The Libra Rationale


This post is by Jeff Carter from Points and Figures


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One assertion that I’d like to make is that finance is one of the most innovative sectors of the economy.  It’s more innovative than almost any other industrial sector.  People like to poke fun at accountants, bankers, and economists but the financial services industry is the fastest moving industry in the world.  This is the hopeful part of cryptocurrency.  Digital currency married with software ought to speed financial innovation that will benefit more people and lift their lives up.

Read this white paper put out on the Libra coin by Facebook.  As a guy that participated in futures markets for 30 years, I had a little trouble with some of the framing behind the Libra idea. The paper leads off with a “Problem Statement”.

All over the world, people with less money pay more for financial services. Hard-earned income is eroded by fees, from remittances Continue reading “The Libra Rationale”

Brex valued at $2.6B with new cash from Kleiner Perkins


This post is by Kate Clark from Venture Capital – TechCrunch


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Reports published late last month indicated Brex, the fast-growing fintech startup, was raising yet another round. Today, the San Francisco-based company is confirming it’s closed on $100 million in Series C-2 funding at a valuation of $2.6 billion.

Kleiner Perkins has lead the round via former general partner Mood Rowghani, who left the fund last year to form Bond alongside Mary Meeker and Noah Knauf. Existing investors DST Global, IVP, Y Combinator and Greenoaks Capital have also participated in the round. 

The Y Combinator graduate, which provides corporate cards tailored for startups, is also announcing the launch of its third product: a card made specifically for life sciences companies. With a focus on pharmaceutical, biotech and cosmetic businesses, Brex has customized its underwriting model for the life sciences sector and crafted targeted rewards, including cash back on lab supplies and conference fees.

Brex’s funding history

March 2017: Continue reading “Brex valued at $2.6B with new cash from Kleiner Perkins”

Should The Poor Save For Retirement?


This post is by Jeff Carter from Points and Figures


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Every day in my inbox, I get the American Enterprise Institute daily email.  Sometimes there is some interesting stuff in it.  Today, an article caught my eye.  Should the poor save for retirement?

If you read the book Nudge by Richard Thaler, he talks about ways to “nudge” people to save.  Opt-in versus opt out.  There are companies cropping up that help the poor, or anyone takes spare change and put them in interest-bearing or stock accounts to grow.  There is no doubt that people misunderstand how compound interest and compounding works.  But, the real question is if I can use the money today to make myself better off should I do that versus saving it for tomorrow?

Remember, we are talking about people that don’t have much to start with.

Economist Andrew Biggs ran a study.  He found that “for very Continue reading “Should The Poor Save For Retirement?”

Unraveling the ‘Secrets of Sand Hill Road’ and the VC thought process, with Andreessen Horowitz’s Scott Kupor


This post is by Arman Tabatabai from Venture Capital – TechCrunch


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Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Connie Loizos sat down with Scott Kupor, managing director at venture capital firm Andreessen Horowitz to dig into his new book Secrets of Sand Hill Road, discuss his advice for new founders dealing with VCs and to pick his brain on the opportunities that excite him most today.

Scott gained inspiration for Secrets of Sand Hill Road after realizing he was hearing the same questions from different entrepreneurs over his decade in venture. The book acts as an updated guide on what VCs actually do, how they think and how founders should engage with them.

Scott offers Connie his take on why, despite the influx of available information on the venture world, founders still view VC as a black box. Connie and Scott

Continue reading “Unraveling the ‘Secrets of Sand Hill Road’ and the VC thought process, with Andreessen Horowitz’s Scott Kupor”

Social Capital reincarnated


This post is by Kate Clark from Venture Capital – TechCrunch


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Nine months ago, the once high-flying venture capital fund Social Capital made the bold decision to stop accepting outside capital and operate as a family office, in essence.

The co-founder of the outfit, brazen billionaire and early Facebook executive Chamath Palihapitiya, pledged to upend his investment strategy and make fewer but much larger investments as a means to improve his returns. Naturally, a near-complete exodus of Social Capital’s venture capitalists followed.

Today, the firm’s three founders, Palihapitiya, Mamoon Hamid and Ted Maidenberg, have gone their separate ways. Palihapitiya is rewriting the Social Capital playbook, Hamid is busy reinvigorating Kleiner Perkins and Maidenberg is building on top of the data-driven strategy and proprietary software dubbed “Magic 8-Ball” he built at Social Capital, with a new firm called Tribe Capital.

Quietly, Tribe Capital’s co-founders, Maidenberg and former Social Capital partners Arjun Sethi and Jonathan Hsu, have deployed millions of dollars in Social

Continue reading “Social Capital reincarnated”

Which type of funding is actually best for your business?


This post is by Arman Tabatabai from Venture Capital – TechCrunch


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When starting a tech company, there seems to be a playbook that most entrepreneurs follow. While some may start with a bit of bootstrapping, most will dive straight into raising seed money through investors. In many cases, this is a great path. It’s a path I’ve taken twice myself, first with GroupMe, and then again with Fundera.

