Steve Brotman: Hi, I am Steve Brotman, Managing Partner and Founder of Alpha Partners. Welcome to Driving Alpha, the podcast dedicated to trailblazers shaping the future of venture capital and tech innovation.
Today’s guest is Ira Weiss, Founding Partner of Hyde Park Venture Partners and a recognized leader in early-stage Midwest investing. Ira’s story is anchored in both academic achievement and entrepreneurial vision. He earned his undergrad degree in accounting and economics from the University of Illinois and then went on to receive his MBA and PhD in accounting and economics from Chicago Booth.
Ira Weiss: Ira began his career as an accountant at Coopers & Lybrand before pivoting towards teaching and startups. Currently, Ira is a professor of entrepreneurship at the University of Chicago Booth, where he teaches courses on entrepreneurship and startups.
Steve Brotman: His passion for nurturing the next generation of founders is evident in the classroom as it is in the boardroom. As a founder and General Partner of Hyde Park Venture Partners, which he started in 2011, Ira has made over 150 venture capital and angel investments, fueling growth from early-stage, technology-driven companies across the Midwest and beyond.
Hyde Park is renowned for backing bold entrepreneurs, with Ira at the forefront of many of its most significant deals. Major portfolio companies under Ira’s leadership at Hyde Park include FourKites, ShipBob, and G2. We might even talk about Audit Site, an up-and-coming, interesting company.
And beyond investing, Ira’s influence extends to thought leadership in startup finance and strategy, contributing insights through teaching and active engagement in the startup communities.
Get ready for a wide-ranging conversation with Ira Weiss as we explore what it takes to spot entrepreneurial opportunity, drive transformative growth in America’s heartland, and build the next wave of breakout startups—right here on Driving Alpha.
Ira Weiss: Great to be on, Steve. Driving Alpha is a super interesting podcast. I know you’ve had Jason Calacanis and some others on this, and I’m really excited to share the little knowledge that I have with your audience.
Steve Brotman: Me too. It’s great to have you on. We’ve known each other for many years, and notably, my son just graduated from the University of Chicago. I just got back, and he just started his career with Jason actually at Launch.
Ira Weiss: How about that? Okay. How was his experience at the University of Chicago?
Steve Brotman: Amazing. He had a great time. Chicago’s often dinged as the school where fun goes to die. I don’t think he found that. I think he sucked the marrow from the bone of the school, got a ton out of it from professors like yourself. And frankly, now that he’s in Austin, where my wife said to me, “Well, that’s where fun goes to live,” he’s taking a lot of what he learned at Chicago and is super excited. I think Chicago really prepared him. So thanks to you and the faculty at Chicago. You guys did a wonderful job, and we couldn’t have asked for a better result.
Ira Weiss: I’m glad he enjoyed it. We’re still trying to live down the old reputation of the University of Chicago, which is where fun goes to die. But I think it is a pretty different university now for the undergrads, and I think they both get a rigorous academic experience together with a more-than-adequate social life in a major city like Chicago.
Steve Brotman: He had a blast every minute of every day. He really did have fun. And I don’t think Chicago’s for every kid. It’s not everyone’s taste. But for a student who wants to really explore their academic and intellectual horizon, that was really impressive. And he really did have a great time there. I think the reputation is an older reputation, and clearly, he truly enjoyed it and got a lot out of it.
So anyways, changing channels back to venture capital. I mean, sitting at that intersection of venture capital and startups and entrepreneurship—how did that happen? That doesn’t happen that often. A buddy of mine who started as an entrepreneur is a professor of entrepreneurship at Columbia. I was just curious how that happened and how you ended up as a VC, going from accounting to venture capital. That’s not like a typical life pattern. So just curious on those two life paths.
Ira Weiss: Yeah, well, I really live in both worlds now, which I have for quite a while. As you had mentioned earlier, I got my PhD from the University of Chicago. My first academic appointment was actually in New York at Columbia Business School, and I got out there in 1999 when the tech bubble was in its bloom. A lot of my students were going off to work at technology startups, and at that point, I wasn’t really ready to leave my academic job to start a technology company or work at one.
