Extra Crunch Tuesday: 13 Boston-focused venture capitalists talk green shoots and startup recovery

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Tuesday, June 30, 2020 By Walter Thompson

Welcome to Extra Crunch Tuesday

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Image Credits: Nigel Sussman

In the second half of our Boston-area investor survey, a baker’s dozen of investors shared their thoughts about the startup hub’s future.

Although one investor told us that it’s “still too early” to see signs of recovery, other VCs said many companies are using AI to maximize savings, promote automation and optimize across the board, which has led several firms to outperform their pre-COVID forecasts.

Here’s who we spoke to:

  • Lily Lyman, Underscore VC
  • Rudina Seseri, Glasswing Ventures
  • Jamie Goldstein, Pillar VC
  • The Victress Capital team (Lori Cashman, Suzanne Norris, Kate Castle, Madeline Keulen, Molly Sellers)
  • Rob Go, NextView Ventures
  • Bill Geary, Flare Capital
  • Michael Greeley, Flare Capital
  • Jeff Bussgang, Flybridge Ventures
  • Neeraj Agrawal, Battery Ventures

We’re off on Friday to celebrate Independence Day; have a great week!

 

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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Where to open a game studio

Where to open a game studio image

Image Credits: LuisPortugal / Getty Images

In recent months, the global economy shuddered to a halt, the world embraced remote work and the U.S. government temporarily stopped issuing work visas.

Gaming entrepreneurs considering their next move have a lot to consider, so TechCrunch media columnist Eric Peckham surveyed several VCs who focus on the sector to find out which cities they recommend.

“The most interesting takeaway was the lack of consensus,” he concluded.

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Running a queer dating startup amid a pandemic and a racial justice uprising

Running a queer dating startup amid a pandemic and a racial justice uprising image

Image Credits: Photo by Noam Galai/Getty Images for TechCrunch / Getty Images

Reporter Megan Rose Dickey interviewed Robyn Exton, founder of queer dating app Her, to discuss the unique challenges of operating a social platform in the midst of COVID-19 and a global movement for racial justice.

“It's been wild,” she says. "Honestly, I think it's kind of been a barometer for human psychology.”

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Who really benefits from reskilling?

Who really benefits from reskilling? image

Image Credits: Bryce Durbin / TechCrunch

The U.S. unemployment rate has reached 13.3%, and the Congressional Budget Office predicts that it won’t fall to 9.5% until the end of 2021.

Natasha Mascarenhas interviewed entrepreneurs and investors who work in reskilling technology to see how live online classes, MOOCs (massive open online courses) and other edtech innovations are helping workers level up.

“You have to make sure the return of investment is positive and well-aligned to employment otherwise it is not a good intervention,” said David Blake, co-founder of Degreed and Learn In.

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CIO Cynthia Stoddard explains Adobe's journey from boxes to the cloud

CIO Cynthia Stoddard explains Adobe's journey from boxes to the cloud image

Image Credits: Dennis Sylvester Hurd / Flickr under a Public Domain license.

Not that long ago, anyone who wanted the latest version of Adobe Photoshop had to leave their home, visit a store and stand in line with their purchase. Today, “click to upgrade” is a universal expectation.

Enterprise reporter Ron Miller interviewed Adobe CIO Cynthia Stoddard to learn more about how the company migrated to cloud service subscriptions. Not only did the move streamline operations, it brought Adobe much closer to its customer base.

"You have to work with people. You can't just say, 'Okay we're going to move everything to the cloud.' You have to actually work with the engineering teams, empower them to try new things out, help them with the right level of tooling and how they work as an organization," Stoddard explained.

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Volcker Rule reforms expand options for raising VC funds

Volcker Rule reforms expand options for raising VC funds image

Image Credits: Bloomberg / Getty Images

Federal legislation restricts the types of investments banks are allowed to make in private equity and venture capital. Reforming it “has been a domestic regulatory priority for the Trump administration since Inauguration Day,” writes Managing Editor Danny Crichton.