Ironically, though, my second venture-backed company is a business focused on helping entrepreneurs find debt financing—a process I’ve gone through only once myself. But after five years of building and scaling this business, it’s made me take a step back and consider the question of when and where debt financing might be a better option for a business than equity financing, and vice versa.

I view these financing vehicles differently now than I did half a decade ago, and think it’s time we start to think a bit wider and diversely about

Continue reading “Which type of funding is actually best for your business?”

Should your company move into a co-working space, sublease space or traditional office?


This post is by Arman Tabatabai from Venture Capital – TechCrunch


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It’s a cautionary tale we hear far too often: Company A, hiring staff and growing rapidly, finalized a 10-year lease for office space. One week after move-in they had filled their space to the brim, with engineers sitting on top of sales staff, interns working in the hallways and the CEO operating out of a small conference room.

Company A had backed themselves into a corner, in desperate need for more room with no easy solution to the problem, and looking to swiftly dispose of their inadequate space.

In the startup environment, everything moves at a breakneck pace. Raising venture capital, hiring staff, assembling a board, etc. – all while working day-in and day-out to refine a product or service meant to disrupt the world. With senior staff pulled in different directions, there is little time for a strategic analysis of office space needs.

My team at Colliers specializes in

We Work Offices In Chicago

Continue reading “Should your company move into a co-working space, sublease space or traditional office?”

Startups Weekly: Will the real unicorns please stand up?


This post is by Kate Clark from Venture Capital – TechCrunch


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Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about the sudden uptick in beverage startup rounds. Before that, I noted an alternative to venture capital fundraising called revenue-based financing. Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets.

Here’s what I’ve been thinking about this week: Unicorn scarcity, or lack thereof. I’ve written about this concept before, as has my Equity co-host, Crunchbase News editor-in-chief Alex Wilhelm. I apologize if the two of us are broken records, but I think we’re equally perplexed by the pace at which companies are garnering $1 billion valuations.

Here’s the latest data, according to Crunchbase: “2018 outstripped all previous years in terms of

😲

Continue reading “Startups Weekly: Will the real unicorns please stand up?”

Is the tech press too positive in its coverage of startups?


This post is by Kate Clark from Venture Capital – TechCrunch


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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

It’s our first week in the new TechCrunch podcast studio, or it was for Kate Clark and Chris Gates. Alex Wilhelm will be back in SF next week. For now, we fired up the mics and dug into what was a veritable barrage of news.

First, Paul Graham’s contentious comments. The co-founder of Y Combinator tweeted some criticism of the tech press on Thursday; naturally, Kate and Alex had a few thoughts. In summary, Graham doesn’t seem to understand what it is we tech journalists do, and that’s a problem.

Next up Continue reading “Is the tech press too positive in its coverage of startups?”

The Small Town Bank


This post is by Jeff Carter from Points and Figures


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Small town banks really have had it tough. It has always been hard for them because of the mega trends of people moving away from small towns to the city, but there are other challenges that lurk around every corner.

The big decider for small town banks in the past ten years was Dodd-Frank. Dodd-Frank absolutely crushed community banking. The major domo regulations that government threw at the banking system to punish it in order to deceive the public from the real problems were unaffordable to community banks.  However, the tidal wave that upset community banks was rooted in public policy prior to Dodd-Frank.  Dodd-Frank was the nail in the coffin.

To give you some sense of the changes, here is a quote from the WSJ article I linked to above:

The 4,600 U.S. banks with $1 billion or less in assets—small community banks—today hold 6.6% of all Continue reading “The Small Town Bank”

PipIT Is Top Ten Payment & Card Solution Provider 2019


This post is by Jeff Carter from Points and Figures


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One of our portfolio companies, PipIT was just named one of the top ten payment and card providers by CIO Applications Group in Europe.  PipIT is based in Galway, Ireland.  PipIT enables the unbanked to send money around the world so they can pay bills.  It’s digital cash, but it is not crypto or blockchain.

52% of the world’s population is unbanked.  In developing nations where people may have a bank account, 25% of them go unused.  Just having a bank account isn’t the total answer.

Here is a link to an article and interview with PipIT CEO Ollie Walsh describing how they do it and why they do it.

Here is a short video describing what they do.

One of the things that people underestimate is that a cashless society puts financial inclusion at risk.  We talk a lot about income inequality and the lack of Continue reading “PipIT Is Top Ten Payment & Card Solution Provider 2019”

Was It The Banks Fault?


This post is by Jeff Carter from Points and Figures


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As you go to the polls today, it might be helpful to read this post by Professor John Cochrane.  It talks about the financial crisis ten years later.  The financial crisis spawned a lot of really bad legislation and policy.  It also created a lot of falsehoods that permeate the dialogue and discourse.

Cochrane lays it bare.

He talks about the causes, and the fixes.  He talks about leverage and being over leveraged.  It’s a calm and academic breakdown.  You should read it because you won’t find David Stockman talking about a 40% decline in the stock market and you won’t find a permabull case for Dow 50,000.

