Alumni New Venture Challenge

At Chicago Booth they have had the New Venture Challenge (NVC) for a long time now.   A friend of mine who is a local VC here in Chicago once told me you’d have a pretty good fund going long the winner of the NVC year after year.

In a brand extension, Booth has created the Social New Venture Challenge (SNVC) and the Global New Venture Challenge (GNVC).  Critics might say it dilutes the brand but the truth is innovation can happen anywhere, not just the full time MBA program.  Booth attracts some pretty high quality people in all of its programs.  You might say you’d have a pretty strong network if you just networked with people who graduated from Chicago Booth.

Since my classmates and I started Hyde Park Angels in 2007, entrepreneurship has become one of the top concentrations at Booth.  It used to be finance.

The school Continue reading "Alumni New Venture Challenge"

Different Strokes For Different Exchanges

One of the thing that really bugs me about exchanges is that there is no real standardization.  Unless you hear from a friend or actually open an account, it’s hard to know how it really works.

Coming from the CFTC side of the business, there was a certain amount of standardization.  No payment for order flow.  No wash trading.  When you saw volume and open interest in a contract you could be relatively sure what the liquidity pool would look like. When you are trading, you have to be able to get in, and get out of a position.  Less liquidity and the price to play goes up.  The SEC side of the business is a lot murkier.

Stablecoins are the rage, but the way to hedge risk in crypto is via traditional means.  If you used futures, options and OTC bilateral derivatives, Continue reading "Different Strokes For Different Exchanges"

Do You Need A Bank?

I don’t think I need a bank anymore.  I only need a virtual wallet with a little money deposited in it.  I didn’t need a bank for a mortgage.  I have a stock brokerage account.  I only use my bank to pay bills and to get cash out of an ATM when I need cash.  I try never to carry a lot of cash or use it.

Bill paying can be done plenty of other ways as we have seen with our portfolio company PipIT.

No one really uses a bank to get wealth advice anymore.  That’s done via the big brokers or in the RIA market.  I still bank at the same bank I have always banked at, but I don’t feel any particular loyalty to it.  The reason I banked there was they gave me my seat loan.

When we talk to startups about banking, we talk to Continue reading "Do You Need A Bank?"


Was in San Francisco for a couple of days.  My wife and I spent a month there last February. Since last February, it seems like there are less homeless walking around. They are still there, just seemed to be less of them.  I saw no human poop on the street and no used needles. I could be wrong since I only walked in a limited area this trip.  Maybe this trip was myopic for me.

I did try a new restaurant, Mister Jiu’s.  It was pretty darn good and I would encourage anyone to go there.  Maybe the best and most creative Chinese food I have ever had.  As a matter of fact, it was now that I reflect on it.

I was at a conference.  One thing that struck me was the pure myopia of a lot of the panelists.  There are only two or three business schools in Continue reading "Myopia"

Regulation As Sport; Regulation As Political Tool

I was pleased to see the above tweet by Paul Graham. I don’t know Paul at all. I respect what he has done with Y Combinator and other efforts in and around entrepreneurship. I hope that he and other people like him are quickly coming to the realization that the hearts and minds of regulators isn’t in the best interest of people, but in the best interest of the regulators.

His tweet is exactly why you got Brexit.  It’s not because of racism or nationalism.  It’s also one reason Trump was elected president.  Aggressive US regulators killed off whole sections of the American economy dooming people. Not only that, but parts of the government Continue reading "Regulation As Sport; Regulation As Political Tool"

Podcast With Four Star Wealth

I did a podcast with my friend Brian Kasal the other day. He runs Four Star Wealth in Chicago. He was a member of Hyde Park Angels. I recruited him early in the game.  We are co-investors in Ycharts, and he is a customer.  He is also a customer of another one of my angel investments, Riskalyze.

Hope you enjoy it.  I am traveling from San Francisco back to Chicago today.

Can You Trust Existing Crypto Exchanges?

There are 2000 Cryptocurrencies being traded at 14000 exchanges worldwide.  In the first nine months of this year, there has been $1B in theft at those exchanges already.  Here is what Reuters said,

Theft of cryptocurrencies through hacking of exchanges and trading platforms soared to $927 million in the first nine months of 2018, up nearly 250% from the level seen in 2017, according to a report from cyber security firm CipherTrace released on Wednesday.

On another note, some exchanges with very weak anti-money laundering processes have allowed $2.5B to be laundered through the crypto exchanges since 2009.

It is super easy to put together a platform to match trades.  It’s hard to actually do the business of being an “exchange” or even an auto trade platform.

There is a lot of talk about “institutional capital” coming into the crypto space.  It’s talk.  Institutional capital isn’t going to Continue reading "Can You Trust Existing Crypto Exchanges?"

