AI-powered drug development, VW teams up with Rivian, and DEI is 'bad'

Mary Ann, Haje and Kirsten are back on the mic for this week's episode, which was is jam-packed with deals, hot topics, and the latest dramaaaaaa in the tech world. For Deals of the Week, Haje wanted to chat about Formation Bio, an AI-focused drug development startup that just raised a whopping $372 million in Series D funding, led by Andreessen Horowitz. Next, Kirsten broke down the surprising partnership between Volkswagen Group and Rivian and how its initial $1 billion investment could grow up to $5 billion. To wrap up our deals, Mary-Ann highlighted Nubank’s acquisition of Hyperplane, an AI-for-banks startup. Moving onto our themes, Haje took us on a deep dive into the fediverse, a decentralized network of social media platforms like Mastodon, Threads, and even Trump’s Truth Social. The fediverse has seen a surge in popularity, especially after Elon Musk acquired Twitter (now X). Mastodon, for example, has just about tripled its user base since Musk took over. The appeal lies in its decentralized nature, offering users more control and niche communities. Whether you’re a photographer, a journalism enthusiast, or just someone fed up with traditional social media, the fediverse has something for you. Last but not least, we discussed the ongoing debate around DEI (Diversity, Equity, Inclusion) in tech in a more controversial segment. Scale AI’s founder Alexandr Wang recently sparked a debate by advocating for MEI (Merit, Excellence, Intelligence) over DEI. This has drawn support from big names like Elon Musk and Palmer Luckey but also significant criticism. The stats are troubling: new women recruit levels in the U. S. data industry have dropped dramatically, and DEI-related job listings are down. Equity will be back on Wednesday with a new interview episode, so stay tuned! Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Monday, 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.

• 0:11Speaker 00

  Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. Today is June 28, 2024. I'm Maryann Azaveto and joining me today is Senior TC Reporter, Haya Camps. Haya, how's it going?

• 0:25Speaker 01

  You know what? I made an incredibly dumb decision, which was to go camping in the depth of the desert. So I've been trying to survive in 115 Fahrenheit, which for my parents, I ended up calculating it's 46 Celsius.

• 0:38Speaker 00

  Oh, my goodness.

• 0:39Speaker 01

  And at night, it was 90 something and I just gave up. So now I'm in a hotel. I'm in the AC. Call me a wimp, but clearly I'm not cut out for camping in the wilderness.

• 0:49Speaker 00

  115 degrees Fahrenheit, that does not make you a wimp.

• 0:53Speaker 01

  In a tent. Not a great idea.

• 0:55Speaker 00

  Oh, my goodness. Well, I'm glad you're here. We're also joined today by Senior Reporter and Editor Kirsten Corset. Kirsten, how is it going in your world? I imagine it's hot also where you are, right?

• 1:06Kirsten Korosec?

  Yeah, as a dweller of the desert, I can tell you officially, it's hot, it's summer, AC is necessary. Haya, I'm not going to say dumb because you called yourself that, but I'll say misguided and naive perhaps, but you've learned now.

• 1:22Speaker 01

  You can say dumb. We're friends.

• 1:25Kirsten Korosec?

  You've learned now and so happy that you're poolside and able to chat about equity in a more comfortable environment.

• 1:33Speaker 00

  Yes, and I'm glad you didn't like dehydrate or get heat exhaustion or anything like that.

• 1:38Speaker 01

  Yes.

• 1:39Speaker 00

  Anyway, we've got lots to talk about today. Deals of the week include Formation Bio, Volkswagen and Rivian's big deal, and New Bank acquiring Hyperplane. We're also going to be talking about a fun feature that Haya put together on the Fediverse and a look at DEI and meritocracy in tech, as well as the latest at fearless funds. So, Haya, Formation Bio is your deal of the week. They just raised $372 million. Tell us more about this company. That's a lot of money.

