The debate about the impact of new technology, particularly AI, on society continues to rage.

Last month, for example, the current front runner to replace Jerry Brown as Californian Governor in 2018, Gavin Newsom – traditionally one of Silicon Valley’s most vocal supporters – warned graduating computer science students at UC Berkeley about the duty to “exercise their moral authority” to improve society.

“This is code red, a firehose, a tsunami, that’s coming our way,” he said about the impact of new technology on jobs and inequality. So is Newsom right? Is the job of entrepreneurs and technologists, in his words, to “exercise their moral authority”?

To answer this question, and to talk more generally about the impact of AI on employment, I sat down with the co-director of the MIT Initiative on the Digital Economy, Andrew McAfee.

One of the world’s leading authorities on the economic consequences of new technology, McAfee is also the co-author of the 2014 bestseller The Second Machine Age and the just published Machine, Platform, Crowd.

Three years ago, I interviewed McAfee and his co-author, the MIT professor Erik Brynjolfsson, about the connection between digital technology and jobs. So what’s changed since 2014, I asked McAfee about his findings in his new book. What has surprised him most about developments over the last three years?

On the one hand, McAfee admits, “We all underestimate the pace of progress” in the sense that things have changed much faster and more dramatically than he ever imagined. But on the other hand, he confesses, he admits to being surprised by the surprising number of jobs that have been created by all this new technology.

These jobs may not always be great, he admits. But they exist. Thus far, at least, then, we have been spared Gavin Newsom’s “tsunami” of technological unemployment. McAfee’s biggest regret lies in what he see as the failure over the last three years of public policy to get ready for the oncoming storm.

None of the suggestions laid out in The Second Machine Age — liberalizing immigration policy or investment in infrastructure, education and research — have been pursued. And so, McAfee warns, we may today be even more vulnerable to the darker economic consequences of the digital revolution.

Should Silicon Valley exercise its moral authority to stop developing this job-killing technology? Here McAfee is unequivocal. Absolutely not, he says. Over the next fifty years, he acknowledges, the economy will become “massively automated”, but at the same time society will have had half a century to adapt itself to the march of the robots.

McAfee ultimately remains an optimist. Things are going to work out okay in the long-run, he promises. In the end, we will be able to control the tsunami that is coming our way.

Many thanks to the folks at the Greater Providence Chamber of Commerce for their help in producing this interview.

Glassdoor just released its top 100 U.S.-based companies to work for next year. Because we cover technology here at TechCrunch, we broke out the top 10 tech companies from the list.

The rankings are based on employee feedback from companies with more than 1,000 employees. Through Glassdoor, employees rate companies based on things like their CEO, career opportunities, compensation and benefits, culture and values, and work-life balance. To be considered for the list, each employer needed at least 75 ratings across each of the workplace attributes.

Without further ado, here are the top 10 tech companies to work for in the U.S., along with what some employees say about them.

HackerRank, the skills-based recruiting platform and online coding challenge community, today announced that it has raised a $30 million Series C funding round led by JMI Equity, a fund that specializes in helping software companies scale. Existing investors Khosla Ventures, Battery Ventures, Randstad and Chartline Capital Partners also participated in this round.

As HackerRank co-founder and CEO Vivek Ravisankar told me, the company now has over 3.4 million developers in its community, which has grown organically since the company’s launch in 2012. What’s maybe just as important, though, is that the service has also brought on a wide variety of companies to its HackerRank for Work program that are looking to use the services platform (and community) to recruit developers. According to Ravisankar, these customers include five of the top eight commercial banks, for example, as well as auto manufacturers, retailers and others. Ever company is now a software company, after all, and they are all looking for talent. With these customers, HackerRank was actually cash flow-positive for a part of 2017 and expects to return to that in the near future.

Over the course of the last year, HackerRank also expanded beyond core programming skills and adding support for other technical roles, including DevOps positions, database specialists and others. 

“To be frank, we didn’t think we needed $30 million,” Ravisankar told me, but JMI looked like a good match for HackerRank and this round, which brings the company’s total funding to $58.2 million to date, gives it a long runway to expand its product portfolio.

Specifically, Ravisankar is focussing on three areas: doubling down on customer acquisition and HackerRank’s go-to-market strategy, investing more in its community, and using machine learning and data science to better match employer and job seekers.

It’s this last part that’s probably the most interesting. HackerRank sits on a trove of data about what skills job seekers possess and which ones employers are looking for. “It’s very hard for a lot of companies to quantify what makes a great developer,” Ravisankar explained — and the same goes for developers who don’t always know what they are looking for. So at this point, the HackerRank team is trying to figure out how it can best use its data to say whether a developer is a good fit for a job.

HackerRank currently has about 150 employees but this new round will allow it to hire a few more, too. Chances are, it’ll use its own platform to do so.

An Oxford University study of remote gig economy work conducted on digital platforms has highlighted poor-quality working conditions with implications for employees’ well-being.

The research comes at a time when political scrutiny is increasingly falling on algorithmically controlled platforms and their societal impacts. Policymakers are also paying greater attention to the precarious reality for workers on platforms that advertise their gig marketplaces to new recruits with shiny claims of “flexibility” and “autonomy.”

Governments in some regions are also actively reassessing employment law to take account of technology-fueled shifts to work and working patterns. Earlier this year, for instance, the U.K. government announced a package of labor market reforms — and committed to being responsible for quality of work, not just quantity of jobs, for the first time.

The Oxford University study, entitled Good Gig, Bad Big: Autonomy and Algorithmic Control in the Global Gig Economy, looks at remote gig economy work, such as tasks like research, translation and programming carried out via platforms such as Freelancer.com and Fiverr (rather than gig economy platforms such as food delivery platforms, where workers must be in local proximity to the work — albeit, those platforms have their own workforce exploitation critiques).

The researchers note that an estimated 70 million workers worldwide are registered on remote work platforms. Their study methodology involved carrying out face-to-face interviews with just over 100 workers in South East Asia and Sub-Saharan Africa who had been active on one of two unnamed “leading platforms” for at least six months.

They also undertook a remote survey of just over 650 additional gig platform workers, from the same regions, to supplement the interview findings. Participants for the survey portion were recruited via online job ads on the platforms themselves, and had to have completed work through one of the two platforms within the past two months, and to have worked in at least five projects or for five hours in total.

Free to get the job done

The study paints a mixed picture, with — on the one hand — gig workers reporting feeling they can remotely access stimulating and challenging work, and experiencing perceived autonomy and discretion over how they get a job done: A large majority (72 percent) of respondents said they felt able to choose and change the order in which they undertook online tasks, and 74 percent said they were able to choose or change their methods of work.

At the same time — and here the negatives pile in — workers on the platforms lack collective bargaining so are simultaneously experiencing a hothouse of competitive marketplace and algorithmic management pressure, combined with feelings of social isolation (with most working from home), and the risk of overwork and exhaustion as a result of a lack of regulations and support systems, as well as their own economic needs to get tasks done to earn money.

“Our findings demonstrate evidence that the autonomy of working in the gig economy often comes at the price of long, irregular and anti-social hours, which can lead to sleep deprivation and exhaustion,” said Dr. Alex Wood, co-author of the paper, commenting in a statement. “While gig work takes place around the world, employers tend to be from the U.K. and other high-income Western countries, exacerbating the problem for workers in lower-income countries who have to compensate for time differences.

“The competitive nature of online labour platforms leads to high-intensity work, requiring workers to complete as many gigs as possible as quickly as they can and meet the demands of multiple clients no matter how unreasonable.”

The survey results backed the researchers’ interview findings of an oversupply of labor, with 54 percent of respondents reporting there was not enough work available and just a fifth (20 percent) disagreeing.

The study also highlights the fearsome power of platforms’ rating and reputation systems as a means of algorithmically controlling remote workers — via the economic threat of loss of future work.

The researchers write:

A far more effective means of control [than non-proximate monitoring mechanisms such as screen monitoring software, which platforms also deployed] was the ‘algorithmic management’ enabled by platform-based rating and reputation systems (Lee et al., 2015; Rosenblat and Stark, 2016). Workers were rated by their clients following the completion of tasks. Workers with the best scores and the most experience tended to receive more work due to clients’ preferences and the platforms’ algorithmic ranking of workers within search results.

This form of control was very effective, as informants stressed the importance of maintaining a high average rating and good accuracy scores. Whereas Uber’s algorithmic management ‘deactivates’ (dismisses) workers with ratings deemed low (Rosenblat and Stark, 2016), online labour platforms, instead, use algorithms to filter work away from those with low ratings, thus making continuing on the platform a less viable means of making a living.

As a result of how platforms are organized, remote gig workers reported that the work could be highly intense, with a majority (54 percent) of survey respondents saying they had to work at very high speed; 60 percent working to tight deadlines; and more than a fifth (22 percent) experiencing pain as a result of their work.

“This is particularly felt by low-skilled workers, who must complete a very high number of gigs in order to make a decent living,” added professor Mark Graham, co-author, in another supporting statement. “As there is an oversupply of low-skill workers and no collective bargaining power, pay remains low. Completing as many jobs as possible is the only way to make a decent living.”

The study also highlights the contradictions inherent in the gig economy’s “flexible working” narrative — with the researchers noting that while algorithms do not formally control where workers work, in reality remote platform workers may have “little real choice but to work from home, and this can lead to a lack of social contact and feelings of social isolation.”

Gig platform workers also run up against the rigid requirements of demanding clients and deadlines in order to get paid for their work — meaning there’s a whip being cracked over them after all. The study found most workers had to work “intense unsocial and irregular hours in order to meet client demand.”

“The autonomy resulting from algorithmic control can lead to overwork, sleep deprivation and exhaustion as a consequence of the weak structural power of workers vis-a-vis clients,” they write. “This weak structural power is an outcome of platform-based rating and ranking systems enabling a form of control which is able to overcome the spatial and temporal barriers that non-proximity places on the effectiveness of direct labour process surveillance and supervision. Online labour platforms thus facilitate clients in connecting with a largely unregulated global oversupply of labour.”