A group of regulatory agencies have signed off on changes that will allow banks to invest in venture capital firms. Does this mean banks will roll up their sleeves and get some dirt under their nails when it comes to capital formation, anchoring funds and asset allocation?

“The more nuanced change is that the reform could help smaller funds in cities outside major hubs like San Francisco and New York raise capital,” Danny concludes.

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Newzoo forecasts 2020 global games industry will reach $159 billion

Newzoo forecasts 2020 global games industry will reach $159 billion image

Image Credits: Henrik Sorensen / Getty Images

In its 2020 industry report, games and esports analytics firm Newzoo predicted that gaming revenue would reach $159.3 billion in 2020, a year-over-year increase of 9.3%.

By comparison, the film industry generated $101 billion in 2019.

Eric Peckham breaks down Newzoo’s report by gaming sector and geography. Approximately 2.69 billion people will play video games this year, but “further lockdowns are likely to only increase industry revenue.”

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This Week in Apps: WWDC20 highlights, App Store antitrust issues, tech giants clone TikTok

This Week in Apps: WWDC20 highlights, App Store antitrust issues, tech giants clone TikTok image

Image Credits: Bryce Durbin

In her latest recap of the mobile software industry, Sarah Perez recapped major takeaways from Apple’s WWDC20, covered the launch of TikTok for Business and noted Amazon’s release of Amazon Honeycode, its new no-code mobile and web app builder.

Plus, funding and M&A news, COVID-19 contact tracing apps and many more headlines.

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Starz CEO Jeffrey Hirsch on programming in a digital world

Starz CEO Jeffrey Hirsch on programming in a digital world image

Image Credits: Michael Kovac / Getty Images

For his third story last week, Eric Peckham interviewed Starz CEO Jeffrey Hirsch about the challenges — and opportunties — associated with running a major subscription video on-demand service during a global pandemic and economic downturn.

“The more things change, the more they stay the same, right?” said Hirsch. “Now, digital and SVOD allows you to do a lot of great, different things as a consumer, but at the end of the day, a show on Starz linear is the same as the show on Starz over-the-top.

It's just a little more easily accessible and more mobile than it was before. And cheaper.”

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Startups are poised to disrupt the $14B title insurance industry

Startups are poised to disrupt the $14B title insurance industry image

Image Credits: manusapon kasosod / Getty Images (Image has been modified)

Title insurance has changed little in the last century, which means a handful of startups are well-positioned to grab a piece of the $14 billion industry.

Favorable state and federal legislation has enabled the biggest companies to control more than 85% of the U.S. market, but “recent changes in legislation and technology have made the industry ripe for disruption.”

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From napkin notes to term sheets: A chat with Inspired Capital's Alexa von Tobel

From napkin notes to term sheets: A chat with Inspired Capital's Alexa von Tobel image

Image Credits: Alexa von Tobel

On a recent episode of Extra Crunch Live that spanned a number of topics, Alexa von Tobel of Inspired Capital shared tips for breaking into venture capital and looked into the future of hospitality industries like hotels and restaurants.

When it comes to starting a career in VC, “you just have to have a learning mindset,” said von Tobel.

“Find a few mentors. You'll find people like me. I want to pay it forward. I want to help as many people as I can. There's only 24 hours in a day, but I'm always willing to say, ‘Hey, do this, read this, know about this, check this out. Here's a person you should be friends with.'”

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The virtual state of corporate venture capital today

The virtual state of corporate venture capital today image

Image Credits: Maskot / Getty Images

Since the start of the COVID-19 pandemic, Merck Global Health Innovation Fund (MGHIF) has completed three follow-on investments, two spinouts and two new deals.

“It hasn't been easy,” says GHI Fund President Bill Taranto. “It's hard to do venture when you can't venture out into the world, meet founders and do diligence the way we did in the past. But it is possible, if you do some innovating of your own and set up a smoothly functioning system to do CVC virtually.”

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Four views: How will the work visa ban affect tech and which changes will last?

