Tremendous

An angel investor's take on life and business

  • Christmas Camping in New Jersey

    As Christmas drew near and the mercury fell, most people huddled inside with a warm mug of cocoa. Not us.

    Get the blog before anyone else…subscribe!

    On Tuesday, my friend Tom and I cruised down the highway, headed to the wilderness. Already by 3pm, the sun hung low in the sky.

    I couldn’t wait to spend time around friends free of distractions. But I also wondered if we could stay warm.

    “Land really is the best art.”

    Andy Warhol

    We pulled up to the little lean-to that would be our home for the next two days. We were utterly alone, every other site deserted.

    Surrounding us was Stokes State Forest, a wonderful natural spot in northwestern New Jersey. We settled and in Tom whipped up a Brunswick stew as I warmed myself by the stove.

    This delicious dish is easy to make and great for a campsite. Just empty some cans of beans and corn into a pot along with onion and pre-cooked pulled pork, and you’ve got yourself a beautiful hot meal!

    Our little woodstove didn’t look like much, but it threw incredible heat! Soon, I was shedding layers down to a light sweater.

    The next day, our friend Paulie joined us for a lively hike. We took in streams, a frozen pond, and even an abandoned silver mine!

    Winter is a great time to hike. You have the trails to yourself, letting you really focus on nature’s beauty.

    We wrapped up the day eating Beyond Meat burgers by the fire — our one nod to healthy eating on this trip!

    If you go camping this time of year, be sure to get a cabin with a woodstove. Bring lighter fluid and a mix of kiln-dried and regular wood.

    The kiln-dried wood and lighter fluid make it easy to get the fire started. Once it’s blazing, the regular wood can burn more slowly, providing lasting heat.

    You’ll also want good sleeping pads and a 0 degree sleeping bag. This is the one I own — it’s amazing!.

    Don’t be afraid to enjoy the woods even in winter!

    Nature has a special, spare beauty this time of year. And with the right equipment, you’ll be snug as a bug in a rug.

    Would you go camping in winter? Why or why not?

    Leave a comment at the bottom and let me know.

    There will be no blog on Monday for the holiday. See you on Tuesday.

    Merry Christmas everyone! 🎅❄️☃️

    More on nature:

    A Hidden Castle…In New Jersey?

    North Jersey’s Secret Campground

    My Camping Essentials: The Basics, The Wishlist, And The Things I Never Thought I’d Need But Can’t Live Without

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why Crypto is Still Massively Overvalued

    Cryptocurrencies have had a painful year. But you ain’t seen nothin’ yet.

    The promise of many major protocols like Ethereum is that they can power useful apps. But despite their giant valuations, almost no one is actually building anything.

    Get the blog before anyone else…subscribe!

    From a new report on the Swiss crypto site Blockzeit:

    …according to the data from December 2022, Ethereum (ETH +2.21%) has 183 active developers each day, which is the most among all blockchain protocols and dapps. Cosmos (ATOM +1.41%) and Cardano (ADA +0.18%) came in second and third, respectively, with 145 and 142 active developers. A total of 18 active engineers are presently working on Bitcoin (BTC +0.44%), the most valuable cryptocurrency by market capitalization.

    Ethereum has a fully diluted market cap of $148 billion. That’s after dropping by two thirds this year.

    That puts the value of Ethereum at over $800 million per developer. This valuation is absurd.

    Consider that Microsoft employs about 100,000 of the best coders on earth. And yet, each is worth just $18 million of market cap.

    Microsoft carefully screens engineers and hires the best of the best. Almost all of them work full time.

    Can every random person who writes a single line of code on Ethereum be worth 40 times as much?

    The numbers for other cryptocurrencies are even more stark. Bitcoin has just a handful of engineers, despite a fully diluted market cap of $356 billion.

    If we follow Microsoft’s developer to market cap multiple of $18 million, Ethereum is worth just $3.3 billion. That’s 98% less than its current value.

    There are real use cases for crypto. But enthusiasm, and prices, got way ahead of reality.

    “There’s the signal and the noise. In crypto, 99% of it was noise. But there’s real value and signal there.”

    Mark Cuban

    I’ll be avoiding this market until I see some real products.