Workers that gained the most in this environment were good at mastering skills independently and navigating platforms’ reputation systems so they could keep winning more work — albeit essentially at other workers’ expense, on account of how the platforms’ algorithms funnel more work toward the best-rated (meaning there’s less for the rest).

The study concludes that platform reputations have a “symbolic power” — as “an emerging form of marketplace bargaining power” — and “as a consequence of the algorithmic control inherent to online labour platforms.”

The workers who lacked the individual resources of skills and reputation suffered from low incomes and insecurity.

“Our findings are consistent with remote workers’ experiences across many national contexts,” added Graham. “Hopefully, this research will shed light on potential pitfalls for remote gig workers and help policymakers understand what working in the online gig economy really looks like. While there are benefits to workers such as autonomy and flexibility, there are also serious areas of concern, especially for lower-skill workers.”

For four years, Edhuar Arellano has left his house at 7 a.m. on weekdays to drive customers around the Bay Area for Lyft and Uber . Most days, he doesn’t get home to Santa Clara until 11 p.m. On weekends, he delivers pizzas to make ends meet.

Like a lot of drivers plugging in to ride-hailing apps for work, he likes the flexibility the gig economy has offered. But given the choice, Arellano says he wishes he could just become an employee. That would get him paid vacation, benefits, overtime, his own health insurance and perhaps more say over his working conditions.

“We need to accept whatever they want,” said the 55-year-old father of two grown children. “I can’t control anything.”

That quandary is behind a ferocious battle quietly playing out in the state Capitol in the final days of the legislative session, which ends August 31. Lobbyists for ridesharing companies and the California Chamber of Commerce are scrambling to delay until next year (and the next governor’s administration) a far-reaching California Supreme Court decision that could grant Arellano’s wish — and, businesses fear, undermine the entire gig economy.

The April ruling, involving the nationwide delivery company Dynamex Operations West Inc. and its contract drivers, established a new test for enforcement of California wage laws, and made it much harder for companies in California to claim that independent contractors are not actually employees.

Though the ruling only applies to California, the state’s labor force is so huge that it has already had national impact. Shortly after the decision, U.S. Senator Bernie Sanders of Vermont introduced a bill to make a version of California’s new rule the federal standard, a move that only added urgency to employers’ calls for state lawmakers to hit the pause button on implementing the ruling.

“Businesses are very concerned. The key is who’s going to be sued here in the near future,” said Allan Zaremberg, president of the California Chamber, which represents 50,000 businesses.

They should be, says labor leader Caitlin Vega, who has been similarly lobbying Capitol Democrats to refrain from meddling and let the Supreme Court decision move forward.

“Companies have made so much money already at the expense of workers,” Vega, the legislative director of the California Labor Federation, said Tuesday during a harried break between Capitol meetings. “We really see the Dynamex decision as core to rebuilding the middle class.”

State and federal labor laws give employees a wide range of worker protections, from overtime pay and minimum wages to the right to unionize. But those rights don’t extend to independent contractors, whose ranks have grown dramatically in the gig economy.

Apps such as Uber, TaskRabbit and DoorDash, which match customers and services online and in real time, have given workers an unprecedented ability to freelance but they also have blurred traditional employer-employee relationships and, labor advocates say, invited exploitation.

Some 2 million people, from Lyft drivers to construction workers, consider themselves independent contractors in California. In 2017, according to the Bureau of Labor Statistics, about one in 14 workers was an independent contractor nationally.

If state lawmakers don’t rewrite the law or stall its implementation for a few months, as businesses want — which the Legislature can legally do, though the clock is ticking — the Dynamex decision will subject businesses in California to a standard that is tougher than the federal government’s or most states’.

Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:

• A) Free from the company’s control when they’re on the job;
• B) Doing work that falls outside the company’s normal business;
• C) And operating an independent business or trade beyond the job for which they were hired.

That’s a high bar for the many companies whose bottom lines have depended on large numbers of contractors to deliver a particular service. According to the business lobby, in the months since the Dynamex decision, law firms have received 1,200 demands for arbitration and 17 class action lawsuits.

Last month, business leaders sent a letter to members of Gov. Jerry Brown’s administration, warning that the new test would “decimate businesses,” and urging the governor and Legislature to suspend and then limit the court’s ruling to only workers involved in the Dynamex case. The letter also asked that the decision not apply to other contractors for the next two years.

Not all those contractors are in tech, Chamber head Zaremberg points out. Emergency room doctors and accountants, for example, could also be impacted. Emergency hospitals and trauma centers contract their doctors through medical groups, and doctors generally work at a combination of hospitals and community clinics.

Photo: shapecharge / iStock / Getty Images Plus

Dr. Aimee Mullen, president of the California chapter of American College of Emergency Physicians, confirms that ER docs are among those uncertain about their contractor status.

“A lot of our members use that model. It’s choice. They like flexibility. They like working at multiple hospitals,” Mullen said.

The California Labor Federation’s Vega contends that, disruptive though it may be, the Dynamex ruling is the right one, particularly on worker exploitation. The core group affected tends to be low-income and immigrant workers, she said.

“The Dynamex decision was a victory for working people — truck drivers who are cheated out of wages, warehouse workers forced to risk their health and gig economy workers who want to be treated with dignity and respect,” Vega wrote in a Sacramento Bee op-ed.

Some workers see room for hybrid solutions. Edward Escobar, a San Francisco ride-hail driver of four years and founder of the Alliance for Independent Workers, a group formed by drivers three years ago, says he has seen a big decrease in how much these companies compensate drivers without a commensurate increase in control over working conditions.

Escobar believes gig companies are trying to have it both ways, and should give their workers either true independence or full employment. His proposal: Let workers choose their own classification, with wage and benefit protection for those who choose to be employees, and more control for contractors over which rides to take and what prices to set.

“These tech titans have been taking advantage of these gray areas,” Escobar said.

Assembly Speaker Anthony Rendon, a Paramount Democrat, said earlier this month that while the Legislature is eager to delve into workforce issues, leaders do not have adequate time to act on it before the session ends next week.

“The Dynamex​ decision strikes at the core of what the future of work looks like in our society,” Rendon said in a statement. “From the decline of union membership to court rulings like the Janus decision, we’ve seen the continual erosion of workers’ rights. If the Legislature is to take action, we must do so thoughtfully with that in mind. That will not happen in the last three weeks of the legislative session.”

Nor are the stakes likely to be lowered for workers like Arellano.

“If I don’t work, I have no money,” said the Lyft and Uber driver. “Everything is so expensive in Santa Clara and the Bay Area.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Accel-backed mobile-first jobs app Job Today has pulled in another $16M — an expansion to its November 2016 $20M Series B round. It raised a $10M Series A in January of the same year.

The 2015 founded startup offers a mobile app for job seekers that does away with the need for a CV.

Instead job seekers create a profile in the app and can apply to relevant jobs. Employers can then triage potential applicants via the app and chat to any they like the look of via its messaging platform.

The approach has been especially popular with fast turnover jobs in the service industry, such as hospitality and retail.

Job Today says it has more than five million job seekers registered on its platform, and claims to have delivered more than 100 million candidate applications to the 400,000+ predominantly small businesses posting jobs via the app to date (with 1M+ jobs posted). It currently operates in two markets: Spain and the UK.

The additional funding will be put towards expanding its presence in the UK market — where it says it’s seen “significant growth” in both job postings and candidate applications.

It says the overall volume of applications has increased by 46% year-on-year in the market, with the number of applications per candidate growing by 32% in the same period. The likes of Costa Coffee, Pret A Manger and Eat are named as among its “regular hirers”.

It’s also envisaging a Brexit bump for the local casual job market, as the UK’s decision to leave the European Union looks set to impact the supply of labor for employers…

Commenting in a statement, CEO Eugene Mizin, said: “The casual job market is often the first to experience the effects from macro-economic forces and Brexit will mean that many non-skilled and non-British workers will leave the UK. This will create a demand to fill casual jobs and create new opportunities for the less-skilled school, college and university leavers entering the workforce for the first time in 2019.”

The Series B expansion funds are coming from New York based investor 14W.

Job Today says it got additional growth uplift after integrating with Google Jobs — aka Google search’s built in AI-powered jobs engine. This launched in the UK in July 2018, and Job Today said it saw 101% growth in users in the first month of integration.

GoodTime, the algorithmically enhanced interview process management platform, has raised $5 million in a new round of funding led by Bullpen Capital.

The company uses natural language processing to link interview candidates with the right interviewers inside an organization. The idea is to make the hiring process run more smoothly for large organizations and give overworked human resources staffers a new organizational tool in their toolbox to build better staffing processes.

To do this, Ahryun Moon, Jasper Sone and Peter Lee, the co-founders of GoodTime, have built a tool that uses the calendar as its organizing principle. The idea is that the sooner interviews can be booked with the right people, the better it is for an organization.

Staffing is about more than just setting up an interview, though, so GoodTime also factors in relevant information about both an applicant and an interviewer, including data like gender, ethnicity and relevant university and previous work-history information.

Recruiting coordinators can manage the entire process and make it as frictionless as possible for companies — and in this competitive hiring environment, companies may run the risk of losing out if they can’t pull the trigger on a potential applicant quickly enough.

It’s a problem that GoodTime’s chief executive, Moon, knows all too well. As a former recruiting coordinator at MuleSoft, Airbnb and Dropbox, Moon is well-versed in the problems of recruiting professionals.

She even managed to convince her former employers at Airbnb and Dropbox to adopt the new platform. Those companies have seen their applicants confirm interviews within three hours by using the platform and have seen their time-to-hire rates reduced by 40 percent, according to a statement from the company.

GoodTime, which was seed-funded last year with a $2 million investment from Walden Ventures and Big Basin Capital, managed to attract the education and staffing-focused investment firms GSV Accelerate and Array.vc to its latest round. GoodTime is also a graduate of the Alchemist Accelerator program. 

Based in San Francisco, GoodTime currently has 18 employees on staff and has reached profitability on the strength of its existing customers.