Four views: How will the work visa ban affect tech and which changes will last? image

Image Credits: Catherine Falls Commercial / Getty Images

Last week, the Trump administration extended a prohibition on issuing work visas through the end of 2020. The ban will have a massive impact on U.S.-based startups, since no new H-1B, H-2B or J and L visas will be issued until 2021.

Four TechCrunch staffers analyzed the president's move in an attempt to see what it portends for the tech industry, the U.S. economy and our national image:

  • Danny Crichton: Trump's ban is a “self-inflicted” blow to our precarious economy
  • Natasha Mascarenhas: Innovative immigrants will follow their dreams elsewhere
  • Zack Whittaker: Banning work visas “puts America at a disadvantage on the world stage”
  • Alex Wilhelm: “Immigration is an all-around good”

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How $20 billion healthcare behemoth Blue Shield of California thinks about startups

How $20 billion healthcare behemoth Blue Shield of California thinks about startups image

Image Credits: the_burtons / Getty Images

With more than four million members and $20 billion in revenue, Blue Shield of California is also a prominent investor — in the last 18 months, the nonprofit health insurer has funded about 10 startups.

According to Chief Innovation Officer Jeff Semenchuk, a third of those investments went to companies creating tech that optimizes health care industry operations.

“The other two-thirds are about providing service and care to our members and providers,” he told TechCrunch.

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Playbook PM: Spotted at the White House …

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Jun 30, 2020 View in browser
 
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SPOTTED: Trey Gowdy and Joe Lieberman at the White House this morning. They were near the West Wing.

BULLETIN: ANTHONY FAUCI told a Senate committee this morning that he would not be surprised to see 100,000 cases in the U.S. per day if coronavirus trends don't change. More from the hearing via Brianna Ehley

NEW … YOU SHOULD NOT BE SURPRISED to see HOUSE DEMOCRATS push for further sanctions on Russia in the coming days and weeks, in the wake of reports that the nation's intelligence services paid bounties to the Taliban to kill U.S. soldiers.

HOUSE DEMOCRATS attended a White House briefing this morning with top officials: COS MARK MEADOWS, DNI JOHN RATCLIFFE, national security adviser ROBERT O'BRIEN, NSC counsel JOHN EISENBURG, and NSC officials THOMAS WILLIAMS and MICHAEL ELLIS. But that did little to quell anger over being blindsided by the intelligence, which was first reported in the NYT.

HOUSE MAJORITY LEADER STENY HOYER is continuing his calls for a full congressional briefing by the "intelligence community" -- which sources tell us is referring to CIA Director GINA HASPEL. And the push for tough Russia sanctions is gaining currency in high-level Dem circles.

MORE, from HEATHER CAYGLE, KYLE CHENEY and SARAH FERRIS: "Dems say no 'substantive information' at White House briefing on Russian bounties": "Senior House Democrats left a White House briefing on Russian bounties disappointed on Tuesday, saying they were given 'no substantive information' about allegations that the Kremlin paid Taliban militants to kill U.S. troops — and that President Donald Trump sat on the information for months.

"House Majority Leader Steny Hoyer (D-Md.), who led a group of nearly a dozen Democrats to the White House early Tuesday, said Congress still needs to hear from the heads of various Intelligence agencies — not White House officials — on the stunning allegations. The Trump administration officials tasked with briefing the Democrats, Hoyer said, expressed their opinion of the allegations but didn't share the underlying evidence.

"'What we need is a briefing by the Intelligence community to give us their assessment of the credibility of this information,' Hoyer told reporters in a press conference in the Capitol after the briefing. 'We did not receive any new substantive information about the intelligence.'

"House Intelligence Committee Chairman Adam Schiff (D-Calif.) and Foreign Affairs Committee Chairman Eliot Engel (D-N.Y.), who also attended, echoed Hoyer's concerns. Schiff said he's seeking an in-person briefing from the intel community as well as documentation. 'The right people to give the briefing really were not in the room,' Schiff said." POLITICO

JAMES ARKIN: "McGrath wins Kentucky Senate primary": "Amy McGrath has fended off Charles Booker to clinch the Democratic nomination for Senate in Kentucky, setting up an expensive showdown with Senate Majority Leader Mitch McConnell in November.