    What do you think of crypto valuations? Leave a comment at the bottom and let me know.

    The next blog will be on Friday — I’m going camping!

    More on markets:

    Tiger Global Losing $185 Million a Day

    Seeing Through SBF: How One VC Found the Truth

    How SBF’s Hedge Fund Imploded

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Ethereum founder Vitalik Buterin “593513273GS308_TechCrunch_D” by TechCrunch is licensed under CC BY 2.0.

  • Zero to One

    Founders should launch an MVP as soon as possible and iterate their way to success…right? Wrong, according to billionaire Peter Thiel.

    Get the blog before anyone else…subscribe!

    The controversial venture capitalist and co-founder of PayPal lays out a very different view in his book Zero to One. As I headed off on vacation last week, I dug into this classic.

    Thiel is fundamentally opposed to the Lean Startup framework. Iterating on a minimum viable product (MVP) would never have produced the iPhone, Thiel notes.

    Instead, we should create a fundamental innovation. Our new product should be 10x better than alternatives.

    And forget about big markets. Thiel’s approach is to completely dominate a small market, then branch out.

    “No sector will ever be so important that merely participating in it will be enough to build a great company.”

    Peter Thiel

    I find Thiel’s approach compelling. Total domination of a small market is a stronger indicator of product-market fit than a tiny slice of a big one.

    A monopoly, even in a small area, means you have pricing power. This avoids a race to the bottom with margins headed to zero.

    From that strong position, we can branch out to adjacent markets. For example, PayPal was able to move from enabling eBay payments for top sellers to sending money for any reason.

    Thiel also includes a great trick for investors: ask founders what they pay themselves.

    A reasonable salary of no more than $150,000 ($194,000 in current dollars) strongly correlates with success. This is one of the clearest patterns Thiel has observed from investing in hundreds of startups including Facebook.

    I’m going to steal this one! It may lead to some awkward silences on Zoom, but ya gotta break some eggs to make an omelette.

    I found Thiel’s take on entrepreneurship refreshing. Zero to One turns the standard startup playbook on its head, and it makes a lot of sense!

    I’m going to look more closely at companies dominating an initial small market. And if I ask you your salary, blame Peter.

    What do you think of Zero to One? Leave a comment at the bottom and let me know!

    Glad to be back!

    More on tech:

    Seedscout: Where Underestimated Founders Win

    Why I Just Invested in Rilla, the Killer App for Outside Sales

    Seeing Through SBF: How One VC Found the Truth

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: “Peter Thiel” by jdlasica is licensed under CC BY 2.0.

  • Seedscout: Where Underestimated Founders Win

    Every morning, I have dozens of new LinkedIn messages from founders. I seldom have time to reply. But what if there were a better way for founders and investors to meet?

    Get the blog before anyone else…subscribe!

    Enter my latest investment, Seedscout. Seedscout is an awesome new platform for founders to meet investors.

    The magic of Seedscout is that there’s a monthly fee. This filters off people who aren’t serious.

    What’s left? Awesome founders I want to meet!

    I find myself meeting with almost every Seedscout founder who asks. Meanwhile, my LinkedIn requests languish in digital limbo.

    I recently met an amazing founder on Seedscout whose startup is growing revenue at 70% a month. Once I wiped the drool off my chin, I reached for my checkbook!

    When a platform gives me deal flow like that, I pay attention to their next intro. Meanwhile, since I rarely find solid deals via cold messages, I often don’t have time to respond to those messages.

    For founders without a strong network in venture capital, Seedscout is a super power. You can buy your way in.

    With plans starting at $100/month, a scrappy young founder can drive Uber for a few hours and pay for a membership.

    Seedscout Founder & CEO Mat Sherman is fanatical about opening up venture capital to all great entrepreneurs. In an industry where just 2% of funding goes to women and just 0.4% to black founders, Seedscout is changing the rules of the game.

    In time, Seedscout may replace LinkedIn and AngelList. For me, it already has.

    I’m delighted to be an investor in innovative startup. Best of luck to this scrappy team as they take Sand Hill Road by storm!

    I’m on vacation for the next two weeks. I’ll see you again on Monday, December 19th!

