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Exclusive: Sequoia India and Southeast Asia broadens check range for early-stage Surge program

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Sequoia India and Southeast Asia broadens check range for early-stage Surge program

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Sequoia India and Southeast Asia is broadening the range of its check size for the Surge program as the storied venture firm attempts to make its seed investments more “relevant for a larger set of founders,” it said Thursday.

The venture firm’s check size for the three-year-old Surge program, which previously made $1 million to $2 million investments in early-stage startups in the region, will now go up to $3 million, it said. There’s also no floor size to the investment range, which can start from $300,000 or less, the firm said.

The move comes as the firm, the most powerful and influential venture investor, realizes that some of the early-stage startups it backs through the Surge program need more capital especially during the current market conditions, while some firms are at such a nascent stages – where they don’t have products, for instance – who could do with smaller checks, said Rajan Anandan, a managing director at Sequoia India and Southeast Asia, in an interview with TechCrunch.

Anandan, who previously served as the head of Google India and Southeast Asia and was one of the most prolific angel investors before joining Sequoia, dismissed the idea that the decision is a response to the current market conditions, saying Sequoia had been formulating the change for several months, but said “in [the current] context, it would be even more helpful.”

As the size of its investment changes, the firm said it is not looking to take more ownership in the young startups. The equity range against its investments will continue between 10 to 20% as the ceiling limit, whereas there will be more flexibility to the floor range, he said.

The Surge team. Image Credits: Sequoia India and Southeast Asia

Sequoia began the Surge program, which is similar to Y Combinator’s model, in 2019. The firm selects 15 to 20 startups every six months or so after evaluating hundreds of applications and in-person meetings, and groups them in cohorts. The cohort spends 16 weeks learning the fundamentals of finding their voice, best practices and establishing relationships with peers.

The firm, which has run six such cohorts to date, said it has backed 112 startups through the Surge program who have collectively raised over $1.5 billion in follow-on rounds. “Over 20% of Surge startups were pre-launch when we partnered with them,” Sequoia said.

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About 10% of Surge startups have been building products and services for the world. In the most recent cohort, about 40% of Surge companies were building for the global markets from day one, the firm said. Some of the notable startups to come out of Surge include Doubtnut, Scaler Academy, Khatabook, Bijak, Classplus, Hevo Data, Juno, Atlan, BukuKas, Plum and Apna Club.

But unlike YC’s batches, the size of Surge cohort is not changing. “We like the 15-20 number. Our cohort sizes will roughly remain the same. We have 30 members for Surge that ranges between people who help firms with tech, marketing, and finances. One of the things we have learned is that keeping the cohort to its current size lets us go very deep with every single one of our companies,” he said.

Each participant in the Surge program gets access to an additional $2 million worth of perks that include cloud credits with Google, Microsoft and AWS, corporate cards, popular developer, analytics, marketing and communication tools, and insurance and compliances services. Sequoia also helps these firms find early customers and connects them with top investors for the Series A funding.

Sequoia is also doing away with a dedicated fund for the Surge program. Earlier, it raised $195 million twice for the early-stage program, but now it will draw capital directly from the mothership, which unveiled record $2.85 billion funds for the region earlier this month. “You can safely assume that we will invest more than ever through Surge,” he said.

Even with the current market downturn, which has caused tech stocks to fall to record lows in recent years and slashed the valuation of private firms, Anandan said more young firms than ever are applying to be in the Surge program and he hasn’t noticed any slowdown in the enthusiasm in the ecosystem.

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Exclusive: Small Businesses Are Facing Crippling Amounts of Paperwork. It'll Likely Only Get Worse – TalkOfNews.com

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Small Businesses Are Facing Crippling Amounts of Paperwork. It'll Likely Only Get Worse

#Small #Businesses #Facing #Crippling #Amounts #Paperwork #It039ll #Worse

If you think you are pushing more paperwork than ever, you’re not alone. According to a new Small Business Index report released this week from MetLife and U.S. Chamber of Commerce, 37 percent of business owners say they are spending more time on licensing, compliance, or other government requirements; that’s vs. 29 percent last quarter. 

The papers started piling up during the pandemic, as businesses started applying for funds through government relief programs such as the Paycheck Protection Program and employees starting requesting more sick leave due to Covid. While that seems reasonable enough, the time businesses are spending on forms and compliance is still likely to increase in the months ahead as federal agencies are seeking to implement more rules and enforce those already in effect.

In March the Securities and Exchange Commission (SEC), proposed rule changes that require registrants to include certain climate-related disclosures in their registration statements and quarterly reports, including information about climate-related risks. Small businesses say the regulator’s proposal on climate disclosures will saddle them with a compliance burden they won’t be able to handle, according to the Wall Street Journal. While small companies normally don’t fall within the SEC’s purview, they fear that they will be forced to cough up heaps of information on their roles, however small, in emitting carbon because the SEC wants large public companies to catalog emissions in their entire supply chains.

“Small and independent businesses cannot afford the experts, accountants and lawyers needed to comply with complex government reporting regimes,” the National Federation of Independent Business said in a comment letter filed with the SEC.

Additionally, the Federal Trade Commission (FTC), and the Consumer Financial Protection Bureau (CFPB) are creating more rules and regulations. In April Director Rohit Chopra told the Senate Committee on Banking, Housing, and Urban Affairs that the CFPB will “dramatically increase its issuance of guidance documents, such as advisory opinions, compliance bulletins, policy statements, and other publications,” to ensure businesses follow regulations. For small businesses without full HR staffs or legal teams to keep up with the added paperwork and unnecessary red tape and regulations, these changes can come as a harsh reality.

