What I’m thinking about: Reflections on comically bad business decision-making.
Everything’s disjointed during the holidays, so I’m going to share a couple of stories you’re bound to get a kick out of (and learn from).
For background, I’ve experimented with various private investments over the past ~15 years.
One of the most significant has been within crypto, having started in early 2014 (Bitcoin was under $1,000 FYI).
During a historic bull run across most assets (*sighing in fond remembrance*) throughout much of 2021, there was a ~6 week period just prior to the Fed raising rates when my liquid net worth was surging by millions of dollars, AND my interest-earning crypto accounts were generating ~$200K in annual cash flow with real-time distro, all ON TOP of our healthy land business income.
Everyone knows the Warren Buffett quote to, “Be fearful when others are greedy, and greedy when others are fearful,” though rare is the investor who obeys that, particularly in periods of extreme greed or fear…
Needless to say, I didn’t take anything off the top, and what followed was a slow-moving train wreck of net worth destruction in the neighborhood of 80+%.
(For what it’s worth, all of my other friends/investors were caught in a similar situation, or worse. The Fed gave plenty of advance notice on where rates were going, and we all hand-waved it away, or didn’t have the experience to comprehend the impact.)
To make matters worse, by mid-2022, most of my crypto holdings got tied up in one of those crypto bank collapses (e.g. FTX, Celsius, BlockFi, etc.), though mine was within a platform called Vauld, where I had direct access to the CEO.
Even with ample opportunity to remove my holdings to self-custody as the crypto market was melting down, I placed my trust in the wrong people and institutions, and Vauld entered a restructuring that is STILL ongoing 3.5 years later (you can look up the details if interested).
All this while real estate and land flipped to a nasty market by the second half of 2022…
Toughest year personally and professionally to date.
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With crypto rebounds over the past few years, most of those restructurings have resolved and made creditors whole, and while Vauld has returned significant assets back to us so far, the process has been far from smooth…
To catch you up on the current status, Vauld recovered $90M liquid from the largest counterparty that owes us funds four months ago, and per the legal docs, was due for distribution to creditors immediately thereafter (As one of the larger creditors, the portion of that $90M pile due to me personally would be a windfall, I assure you).
What ensued was a major boardroom dispute over which platform to distro the assets, and the Vauld CEO and Creditor Representative (a fellow creditor with more than $3M locked up in Vauld) went rogue against Kroll (global risk advisory firm), which is managing the collection process.
Tons of detail I’m skipping over, but suffice to say the dispute continued to escalate, the CEO was fired, and the Creditor Representative seems inclined to self-destruct with significant collateral damage for the sake of ego (the longer I’ve been in business, the more I realize how common this behavior is, and I’ve been guilty of that myself, in truth.)
Right now, awaiting resolution in the Singapore Court, best case is distro by mid-Feb, could be much longer. Meanwhile, there’s been about a ~10% net loss on the $90M pile given the recent crypto downturn, compared to when the funds were recovered.
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I was relaying over that Vauld update to a friend recently, and it serves as a reminder on how dysfunctional and messy any human venture can be, regardless of the money involved.
If we’re able to routinely put our egos aside, and stay focused on building from a ‘we-first’ mentality, alongside servicing our customers and investors to the best of our abilities, we’ll position ourselves better than ~90% of other businesses (my estimate, but sure feels about right!) for long-term profitability and impact.
And personally, as “financially rich” as I felt in that short span in late 2021, key friendships were in a rocky place, and I was lonely. If the universe presented me a trade where I could go back in time and sell all my investments at their peak, at the cost of those friendships, I wouldn’t take the deal, or spend more than a second thinking about it.
Rebuilding financial wealth is inevitable, but never at the cost of sacrificing the relationships most important to me.
Also, as Ray Dalio notes, “Pain + Reflection = Profits.”
2022 brought a TON of pain and reflection. If I had acquired a bunch of wealth quickly, I may not have been as incentivized to build a much more sustainable long-term profit engine like Serious Land Capital.
Plus, no one ever understands their true financial risk tolerance until they lose money. While I’m certainly not seeking it out, I now know that I can stare down millions of dollars of losses and not lose my nerve to steady the ship and start the rebuilding process.
Never let your pain go to waste. Your mental toughness is your greatest advantage in a society of comfort-seekers.
Let’s not ask, “What does 2026 have in store for me?”, rather…
“What do YOU have in store for 2026?”
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Looking for a funding partner who understands the pain of loss, and will do whatever it takes to avoid that? Funding deals from $50K to $1M+. Land investing experience preferred, but not required.
