Will Change.org’s new funding compromise its mission?

Petition website Change.org has raised a $25 million Series C round in a rather unusual way. Instead of finding institutional investment firms, Change.org’s new funding comes from socially conscious individuals (and a few firms with social investment mandates): Bill Gates, Richard Branson, Arianna Huffington, Evan Williams, Jeff Weiner, Jerry Yang and others. The list is a veritable who’s-who in tech.

Change.org makes money through sponsored recommendations, where petition creators can pay to put their petitions in front of other Change.org users with similar interests.

With the additional capital, Change.org will expand its mobile, political, and global efforts (Yeap, they’re pioneering GoMoPo. Hey, it’s better than AOL’s HoMo). The company plans to make it easier for people to create and sign petitions from their phones, as well as verify politicians and organizations on the app so these entities can converse directly with petitioners. And although Change.org already has employees in twenty countries, it wants to further expand the app’s tools and languages.

But the hefty bundle of new cash raises some questions for the company. Will Change.org’s humanitarian mission — “to empower people everywhere to create the change they want to see” — be compromised by its investors’ need for an exit?

Not surprisingly, Change.org COO Jen Dulski says no way. She had a few solid points to back herself up. The investors joining Change.org’s round have agreed to an unusual exit route. Down the line, the company can choose to return their money via private secondary equity offering or stock repurchasing, instead of an acquisition or IPO. That’s one big benefit to raising funding from socially conscious investors who are putting in their own cash, instead of a VC firm with LPs who need a big return.

Secondly, Dulski pointed out that Change.org is a certified benefit corporation. There’s no legal requirement to go along with that, but in order to keep its benefit corp status Change.org needs to apply to renew it every year. “The process is very rigorous,” Dulski says. “It makes sure you treat your staff in a certain way, you take care of the environment, that you’re transparent.” Change.org is also in the process of legally incorporating as a benefit corporation, which will add even more onerous standards to live by.

Two charts that show why Uber’s valuation isn’t ridiculous

Uber’s latest funding brings the company into the stratosphere of private company valuations.

At $40 billion, Uber is believed to be four times more valuable than Airbnb, Snapchat, Palantir or Dropbox. Its valuation is eight times larger than Pinterest’s, fifty-seven times larger than Lyft’s, 100 times larger than Instacart’s.

The news sent the tech world into a tizzy. People called Uber’s new valuation eye-popping, ridiculous, absurd. Just like Uber’s last round of funding, it was heralded as proof of a bubble, an upcoming crash, the tech apocalypse, etc.

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But when you plot Uber’s valuation compared to big public tech companies, it looks less dramatic. [company]Amazon[/company], [company]Facebook[/company], [company]Microsoft[/company], [company]Amazon[/company], [company]Oracle[/company] and others are — as you’d expect from mature companies — much larger by market cap than Uber’s current valuation. Twitter is much smaller. Investors are essentially saying that they think Uber will be nearly as valuable as [company]Yahoo[/company] or [company]eBay[/company] and more valuable than Twitter when it goes public. It’s not a totally outlandish conclusion for them to bet on, given current tech hype and market trends.

Uber’s staggering valuation says more about the changing nature of tech fundraising than it does about Uber investors’ ridiculousness. Companies are staying private longer, choosing to develop their product outside of the prying public market’s eyes. Uber is leading that trend, a pioneer for a new kind of growth model.

Without much precedent, it’s hard to know what Uber’s eventual IPO will look like. It has more money and time to hone its business, so it’s not entirely fair to compare is to the IPOs of yesteryear and call its valuation outsized. We’re playing by a new set of rules.

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There’s another way to look at Uber’s valuation. CEO Travis Kalanick isn’t content for his company to remain a car-hailing app. He plans to move into urban logistics and shipping, doing everything from delivering food to transporting supplies. When Uber drops off kittens on National Cat Day, it’s not just a publicity stunt — it’s logistics testing.

On that note, perhaps Uber should be compared to public transportation, logistics and automotive corporations. Companies like [company]Ford[/company] and [company]Tesla[/company] are distant cousins to Uber, but given that Kalanick wants Uber to replace car ownership, they may be competitors down the line. The same goes for [company]FedEx[/company] and [company]UPS[/company].

Uber’s valuation puts it at less than half the market cap of UPS, but close to the market cap of FedEx ($51 billion). From an automotive standpoint, the numbers are even more optimistic, with Ford and [company]General Motors[/company]’ market caps not that much bigger than Uber’s valuation. Tesla and Hertz’s market caps, $29 billion and $11 billion respectively, are smaller than Uber’s $40 billion valuation.

Uber’s investors are essentially saying that they think when the company goes public, it will be worth at least half as much as GM and Ford and more than Tesla and Hertz.

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With its $5.5 million in funding, Ello looks to the future

Ello has raised $5.5 million in a round led by Colorado’s Foundry Group. The social networking site’s rapid viral growth moved up the timeline on its fundraising efforts, since it needed the cash to keep up with the flood of user requests. Along with the round, the company converted Ello into a public benefit corporation — legal lip service for prioritizing the public good over profits — and had investors sign a no-ad agreement.