• 2:12Speaker 01

  That is a lot of money. It is a Series D, so they've been at it for a while. They've raised more than $600 million to date. At a hell of a valuation, too. The company last was valued at the last round at over a billion. And this time around, they won't disclose the valuation, but it's significantly higher, they say. It's a really interesting company, right? It's a AI-focused drug development startup that is really trying to make drug development faster and easier. And Drayson wrote a little piece about it, and they basically described it as an AI-native pharma company focused on drug development. And they describe it as arguably the consequential bottleneck in bringing new medicines to patients. And I think it's a really interesting piece, right?

• 2:53Speaker 01

  Making medicines has for so long been incredibly expensive, but then the drug trials, clinical trials and all that kind of stuff makes it exponentially more expensive. And then the crazy thing that happens is if the trial fails, i.e. it's not safe or it doesn't work, all of that is down the toilet. And so the AI tech is trying to fail fast if it needs to fail or develop the right drugs.

• 3:16Kirsten Korosec?

  I was curious about that. I was curious about where AI came into this. I know it can take a very long time to figure out if a drug's going to work or not. So basically, what you're saying is it helps kind of speed up that time so that a company's losing perhaps less money if it doesn't work out or getting something to market faster if it does.

• 3:35Speaker 01

  Yeah, I think it's both. I mean, the the whole point of this is to help with patient recruitment, to find out who should you test these drugs on, but much more importantly, using recommendations based on AI for the R and D process. So that predicts the toxicity of the drugs, the tolerability and the efficacy. And so with all of those things, it just really helps the the speed of drug discovery. And it means that they can stop development much sooner if it turns out, wait a minute, this is never going to work, rather than get several years and millions and millions of dollars in.

• 4:07Kirsten Korosec?

  So a point of clarification here, when you say AI, what bucket do we want to put this in? Is this a AI model that is pulling from, let's say, a very specific LLM? If that is the case, it's very reminiscent of this startup that I covered in EV battery tech, which is using generative AI specifically for its own form of drug development, in their case, the electrolyte that's going to be used in a battery. And what they're doing is they're kind of creating these custom LLMs that are only pulling from scientific data. It's not like to to avoid those hallucinations and things like that. So is this similar?

• 4:44Speaker 01

  Yeah, so it's really interesting because in general, what they do is they say, hey, based on all of these chemical and biochemical markers and features of these particular small molecules, this is the effect it has on bodies, based on like a really broad dataset. And so they can actually use like a huge data model based on things they found about previous drugs and previous interactions and previous everything and spit out potential improvements. Now, they also have a massive deal in place with OpenAI. So clearly, they're using large language models that way. And in fact, Islam Altman is one of the investors in this as well. So there's a whole melange here. But the company's been around since

• 5:26Speaker 01

  2016. And, you know, that is a long time ago in AI terms. And I think they've seen a lot of evolution in what kind of AI models they're using and how they're being used.

• 5:37Speaker 00

  Sounds like that in their pipeline, they've got a few different drugs, like one looking at hand eczema, one looking at sensory neuropathy, and one at knee osteoarthritis. Once again, I really love where when artificial intelligence is doing something more meaningful than just helping kids write essays in school. So this is a fascinating company. And hey, anytime you can get needed drugs to market faster or help companies move quicker in general in this space, I'm all for it.

• 6:10Speaker 01

  And drug discovery AI, you know, they're expecting to find about $5 billion worth of investments by 2028. So it's a super hot market. There's a whole bunch of companies in this all over the world, raising hundreds of millions of dollars. So and it makes sense, right? Drug discovery is incredibly expensive. And this is such a good use case for basically making up for boring lab legwork and being able to do that with computers instead.

• 6:36Speaker 00

  Yeah, yeah. Some of the competitors include or other companies working in this space, evolutionary scale, isomorphic labs, profluent, yeah, a bunch of others. But let's move on to another deal in a different space, but still also very interesting nonetheless. This one caught my attention because I was impressed with how much Rivian's stock shot up when Volkswagen announced it was going to invest $1 billion into the company as part of a broad software development deal. Kirsten, was this a surprise?

