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Abacus.AI raises another $22M and launches new AI modules

AI startup RealityEngines.AI changed its name to Abacus.AI in July. At the same time, it announced a $13 million Series A round. Today, only a few months later, it is not changing its name again, but it is announcing a $22 million Series B round, led by Coatue, with Decibel Ventures and Index Partners participating as well. With this, the company, which was co-founded by former AWS and Google exec Bindu Reddy, has now raised a total of $40.3 million.

Abacus co-founder Bindu Reddy, Arvind Sundararajan and Siddartha Naidu. Image Credits: Abacus.AI

In addition to the new funding, Abacus.AI is also launching a new product today, which it calls Abacus.AI Deconstructed. Originally, the idea behind RealityEngines/Abacus.AI was to provide its users with a platform that would simplify building AI models by using AI to automatically train and optimize them. That hasn’t changed, but as it turns out, a lot of (potential) customers had already invested into their own workflows for building and training deep learning models but were looking for help in putting them into production and managing them throughout their lifecycle.

“One of the big pain points [businesses] had was, ‘look, I have data scientists and I have my models that I’ve built in-house. My data scientists have built them on laptops, but I don’t know how to push them to production. I don’t know how to maintain and keep models in production.’ I think pretty much every startup now is thinking of that problem,” Reddy said.

Image Credits: Abacus.AI

Since Abacus.AI had already built those tools anyway, the company decided to now also break its service down into three parts that users can adapt without relying on the full platform. That means you can now bring your model to the service and have the company host and monitor the model for you, for example. The service will manage the model in production and, for example, monitor for model drift.

Another area Abacus.AI has long focused on is model explainability and de-biasing, so it’s making that available as a module as well, as well as its real-time machine learning feature store that helps organizations create, store and share their machine learning features and deploy them into production.

As for the funding, Reddy tells me the company didn’t really have to raise a new round at this point. After the company announced its first round earlier this year, there was quite a lot of interest from others to also invest. “So we decided that we may as well raise the next round because we were seeing adoption, we felt we were ready product-wise. But we didn’t have a large enough sales team. And raising a little early made sense to build up the sales team,” she said.

Reddy also stressed that unlike some of the company’s competitors, Abacus.AI is trying to build a full-stack self-service solution that can essentially compete with the offerings of the big cloud vendors. That — and the engineering talent to build it — doesn’t come cheap.

Image Credits: Abacus.AI

It’s no surprise then that Abacus.AI plans to use the new funding to increase its R&D team, but it will also increase its go-to-market team from two to ten in the coming months. While the company is betting on a self-service model — and is seeing good traction with small- and medium-sized companies — you still need a sales team to work with large enterprises.

Come January, the company also plans to launch support for more languages and more machine vision use cases.

“We are proud to be leading the Series B investment in Abacus.AI, because we think that Abacus.AI’s unique cloud service now makes state-of-the-art AI easily accessible for organizations of all sizes, including start-ups,” Yanda Erlich, a p artner at Coatue Ventures  told me. “Abacus.AI’s end-to-end autonomous AI service powered by their Neural Architecture Search invention helps organizations with no ML expertise easily deploy deep learning systems in production.”

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To Do Politics or Not Do Politics? Tech Start-Ups Are Divided

Rob Rhinehart, a co-founder of nutritional drink start-up Soylent, declared in a blog post last week that he was supporting Kanye West for president.

“I am so sick of politics,” Mr. Rhinehart wrote. “Politics are suddenly everywhere. I cannot avoid them.”

David Barrett, the chief executive of Expensify, a business software start-up, went in another direction. In an email to his company’s 10 million customers last week, he implored them to embrace politics by choosing the Democratic presidential nominee, Joseph R. Biden Jr.

“Anything less than a vote for Biden is a vote against democracy,” Mr. Barrett proclaimed.

With days to go before the election on Tuesday, Mr. Rhinehart and Mr. Barrett represent the twin poles of a start-up culture war that has openly erupted in Silicon Valley. Start-ups such as the cryptocurrency company Coinbase and the audio app Clubhouse have become embroiled in a debate over how much politics should be part of the workplace. And venture capitalists and other tech executives have weighed in on social media with their own views.

“I have never seen another instance like this in my career,” said Bradley Tusk, a venture capitalist and political consultant. “There’s no real separation anymore, in the current political climate, between politics and everything else. It has permeated absolutely everything.”

Silicon Valley tech workers have long been regarded as liberal but not politically overactive. After President Trump’s victory in 2016, however, workers at large tech companies such as Google and Amazon began agitating more on issues like the ethics of artificial intelligence, immigration and climate change.

Now many start-up workers, who have been sold on a mission of changing the world, expect their employers to support their social and political causes, entrepreneurs and investors said. This summer’s protests against police violence prompted many tech companies to re-examine their own issues with race. And the pressure to make political moves before the election has only intensified.

The shift has grown partly out of a realization that no tech platform is completely neutral, said Katie Jacobs Stanton, who invests in start-ups through her venture capital firm, Moxxie Ventures. Founders who build companies with millions of users “really have an obligation to have a point of view and make sure their products are being used for good,” Ms. Stanton said.

“It’s disingenuous and it’s also the luxury of the privileged to say, ‘We don’t have a point of view,’” she added.

But others said they feared becoming a lightning rod or inflaming tensions at a hypersensitive moment during the coronavirus pandemic. Some worried that their companies could be sued by employees who might say they were discriminated against because of their political beliefs. Others said any move could be attacked by those who found the actions inauthentic or not enough.

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Those tensions exploded in public last month when Brian Armstrong, the chief executive of Coinbase, penned a 2,000-word blog post to “clarify” his company’s culture. Mr. Armstrong wrote that he wanted Coinbase to generally avoid engaging with broader social issues and workplace conversations about politics. He said it was a way to minimize distraction and focus on the start-up’s mission of creating “an open financial system for the world.”

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Credit…Steven Ferdman/Getty Images

Two months earlier, dozens of Coinbase employees had staged a walkout after executives were slow to express solidarity with Black Lives Matter protesters and minority employees, several workers said. In his post, Mr. Armstrong said employees who disagreed with his “no politics” stance could leave.

His position immediately created waves across Silicon Valley. Some praised the move, with one Coinbase investor comparing Mr. Armstrong to Michael “Jordan in his prime.” Others said opting out of politics was itself a political statement.

Dick Costolo, a former chief executive of Twitter, tweeted that “me-first capitalists who think you can separate society from business” would be shot in “the revolution.” He deleted the post after, he said, it set off violent threats and harassment.

In an interview, Mr. Costolo said it was impossible for companies to separate their mission from their impact on the world. “If you try to separate the social contract from the economic contract, don’t be surprised when there’s an uprising, because they’re linked,” he said.

Some Coinbase workers disagreed with Mr. Armstrong. “I’m just so mystified by the apparent lack of awareness in the blog post,” Ryan King, a Coinbase engineer, wrote on the company’s internal Slack messaging system. The message was reviewed by The New York Times. “A declaration that we’re not going to touch ‘broader societal issues’ fails to acknowledge that we’re a part of society.”

About 60 Coinbase employees, or 5 percent of the work force, have resigned, the company said. A spokeswoman declined further comment.

At Expensify, based in Portland, Ore., Mr. Barrett took a different position. After spending more than a decade in Silicon Valley, where he found a “uniform view” that politics was not good for business, he moved to Portland four years ago. Now, he said, “choosing not to participate is also a choice — it’s a choice to defend the status quo.”

So when Expensify employees drafted an email to tell customers to vote for Mr. Biden, after concluding in an internal discussion that re-electing Mr. Trump would be a threat to democracy, Mr. Barrett favored sending it out. While roughly a third of Expensify’s top management opposed sending the email because it could alienate customers, the majority ruled, Mr. Barrett said.

Last Thursday, Expensify blasted its message to its 10 million users. “Not many expense reports get filed during a civil war,” Mr. Barrett wrote.

The email instantly drew criticism and praise on social media. Job applications, web traffic and customer sign-ups have since spiked, Mr. Barrett said. But he also received death threats, prompting him to hire private security. No customers have quit, potentially because Expensify’s system takes months to switch out of, he said.