The reason I started blogging was because I knew Dodd-Frank was a terrible response to the financial crisis.  Sarbanes-Oxley was a less terrible response to Enron, but Dodd-Frank was exactly the wrong thing to do and doesn’t protect us at all Continue reading “Was It The Banks Fault?”

Are Companies Responsible for Employees?


This post is by Jeff Carter from Points and Figures


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Senator Elizabeth Warren doesn’t think they are and she’s proposing a new bill to put in regulations that would make sure they are.  She wants to establish a new “federal corporate charter” for companies larger than $1B.

Clearly, she detests and abhors Milton Friedman.  I wish Friedman were alive to debate her. He would do so and relish the opportunity.  He would eviscerate her points one by one with logic, smiling all the way.

Here are her points:

In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion. That’s trillions of dollars in profits that might otherwise have been reinvested in the workers who helped produce them.

Before “shareholder value maximization” ideology took hold, wages and productivity grew at roughly the same rate. But since the early 1980s, real wages have Continue reading “Are Companies Responsible for Employees?”

Our Investment in Holberg Financial


This post is by Jeff Carter from Points and Figures


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We met Joe Holberg through Rob Topping.  Rob is another Chicago investor.  I never asked Rob how he met Joe but my guess is it was through the Michigan network since they are both alums.

Joe grew up in western Michigan.  He paid his way through school and went on to work for Teach for America and Google.  One day, he woke up with an idea, a cell phone and a computer and started Holberg Financial.  Ironically, my father spent his teen years in western Michigan.  I still have some family there in Three Rivers.

Holberg Financial is a financial health and wellness platform that helps employees reduce financial stress. 85% of Americans are financially stressed and 62% have less than $1,000 in savings. HF is 100% free to employees and 100% unbiased since they don’t sell data, products, or financial services. They just get people the unbiased info Continue reading “Our Investment in Holberg Financial”

Your School


This post is by Jeff Carter from Points and Figures


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Fred Wilson wrote a post today about where you went to school and the VC biz. He’d like to see some things change and he’d like it sooner rather than later. I don’t disagree but I also know that inertia, network effects and networks are hard to change.

Fred’s post came out of Richard Kerby’s post on Medium. My friend Rick Zullo is partners with Richard and was tweeting about it yesterday. They have a VC firm in NYC. Jason Rowley of TechCrunch wrote a series of posts about where VCs went to school and what they studied.

Unfortunately, it does matter.

It’s reflected in the cost of tuition and the difficulty in getting in. There is only one Stanford. There is only one Harvard. I think it will change but change will be slow. There are factors outside of network that bear on the reasons why.

In my own Continue reading “Your School”

Regulation and The Retail Investor


This post is by Jeff Carter from Points and Figures


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One of the things that came out of the lunch we did at the University Club the other day was the focus of the SEC. There are several agencies and independent organizations that regulate finance and the SEC is at the top of the pyramid.

I have spoken to both SEC and CFTC regulators on cryptocurrency. They seem to be working together and are not engaged in turf battles. Right now, they say that’s the case and you have to take them at their word. In past engagements, like the CFMA Re-authorization in 2000, it was a brutal bare knuckle battle between agencies and the industries they regulated.

Here are a couple generalizations.

When we think about markets the CFTC regulates, they are not targeted to retail investors. They exist for the risk management and risk transfer of professional investors and big time industrial organizations. That requires a different touch Continue reading “Regulation and The Retail Investor”

A Bit Of Reprieve


This post is by Jeff Carter from Points and Figures


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Congress started to roll back some of the Dodd-Frank law last week.  This is good news.  The reason I started blogging way back when was because of the debate over Dodd-Frank.  You could see the freight train coming.

Sarbanes-Oxley was another act that was done in haste to combat one or two companies wrongdoing.  Again, the end result was that companies were staying private longer. A lot of that has been fixed but why did we do it in the first place?  Spite.  Populism.

Government regulation is keeping the middle class and poor from growing their wealth.  They are locked out of many types of investments because of the overlords fear.  It’s wrong.  One of my hopes with cryptocurrency is that this can be remedied.

Dodd-Frank was and is a terrible law.

The legislation gave the government the power to intrude deep into our lives.  The headline stuff on Continue reading “A Bit Of Reprieve”

Ycharts +TD Ameritrade


This post is by Jeff Carter from Points and Figures


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The news came out last week but it is worth highlighting. Ycharts integrates with TDAmeritrade now on their Veo One platform.  Ycharts is a B2B Fin Tech company I invested in back in 2009.  Their target market is RIA’s, wealth managers, hedge funds and other firms like that in the investor universe.

Ycharts is like a Swiss army knife for investors.

I have used it successfully to pick strike prices for options trades.  It is the best research terminal on the web.  It’s not for moment to moment trading. It’s an example of the quiet things going on behind the wall that you might not notice because it’s not on your phone.  But, they add a lot of value.