The UK government has set out a labor market reform package it bills as a major upgrade to workplace rights in the era of disruptive gig economy platforms.

The reforms, which include new legislation, are intended to take account of changes in working practices including those flowing from tech platforms.

But despite some gig economy platforms standing accused of exploiting workers, the government’s package does not look set to require a radical reworking of existing business models — and unions have attacked the reforms as weak and lacking substance, pointing out that, for example, a right to request a more stable contract doesn’t add up to much of a rights advance.

Among the measures being announced today (some of which have been trailed before) are:

• a day one statement of rights for all workers setting out leave entitlements and pay, and also including detail on rights such as eligibility for sick leave and pay; and details of other types of paid leave, such as maternity and paternity leave
• introducing a right for all workers, not just zero-hour and agency, to request a more predictable and stable contract, providing more financial security for those on flexible contracts
• plans to bring forward proposals for a new single labour market enforcement body to ensure workers rights are properly enforced; and more resource for the Employment Agency Standards (EAS) Inspectorate
• an end to the legal loophole which enables some firms to pay agency workers less than permanent staff (aka the ‘Swedish derogation’)
•  an extension to the the holiday pay reference period from 12 to 52 weeks, to “ensure workers in seasonal or atypical roles get the paid time off they are entitled to”
• enforcing vulnerable workers’ holiday pay for the first time
• ensuring tips left for workers go to them in full

The government also says it is committed to legislate to improve the clarity of the employment status tests to “reflect the reality of the modern working relationships” — though it does not provide any detail on how exactly it intends to reform such tests.

The labor market package comes ten months after it unveiled a plan slated to expand workers rights. It also kicked off a number of consultations at that time.

With today’s package, the government is drawing heavily on an independent review of modern  working practices it commissioned, which was carried out by Matthew Taylor and published last summer.

It says it’s taking forward 51 of the 53 recommendations in the Taylor review — agreeing with him that banning zero hours contracts in their totality would “negatively impact more people than it helped”.

It has also accepted Taylor’s view that the flexibility of ‘gig working’ — where platforms distribute paid tasks via apps, and use digital technology to remotely manage what can be tens of thousands of individuals providing a service for the business — is “not incompatible with ensuring atypical workers have access to employment and social security protections”; and that platform-based working offers opportunities for “genuine two way flexibility”, as well as opportunities for those who may not be able to work in “more conventional ways”.

That’s likely music to the ears of gig economy giants that have built massive businesses by claiming to offer flexible work opportunities for the ‘self-employed’, using algorithms to distribute jobs and remote-manage a distributed workforce, thereby enabling them to massively shift employment risk onto the individuals who actually provide the core service.

Though the government also claims to be going further than Taylor in some instances.

Business secretary, Greg Clark, said the government’s intention is to build “an economy that works for everyone”, while also lauding what he dubbed “an effective balance between flexibility and worker protections” — which he credited for helping the UK have “the highest employment rate on record”.

Yet, at the start of this year, the government also committed itself to being “accountable for good quality work as well as quantity of jobs”.

And today’s package reiterates that the secretary of state for Business, Energy and Industrial Strategy will take a new responsibility to the ensure the “quality of work”.

So expect a lot of hot air to be expended in the future over what does — and does not — constitute ‘quality’ work. (Albeit, measuring working time is hard enough, from a legal point of view, let alone determining work “quality”… )

“The UK has a labour market of which we can be proud. We have the highest employment rate on record, increased participation amongst historically under-represent groups and wages growing at their fastest pace in almost a decade,” Clark said in a statement.

“This success has been underpinned by policies and employment law which strikes an effective balance between flexibility and worker protections but the world of work is changing, bringing new opportunities for innovative businesses and new business models to flourish, creating jobs across the country and boosting our economy.

“With new opportunity also comes new challenges and that is why the government asked Matthew Taylor to carry out this first of a kind review, to ensure the UK continues to lead the world, through our modern Industrial Strategy, in supporting innovative businesses whilst ensuring workers have the rights they deserve.”

“Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK,” he added.

Last year two parliamentary committees urged the government to close gig-economy employment law loopholes — saying they had enabled “dubious business practices” by letting digital work platforms use flexibility as a tool to circumvent workers rights and entitlements.

The committees went on to call for companies with a self-employed workforce above a certain size to be required to treat individuals as workers by default.

Today’s reform plan certainly does not look to be going so far.

Much will rest on how exactly the government changes the law around employment status tests — and that’s still tbc.

Rachel Farr, a senior professional support lawyer in the Employment, Pensions & Mobility group at law firm TaylorWessing, told us it’s also rather easier said than done — suggesting it’s difficult to see how the government will “truly improve clarity”.

This element of the reform is a key consideration where gig economy businesses are concerned, as they typically allow for so-called ‘multi-apping’ — meaning those providing a service on one platform can be logged into multiple (rival) platforms simultaneously available to work. So the issue — for employment law purposes — is how to determine what constitutes working time in a platform context. (Which you need to be able to measure in order to determine employment status.)

“Simply codifying the existing case law tests will still mean each case is dependent on its specific facts, so is the government proposing to change the boundaries with some ‘check box’ style tests as they have in other EU jurisdictions?” wondered Farr. “This means greater clarity through simplifying the law but would probably mean we lose the nuances of existing U.K. tests and that some people who are currently genuinely self-employed will find that they may become workers (or vice versa).”

Uber was back in court in the UK two months ago for its latest appeal against a 2016 employment tribunal ruling which found that a group of Uber drivers were workers, not self-employed contractors as it contends.

The company has previously suggested it would cost its UK business “tens of millions” of pounds if it reclassified the circa 50,000 ‘self-employed’ drivers operating on its platform as workers.

So the devil will be in the detail of the commitment to clarify employment status tests — and where those tests end up drawing the line.

But the government’s embrace of the overarching notion of a “balance” between flexibility and worker protections looks very friendly to current-gen gig economy business models.

A decision on Uber’s latest tribunal appeal is rumored to be due this week, though it’s not clear that it will provide much clarity on the multi-apping/working time issue. TaylorWessing litigator Sean Nesbitt also told us the tribunal has not been able to spend much time debating those elements.

Responding to the government’s reform package today, the ride-hailing giant sounded pleased. An Uber spokesperson said: “We welcome more clarity from the Government and look forward to working closely with them to make sure drivers can keep all the benefits that come from being your own boss.”

“The majority of drivers choose to partner with Uber because of the freedom and flexibility on offer. A recent Oxford University study found that most drivers want to choose if, when and where they drive,” it added.

At the same time UK unions offered a downbeat assessment of the reform package.

Reuters reports the Unite Union making critical comments. “People on zero hour contracts and workers in the insecure economy need much more than a weak right to request a contract and more predictable hours,” it quoted Unite general secretary Len McCluskey responding to the reform package.

While the Independent Workers Union of Great Britain general secretary, Jason Moyer-Lee, tweeted that “exploited workers are sick of press releases, rhetoric and self-congratulatory announcements”. He added that a “real update in rights and a serious enforcement regime” does not seem to be on offer with the government’s package.

The IWGB union has supported a number of legal and protest actions by gig economy workers in recent years, including a (so far unsuccessful) human rights challenge to Deliveroo’s opposition to collective bargaining for riders.

This summer an inquiry into pay and conditions for Deliveroo riders, carried out by UK MP Frank Field, likened the model to casual labor practices at British dockyards until the middle of the 20th century — finding a dual labour market that he said works very well for some but very poorly for others.

In its response to Field’s report, as well as claiming Deliveroo riders choose flexibility, the company emphasized it had been pushing the government to update employment rules to end what it dubbed “the trade-off between flexibility and security and enable platforms to offer riders even more benefits without putting their employment status at risk”.

Responding to the government’s reform package today, a Deliveroo spokesperson reiterated this line, saying: “Court judgements have consistently found Deliveroo riders to be self-employed. However, Deliveroo has consistently said that we would like to see the rules change to end the trade-off between flexibility and security that currently exists in employment law, to allow companies such as ours to offer more benefits to riders.”

“Independent research has shown riders are consciously choosing to opt out of traditional employment in favour of new ways of working where they have more control,” the spokesperson added. “On-demand working is set to grow as people want to fit work around their lives, not vice versa, and we will work with the Government to ensure the interests of Deliveroo riders can be advanced.”

Also responding to the government’s reform package, Field told us: “Justice demands a bold programme of reforms from the Government to protect workers in the most vulnerable positions. The reports that Andrew Forsey and I have published on the growth of insecure work paying poverty wages at firms like Hermes, Uber, and Deliveroo have given urgency to this demand and, at last, the Government looks set to act. A key test for anything the Government does bring forward must be its ability to rid the labour market of those sources of injustice – chronically low pay, precariousness, bogus self-employment, and appalling exploitation – which characterise all too many jobs at the moment.”

Startups are but one species in a complex regulatory and public policy ecosystem. This ecosystem is larger and more powerfully dynamic than many founders appreciate, with distinct yet overlapping laws at the federal, state and local/city levels, all set against a vast array of public and private interests. Where startup founders see opportunity for disruption in regulated markets, lawyers counsel prudence: regulations exist to promote certain strongly-held public policy objectives which (unlike your startup’s business model) carry the force of law.

Snapshot of the regulatory and public policy ecosystem. Image via Law Office of Daniel McKenzie

Although the canonical “ask forgiveness and not permission” approach taken by Airbnb and Uber circa 2009 might lead founders to conclude it is strategically acceptable to “move fast and break things” (including the law), don’t lose sight of the resulting lawsuits and enforcement actions. If you look closely at Airbnb and Uber today, each have devoted immense resources to building regulatory and policy teams, lobbying, public relations, defending lawsuits, while increasingly looking to work within the law rather than outside it – not to mention, in the case of Uber, a change in leadership as well.