Sometimes You Have to Look At Accounting

One of the things you should learn in business school is the differences between accounting and economic numbers.  You never make a long term business decision based on accounting numbers.  You have to look at costs and opportunity costs.

An aside, government people make this mistake all the time.  If there is a stream of cash, and they want more revenue they think if they increase the tax rate, or slap on a tax the change in the tax will equal the revenue imputed.  Hence, a lot of folks in Chicago think that if you slap a 9.5% personal income tax on people that you will get 5.05% higher tax revenue than you do today with our existing 4.95% tax.  Any logical person knows it doesn’t work that way and human behavior changes.

That’s why accounting numbers and economic numbers are very different.

At the end of Continue reading "Sometimes You Have to Look At Accounting"

The Introduction

This is not about how to handle a double opt-in introduction.  This is about how to introduce yourself on a phone call or a public engagement.  If you go to a conference, sometimes it takes 15 minutes to introduce the panel for a one hour panel discussion.  That sucks for the people that paid to go to the conference.

We have this thing called the internet so it’s pretty easy to search a background on someone.  I think that introductions should be 30 seconds or less, no matter who you are.  The fact that you are there gives the panel credibility, and you can always publish full bios on a handout or even put them on a poster board.

If you ever took a speech class, you know how hard it is to put together a meaningful, impactful 60-120 second speech.  Same with panel introductions which is how I came Continue reading "The Introduction"

The Fed And Valuation

In case you missed it, the Fed raised rates another quarter point.  In case you missed it, unemployment rates are at record lows all around the country and with all ethnic groups.

What’s that mean for startups?

Supply and demand effects from interest rates going up are going to filter through a lot of different parts of the economy.   They will affect things that are not just quantitative.

Great startups are often created in times of duress.  Resources are cheaper.  Problems are laid bare.  In good economic times the tide is in and everyone looks pretty good.  Customers might not be as focused on cost cutting or finding new solutions to problems.  That’s not to say we should always be in duress or hope for periodic downturns just to get great startups going.  But, it’s a fact.

It’s gonna be tougher to recruit.  Founders are going to have to

Continue reading "The Fed And Valuation"

Chicago Entrepreneurs Lead Again

Pitchbook recently released their latest data on returns from investing in various startup communities.  Chicago led the way last time and it’s still on top.

Nearly half of Chicago investments (45%) have provided a 10x ROI, compared to 25% of investments in the Bay.  If I was going to poke holes in that I’d suggest that the sample sizes are a lot different. However, the numbers are the numbers and value is in Chicago.  This was the fifth straight year of record-setting investment in Chicago.  There was $3.8 billion invested across 623 deals

Again, small by Bay Area standards but super positive direction.  Especially given returns.

One of the biggest differences between Chicago and other ecosystems is access to capital.  There is far less capital in Chicago, so investors here don’t traditionally invest pre-product or pre-revenue. That means companies that get investment here are generally further along when it Continue reading "Chicago Entrepreneurs Lead Again"

Magatte Wade, The Power of Entrepreneurship

Yesterday, I visited my friend Professor Mike Gibbs class. He teaches microeconomics at Chicago Booth. It was the first class for the new MBA students. He talked about how markets are hard wired into people no matter where they live. If you like chocolate and I have chocolate, and you have sausages and I like sausages, trading with each other makes each of us better off.

This actually happens all the time in situations that are dire. Professor Gibbs talked about the Economics of a POW Camp study that was written by an English economist who was imprisoned during WW2. There was no “money” or fiat currency. The POW’s could only transact in the goods that came in their Red Cross packages.

When I was on the board of the National World War Two Museum, I actually met Irwin Stovroff who was a POW at Stalag Luft One-where the Continue reading "Magatte Wade, The Power of Entrepreneurship"

Helping People $1 At A Time in A $1B Market

Great news for people that live in Zimbabwe and work out of the country.  WLV portfolio company PipIT has partnered with ZymPay to provide effortless and seamless money transfer.

If you know anything about Zimbabwe, you know the government there has totally devalued their local currency.  It’s pointless to use it and even more pointless to expend effort to work to earn it.  That’s fueled a large Zimbabwe diaspora.

The amount of money being sent into Zimbabwe from nationals working outside the country is $1B per year and it’s a giant part of their local economy.  Without it, the country would be in worse shape than it already is.  Three to four million citizens are living outside their home country.

PipIT and ZymPay allow people to make cross border payments and pay for goods and services directly in real time.  Payment is received and confirmed simultaneously and recorded in Continue reading "Helping People $1 At A Time in A $1B Market"

Chicago TechStars

Just went to the Chicago TechStars Demo Day.  It’s a lot different than it used to be.  Some people might miss the way they did it at the House of Blues, but I think each way had its own place.  In the “old days”, we needed some pizzaz.  The community needed some hype, some glitz and glam.  Doing stuff like a demo day at the House of Blues provided that.

