This is Crazy

I was skimming the news and saw this article on the man who bet his entire life savings on Bitcoin.

For one Dutch businessman and father of three, it was the year to make a radical change. Didi Taihuttu sold almost everything he owned, including his business, house and car, and put all that money into bitcoin. He bet everything he had, and everything his family had, on a decentralized cryptocurrency future.

When Mr. Taihuttu first bought into bitcoin in February 2017—with the price around $1,000—he told The Wall Street Journal he was “in it for the long run.” He held on to his investment even as it hit historic highs of almost $20,000. Then came the bitcoin crash.

That’s just crazy and he put his family at huge risk.  I know you can be bullish on bitcoin but I also remember the old CME poster, “Risk not thy

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The Rehab

We started a rehab today.  We have been planning it for a year and a half.   It’s our fifth building project.  When we became empty nesters, we downsized.  Big time.  I saw the Illinois tsunami coming, and I couldn’t sit still.  At the same time, my business for the time being is here so I can’t leave.

Most of my friends are leaving or they are redomiciling.  When I mean most, it’s not 90% but it’s over 80%.  Most of my friends are encouraging their children to go to school out of state and not take jobs back in Chicago.  This is very very different from the past.  A good friend of mine grew up in NYC.  He went to Harvard and when he met a Chicago person at Harvard virtually 100% of them wanted to move back to Chicago after graduation.

We looked for a place in a Continue reading "The Rehab"

Project 33 In Chicago

Last week, Penny Pritzker the former Commerce Department Secretary under President Obama announced a new plan for Chicago tech called Project 33.   John Pletz is a person I respect and a tech columnist for Crain’s.   He thinks it’s a good idea.  The prior link is to his column.  It’s good and it uncovers some past problems.  Others have added support via Twitter and other mediums.

I am mixed.

One of the good things about this is it seems like corporate CEO’s will get engaged.  If they force their companies to be more hospitable to startups selling into them that is a good outcome.  It’s terribly hard to sell into a corporation.  Ask some of the B2B Startups that have come through the various accelerators how arduous it is to get a corporation, bank, insurance company or large institution to do more than a token pilot.  Forget about selling Continue reading "Project 33 In Chicago"

The Dearth of Clearing Kills Innovation

It’s really hard for people to grasp basic finance much less the nuance of regulation.  Our nation’s financial system is bifurcated among a lot of different regulators.  When it comes to capital marketplaces, there are two that hold sway; the SEC and CFTC.

They look at things very differently.  Yesterday at the Fintank Blockchain event, panelists Richard Sandor and Dennis Chookasian made that exact point.  The way the regulators look at things shapes the competitive environment in each of their domains.

For example, on the SEC side there is a terrific amount of fragmentation.  Pay for order flow is allowed.  Dark pools are allowed.  Clearing the trades is a commodity.  But, existing clearing operations extract a lot of second and third degree pricing to realize some producer surplus.  At the same time, there is nothing driving the SEC clearinghouses to innovate.  At the FIA show in Chicago I stopped by Continue reading "The Dearth of Clearing Kills Innovation"

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"

Myopia

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"

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.

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’s startups continue to lead the nation in returns


GUEST: Today, PitchBook revealed its 2018 Chicago VC Ecosystem report, released in conjunction with ChicagoNEXT’s Chicago Venture Summit. This report finds that Chicago continues to outpace every other U.S. venture ecosystem — including the Bay Area — in median multiple on invested capital (MOIC). Chicago startups give investors a median MOIC of 5.…Read More

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"

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.

 

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”.

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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"

Democratizing Food

Prior to investing via West Loop Ventures I made a bunch of angel investments.  One of the companies I invested in was Simple Mills.  I like to joke that I am the worst consumer products investor in the world because my track record proves it.  I invested in Simple Mills for a few of reasons.

  1. Virtually every person I respected said that Katlin Smith was a tremendous person and when you met her, watched her present, you got a very good sense that she was.
  2. I knew about the gluten free trend, had tried some of the products and tried Simple Mills and found their products to be delicious.
  3. Chicago is a good place to invest in a food company.
  4. She won the New Venture Challenge at Chicago Booth.