Tayo Oviosu, chief executive of Paga, a payments start-up in Lagos, Nigeria, said Expensify’s email had crossed a line. Mr. Oviosu isn’t opposed to companies’ speaking up on social justice issues, “but that is very different than leveraging the fact that you used my personal information to tell me I have to vote in a certain way,” he said. “That is wrong.”

Mr. Oviosu, who was using a trial version of Expensify and was considering adopting the paid version, said he now planned to look at alternatives. “I think they lost me completely on this,” he said.

The start-up culture wars are also evident on Clubhouse, where people join rooms and chat with one another. The app has been a popular place for investors such as Marc Andreessen and other techies to hang out in the pandemic. (Mr. Andreessen’s venture firm, Andreessen Horowitz, has invested in Clubhouse, Coinbase and Soylent.)

On Oct. 6, Mr. Andreessen started a Clubhouse room called “Holding Space for Karens,” which describes having empathy for “Karens,” a slang term for a pushy privileged woman. Another group, “Holding Space for Marc Andreeeeeeeeeeeeeeeessen,” soon popped up. There, people discussed their disappointment with the Karen discussion and other instances when, they said, Clubhouse was hostile to people of color.

Mr. Andreessen and others later started a Clubhouse room called “Silence,” where no one spoke. Andreessen Horowitz declined to comment.

At a “town hall” inside the app on Sunday, Clubhouse’s founders, Paul Davison and Rohan Seth, were asked about Coinbase’s and Expensify’s political statements and where Clubhouse stood. They said the company was still deciding how Clubhouse would publicly back social causes and felt the platform should allow for multiple points of view, a spokeswoman said. She declined to comment further.

Yet even those wishing to stay out of politics are finding it hard to avoid. On Saturday, Mr. Armstrong shared Mr. Rhinehart’s blog post endorsing Mr. West on Twitter. “Epic,” tweeted Mr. Armstrong.

Several users pointed out the hypocrisy in Mr. Armstrong’s sharing something political after telling employees to abstain. One of his employees, Jesse Pollak, wrote that Mr. Armstrong had shared something with “a large number of inaccuracies, conspiracy theories, and misplaced assumptions.”

Soon after, Mr. Pollak and Mr. Armstrong deleted their tweets.

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Airbnb Fights Its ‘Party House Problem’

The luxury cabin in Incline Village, Nev., just north of Lake Tahoe, has a hot tub, sauna, pool table, fire pit, two patios and a backyard full of towering pine trees. It sleeps 14, according to its listing on Airbnb. And it has been a nightmare for Sara Schmitz, a retiree who lives next door.

The home is frequently the site of raucous bachelor parties and weddings, Ms. Schmitz said. Recently, a crew of college students stayed there, blowing weed smoke into her house. When she asked them to stop, they threw trash in her yard.

“It’s a constant party house,” said Ms. Schmitz, 57. She has called the police a dozen times about the property and joined the Incline Village STR Advisory Group, an organization that fights short-term rentals — for which the largest source is Airbnb.

What Ms. Schmitz encountered is part of the “party house problem” facing Airbnb. That’s when guests who book its properties hold parties in them, something that appears to be happening more frequently in the coronavirus pandemic, as people look for places to socialize with bars closed and hotels appearing risky. In July, New Jersey police broke up a party at an Airbnb with more than 700 people in attendance.

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Credit…Max Whittaker for The New York Times

The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared to last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.

Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.

Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up largely prioritized growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.

The issues are now fueling Airbnb’s many fights with communities over how to regulate home rentals. Groups like the one in Incline Village are becoming more vocal and are sharing their strategies for fighting short-term rentals. Cities including Chicago, San Diego, Ann Arbor and Atlanta have recently proposed or enacted stricter rules or bans on the properties.

“Airbnb’s long-run viability and profitability is going to have a big question mark” if the party issue is not resolved, said Karen Xie, a professor at the University of Denver who researches the short-term rental industry.

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Credit…Max Whittaker for The New York Times

Christopher Nulty, an Airbnb spokesman, said the company is combating the party houses with “robust new policies, products and technologies to stop large gatherings, which far exceeds measures taken by others.” He said Airbnb has made changes even though the moves “knowingly impacted growth and nights booked.”

Airbnb began rolling out new rules against party houses around the same time that it was preparing to file to go public. In July, it said guests under the age of 25 with less than three positive reviews on the site could not book entire homes near where they live. In August, the same month it filed for a public listing, it placed a 16-person cap on reservations, banned parties and sued guests who were responsible for the events.

Last month, it started testing technology to block suspicious last-minute bookings and suspended some party houses from its listings. And ahead of Halloween — the one-year anniversary of the shooting at the Airbnb in Orinda, Calif. — it banned one-night rentals on Halloween.

Some said the measures were too little, too late.

“The damage has really been done to the neighborhoods during that time,” said Austin Mao, an Airbnb host in Las Vegas. He said the costs of repairing damages from parties at his properties, which host as many as 2,000 guests a month, have been tremendous. Neighbors complained so much about parties over the summer that he converted a third of the listings to long-term rentals.

In 2016, Christopher Thorpe, an entrepreneur in Lincoln, Mass., said he faced $28,000 in damages after an Airbnb guest threw an 80-person rave, complete with ticket sales, at his home. Mr. Thorpe later learned that other hosts had reported that guest for parties, but Airbnb had not removed the renter from the platform.

“Airbnb put up as many roadblocks as they could to avoid dealing with this,” Mr. Thorpe said.

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Credit…Kyle Oster/Fox5

Airbnb has long grappled with safety issues, said the six former employees who worked on trust and safety and who asked to remain anonymous.

Two of them said they asked Airbnb to sue people who frequently threw parties at the rentals for the damages, but executives feared that would draw attention to the events. Several also said they pushed to limit or remove the “Instant Book” option, which confirms bookings immediately without requiring approval from the host. But the feature, which was used by almost 70 percent of listings in 2019, boosted convenience and made Airbnb more competitive with hotels. So Airbnb did nothing, they said.

Mr. Nulty said Airbnb promoted Instant Book so hosts could not discriminate against guests by denying some of them a booking, adding that hosts can turn off the feature. He denied that executives had been urged to sue party promoters and said its legal team did not reject proposals because of concerns over public attention.

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Credit…Max Whittaker for The New York Times

In Incline Village, which has a population of around 9,000, the Airbnb party houses have increasingly grated on residents. Shortly after Joe and Edie Farrell, retired physical therapists, moved permanently into their vacation home there last year, the house next door became an Airbnb. Blasting music and drunk people created “10 days of anxiety” around July 4, said Ms. Farrell, 70.

“Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell, 68, said. “Now you have to worry about your safety and peace and quiet.”

Then came last year’s fatal shooting at the Airbnb in Orinda. A Vice news article that outlined Airbnb’s fraudulent listings and fake host accounts also went viral, raising questions about trust.

In response, Airbnb said it would ban parties thrown by professional organizers that were promoted on social media. It also said it would verify that all seven million of its listings were as advertised by Dec. 15, 2020, and announced a global hotline for neighbors to report parties. And it promoted its head of policy, Margaret Richardson, to be vice president of trust. (She has since left.)

But when the pandemic hit in March, executives scrambled to keep the company afloat. Verification stalled. (Airbnb said 40 percent of listings have “begun the verification process.”) The neighborhood hotline, which was supposed to be available globally, is only accessible in the United States, Canada and the Netherlands.

In May, Airbnb cut a quarter of its staff, including a large chunk of its safety team. In an internal Q. and A. with Brian Chesky, Airbnb’s chief executive, employees protested the layoffs. One said the decision would leave guests without support for weeks, according to a list of the questions viewed by The Times. Another wrote that he would feel unsafe staying in an Airbnb or renting his home on the site because of the lack of a safety plan.

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Credit…Ray Chavez/The Mercury News, via Getty Images

In the first week after the layoffs, safety cases piled up, said former employees. Airbnb asked many of those it had laid off to return temporarily to work through the cases; many of those workers have since remained, said current and former employees. In Dublin, the layoff plans were rescinded altogether, they said. Airbnb said the team that manages user safety is now the size it was before layoffs.