Indeed, more recently, examples of founders and startups running into serious regulatory issues are commonplace: whether in healthcare, where CEO/Co-founder Conrad Parker was forced to resign from Zenefits and later fined approximately $500K; in the securities registration arena, where cryptocurrency startups Airfox and Paragon have each been fined $250K and further could be required to return to investors the millions raised through their respective ICOs; in the social media and privacy realm, where TikTok was recently fined $5.7 million for violating COPPA, or in the antitrust context, where tech giant Google is facing billions in fines from the EU.

Suffice it to say, regulation is not a low-stakes table game. In 2017 alone, according to Duff and Phelps, US financial regulators levied $24.4 billion in penalties against companies and another $621.3 million against individuals. Particularly in today’s highly competitive business landscape, even if your startup can financially absorb the fines for non-compliance, the additional stress and distraction for your team may still inflict serious injury, if not an outright death-blow.

The best way to avoid regulatory setbacks is to first understand relevant regulations and work to develop compliant policies and business practices from the beginning. This article represents a step in that direction, the fifth and final installment in Extra Crunch’s exclusive “Startup Law A to Z” series, following previous articles on corporate matters, intellectual property (IP), customer contracts and employment law.

Given the breadth of activities subject to regulation, however, and the many corresponding regulations across federal, state, and municipal levels, no analysis of any particular regulatory framework would be sufficiently complete here. Instead, the purpose of this article is to provide founders a 30,000-foot view across several dozen applicable laws in key regulatory areas, providing a “lay of the land” such that with some additional navigation and guidance, an optimal course may be charted.

The regulatory areas highlighted here include: (a) Taxes; (b) Securities; (c) Employment; (d) Privacy; (e) Antitrust; (f) Advertising, Commerce and Telecommunications; (g) Intellectual Property; (h) Financial Services and Insurance; and finally (i) Transportation, Health and Safety.

Of course, some regulations may touch on multiple regulatory areas, for example, the “Fair Credit Reporting Act” is a law ultimately about privacy, but it impacts many financial and employment-related services as well. Certain laws may therefore be cross-listed in more than one regulatory area. Also, since we can’t look at every U.S. state and city, this article will focus primarily on the federal and California state laws.

After you focus on the particular regulatory areas that may implicate your business, next reference the short quotations and links to relevant primary and secondary sources below, then work to identify the specific compliance risks you face. This is where other Extra Crunch resources can help. For example, the Verified Experts of Extra Crunch include some of the most experienced and skilled startup lawyers in practice today. Use these profiles to identify attorneys who are focused on serving companies at your particular stage and then seek out any further guidance you need to address the regulatory matters pertinent to your startup.

With that as context, the Startup Law A to Z – Regulatory Compliance checklist is below:

Taxes

• Federal
  • Federal Employer Number
  • Income Tax
  • Estimated Taxes
  • Self-Employment Tax
  • Employment Taxes
  • Excise Tax
  • Internal Revenue Code Rule 409A
  • Internal Revenue Code Section 422 and 423
  • Internal Revenue Code Section 83(b)
• California
  • State Employer Number
  • Foreign Qualification
  • Franchise and Income Tax
  • Sales and Use Taxes
  • Special Taxes and Fees

Securities

• Federal
  • Securities Act of 1933
  • Securities Exchange Act of 1934
  • Jumpstart Our Business Startups Act of 2012
  • Internal Revenue Code Rule 409A
  • Internal Revenue Code Section 422 and 423
  • Internal Revenue Code Section 83(b)
• California
  • Corporate Securities Law of 1968

Employment

• Federal
  • Affordable Care Act
  • Age Discrimination in Employment Act of 1967 (ADEA)
  • Americans with Disabilities Act of 1990 (ADA)
  • Civil Rights Act of 1964
  • COBRA Requirements
  • Employee Retirement Income Security Act of 1974 (ERISA)
  • Equal Pay Act of 1963
  • Federal Fair Labor Standards Act (FLSA)
  • Genetic Information Nondiscrimination Act
  • Immigration Reform and Control Act
  • National Labor Relations Act
  • Pregnancy Discrimination Act
• California
  • Disabled Persons Act
  • Fair Employment and Housing Act
  • Family Rights Act
  • New Parent Leave Act
  • Unruh Civil Rights Act
  • Worker’s Compensation Insurance (Cal. Labor Code Section 3700)

Privacy

• Federal
  • Federal Trade Commission Act
  • Children’s Online Privacy Protection Act (COPPA)
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Health Information Technology Act (HITECH)
  • Fair Credit Reporting Act
  • Gramm-Leach-Bliley Act
• California:
  • Consumer Privacy Act of 2018
  • Online Privacy Protection Act of 2003 (Cal-OPPA)
  • Confidentiality of Medical Information Act
  • Consumer Credit Reporting Agencies Act
  • Electronic Eavesdropping, Invasion of Privacy Act
  • Insurance Information and Privacy Protection Act
  • Privacy Rights for California Minors in the Digital World
  • Shine the Light Law
  • Student Online Personal Information Protection Act
• International:
  • GDPR

Antitrust

• Federal
  • Clayton Act
  • Robinson-Patman Act
  • Sherman Act
• California
  • Cartwright Act

Advertising, Commerce and Telecommunications

• Federal
  • Federal Trade Commission Act
  • Clarifying Lawful Overseas Use of Data Act
  • Communications Decency Act, Section 230
  • Computer Fraud and Abuse Act
  • Controlling Assault of Non-Solicited Pornography & Marketing Act (CAN-SPAM)
  • Electronic Communications Privacy Act
  • Export Administration Regulations
  • Restore Online Shoppers’ Confidence Act
  • Telecommunications Act
• California
  • Consumers Legal Remedies Act
  • Unfair Competition Law
  • Comprehensive Computer Data Access and Fraud Act

Intellectual Property

• Federal
  • Anticybersquatting Consumer Protection Act
  • Copyright Act, Copyright Revision Act of 1976
  • Digital Millennium Copyright Act
  • Defend Trade Secrets Act of 2016
  • Economic Espionage Act of 1996
  • Electronic Communications Privacy Act of 1986 (ECPA)
  • Prioritizing Resources and Organization for Intellectual Property Act of 2008
  • Lanham (Trademark) Act of 1946
  • Leahy-Smith America Invents Act
  • No Electronic Theft Act
  • Patent Act
• California
  • Uniform Trade Secrets Act

Financial Services and Insurance

• Federal
  • Gramm-Leach-Bliley Financial Modernization Act
  • Dodd-Frank Act
  • Fair and Accurate Credit Transactions Act
  • Fair Credit Reporting Act
  • Financial Industry Regulatory Authority
  • Sarbanes-Oxley Act of 2002
  • Unlawful Internet Gambling Enforcement Act of 2006
• California
  • Financial Information Privacy Act
  • Song-Beverly Credit Card Act of 1971

Transportation, Health & Safety

• Federal
  • Department of Transportation Act
  • Federal Food, Drug, and Cosmetic Act
• California
  • Confidentiality of Medical Information Act
  • Public Utilities Act

Before diving into further detail, it may be helpful for some readers to note the distinction between a law and a regulation. Simply put, regulations provide more detailed direction on how certain laws should be followed. So regulations are not technically laws, but they carry the force of law (including penalties for violation), since they are adopted by governmental agencies under authority granted by statute. Beyond that, understanding how laws and regulations are actually enacted is helpful to illustrate the extent to which the process is politically driven.

In the U.S., a bill must first pass both legislative branches of government, then, if signed by the executive branch, it will be codified in statute as law (Schoolhouse Rock anyone?). Once codified, the legislative branch will authorize the relevant executive department or agency to determine whether specific regulations are necessary to give the law effect. If so, those executive departments or agencies will determine what further rules are needed, and in turn, work to enforce them.

At the federal level, for example, proposed regulations are developed first through a “Notice of Proposed Rulemaking,” listed in the Federal Register and filed in the corresponding executive agency’s official docket (available at Regulations.gov). This affords the public an opportunity to comment on the regulations. After receiving comments, the filing agency may revise the proposed regulation before final rules are issued, which again will be published in the Federal Register and then filed in the agency’s official docket at Regulations.gov, before they are codified in the Code of Federal Regulations (CFR).

At nearly every step in this process then, institutions, government, and interest groups are working – sometimes at cross purposes – to shape what the law will be and how it will impact your startup.

The Startup Law A to Z – Regulatory Compliance reference guide is below:

A. TAXES

Meet Georges, a French startup that wants to help freelancers, doctors and lawyers when it comes to accounting. With Georges, you can get rid of your accountant altogether and switch to a software-as-a-service product. Alven is leading today’s round with other investors also participating.

Automated accounting is an interesting space. For instance, Roger just raised $7.35 million last week. But Georges focuses on one type of company in particular — people working on their own as freelancers, coaches, doctors, architects, lawyers, etc.

The product is dead simple. First, you connect Georges with your professional bank account. The company leverages Bankin’ to connect to the vast majority of French banks. After that, Georges automatically tags revenue and expenses to calculate your annual revenue, VAT, etc.

It’s not perfect so you still have to manually categorize some transactions. But it’s still much faster than entering each transaction in an accounting application. Once everything is tagged properly, Georges generates paperwork and sends it to tax authorities.

The company competes with more traditional software solutions, such as BNC Express. With a bit of machine-learning, Georges could quickly become much more efficient than those legacy tools.

Georges has attracted tens of thousands of customers so far. It currently costs €24 per month ($27 per month) to access the platform.

The startup had previously raised a $1.1 million (€1 million) seed round from Kerala and Fast Forward in March 2018. It’s going to be interesting to see if they can expand to small businesses and other types of companies as it would represent a big market opportunity.

The competition for top talent today is more fierce than ever. And when it comes to attracting and retaining that talent, we know that benefits play a major hand in how well an employer fares.

To that end, Fairygodboss, the largest career community for women, in partnership with Extend Fertility recently conducted research on the benefits today’s female talent cares most about. After surveying 1,000 professional women, we found a full 87% of them said a company’s benefits package was either important or very important to them when evaluating a job offer.

The presence — or lack thereof — of certain benefits also had a noticeable impact on respondents’ likelihood to stay at an employer. Given that, when a worker leaves a company, it can cost 33% of their annual salary to replace them, ensuring benefits packages are up to snuff is crucial for companies that want to avoid turnover.

