passed away in 2021 just after raising $30 million. The VC’s mission was to help early-stage healthcare companies started by underrepresented founders. Pharma company Eli Lilly was one of Unseen’s LPs, and in a move to protect its own investment while signaling confidence in Unseen’s mission, has brokered a deal for Seae Ventures to acquire the unmoored VC. It’s a good fit, as Seae Ventures is another diversity-focused VC firm. Meanwhile, a recent TC story on deep tech funding caught the Equity pod’s attention. The gist: a recent survey of 30 deep tech VCs from eight countries found that very technical CEOs raise larger rounds. The survey also noted that pre-seed and Series A deep tech hardware rounds were bigger in 2023 than in 2022. While the survey seems to provide a rosy picture for technical CEOs, it does not provide a complete one. For instance, the survey focused on Europe, which got the Equity crew musing about whether those same stats would hold up in North America. And it followed rounds up through Series A. The Equity pod wondered if the results changed in Series B rounds and beyond. Plus, we think the rise of deep tech-focused funds may also play a role here too. Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:11Kirsten Korosec?

  Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. Today is Friday, July 12. I'm Kirsten Korosec, Transportation Editor here at TechCrunch, and joining me today is Senior TC Reporter on the Venture Beat, Becca Scootac. How's it going, Becca?

• 0:30Speaker 01

  I am hanging in there. How are you?

• 0:33Kirsten Korosec?

  Great. Hanging in there. Are you fresh off of the vacation beat?

• 0:38Speaker 01

  I'm fresh off the vacation beat, and we are dealing with our second heatwave of the summer already. So I saw in a newsletter yesterday, and I thought it was very accurately described. Walking outside right now feels like walking into someone's mouth. It's awful.

• 0:52Kirsten Korosec?

  So descriptive and horrifying all at the same time. So good luck with that.

• 0:58Speaker 01

  Thanks.

• 0:59Kirsten Korosec?

  We're also joined by Senior TC Reporter on the Transportation Desk, Rebecca Bellan. Rebecca, how are you?

• 1:05Rebecca Bellan?

  I'm good. I'm better hearing that little tidbit. That was funny. But I was a little bummed this morning because I read that Elon has volunteered his sperm to colonize Mars. So it just hasn't left my head.

• 1:15Kirsten Korosec?

  Oh, yeah.

• 1:16Rebecca Bellan?

  Reportedly.

• 1:17Kirsten Korosec?

  Lots of visual, yeah, lots of imagery there. But I think that we should maybe instead talk about venture deals and other things than Elon sperm. So we've got a lot to cover on the show today, as usual. We're going to kick things off with a few deals, Musk's court ruling, OpenAI's observer seats, Duolingo's latest acquisition, and then later on, we're going to talk about companies continuing without their founders. I think, Rebecca, you have a lot to say on that one, and deep tech startup funding. So let's kick things off with Elon, not Elon sperm. Elon Musk has finally gotten another win in the long

• 1:58Kirsten Korosec?

  string of legal and litigation that he's been facing over the years. What happened is a judge ruled that they basically dismissed a lawsuit that he was facing after firing 6,000 Twitter Employees. This was back in 2022. And basically, the lawsuit was filed by the former head of people experience. So your HR person that alleged that X Corp, formerly Twitter, paid fired Twitter employers less severance than they were contractually promised. So the lawsuit's been dismissed. Rebecca, Becca, any takes on this one surprising?

• 2:32Rebecca Bellan?

  I don't know if it's surprising necessarily, but it is a raw deal. Like you sign up at a company, you think you're going to get one thing if you happen to be fired. And then because X is like a different company, essentially, this means that they don't get the same deal that they were promised, which really sucks for them.

• 2:49Speaker 01

  Yeah, every time something like this comes up and it's like, wow, I can't believe the company can do that. I used to be a steward at the Forbes Union and being in a union and doing that kind of work has just made me learn that it's like anything that you think a company can't legally do, like they probably can to their employees. It's just, it's very depressing. So it's a bummer to hear that. Yeah, because like Rebecca was saying, it's like you literally sign a contract. So like you of course think you have these protections, but it's just never the whole story.

• 3:20Kirsten Korosec?

  Right. And companies run by Musk are known for being tough places to work. You know, this is not your 40 hour work week scenario. So leading up to this, if we go back in the history books a little bit, rewind the clock a couple of years, you might remember that it was all about going hardcore and people putting in a lot more hours. And then suddenly a major culling of jobs at the company. And then after all that work, they're not getting their severance. So the question really for me that I'll be watching, I know that you two will be as well, is what happens now? There are other lawsuits.

