HIT Investments

10/17/2026

769,000 reasons to celebrate the Stackers! 📈

According to Fidelity, a record 769,000 people now have more than $1 million in their 401(k) accounts.

That's up 162% in just four years.

Most didn't get there by chasing the next hot stock or trying to time the market.

They saved consistently, invested patiently, and gave compounding time to work.

That's what being a Stacker is all about.

Building wealth isn't about looking rich. It's about buying back your freedom.

Congratulations to all the Stackers quietly building wealth, one paycheck at a time. 👏

Stack Knowledge. Stack Capital. Stack Time.

10/16/2026

The US government, US corporations, and US Citizens faced the same rate hikes. One now pays more in interest than at any point since 1991. The other pays the least since 1962.

The difference is a playbook we can use at home.

Government
Federal net interest climbed from 1.5% of GDP in 2021 to 3.2% in 2025, matching the 1991 peak. The debt kept growing, a large share sat in short-term bills, and as it rolled over it repriced at higher rates.

Corporate
Nonfinancial corporate net interest fell from 2.2% of GDP in 2008 to 0.7% in 2025. Companies locked in long-term fixed debt in 2020 and 2021, then held cash that earned more as rates rose. Their costs stayed put while their interest income went up.

Personal
The same math shows up in our own finances.

→ A fixed mortgage locked at a low rate works like that corporate bond issuance. Rising rates don’t touch it.
→ Variable debt, like credit card balances and HELOCs, works like the government’s short-term bills. It reprices every time rates move.
→ Cash sitting in a checking account earning close to nothing gives up the income that helped corporations offset their borrowing costs.

Three questions worth asking about our own balance sheet:

Which of my debt is fixed, and which floats?
When does it reprice?
What is my cash earning?

The amount of debt matters but so do its terms.

Which are you behaving more like right now: the government or the corporations?

Chart: Bianco Research

Learn. Build. Invest.

10/15/2026

Five questions I like to ask founders
1. What are you building?
2. Why are you building this?
3. Why now?
4. What's your unfair advantage?
5. What are the top three reasons this fails?

I've found 3 and 5 are where most fumble and become the most interesting.

After the initial call, I process the opportunity through four lenses in order: People, Product, Market, Economics.

Each claim is labeled as fact, estimate, interpretation or assumption, and graded by how independently it's verified.

As I get into the weeds I constantly ask myself if what I learn will change my decision, if it won't I move on, if it could, I keep digging. In Wiltbank and Boeker's angel study, deals with more than 20 hours of diligence returned 5.9x on average, versus 1.1x below that. It wasn't a controlled comparison, so I don't treat hours as a target but I do treat it as a reminder that our work is an edge.

Does your investment portfolio include startups with outsized return potential? How do you gain an edge?

Learn. Build. Invest. Stack Knowledge. Stack Capital.

10/15/2026

Four randomized trials covering 759 startups tested one question: does teaching founders to work like scientists change their decisions?

It did. Founders trained to form hypotheses and test them were 9.8 percentage points more likely to terminate an idea. They also earned more cumulative revenue (Camuffo et al., Strategic Management Journal, 2024).

Killing an idea sounds like failure. In practice it frees time and capital for the direction that's working.

What we look for in diligence:
• Dated hypotheses. What did you believe six months ago?
• Real tests. What did you measure, and what counted as a pass?
• Contrary findings. What did you learn that you didn't want to hear?
• Decisions. What did you stop doing because of it?

A founder who can show us a dead idea and the evidence that killed it gives us more confidence than a founder whose plan never changed.

The same discipline applies to us as investors. What's a thesis you dropped because the evidence said so?

Learn. Build. Invest.

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10/14/2026

Two startup exits with the same gain can carry very different tax bills. The difference is often one box on the K-1: QSBS eligibility.

Section 1202 lets investors exclude gain on qualified small business stock. The basics:

• C-corporation stock acquired at original issuance, directly or through a fund that bought at issuance

• Company gross assets under $50M at issuance; $75M for stock issued after July 4, 2025

• Stock issued before that date: hold more than 5 years for the full exclusion

• Stock issued after: 50% excluded at 3 years, 75% at 4, 100% at 5

• Per-issuer cap: the greater of $10M ($15M for newer stock) or 10x basis

In our own recent distribution, every lot sold was QSBS eligible. The shares were bought in 2017 and 2018 and the gains will stay in our partners pockets.

Two cautions. Through a fund, you generally need to have held your interest when the fund bought the stock and some states don't follow the federal exclusion.

