From The Degenerate Economy To The Prostate Economy ...Money Never Sleeps But It Does Slow Down

Happy Friday.

Tonight I head to Italy for my annual fall ride with friends. We are riding in the Piedmont region this year.

The following week I am back in New York City for Stocktoberfest and our annual Social Leverage LP and founder event. These two events take a ton of planning, but they really force me to think about the years ahead - with the smartest people I know gathered - which has been a key to Stocktwits and Social Leverage success.

One fireside chat I am excited about for Stocktoberfest is with Anthony Denier the CEO of Webull ( $BULL ( ▼ 0.62% ) )and the future of brokerage and investing.

While the ‘Degenerate Economy’ is what I write and think about, my seed investing long moved to the category of wealth investing. Our 2021/2022 Social Leverage emerging manager fund ( a $60 million one of one fund ) invested about 25 percent of the capital into crypto and fintech so we not only caught the bottom in crypto, we caught the acceleration of the degenerate economy. Funds of ours were early investors in Hyperliquid, Pump.fun, Kalshi, Underdog Fantasy and Novig to name a few. If I had been pitched these directly at Social Leverage, I doubt that I would have invested. I am not the customer.

So what do I see now?

As the 61 year old CEO of Stocktwits, now 18 years old and as a seed investor writing checks from our 5th fund, a few things seem obvious to me. First, the degenerates will. be degenerates. Like Snapchat was to high schoolers in the mobile/social web era, the what I call silly and wreckless degeneracy is to most 18-30 year olds today. God bless. Have at it. I do not judge.

Between the trillions coming down to these degenerate ‘yoots’ and the lessons they will learn from betting and speculating with memes, 0 dated options, leveraged ETF’s and so on, my bet is that they will all converge at some point soon in a wave of serious investing and capital allocation. I see this with our fund 3 and 4 investments like FREC.com, UseSeeds.com, SECFI.com and many others. We were a bit early to this category, but such is seed investing at reasonable prices!

As I tell my real estate friends that have long made money in the ‘storage space’ business, I am focused on the boring but endless growing TAM of the ‘storage space of money’.

At a practical level what does that mean?

As CEO of Stocktwits, my focus on products and services for the platform is the 30-80 year old and our ‘Stocktwits everywhere’ strategy powered by our Cashtag API. It is too noisy and crowded in the 18-30 year old degenerate economy for us to compete.

As seed investors, this focus may mean less ‘unicorns ’ but the art of the seed investing business can be in capital efficiency and larger stakes in businesses that reach escape velocity in the $300-400 million range. These new ‘wealth’ products and companies have high margins and AI is a tailwind for the companies building and distributing them. I am also very confident that the the ‘money storage’ business as well as wealth products and companies built for the ‘prostate economy’ will be part of a huge acquisition wave that will take place in this sector of the financial markets.

Have a great weekend.