• 3:59Kirsten Korosec?

  We have at least one former CEO of Twitter and other former Twitter executives are seeking 128 million in severance payments. We'll see how that plays out. Then there is a whole long list of other legal wranglings that Elon Musk is going to be dealing with, all related to Twitter.

• 4:19Rebecca Bellan?

  What was the difference between what, you know, for this lawsuit, what they were promised and what they ended up getting? Wasn't there something about, you know, more money for senior employees as well?

• 4:29Kirsten Korosec?

  So my understanding is that the complaint stated that the fired employees were offered at most three months of severance pay while Twitter's severance plan previously had promised upwards of six months pay to senior employees. So that's that discrepancy. But I don't know if there were other details in there, differences between senior employees and regular level employees.

• 4:51Rebecca Bellan?

  Right. And then so that altogether, they're saying that would have been $500 million that Musk would have had to pay.

• 4:56Kirsten Korosec?

  Correct. Exactly. So he avoids that one. More to come on that front, but we should shift the conversation over to another deal. This is interesting. Microsoft is leaving the observer seat over at OpenAI. Rebecca, take this one away.

• 5:15Rebecca Bellan?

  Yeah. So in a letter that was sent to OpenAI on Tuesday, Microsoft said that it's going to leave its observer seat on OpenAI's board. For those who don't know, board observers don't have voting rights or fiduciary responsibilities. Investors just like to take these seats so they can keep an eye on their investment. So Microsoft said that, you know, the company has seen enough progress being made in the AI company and it's quote confident in its direction. So it's no longer a board observer, but Microsoft still does own 49% of OpenAI after investing nearly $13 billion. So yeah, that's interesting. And there's antitrust stuff going on there that we can talk about or speculation as to why Microsoft gave up its seat. But the other interesting thing is that OpenAI says that now there won't be any more observers on the board. So there had been some rumors swirling around that Apple was gaining an observer's seat

• 6:00Rebecca Bellan?

  as well after the two companies announced a partnership last month. That is going to see Siri plus ChatGPT vibes on your iPhone and Mac. But this puts that to rest, I think.

• 6:10Speaker 01

  Yeah, I would say what was interesting about this to me is that antitrust piece. Because I remember when I first saw like the headline, like, okay, they're leaving the board. I was like, that's kind of crazy, especially when you have such a huge stake and you do have this visibility into the company. Like, I don't know why you would give that up. But I know Dan Primack talked about in his newsletter, he smartly was saying that the CEO of Microsoft doesn't just like overlook something like that. He's not leaving and just being like, oh, haha, like, things will be fine. Which makes it seem like that antitrust piece is probably a big player here, which I'll admit, I didn't realize could be a factor in antitrust. Like, that's something I've just like never come across in antitrust, I guess. But I know people are saying people like Nvidia might be getting investigated for the same reason.

• 6:54Speaker 01

  So this might just be an area that I just hadn't paid enough attention to.

• 6:57Kirsten Korosec?

  Yeah, I mean, I wasn't buying the line that Microsoft was giving, which is that they're confident in their direction and we're just, you know, we don't need to be a part of it. Because as you both note, Microsoft still owns 49%. They clearly have an interest in what's going on here. So to your point, Becca, about the antitrust piece, there seems to be something else going on here. Because OpenAI is a very important company for them. Certainly not one that they're going to just ignore unless they have to, technically speaking, by removing that observer seat.

• 7:31Rebecca Bellan?

  I feel like this might be coming from the OpenAI side of things, not like Microsoft being like, oh, no, we're good, we're okay, we don't need to have a look into this. Because it would give them a, yeah, I guess this is where the competition comes in. It gives them a competitive advantage to see what a potential competitor is doing, right? Because Microsoft has its own, has Bing and has its own AI stuff going on. So it's, yes, Kirsten.

• 7:54Kirsten Korosec?

  I'm gonna push, I'm gonna push back on that because I don't see what the upside is for Microsoft to listen to what OpenAI is saying. It's like, well, we don't want you here, you know? Hmm, well, we're gonna come anyway, so. I don't really see why Microsoft would bow down to really any pressure that OpenAI was exerting here, which is why I'm sort of leaning a little bit more towards Becca's take on this, which is there's something else underlying here, possibly the antitrust, that is pushing Microsoft to give up an observer seat. Otherwise, I just don't really see, again, what the upside is for them to walk away from that.