"Booker, who was down in the polls and way behind in fundraising in the months leading up to last week's primary, surged in the final weeks, fueled by national and local progressive endorsements and the protests against racial injustice in his hometown of Louisville.

"But McGrath, a former Marine fighter pilot making her second run for federal office, prevailed — mostly on the strength of the absentee ballots cast in the weeks leading up to the primary that were tallied on Tuesday." POLITICO

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ELAINA PLOTT goes deep on JEFF SESSIONS and the ALABAMA SENATE RACE in the NYT MAGAZINE: "The Fall of Jeff Sessions, and What Came After": "[S]hortly after leaving the Justice Department, Sessions entered talks to join the law firm Maynard Cooper & Gale, which was founded in Birmingham, Ala. With a longtime friend of Sessions's pulling for him on the inside, the deal seemed all but done. But ultimately, the firm's leadership decided against bringing him in, the news of which was broken to Sessions over dinner at Charlie Palmer's in Washington. 'People at Maynard obviously respect Jeff,' said one person with direct knowledge of the decision, speaking on the condition of anonymity. 'But I don't think, given the manner in which he left' the Justice Department, 'he could make the business case for how the work would follow.' …

"'[I] have to confess, you know,' [Trent] Lott recalled, 'without being asked, I said, "Let me just say right here at the beginning: I hope that you will not think about running again for the Senate. It's just not what it used to be."' …

"The mantra was: 'Back to the men and women in blue,' Sessions told me. 'The police had been demoralized. There was all the Obama — there's a riot, and he has a beer at the White House with some criminal, to listen to him. Wasn't having a beer with the police officers. So we said, "We're on your side. We've got your back, you got our thanks.''' (Asked whether this was a confused reference to the meeting Obama had with the scholar Henry Louis Gates Jr., who had been wrongfully arrested entering his own home, and the police officer involved in the arrest, a Sessions spokesman declined to elaborate.)"

Good Tuesday afternoon.

SCOTUS WATCH -- "Supreme Court hands victory to DeVos in decision on aid to religious schools," by Nicole Gaudiano: "In a huge win for backers of school choice including Education Secretary Betsy DeVos, the Supreme Court on Tuesday sided with three Montana families who asked the court to declare that excluding religious schools from student aid programs is unconstitutional.

"The case, which has drawn intense interest from the Trump administration, could have major implications for the use of public dollars to pay for religious schools. Espinoza v. Montana Department of Revenue looked at whether the Montana Supreme Court violated the U.S. Constitution when it struck down a tax-credit scholarship program that allowed students to attend private schools, including religious schools." POLITICO ... The decision

OK THEN! … NBC: "S. Dakota Gov. Noem says 'we will not be social distancing' at July 3 celebration with Trump at Mount Rushmore," by Rebecca Shabad

THE WORLD REOPENING -- "E.U. Formalizes Reopening, Barring Travelers From U.S.," by NYT's Matina Stevis-Gridneff in Brussels: "The European Union will open its borders to visitors from 15 countries as of Wednesday, but not to travelers from the United States, Brazil or Russia, putting into effect a complex policy that has sought to balance health concerns with politics, diplomacy and the desperate need for tourism revenue.

"The list of nations that European Union countries have approved includes Australia, Canada and New Zealand, while travelers from China will be permitted if China reciprocates. The plan was drawn up based on health criteria, and European Union officials went to great lengths to appear apolitical in their choices, but the decision to leave the United States off the list — lumping travelers from there in with those from Brazil and Russia — was a high-profile rebuke of the Trump administration's handling of the coronavirus crisis." NYT

HUNT FOR A VACCINE -- "FDA to Issue Guidance on Covid-19 Vaccine Approval," by WSJ's Thomas Burton: "The Food and Drug Administration plans to release guidance Tuesday outlining its conditions for approving a Covid-19 vaccine, including a requirement that any vaccine be at least 50% more effective than a placebo in preventing the disease. The FDA said that no vaccine would be approved unless a vaccine company had "clearly demonstrated" proof of a vaccine's safety and effectiveness through a clinical study, according to a summary of the guidance viewed by The Wall Street Journal.