Not all benefits are created equal, though. If the package at your company seems outdated, it’s possible you could actually be driving top talent away. So, we spoke to thought leaders — from CEOs to heads of HR — to find out which benefits and policies send a red flag to job seekers that an organization is behind the times. If your company’s handbook includes any of the following eight policies, it’s possible you’re seen as outdated, according to experts.

Check out our accompanying article highlighting the 10 benefits and policies any modern workplace should have on Extra Crunch.

1. Paid maternity leave is offered — but other leave benefits aren’t.

Image via Getty Images / Aleutie

Considering at least 40% of middle- and large-sized U.S. companies still offer zero paid maternity leave to employees, we’re not saying this benefit isn’t worth having. But as Sarah Morgan, a Senior HR Director of SafeStreets USA, said, to stop at a paid maternity leave benefit is to fail to acknowledge our expanding understanding of families and the ways those families need to be supported.

“The definition of family is changing, and people are living longer,” Morgan said. “Employees need more than just time away from work when they have a baby or someone dies. They also need time for school-aged children, aging parents, deployed spouses and even pets…when they need this time, they should not have to choose between their loved ones and financial hardship.”

2. There’s a gym reimbursement benefit.

Again, at face value, this isn’t exactly the worst benefit for a company to offer. The problem, as Tasia Duske, CEO of Museum Hack, put it, is that too many companies see a gym membership credit as checking off their “employee wellness” box in full.

“What if an employee wants to join a yoga studio, or what if they want a massage instead? Especially with millennial employees, defining what’s ‘healthy’ varies from person to person,” Duske said. “A smart benefit to provide is a Healthy Lifestyle Credit where there’s a lot more flexibility and no judgment. Employees can use their credit to pay for a visit to the dentist, tai chi lessons, to see a therapist or anything in between.”

3. Employees are beholden to a set time and place to work.

A lack of flexibility is one of today’s biggest tell-tale signs of an outdated employer, something Matthew Ross, Co-owner and COO of The Slumber Yard, spoke to. “We don’t have a set time employees need to be in the office by and we frequently allow them to work from home, coffee shops and sometimes even bars for a change of scenery,” Ross said.

“I know how mentally draining it can be to sit down at the same desk all day, so it’s nice when employees are able to leave and work from different locations. I believe this helps keep the work fresh and boosts overall morale.”

4. There’s a strict dress code.

Image via Getty Images / TatianaKrylova

Unless a uniform is legitimately required for a role, companies that mandate strict employee dress codes should seriously rethink these policies, said Greg Kuchcik, VP of HR at Zeeto.io. “Almost all companies have moved to a business casual at most with a lot of companies moving to no dress code altogether,” Kuchcik said.

“If you have strong HR/management and trusted employees, there is no reason that you can’t allow your workers to be comfortable all day, every day.” Nicole Green, HR and Employee Engagement Manager at Perfect Search Media, echoed this. “Casual dress can lead to an environment that is more open-minded and allows for focus on ideas over a dress code,” she said.

5. There are policies that restrict employees’ social media use.

Not long ago, it wasn’t uncommon for companies to have set policies in place that regulated employees’ use of and access to social media platforms. But now, such a policy makes a company look outdated, as Lucas Group’s Chief People Officer, Carolina King, said.

“I certainly feel that limiting employee’s access to social media is a thing of the past and detrimental to a company’s ability to attract top talent,” King said. “I also think when companies do not offer bring your own device (cell phone) programs or policies, they feel behind the times.”

6. Performance reviews are the only policy for sourcing employee feedback.

Research shows that 75% of the causes for employee turnover are preventable. But companies that remain married to an outdated model of performance review-based feedback miss out on opportunities to address those causes. “Performance reviews are often the only official opportunity for an employee to share concerns, ask questions, and have a conversation with a manager,” Vivek Kumar, a recruiter, said.

“However, performance reviews are also used by companies to determine bonuses and raises, which restricts employees from speaking freely and without fear of consequences. Implementing a system of continuous employee feedback is an excellent replacement for an uncomfortable, high-pressure quarterly or yearly performance review.”

7. There’s an official bereavement leave benefit or policy.

Image via Getty Images / Nataliia Kostiukova

On the surface, bereavement leave may seem like a humanitarian benefit for employers to offer. But by enforcing a set number of days for this kind of leave, companies are engaging in a form of employee hand-holding that has no place in the modern working world, said Cindy Harvey, CEO of Amelia Dee.

“Instead of dictating how long it should take someone to recover from an illness or to grieve, these policies should be more flexible, empower managers and employees to have conversations, and do what is right for the person and situation,” Harvey said. “Doing this also supports positive employee mental health and wellness practices in the workplace, two critical issues in workplaces today.”

8. There’s unlimited PTO.

A policy of flexibility, as referenced earlier, is crucial for any employer that wants to remain relevant today. An increasingly trendy benefit in this space is unlimited paid time off; but research around the detriments of this policy may soon make it an outdated offering, argued Samuel Johns, HR Specialist and Office Manager at Resume Genius.

“On the face of it, unlimited PTO is a blessing, since an employee can theoretically take off the time they need to recenter and recharge themselves. However, recent 180-degree about-faces by several companies have revealed that unlimited PTO policies are unworkable, since employees end up toiling away with less PTO than they would using a standard PTO system,” Johns said.

“At Resume Genius, we do offer unlimited PTO, but we also have a minimum PTO requirement of 10 days a year. On top of that, managers are notified if their team members haven’t taken a day off in the last six months, and are asked to schedule them some much-deserved time off.”

Check out our accompanying article highlighting the 10 benefits and policies any modern workplace should have on Extra Crunch.

Want to attract (and retain) top talent, making your company’s workforce more competitive and cutting down on turnover costs to boot? The simplest way to do so starts with the benefits and policies you offer to employees.

We already know that benefits play a major hand in how candidates evaluate a job offer. One recent survey conducted by Fairygodboss, the largest career community for women, in partnership with Extend Fertility, found that 87% of professional women say a benefits package is important or very important to them when interviewing at a company. Respondents stated that the presence (or absence) of certain benefits would impact their likelihood to stay at an employer, too.

So, which specific benefits and policies are the ones that will set your company apart as a modern, desirable workplace? We spoke to experts — from CEOs to heads of HR — to find out exactly what the benefits package of today’s most relevant employers looks like.

1. Summer Fridays

Giving employees a few extra hours to jumpstart their weekend through “Summer Fridays” can lead to a whole spate of positive benefits, including improved morale, focus and engagement at work, according to Brian Kropp, Group Vice President of HR Research at Gartner . “Most companies have told us that with this benefit in place, they’ve found employees work harder earlier in the week because they know they have to complete their work before Friday,” Kropp said.

2. Pay transparency

Via Getty Image / abstractdesignlabs

The days of salary and bonus conversations happening only behind closed doors are long gone. Thanks to whisper networks and a growing belief in salary sharing, for many companies, this information is available with or without their consent. Companies who want to appear modern (as well as do the right thing) should embrace this trend through official pay transparency policies.

“Companies that don’t want to appear outdated have written pay, incentive and bonus plans for all employees at all levels so that how pay is calculated is not a mystery,” Sarah Morgan, Senior HR Director of SafeStreets USA, said.

“The compensation is equitable across gender and races so everyone is paid fairly based on the position, experience, skills and responsibilities. Such companies are also open about their pay policies and share general information about how much people are earning at every level. This may be shared as ranges or as specific amounts.”

3. Inclusion initiatives

Compensation is the most intimate way a company can interact with its employees. For far too long, compensation managers and committees have operated behind closed doors, keeping pay guidelines shrouded in mystery. Developers with equal experience, performing at the same level, and huddled around the same table while trying to perfect autonomous ocean to table omakase experiences could receive drastically different pay packages. Those times are over.

Unemployment sits at historic lows, investors are pouring in money through massive rounds, and companies are stepping on, over, and around each other to attract the best talent. Silicon Valley sits at the epicenter of competitive labor markets, but we’ve heard the same story over and over: Big Company X is coming to town, and we can’t pay like them.

Heads up Seattle, Austin, Boulder, Boston, New York, Chicago, and most recently, Virginia! Recruiters must be aggressive, and it’s only a matter of time before an all-star employee mentions a 25% pay bump available at Company X. A team member hears the news and they’re suddenly browsing job boards as well. The dreaded churn switch is pushed a notch higher.

Today’s workforce is more connected than ever, having grown with technology since the days of Tetris, Shufflepuck, and Oregon Trail. What was once taboo to share with anyone beyond your significant other, is now being posted freely for the masses.

We won’t even start on the impacts of social media! Reviews and ratings began popping up for schools, restaurants, and workplaces. Glassdoor, Salary, and others provide deep insights to pay, work-life balance, and executive leadership approval ratings.

Then, things went a step further by detailing gender alongside compensation, most notably in the employee-led survey at Google in 2017. It was the shot heard round the world. How could a well-known organization which prides itself on diversity, and that some think is the entire internet, find itself with gender pay disparity?

Over the past year, I’ve visited and revisited the gender pay gap with various talent partners at prominent venture firms. Kelly Kinnard of Battery Ventures and Bethany Crystal of USV authored pieces on the topic. One theme was common when discussing pay disparity – What if we had real data? What if we had corporate-sourced data that wasn’t subject to disgruntled employees or selective reporting? Well, we do.

Advanced-HR hosts the world’s largest compensation database specific to venture-backed companies. For the first time, we took a deep dive into compensation and gender at privately held, VC-backed companies and we’re sharing the findings.

Thousands of companies and 10,000+ corporate-sourced employee data points. Nothing inferred. Though we analyzed the entire data set, this article only considers US Company data.

We do not display gender-based compensation data but VC-backed companies can access our database of 2800+ participants for free by completing a quick survey. Venture firms and all others interested in our data, contact us here.