So a colleague of mine and I started doing some startup investing on the side, and I just fell in love with early-stage startups—the energy, learning about what the future’s going to look like, seeing how quickly things move along in the startup world. And so I did that on the side of being a professor for quite a while and eventually kind of morphed my career over into being able to do a bit of both. So that’s how.
And I think when my students ask me, “How do you become a venture capitalist?” I have, like, different suggestions for them for routes, but my route is kind of a long route. But it’s the route that I would call self-trained in some way, where you start writing checks for startups and then just do it for a long enough period of time that you know a little bit more about what you’re doing than when you started.
Steve Brotman: Out of a professor’s salary, I wouldn’t expect that you’d have a lot of spare cash lying around to throw at startups. But I guess in an angel-like way, that was kind of feasible. Self-taught is probably not the biggest route to venture capital.
Ira Weiss: No, I think it is not. I think some of the tried and true routes are like becoming an entrepreneur, starting a company, and then hopefully being successful enough at it that if you—after having that experience—want to turn over to the dark side, the investing side, you’re able to do that. So that’s a tried and true route.
The only one of the downsides to that route is that most startups are not successful. And so if you know you want to be a venture capitalist, that is a little bit of a hard route to forge, even if it’s super, super valuable.
Steve Brotman: Can you mention a couple others just ’cause I think the audience might just find that interesting?
Ira Weiss: Yeah, I think another historical route—things are changing a little bit now—but another historical route, at least for my MBA students and some undergrads, is to go work in certain roles at quickly growing startups. Those roles historically have been product roles and growth roles. Because you learn a lot about go-to-market, you learn a lot about technology, you learn a lot about customer needs, you learn a lot about understanding markets and how to orient a product towards the market.
So for some of my students who know they want an entrepreneurial career, they want to be in venture capital but can’t necessarily get one of those jobs right out of school, my suggestion is: find a quickly growing growth-stage startup that already seems like it’s quite successful but still early enough to have a good experience. Get a product role or a growth role. Now it’s changed a bit—obviously, if you get an AI role, data roles—I think those are also maybe more valuable now. But that is another kind of tried and true route to be able to eventually turn to the investor side.
Steve Brotman: Excellent. So as you first started looking at companies, what do you feel like you look for today in terms of companies, and how do you feel like that’s changed from when you started investing?
Ira Weiss: You know, there’s like a list of things. Our firm and I—we usually get involved really early. People would describe it historically as like two people in a garage. Now it’s, let’s say, three to five people, sometimes as many as 10. Usually, for us, it’s pre-product launch, although sometimes there’s some product and maybe early product-market fit.
So, there’s a list of, let’s say, ten things that investors and VCs really want. Many of them are things that wouldn’t surprise anyone: large and quickly growing markets, network effects, virality. A team that has some domain expertise.
There are other things that we have learned over time are useful—especially for really early-stage companies. One of those may be a founding team that has worked together in the past. There can be a lot of ups and downs in really early-stage companies, and the more history people have together, especially a working history, the more likely it is that they’ll just be able to go through some of those ups and downs.
There’s a lot of other things that we really like—that are the common things that VCs like—but that gives you a sense of the 10 things we want to look for.
Steve Brotman: And do you think that’s changed in the current market with technologies like AI emerging?
Ira Weiss: Well, yes. A little bit about historically when I started investing. Anyone listening to this podcast who’s not 50 years old or older like I am—someday you will get to this point as well—when you look back, you’re like, “When I started…” So, when we started, you needed about $5 million to get a product to market.
Then, for a long period of time, you needed, let’s say, $300K to $500K once cloud and AWS launched, and all the online tools—so you could get a product launched for that.
Now, you really just need one developer. If you’re a founder, a developer or two can effectively get a product into the market. In some cases, you don’t even need a developer, with some of the new tools. Cursor is more technical, but Lovable and other low-code things—so I think the world has changed a lot in the pace at which things are able to be tested by the market.