• 7:06Kirsten Korosec?

  Yes, yes, it was a surprise. I was just out with Rivian in Seattle, testing their next gen, basically their improved next gen R1 line. This is their SUV and their truck. And was definitely not anything on my radar that they would be partnering with VW. That was, I put it in the bucket of did not expect this in 2024. However, looking at this deal, it's quite interesting and it does make sense, even though I did not forecast it. Rivian is at an interesting point in its lifespan. It is now putting out its new and improved R1 as an R1T.

• 7:46Kirsten Korosec?

  And it has a couple of years until its next generation of vehicles comes out. So really, they have to do two things. Reduce the cost of making these vehicles. Right now, they lose about $38,000 for every vehicle that they make.

• 8:03Speaker 00

  Really?

• 8:04Kirsten Korosec?

  This next generation, yeah, it's not a good business model. This next generation is meant to greatly reduce that. So they need to lower costs. And at the same time, they need to keep selling these new and improved R1s while they wait for this whole next future generation to come to pass. So that means they're plowing through a lot of money, even as they go towards that profitability moment. Here comes VW. VW needs help with software. There is no question about it and their electric architecture. This is not the battery for people who aren't into vehicles. This is the zonal architecture, which is what Rivian has created, which is where all of the, let's say, mini computers or ECUs are laid out in the vehicle.

• 8:46Kirsten Korosec?

  And a correct and let's say efficient architecture can really be important as you then integrate it with software. VW has really struggled with this as it pursues this thing called the software defined vehicle. And they say in Rivian, the promised land, if you will. Rivian meanwhile, really needs money. So here are these two come together. This deal is potentially worth up to $5 billion. So initially, it's pretty complex and we won't get into all the details here. But initially, it's a billion dollar investment. But then there's a joint venture that's going to be created in which IP from Rivian will be part of this. And so there, there will be a payment structure there.

• 9:30Kirsten Korosec?

  That joint venture is going to be about $2 billion. And then this can scale up to $5 billion over time.

• 9:36Speaker 01

  There's an interesting piece here. I mean, we keep saying Volkswagen, but we're actually talking about Volkswagen Group, right? That includes a whole lot of brands. What else is in that group?

• 9:43Kirsten Korosec?

  Right, so we're talking Porsche, we're talking Audi. We're even talking this upstart called Scout, which is supposed to be this very American focused, sort of nostalgia, all electric brand that has yet to produce a vehicle. But it is, you know, in the works right now, multiple brands globally. So this is really, could be quite large if it goes well. And I will put that as a massive caveat. We are talking about a company, VW Group, with almost 700,000 employees. Wow. Rivian certainly has quite a, you know, many thousands of employees, but nothing close to this. Its software arm, VW Group's software arm called Carriad, has struggled for years,

• 10:29Kirsten Korosec?

  really since its creation in about 2020, to execute on this next generation of software. If the two can come together and have a symbiotic relationship, then this could be really successful. But we have to see. But in the short term, Rivian's really winning on the money side.

• 10:47Speaker 00

  Yeah, for sure.

• 10:48Speaker 01

  I mean, the first time I bought a Tesla, I kind of joked that I bought a $70,000 iPad with a free car. But conceptually, that is super important, right? The fact that it's so software driven, why are the car manufacturers struggling so much making this work? Is it because it's fundamentally a different way of approaching how to build a car?

• 11:07Kirsten Korosec?