Today it was at 1871.  It was low key.  But, that doesn’t mean the presentations were any lower key, they weren’t.  They were as polished and professional as ever.  But, it was a recognition that Chicago has arrived as an ecosystem.  We are the City of Big Shoulders.  We put our shoulder on the object and we move it.  It’s not glamorous.  But, we get it done.

I think that’s what a lot of the Chicago startup scene is.  You Continue reading "Chicago TechStars"

Chicago Venture Summit

I am a bit drained today as I was at the Cubs game last night.  It was a tough way to end the season.  The Cubs played decent baseball, but not blowout baseball all the way down the stretch and into last night.  2 runs in 22 innings of playoff baseball isn’t going to get you anywhere.

The 4th Chicago Venture Summit is on today and I will be there late.  Yesterday, Holberg Financial pitched at the Fin Tech break out session.   Fintank ran that session and did a pretty good job of explaining why Chicago is a Fin Tech hub.  WLV is also investors in Megalytics, and in CFX/OFN.  They made a good case why Chicago will be the center of the universe in the future when it comes to crypto.  It is a place where some very big companies are being built as we speak.

One Continue reading "Chicago Venture Summit"

A Unique Win Win Way to Get A Job At A Startup

Often, I get approached by people wanting to work at a “startup”. Perhaps they are sick of the corporate/consulting grind. Maybe they are looking to renew themselves. Maybe they really like to build stuff from the ground up and want to be involved with a startup.

It’s pretty easy to point them in the direction of a website like Built In Chicago or a VC website. Scan portfolio companies and ask the VC for a warm intro. Or, just cold email them if the job you want is posted. Or, network into a conversation. Maybe there is even a head hunter that is working for the company or VC that you can find.

Want to know a better way?

Put your entrepreneur hat on. What are you concerned about?

Who Will Be Mr. October?

Reggie Jackson was always known as Mr. October.  He devastated teams when he played for the A’s and Yankees.  Every year, Oct 1 starts the baseball playoffs and now that the Cubs are making it an annual ritual it gets pretty exciting for me.

For most of my life, it was not this way. As a fan, I am trying to enjoy each moment and not be jaded (like Yankees fans).

Who do you think will be a surprise break out star in this years playoffs?  There always seems to be one player that rises to the occasion and really competes.  Last year it was George Springer of the Houston Astros.  Astros fans might have been familiar with him, but the rest of us were not.

The AL looks pretty dominating this year compared to the NL teams but you don’t know until you play the games.

Eamus Catuli.


You Cannot Mislead Markets

Yesterday Elon Musk settled with the SEC.  He’s lucky.  He got off cheap.  A $20MM fine is peanuts.  Relinquishing his chairman role hurts his ego, but he remains CEO.  He is lucky he wasn’t forced to leave entirely.

If you read Craig Pirrong‘s posts about Tesla over the years, you’d have had an alternative opinion in your hands instead of the fan boy coverage that a lot of tech companies get from the press.  Tesla doesn’t make money.  It’s cool technology and a cool car.  It only exists because of government subsidies.  Take that away and the entire business crumbles.

His merger last year with Solar City wasn’t a good business idea either.  Tesla is hemorrhaging cash.  It’s not like they could be cash flow positive if they stopped investing in x or y.  It’s just red ink everywhere.

Markets tell people information.  All you have to do is Continue reading "You Cannot Mislead Markets"

A Couple of Free Resources For Startups

One of the things that big universities have over smaller universities is resources.  It’s not to say small college isn’t good, it’s just a fact that a big land grant institution is going to have resources the smaller and mid size schools don’t.  It might be worth exploring resources at your local big state school to see if you can use anything.

I know at IIT in Chicago, they have wet lab space available which is hard to find.  At the University of Nebraska they have a similar program.  I am quite sure at big schools you can find something somewhere you might be able to use to help your company out.  There is an opportunity cost, since it takes up time to dig and organize the project.

A number of years ago, Professor Paul Magelli created a resource inside the Gies College of Business.  It’s called “Illinois Business Consulting”.

Continue reading "A Couple of Free Resources For Startups"

Points of Light

On a day when we all can use some points of light, I will bring you one.  One of WLV‘s portfolio companies, Holberg Financial, was accepted into the Points of Light Civic Accelerator.  This is a big deal.

We really love what Holberg is doing and are glad that the accelerator does too. Holberg added more customers again last month and is bringing financial security more people.  Holberg is one of thirteen companies that was accepted. The process to get in was long and arduous with a lot of interviews.  The accelerator takes place over time in three cities, Atlanta, Philadelphia and Chicago.

From the linked article:

“We are Continue reading "Points of Light"