In August, Airbnb introduced more changes to improve safety. It sued a guest who held a party in Sacramento that resulted in three people getting shot. It then sued another guest who hosted a party in Cincinnati, where a property manager was shot in the back while trying to break up the event.

On Oct. 19, the company sued Davante Bell, a party promoter in Los Angeles who threw parties at Airbnb mansions. “Airbnb has suffered and continues to suffer reputational harm and potential liability to third parties as a direct result of Bell’s actions,” the company’s lawsuit said.

Mr. Bell, who declined to comment on Airbnb’s suit, has been selling tickets to a new party called “Nightmare on King Bell Street Halloween Mansion Party” on social media. This week, he continued posting fliers for the event. When asked if the party would be held at an Airbnb, Mr. Bell did not answer.

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Remote but Inclusive for Years, and Now Showing Other Companies How

From her home in Beaverton, Ore., Jamie Davila leads a team of eight engineers in seven states for the technology start-up Ultranauts. Like millions of other people during these work-from-home times, she relies on popular communication tools like Zoom and Slack.

But Ms. Davila and Ultranauts also work remotely in ways that make them different from most companies. They follow a distinctive set of policies and practices to promote diversity and inclusion among employees.

All video meetings have closed captioning, for workers who prefer to absorb information in text. Meeting agendas are distributed in advance so people who are uncomfortable speaking up can contribute in writing beforehand. Employees are asked daily for feedback, like whether they believe their strengths are valued and if they feel lonely at work.

“The whole idea is to create a safe space that allows everyone to be heard,” Ms. Davila, 36, said.

Ultranauts has been working for years on the challenges confronting so many companies during the pandemic, and probably beyond: how to effectively work remotely, make progress toward diversity and inclusion goals, and build a strong organizational culture.

The company, founded in 2013 by two former roommates at the Massachusetts Institute of Technology, has had a remote work force from Day 1. It was also founded to use the untapped talent of autistic people, who often think and process information differently from the rest of the population. Seventy-five percent of Ultranauts employees are on the autism spectrum.

So the small start-up may offer lessons for corporate America in how to hire, manage and motivate far-flung employees, whose work and careers can suffer without the face time and hallway conversations of office life.

“Ultranauts’ purposeful construction of a workplace that really supports people is extraordinary,” said Susanne Bruyere, academic director of the Yang-Tan Institute on Employment and Disability at Cornell University. “Its techniques and tools could absolutely be applied more broadly.”

The start-up’s customers include big companies like AIG, BNY Mellon and Cigna. It began with manual quality testing of websites and apps but has steadily moved to more advanced work like data-quality engineering, data analytics and automated software testing.

When the pandemic hit, Ultranauts, which is based in New York, lost business as a couple of large customers made cuts to conserve cash. But it quickly picked up new work from companies that are accelerating digital projects despite the downturn. The business now has 90 employees, up from 60 a year ago. Its goal is to expand to 200 in two years.

Ultranauts is backed by social-impact investors — which seek financial returns, but not windfalls — including The Disability Opportunity Fund, SustainVC, Wasabi Ventures and Moai Capital. They have invested $5.7 million so far.

The company insists its work force is a competitive advantage. The edge, it says, is not so much that autistic brains are wired for computing tasks but that people on the autism spectrum are a diverse group.

One person may recognize patterns quickly, while another has a more measured cognitive style but arrives at different patterns and ways to fix code. The key lies in harnessing the varied talents of teams.

Meetings are recorded, transcribed and archived not only to accommodate workers who prefer reading to listening but also to foster a more open organization. That extends to the weekly meetings of the six-person leadership team at Ultranauts. The notes of those sessions, including the decisions made and reasons behind them, are published on the companywide Slack channel.

“It is a lot more transparency than most people in business are comfortable with,” said Art Shectman, a co-founder and the company’s president.

Ultranauts’ leaders believe their style of wide-open, explicit communication — no unwritten rules — could benefit any company. Ultranauts is giving away a valued homegrown software product, Biodex, as part of a test to see how widely its tools and practices might take root in the corporate mainstream.

Each employee at Ultranauts has a Biodex profile that states the person’s work, communication and feedback preferences. What is your typical response time to messages — a few minutes, a few hours, same day? If a colleague has constructive criticism, how do you want to receive the feedback — orally or in writing?

Each morning, Biodex sends out a bot message with two questions: How “interactive” — ready to communicate with others — are you feeling today? What’s your energy level today? Workers answer on a 1-to-10 scale.

Rajesh Anandan, a co-founder and the chief executive of Ultranauts, describes Biodex as “a quick-start guide for how to work with a person.”

Ultranauts is letting teams at about a dozen organizations, from big corporations to start-ups, try out a test version of Biodex. If trial runs with outsiders go well, Ultranauts plans to make Biodex a free download on the Slack app store by the end of the year. Other Ultranauts apps, like its program for polling worker sentiment and well-being, would follow.

“We’ve built an engine that unlocks opportunity for people who haven’t had a fair shot before,” Mr. Anandan said. “But if we only do that for ourselves, it won’t have much of an impact.”

Mr. Anandan is a former Bain consultant who switched gears and careers. In 2003, he went to work for the Global Fund to Fight AIDS, Tuberculosis and Malaria and later started an incubator for social ventures at UNICEF. Both he and Mr. Shectman, a software engineering consultant, had known since their M.I.T. days autistic people who struggled to find work.

Many autistic people do well with the structured coursework of school, earning undergraduate and graduate university degrees. But they often stumble at the first hurdle into the job market — the traditional job interview. They tend to struggle with social interaction, speaking informally and reading the nonverbal cues of communication.

That was the case for Leslie Reis. She holds a master’s degree in software engineering, but had not had a full-time job until Ultranauts hired her last year.

Writing, Ms. Reis explained, is how she communicates best. “For a lot of organizations, that was perceived as something that would be a drawback,” she said in an email, “rather than a way for me to participate more fully.”

Ultranauts does not use work experience to filter job candidates. The company does conduct structured interviews, but hiring is largely based on skills assessments that it has developed to measure traits like the ability to work through new problems and take guidance and apply it. Work simulations are another test.

Tulco, an investment firm in Pittsburgh, hired Ultranauts this year to do data-quality work. Tulco invests in traditional businesses that it thinks can become more efficient and profitable by applying data science and artificial intelligence, but creating those A.I. algorithms requires sifting through troves of messy data.

Ultranauts’ work has impressed Matthew Marolda, executive vice president for data science at Tulco. On one project, its team cleaned up and loaded a vast amount of information into an A.I. model with remarkable speed, days instead of weeks, he said.

“This is a work force with inherent strengths,” Mr. Marolda said. “They’re really good at pattern recognition and really good at detail work.”

Seeking new pools of skilled workers, and prodded by advocacy groups, several companies in recent years have begun programs to recruit and employ autistic workers, including SAP, Microsoft, Ernst & Young and JPMorgan Chase.

Ultranauts is one of a handful of small companies and nonprofits in Europe and the United States that employ mainly autistic workers for jobs in technology. Others include Specialisterne, Auticon, Daivergent and Aspiritech. Ultranauts stands out, experts say, for working entirely remotely from the outset and for developing its carefully crafted combination of digital tools and workplace practices.

Its culture has certainly resonated with Ms. Davila, who is autistic and was hired four years ago, with no formal training in computing. Since then, she has mastered not only programming languages but also skills as a manager.

Ultranauts has also been her ladder to the middle class. “Before I got the job at Ultranauts, I was on food stamps,” Ms. Davila recalled. “Now, I own my own house. And it’s a nice house in a nice neighborhood.”

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Snowflake Stock More Than Doubles in IPO Debut

SAN FRANCISCO — It’s bonanza time in Silicon Valley and on Wall Street.

Snowflake, a data storage and analytics provider, kicked off a frenzied phase of technology initial public offerings on Wednesday when its stock opened at more than double its listing price and then soared in early trading, in a sign of Wall Street’s appetite for fast-growing companies.