If you know about early stage investing and look at the above as multiple choice, only the first reason makes Continue reading "Democratizing Food"

What An Opportunity

Yesterday, a group of venture capitalists, angels (HPA, Irish, Chicago Arch) and I toured the University of Illinois and networked with the entrepreneurial efforts going on down there.  What they are doing is nothing short of amazing.  A lot of VC’s figured out how to plug into Illinois and I suspect there will be a lot more deal flow and check writing that goes on between Chicago and Champaign.

If you are reading this and you are being recruited for athletics at Illinois, consider the fact that if you don’t make it as an athlete you can do better and build a sustainable career as an entrepreneur.  The students there are building products and companies that will change the world.  Think outside the box when it comes to your recruitment.  Someday it all ends and you have to find something else to do.  You might not have the idea for Continue reading "What An Opportunity"

The Great Migration

Was reading some data from the Cato Institute.  It has to do with Tax Reform and Interstate Migration.  The problem is the data is a little too fresh.  Tax reform was only passed in 2017, so 2018 is really the first year that people are feeling the effects of it.

One of the major effects is SALT.  That’s the ability of citizens to deduct state and local taxes from their federal taxes.  In the past, it’s always been allowable.  Now, it is not and high tax states are trying to find an end run around it.  They have even resorted to the courts, trying to characterize taxes we pay for public schools as charities.  Of course, the other tact might be to act responsibly and reduce the tax burden on citizens but who knows a politician that would want to do that? There is no clear relationship between the level Continue reading "The Great Migration"

Sometimes It Is Just Luck-But You Still Have to Take Risk

When people tell me I am “lucky” I get a bit offended.  I took a lot of personal risk and continue to take a lot of risk.   I worked super hard and put in long hours.  I did stuff few other people would have done at the time.  Who runs orders to a pit and takes the abuse that comes with it, with a business degree from college for three months, no insurance for $150/wk gross?  No one handed me a money tree or a success tree.  Throughout various parts of my life, I have assumed risk.  Especially in my 20’s-50’s.  Outsize stupid risk on some occasions.

To tell you the truth, since 2009 it has been a total grind for me.  I have had a few ups but mostly downs and battled a lot of demons internal and external.  Some people took advantage and were shitty.  I would

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School Spirit That Leads to a Cult

Went to the Notre Dame vs Michigan game yesterday.  A good friend of mine went to Notre Dame Law and had tickets.   I love to go to college campuses.  Always have.  It’s always interesting to me and sometimes campuses say a lot about the culture that comes out of the university.  Sometimes, it doesn’t.

For example, if you go to Emory in Atlanta, there are a lot of signals that Coke put a lot of money in that school. The building rock was quarried nearby.  At Davidson, the buildings are very traditional looking and it’s a traditional liberal arts undergraduate experience.  Classic college.

Love or hate them, many schools spawn a cult among their alums.  Both Michigan and Notre Dame are like that.  I am not using the word “cult” in a derogative sense.  I am thinking about it in a positive sense.

Usually, to create a community like Continue reading "School Spirit That Leads to a Cult"

Transition is Scary

One thing to keep in mind as your startup firm grows is transition can be very scary.  You had two founders who became ten employees who became fifty employees and now all of a sudden you are a company.

For some of those early employees, the transition might be scary. They might feel out of place.  The new employees, new role, new responsibility might make them feel hamstrung.  Might make them feel uncertain.  Maybe they have never been in a role like this before?  Maybe instead of having a focused team in one spot, you are opening up branch offices in different cities so coordination and communication will be totally different.

I don’t think you need to be a “B Corporation” to treat employees well and to manage transition.  Just lead with some emotional intelligence and transitions can be seamless.

I was thinking about transition today because of our puppy

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Professor Harry Davis, on Leadership

Leadership is hard. There are no classes in school for it unless you go to certain schools. Military academies actively train leaders. At those schools, the first step is learning how to follow.

One of the reasons I signed on with Raman Chadha and his ideas around The Junto Institute is that there is a gap in education around leadership. As Raman pointed out and found, we teach people to pitch. We teach people accounting, marketing and finance. We teach them operations. We don’t teach them to lead.

I never realized the wisdom behind Schofield’s quote until later in life. It’s pretty succinct and genius. It helps to know that it came at a time when the military was learning new ways to lead.

Not Continue reading "Professor Harry Davis, on Leadership"