There's fraud in the air

For better or worse, I’ve been down the rabbit hole of reading about recent fraud in the startup and tech world today. This was sparked by two incidents:

1) One in which I narrowly avoided being deceived. This happened over a year ago and this situation seems to be coming to a close. Naturally, it brought up repressed memories.

2) I received an email today from an executive at a publicly traded company that blasted me and Secfi for being “up to speed on the latest meme stocks.” He called his company a top 10 meme stock.

(I’m purposely being vague and not disclosing much detail due to privacy and confidentiality concerns. I wish I could talk about it more.)

After not being to get the two incidents out of my head today, I did a bunch of research on a few other fraudulent incidents over the past few months. I listened to a podcast about another tech company that we were reviewing 2 years ago and luckily passed on working with. Turns out they too were misleading investors and there was some fraud discovered after they had gone public earlier this year.

What a time and world we live in. Greed is out of control. Fraud is in the air and in plain sight.

There’s a lot of amazing founders and operators out there building some great companies that will benefit society. Unfortunately there’s a whole mess of grifters as well taking advantage of the excess supply of money.

A lot of this is candidly hard to ignore. I feel like I run into these potentially sketchy situations way too often. Again, purposely being vague here, but there may be one or two big VC backed startups that I am aware of that may have some rippling effects throughout the VC backed startup world.

I’m not sure as they’re just gut feelings at this point, but things aren’t adding up and I wouldn’t be surprised to see a few more big incidents pop up in the next coming year or two.

Slowing things down

I’m writing this on my couch after a long Monday due to a long weekend. My good friends got married over the weekend and while I had a blast celebrating them, I’m absolutely exhausted both mentally and physically.

While there’s nothing wrong with a good party weekend, I feel like my body has not been reacting well with my current hectic life. The last few months have felt like constant work, travel and social activities.

Of course, timing is difficult as everyone is looking to get married and travel after a year of staying home. But I have no one to blame but myself. No one is forcing me to travel, stay up late or attend every event. It’s my body and I need to do a better job treating it well.

It’s not rocket science for what I need to do to feel better - I simply need to get more sleep/rest and drink less. I have another two long weekends in a row coming up and my goal is to slow things down a bit. My body will thank me after the weekend.

Business of Sleep part 2

About 2 years ago, I wrote about The Business of Sleep on this blog after reading a great article. Two years later, I still remain bullish on the future of sleep tech. Simply put, sleep affects performance and lots of people like me are terrible sleepers. I’d pay handsomely to get better sleep every night.

I was eating lunch on my deck of my coworking space today and I met the founder of a new VC fund that focuses on sleep tech. We didn’t talk long as we were both eating lunch and I had a meeting to go to, but he mentioned that his fund is the only firm focused solely on sleep.

It’s great to see that there are capital allocators interested in focusing on the future of sleep. I have a genuine interest in sleep tech and I’m hoping I can pick his brain a bit more in the future.

Sleep is a relatively new industry so there’s not many companies focused on it in the pubic markets right now, but I’ve been keeping my eyes peeled for angel investment opportunities in the private markets. I’ll continue to do so and hope that more entrepreneurs are focused in this space.

Meetings

Meetings seem to be everyone’s favorite topic to hate on these days. Oddly enough, tools like Zoom that were made to make communication easier have possibly led to more meetings than when we were in the office.

I often hate meetings as well. I’d like to just put my head down, crank out some work and head home, but like it or not, they’re necessary to ensure that the ship is headed in the right direction.

I built the Equity Strategy team At Secfi to be ultimately flexible given that we are often on calls with clients and stakeholders nearly the whole work day. I didn’t want to layer on many meetings on top of an already busy day of meetings for the team. On the other hand, I wanted to build a collaborative environment in which we worked together on shared common goals and objectives.

Within the team, we only have 3 standing meetings.

• Monday Standup - 30 minute standup with our Operations team where we go over deal flow, deadlines for the week and pressing items that we need to strategize on.

• Thursday Standup - 30 minute standup where everyone on the team has a chance to bring up important items for discussion or feedback. We discuss new deals, strategy and opportunities.