“[Small businesses] are wading through a seemingly never-ending debate of rule changes and shifting incentives that threaten their fundamental abilities to create, build, and grow the enterprises that will power our economy forward,” said Joe Shamess, General Partner at Flintlock Capital, during testimony before the House Small Business Committee in a hearing on veteran entrepreneurship in June 2022.

Meanwhile, a rare opportunity to overturn the federal government’s ability to police corporations is starting to materialize. Some regulations watchers suggest that the recent Supreme Court of the United States decision in which the Environmental Protection Agency was ruled to have overstepped its authority to curb power plants’ carbon emissions could fuel an easing of red tape in other instances. Similar cases involving the Clean Water Act, among others may follow similar precedent. 

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Exclusive: Bank of England's Bailey warns global economic outlook has 'deteriorated materially' – TalkOfNews.com

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Bank of England's Bailey warns global economic outlook has 'deteriorated materially'

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Andrew Bailey, governor of the Bank of England, has said the global economic outlook has deteriorated materially after surging commodity prices pushed up inflation around the world.

Bloomberg | Bloomberg | Getty Images

LONDON — The governor of the Bank of England said Tuesday that the global economic outlook has “deteriorated materially” and warned of possible further shocks to come.

Andrew Bailey blamed Russia’s invasion of Ukraine for piling further pressure on commodity prices and already rising inflation, and said that further resilience is needed to mitigate future risks.

“The global economic outlook has deteriorated materially,” Bailey said at a briefing at the Bank of England.

“It is the right time to lock in resilience so that we are well prepared for future possible shocks,” he added.

The warning came as the central bank published its Financial Stability Report Tuesday, in which it outlined a number of risks to the U.K.’s economic outlook. Those include ongoing disruption to food and energy markets as a result of the war, high household and government debt, as well as the continued impacts of Covid-19 in China.

We expect households and businesses to become more stretched over coming months.

Andrew Bailey

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governor, Bank of England

The BOE, alongside other central banks, has been raising interest rates in a bid to bring down high prices. However, Bailey acknowledged that this had made the economic landscape harder for households and businesses, and that there was little sign of let up in the near-term.

“These higher prices, weaker growth and tighter financing conditions will make it harder for households and businesses to repay or refinance debt,” he said.

“Given this, we expect households and businesses to become more stretched over coming months. They will also be more vulnerable to further shocks,” he said.

BOE lifts banking capital demands

The comments came as the Bank on Tuesday lifted its countercyclical capital buffer rate (CCyB) for banks from 1% to 2%, starting in July 2023. Central banks increase the regulatory capital demand when they believe risks are building up.

Bailey said the Bank’s Financial Policy Committee would be willing to continue readjusting the rate as needed.

“Given considerable uncertainty around the outlook, the FPC will continue to monitor the situation,”  he said. “We stand ready to vary the UK CCyB rate — in either direction — depending on how risks develop.”

In sharp contrast to the financial crisis, it is in a position to cushion the economic shocks, not add to them.

Andrew Bailey

governor, Bank of England

Bailey also said the BOE would move ahead with its annual stress test in September, evaluating the U.K. banking system’s ability to handle various potential risks, including higher interest rates, asset price falls and “deep” recessions.

However, he added that the sector looks generally strong and that lenders are much better placed now than during the 2008 Global Financial Crisis to handle a severe economic downturn.

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“The economic outlook is uncertain and undoubtedly a very challenging one for many households and businesses,” he said.

“The banking system is resilient to that outlook, however, or even a much worse one. In sharp contrast to the financial crisis, it is in a position to cushion the economic shocks, not add to them.”

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Exclusive: Twitter sues India’s government over content takedown orders – TalkOfNews.com

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Twitter sues India’s government over content takedown orders

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Twitter has sued the Indian government to challenge some of its takedown orders, a source familiar with the matter told TechCrunch, further escalating the tension between the American social giant and New Delhi.

In its lawsuit, filed Tuesday in Karnataka High Court, Twitter alleges that New Delhi has abused its power by ordering it to remove several tweets from its platform.

The lawsuit follows a rough year and a half for Twitter in India, a key overseas market for the firm, where it has been asked to take down hundreds of accounts and tweets, many of which critics argue were objected because they denounced the Indian government’s policies and Prime Minister Narendra Modi.

Reuters first reported the lawsuit. A Twitter spokesperson declined to comment.

Twitter has partially complied with the requests, but sought to fight back many of the challenges. Under India’s new IT rules, which went into effect last year, Twitter has little to no room left to individually challenge the takedown orders.

The tension between the two was apparent on May 24 last year, when Delhi police, controlled by India’s central government, visited two offices of Twitter — in the national capital state of Delhi and Gurgaon, in the neighboring state of Haryana — to seek more information about Twitter’s rationale to label one of the tweets by ruling partly BJP spokesperson as “manipulated media.”

Delhi police said it had received a complaint about the classification of the spokesperson’s tweet and visited the offices to serve Twitter India’s head a notice of the inquiry. In a statement, the police said Twitter India’s managing director’s replies on the subject had been “very ambiguous.”

Twitter at the time described the episode as “intimidation.”

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The company has “concerns with regards to the use of intimidation tactics by the police in response to enforcement of our global Terms of Service, as well as with core elements of the new IT Rules,” it said.

Twitter India managing director resigned from the firm last year.

Twitter is not the first tech giant to sue the Indian government. WhatsApp sued New Delhi last year, challenging new regulations that could allow authorities to make people’s private messages “traceable,” and conduct mass surveillance.

It’s unclear if the new lawsuit will have any impact on Twitter’s proposed acquisition by Elon Musk. Musk’s Tesla has been attempting to enter the Indian market for several years but wants the government to let it first sell and service imported cars first.

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