    Until then, please enjoy some classic posts from the archives:

    The Startup Pitch Checklist

    Mark Twain: Venture Capitalist

    North Jersey’s Secret Campground

    The Swami Who Taught Me About Politics

    The Ultimate Score: Turning $300k into $2.4 Billion on Coinbase

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why I Just Invested in Rilla, the Killer App for Outside Sales

    Every day, sales reps go to meetings across America to land that big deal.

    Get the blog before anyone else…subscribe!

    Their managers hope they absorbed the lessons of training and can bring in the sale. Unfortunately, they rarely have the time to go along.

    But with cutting edge AI, sales managers can now analyze every customer meeting without ever leaving their office!

    Rilla records sales meetings and tags the most important moments. You’ll know if reps are following the script, what customer objections are, and a lot more.

    Other platforms like Gong or Chorus may work for inside sales with its clean audio. But for outside sales in the noisy, chaotic world, Rilla is king.

    You just press record on a phone or tablet and that’s it! Rilla takes care of everything else.

    No wonder sales teams are adopting Rilla at an incredible rate.

    Sales managers see a 20-30x productivity increase. Reps get the feedback to make their pitch better than ever, meaning more commissions.

    I’m delighted to be an investor in Rilla’s recent seed round. The founder, Sebastian Jimenez, is tenacious and laser-focused on his customers.

    If you’re in outside sales, book a demo with Rilla and see what it can do for you!

    More on tech:

    Seeing Through SBF: How One VC Found the Truth

    Getting to $10 Million ARR Without a Series A

    Why I Love B2B Startups

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Sebastián Jiménez, Founder & CEO of Rilla

  • New Report: AMC Fails to Deliver Hit 4.3 Million

    Fails to deliver in shares of AMC Entertainment Holdings reached extraordinary levels in November. 4.3 million shares have failed to clear by November 14th, the latest data available.

    Get the blog before anyone else…subscribe!

    This new report, out today from the SEC, shows the highest levels of fails to deliver in months. This is particularly striking given the much lower fails to deliver in the largest stocks.

    Let’s see how many fails to deliver some of the largest stocks in the market had on November 14th:

    Amazon: 253

    Apple: 0

    Google: 0

    Microsoft: 11,553

    These companies are hundreds of times larger than AMC. But somehow, a little theater chain dwarfs them all in failed stock trades.

    Fails to deliver can happen for benign reasons. But a long and persistent pattern of fails to deliver, as in AMC stock, can point to something more nefarious.

    Huge numbers of failed trades can indicate naked short selling. This is the illegal practice of selling short shares you never borrowed.

    It’s a potent way to crush a stock’s price. After all, if you don’t have to borrow a stock, you can sell short all you want!

    Increasing failed trades may be related to higher borrowing costs for AMC shares. With fees going from 20% to up to 100% a year, borrowing shares is more expensive than ever.

    It’s a lot cheaper to naked short sell. Unfortunately, it’s also against the law.

    I urge the SEC to investigate the long term pattern of chaos in AMC shares. Only a full investigation can restore confidence in markets.

    What do you think of this huge fails to deliver number? Leave a comment at the bottom and let me know!

    Today is the blog’s second birthday! Thank you guys for a great two years! 🙏

    There’s a lot more to come!

    More on markets:

    Tiger Global Losing $185 Million a Day

    Hedge Funds Lose Billions as FTX Implodes

    Is SBF Headed to Prison?

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Seeing Through SBF: How One VC Found the Truth

    The best venture firms in the world stand to lose billions in the FTX collapse. But one man saw through Sam Bankman-Fried.

    Get the blog before anyone else…subscribe!

    His name is Alexander Pack. Pack planned to invest millions in FTX, until the red flags started to mount.

    Pack, managing partner of Dragonfly Capital at the time and currently of Hack.vc, was bewitched by SBF at first. From a new report in Fortune:

    “He seemed like one of the smartest people I’ve ever met…He looks different from everybody else; he thinks different from them. So yeah, I was very taken with him. We all were. That’s why we spent so much time and were so interested in it.”

    For all SBF’s charisma, warning signs began to appear. The profits of his trading firm, Alameda Research, were dropping bit by bit.