• Biweekly After-Action - Hour long meeting where we go over team wins and achievements, and then discuss areas we could improve on as a team. We discuss our shortcomings and how we can address going forward.

Most of the rest of our communication is done via Slack and email. This has largely worked for our growing team of now 10+ individuals but I also suspect that we’ll have to change things up more as we continue to grow.

Playing the long game

We’re in a fortunate position at Secfi that we’ve got more business than we can handle right now. It’s a good problem, but a problem nonetheless.

We’re continuing to hire and scale our teams in order to meet demands, but the business has unfortunately outpaced our hiring over the last few months. I’ve had to make some tough decisions over the last few months to address the capacity issue.

On one hand, we want to grow the company and revenue as fast as possible. We’re of course a for-profit business and we want to grow and make money. On the other hand, we also must look back to our core value of being customer-focused and must ensure that we provide the best experience possible.

At this point, we cannot work with everyone and provide the customer experience that we want for everyone. It hurts when we have to tell someone we can’t help them now, but it’s much better than providing promises that we cannot deliver on.

This may hurt us short-term, but we’re playing the long game here. Most importantly, we want to make sure we always do the right thing for our clients.

Bye for now Amsterdam

I leave for back home tomorrow morning. I had just got over my jet lag and felt great for the first time all week. One side of me wishes that I had another week or even two.

The week long trip was short but it might’ve been my favorite one to Amsterdam. Not being able to come for 1.5 years made me appreciate my time here much more and I did my best to not take it for granted.

I had an amazing dinner at an omakase sushi restaurant called Ken Sushi on Thursday and I confirmed that not all sushi in the Netherlands sucks. On Friday, I got to hang out with the team at a happy hour and went to dinner with some on the team. It felt good to break bread with my Amsterdam colleagues again.

Today, my friend Cliff and I took the 20 minute train ride to Utrecht. I realized I had been really missing out on some of the smaller cities in Holland. It’s an amazing small walking city with a big canal. It feels much more medieval and there are plenty of restaurants and bars on the canals.

While paddle boarding the canals today, we ended up stopping at a small wine shop that is under construction. The owner and his girlfriend invited us to come up and we ended up spending most the evening with them.

I miss traveling and meeting new people. I can’t wait to be back in Holland again. For now, it’s back to San Francisco for some R&R before I hit wedding season part II.

Team events

We had a team event yesterday in Amsterdam for the first time since the pandemic began. It was amazing to meet everyone in person. Some people had joined the company during the pandemic and we have been working together for over a year and had never met in person.

There’s nothing that replaces in person interaction. I wrote a bit about business travel a couple weeks ago where I predicted that business travel will come back - not necessarily for meetings/sales calls, but for more frequent all-hands or team gatherings as remote teams look to meet in person again.

At the team event, we did a lot of brainstorming as a company on how we can continue to bridge the gap between our US and Amsterdam teams. Pretty much everyone said it’s vital for the entire team to meet in person and most believe that we should be spending time in each other’s offices more often.

I’m really looking forward to spending more time in Amsterdam and having visitors to San Francisco (eventually).

The new age day traders

I’ve been at multiple weddings this year and have caught up with a lot of old friends after 2+ years. It seems like everyone is now investing by picking stocks and cryptocurrencies.

I’ve written a lot about the new day and age of investing. It seems like everyone thinks they’re a successful day trader. While all the hype right now in the finance world is about venture capital, I believe hedge funds may make a come back with future generations trading the way they do.

This is both an awesome and scary thought. I believe everyone should have access, but quite often a lot of these traders are in over their heads. A lot of my old friends at these weddings have been playing with a lot of leverage lately and I’m terrified for them.

I loved this tweet story by Trung Phan about Jim Simons and his hedge fund, Renaissance Tech. You should read it for yourself, but it tells the story about a mathematician named Jim Simons who ended up running the most successful hedge fund of all time.

Perhaps the craziest part of the thread was the fact that despite being the most successful hedge fund of all time, they only won 50.75% of their trades.

Yes, these brilliant PhDs who are likely much smarter than you and I won only a tad bit more than half their trades.