The company opened at $245 a share on the New York Stock Exchange, up from $120 set by its bankers, and then shot up to as high as $319 before closing at $254. The listing, which valued Snowflake at $70.4 billion, was the largest so far this year and the largest ever for a software maker, according to Renaissance Capital, which tracks I.P.O.s. It was also a major payday for Snowflake’s venture capital investors, who had valued the start-up at $12.4 billion just seven months ago.

Snowflake is among several prominent tech companies that are expected to list their shares in the coming months as the tech industry thrives amid the pandemic-induced economic downturn. After a lull in I.P.O.s during the volatile early months of the coronavirus crisis this spring, new listings roared back over the summer and have accelerated in recent weeks, even as tech stocks hit some recent turbulence.

Other companies are also rushing to get out ahead of the Nov. 3 election, which could lead to more volatility. They include Airbnb, the home rental company; DoorDash, the on-demand delivery provider; Wish, an e-commerce site; Palantir, a data analytics start-up; OpenDoor, a real estate marketplace; and Asana, a collaboration software provider.

This week, the software companies Sumo Logic, American Well Corporation and Unity Software are also set to go public, along with JFrog, which listed its shares on Wednesday. Together, the debuts represent a private market value of more than $78 billion.

Investors are eager to back hot I.P.O.s to juice their returns, said Kathleen Smith, principal at Renaissance Capital. “We’ve been on this rocket ship of returns since the drop in March,” she said.

But Ms. Smith cautioned that Snowflake’s high price set it up for trouble if it did not keep growing quickly. “It’s nosebleed territory,” she said. “It can’t mess up on the growth side.”

Frank Slootman, Snowflake’s chief executive, agreed. “This is just a hot deal, and we’ll have to live with the consequences of it,” he said in an interview with CNBC.

The action followed weeks of mounting hype over Snowflake, which offers database software that companies use to store and analyze their reams of information. Mr. Slootman, a longtime Silicon Valley software executive who has led Snowflake since 2019, previously ran ServiceNow and Data Domain, both of which also went public.

On Tuesday, Snowflake sold 28 million shares for $120 each, a sharp increase from its initial price range of $75 to $85. It raised a total of $3.4 billion in its offering, which was led by Goldman Sachs and Morgan Stanley.

The company’s revenue has been growing quickly, jumping 133 percent in the first six months of the year to $242 million, up from $104 million during the same period last year. But it is also unprofitable, losing $171 million in the first half of this year. In its offering prospectus, Snowflake emphasized that once customers begin using its services, it often gets them to move more of their data onto its platform.

Snowflake’s largest investors include Sutter Hill Ventures, which owns 20 percent of the company, as well as Altimeter Capital, Redpoint Ventures, Sequoia Capital and Iconiq Capital. Last week, Berkshire Hathaway and Salesforce Ventures each agreed to purchase $250 million of shares in Snowflake’s public offering, stoking hype around the listing.

In recent years, public market investors have been skeptical of the richly valued, money-losing “unicorn” start-ups that enjoyed a decade of free-flowing venture capital. Last year, Uber’s I.P.O. flopped and WeWork, the co-working company, pulled its I.P.O. after intense scrutiny.

The arrival of the coronavirus in March further threatened to upend the start-up industry. But the opposite has happened. Start-ups and big technology companies alike have benefited as people work and learn from home and live more of their lives online. Now start-ups are taking advantage of the booming stock market and investor excitement for tech.

Several tech start-ups with upcoming market debuts plan to try new methods and processes for the transaction. Some, including OpenDoor, the vehicle sales site Shift Technologies and various electric vehicle makers, are agreeing to “blank check” mergers via special purpose acquisition companies. Such transactions offer more flexibility around deal terms and can be completed quickly.

Others, like Palantir and Asana, said they would go public via direct listing, which bypasses the traditional underwriting process. With a private valuation of $20 billion, Palantir could be the largest company to try such a transaction, following in the footsteps of Slack, the workplace collaboration service, and Spotify, the music streaming company. Venture capitalists have argued for this method because it does not aim for a first-day trading “pop” that indicates the company could have priced its shares higher and raised more money from the transaction.

Past direct listings have also not raised new capital, but in August, the Securities and Exchange Commission approved the New York Stock Exchange’s plan to let companies raise money in direct listings. The plan has been criticized by some as harmful to potential investors.

Other companies may explore the Long Term Stock Exchange, a new trading platform created by Eric Ries, author of tech bible “The Lean Startup.” The exchange, which is intended to give longer-term investors more voting control, is backed by several of Silicon Valley’s top investors. It opened for business last week.

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Snowflake More Than Doubles in Debut as Wall Street Embraces Tech IPOs

SAN FRANCISCO — It’s bonanza time in Silicon Valley and on Wall Street.

Snowflake, a data storage provider, kicked off a frenzied phase of technology initial public offerings on Wednesday when its stock immediately more than doubled in its market debut, in a sign of Wall Street’s appetite for fast-growing companies.

The company opened at $245 a share on the New York Stock Exchange, up from $120 set by its bankers, before shooting to $298 and then later bouncing around. The listing, which valued Snowflake at more than $68 billion, was the largest so far this year and the largest ever for a software maker, according to Renaissance Capital, which tracks I.P.O.s. It was also a major payday for Snowflake’s venture capital investors, who had valued the start-up at $12.4 billion just seven months ago.

Snowflake is among several prominent tech companies that are expected to list their shares in the coming months as the tech industry thrives amid the pandemic-induced economic downturn. After a lull in I.P.O.s during the volatile early months of the coronavirus crisis this spring, new listings roared back over the summer and have accelerated in recent weeks, even as tech stocks hit some recent turbulence.

Other companies are also rushing to get out ahead of the Nov. 3 election, which could lead to more volatility. They include Airbnb, the home rental company; DoorDash, the on-demand delivery provider; Wish, an e-commerce site; Palantir, a data analytics start-up; OpenDoor, a real estate marketplace; and Asana, a collaboration software provider.

This week, the software companies Sumo Logic, American Well Corporation and Unity Software are also set to go public, along with JFrog, which listed its shares on Wednesday. Together, the debuts represent a private market value of more than $78 billion.

Investors are eager to back hot I.P.O.s to juice their returns, said Kathleen Smith, principal at Renaissance Capital. “We’ve been on this rocket ship of returns since the drop in March,” she said.

But Ms. Smith cautioned that Snowflake’s high price set it up for trouble if it did not keep growing quickly. “It’s nosebleed territory,” she said. “It can’t mess up on the growth side.”

Frank Slootman, Snowflake’s chief executive, agreed. “This is just a hot deal, and we’ll have to live with the consequences of it,” he said in an interview with CNBC.

The action followed weeks of mounting hype over Snowflake, which offers database software that companies use to store and analyze their reams of information. Mr. Slootman, a longtime Silicon Valley software executive who has led Snowflake since 2019, previously ran ServiceNow and Data Domain, both of which also went public.

On Tuesday, Snowflake sold 28 million shares for $120 each, a sharp increase from its initial price range of $75 to $85. It raised a total of $3.4 billion in its offering, which was led by Goldman Sachs and Morgan Stanley.

The company’s revenue has been growing quickly, jumping 133 percent in the first six months of the year to $242 million, up from $104 million during the same period last year. But it is also unprofitable, losing $171 million in the first half of this year. In its offering prospectus, Snowflake emphasized that once customers begin using its services, it often gets them to move more of their data onto its platform.

Snowflake’s largest investors include Sutter Hill Ventures, which owns 20 percent of the company, as well as Altimeter Capital, Redpoint Ventures, Sequoia Capital and Iconiq Capital. Last week, Berkshire Hathaway and Salesforce Ventures each agreed to purchase $250 million of shares in Snowflake’s public offering, stoking hype around the listing.

In recent years, public market investors have been skeptical of the richly valued, money-losing “unicorn” start-ups that enjoyed a decade of free-flowing venture capital. Last year, Uber’s I.P.O. flopped and WeWork, the co-working company, pulled its I.P.O. after intense scrutiny.

