Mar 30, 2016 · 26m · top-founders
From $10m+ Hedge Fund Details to $2.4m Travel Company To FinTech Startup with Derek Capo of eFin EP 209
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Nathan Latka interviews entrepreneur Derek Capo, exploring his journey from executing multi-million-dollar hedge fund trades to building a $2.4 million educational travel company in China and launching the fintech intelligence platform eFin.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 32.1% of the talking time here. How this is scored →
Nathan as informed peer 4.1 Guest teaching 3.4 Guest disagreement 1.4 Nathan pushing back 3.3
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:07 Capo adjusts unit economics under scrutiny
When challenged on revenue math, Capo firmly re-explains his pricing tiers to reconcile 300 customers with 2.4 million dollars in revenue.
Hardest push from Nathan ▶ 16:17 Latka confronts Capo on management listingLatka directly inspects eFin's website in real-time and demands to know why Capo's name is omitted from the management page.
Biggest teaching moment ▶ 4:25 Capo breaks down catalyst hedge fund mechanicsCapo provides an insider breakdown of timeline catalysts, liquidity discipline, and the mechanics behind activist shareholder intervention.
Nathan holds their own ▶ 3:35 Latka analyzes historical JetBlue trading pricesLatka references precise JetBlue price levels across 2004, 2006, 2009, and 2016 to validate and contextualize Capo's trade.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Derek Capo's Early Career and Big Hedge Fund Wins | 6 | 4 | 1 | 2 | Latka demonstrates detailed knowledge of JetBlue's historical stock prices between 2004 and 2016 to verify Capo's windfall trade. Capo explains how the fund captured value around fuel hedges and rapid airline growth. | |
| Catalysts, Timelines, and Activist Hedge Fund Strategies | 4 | 6 | 2 | 2 | Capo educates Latka on hedge fund catalyst trading, unwinding timeframes, and activist fund tactics. Latka draws the comparison to Bill Ackman, which Capo builds upon. | |
| Navigating Low Base Pay and Beating Ivy League Competition | 3 | 4 | 1 | 2 | Capo details starting at a low base salary of thirty thousand dollars compared to Ivy League peers and proving his boss wrong. Latka reinforces the hustle mindset over college pedigrees. | |
| Spotting the Housing Bubble and Shorting Market Risks | 6 | 4 | 2 | 6 | Latka catches a numerical discrepancy when Capo mentions 300 customers at five thousand dollars resulting in 2.4 million dollars in revenue. Latka immediately presses Capo on the math, prompting Capo to clarify seasonal pricing variations. | |
| Launching eFin to Reinvent Financial Market Intelligence | 5 | 3 | 2 | 6 | Capo describes eFin's valuation algorithm. Latka live-checks the website and challenges Capo on why his name does not appear under the management team section. | |
| eFin Monetization, Seed Fundraising, and Market Shifts | 4 | 4 | 1 | 3 | Capo explains eFin's pre-revenue status, convertible note seed funding target, and long-term pivot from subscriptions to a proprietary fund. Latka explores the changing tech fundraising climate. | |
| Derek Capo's Online Contact Channels and Networking | 4 | 2 | 2 | 5 | During the Famous Five, Latka pushes Capo to provide an actual published business book instead of an unpublished family story. Capo complies and mentions Richard Branson's autobiography. | |
| Summary of Derek Capo's Entrepreneurial Career Journey | 1 | 0 | 0 | 0 | Latka wraps up with a quick recap of Capo's journey and transitions into the sponsor read and outro. |
Statements from this episode (11)
Capo: JetBlue trade netted $3M to $4M in two weeks
“My biggest win, ah, was I think buying JetBlue. It was actually, ah, it was actually early in, in the time when they were still growing, and I think I made them within, I think in about a week or two, I made them like three or four million dollars.”
Capo: Peregrine Software holding produced $9M to $10M profit
“There was another one called Peregrine Software, where my boss had had the position for a long time, and I had been in charge to start monitoring the company. I went over to meet the CEO in Atlanta and I came back and I said, no, we're not selling the position…”
Derek Capo: Hedge fund trades depend on 3-to-6-month catalysts
“Well, usually whenever we make investments we always try to look for a catalyst that's going to happen within the next three to six months. It's going to get the stock to move higher, whether it's a corporate event whether it's earning surprises, whether it's …”
Derek Capo: Activist hedge fund strategies harm businesses long-term
“And the thing is that actually hurts the businesses in the longterm, like really hurts the businesses in the longterm. And I think yeah, you know, makes their investors money and stuff. But at the end of the day, it actually hurts future shareholders.”
Derek Capo: Everest Capital Main Fund Managed $300M-$400M Around 2004
“The main fund at that time, I think, was about 300 or four hundred million dollars, and we put about a one or two percent position, which basically means two percent of the entire fund was invested into buying shares of the company, and so two percent of like …”
Derek Capo: Starting base salary at Everest Capital was $30,000
“Oh, at that time, it was 30,000 dollars.”
Capo: Top-school peers at Everest Capital made $100k+ base plus 2-3x bonuses
“Everybody that was my co-worker were basically people from Stanford, Columbia, Harvard, you know, UPenn, you name it. They got paid a hundred and something thousand dollars a year, and then they were paid the bonuses, and the bonuses could have been a certain …”
Capo: Hedge fund got repeatedly stopped out shorting housing stocks before crash
“What ended up happening was the last year I was there, we were shorting housing stocks. We were shorting mortgage insurance companies. It just kept going up. They just, they kept on going up on us. We kept on getting stopped out”
Capo: China study abroad business generated $2.2M+ from 300+ customers
“So the average, yeah, the average is about seven or eight. I'm saying in the summers, we would have kids that would pay us like four or five grand, and then we would have in the fall, we would have people that would pay us between seven to 12,000 dollars on av…”