"According to the summary, the FDA also said a vaccine wouldn't be approved simply if it leads to antibodies in the bloodstream of patients, on grounds that it is not known what level of antibodies will confer protection to patients. The FDA said it would also require a vaccine maker to conduct further monitoring of safety after any approval and recommended that people getting the vaccine be followed for a year after treatment." WSJ

WHAT'S LEFT OF THE PPP -- "Paycheck Protection Program nears end with $130 billion left unused, and lawmakers eye next steps," by WaPo's Jonathan O'Connell, Erica Werner and Aaron Gregg: "With the deadline to apply for the Paycheck Protection Program coming just before midnight Tuesday night, Sens. Marco Rubio (R-Fla.) and Ben Cardin (D-Md.) are leading a group considering how best to use the remaining funds to help small businesses as they begin to reopen.

"Rubio is working on legislation that would create new programs to expand uses for the funds, such as allowing chambers of commerce to apply as well as directing more money to certain businesses that prove they were affected by the pandemic. According to a draft copy of the bill that was obtained by The Washington Post, the legislation would also set aside $25 billion for businesses with fewer than 10 employees and formally prevent hotel or restaurant chains from receiving more than $2 million total." WaPo

 

POLITICO Magazine Justice Reform: The Prison Conditions Issue, presented by Verizon: The Covid-19 pandemic has highlighted the difference between "inside" and the rest of society. With crowding, inadequate funding and inconsistent medical care, prisons have become hotbeds of the outbreak ― with a heavy cost also paid on the outside. POLITICO Magazine's second Justice Reform package looks at movements to improve prisons and how the epidemic has affected them. READ THE FULL ISSUE.

 
 

THE COVID IMPACT -- "Drive-up U.S. citizenship eases backlog, but new threat looms," by AP's Ben Fox and Mike Householder in Detroit: "A 60-year-old U.K. citizen drove into a Detroit parking garage on a recent afternoon, lowered the window of her SUV to swear an oath, and left as a newly minted American. It took less than 30 minutes. ... Similar drive-thru ceremonies are being held around the country, but perhaps for not much longer.

"U.S. Citizenship and Immigration Services says a budget crisis could force the agency to furlough nearly three-quarters of its workforce, severely curtailing operations as tens of thousands of people wait to become citizens. That could have potential political consequences, especially in states such as Michigan and Florida where the number of newly naturalized Americans already exceeds the narrow margin of victory for President Donald Trump in 2016." AP

SWAMP READ … NBCLX'S NOAH PRANSKY: "A nine-month NBCLX investigation, which included the review of thousands of Foreign Agents Registration Act (FARA) filings, revealed more than 50 former members of the House and Senate who have worked for foreign interests in just the last five years.

"That includes more than a dozen who leveraged their elected positions into jobs lobbying for controversial countries, such as Russia, Saudi Arabia, and China. Some of the former Congressmembers even advocated positions that seemed to contradict public stances they took while representing the American public." NBCLX

THE NEW COLD WAR … NYT: "A New Superpower Competition Between Beijing and Washington: China's Nuclear Buildup," by David Sanger and William Broad: "When negotiators from the United States and Russia met in Vienna last week to discuss renewing the last major nuclear arms control treaty that still exists between the two countries, American officials surprised their counterparts with a classified briefing on new and threatening nuclear capabilities — not Russia's, but China's.