About the data

Each year, we have the privilege of running the industry standard VC Executive Compensation Survey alongside 160+ top venture firms. All sponsoring firms and their participating portfolio companies receive the final report of detailed, aggregate, and anonymous compensation data. Before we review compensation, let’s visit gender representation at VC-backed companies.

The following slide is part of a more comprehensive 11-slide deck viewable at the end of this article, highlighting takeaways and key findings from our data.

Data is great. Now what?

It’s the hot topic and hiring managers are on red alert. Pay fairly or risk a PR nightmare. Here are some steps you may want to consider.

1. Founders need to hire. Owning the hiring process allows founders to gain valuable experience and exposure. By creating job descriptions, founders can be thoughtful and sensitive to the fact that connotations and tone can unintentionally isolate a specific segment of eligible talent.

There is a special chaos that happens when a startup reaches 30 employees. People have a harder time tracking what’s going on, and it’s easy for some to feel left out or ignored.

Right when you want employees focusing on taking the company to the next level, they’re suddenly focused on their own futures. Insecurities and politics can abound, and the work can suffer.

How to stop the madness? In my experience, it all comes down to structure. It might seem early, or scary to a company used to succeeding on grit, but 30 is a key time to begin putting processes into place.

You’re no longer 10 people sitting around a table together, and communication can start to break down. Looking to large companies is no help either. It’s easy to get lost in a sea of frameworks, and you don’t want to overwhelm your team.

What steps can you take to keep things on track and scale effectively? How much is too much?

My company, Bright + Early, works with companies at exactly this stage, helping them grow up without losing the culture that makes them special. For a company just on the verge of scaling, here’s what I recommend.

Values

The future of work is so uncertain that perhaps the only possible job security exists for the person who can credibly claim to be an expert on the future of work.

Nevertheless, there are two trends purported experts are reasonably certain about: (1) continued growth in the number of jobs requiring substantive and sustained interaction with technology; and (2) continued rapid expansion of the gig economy.

This first future of work trend is evident today in America’s skills gap, with 7 million unfilled jobs — many mid- or high-skill positions requiring a range of digital and technology capabilities.

Amazon’s recent announcement that it will spend $700 million over the next six years to upskill 100,000 of its low-wage fulfillment center employees for better digital jobs within Amazon and elsewhere demonstrates an understanding that the private sector must take some responsibility for the requisite upskilling and retraining, as well as the importance of establishing pathways to these jobs that are faster and cheaper than the ones currently on offer from colleges and universities.

These pathways typically involve “last-mile training,” a combination of digital skills, specific industry or enterprise knowledge and soft skills to make candidates job-ready from day one.

The second trend isn’t new; the gig economy has existed since the advent of the “Help Wanted” sign. But what’s powered the gig revolution is the shift from signs and classified ads to digital platforms and marketplaces that facilitate continued and repeated matching of gig and gig worker. These talent platforms have made it possible for companies and organizations to conceptualize and compartmentalize work as projects rather than full-time jobs, and for workers to earn a living by piecing together gigs.

Critics of the gig economy decry the lack of job security, healthcare and benefits — and rightly so. If it’s hard to make ends meet as a full-time employee making a near-minimum wage, it’s impossible to do so via a gig platform at a comparable low wage. But rather than fighting the onset of the gig economy, critics might achieve more by focusing on upskilling gig workers.

To date, conversations about pathways and upskilling have focused on full-time employment. In the workforce or skills gap vernacular, upskilled Amazon workers might leave the fulfillment center for a tech support job with Amazon or another company, but it’s always a full-time job. But how do these important concepts intersect with the rising gig economy?

Image via Getty Images / PeterSnow

Just as there are low-skill and high-skill jobs, there are gig platforms that require limited or low skills, and platforms that require a breadth of advanced skills. Gig platforms that can be classified as low-skill include Amazon’s Mechanical Turk, TaskRabbit, Uber and Lyft and Instawork (hospitality). There are also mid-tier platforms like Upwork that span a wide range of gigs. And then there are platforms like Gigster (app development) and Business Talent Group (consulting and entire management functions) that require the same skill set as the most lucrative, in-demand, full-time positions.

So just as Amazon is focused on last-mile training programs to upskill workers and create new pathways to better jobs, in the gig economy context, our focus should be on strategies and platforms that allow gig workers to move from lower-skill to higher-skill platforms, i.e. pathways for Uber drivers to become Business Talent Group executives.

One high-skill gig platform has developed an innovative strategy to do exactly this. CreatorUp is a gig platform for digital video production that has built in a last-mile training on-ramp. CreatorUp offers low-cost or free last-mile training programs on its own and in conjunction with clients like YouTube and Google to upskill gig workers so they can be effective digital video producers on the CreatorUp platform.

CreatorUp’s programs are driven by client demand; because the company saw significant demand from clients for AR/VR video production, it launched a new AR/VR training track. Graduates of CreatorUp’s programs join the platform and are staffed on a wide range of productions that clients require to engage customers, suppliers, employees and/or to build their brands.

The good news for CreatorUp and other high-skill gig platforms that begin to incorporate last-mile training is that investing in these pathways can start the flywheel that every successful talent marketplace requires. Clients only patronize talent marketplaces once there’s a critical mass of talent on the platform. So how do platforms attract talent? One way is to be first-to-market in a category. A second is to attract billions in venture capital. But a third might be to use last-mile training to create new talent.

CreatorUp believes its last-mile training programs have allowed it to grow a network that serves diverse client needs better than any other video production platform. For not only has last-mile training allowed CreatorUp to understand and certify the skills of talent on the platform, and therefore to meet the needs of more clients, it also has allowed CreatorUp to bid more competitively because newly trained talent is often willing to work for less.

Last-mile training has the potential to be a win-win for the gig economy. It’s a strategy that may allow gig platforms to scale, matching more talent with more clients. Meanwhile, by allowing workers to upskill from lower-tier gig platforms to higher skill platforms, it’s also the first gig economy solution for social mobility.

LinkedIn, with 645 million users in 200 countries, is the undisputed leader when it comes to being the world’s biggest network of professionals, a position that it uses to leverage products in areas like recruitment and e-learning. But in achieving that size, it hasn’t really developed products for a more targeted approach for specific verticals or audiences. And that has opened the field to a wide variety of startups to fill in the gaps and compete with it. Today, one of these hopefuls — a startup called RippleMatch that has built a recruitment platform to help organizations specifically to connect with recent graduates from more diverse backgrounds that match their needs — is announcing a Series A of $6 million to do just that.

The funding, which will be used to expand the platform, as well as for business development, is being led by G20 Ventures, with Work-Bench, and previous investors Accomplice, Bullpen Capital and AlleyCorp also participating.

The company is not disclosing its valuation, but from what I understand it’s a “material step up,” as it has been on a steady growth curve and counts companies like Pfizer, TripAdvisor and Qualtrics among its customer base. This is also the first significant outside money that it has raised. RippleMatch’s very first funding, in fact, was the signing bonus that co-founder Eric Ho received when he once got a job at Facebook. “It was the need to pay that back that led us to raising this Series A,” joked Andrew Myers, the other co-founder who is also the CEO.

Myers and Ho met and started the company when they were still students at Yale University. Ho was about to graduate, but Myers was still in the thick of his undergrad degree, which he still has yet to complete (and, as is the way of tech founders, may never finish).

The idea for the company came when Myers — who studied history and political science — was thinking about the predicament that a lot of his friends from back home in Colorado were facing in the working world.

Like Myers, they were also undergraduates. But unlike him, they were not at Yale nor any other top-shelf school that has the benefit not only of prestigious name recognition, but typically strong recruiting pipelines to some of the most competitive companies hiring graduates for lucrative entry-level positions.

“I was very cognisant of the divide coming from different socio-economic backgrounds,” Myers said in an interview. “I could see that a lot of my friends from home would be better hires for places than some of the people I knew at Yale. They just didn’t have the same opportunities. We didn’t think of this as a business venture in the early days; it was a problem that our friends had that I wanted to solve.”

Using AI to cut out the recruiter

RippleMatch’s approach is relatively straightforward: The company has built a platform that takes a potential candidate through a relatively quick set of questions about his/her career and geographical ambitions, interests and so on, along with a copy of the candidate’s resume.

It then combines these with basic information about a candidate’s GPA and test scores. Taking all that and combining it with more information sources outside of the candidate’s own input, it comes up with some 300 data points that it crunches together to match candidates with job and internship opportunities. On the employer side, it not only sources job vacancies of the moment, but also works on matching an employer’s wider hiring strategy with this trove of people — the idea being that it’s bringing up possibilities that the employer might have otherwise passed over or not even seen to begin with.

Myers says that the matching algorithms that RippleMatch has built, which include the ability to ascertain what people might directly and indirectly be best suited to do, essentially cut out the “middle man” in the process — that is, the recruiter, as well as potentially the relationships and pipelines that may already exist, thus leveling the playing field for everyone, making it just as likely that an employer will discover their next star hire from a small college in the Midwest as from Stanford.

As Mike Troiano, the partner at G20 who led the firm’s investment in RippleMatch, describes it, a school’s name recognition and networking prowess aren’t the only things standing in the way of qualified candidates getting a look in the door. His daughter was having a hard time getting a response from a company she contacted for an internship and when they put together her LinkedIn profile, they realised that she simply lacked the professional network to figure out if there was someone to contact and help.

Indeed, while LinkedIn has proven to be a strong starting point for many professionals in their career progression, its shortcomings are most obvious in more specific examples like these. (It was one reason that LinkedIn made a big push some years ago to start trying to bring younger users on to the platform, to work on ways of getting them to start building up their profiles and networks.)

RippleMatch is part of a growing number of startups that have been identifying and (for their purposes) exploiting these kinds of holes in LinkedIn’s wider platform. Another startup that has been building a platform also aimed at graduates and specifically at trying to help source more diverse pools of candidates is Handshake (which itself raised $40 million less than a year ago).

Handshake takes a different approach in that it offers job boards and proactively works with universities and recruitment organizations and offers users a social network / community of sorts from which to source advice and exchange information. All this has helped boost that company’s database to 14 million people as of last year, likely more now that it’s opened up access to all university students in the U.S.

