Network Effects and Venture Capital


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




In the last several years there has been a lot of fund formation in venture capital.  New funds have started.  Existing funds have raised much larger funds.  There is a lot more money being put into innovation today than there was ten years ago.  However, the amount of money in geographical areas has remained uneven.  Sort of like income inequality, where the rich get richer while the poor stay about the same.  For example, there are 12 VC funds in Michigan.  There are 12 in one building in Palo Alto.

The Brookings Institute just released a study on venture capital by geography.  It’s an interesting read.  Brookings also did an analysis with some Michigan MBA students.  Several years ago, Stephen Spreiser and graduate students at the University of Illinois did a similar analysis.

Access to capital was one of the Continue reading “Network Effects and Venture Capital”

Should The Poor Save For Retirement?


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




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?”

Corporate Fascism


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Salesforce told anyone that uses its product that they cannot use it for sales of firearms. That’s corporate fascism. If I were any gun retailer or wholesaler that used Salesforce I would sue them for antitrust, and sue them civilly for damages.  The way I’d drop the suit is if Salesforce made my data portable in an easy format so I could hop on a competitive system.

YouTube, a property of Google, is investigating a conservative journalist. Again, corporate fascism.  They never seem to investigate the other side.  It sure seems like YouTube attacks conservatives and limits their reach on their platform a lot more than liberals.  If you wonder why people might have this perception, think back to the day after Trump was elected President.  Google top management, including the founders, held a meeting about it.  A lot of folks are upset about Continue reading “Corporate Fascism”

50 Years Till Blowup


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Was chatting with a friend about the federal deficit.  Seems everyone that has been elected talks a good game about the federal deficit but does nothing about it.  The thought going around Washington DC today is that America has about 50 years until the deficit becomes a problem we cannot handle.

No one wants to default on debt.  However, no one seems to have the political will to deal with the main drivers of the deficit.  The biggie is entitlement spending.  For example, when Social Security was instituted, people lived far shorter lives.  When Federal government retirement ages were established, people rarely lived a few years beyond retirement.  Try to monkey with changing those ages when benefits are received and all of a sudden you are Satan.

Layer on the crappy policies that are deeply entrenched in the federal budget like subsidies, grants, Continue reading “50 Years Till Blowup”

Dark Patterns Are Insidious Or Are They Harmless?


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Do you know what a data pattern is?  Digital companies use them all the time.  I didn’t know what they were called until I went to the Stigler Center Conference.  Dark patterns are powerful.  They combine what we know about behavioral economics and put it into a digital format with instantaneous clicks and responses.

Should we regulate their use?  If so, how?

However, there are two schools of thought on them.  In my discussion below, I will highlight what digital companies are doing but also mention ways physical experiences mimic things that are happening on the web.  If we regulate the web, should we also regulate the physical experiences?  You will notice that the academics that are offering conflicting views teach at the same university.  They aren’t living in a bubble.

University of Chicago Professor of Law Lior Strahilevitz made the Continue reading “Dark Patterns Are Insidious Or Are They Harmless?”

Should We Establish A Digital Authority?


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Spent much of the last two days at the Stigler CenterProfessor Luigi Gonzales organized a pretty powerful conference.  It was a lot to take in, and in the University of Chicago tradition, it wasn’t just one opinion being spouted.  People had to defend their ideas, and there was consistent debate.  As a passive audience member, some of my assumptions were challenged.  It was a lot to take in and frankly, I am still taking a lot of it in.

One of the ideas that came out of the conference was that some sort of digital authority should be established to police digital companies.

I don’t think I agree with this conclusion, but I certainly understand where it comes from.  Digital companies can do a lot to put chokepoints in distribution.  Once they attain market power, they are hard to dislodge.  The Continue reading “Should We Establish A Digital Authority?”

Why Is There Wealth Inequality?


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




It’s not a huge statistic but there is wealth inequality all over the US.  There is all over the world.  In some places, it’s because of caste systems or because one political class inflicts its will over another like in Venezuela.  In the US, it’s not as clear.  It troubles me because in the US, while we always have had different outcomes, the opportunities for getting wealthy are harder to see.

In the book “Alienated America”, a lot of people feel like there is no American Dream. This is sad. I understand why they feel that way.  The American Dream does live and you can find several examples of it.  The other interesting part about wealth in America is it is more fluid than other countries.  Once you earn a lot of money doesn’t mean you will always earn and have a lot Continue reading “Why Is There Wealth Inequality?”