  Correct. Yeah, I mean, in short, and we could have a whole show for everyone out there on this topic. But generally speaking, people have been, legacy automakers have been going after this quote unquote, software-defined-vehicle, very jargony, silly term, for a long time now, really trying to replicate what Tesla has done, and I would say arguably, what Rivian has done, very much a clean sheet approach. The legacy automakers, you have to understand, have for generations created this massive network of suppliers, pulling in different pieces, not building a lot of things in-house. One could say automakers are really designing and then assembling the vehicles, but there are many of these

• 11:48Kirsten Korosec?

  components are being created, produced by other suppliers. And while Tesla and Rivian certainly use suppliers, much of the software and the underlying electrical architecture has all been developed in-house. And therein lies the difference. The capability is what matters. So, everyone talks about software updates being wirelessly done, just like your iPhone. A lot of companies can't do that, or in a meaningful way, that goes beyond the infotainment system. They can't push a software update that would change the performance of the vehicle. Or if they do, they have the owner bring it to the dealership so it doesn't brick the car. If you have a next-generation electric vehicle architecture, coupled with

• 12:30Kirsten Korosec?

  best-in-class software, you're able to do that. And so this is the goal, ultimately, for pretty much every one of the big legacy automakers.

• 12:39Speaker 00

  Yeah, seems like a really potentially transformative deal for both companies. Speaking of really interesting deals, I was surprised but intrigued by New Bank, which is a digital bank out of Brazil, acquiring a startup called Hyperplane. No big shock that Hyperplane is described as an AI for bank startup. And this caught my attention, too, because actually, when our reporter, Frederique, first covered Hyperplane in December, I thought, wow, okay, this is an interesting company. There's this little San Francisco-based startup, and they've built these foundation models to help banks predict customer behavior. They came out of stealth and December, they raised $6 million in a funding round led by former Stripe exec

• 13:21Speaker 00

  Lackey Groom. And the idea behind the company is to help banks use their first-party data to build personalized experiences by predicting user behavior. So New Bank is really like, it's doing very, very well. I think it had a profitable first quarter, reached a market cap of over $50 billion over the past year. It overtook another company to be, I think, the largest bank. I have to look up exact words. But anyway, in Latin America, it's just growing like crazy. So it's not a surprise that we don't know how much it paid for Hyperplane, probably not a huge amount, but it probably could see the value in this budding startup. So very intrigued by this deal. Also, coincidentally, this week, Chime, a very

• 14:04Speaker 00

  large bank here in the US, digital bank, acquired a company called Salt Lab. So two M&A deals in this space this week.

• 14:12Kirsten Korosec?

  Question, I'm not sure if you have the answer here, but this is interesting, this sort of predictive tech. And as far as you know, is it only going to be used for making the experience better for customers? Or is there a, I'm not going to say nefarious purpose that it could be used for, but could it be used also to predict, for instance, like the riskiness of the customers buying habits, or whether they'll go into debt? Or could it be used for any of these other pieces? Or is it really about improving the, customer-facing experience as they do their banking?

• 14:48Speaker 00

  Yes, I honestly don't know all the details because I didn't cover the startup. But I know, according to Frederick's story, that the company did launch this LLM that specifically can help banks predict when a customer may churn, or things like that. So I think it can go, to your point, beyond just providing like these personalized, more customized experiences for users. But you know, I think with New Bank and its very large pocketbook, there may be more applications than originally thought here.

• 15:21Kirsten Korosec?

  I have to wonder if this is going to be the beginning of a whole new group of M&A happening on AI. So AI applied just on predictive, you know, on forecasting. I could see the application with links, but I could also see application with other companies. And I'm wondering how, let's say, saturated the marketplaces with startups that are going after this very specific area, which is sort of predictive consumer behavior piece using AI.

• 15:49Speaker 00

  Yeah, probably a lot. I think the question is, like, which ones are actually doing something very meaningful? Are those just saying they're doing something meaningful, right? That that remains to be seen. I don't know, but I just, I really love it when we as a team at TechCrunch write about startups in their very early days and then they go on like this to be acquired by a very large company just a few months later, or, you know, go on to raise a lot more money and become profitable sooner or later. I just feel like part of what we do as reporters and editors is sort of like what investors do, identify which startups have a lot of potential. So in my view, you know, just to nerd out a little bit, I feel like this is a case where, you know, one of our staffers was like, okay, this is a cool company, early days, but cool. And then

• 16:34Speaker 00

  look here, you know, six months later, they get acquired by NewBank. So I think that's very interesting.