The arrival of the coronavirus in March further threatened to upend the start-up industry. But the opposite has happened. Start-ups and big technology companies alike have benefited as people work and learn from home and live more of their lives online. Now start-ups are taking advantage of the booming stock market and investor excitement for tech.

Several tech start-ups with upcoming market debuts plan to try new methods and processes for the transaction. Some, including OpenDoor, the vehicle sales site Shift Technologies and various electric vehicle makers, are agreeing to “blank check” mergers via special purpose acquisition companies. Such transactions offer more flexibility around deal terms and can be completed quickly.

Others, like Palantir and Asana, said they would go public via direct listing, which bypasses the traditional underwriting process. With a private valuation of $20 billion, Palantir could be the largest company to try such a transaction, following in the footsteps of Slack, the workplace collaboration service, and Spotify, the music streaming company. Venture capitalists have argued for this method because it does not aim for a first-day trading “pop” that indicates the company could have priced its shares higher and raised more money from the transaction.

Past direct listings have also not raised new capital, but in August, the Securities and Exchange Commission approved the New York Stock Exchange’s plan to let companies raise money in direct listings. The plan has been criticized by some as harmful to potential investors.

Other companies may explore the Long Term Stock Exchange, a new trading platform created by Eric Reis, author of tech bible “Lean Startup.” The exchange, which is intended to give longer-term investors more voting control, is backed by several of Silicon Valley’s top investors. It opened for business last week.

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A Black Venture Capitalist Sees Challenges as an Investing Edge

Marceau Michel’s idea for a new on-demand staffing company, Werkhorse, was good enough to win a start-up pitch competition and a coveted spot in a tech incubator in Portland, Ore., two years ago. But no matter what he did, Mr. Michel could not seem to land the funding he needed.

As he met with mostly white investors, he had a sneaking suspicion that he was not getting a fair hearing. “I ran into that glass ceiling of being a Black entrepreneur,” he said. “I kept having the goal posts pushed out on me.”

He was told he should first try to obtain more money from family and friends. Or to offer more proof that his idea would really work. Or to reach out again a little later.

After months of frustration, Mr. Michel unleashed a material cri de coeur: a T-shirt bearing the phrase Black Founders Matter and an upraised fist. There was no plan behind it, and he had little time to devote to selling the shirts. He set up an e-commerce system on Shopify to automate their sales and turned his focus back to Werkhorse.

While he wasn’t paying attention, the shirts changed the course of Mr. Michel’s career: They were the catalyst for a new investment fund dedicated to Black-owned businesses that the accidental venture capitalist sees as entwined with racial justice.

Even with the pandemic upending the economy, Mr. Michel raised $1 million for the fund over the course of a month this summer. Those contributions arrived as protests proliferated across the country in response to the death of George Floyd, the Black man who died after a Minneapolis police officer knelt on his neck for more than eight minutes.

The fund’s $10 million goal is modest compared with those set by Silicon Valley investors — the median size of all venture capital funds this summer was $100 million, according to data by Pitchbook — but Mr. Michel plans to put its resources into companies that he views as strengthened by the obstacles they must overcome.

Black start-up founders face far more difficulty raising money than their white competitors. The Ewing Marion Kauffman Foundation, a charity based in Missouri that promotes education and entrepreneurship, surveyed more than 500 founders and found that outside investors and lenders put up about two-thirds of the money that white start-up owners use to start their businesses, while Black owners had to put up more than half themselves. On average, 17 percent of the funding to white start-ups came from investors, compared with 1.5 percent for Black founders.

“I see the pain, the frustration, of: ‘Can you see me? I am viable,’” said Philip Gaskin, the foundation’s vice president for entrepreneurship, who works with Black business owners to help them raise capital. “The inequities have been there for a long time.”

Several groups, like Black Angel Tech Fund and the New Voices Fund, already focus specifically on supporting Black business owners, and they are far larger than Mr. Michel’s modest operation. New Voices, for instance, has dedicated its entire $100 million heft to funding start-ups owned by women of color. And in this moment of heightened attention on racial equity, the venture capital community at large has been rushing to pledge additional support for minority-owned businesses.

But rarely is a fund started by someone like Mr. Michel. He does not come from great wealth or even start-up success. Instead, he is turning the frustrations he faced with his first company into a way to help others overcome the same challenges.

And more than most venture capitalists, Mr. Michel can relate to the business owners he is seeking to support. The son of Haitian immigrants, Mr. Michel grew up in Queens in a family that was financially secure but that had little to spare on speculative investments like Werkhorse.

“My parents came from poverty, so they had turned over a leaf of being stable and raising me in a stable environment,” Mr. Michel said. “They didn’t have the capital to give me to invest.”

But even as the typical barriers Black start-ups face were stalling Werkhorse, Black Founders Matter was gaining momentum.

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Credit…Akila Fields

Rick Turoczy, a founder at the Portland Incubator Experiment, where Werkhorse was based, put the Black Founders Matter shirts on his blog, Silicon Florist. So far, Mr. Michel has sold about $10,000 in shirts.

Mr. Michel began to tell his story to local business publications, and it resonated. “There weren’t many voices, Black voices, that were asserting themselves in this space,” he said. “I happened to be one that someone caught wind of.”

A report in Black Enterprise Magazine was spotted by the mother of a reporter for TechCrunch, who then contacted Mr. Michel for an article. “That was the interview that changed the future of Black Founders Matter, because she asked what I wanted to do besides sell T-shirts,” he said. Without hesitating, he blurted out an idea about starting a venture fund for Black-owned start-ups. When the reporter asked how much money he would raise, he picked a number — $10 million — and was surprised when it became the headline.

Mr. Michel’s advisers — including Mr. Turoczy — saw an opportunity for him.

“They said: ‘We love what you’re doing and we want to help,’” Mr. Michel said. He put Werkhorse on hold, and the Portland Incubator Experiment’s leaders introduced him to the managing director of a Portland-based venture capital fund, Rogue Venture Partners. Mr. Michel spent six months at Rogue absorbing the customs and procedures of venture capital investing.

By March 14, 2019 — his 35th birthday — Mr. Michel was ready to share a pitch for a venture fund. He presented it to a packed theater in Portland for the incubator’s annual pitchfest: Pie Day, the crowning event of Portland’s start-up scene.

Mr. Michel explained to the crowd how the hurdles that Black business owners face make their businesses more resilient and safer for investors. He pointed out that only 1 percent of investment in tech start-ups went to Black entrepreneurs, and that although Black women owned 12.5 percent of all businesses in the United States, they got only 0.02 percent of investment. And he highlighted examples of Black founders who had excelled — and made boatloads of money for the investors who dared to help them.

“Investing Black is financially viable,” he told the crowd. Then he announced the creation of the Black Founders Matter fund.

Stephanie Kelly and Jason Saunders, a white husband-and-wife team of start-up investors, were drawn to the potential of the companies Mr. Michel wants to support. “If you look at the return on investment there, it’s stratospheric compared to the broader venture universe,” Mr. Saunders said. “It’s kind of the other end of the spectrum from the Bay Area tech bros who have an idea and get $100 million.”

Even though the Black Founders Matter fund hasn’t handed out any money yet, Mr. Michel has already steered funding to one project. In June, he and Himalaya Rao-Potlapally, a venture capital consultant who has become a partner with him in the fund, announced that they had invested $40,000 in a Black-owned start-up publisher called A Kids Book About. Mr. Saunders and Ms. Kelly put up $25,000.

The publisher produces books to help children and parents talk about difficult subjects like bullying and divorce. Jelani Memory helped found the publisher after writing a book for his own children about dealing with racism.

He had such a hard time raising money at first that he found ways to minimize his costs, such as using a print-on-demand service that produced a copy only after a customer had paid for it. That meant Mr. Memory’s business was profitable almost from the start.

“When people really start seeing the metrics, there’s going to be a landslide in that direction,” said Mr. Saunders. He said he and his wife were eager to take part in the $10 million fund.

Recent months have provided Mr. Michel’s fund with obstacles, but also a renewed sense of purpose.

After the onset of the pandemic, “everything went dead” for the fund, Mr. Michel said. “I felt like, maybe this isn’t the right time to be doing this.”