Learn. Build. Invest.

Learn more about QSBS and how you can utilize it in your own financial plan through our Financial Wellness Program.

Learn. Build. Invest. Stack Knowledge. Stack Capital.

10/13/2026

Our first exposure to Lambda came in 2017, as a limited partner in 1517's fund. We added through a separate vehicle in 2023. This year, 1517 sold part of their Lambda position in a secondary sale.

Nine years from the investment to distribution.

That timeline is the part of venture that's easy to underestimate. What it taught us:

1. Illiquidity is the cost of entry. Early-stage capital should be money we won't need for a decade or more.

2. The company you back evolves. Lambda didn't start off as an AI infrastructure company. The product changed, the founders didn't.

3. Partial liquidity is a tool. Selling a slice takes risk off without walking away from the position. But if you plan for the illiquidity, you won't need to take a discount in the secondary markets like what happened here.

4. Holding period may drive taxes. Our exposure to Lambda will meet QSBS qualifications and will be tax free.

Patience isn't passive. It's choosing each year to keep a position for reasons we can still defend.

Learn. Build. Invest.
Ventures

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10/11/2026

In 2016, we invested early in Luminar. In 2021, we received our Luminar shares after the IPO. In April 2026, Luminar's pre-bankruptcy equity was cancelled.

We sold our shares and distributed the cash after the IPO, but some of our friends did not.

The lesson wasn't about Luminar. It's about the gap of what to do when a private holding becomes liquid.

Three rules we follow when a private holding becomes liquid:

1. We have a plan before the shares arrive.

2. We treat the IPO distribution as a new buy decision. If we wouldn't buy the stock in the venture fund with fresh cash, holding it is the same choice.

3. Watch concentration and its associated bias. A winner can quietly become the largest line in a portfolio and part of who we are.

We are aware and fight off our behavioral biases: anchoring to the high, and wearing the endowment effect. We are prepared and resist the urge to value what we own more than what we'd pay if we didn't.

Learn. Build. Invest. Ventures

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10/10/2026

Two of our early-stage investments went to zero. One was Space Perspective.

I share this because survivorship bias is the default setting in venture content. Wins get posted. Write-offs go quiet.

After entry, and further due diligence we learned the founders chose to walk away from a prior project. Our odds went down immediately, and we saw it play out when they refused to cut costs and grind when money got tight later on in our venture.

What changed in our process afterward:
1. We look for strong founders with grit, integrity, and historical success.
2. We talk with technical experts, advisors, and people around the team with first hand knowledge.
3. Our research doesn't stop, we continue to learn and improve throughout.
4. We separate the decisions from the outcomes. We can make good decisions and still achieve positive outcomes and vice versa.

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Ventures

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10/09/2026

At pre-seed, the founding team carries 45% of our scorecard. At seed, 35%.

The research behind that choice:

• Founders with prior success reached an IPO or filing 30.3% of the time in one historical U.S. VC sample, versus 20.9% for first-time founders (Gompers et al.).

• Founders with 3+ years in the same industry reached a top 0.1% growth outcome at 0.22%, double the 0.11% rate for founders with none (Azoulay et al.).

• Measured knowledge and skills correlated with business performance at .204, versus .090 for education and experience proxies (Unger et al.).

That last finding shapes our diligence. A résumé line is a proxy. A shipped product, a closed customer, or a reference who watched the work is evidence.

For every advantage a founder claims, we write down five things: is it verified, the research behind it, the expected benefit, how it changes the probabilities, and what we may still need to verify.

Our research supports the decision; not the one off outcome.

What's the strongest evidence of skill you've seen a founder show?

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Ventures

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10/08/2026

52% of angel exits returned less than the money invested.

7% returned more than 10x.

That's from Wiltbank and Boeker's study of 539 angel investors and 1,137 exits or closures between 1990 and 2007.

We reference these numbers as our baseline for three reasons:

1. A loss is more likely than not on any single check. We size every early-stage position as if it can go to zero.

2. Returns concentrate in a few outcomes. A portfolio needs enough positions for the rare outlier to show up.

3. The middle is wide. About 41% of exits landed between 1x and 10x. The behavioral bias hiccup here is survivorship bias. We hear about the unicorn. We rarely hear about the rest.

The study has limits: self-reported data, a 13% response rate, an older cohort. We treat it as a starting baseline, then update it with company-specific evidence.

How do you size a position when a loss is the more likely outcome? Do you walk away, embrace the risk, size it appropriately or discount it heavily?

We go deeper on the math in the Stackers Club at HIT Investments.

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