    It turned out SBF wasn’t focused on the business he was pitching Pack. Instead, he was working on a new crypto exchange called FTX.

    [Pack] was interested in SBF’s new exchange, but Bankman-Fried balked and supposedly told Pack he couldn’t invest in the separate business. Bankman-Fried, he says, haggled, telling Pack he would have to pay more if he wanted exposure. “And that was a big red flag, obviously for our investment,” Pack said.

    Pack was right to take this as a huge red flag. A founder who’s distracted from day one isn’t a good bet.

    SBF also became increasingly secretive:

    “He wouldn’t tell us who [the investors] were because he didn’t want us to talk to them,” Pack said.

    Bankman-Fried thought if the seed investors knew he was considering taking venture funding, the seed investors might redeem their money, Pack said.

    Pack asked him how he would deal with the situation. “And Sam said, ‘Oh, I probably just won’t tell them at all. You know, we’ll keep it secret. We’ll figure out some way to keep it secret.’”

    Pack realized that the FTX founder could easily keep valuable information from him as well. “That was definitely one of the flags,” he said.

    Pack is 100% right that if SBF will deceive his existing investors, he’ll deceive Pack too.

    What’s more, existing investors should be your biggest cheerleaders! You should be begging prospective investors to talk to them and find out how great you are.

    And why would those early investors want to sell if the company was doing well?

    In all, we have a picture of a distracted, unscrupulous founder. With hundreds of deals available at any given time, why choose this one?

    Pack was considering investing just a couple of million dollars. But he appears to have done more diligence than the giant firms that put in hundreds of millions!

    Those big firms have huge teams to diligence a company backward and forward. But they were outmaneuvered by little old Pack.

    The lessons for founders and investors are clear.

    Founders must be focused and keep their financials tight. And investors should be wary of distracted, secretive, and unscrupulous entrepreneurs.

    What do you think of the FTX collapse? Leave a comment below and let me know!

    More on tech:

    Is SBF Headed to Prison?

    Tiger Global Losing $185 Million a Day

    Where Did Sequoia Go Wrong on FTX?

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: FTX CEO Sam Bankman-Fried

  • Tiger Global Losing $185 Million a Day

    One of the world’s largest hedge funds is fighting for survival. Tiger Global Management has lost $42 billion this year — $185 million for every trading day.

    Get the blog before anyone else…subscribe!

    The fund has been stung by bad bets in public tech stocks and startups. From a report in the trade journal PYMNTS:

    Tech investor Tiger Global Management has reportedly slashed the value of its private funds by nearly 25% this year, leading to one of the industry’s largest-ever declines in assets at $42 billion.

    Meanwhile, some of the companies held by Tiger Global’s venture unit that had been private but have since gone public lost value, sources told Bloomberg.

    The unit oversaw around $43 billion as of the end of September, falling from $65 billion at year-end. Assets in the firm’s public investment operation shrank from $35 billion to $15 billion the sources said. Tiger Global was not immediately available for comment.

    The real losses may be even bigger. The NASDAQ is down 30% this year, significantly worse than the markdown Tiger has taken on its startup portfolio.

    To add insult to injury, Tiger was burned in the bankruptcy of FTX. The fund’s $38 million investment is now worth zero.

    For Tiger’s public stock portfolio, the picture is especially bleak. The portfolio is down 57% this year.

    This means Tiger’s public stocks would have to more than double just to get back to even. With a weak world economy, this seems unlikely.

    I think Tiger’s shutdown is imminent.

    The firm cannot charge performance fees until it makes back its losses. That could be years from now, if ever.

    That juicy 20% performance fee is the lifeblood of hedge funds. Without it, there are no big year end bonuses.

    Let’s face it: people don’t join hedge funds to save the world. They sign up to make money, and lots of it.

    With Tiger’s future in doubt, employees are likely to jump ship.

    But if the managers create a new fund, they start with a clean slate. They can start charging performance fees again on day one.

    Nice for them. Not so nice for their investors.

    What do you think the future holds for Tiger? Leave a comment at the bottom and let me know!

    More on markets:

    Is SBF Headed to Prison?