• 8:34Speaker 01

  Yeah. I'm curious how we would be talking about this exact scenario if it was a company that wasn't OpenAI. Like, finding out that Nvidia might be going through something similar is interesting because it's like you haven't heard very much about it. Because like, we don't need to tell you, dear listeners, but OpenAI's board has never really just been, you know, a calm, peaceful place to hang out. Like, there's just like always some drama going down in the OpenAI board, and there has been for quite a while. So it's like, it's interesting to see this come up here because, yeah, if this was any other company, I'd be like, oh, maybe I do believe that. But it's like, it's OpenAI board, I'm like, there's gotta be like multiple things going on here because there's always something going on with that board.

• 9:10Kirsten Korosec?

  Yeah, so true. There is always multiple things going on. Not a chill place, definitely not low-key at all. So, we will be paying attention to, who knows, maybe by next week, we'll have a whole new update on observer seats. They're back at OpenAI. But, moving on, Becca, you had an interesting deal you wanted to talk to us about this week, about Duolingo acquiring a Detroit-based design studio.

• 9:33Speaker 01

  Yes. So this week, Duolingo announced that it had completed a deal to buy Detroit-based animation and motion design studio Hobbs. While the price of the deal wasn't disclosed, we know that the acquisition was for cash plus equity awards for the Hobbs team members that got acquired. Hobbs had 12 designers, motion animators, creative strategists, creative directors, and producers that will join Duolingo full-time. I think this is a really interesting deal for a few reasons. One of which being that Duolingo was already working with this studio quite often. While Duolingo is not an AI company, I actually have a feeling this is kind of like a deal we should pay attention to as to what could come in the AI space. There's so many companies starting that are like, you can hire us to build your AI this or to work on your infrastructure that.

• 10:17Speaker 01

  If you're working with these companies for so many of your projects and it's going well, it's kind of like... Almost seems natural to bring them into the fold. So that was what stood out first, even though, of course, Duolingo is not an AI company, although they use it. The other thing is someone who has used Duolingo for a while, I'm like, if you're going to make more animation, you're going to make this more fun. That's great. I've used Duolingo for years and they've, they've improved that stuff, but the app is very, very similar to when I started using it like five years ago. So if they're going to like beef stuff up, like I'm kind of excited about that as a user.

• 10:47Kirsten Korosec?

  Okay. So I'm wondering if we're going to see the beginning of a trend where a company, Duolingo, for instance, not an AI company, starts to use an AI company or that talent and then decides, you know what? Let's just buy that company. So in your view, is this essentially more of like an aqua hire deal? And really about just capturing what they want to use to push the app forward? And instead of paying for that service, hey, we've got a little extra coin right now. Let's just acquire this small company.

• 11:19Speaker 01

  For sure. And it seems like Duolingo is actually kind of hinting that they're considering an aqua hire deal as well. So it definitely would make sense. If this is a 12 person studio in Detroit and they're working with a big company like Duolingo, it's like, I wonder how many other high profile, large, deep pocketed clients that they have. Like this might be one of those things that truly is like everyone wins.

• 11:39Rebecca Bellan?

  Do we know if, under Duolingo, if Hubs will continue to serve other clients? Will this be an additional revenue stream for Duolingo? Or is it just so that Duolingo can be more vertically integrated and make learning language more of like a game? I mean, it already is like that for Duolingo, but this just kind of boosts that, doesn't it?

• 11:54Speaker 01

  You know, I'm not sure, but that is a really interesting question because it would be interesting if they were adding another revenue stream. I have a feeling they probably aren't. But yeah, like I was saying, the team's so small, I'm like curious how many clients outside of Duolingo they had to begin with.

• 12:07Kirsten Korosec?

  One other note, Anaheim, another reporter here, had previously reported that investors were calling this a good time to invest in early stage ed tech. So maybe this is the beginning of like that M and A activity. I would add another layer to that though, which is any ed tech company that purports to have quote unquote AI, I think is ripe for the taking, especially small firms and ones that might be bumping up into funding trouble. I'll put my predictors hat on for a moment. I think we're going to see a lot more of those types of deals through the end of the year.

• 12:42Rebecca Bellan?