For investors and entrepreneurs, there’s good and bad. The good is you may see a lot more things where it looks like there’s traction, because there’s a pilot or early customers. But there are just so many more companies doing very similar things that you have to really understand what gives you some differentiated reason to attack a market.
Sometimes you just get lightning in a bottle—especially some of the consumer stuff. We mostly do more B2B investing, but there are consumer companies that launch and go viral, and you’re able to develop those network effects where you have a moat. And once you see that taking hold, certainly we tend to get involved before that, but you can see it early these days.
Steve Brotman: So let’s take ShipBob as an example. Share a little bit about what you saw in ShipBob at the very beginning of that company and what it’s become today.
Ira Weiss: Yeah, ShipBob does e-commerce fulfillment. For people not familiar with that term, you order something from Amazon or online, and some box shows up at your door. Whether you order from Amazon or elsewhere, there’s some company—sometimes Amazon—that packages it and gets it to your door. That’s what ShipBob does.
It has become—I think most people would say something like the Shopify of e-commerce fulfillment, where hopefully it is becoming the default provider for many.
You might think, “Well, I order almost everything through Amazon.” But there are lots and lots of brands that sell on Amazon and elsewhere—and they self-fulfill. Or they may not want to be completely dependent on Amazon.
So, that is ShipBob. It’s become very exciting. Early on, we saw a few things. The two co-founders had grown up together in India. They both came to America for college—one went to Purdue, one went to the University of Illinois. One worked at one of our portfolio companies as a software developer. The other worked at Deloitte in supply chain.
They left together to start a company. Their first idea pivoted into ShipBob. We got to know them a little bit when they started, but the first idea wasn’t going to be the billion-dollar one. Once they pivoted, there was early traction.
Between the founders being super interesting and a market that was going to grow 15–20% for 20 years or more, that made us think it could be exciting.
There were concerns—it mostly sounds like a service, not software. But the founding team and their model focused on solving everything with software—even though they also had to do physical service like boxing things up and shipping them.
That’s some of what we saw early—really large market, growing quickly. If you searched online for an e-commerce fulfillment provider, you might find 300 companies, maybe more. It could be a thousand. As a VC, on the one hand, maybe that scares you—what are all these little companies, and no one’s become really big? Or you could say, “It’s a fragmented market, most don’t have much tech. If someone comes along and builds software-first, maybe they can win.”
There are also network effects in logistics. Once you’re big enough with fulfillment centers in multiple parts of the country and enough shipping volume, your cost structure goes down and you ship faster at lower cost. Those kinds of network effects make for interesting long-term moats.
Steve Brotman: When you first mentioned it to me, I thought, “What a tough business—the fulfillment business is gritty and not software.” To your point, what was it that made you want to dig deeper? Do you remember what the hook was that made you think, “We need to have these guys in again?”
Ira Weiss: I would say the founders—how connected they were, how smart, how gritty—combined with the interesting market. At the time, there was a movement in the Bay Area against service-heavy companies—even those with some software. Some were clearly failing. But it was such an incredible, juicy market.
The other thing we liked was stickiness. I like sticky services. Entrepreneurs do too. What makes something sticky? Mission-critical, data people use, daily engagement. With ShipBob, fulfillment is inherently sticky—because the provider has your inventory.
B2B software, when mission-critical, is also sticky. This company had both. Some customers who started small have become huge—and they still fulfill with ShipBob. Customers cycle off here and there, but many have stuck for years.
Steve Brotman: Sounds like an interesting company. Looking forward to hearing where they end up.
Ira Weiss: And maybe getting back to what we look for: I like sticky products. Founders do too. What makes a product sticky? Mission-critical, used every day, important data. Think Salesforce—many people use it daily and input data. Early in my career, I underappreciated how powerful that is. But over time, I realized—data, user frequency, and network effects make it very hard to rip something out.
Steve Brotman: Are there other up-and-coming companies you’re excited about?