Many should take a lesson from this before trying to day trade their way to millions. This is who you’re going up against.

Back in Amsterdam to do some thinking

I’m back in Amsterdam after over a year and half. It feels great to be back in my 2nd (or 3rd) city away from San Francisco. I had a great direct flight that was nearly empty. I got an entire row to myself — one of the perks of traveling during the pandemic.

Unfortunately for me, I botched my jet lag plan by sleeping until 3pm after I landed at 9am. It’s going to be a long day tomorrow for me.

I’m really excited to be back in Amsterdam.

Most importantly, I can’t wait to see my colleagues in person after a year and half. I’ve become close with my teammates over the last few years and it’s going to be really nice to see everyone again. We’ve also hired like crazy out here and I can’t wait to meet the new team members in person. Live just hits different.

I’m also excited to spend a week out here with minimal client calls and more focus on strategic initiatives and planning for the future.

I’m looking at this week as a bit of a workcation. Being 9 hours ahead means I get to skip most of the weekly routine meetings and I’ve blocked off my calendar from client calls. I’ve been stuck in a spiral of deals lately and candidly I need a break. It’ll be good to sit down with the team and brainstorm like we used to when things weren’t so hectic all the time.

I haven’t been this excited for a week of work like this in awhile. I can’t wait to get started tomorrow… I just hope I’ll be able to get some sleep until then.

Teaching how the business works

When we were in the very early startup stages, every hire we made had to know how to do a little bit of everything. For example, we had engineers working on operational items such as KYC checks and contract processing. I even attended product and engineering meetings to help out as needed.

An amazing byproduct of being forced to do everything is that everyone generally knows how the entire business works end to end. Early employees quickly became the “Swiss army knife”.

Naturally, as the company grew, we hired more people to do specific functions and roles within the organization. It’s a by product of the company growing up.

However we’ve come to realize that we’ve grown so fast that we’re starting to specialize a lot more and lose the more well-rounded knowledge around the entire business. We’re hoping to reverse that a bit with more in-depth training around the entire business.

As we onboard new employees, they’ll take stints working in different areas of the business. Everyone will sit in on a sales call. Everyone will look to open an account and process a transaction. Our hope is that this will make employees much more well-rounded across the board and hopefully lead to higher performance due to understanding what makes the business run in each step.

Where has this year gone?

I had a crazy realization today that it’s been pretty much a year and a half since the pandemic started. We’re closer to Christmas 2021 than we are to New Years and this year has flown by. Football season is upon us and quite frankly I am excited for wedding season to be over. I could use a long vacation of doing nothing after all this summer travel.

Onto the markets.

The S&P 500 is up 17.8% and the Nasdaq is at 14.5% YTD. It sure doesn’t feel like a year of gains given everything going on. If you had asked me to guess based on feeling and sentiment, I would’ve thought we’d be in a down year. I suppose after what happened in H2 last year, everything is going to seem calm and slow. The public markets seem to be chugging along despite some fears about the delta variant and another shut down.

On the private market side, valuations are through the roof. Deal activity both in the M&A and VC space is at unprecedented levels. There doesn’t seem to be an end either. Funds are raising more money at again, unprecedented levels. Even Blackstone launched a growth equity arm recently.

It’s the best time to start a business in the history of the world due to VCs willing to pour money into companies. It’ll continue to be a great time to start a business for the foreseeable future given how much ammo these funds are accumulating right now.

I have no idea how it all ends, but hey the roaring 20s are here and let’s hope it lasts awhile.

Here we go again?

I had a great week flying to Chicago for work and then flying straight to Portland for the weekend to attend a good friend’s wedding. It was my first time traveling for work and first wedding I attended this year that was a close friend. I caught up with some old friends for the first time in 2+ years.

It felt like everything was normal again.

That feeling was short lived as today San Francisco announced that we are going back to wearing masks indoors again. I know it’s not the end of the world and I will happily wear a mask indoors to help protect others. I understand the need to protect people, but like many others, I am absolutely fed up by this.

The pandemic can and should be over by now. The fact that it isn’t is extremely frustrating. Those that are vaccinated have to pay the price because of the few that are unwilling to do so.

