Tag Archives: Venture Capital

Is Your Startup Stalled? Pivot to Blockchain

By Erin Griffith – In the high-stakes world of venture-backed startups, not growing is the same as dying. Historically, stalled companies sought a sympathetic acquirer or quietly shut down. Now, startups have a new potential lifeline: They pivot to blockchain.

The rush by startups into cryptocurrencies mirrors similar moves among publicly traded companies, where shares of several cheap, thinly traded stocks have spiked after merely adding the word bitcoin or blockchain to their names.

Even the stock price of the parent company of Hooters leapt nearly 50% at the mere mention of blockchain in a press release. The Securities and Exchange Commission has taken note, halting trading in some cases, because of the risks these currencies posed to inexperienced investors.

The rush by startups into cryptocurrencies mirrors similar moves among publicly traded companies, where shares of several cheap, thinly traded stocks have spiked after merely adding the word bitcoin or blockchain to their names.

Even the stock price of the parent company of Hooters leapt nearly 50% at the mere mention of blockchain in a press release. The Securities and Exchange Commission has taken note, halting trading in some cases, because of the risks these currencies posed to inexperienced investors. more>

Updates from Chicago Booth

What has happened over the past 40 years in the United States, particularly in cities?
By Veronica Guerrieri – It is well known that the US has experienced a large increase in income inequality, which, in my view, is one of the biggest problems of the US economy. At the same time, there has been an increase in neighborhood segregation, especially in larger cities: the rich are more and more concentrated in rich neighborhoods and the poor in poor neighborhoods. Alessandra Fogli of the Federal Reserve Bank of Minneapolis and I document a strong correlation between inequality and residential segregation.

The data show that cities with more segregation have a bigger education gap between the children of rich and poor families—and have less intergenerational mobility, which measures how hard it is to become rich if your parents are poor. In rich neighborhoods, it’s easier for kids to get a good education, and the return on education is higher. There are better schools, parents invest more in after-school activities, and there are stronger peers. This means that segregation amplifies inequality. At the same time, inequality increases segregation because richer people are happy to pay more to live in better neighborhoods. more> https://goo.gl/Qxi1wD

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Chilling Signs of a Market Top

By Adam Shell – Was Twitter‘s rocket launch into the stock tweet-o-sphere the latest sign that the U.S. stock market is getting frothy?

Right now, the economy and corporate earnings are growing at a modest clip of roughly 3% and 5%, respectively. But stock gains in 2013 are running at a much faster pace. Still, it’s hard to say the market is peaking as market reversals caused by sentiment extremes are more predictable at market bottoms when pessimism is high, says Jurrien Timmer, a portfolio manager at Fidelity Investments. more> http://tinyurl.com/pc6eau3

Five Capabilities That Mid-Sized Manufacturers Need To Build

By Mindy Fiorentino – Mid-size companies, with revenues between $10 million and $1 billion, are expected to outpace larger companies in growth over the next 12 months, according to recent research (pdf) by the Ohio State University Fisher College of Business and GE Capital.

Mid-sized manufacturing companies have three very big advantages over larger companies. They are:

  • Focus
  • Speed
  • Closeness to customers

A mid-sized manufacturer needs to do the following five things right:

  • Hire the right managerial skill set
  • Gain access to cash and working capital
  • Deploy technology that provides insights into business performance
  • Look bigger than they are
  • Improve operational capabilities and deploy changes rapidly

more> http://tinyurl.com/6r9rkv6

Seeing Like a Cable Company

By Timothy B. Lee – Imagine it’s March 2005 and you’re Chad Hurley, Steve Chen, or Jawed Karim. You just launched a website called YouTube and you’re trying to raise a round of venture capital. But potential investors keep pointing out that Comcast‘s bandwidth cap–and similar caps from other broadband incumbents–constrain the potential demand for YouTube’s product.

You’re likely to find it difficult to even get a meeting. Comcast’s executives have their hands full negotiating deals with big guys like Disney and Time Warner. They’re too busy to talk to a guy with a website they’ve never heard of. Even if you get a meeting, the conversation isn’t likely to go well. more> http://tinyurl.com/7y4xosm

Dropping out: Is college worth the cost?

CBS NewsPeter Thiel, the billionaire venture capitalist, is beseeching students to drop out of a university system he says is broken — churning out too many half-educated graduates seeking too few jobs. Thiel put his money where his mouth is and pays selected students $100,000 each to drop out and focus on ideas that will benefit themselves and the world at large. Waiting for graduation, he says, is an expensive waste of time.

Peter Thiel: “We have a bubble in education, like we had a bubble in housing in the last decade. Everybody believed you had to have a house. They’d pay whatever it took. Today, everybody believes that we need to go to college, and people will pay whatever it takes.” more> http://tinyurl.com/7a8m5s6