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Politics

Pelosi, Khanna plead for stimulus to include VC-backed startups

In a letter, the lawmakers ask the Trump administration to include the "engine of the innovation economy" in stimulus package loans.

House Majority Leader Nancy Pelosi

House Majority Leader Nancy Pelosi convened a vote on the stimulus Friday.

Photo: Sarah Silbiger/Bloomberg via Getty Images

House Majority Leader Nancy Pelosi and Rep. Ro Khanna are asking the Trump administration to ensure that venture capital-backed startups aren't excluded from small-business loans under the coronavirus stimulus package.

In a letter sent Tuesday to Treasury Secretary Steve Mnuchin and Small Business Administration head Jovita Carranza, Pelosi and Khanna called attention to a quirk of the stimulus package that could make it impossible for venture-backed startups to be considered small businesses, and therefore, be eligible for loans under the $2 trillion CARES Act. Under the SBA's current definition, small businesses include any business with fewer than 500 employees, but some companies that have venture funding are required to count all of the employees of any other startups that VC has invested in. In a recent interview with Protocol, Khanna called the definition "absurd."

Now, he and Pelosi are urging the administration to "exercise appropriate discretion under the law" and issue guidance including VC-backed startups in the loan program.

"Startups are the engine of the innovation economy, and our districts in California's Bay Area and Silicon Valley are home to thousands of these companies," Pelosi and Khanna, wrote. "Other high-tech hubs around the country with a strong startup ecosystem will also be in need of … financing to preserve jobs and survive."

At issue is the SBA's so-called affiliate rule, which seeks to prevent large companies from getting access to SBA loans. The agency considers companies affiliates if one has control over another. That, many tech and startup advocates have argued, is an overly fuzzy definition that will lead to confusion and possibly unnecessary rejection of small startups that are part of large venture capital portfolios.

Over the weekend, more than 100 tech trade associations and lobbying groups including TechNet and the National Venture Capital Association sent a similar letter to Mnuchin and Carranza, asking for a fix. "Without clear guidance enabling startups and small businesses supported by equity investment to access the loan facility, many of these startups may be rendered ineligible," the letter read. "The confusion alone could lead to waves of preventable layoffs."

Join senior reporter Issie Lapowsky in conversation with Rep. Ro Khanna during Protocol's Virtual Meetup at noon Thursday. Sign up here.

Already, venture-backed startups have laid off and furloughed workers. Congress designed the CARES Act loan program specifically to discourage that. They designed the loans such that they turn into grants if a business doesn't lay off employees or cut wages before June 30. In his interview with Protocol, Khanna said he suspected VC-backed startups wouldn't have a problem getting the money up front, but that they might face questions when it comes to converting the loan into a grant later on.

"I would hope [the SBA] wouldn't interpret things in a way that defies common sense," Khanna said, "but there is that slight risk."

Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

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Protocol | China

China’s edtech crackdown isn’t what you think. Here’s why.

It's part of an attempt to fix education inequality and address a looming demographic crisis.

In the past decade, China's private tutoring market has expanded rapidly as it's been digitized and bolstered by capital.

Photo: Getty Images

Beijing's strike against the private tutoring and ed tech industry has rattled the market and led observers to try to answer one big question: What is Beijing trying to achieve?

Sweeping policy guidelines issued by the Central Committee of the Chinese Communist Party on July 24 and the State Council now mandate that existing private tutoring companies register as nonprofit organizations. Extracurricular tutoring companies will be banned from going public. Online tutoring agencies will be subject to regulatory approval.

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Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

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Why the biggest risk to your business this year is burnout — and how to tackle it

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
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is this tech?

It’s soul-destroying and it uses DRM, therefore Peloton is tech

"I mean, the pedals go around if you turn off all the tech, but Peloton isn't selling a pedaling product."

Is this tech? Or is it just a bike with a screen?

Image: Peloton and Protocol

One of the breakout hits from the pandemic, besides Taylor Swift's "Folklore," has been Peloton. With upwards of 5.4 million members as of March and nearly $1.3 billion in revenue that quarter, a lot of people are turning in their gym memberships for a bike or a treadmill and a slick-looking app.

But here at Protocol, it's that slick-looking app, plus all the tech that goes into it, that matters. And that's where things got really heated during our chat this week. Is Peloton tech? Or is it just a bike with a giant tablet on it? Can all bikes be tech with a little elbow grease?

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Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

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Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
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Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
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