I know this pandemic will end at some point, but it appears that it’s two steps forward, one step back at this point.

The future of business travel

I traveled for work for the first time in a year and a half. One of our partner companies had a team all-hands in Chicago and invited us to do a presentation. It was an amazing experience and I was stoked for the opportunity to travel again.

We presented an Equity 101 session for stock options and had some great feedback from the crowd afterwards. Since the pandemic started, I’ve done many presentations via Zoom and it just never compares to doing things live in person. I had a lot of fun and I got the chance to meet with a lot of our clients as well.

At the beginning of the pandemic, there were a lot of bold predictions around the future of business travel. Many thought that business travel would be dead forever as we go to fully remote. I don’t believe that. After a year and half of not meeting in person, I’m more convinced than ever that people will still travel for work and do it quite a bit.

I do think there’ll be less travel in some ways. Perhaps flying for a weekly one hour client meeting isn’t going to continue given the effectiveness of Zoom, but now that people and companies are going fully distributed, I imagine that we’re going to start to see a lot more get togethers in cities much more often.

At Secfi, we are starting to hire remote from all over the country, but we will have much more frequent get togethers in San Francisco and New York. I’ve spoken to quite a few companies and it appears that this will become the standard in the future.

The future of college football

I’m a huge college football fan and have been ever since I stepped foot on campus at the University of Washington. Growing up in the Bay Area, there was always the Cal vs Stanford rivalry but college football was never that big. Going to a school like UW that cared so much for their sports teams was an amazing experience and I fell in love with everything college football.

There’s been major news in the college football world the last few weeks.

The Supreme Court ruled that the NCAA can no longer prevent college athletes from getting paid for their likeness. This has been an ongoing debate for years. Colleges, leagues and others have been profiting off college athletes for a long time and none of that money has gone back to the athletes themselves.

While I do believe that athletes should get paid, I unfortunately see this as the beginning of the end for college football. We are now in a world where you can buy athletes legally and the highest bidder will win. For better or worse, this will shift the sport into a world where the universities that have the most money and care the most about football will win. This typically happens in the midwest and the south.

I believe that college football will likely shift to a much more regional sport in which the best athletes will start flocking to the biggest schools in the south and midwest where they just care more about football. West coast teams will not be able to contend. This has been the trend over the last ten years and it will only get worse from here.

We have seen the first ripple effects of this as Texas and Oklahoma have been rumored to be making a bolt for the SEC, leaving behind the Big 12. I suspect that this will be the first domino in conference realignment meaning that more changes will be coming.

The tradition and pageantry of college football unfortunately is likely all but over. Teams will need to realign to focus on maximizing as much money as possible in order to contend. As a major fan of a west coast team, I’m not looking forward to the future of the sport.

Live presentations

I’m finally moved into my apartment and it feels great to be home. I got two rounds of golf in with friends this weekend and caught up with people I haven’t seen in a few months. Unfortunately, my work and wedding travel schedule is going to keep me away from the apartment for much of August and September.

Speaking of business travel, I’m doing my first presentation at an all company meeting in Chicago on Wednesday. It’s been the first presentation that I’ve done live since the start of the pandemic when DoorDash brought us in. I’m incredibly excited to start doing these presentations in person again.

There’s just an element of in-person live presentations that you cannot get from Zoom. Getting everyone’s undivided attention and controlling energy levels is just so much easier. I suspect that there’s going to be a lot more energy and excitement to talk about stock options and taxes than my previous presentations via Zoom. It’s just simply a lot more fun.

I’ll be taking two people from our team with me to do the presentation - one of which I haven’t met in person yet. I miss the camaraderie of business travel and I can’t wait to break bread with my colleagues.

Routine

I’m finally back home in San Francisco after a 3.5 month break. My remote work stint was great in many ways, namely I got to work remote in a foreign country while also seeing a lot of friends in New York. It was an experience that Sophia and I may not have again for awhile.

While I enjoyed our time, I am very excited to be home. While I wouldn’t say there was much disruption from working remote per se, there was a lot of personal things to do that took up a lot of time. I just felt busy for the last 3.5 months and it wasn’t just because of work.