Some Tips on Angel Investing


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Saw this stream across Twitter and it seems pretty good.

Charlie Munger says investing requires a latticework of mental models. Here are 11 lessons for your angel investing lattice:

  1. If you can’t decide, the answer is no.
  2. Proprietary deal flow means ‘they want you’.
  3. Investing takes years to learn but improves for a lifetime.
  4. Valuation matters: you will have to pass on future greats.
  5. Back $0B companies.
  6. Judgment is important but overrated.
  7. Invest only in technology.
  8. Some of the best investors have no opinions.
  9. Incentives make for bad investing advice.
  10. Play fantasy football.
  11. Power beats contracts.

They have their own descriptions of these tips at the web link I posted but I thought I might elaborate on my own.

  1.  Truly, if you can’t decide the answer must be a No.  Why?  You only have so much risk capital.  You must allocate that capital to companies and entrepreneurs Continue reading “Some Tips on Angel Investing”

Wireless Charging is Hard


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Apple announced that they weren’t coming out with their wireless charging mat for devices as announced.  I was an angel investor in a Chicago company, NuCurrent, that is the industry leader in wireless charging.  It’s super technical, and it is super hard.

NuCurrent has many Ph.D. electrical engineers working daily on the problem.  NuCurrent has a patent portfolio that is second to none.

Their CEO Jacob Babcock recently wrote a post on their blog about Apple Power. Here is an excerpt of what he wrote.  Click over and read the whole thing.

Apple’s AirPower product was an ambitious concept that took on multiple, overlapping technical challenges related to wireless power. These included:

Variable loading
Having from one to three devices charging simultaneously

Variable charging rates
Supporting devices with different power requirements (ie. Watches and AirPods need less power than iPhones)

Variable receiver sizes
Supporting Continue reading “Wireless Charging is Hard”

Tech Is Separating Us; Tech Is Leaving Communities Behind; Capitalism Can Save Us


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




There is a lot of volatility in the news from day to day on tech. It’s interesting to me that Senator Elizabeth Warren is beating the drum on regulating companies like Facebook ($FB), Google ($GOOG) and other Silicon Valley titans. The right wing is echoing her sentiments but for different reasons. They see those companies as oppressive and against free speech along with the way they discriminate against right wing websites, employees who are conservative, causes that are conservative, and conservative speech.

When I was at the i7 in Torino, Italy a well respected Italian computer scientist offered up the idea of regulating the big tech giants. That was September of 2018. Ted Ullyot correctly asked, “How do regulate an opt-in service?” It’s a great question.

Personally, I am a huge fan of free markets, capitalism, and creative destruction.  Why can’t a company come and knock Google off its Continue reading “Tech Is Separating Us; Tech Is Leaving Communities Behind; Capitalism Can Save Us”

Congratulations to Professor Ray Ball


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Yesterday I read the news that my friend Professor Ray Ball received an award.  Big hearty congratulations to him.  Like me, he likes to cook and drink good wine.

He is a PhD Economist that has done a lot of research in the field of accounting.  In 1968, he wrote a paper on “An Empirical Evaluation of Accounting Income Numbers” which was published in the Journal of Accounting Research.

It was groundbreaking.

He received the Wharton-Jacobs Levy Prize along with co-author Phil Brown.  Professor Brown is also a PhD economist from Chicago. The prize is given biennially.  If you are an academic and receive the prize, it’s highly likely that you received a Nobel Prize.  Harry Markowitz and William Sharpe received previous prizes.

Ray also authored another ground breaking paper.  “Anomalies in Relationships between Securities’ Yields and Yield surrogates,” published in the Journal of Financial Economics in 1978.   It Continue reading “Congratulations to Professor Ray Ball”

Millennials Leaving Chicago


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




This study is from the liberal think tank, The Brookings Institution.  Their conclusion is wrong.  It’s not about affordable housing.  It’s about an affordable life.  If Governor Pritzker has his way, housing in Illinois will get a lot more affordable.

New York and LA beat Chicago. Houston, Denver and Dallas are where millennials are moving.  We already knew that people over the age of 55 were leaving in a massive migration.  Check out the differences in the all in cost of living in the various places and you can see why some cities are attractive and some are not.