Others that have been pecking away at the LinkedIn hegemony include the likes of Triplebyte, another well-capitalised recruitment startup that specifically targets software engineers. The startup has built its own assessment platform (used by RippleMatch to recruit, incidentally) which its CEO and co-founder Harj Taggar also believes can help level the playing field between those who are coming from big-name companies and schools and those who are not, focusing solely on a person’s ability to code. LinkedIn might have millions of profiles of engineers to Triplebyte’s thousands, but the key with the smaller company is that it has profiles of people “who are actively job searching,” which he notes stands in contrast to the unsolicited contacts that many people get on LinkedIn, just by virtue of being there. “We’re getting two times the rate of responses that recruiting teams see on LinkedIn,” Taggar claimed. It’s now ramping up with a premium tier aimed at those recruiting at scale.

RippleMatch is still at a relatively small and early stage of its life in comparison to these two. While it has partnerships with some 1,200 diversity focused organizations on campuses to bring in more candidates, and today some 60% of its candidate pool are from underrepresented backgrounds, the company today only has about 100,000 candidates in total on the platform, and agreements with 60 companies that tap RippleMatch to find them. But, at a time when the economic, societal and geographic rifts seem insurmountable in countries like the U.S., it’s more important than ever to work on ways to help close those gaps, paving the way for a big opportunity for tech-based solutions like RippleMatch’s.

Evidence continues to roll in that American workers are out of position for the high-value jobs of today and tomorrow. Start with the fact that there are 7.3 million unfilled jobs, millions of which are high-skill positions in IT, professional services and healthcare. Then add that employment growth in IT is stagnant — a phenomenon that is entirely a supply-side problem.

What are America’s colleges and universities doing to solve the problem? Until recently, they’ve been a big part of the problem. Academic programs at colleges and universities are controlled by faculty members who typically aren’t incentivized to align curricula to employer needs. Few are interested in what employers are seeking, particularly for entry-level positions. Many have never worked in the private sector or have only outdated or tenuous connections to non-academic employers.

Most educators simply resist the idea that instruction should be aligned to employment opportunities. Colleges have always positioned themselves to help students gain the skills they need to get a good fifth job, not necessary a first job. Unfortunately, the labor market has changed: If you don’t get a good first job, you’re unlikely to get a good fifth job. And currently, around 45% of new college graduates are not getting good first jobs and find themselves underemployed.

In early August, EMSI, a provider of labor market analytics that is part of the Strada Education Network, released a study showing that our current system of post-secondary education is not providing linear paths to good first jobs, but rather a “crazy flow” or “swirl.” The report analyzed millions of graduates from six very different majors and found that graduates of all six are effectively going after the same jobs in sales, marketing, management, business and financial analysis.

Commenting on the study in Inside Higher Education, experts concluded that straightening the swirl might require integrating actual work into academic programs. “This really makes a strong case for work-based learning,” said Jane Oates, a former official in the U.S. Department of Labor during the Obama administration, now president of WorkingNation. “Colleges and universities need to provide students with practice in the context of the workplace,” agreed Lynn Pasquerella, president of the Association of American Colleges and Universities.

Creating clearer pathways to good first jobs by connecting school and work becomes even more critical considering that a recent survey found that 61% of all full-time jobs seeking entry-level employees at least on the surface ask for at least three years of experience, and that summer employment for students remains near an all-time low. With this backdrop, perhaps 45% underemployment for new graduates is as good as we can do.

New models are emerging to better connect school and work. New career services management platforms like Handshake offer much more functionality than legacy systems to connect students with employers recruiting on campus. Portfolium — a division of Instructure — allows students to create ePortfolios of their work and show their skills to employers.

Many colleges and universities have invested in experiential learning and work-study programs. Some schools do this better than others; Northeastern University offers the most comprehensive co-op program of any American institution. But few have been able to do it systematically, for the same reasons academic programs aren’t well-aligned to employer needs. That’s all changing with the rise of new marketplaces connecting students and faculty with real work from real employers.

One such marketplace is Parker Dewey. Named for progressive educator Francis Parker and philosopher John Dewey, Parker Dewey helps employers create “micro-internships”: real projects that employers need done but that can be outsourced to college students. In Parker Dewey’s micro-internship marketplace, the employer defines a project and sets a fixed fee for completing the work. Parker Dewey reaches students through career services postings and attracts applicants for the project. Then the employer selects one or more students to do the work. The marketplace makes it easy for employers to try out students who may have no work experience and therefore reduces “Hiring Friction,” i.e. the reduced propensity of employers to hire candidates who literally haven’t done the same job before, and the reason so many entry-level jobs seem to be asking for experience.

Another marketplace that’s gained even more traction is Riipen, a platform that got its start in Canada, connecting Canadian colleges and universities with employers, but now growing rapidly in the U.S. While Riipen works with employers in a manner similar to Parker Dewey, its approach to colleges and universities is very different. Rather than approaching career services, Riipen incorporates employer projects directly into college and university courses, thereby connecting employment and employability with the beating heart of colleges and universities: individual faculty.

Riipen’s three-sided marketplace of employers, educators and students appears to provide a more effective vehicle for gathering talent (and employers) on the platform; once faculty incorporate projects into their coursework — e.g. a professor of marketing adding a project reviewing and analyzing Google Ads data — the projects become mandatory and more students complete them. On Riipen, small and mid-size businesses tend to provide real-time projects, while larger companies have begun to re-use the same projects in a bid to test dozens or hundreds of students and recruit top performers. Over the past year, Riipen reports an order of magnitude increase in platform usage by employers, faculty and students.

New marketplaces like Riipen have the potential to be win-win-win-win. First, employers recruit better talent, and more reliably; content valid simulations are more than twice as accurate as any other talent screening mechanism or criteria. And it’s more cost-effective than attempting to recruit on campus. Second, universities augment career services and improve employability of graduates, which should allow them to attract more students. Third, for the first time, faculty can easily incorporate real work projects into their courses — projects that students will be energized to complete knowing there’s a real employer on the other end. And last but not least, students gain a way to stand out from the pack by exhibiting their abilities in a meaningful context, hopefully clearing a path to a good first job at the same employer, or if not, gaining valuable relevant work experience.

In a few years, as a result of marketplaces like Riipen, completing real work projects as part of an academic program should be commonplace. So there’s also a fifth winner from marketplaces that connect school and work: the overall economy. Millions of new college graduates will get relevant work experience, many more will find good first jobs and our workforce will be better positioned for the high-value jobs of today and tomorrow.

Andreessen Horowitz has led a $15 million Series A in US-based job matching platform for nursing vacancies, Incredible Health. Other investors in the funding round include NFX, Obvious Ventures, Precursor Ventures and Gingerbread Capital. To date the recruitment startup has raised a total of $17M.

The California startup’s pitch to nursing professionals and hospitals is faster and more efficient hiring via proprietary matching algorithms which replace the need for hospitals to manually sift applications. Instead the platform matches job seekers to nursing vacancies based on criteria supplied by both sides of its network.

Why focus on nurses? The startup cites a statistical claim that by 2024 the US will have a shortage of a million nurses — which it argues poses a risk of financial loss to hospitals, as contractors cost more to employ, while also contending that a growing number of unfilled nursing vacancies risks the quality of care hospitals are able to offer patients.

It launched its recruitment platform in late 2017 and has so far limited its range to California, with 150+ hospitals in the region signed up and an undefined “thousands” of nurses on board.

The Series A funding will be going towards accelerating national scaling in the US.

As well as VC backers, Incredible Health’s Series A includes participation from a number of individual investors hailing from the hiring space — including Hired founder, Matt Mickiewicz; Steve Goodman, founder of Bright.com (acquired by LinkedIn); and Pete Kazanjy, founder of Talentbin (acquired by Monster) .

“We look at at least 40-50 different criteria, including location preferences, licenses and skills,” says co-founder and CEO Iman Abuzeid who has a background as a medical doctor. Her co-founder and CTO, Rome Portlock, who comes from a family of nurses, is an MIT alum — where he studied computer science.

“We work with each hospital individually to understand their key needs so we can customize their algorithms, enabling personalized matches that don’t waste the recruiter’s time,” Abuzeid adds. “We also find out the nurse’s preferences through automated methods.

“At the end of the day, a hospital recruiter or hiring executive does not want to see 200 candidates in their app, they want to see 12 that are the right fit. Same with the nurses — they don’t want to hear from 76 employers, they want to hear from three that are the right fit.”

Incredible Health’s claim for its approach is that it yields 3x faster recruitment vs the national average — saying hires via its platform take 30 days or less instead of up to 90 days on average.

It also makes a further claim of 25x “hiring efficiency” for hospitals as a consequence of its matching algorithms taking over much of the hiring admin. This is based on data from hospitals which, prior to using its platform, had to review an average of 500 applicants to fill a single position vs the matching tech cutting that to an average of just 20.

Nurses don’t apply to jobs on Incredible Health’s platform; it’s up to hospitals to apply to nursing professionals the algorithm deems a suitable match for a job vacancy.

Hospitals can’t browse all available nurses; they only see candidates the algorithm selects for them — so, as with nurses, they’re trading wider visibility of the job market for algorithmic matches based on non-disclosed “proprietary” criteria.

Incredible Health sells that reduction of agency as an efficiency saving to both sides of its network.

“Rather than completing an application for every potential employer — a process which takes an average of 45 minutes per application — nurses who use Incredible Health complete one profile — a process that takes less than 5 minutes. That profile is then used to screen and custom-match them to multiple great job opportunities,” says Abuzeid, adding when asked about criteria that nurses have to provide “data like their job preferences, experience and skill set, and also their education and licensing” as part of the onboarding profile-building process. 

For nurses this load-lightening switch from active jobseeker to passive platform lurker — i.e. once they’ve created their profile — is how Incredible Health hopes to woo healthcare workers away from traditional job boards (such as specialist nursing vacancies board Indeed).