  Yeah, I agree with you, but I think it won't just be in the ed tech sphere. I think that AI is expensive as hell to run. And as a result, you know, you're seeing a lot of the big tech companies swallow up the little guys. And it's across sectors. So I mean, the only thing that's connecting them is maybe AI, but it's across sectors. So it's hard to cry antitrust. But it is really difficult to raise the money or even to keep your bottom line somewhere sustainable when you're doing an AI company, I think. So we'll see a lot more M and As for sure.

• 13:10Kirsten Korosec?

  You know what's also difficult? If you're running a company and the founder dies, which is what we're going to talk about after the break.

• 13:24Kirsten Korosec?

  So as I mentioned before, one of the most difficult things a company can go through is when their founder or CEO dies. And Rebecca is actually quite familiar with this because a few months ago, she wrote a story about a small, yet popular e-bike company called Onyx Motorbikes and sort of unwound the story of what happens when the CEO and the person really running and the visionary dies. And now we have another example, another story of this happening. Rebecca, walk us through what happened.

• 13:55Rebecca Bellan?

  Yeah, so Unseen Capital was a VC firm founded by Coyote Owens, if I'm saying that correctly, and probably not. So Owens launched Unseen in 2020 to focus on early-stage healthcare companies started by underrepresented founders. He ended up raising about 30 million for the firm, but sadly died from cancer the following year. Eli Lilly, the pharma company, it's a pharma company, but is also one of Unseen's LPs, realized the firm probably wouldn't survive without Owens at the helm. And so they set out to find a new home for the VC. Now, I think it's like pretty rare for one VC to buy another one, but this one seemed to be a good fit. So Say Ventures this week announced that it is buying Unseen Capital. It's another diversity-focused VC firm, also backed by Eli Lilly.

• 14:39Rebecca Bellan?

  And the acquisition will give Say's total assets under management $200 million. Another reason this is a good fit, like Say Ventures says they will continue to honor Owens' vision, not only by backing young healthcare companies founded by minorities, but also through a fellowship in Owens' name and a scholarship fund for historically black college and university students. Yeah, if it's a good fit, it's a good fit. I'm not sure if Owens had a succession plan, but it does show that investors in a firm will step in when a founder dies to try to protect their investment. And yeah, that's kind of similar to Onyx Motorbikes, which you mentioned. There's still not really a resolution there. The founder died without a succession plan and his estate is now kind of somewhat up for grabs.

• 15:21Rebecca Bellan?

  But some of Onyx's biggest investors are the ones trying to get control of that estate so that they can, you know, be made whole or keep the company running or, or, or something. But everything's like kind of halted at the moment because, yeah, again, there was no plan, no will for Onyx.

• 15:36Speaker 01

  Yeah, and this is not the same scenario, of course, but reminds me of something I wrote. It was either earlier this year or it might have been last year. But it was about how when founders start a company, and of course, the same thing can apply to emerging managers and other VC funds because we're seeing a lot of emerging managers break up at this point. But you should always just plan for the absolute worst, like from the beginning. And you just hope you never use those plans. But I was talking with some like head of talent at VC funds as well as consultants who work in this area. And they're like, you'd be so surprised just like how often something goes wrong with the leadership, whether it's as tragic, of course, as a founder passing away. But there's also just so many other things that could happen that would make a founder leave or make a founder just not be able to run the fund anymore.

• 16:21Speaker 01

  That it's like they always recommend they're like best practice day one. Not the funnest conversation, but the same thing could be said about planning your will when you're young and healthy too. So this is just a really interesting case. I mean, it's great. It sounds like the fund at least has a good outcome. But definitely something that I think isn't talked about enough in the venture space. But it really is important to have that kind of stuff in place.

• 16:41Rebecca Bellan?

  Yeah, it's clearly like a super sad and heavy outcome. And I think when you're building something and you have a vision, the last thing you want to be thinking about is the demise of that or yourself.

• 16:54Speaker 01

  Right.

• 16:55Rebecca Bellan?

  And so it's good advice to be sort of thinking about that. And that was some of the advice that was given.

• 17:01Kirsten Korosec?

  Around the Onyx Motorbike situation, which has had a much more complicated end, actually not even an end yet, as Rebecca mentioned. In this case, it really seems like, on the face of it, serendipitous and quite positive that another VC is not only willing to take on the assets under management, but really put a positive step forward for the legacy that the original founder had built, which is kind of amazing. I'm really curious to see what happens with this VC firm and how they continue that vision. And, you know, we should probably talk to some of those startup founders and see how that transition has gone for them.