Ira Weiss: Yeah, you mentioned one earlier—Audit Site. I’m an accountant by training, got a PhD in accounting, and I audited for a year at Coopers & Lybrand, now part of PwC. Audit Site automates financial audits and quality-of-earnings audits. Anyone who’s been through an audit knows it can be painful and slow.
Audit Site’s software is used by the accountants themselves. It automates their side of the process. It doesn’t do everything, but it dramatically streamlines it. That’s one we’re excited about.
Steve Brotman: Once you do the auditing, do you start doing the taxes? Is that downstream?
Ira Weiss: Not this company specifically. Others are automating taxes, and that’s moving quickly. Audit is different—different regulation, different risks. Auditors worry about liability and lawsuits. So it’s a slower-moving market. But this company understands the intricacies of the job well. I predict they’ll stay squarely on the audit side.
They also work on transaction advisory—quality of earnings reports. These are common during acquisitions. You may already be audited, but buyers want to know if anything unusual is hidden under the surface. These reports can take six weeks and cost $75K to $125K. Audit Site doesn’t automate everything, but it reduces six weeks to a few days. The software itself is almost instantaneous.
Steve Brotman: AI obviously is impacting that whole process stream, right?
Ira Weiss: Well, Audit Site uses a combination of algorithms and AI. AI has done amazing things for our companies—especially speeding up new product development. But in audit, hallucination is a problem. Auditors won’t accept “It’s 99% right, but it might hallucinate 1%.” So companies like Audit Site use AI differently than consumers might.
Steve Brotman: It just struck me—auditing is like a tick-and-tie process. This is here, that’s here—do they match? AI could help there. But hallucination is an issue. Maybe the AI needs a second internal check system—like a “credit and debit” for hallucinations too.
Ira Weiss: You’re good at this. Were you an auditor? CPA?
Steve Brotman: I worked at Accenture. I’ve got a JD-MBA, so maybe too educated to be a VC—but not as much as a PhD in accounting! There aren’t many of those in venture.
Ira Weiss: We are probably a rare breed.
Steve Brotman: What about ShipBob—are they using AI now?
Ira Weiss: All of our companies are adopting AI in some form. Even ShipBob, which is heavy on physical infrastructure, uses AI to accelerate innovation. AI is the fastest platform shift I’ve ever seen—much quicker than the internet or mobile.
It helps with new product development and also raises the bar. Companies that don’t adapt quickly may get overrun. AI creates disruption, but also opportunity.
In ShipBob’s case, their physical infrastructure is a moat that’s hard to replicate—even with better AI. But for many other companies, moats are thinner. We used to judge stickiness based on usage and data. But with fewer users required in an AI world, our paradigm may need to shift.
Steve Brotman: Fewer seats, right?
Ira Weiss: Nobody sells by seat anymore, but we used to think, “How many people use this?” In the AI world, it might just be one person using the tool—but it’s still sticky. That’s great for customers, but maybe not for pricing or retention metrics. So yes, we’re shifting how we think.
Steve Brotman: Also scary to be an employee, right?
Ira Weiss: If you’re not adapting quickly, that is certainly very true.
Steve Brotman: Have you seen it seep into academia or the teaching market? Has there been any impact just yet, or is it pretty much steady-as-she-goes?
Ira Weiss: I mean, I think it has increased the pace of research in the academic market. Academics are actually pretty quick early adopters of technology to get ahead in general. We’ve certainly seen this on the statistics and software side. The thing academia struggles with now is that my students can often just take my homework assignment and put it into ChatGPT or Perplexity, or whatever it may be, and it’s like—how much work are they doing versus the system?
We had moved to a world where we were doing more and more tests online, but at least for the final exam, we do actually have faculty members that are moving back to having more in-person exams. That way, you control the environment and know what the real knowledge is.
That’s temporary. What we really want is for students to use whatever tools they have to learn the most and to do the best job. But we’re certainly struggling with it.
Steve Brotman: You know, it’s interesting—my son was talking about how some kids don’t use any AI and do all the assignments manually. Then some leverage it to the hilt and figure out all different ways to do better. One could argue the kids who leverage AI are going to do better in life, right? But at the same time, you worry they’re missing real skills—like writing or critical thinking. What do you think about all that?