Its marketing thus leans heavily on claims that nurses just need to spend a few minutes creating a profile and then watch as the great job offers to roll in.

It also claims nurses who find employment through its two-sided platform score on average a 17% salary increase and a 15% reduction in commute time.

Though all these figures are derived from an unknown number of nurses working across a subset of hospitals in a single US state — so it remains to be seen how claimed perks get squeezed as the platform scales its national range and necessarily opens up to a wider pipeline of nursing professionals.

For now, Incredible Health also says its focus is on building a career marketplace for nursing professionals to connect them with “permanent, well-paid hospital jobs”, rather than dealing with travel and temp nurses. 

Again, whether it’s able to maintain focus on what one investor calls “high value health care workers” and the claimed high quality permanent jobs as the business scales will also be one to watch.

Commenting on the Series A, Andreessen Horowitz managing partner Jeff Jordan told us: “Incredible Health’s mission is to help health care professionals live better lives and do their best work.  They’ve seen strong early success helping to match these health care professionals with hospitals throughout California, and are beginning to expand their solution nationally.  We look forward to supporting their efforts to building a game-changing health care employment marketplace.”

Part of the funding will go on expanding from a pure hiring platform — to what the startup bills as a “community for health care professionals as they advance their careers” — in a clear bid to nurture and expand its candidate pool so it can be responsive to platform needs.

“High caliber nurses are out there, but employers have a hard time hiring them through traditional methods like job boards and recruiting agencies because those methods rely almost exclusively on human engagement — not technology — to scour through applications, licenses and experience — and manually vet and qualify them for jobs,” Abuzeid tells TechCrunch, dubbing the job-board competition “outdated methods”.

As well as offering a “streamlined” hiring process for nursing roles, as she puts it, she notes the platform automates “entire parts of the screening and vetting process” — meaning “we’re able to deliver high-quality nurses at scale”. 

That said, there’s still manual work involved — with the startup noting on its website that staff may contact nurses to “make sure you’re presenting yourself in the best way possible to top hospitals”, as well as telling hospitals that candidates are pre-screened for “licenses, experience, responsiveness, and more” (though at least some, if not all, of that vetting is automated).

Like any platform startup, Incredible Health is hoping to channel network effects to its advantage — including by feeding data back in to improve matching algorithms.

“Our system gets more effective the more who use it,” Abuzeid tells us. “The first [effect] is a traditional marketplace network effect: More nurses has attracted more hospitals, and more hospitals has attracted more nurses. And then, there’s the data network effect: The more each side uses it, the ‘smarter’ our algorithms get, too.”

Each hospital onboarded onto the platform brings with it a range of needs “advancing our system’s performance abilities”, she adds.

While algorithmic recruitment can clearly speed up the business of matching candidates to relevant jobs — a factor evident in the sheer number of job matching startups now playing in different sectors — it inevitably entails a loss of control for both sides of the employer-applicant divide.

Depending on matching criteria used there could be potential for gender and/or racial bias to creep into automated selections — bias that would be difficult for hospitals to detect since they’re only able to view a subset of candidates deemed a match, rather than the entire available pool at the time.

However Abuzeid dismisses the idea that there’s any risk of bias in Incredible Health’s approach. 

“We operate successfully in a very regulated industry,” she says. “Because potential employees are assessed on their skills, experience and certifications, the technology weeds out biases typically found in processes which are largely human-powered.”

On the business model front, Incredible Health is charging hospitals what it bills as a “simple, flat fee pricing regardless of level, experience or location” — which it touts as “cheaper and more scalable than traditional recruiting agencies”.

“Traditional recruiting agencies are very expensive, because they don’t use technology in their screening and matching processes. It’s all people powered and can cost $20,000-$30,000 per single hire,” Abuzeid claims.

As for rival (lower fee) legacy job boards, she argues they offer “quantity, not quality and require lots of work for nurses and employers to find a good fit” — claiming this old school method results in “really low hiring rates at 0.2%”. 

Employee leave benefits are a complicated web of company and government policies, and Cocoon is out to bring clarity and simplicity to both the employer and employee experience.

The platform launched Wednesday across all 50 states and is designed for any type of employee leave, like parental, medical, caregiver or bereavement. It factors in all company government and insurance benefits and manages all facets of the leave from compliance to claims management to payroll calculations.

In addition to the launch, the San Francisco-based company announced it raised a $20 million Series A funding led by Index Ventures, with participation from First Round Capital, SemperVirens, XYZ, Magnify Ventures and a group of individual investors. This brings the company’s total funding to $26 million, co-founder and CEO Mahima Chawla told TechCrunch. This includes a $5.5 million seed round with Index and First Round in December 2020.

Chawla, Lauren Dai and Amber Feng founded the company in June 2020. The idea for the company stemmed from a conversation Chawla and Dai had with co-workers and friends about leave benefits. They thought, at the time, that leave was similar to putting an out-of-office on your calendar, but as they learned that it was more about navigating company, government and insurance laws, especially around how it worked at a particular company, who pays during a leave and how it works, they saw a need to simplify the experience.

“Even extremely benefit-friendly companies are having a hard time,” Chawla said. “We talked to hundreds of employees and HR managers across all industries, and to everyone, it is a nightmare. We thought it shouldn’t be hard for someone to take care of themselves. This impacts everyone, but there is not something to make it easier, so we saw a big opportunity to make an impact.”

Cocoon’s platform has areas for both employers and employees. On the employer side, it handles compliance and payroll complexities so that the company knows what its payroll responsibilities are, but takes all of that work off of the employer’s plate. The employee will go on Cocoon and design a leave from beginning to end via an automated process that Chawla said can be done in under 10 minutes.

Since its launch in January, the platform has collected a rich set of data, including how employees are using their leave benefits and what they are taking it for to create insights for employers to understand how better to craft their benefits.

Cocoon is already working with large employers, like Carta, and Chawla sees its responsibility as taking the pain out of leave. Other companies in the benefits space are coming at the problem of leave in a more piecemeal way, while Cocoon is taking a holistic approach and applying software and automation to reduce the amount of back-and-forth both employers and employees have to do when managing leave.

The new funding will be used for hiring, particularly in engineering, sales and customer success and building out additional products.

“We are seeing massive inbound inquiries through customer referrals and broker relations,” Chawla said. “Next year, it will not just be about expanding the base of employers, but also moving into different industries and employers of different sizes.

As part of the investment, Mark Goldberg, partner at Index Ventures, has joined the company’s board of directors. He says this investment was a personal one for him as he was finishing up a paternal leave and helped write the leave policy for the firm. In fact, one of his colleagues spent over 25 hours on the phone with California’s Employment Development Department during the initial part of her maternity leave trying to navigate a clerical error that threatened her job.

Goldberg has known the Cocoon team for a while, following the co-founders from their previous respective positions at Square and Stripe.

“When Mahima called me and said the band was coming together, I wanted to get involved,” he added. “We are looking for that core talent vortex. If you can get the DNA in the first 10 employees, the next 100 will be top-notch. It’s similar to what we saw in the early Plaid team.”

Company benefits make or break the ability to recruit top talent. On one side of that is 401(k), while on the other are consumer-directed benefits, any accounts offered by the employer to use for a designated purpose that typically has tax-advantaged benefits.

Elevate has a new approach to how employers and employees access, manage and experience consumer-directed benefits. Former Businessolver executive Brian Cosgray and former ConnectYourCare founder Brian Strom started the company in 2020.

CEO Cosgray explained that these benefits are most commonly the out-of-pocket healthcare expenses an employee has, like health savings accounts, flexible spending accounts, commuting expenses, tuition reimbursement or even reimbursement of expenses for adoption or fertility treatments.

Statistics show that 95% of American companies offer these benefits, but are only used by 95 million American employees. Meanwhile, with half of Americans enrolled in high-deductible healthcare plans and 21% of working-age individuals underinsured, consumer-directed benefits programs are meant to help offset rising costs that employers and employees end up paying, Cosgray said.

And, with anything involving the tax code, administration of these types of benefits can get complicated. Cosgray saw this firsthand: At his former company, he sold these types of benefits to large employers, but was constantly coming up against the same issue of an industry heavily reliant on a paper-based process.

“It is hard for employees to understand and make use of these benefits when there’s tons of legalese and tons of jargon,” he told TechCrunch. “They don’t know which card to use, mainly because there were multiple cards due to growth of the industry through consolidation. I went looking for a better alternative and couldn’t find one.”

Elevate consumer directed benefit dashboard. Image Credits: Elevate

The Denver-based company emerged Monday from a year in stealth mode. Its platform enables employees to view, plan and manage their pre-tax benefits from one web and mobile dashboard. There is also one contactless card for all of the benefits, and claims are processed instantly with reimbursement taking place within minutes. On the employer side, they can customize their offering with standard templates for many of the common plans and then configure the plan for their particular market or plan.

To date, the company raised $15 million in total funding, $12 million of it a new capital infusion of Series A funding, co-led by Greycroft and Norwest Venture Partners, with participation from existing investor Bowery Capital. Elevate intends to put the new funds to work in sales, continued product innovation and hiring additional talent for its implementation and service teams.

Cosgray said it was too early to discuss growth metrics, but said the company spent a year building out the product and now has its first set of customers. It will be rolling out to a few distribution partners in the first quarter that will give Elevate access to approximately 900 employers.

Meanwhile, Ellie Wheeler, partner at Greycroft, invests heavily in the digital healthcare space and said that as with other areas that touch consumers, employees are expecting a platform that makes sense, is as easy to use as other products and gives them flexibility in the way they can use it.

Rather than provide $150 to a very specific gym, employers are moving toward a benefit like a lump sum that can be allocated as the employee pleases: some for transportation, some for childcare or some for healthcare, she said.

She believes Elevate is coming into the market with deep domain knowledge and expertise. The founders are also building a product “for the modern world” that isn’t making assumptions about needs and wants, but building in the flexibility for employers and employees to decide that.

“They know all the players and are not coming up the curve on the market, they know what it is,” Wheeler added. “They know how to win, and they’re off to a running start.”