Then came Mr. Floyd’s death in May. Suddenly, Mr. Michel’s idea was not a whisper on the fringe of the venture capital industry but part of a broader discussion on racial equity.

Mr. Michel began attending protests in Portland, which has had some of the country’s most visible demonstrations, and spoke at some of the gatherings. He believes ending police brutality is just the first step toward racial equality.

“If police officers are not killing Black people anymore, does that mean that Black lives are inherently better?” he said.

Without better opportunities for Black Americans to build wealth, Mr. Michel said, “we’re still locking them out of prosperity.”

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Preaching Equality, Start-Up Didn’t Practice It With Employees

SAN FRANCISCO — Onstage at an industry conference last year, Henry Ward, chief executive of the financial technology start-up Carta, described his vision for transforming the way that workers get paid.

Working for a paycheck had evolved from indentured servitude and serfdom, he said. In the next era, employees would own a stake in their companies.

“Our mission is to create more owners in the world,” Mr. Ward said.

Carta has turned that message into a $3 billion valuation and become one of Silicon Valley’s hottest start-ups. But even as it espoused its ownership-for-all creed, the company behaved inequitably to many of its own 838 workers, according to interviews with more than a dozen current and former employees, along with reviews of emails, internal communications and corporate documents.

The current and former employees, four of whom spoke on the record, said they were often belittled, excluded from meetings and made to feel as if they were at fault for their own mistreatment. Those who voiced concerns said they were sidelined, demoted or given pay cuts.

Many of those who were mistreated were women, the current and former employees said. One woman was fired after an emotional outburst in a meeting. Another was pushed out after raising regulatory concerns.

Some former workers are now pushing back. Three of them, including a former top operations executive, have sued Carta in the last year, accusing it of wrongful termination. In a suit last month, Emily Kramer, a former Carta marketing executive, said that she had been paid less than her male peers and that Mr. Ward had disparaged her with a vulgarity after she voiced concerns about a presentation. She said that incident had forced her out of the company.

Ms. Kramer’s lawsuit and others said Mr. Ward set the tone by denigrating employees and dismissing concerns. While his blunt management style fostered loyalty among some, the current and former employees said, it alienated many others.

The discontent at Carta has emerged as the mission-driven facade of many idealistic tech start-ups has started cracking. In recent months, workers at the apparel start-up Everlane, the feminist work space The Wing and the therapy app Talkspace have criticized the mismatch between their employers’ public messages of empowerment and justice and their private actions.

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Credit…Cayce Clifford for The New York Times

The current and former Carta employees said what they had experienced was directly at odds with the start-up’s crusade for fairness for workers and more equality for women. Mr. Ward not only stated those goals publicly but had Carta advertise them on billboards in San Francisco, including one that implored other tech companies to close a “gender equity gap” faced by women.

“This is a company that makes a conscious decision to market itself as a company that cares about fair practices,” Ms. Kramer said in an interview. “I know it’s smoke and mirrors.”

A Carta spokeswoman said the start-up was a “consistent, vocal and passionate advocate for gender equity, internally and externally.” She said that one-third of Carta’s top executives were women and that its female employees had reported higher satisfaction than men in its most recent survey.

Jane Alexander, Carta’s chief of staff, said of Mr. Ward: “Henry has a polarizing style that is a combination of his personality, his vision and his passion. It does not work for everyone.” But, she said, he “is fair and cares fiercely about Carta’s employees.”

Mr. Ward, 44, has worked in sales and operations at Silicon Valley start-ups since the early 2000s. In 2012, he founded Carta, initially called eShares. Investors, start-ups and their employees use Carta’s software to manage, issue and value their equity; the company takes a fee for the use of its systems.

The start-up, which is based in Palo Alto, Calif., has raised nearly $700 million from investors including Andreessen Horowitz and Goldman Sachs. Among Carta’s customers are the stock trading app Robinhood and the fitness booking service ClassPass.

Mr. Ward hired new employees quickly. In public, he said he wanted the “Cartans” to stay for a decade or more. But he privately told executives to “hire fast, fire fast” lest workers become too comfortable, said three former employees who heard him. A Carta spokeswoman denied Mr. Ward had said that.

In a 2015 memo to new employees, Mr. Ward offered a warning: “Doing Carta is hard. You will learn that soon.”

Issues surfaced. Liz LeCrone, a product manager, said a young female employee staying in Carta’s corporate apartment told her in 2017 that she had woken up to discover a male co-worker, who was senior to her, in her room naked. The woman reported the incident to the company, Ms. LeCrone and two others with knowledge of the situation said. Carta excused it as sleepwalking.

Ms. LeCrone, who left Carta in 2018, said that while the company had believed the woman’s account, “how they handled the situation proved to us that they did not value her.”

A Carta spokeswoman said the company had fully investigated the matter and handled the situation accordingly.

That year, Mr. Ward attended a meeting with an internal group that was set up to discuss women’s issues. The group proposed that Carta create a way for women to anonymously report harassment or discrimination without fear of retaliation, four people who attended said.

Mr. Ward dismissed the idea. Attendees erupted into emotional outbursts and raised voices, the people said.

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Credit…Carta

The next day, Carta fired one of the women who had spoken up in the meeting. She was told it was because she did not receive feedback well and had shown frustration in meetings, according to four people, as well as a review of emails and text messages.

Carta said “departure paperwork” for the woman had been filed before the meeting. The company said it created the anonymous reporting tool last year.

Caroline Griffith, who worked on Carta’s sales and marketing teams in 2017 and 2018, said she was fired in 2018 for reasons that were not made clear to her. When she received an offer for a new job afterward, a Carta executive whom Ms. Griffith had little contact with told her future employer that she was difficult. The offer was rescinded, she said.

Carta said it prohibited providing information on former employees, other than confirming dates of employment.

In 2018, the company published a study on women and equity, called the Gap Table. It also examined its own compensation practices and found pay disparities based on gender.

To fix those, Carta added $2 million in annual payroll and issued $8.3 million of equity to employees. But equity is doled out in tranches over years and rises in value when start-ups raise funding at higher valuations, rewarding those who joined early and stayed longer. Carta did not make up for the lost time or higher valuation for the employees who had been underpaid.

“I’m embarrassed that we are part of the problem,” Mr. Ward wrote in a blog post about the study. “But we want to be part of the solution.”

He wrote that Carta would add its first female board member by the end of 2018. The company has not done so. Carta said it was still committed to appointing one.

When Carta raised new funding last year, Andrea Walne, head of liquidity solutions, attended the investor meetings because she led the business side of CartaX, an exchange for private stocks that the company was planning. She said it had become clear that she was not supposed to speak, even when executives told investors that CartaX — which has not been released — would be available by mid-2020.

“I was there as a prop,” she said.

Ms. Walne said she had raised concerns to the legal team that CartaX would not get regulatory approvals by mid-2020. Soon after, she said, she was informed that she had performance issues, though she was not provided details. Then she was offered a “revised” compensation plan of 35 percent less and given 24 hours to decide whether to accept, she said. She left the next week.

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Credit…Madeline Cass for The New York Times

A Carta spokeswoman denied Ms. Walne’s allegations.

Ms. Kramer said she had been sidelined after she protested a slide in a Carta presentation last year that included a reference to slavery. She said the mention of slavery was offensive.

In November, Mr. Ward told Ms. Kramer in a meeting that she had received passes because she is a woman. He called her an “asshole” who needed to go into recovery for her behavior, her lawsuit said. She left Carta, saying she had no other choice.

Ms. Kramer also said in her suit that she had been granted only a third of the equity of her male peers. While Carta later rectified the disparity, it did not accelerate her vesting schedule to make up for the lost time, she said.

In a Slack message about Ms. Kramer’s departure, which was viewed by The Times, Mr. Ward praised her work. “She bent the arc for us,” he wrote. “We will always be grateful.”

Carta said Ms. Kramer’s allegations were “unfounded.”

In December, Frank Han, a senior vice president of operations who left Carta in March 2019, filed a lawsuit accusing the company of wrongful termination and retaliation. In his suit, Mr. Han said Mr. Ward had recruited him in late 2018, persuading him to walk away from a different job offer he had accepted.