"The intelligence had not yet been made public in the United States, or even shared widely with Congress. But it was part of an effort to get the Russians on board with President Trump's determination to prod China to participate in New START, a treaty it has never joined. Along the way, the administration is portraying the small but increasingly potent Chinese nuclear arsenal — still only one-fifth the size of those fielded by the United States or Russia — as the new threat that Mr. Trump and President Vladimir V. Putin of Russia should confront together." NYT

HONG KONG LATEST -- "Business Embraces Hong Kong's Security Law. The Money Helps," by NYT's Alexandra Stevenson in Hong Kong: "Beijing twisted some arms to win that support, hinting that it could use its huge clout to punish any global company or local tycoon who crosses it. But China has also won over some business hearts and minds — and a big new inflow of Chinese money into the territory has helped it make its case.

"The money, totaling billions of dollars in new stock offerings and property deals by blue-chip Chinese companies in the past few weeks alone, have bolstered perceptions in the business world that Hong Kong will remain a deeply profitable place to do business for years to come. Some business leaders and bankers even endorse Beijing's argument that the new law will help Hong Kong's status as a business hub by helping the police crack down on sometimes violent antigovernment protests." NYT

 

BROKEN GOVERNANCE AND GLOBAL LEADERSHIP: Broken social contracts and damaged economies make 2020 perhaps the best opportunity in decades to rethink governing. But the window for change is opening just as faith in democracy seems to be declining. How will this dynamic play out on the world stage? Our Global Translations newsletter, presented by Bank of America, layers global news, trends and decisions with contextual analysis from the world's sharpest minds. For a unique perspective that you cannot find anywhere else, SUBSCRIBE TODAY

 
 

HOLLY OTTERBEIN: "Ocasio-Cortez raises AIPAC ire over effort to tie Israel aid to annexation": "A dozen Democratic lawmakers have signed onto a hotly debated letter spearheaded by Rep. Alexandria Ocasio-Cortez that calls for placing conditions on aid to Israel if it moves forward with plans to unilaterally annex parts of the West Bank, according to a copy obtained by POLITICO.

"The letter, parts of which were previously leaked to the media, was condemned Monday by the American Israel Public Affairs Committee as harmful to America's interests before the statement or its signers were finalized. … Along with Ocasio-Cortez, Tlaib, McCollum and Jayapal, the letter was signed by Reps. Ilhan Omar, Ayanna Pressley, Raul Grijalva, André Carson, Nydia Velázquez, Bobby Rush, Jesús "Chuy" Garcia, and Danny Davis, as well as Sen. Bernie Sanders." POLITICO

BEYOND THE BELTWAY -- "Thousands of U.S. judges who broke laws or oaths remained on the bench," by Reuters' Michael Berens and John Shiffman in Montgomery, Ala.: "Judges have made racist statements, lied to state officials and forced defendants to languish in jail without a lawyer – and then returned to the bench, sometimes with little more than a rebuke from the state agencies overseeing their conduct. ...

"In the first comprehensive accounting of judicial misconduct nationally, Reuters reviewed 1,509 cases from the last dozen years – 2008 through 2019 – in which judges resigned, retired or were publicly disciplined following accusations of misconduct. In addition, reporters identified another 3,613 cases from 2008 through 2018 in which states disciplined wayward judges but kept hidden from the public key details of their offenses – including the identities of the judges themselves. All told, 9 of every 10 judges were allowed to return to the bench after they were sanctioned for misconduct, Reuters determined." Reuters

STAFFING UP -- "Joe Biden Ramps Up in Michigan," by WSJ's Joshua Jamerson: "The former vice president's campaign said Eric Hyers would serve as Michigan state director. Mr. Hyers was the campaign manager for Democrat Andy Beshear's successful 2019 bid to unseat Kentucky Gov. Matt Bevin, a Republican."

TRANSITIONS -- Wesley Coopersmith is joining Sen. Kelly Loeffler's (R-Ga.) office as legislative director. He most recently has been deputy director of government relations at Heritage Action. … Kabir Thatte will be director of advance for Jaime Harrison's Senate campaign in South Carolina. He previously was senior advance lead for Pete Buttigieg's campaign, and is an Obama alum. … Wally Hsueh is now VP for international affairs on FedEx's government and regulatory affairs team. He previously was deputy chief of staff for Sen. Steve Daines (R-Mont.).

 

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