Ira Weiss: I think it is a tool that you want to use aggressively to improve yourself. In a school setting, that means improving your knowledge. It’s great for students to use it a lot. But if it means that for the whole quarter—or whole semester—all their assignments were done using AI, and then they show up and don’t have that crutch, and they have no idea how to solve something? Then I don’t think that student is better off.
The students who are better off are the ones who use it to improve their knowledge. Some of my students use it to help them learn. Like, “AI, explain this to me. Here’s the kind of stuff I understand—explain it in my terms.” That kind of usage helps you accelerate knowledge.
It’s not going anywhere, and it’s only getting better, quickly.
Steve Brotman: I’m going to shift gears a little bit. You mentioned this multifaceted way of looking at things—like stickiness, market size, founder chemistry. I’ve been thinking a lot about this at Alpha. At Hyde Park, how do you come to a decision?
Is it an IC that votes? Or is it partner-driven? If the partner wants to do it, they do it? How does that work? There are lots of reasons to say no, and only a couple to say yes. How do you manage that process?
Ira Weiss: We do have a voting system. My partners and I have mentors, and we vetted a system—gleaned information from them to create our voting process.
There’s a formal investment committee. The formal IC needs to vote on it. We’ll present information at an IC meeting to the entire investment team. Everybody gets to vote. We always want the most junior person—not on the deal—to vote first. If they vote last, they might get pushed by the breeze, so to speak.
So, most junior votes first.
Steve Brotman: Really? Is it literally go-around-the-room, thumbs up or down?
Ira Weiss: No, we ask everyone verbally to rate it on a scale of 1 to 10, and then also give a yes, enthusiastic yes, or no. So everyone gives two votes—numeric and binary.
You might be super enthusiastic about the company—so you say “yes, enthusiastic”—but maybe not excited about valuation, or a specific part of the profile, so you give it a lower number.
We try to tease out as much information as we can.
Steve Brotman: Is it anonymous? Or do you all say it out loud?
Ira Weiss: It’s not anonymous. We want people to explain—though they don’t have to. Like, “Yes, but I think this market’s going to undergo changes. It’s unclear how it’ll play out. Super interesting team, but there are 15 other companies doing it.”
That color is valuable.
There are formally three people on the investment committee—myself and the two main partners. You’ve got to win two of the three votes. It doesn’t have to be unanimous. Unanimity can create tension.
But everyone in the room knows how people feel. If there’s a lot of negative feedback, you may want to go back and think about it longer.
Steve Brotman: How do you guys do it? I know your model’s different, but do you have the same kind of voting system?
Steve Brotman: It’s similar to what you suggested. We try to start at the junior level and get their opinion. But it’s not a formal yes/no. It’s more of a vibe.
We’re also different—we look at deals where Bain or General Atlantic is leading. Not that it’s the end of the conversation, but it shows the quality.
One time I heard General Atlantic ran an analysis: companies they took to IC and passed on performed about the same as the ones they said yes to. That tells you how high the bar is just to get to IC.
There are a couple times we’re looking at deals and thinking, “This is insane—but what was IVP thinking?” So, we do chat with board members, get feedback.
Our decision process is more consensus-driven. A lot of times, the question is: is there someone standing on the desk saying, “We’ve got to do this!” Someone prepared, read everything, and won’t be shaken.
But if someone’s standing on the desk saying, “This is crazy,” that’s helpful too.
It does work, but there’s no formal vote. I’ve been thinking a lot about this stuff. There’s no one right answer. It’s just interesting how different firms evolve.
One firm I talked to—no votes at all. If a partner wants to do it, they do it. They take feedback into account, but if they still want it, they do it. The non-consensus deals are often the most successful. We live in a power-law world.