• 16:40Speaker 01

  Yeah, I think for me, the cool thing was, you know, at the tail end of last year, they raised $6 million. And I just took a quick look at who the investors are. And there's no blue chips in there, right? So this is likely a pretty decent acquisition, and this could be life-changing to a bunch of these funds. So I'm really curious if we keep digging to see where this goes, because I think it's really interesting. It's a really fun acquisition, and it shows that there's still a lot of M&A activity happening in, especially in fintech, but also across the ecosystem.

• 17:12Speaker 00

  Yeah, yeah, agreed. Well, we've got to take a break now. But after the break, Haya, I can't wait to talk to you about this absolutely fantastic feature you did on the Fediverse. We'll be back.

• 17:28Kirsten Korosec?

  All right, Hyah. So you wrote this fun feature called Welcome to the Fediverse, and this was so informative. I learned so much. Tell us how this story came about.

• 17:40Speaker 01

  It was actually really funny. So Henry, who's also the head of audio product, so he's our boss, came to me with a Slack question. He was like, dude, can you explain what the Fediverse is? It makes my head spin. It's confusing. And we got a message back and forth a bit. And he was like, wait, this is a post. And I got to do my favorite thing, which is nerd out hard on a topic, right? Go deep, do all the research, look into everything, and then write a post about it. And the thing is, the Fediverse, in a nutshell, is kind of a decentralized version of Twitter, essentially, a way of feeding information between different platforms and networks and that kind of stuff. And you know, you've obviously heard of Twitter, but there's also Threads and Mastodon. And ironically,

• 18:23Speaker 01

  Truth Social, which is Trump's social network, also runs on the Fediverse platform called Mastodon. And so, yeah, it's been really interesting to see that evolve. And, you know, it's always kind of been this in the background, something that nerds use if they want to spin up their own Twitter. And then a really major thing happened, which was Elon Musk bought Twitter, turned it into X. And it's hilarious. You see the graph of adoption, for example, Mastodon, it exploded as soon as Musk bought Twitter. Everybody was like, okay, this is not a good idea. Let's figure out something else. And a lot of little subgroups, there is an instance focused on photographers. There's one focused on queer folks. There's an instant focus on people

• 19:07Speaker 01

  who are really into clouds, you know, it just kind of exploded in every possible direction. And the cool thing is, all of these different platforms kind of interact with each other. So you have a user account on one. It means that you can actually post on other platforms as well. So you have your main subgroup, maybe it's for journalists, maybe it's for researchers, maybe it's for whatever, but you can also kind of go outside of your little bubble and have conversations elsewhere. And in a nutshell, that's really what the Fediverse is for.

• 19:38Kirsten Korosec?

  So first of all, I love a story or assignment that occurs by a conversation happening through messaging. And it happens all the time. I'm like, oh, you just assigned yourself a story. Good job. But and it does happen, actually, for our listeners, quite a bit. You'd be surprised with the brain trust over here at TechCrunch. Here's my question, though. Stepping way back, you talk about how really Elon buying X sort of catapulted this, but the Fediverse was in existence before. How small was it before? Like, where was it? Because I just was pretty unaware of it at all, up until more recently.

• 20:16Speaker 00

  Same. Like, I was surprised that Mastodon had been around since 2016. I mean, I thought it was much newer.