Coming back home to San Francisco allows me to get back in a normal routine of work and play. After a crazy 3.5 months, I’m ready to get to the grind of work and my regular weekend golf sessions with the group. I’m already feeling great after two days back. There’s nothing like home.

Staying alive long enough

Count me as one of the people who thought the Suns were going to gentlemen sweep the Bucks after they went up 2-0. The Suns seemed to be peaking and the Bucks seemed to be plateauing in the first two games. I was expecting a fast and easy series.

Give credit to the Bucks who never gave up and have now taken a 3-2 lead in the series going back to Milwaukee. They fought to stay alive long enough and they’ve now taken a lead.

I couldn’t help but compare this to startups and new companies. Sometimes the biggest challenge in starting a new company is staying alive long enough. Often times, a company just needs to make it long enough to catch enough breaks.

I’ve seen this time and time again in my role at Secfi. Companies that I saw 2-3 years ago that seemed to be struggling have now made it out on the other side of the pandemic as new unicorns or on a path to go public soon. And yes, for many that break was COVID-19.

I wish I could speak openly about some of these stories of companies as they are fascinating business cases. Unfortunately, I’ll have to wait until they go public.

The state of VC money

I haven’t written much about technical or industry related topics lately. I’ve just been so busy with work and life events that once I get to my blog, I just want to zone out and talk about life more. I’m hoping to start writing more about fintech, investing and startups when I get back to San Francisco next week.

One trend that I did want to dive into more detail was company valuations and the changing landscape of VC/angel money. Over the last year and half, we have seen record breaking VC/angel investment in startups. Valuations and amount of capital coming into the startups have increased significantly.

I suspect there’s 3 main reasons for this:

• More demand in the market. There’s more money in the system than ever before due to government monetary policy. Investors are putting this money to work increasing the competition for investment. It’s never been easier to raise a micro-VC fund or become an angel investor.

• Companies are growing larger at much faster rates. Improving tech has made building products and generating revenue easier than ever before. Startups are reaching levels much faster.

• Accelerating trends due to COVID. If there’s one good thing coming out of the pandemic, it’s going to the innovation that stems from COVID accelerated trends. New industries have been born and trends that once were going to take years to take hold are now accelerated to now.

Each of these reasons likely warrants it’s own blog post so I’ll look to touch upon this trend more in future posts. For now, it’s back to catching up on emails from the day.

Roaring 20s

Seems like everyone is in summer mode right now. My Instagram feed is full of friends traveling. A lot of my colleagues are out of office many days this month.

I spent Saturday partying with some old friends. Many of them had been living elsewhere for the pandemic and have since started coming back to New York.

Yesterday, the Euro Championship final between England and Italy was played. Bars were crowded to the brink and there were viewing parties where people were standing shoulder to shoulder.

It’s been glorious to watch everything start going back to normal.

For myself, I have a wedding this weekend and then head back to San Francisco and my new apartment. I’m excited to be back home but also realize that I won’t be home much of July or August to appreciate the new apartment. I’ll be flying to Chicago, Portland, Amsterdam, Seattle, New York and Ann Arbor in the span of a few weeks for both work, weddings, and leisure.

I’m already a bit anxious thinking about the lack of sleep, but my excitement levels are through the roof.

The end of my west coast hours on east coast experiment

I’ve officially thrown in the towel on trying to work west coast hours on the east coast. At the beginning of my 3-4 month trip to the eastern time zone, I decided that I would try to work west coast hours in order to shift work hours to when I am most productive.

I’ve written quite a bit on the struggles of this experiment over the last few months. Unfortunately the end result was just that my work hours expanded from 9am ET to 9pm ET.

I suspect that working west coast hours on the east coast would work best for individuals at companies where everyone is working on west coast time. At Secfi, we have people on both coasts as well as Europe so this was a challenge.

In addition, the challenging nature of a Series A startup just made it really difficult to contain my work hours. Instead of taking mornings off to work out, I found myself reading emails from the minute I woke up.

Of course a lot of this is on myself for setting up boundaries, but I just couldn’t ever make it work to the point of success. I am excited to get back home to San Francisco and start working normalized hours again.