• 17:44Speaker 01

  Yeah, that's exactly what I was going to say. Even not necessarily such a tragic situation like this is, but I've been tracking, there's been so many VCs this year just leaving their firms and going to others. And it's like, if you just invested in a company six months ago and you're on the board, but your fund that you just left is who supplied the money, it's like founders are in a weird spot. I really also just want to touch on the fact that Eli Lilly just did this in general. I mean, I'm not saying I don't have faith that LPs really take this much care for all of their investments and the funds and the companies that they do work with. But it's really heartwarming to see them be like, you know what, we really want this mission to succeed. So we're going to try to figure out a way to make that happen. And I love that aspect to it.

• 18:27Rebecca Bellan?

  Yeah, and you know, we were talking about acqui hires before. I think that because, obviously, Owen's passed away in 2021, it's now 2024, this is happening. A lot of the partners at Unseen had already moved on. So I do wonder how this transition will go for the portfolio companies, because a lot of that is kind of, you know, it's a human relationship that you have with your investors. And so I wonder if, you know, they have to meet all these new people now as well as get new expertise, perhaps, or yeah.

• 18:52Kirsten Korosec?

  Well, it certainly adds some certainty, at least for them. New people, new faces, new relationships they have to build, but a more certain future than was after he passed away. So that's, that's a good positive sign. And we'll have to keep track of them. Let's move on to Another thing I want to talk about, which is about deep tech. We obviously cover a ton about deep tech, but there was a really interesting study, and I love the name of it, Deep Tech Hardware Napkin. It's a, you know, sort of like the back of the envelope or back of the napkin, sort of calculations. And it was a survey of 30 deep tech VCs from eight countries.

• 19:31Kirsten Korosec?

  And what they found is a little interesting is that it seems that technical CEOs of these deep tech startups, so any startup that has a technical CEO, appears to be getting more funding, which anecdotally makes a lot of sense to me. And I've actually heard of that in the deep tech space, particularly in, let's say, the AV world, early days, let's say, like the buzzy, hypey time of 2017, 2018. The technical CEOs absolutely got the most money. I think that maybe the one exception might have been Zooks, which has obviously a technical

• 20:12Kirsten Korosec?

  co-founder, and that's Jesse, but his counterpart did not have a technical background and was able to really like get a lot of buzz and excitement and funding as a result. But what do you two think?

• 20:24Rebecca Bellan?

  I'm like on the fence about it. On the one hand, I wonder if VCs are just like, well, I don't understand this stuff. You do, though, so that's good. We'll give you some money. And then on the other hand, as we get to growth stage, are technical CEOs the ones to help bring these companies to scale? When often you hear from VCs that they want to see someone at the helm who has scale experience before and doesn't necessarily come from like an academic background. So, yeah, there might be challenges later on. Becca?

• 20:53Speaker 01

  Yeah, I see arguments for both sides here because of course, having a technical CEO, having someone who really just like actually understands the technology, what it could do, where it could go, as the person directly interacting with the investors, as well as sort of being that public facing person from the company, I could see there being a lot of value there because there wouldn't be miscommunication, say with the CEO who was just a CEO who maybe didn't understand the technology fully. Like you eliminate that entirely. I also think about the fact that you think about some of the companies that have not done well, who have not Had, I don't know, I'm just thinking of like mock industries and the 19 year old CEO building like helium weapons. And then it's like, oh, what do you know? Like, things aren't going well there. And it's like, well, yeah, that's crazy because this is a kid who has no experience

• 21:37Speaker 01

  in this space. Like, wow, it didn't go right. That's wild. But at the same time, I know, like, from having companies on found, especially companies that have come through either a very technical tracker from like, the academic space, they don't frequently have either the researcher or a developer of the tech as the CEO. But we did have one woman on once who, her company is based on her own research, and she made the case that technical CEOs, academic CEOs can actually be really helpful. So I definitely see both sides to this. I feel like it's interesting to see this research, because I would say this isn't an area I would say you could paint with a broad brush. But like, maybe I'm wrong about that.

• 22:13Kirsten Korosec?

  Well, I'm glad you mentioned that, because there is a caveat to that. So first of all, the report came from First Momentum. They're the ones who did the survey. They focused on Europe's deep tech sector. So first of all, it's looking into that world. And I'd be very curious to see if this also applies to startups in North America. Also, they're really looking at that pre-seed and series A, that I think is worth to have a little asterisk on, because we know, and we've seen this certainly anecdotally in all of our coverage, that oftentimes, technical or non-technical CEOs have trouble getting over that series A to series B funding hump. So what I would like this survey to do is then sort of cover these companies throughout,

• 22:58Kirsten Korosec?

  all the way up to series C, and see if there's any difference there.