• 20:23Speaker 01

  Yeah. Well, this is the, this is the way it goes with a lot of these kind of nerd projects, right? People have like this idealistic, like, okay, why do we trust Twitter to be like a centralized source of all this stuff? And originally Twitter was meant to be a decentralized, I mean, Twitter was essentially a joke when it first started, like, hey, this is fun. We can send text messages to each other, but online. And then it kind of evolved, like, Jack's vision for it was for it to be decentralized. And then, of course, it massively exploded and he kind of lost control and it kind of went in a different direction.

• 20:55Kirsten Korosec?

  But that's what Blue Sky was, right, supposed to be. It was that decentralized piece within Twitter that ended up breaking out, correct?

• 21:02Speaker 01

  Exactly. Yeah. So Blue Sky kind of was a response to, like, hey, this is the way I wish Twitter had been from day one, if we had known where it would have gone, right? Nobody had any idea how big Twitter would get. But to answer your question, Mary Ann, when Elon Musk bought Twitter, there was around three and a half million Mastodon accounts in the entire world. That has three-doubled since that day, and pretty quickly, too. But it's always been like a niche, like, okay, we don't really like Twitter, but what else are we going to use? It kind of was like, it kind of replaced forums and Reddit and Twitter. And it was kind of this in-between stuff that people couldn't really make sense of. And then, you know. The acquisition happened and people suddenly, there was a lot of news. It's like,

• 21:47Speaker 01

  okay, what do we do now that Twitter is going to get ruined? We could talk about more whether or not it did get ruined, but there was certainly a lot of changes.

• 21:53Speaker 00

  Yeah, for sure. And we've been tracking these Twitter alternatives since Musk took over. More separately, though, and a bunch of different stories, kind of more focused on each individual one. So I'm sure our listeners are familiar with all of these platforms. But Haya, thank you for putting it all together in one piece. So we can have the context and have a breakdown of it all in a bigger picture. Very, very helpful, also very interesting. So if you haven't read it, definitely look up that story. We're going to move on to another topic. So Dominic Madori Davis and Kyle Wiggers wrote a feature taking a look at a recent post on X that Scale AI founder Alexander Wang wrote about moving away from DEI to instead embrace another acronym called MEI,

• 22:37Speaker 00

  which stands for Merit, Excellence and Intelligence. So that post drew a lot of divided responses. Dom and Kyle took a deep dive, looking at the implications of this. And if I sound hesitant, it's just because this is a very sensitive topic and I want to be careful in how we approach it. Since I didn't actually write the piece, we didn't write the piece and Dom and Kyle aren't here. But there's a lot of, I guess, controversy around this topic. There's a lot of emotions, but it's an important one. And one of the things that Wang wrote was that Scale, his company, is a meritocracy, can't say this word, meritocracy and must always remain one. I don't know. Haya, Kirsten, your thoughts?

• 23:17Kirsten Korosec?

  So first of all, what I liked about the article was that, as you mentioned, it's a super sensitive topic. A lot of people are divided on it. And it's also what I've found in speaking to people about it is when just using specific words, immediately it triggers a response. But then when you end up having a larger conversation about it, oftentimes people are a lot closer than they realize. What I liked about this article was that it didn't just lean on a take. It wasn't a hot take. It actually, they spoke to a number of people about not just what this means, but how it could potentially play out and be interpreted and what This might mean for the industry. So that is where I just give them kudos for that because

• 23:59Kirsten Korosec?

  it's just very easy to just weigh in and have a take. This wasn't that. And I know that I'm sure that they've gotten a lot of responses. To me, what's really interesting is going to be beyond this article and beyond, quite frankly, Alexander Wang's tweet on X is, is there an undercurrent of actually pushing towards this ideology in practice or not in the industry? Because right now, people are talking about it, but is it actually happening?

• 24:27Speaker 00

  Well, they did provide some statistics to your point, Kirsten. In 2023, the US data industry saw new women recruit levels drop by two thirds, from 36% in 2022 to just 12% according to one staffing firm. DEI-related job listings have also declined 44% in 2023, according to data from the job site Indeed. Not great. We also saw another story this week about Fearless Fund's founder resigning. And this is after being sued for providing grants to black women business owners. I think, you know, we don't know the details about exactly why she resigned, but I think it's just a reflection of all of this that's going on.