I guess all the bullshit that prior Governor Rauner passed around higher tax rates, sanctuary state, sanctuary city, abortion on demand isn’t important to them.  What they really want is a job and an opportunity to build wealth so they can have productive lives, build families and chase the American Dream Continue reading “Millennials Leaving Chicago”

The Strength of Chicago’s Tech Ecosystem, or Non-Strength


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




At 7 minutes in, John Pletz and Amy Guth talk about the Chicago Tech community. Can an Instagram like company be built in Chicago?

Are Chicago investors risk averse and skittish? Do Chicago entrepreneurs think big enough?

Good conversation.  Here is the tweet John talks about in the podcast.

When I started Hyde Park Angels at the very first meeting I said we would invest in things that the Midwest was good at. We weren’t Silicon Valley and why would you want to be. If you want to compete with them, you were guaranteed to lose since someone could get in a car or on a plane and be there shortly.

Chicago has tremendous depth of talent in things like B2B Fin Continue reading “The Strength of Chicago’s Tech Ecosystem, or Non-Strength”

Move In Day


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Finally, my wife and I can sort of move back into our apartment.  What a long strange trip it’s been.  We moved out on November 1. We have been gypsies since. Since that time I have been sick consistently.  I am now getting over another flu like thing.

We drove all over the South with our puppy who was a trooper in the car.  I was able to check out Atlanta, and spent some time in NYC. I’ll be in both places again this year.  We finally sent our pup out to a farm in western Illinois and for the last week and a half have been squatting in a friend’s house in southwest Michigan.

Our place is still not quite done but it’s livable.  Now we have to get some furniture.

It will be nice to be back in Chicago full time and get a normal ritual to Continue reading “Move In Day”

Want Help With an MBA? Do You Want To Marry Purpose and Profit?


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Two of the top MBA programs in the world are in Chicago.  Chicago Booth, and Kellogg are consistently ranked in the top ten of all MBA programs.  I am a graduate of Booth, and I work with both Booth and Kellogg students and they are tremendous.

Other schools have MBA programs as well and attract top talent.  DePaul’s Kellstadt School has an MBA school.  When Raman Chadha of the Junto Institute was running the entrepreneurship program they were an early supporter of Hyde Park Angels.  Back then, not a lot of people reached out to help but Raman did.  My undergrad alma mater Illinois Gies College has an MBA program and so does Mendoza at Notre Dame.

Loyola of Final Four fame has one as well.  Loyola is a great school the far north side of Chicago next to the lake.  I love their rivalry with DePaul.  One of my Continue reading “Want Help With an MBA? Do You Want To Marry Purpose and Profit?”

Back in Chicago (for now)


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Got back to Chicago late yesterday afternoon.  My wife and I are still gypsies.  They have made some progress on our apartment, and we can see the end but it’s a process to get there.

Over the past several years, we usually go to a city that is warmer in the month of February and camp out.  I don’t think we will be doing it this year.  We have been living in a studio with our puppy and it’s wearing on us.  So, we are taking off on the 15th of January in the car.

Our first stop will be Atlanta.  I have some meetings set up on the 17th with some startup people.  This year one of the themes for our fund is going to be to get on the road and go out to different B2B Fin Tech ecosystems where we think we might find some good seed Continue reading “Back in Chicago (for now)”

Setting the Schedule


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




For the past several years, my wife and I would spend a month out of Chicago during the winter.  I don’t think that is going to happen this year exactly.  We have been rehabbing our apartment and haven’t been in it since November 1.  It’s really starting to wear on us.  The contractor has done a decent job, but failed to execute on a couple of things that is going to push our project an extra month.

I had planned on a few trips, and now it sort of rolls into a series of trips.  If you want to meet up with me, feel free to ping me.  Here is where I will be and when I will be there.

A Big Difference Between Trading For Yourself And Startups


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




Startups entail assuming a lot of risk.  The outcome is highly variable.  Volatility reigns. At the outset, you don’t know if that startup is going to be a rocket ship or a failure.  All you know is a lot of them fail for a large variety of reasons.  Most people overestimate the failure rate of startups.   At a conference I was at a family office said they had been investing in startups for around 30 years and their failure rate was about 50%.  Those are good odds from where I come from. 50/50 with the upside that a startup can bring.  I’ll take that trade all day long especially if I can figure out ways to improve my odds.

There are a ton of resources today for startup entrepreneurs that didn’t exist before.  You can improve your odds if you want to and work at it.

Back in the

Continue reading “A Big Difference Between Trading For Yourself And Startups”

Different Strokes For Different Exchanges


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




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”

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


This post is by Jeff Carter from Points and Figures


Click here to view on the original site: Original Post




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”