But less than three months after joining, Mr. Han was demoted and Carta tried to lower his compensation, including reducing his equity grant by almost half, the lawsuit said. When Mr. Han protested, he was fired, according to the lawsuit.

He declined to comment. Carta said the suit “has no merit.”

Tyler Borer, who worked in Carta’s client services, also filed a wrongful-termination suit last year. He said in the suit that he had been fired while hospitalized. A lawyer for Mr. Borer said that the case had been resolved and that the resolution was confidential. Mr. Borer and Carta declined to comment on the suit.

Last month, three days after Ms. Kramer’s lawsuit became public, Mr. Ward addressed it on a Zoom call with employees. He repeated the conversation that Ms. Kramer cited in her suit and said many had agreed with him. He also described two times when he had snapped at other employees, displaying his online conversations with those workers and reading one of his apologies aloud, according to two people who attended.

In a question-and-answer session afterward, employees asked about Carta’s gender ratio and efforts to change its culture. Mr. Ward dismissed the questions, the attendees said.

He later posted a message to the company’s Slack channel thanking employees for their feedback.

“I realized I should have started by reiterating that gender and racial inequality in the workplace, particularly in technology, is a serious issue,” Mr. Ward wrote.

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What’s a Palantir? The Tech Industry’s Next Big I.P.O.

About a month before he became president, Donald J. Trump met with the leaders of the country’s top technology companies at Trump Tower in Manhattan.

The meeting included the chief executives of Amazon, Apple, Google and Microsoft and other household names like Tesla and Oracle. And then there was Alex Karp, chief executive of a company called Palantir Technologies that few outside Silicon Valley and government circles had heard of.

Palantir, the only privately held company represented in the room, had become a major player among government contractors. And, indicative of its growing prominence, one of its founders, the venture capitalist Peter Thiel, had supported Mr. Trump during the 2016 election and had helped set up the meeting.

Now, as Palantir prepares to go public in what could be the largest stock market listing of a tech start-up since Uber last year, many are wondering: What exactly does this influential but little-known company do?

Offering software — and, crucially, teams of engineers that customize the software — Palantir helps organizations make sense of vast amounts of data. It helps gather information from various sources like internet traffic and cellphone records and analyzes that information. It puts those disparate pieces together into something that makes sense to its users, like a visual display.

But it can take plenty of engineers and plenty of time to make Palantir’s technology work the way customers need it to. And that mix of technology and human muscle may lead to some confusion on Wall Street about how to value the company. Is Palantir a software company, which is traditionally a very profitable business, or is it a less-profitable consulting firm. Or is it both?

“For investors, it is a bit of a Rubik’s Cube,” said Daniel Ives, managing director of equity research at Wedbush Securities.

Palantir, which was founded in 2003, has long described its technology as ideal for tracking terrorists, often embracing an unconfirmed rumor that it helped locate Osama bin Laden. The name Palantir is a nod to spherical objects used in “The Lord of the Rings” books to see other parts of fictional Middle-earth.

Funded in part by In-Q-Tel, the investment arm of the Central Intelligence Agency, the company built its flagship software technology, Gotham, with an eye toward use inside the C.I.A.

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Credit…Christophe Petit Tesson/EPA, via Shutterstock

Palantir’s technologies can also help track the spread of the coronavirus, as it is now doing for the Center for Disease Control. And they can help locate undocumented immigrants, which is how U.S. Immigration and Customs Enforcement, under orders from the White House, is using these technologies, according to recently released federal documents.

The company is deeply wedded to its work inside the government. Though some Palantir employees have protested its work with ICE and other parts of the government, it has not backed off.

In a letter to potential investors, included in a filing with the Securities and Exchange Commission on Tuesday, Mr. Karp pointedly jabbed at fellow Silicon Valley companies and said he was proud of Palantir’s work with federal agencies.

“Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments,” he wrote, adding that “software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace.”

In recent years, Palantir has tried to expand its work in the private sector, serving big-name businesses like JPMorgan Chase, Airbus and Ferrari and offering new software tools that businesses can use on their own. A little more than half of Palantir’s revenue now comes from commercial businesses, according to the S.E.C. filing.

The 2,500-employee company holds about a 3 percent share of what has become a $25 billion “data analytics” market, according to PitchBook, a firm that tracks the performance of private companies. “That is a small but significant share,” said a PitchBook analyst, Brendan Burke.

Palantir has raised more than $3 billion in funding and is valued by private market investors at $20 billion, but it has not turned a profit since it was founded in 2003. In 2019, Palantir’s revenues topped $742.5 million, a nearly 25 percent increase over the previous year. But it lost more than $579 million, about the same as it lost in 2018, according to the financial documents made public on Tuesday.

The company recently announced that it was moving its headquarters to Denver, which could cut expenses.

A Palantir spokeswoman declined to comment for this article.

Though the company has won an impressive array of federal contracts — in the last four years, it landed at least $741 million in guaranteed money and potentially as much as $2.9 billion, according to the documents — it has also stoked controversy among competitors and federal employees.

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Credit…Shannon Stapleton/Reuters

In 2016, the company sued the Army over the procurement process for a new version of an intelligence analysis system, claiming the process was unlawful and wasteful. Palantir ended up winning the contract, which accounts for $1.7 billion of the $2.9 billion in potential federal contract money it has won since 2016.

In April, an anonymous government official sent a lengthy memo to Joseph D. Kernan, the under secretary of defense for intelligence, describing the inner workings of a flagship Pentagon operation called Project Maven.

An effort to remake American military technology through artificial intelligence, Project Maven has drawn on the expertise of more than 20 American companies, including Palantir.

The project points to how Palantir works with customers. It often deploys specialists, called “forward deployed engineers,” who spend weeks, months or years customizing and expanding its software for the task at hand. The company builds whatever data software that needs building — databases and software connections and on-screen visual displays that help people get their work done.

The details of Palantir projects can vary. It usually connects different sources of data and provides a way for everyday employees to search through it. But in Project Maven, it is offering tools that help seasoned, artificial intelligence specialists build complex mathematical systems, called deep neural networks, that can recognize objects in images.

Inside Project Maven, Palantir provides software that holds enormous amounts of video footage captured by flying drones operated by the Army and the Air Force. A.I. specialists then use this software to build systems that can automatically identify buildings, vehicles and people in the footage.

The memo, obtained by The New York Times, said that although Palantir had come late to Maven, the company had grown to “touch almost every aspect” of the project through contracts worth approximately $40 million a year. The document accused Maven leadership of skirting Pentagon rules and ethics in giving preferential treatment to the start-up, whose employees had developed unusually close relationships with their partners inside the military.

The memo and related emails showed the company’s considerable influence inside the government.

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Credit…Andrew White for The New York Times

Among other complaints, the memo to Mr. Kernan claimed that a Palantir employee had sat in on a meeting where government officials — some of whom did not know the Palantir employee was in the room — discussed future contracts and their dollar amounts, which could give the company an “astounding” advantage when bidding for new work.

After the memo, the Defense Department began a formal inquiry into Project Maven, according to two people familiar with the matter who were not allowed to speak about it publicly. The outcome is not yet known. A Defense Department spokesman for Project Maven declined to comment.

Palantir’s unusual business model is not always a perfect fit for military contracts. Though Palantir sells a combination of software and consulting services, all costs are folded into a single software license negotiated with the customer. In other words, the consulting work done by its engineers is layered into the software licensing fees, according to company financial documents. Typically, the government pays for consulting work separately from software licenses.

This means customers often pay for technology that is not yet built. “It is very unusual,” said Jeff Peters, head of global business development at Esri, a longtime government contractor that competes with Palantir. “The business model is different from almost any other technology company.”

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Credit…Peter DaSilva for The New York Times

VMware Pivotal Labs, a division of Dell, has adopted a similar model to Palantir, saying that it helps customers produce software that actually does what it is supposed to do.

This unusual business model has led to complaints, including in the memo to Mr. Kernan, that Palantir locks customers into its technology. Though the company is in ways building custom software, that software is still owned by Palantir because it is sold under a commercial software license. That means Palantir can sell that customized software to other clients.