• 25:08Speaker 01

  I think the real challenge with a lot of this is that merit, excellence, and intelligence is always such a myopic view of how this is meant to work. If everything was equal, then absolutely, you should hire on merit, on intelligence, and on who is the best at the job. The problem is, the people who are doing the hiring are not unbiased, right? And the DEI movement was meant to kind of put its thumb on the scale and say, hey, let's see if we can make this a little bit more equal. Like, in a world where men and women have the same level of intelligence, why aren't there 50/50 VCs, for example? And then if you kind of follow that all the way down,

• 25:51Speaker 01

  it's like, well, there are a bunch of hurdles in the way that make it pretty hard for certain people to get to the forefront of things. Like, if you always invest in who's been making you money over the past 30 years, you're only going to be investing in white dudes from Stanford. And on a very simple level, that just doesn't make any sense. And so I think that was the response to DEI. It's just gotten really political and really nasty. The article kind of highlights where the conversation is currently at, which I think is really fascinating.

• 26:23Speaker 00

  Yeah, I think to your point, merit, excellence and intelligence. Yes, of course, those are all important things, but it's a fact that underrepresented founders may have all those things, but don't get the same access or have the same visibility that their counterparts might. You just cannot deny that. I don't know, I'll be honest. I mean, these, these sort of conversations just make me really sad that we're still having them to this extent, just kind of bums me out. You know, Alexander Wing's post got support from the likes of Elon Musk, Palmer Lucky, Brian Armstrong, and we'll have to see how things play out. I think in 2020, there was this big focus on DEI that's just tapered off.

• 27:05Speaker 00

  I think that we just, we cannot forget the fact that there are super talented, smart founders all over that just aren't getting the same access, the same opportunities.

• 27:16Kirsten Korosec?

  A couple of things, I wanted to go back to that Fearless Fund story for a moment. This was really interesting. So an appeals court had actually ruled against Fearless upholding this preliminary injunction that had been in place. It started with them being sued by the American Alliance for Equal Rights, which argued that the grant discriminated against non-black women founders, since only black women could apply. And we've seen this type of legal action get played out in a lot of way outside the VC world about equal opportunity, but then it's sort of flipped. So, you know, usually going after, are you discriminating against non-black people as a result of creating these funds for black people?

• 27:58Kirsten Korosec?

  What I'm interested in seeing is how this plays out now that Fearless Fund's co-founder has stepped down and how Fearless Fund actually moves forward and goes about its mission. Is it hamstrung now as a result of that? And will, as an extension of that, other funds or other efforts to do this also hesitate over fear of legal action that could prevent them from doing what they set out to do, their initial charter? If that happens, that could really be devastating for the few funds that exist out there that

• 28:38Kirsten Korosec?

  are trying to give sort of funding or grants towards Black women and other minority founders or people. We aren't really sure how that's going to play out. But to me, that could be the much broader and unfortunate end to what's been happening over at Fearless Fund.

• 28:55Speaker 00

  Very good point. Could set a dangerous precedent. Well, I'm sure our excellent reporters will continue to keep an eye on all this, so we'll just keep looking out for stories on this topic. All right, we're going to have to leave it there for now, but Equity will be back next week. Due to the holiday week, we'll have one episode for you on Wednesday, but no Monday or Friday news roundups. Kirsten has a really interesting interview coming up with VC and serial entrepreneur John McNeil, so stay tuned for that. Until then, you can find Equity under the handle at EquityPod on X and Threads. Until next time, bye-bye. Have a good one.

• 29:29Kirsten Korosec?

  Bye.

• 29:31Speaker 00

  Equity is produced by Teresa Loquenzolo with editing by Kel. 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.