• 23:02Speaker 01

  No, that's such a good point, too, because thinking about it, there's so many examples of companies that started with a technical CEO, then then by a couple rounds in, they had sort of transitioned and like, they take on a different role, they hire someone who kind of has that experience. Yeah, it'd be interesting to see kind of like, okay, this pool of companies, what happened at the next few stages? Are those technical CEOs still in place? Are they having trouble raising? Or did they kind of find a different path? Because I feel like that would be like, very fascinating, like, follow up to this.

• 23:30Kirsten Korosec?

  Yeah. And then touching back on the Europe piece, I also wonder if there's like, a little bit of a cultural difference between Europe and America, because I have talked to some European founders. In America, often VCs want to hear, you know, what the big dream is, what the big vision is. But in Europe, VCs want to hear, like, what can you actually do today? And I wonder if a technical CEO would just be, you know, a little better place to actually paint that picture for VCs. Yeah, that's a really good point. And then there's one other wrinkle in this, which is again, a request for a deeper survey. I have certainly seen in the transportation world, specifically in AVs, where a technical CEO comes in, but doesn't have the business prowess,

• 24:13Kirsten Korosec?

  and it gets to a point where some of their backers either force out or is a happier agreement, I guess, where they leave the CEO spot, take the CTO spot, and put someone more business minded, meant to scale the company. I'd be curious to see what happens when that transition occurs. Do they receive more funding? Is that the little hiccup or hurdle that they've navigated through, and therefore they get this little bump up? Or does it actually hurt them?

• 24:44Speaker 01

  Yeah. And it's interesting too, because I think about some of the past technical founders we've had on Found, shameless plug if people like stories about the startups and the founders who built them. We had, I remember as the founder of Glean, he was an engineer, like very technical, very knows the AI, the tech that the company's building. And we were asking him, because of that, he was the CTO at the company he had founded prior. We were like, how was it like transitioning to be the CEO? And he was like, I don't really like it. He was like, these are not my skillsets. He's like, I do it and I've figured it out. But he's like, definitely not the favorite part of the job. So I also feel like companies that make that transition to having that technical CEO, technical founder, like move to a different role can make a lot of sense and make everyone just be able to play to their own strengths.

• 25:27Kirsten Korosec?

  Yeah, just touching back on Onyx, we talked about earlier, the founder of that company, Tim Seward, he pulled on James Cattablu, the man who took over and then ended up dying, sadly. He pulled him on because he was like, I'm a designer. I came with a cool design for a bike, but I don't want to sell it. I don't want to deal with the business side of this. This sucks. Yeah, I think that's definitely a thing, a trend that we see across industries.

• 25:50Speaker 01

  Yeah. The last thing I would say about that is I'm curious about the relationship with this type of dynamic with investors. While I'm sure technical CEOs may be talking to like a more generalist fund, maybe struggle as they get to those later raises, but I'm curious what the conversations are like because there are so many early-stage, deep-tech-focused funds now. And I like, wonder if that plays any role in this too of there's more deep-tech-focused VCs. They now know the space super well, like they get those hard conversations in a way other VCs maybe wouldn't. And I wonder if that plays into these companies finding more success because there's now just more investors who are just going to get them and get where they're coming from than there were like five, 10 years ago.

• 26:31Kirsten Korosec?

  Well, Becca, I think that you just talked yourself into a story assignment. So can't wait to see the end result of that. On that note, we will have to leave it there, but Equity will be back on Monday. Until then, you can find Equity under the handle at EquityPod on X and Threads. Rebecca, Becca, thanks so much for coming on the show. Where can people find you?

• 26:51Rebecca Bellan?

  Well, I'm on X, unfortunately, at Rebecca Bellan. That's me.

• 26:56Speaker 01

  Yeah, you can also find me on X at Rebecca, two Cs, underscore, scootac. You can, I'm sure if you type in Rebecca S Z, I will come up. There are not many of us, so.

• 27:08Kirsten Korosec?

  Great. And I am on all social media platforms at Kirsten Korsak. Until then, talk to you then.

• 27:17Kirsten Korosec?

  Equity is produced by Teresa Loconsolo with editing by Kell. Bryce Durbin is our illustrator. And we'd like to give a big thanks to our audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thanks so much for listening and we'll talk to you next time.