Which brings us to an interesting question I’d love to ask you. Your genesis is in the Midwest. Obviously, you spent time in New York and ended up in the Midwest. How do you think about Midwestern entrepreneurship? Is it any different from the East Coast or West Coast? Is it typically a different focus, a different vibe? Anything different in how you look at it? Because I know you’ve been a big proponent of the Midwest in investing.
Ira Weiss: I mean, I think you can start a really successful company—one that becomes really successful—almost anywhere, if you have the right founding team for it. You see Shopify built in Ottawa, tech companies built in New York, and companies built all over the country.
Most of the biggest successes have been in the Bay Area, and now, to some extent, they’re starting to be in New York.
For us, the Chicagoland area has about 11 million people. There are a bunch of other really big cities throughout the Midwest. Pound for pound, we don’t really hold our own in terms of starting companies, but there’s a lot of people who have deep knowledge in the sectors they’ve grown up in.
Those are the kinds of things we tend to look for—entrepreneurs who have an advantage. Usually, it’s where the Midwest has an advantage, or the entrepreneur themselves does. Usually, that means they grew up in a certain industry and know it better than others.
Steve Brotman: Can you give some examples?
Ira Weiss: Yeah. FourKites is one of those examples. The founder, Matt Elenjickal, had been at a company called JDA Software for a bunch of years. Before that, he was at a company called i2 that was bought by JDA. He spent many years in supply chain software.
He was in Chicago. Chicago is one of the—if not the—founding cities of the trucking brokerage industry. There are a lot of trucking brokers based here for a variety of reasons. You see a lot of logistics-related software companies, logistics-related companies in general.
That’s an example where he was here—maybe for other reasons—but logistics is just one of the bread-and-butter kinds of things that groups like ours invest in, in the Midwest.
Steve Brotman: You see it when you see it. Like your ShipBob example, or even your auditing company—a lot of the Big Four are in Chicago. There’s that element.
What is it that—if you could go back and tell your younger self—what do you wish you knew then that you know now? If you had to name one or two things you wish you knew back then?
Ira Weiss: I think usually the most successful outcomes come from founders who can take companies all the way. I’ve always appreciated that, but it’s difficult to make changes to a founder-CEO over time.
VCs try to avoid it unless the founder puts their hand up. It’s very disruptive. So, thinking about that early—whether the founding team has someone who can grow through multiple stages and be the right CEO at various points—is really important.
I also underappreciated network effects early. I wasn’t looking for them, didn’t understand how valuable they were for stickiness and dominating markets. Those are two things I look for more now.
Steve Brotman: Ira, this has been an amazing chat. Thank you so much for coming on the pod. It’s amazing what you’ve done at Hyde Park, and I wish you well in continuing to impart your wisdom on future generations of Chicago students.
Ira Weiss: Thanks for having me on. We’ve known each other—what, 13, 14, 15 years? From some of your connections in Chicago and some breakfasts that you’ve hosted. Steve is one of the hardest-working people in this business. He’s always there.
Steve Brotman: Ira, you flatter me. But yeah, I remember one of the first things we did was help JB host a breakfast. It was wildly successful. I think we had 80 or 90 VCs there at one breakfast.
Today, we host breakfasts in San Francisco, New York, Austin, LA sometimes—and it’s just grown and grown. You’ve really taken the mantle in Chicago, and that’s what it takes to grow an ecosystem.
Of all ecosystems, I’d say Chicago’s is probably the tightest. You have the greatest number of GPs at the partner level attending the breakfast and going. That’s a testament to your hard work in Chicago—helping grow that ecosystem.
That’s why I enjoy coming. I try and get to Chicago twice a quarter. And part of the reason is, it’s a little bit of a contrarian bet. You noted that a lot of companies come out of New York and San Francisco.
But when you’re right—and the market is contrarian to that opinion—that’s really when you can make huge, huge types of returns. I wouldn’t count Chicago out for a heartbeat. It’s got great people, and I always enjoy visiting—especially you, Ira, and a lot of the VCs in that ecosystem.
Great to hear your stories, and I can’t wait to see the next chapter. Thanks again for coming on the pod. I’m Steve Brotman, and this is Driving Alpha.