All this hangs over the company as it prepares to go public. If Palantir stumbles, many competitors are poised to build similar technology for the government, including traditional government contractors like Oracle as well as Amazon, Microsoft and a growing number of other tech companies.

“There has been an assumption that Palantir is the only major player in this space,” said Jack Poulson, executive director of Tech Inquiry, which tracks the government work of tech companies. “But it is clear that is not the case.”

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Electric Vehicle Makers Find a Back Door to Wall Street

Steve Burns pulled together several pieces of a business venture over the last year: His company, Lordstown Motors, designed an electric pickup truck, acquired a plant and machinery from General Motors, and racked up thousands of orders.

Yet Mr. Burns was still struggling to raise enough capital. This month, he nailed down that critical piece by agreeing to merge Lordstown Motors with a special purpose acquisition company, or SPAC, a transaction that will net the truck maker $675 million and a listing on Nasdaq.

Another upside: Unlike a conventional initial public offering, a SPAC merger will take just a couple of months, Mr. Burns said. “The traditional I.P.O. time is maybe a year and a half,” he said. “We are in a race to be first with electric trucks. We wanted to get it done and get to the business of building the vehicle.”

SPACs are suddenly in the limelight.

These companies have long existed on the sidelines, providing small or distressed companies with capital and the ability to list their shares on a stock exchange — things they might not have access to otherwise. Sometimes called blank-check companies, SPACs raise money from investors without having a detailed business plan. Their sole purpose is to find another business to buy within two years. If that doesn’t happen, the company folds and investors get their money back.

Although industry watchers say SPAC frauds are rare, one SPAC’s purchase last year of Modern Media Acquisition, a music-streaming business whose books were later alleged to be fraudulent, gave some investors pause. And some aspects of the SPAC business model — namely, the fact that sponsors of these acquisition companies are frequently able to buy substantial stakes in the business they merge with at minimal cost — have raised questions about their benefit to typical shareholders.

In recent months, investors behind SPACs have become particularly enamored with electric vehicle businesses amid rising expectation that such cars and trucks will soon begin displacing vehicles powered by fossil fuels. Shares of Tesla, the world’s leading electric carmaker, have soared so much that its market capitalization is nearly twice as big as Toyota Motor’s.

SPAC transactions with automotive businesses have so far totaled nearly $10 billion — a trend that Kristi Marvin, a former investment banker who now runs the data site SPACInsider, called the summer of “deals with wheels.”

In June, Nikola, which intends to make heavy trucks powered by electricity and hydrogen fuel cells, merged with a SPAC. Investors have set its valuation at about $15 billion — more than half of what the market thinks Ford Motor is worth — even though Nikola hasn’t begun commercial production.

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Credit…Ross Mantle for The New York Times
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Credit…Lordstown Motors/via Reuters

Another electric hopeful, Fisker, has agreed to merge with an acquisition company backed by Apollo Global Management, the private equity firm.

Apollo is just one of several prominent investors that have embraced SPACs. In late July, Pershing Square Tontine Holdings, which is run by the hedge fund manager Bill Ackman, raised $4 billion in an offering on the New York Stock Exchange. Social Capital, which is run by a former Facebook executive, Chamath Palihapitiya, has backed a handful, including one that merged with Virgin Galactic last year.

Michael Klein, a former Citigroup executive, has raised a handful of acquisition companies under the name Churchill Capital. Last month, one of his firms announced a $11 billion deal with the health care services provider MultiPlan.

So far this year, SPAC activity by dollar volume has almost doubled from all of last year, setting a record of $31.3 billion, according to SPACInsider. Credit Suisse has been the most active bank in underwriting the deals, SPACInsider reports, followed by Goldman Sachs and Citigroup.

“It’s always challenging to do a big I.P.O. above $1 billion, especially in today’s volatile environment and the time it takes to file and tell your story to investors,” said Boon Sim, the founder and managing partner of Artius Capital Partners, a private equity firm. Last year, for example, WeWork shelved its I.P.O. after investors grew wary about the office-space company’s management and financial prospects.

In June, Mr. Sim teamed up with Charles Drucker, a former chief executive of the payments company Worldpay, to start a $525 million SPAC that is looking to buy a technology or fintech company.

Pension funds, mutual funds and other investors have warmed to SPACs partly because low interest rates have forced them to search for higher returns.

Since 2018, SPACs have primarily acquired tech and industrial businesses, followed by energy and finance companies, with a typical deal value of close to $1 billion, according to a recent analysis by Goldman Sachs. Soon after offerings were announced, the average SPAC outperformed the stock market, Goldman found, but lagged the broad market after it completed an acquisition.

Mr. Ackman’s SPAC is the largest ever. His company says that because it has the right to buy additional shares of the target business, Pershing Square Tontine’s buying power could be as high as $7 billion. To make the deal more attractive to future investors, Pershing plans to eliminate a feature typical of acquisition companies that allows the sponsor — in this case Pershing — to buy 20 percent of the company it has merged with practically for free.

Mr. Ackman’s seven-person investment team is prospecting broadly for an acquisition target. It is looking for what it calls a “mature unicorn”: a high-quality, venture capital-backed business that was considering an I.P.O.; a distressed company owned by private equity backers; or perhaps a family-owned business. Pershing hopes to sign a deal by next summer.

“There are more large-cap private companies today than ever before,” Mr. Ackman said. In contrast to some of the more speculative deals he has observed, he contended, “we’re trying to merge with a business we can own for a decade.”

Mr. Burns of Lordstown Motors said his deal had come together after he made little headway raising money from investors through conventional means. Many people he spoke to were reluctant to take a chance on an untested company, especially once the coronavirus pandemic took hold this spring.

Executives at Goldman Sachs connected him to David Hamamoto, a Goldman alumnus who had a successful run in real estate investing. Mr. Hamamoto’s SPAC, DiamondPeak Holdings, had considered more than 150 companies for a potential deal.

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Credit…Ross Mantle for The New York Times

Meeting early June, the two men traveled to Los Angeles to see a prototype of Lordstown Motors’ truck, the Endurance, and toured the company’s factory, a former G.M. plant in Lordstown, Ohio. In July, they began holding six to eight Zoom calls a day with institutional investors. After three weeks they had raised some $500 million in what is known as a private investment in a public entity, from companies like G.M., Fidelity, BlackRock and Wellington Management.

The deal gives Lordstown Motors an estimated valuation of $1.6 billion, and Mr. Burns said the company was now planning to start cranking out pickups next year.

Mr. Hamamoto said he was keen to invest in electric vehicles. He acknowledged that electric cars made up only about 2 percent of the U.S. market, but added that number could climb to more than 50 percent within 20 years, according to some analysts.

“You see what Tesla has done over the past year, and now everybody is taking note of this secular shift to electric,” he said.

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Credit…Ross Mantle for The New York Times
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Credit…Ross Mantle for The New York Times

Other start-ups are trying to compete head to head with Tesla, which also plans to make an electric pickup, but Lordstown Motors is focusing on what for now is a relatively uncrowded space — work trucks bought by electric utilities, construction companies and other businesses.

“The fact that we are going after the commercial fleet market is a differentiated value proposition,” Mr. Hamamoto said.

Lordstown Motors had orders for 15,000 trucks before the SPAC deal was announced at the start of this month, a number that quickly shot up to 27,000, or about $1.4 billion in potential sales, Mr. Burns said.

Of course, the company still faces challenges. Each wheel of the Endurance is powered and controlled by its own electric motor. That eliminates many moving parts like drive shafts and axles, but the design is relatively untested. Mr. Burns also has to hire engineers, line up suppliers and set up an assembly line.

Few start-ups have succeeded in the auto industry. Tesla, for example, struggled for years before recently reporting four consecutive profitable quarters. In 2019, its stock tumbled as sales sputtered.

Lordstown Motors’ transaction with DiamondPeak is scheduled to close in October. Mr. Burns said he hoped that the infusion of capital would be enough to get trucks rolling off the assembly line.

“We want enough upfront to get us all the way to the promised land,” he said.

Anupreeta Das contributed reporting.