    How SBF’s Hedge Fund Imploded

    Hedge Funds Lose Billions as FTX Implodes

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Tiger Global CEO Chase Coleman

  • Where Did Sequoia Go Wrong on FTX?

    Sequoia Capital is the greatest venture capital firm of all time. So how did it lose $214 million on FTX?

    Get the blog before anyone else…subscribe!

    Sequoia made two large investments in the crypto exchange, which went bankrupt earlier this month. Sequoia has since marked down those investments to zero.

    The firm’s top leaders apologized to investors on a call yesterday. From Bloomberg:

    Top partners at the powerful venture capital firm Sequoia Capital apologized to their investors in a conference call Tuesday for backing FTX, a pair of bankrupt cryptocurrency exchanges that had allegedly been mismanaged by Sam Bankman-Fried, according to people familiar with the meeting.

    Despite the mea culpa, Sequoia defended its process:

    Although partners on the call were conciliatory, they also defended the due diligence they conducted on the deal. They said staff reviewed financial statements and asked on multiple occasions about the relationship between FTX and Alameda Research, a trading firm that Bankman-Fried also founded and which reportedly borrowed and lost FTX customers’ money.

    Sequoia is wrong to defend this investment.

    FTX had no board. This despite being valued at over $30 billion and entrusted with hundreds of millions of investor’s money.

    Seed stage companies I invest in routinely form a board when the round closes! This is in line with the best practice recommended by attorneys.

    Benchmark General Partner Bill Gurley said it best:

    Benchmark avoided the crypto FOMO. The partners stuck to their knitting and kept backing real startups.

    Sequoia was not so lucky.

    Indeed, its diligence in other crypto deals appears questionable. From The Wall Street Journal:

    When FTX declared bankruptcy earlier this month, Sequoia also edited another post for a crypto investment called LayerZero. An earlier version said the Sequoia partnership approved the investment just 48 hours after an investment memo was completed. The newer version removed references to the fast decision-making.

    In yesterday’s call, Sequoia said it was considering making startups use Big Four accounting firms in the future. Especially for a huge company like FTX, that’s a no-brainer.

    Like most angels and VC’s, I idolize Sequoia. They’re the best of the best.

    I hope to see them get back to their roots. And if other VC’s want to chase crypto dreams, let them.

    In the words of Sequoia founder Don Valentine:

    “What is important is to have the ability and willingness to be different.”

    Don Valentine


    What do you think of Sequoia’s FTX losses? Leave a comment at the bottom and let me know!

    This is the last blog for this week. See you on Monday!

    Happy Thanksgiving everyone!

    More on tech:

    Hedge Funds Lose Billions as FTX Implodes

    Talking FTX, Twitter and Startups at Starta VC

    Getting to $10 Million ARR Without a Series A

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: FTX CEO Sam Bankman-Fried

  • Hedge Funds Lose Billions as FTX Implodes

    Hedge funds trusted crypto exchange FTX with billions of dollars. Now, they stand to lose it all.

    Get the blog before anyone else…subscribe!

    Some funds have lost most of their assets and may cease to exist. From a report out overnight in the Financial Times:

    Hedge funds have billions of dollars stuck on failed cryptocurrency exchange FTX and could face years of waiting to recover anything at all from a marketplace they once believed to be one of the industry’s most reliable bets.

    “I lost my investors’ money after they put faith in me to manage risk and I am truly sorry for that,” tweeted Travis Kling, founder of Ikigai Asset Management, which has a “large majority” of its hedge fund’s assets stuck on FTX. “I have publicly endorsed FTX many times,” he added. “I was wrong.”

    Other funds, such as Galois Capital, had half or more of their assets on FTX. It could take years to recover those assets, if they’re recoverable at all.

    Crypto exchanges typically hold customers’ money longer than stock brokers. This leaves customers more exposed to problems at the exchange.

    To add insult to injury, hackers may be looting what little money FTX has left. A series of abnormal transactions have vacuumed hundreds of millions out of the bankrupt exchange.

    Rather than place their trust in FTX, hedge funds should’ve used a service like Coinbase Custody.

    Coinbase Custody puts customer assets in segregated cold storage. Its parent company is US-based.

    As a public company, Coinbase has to make disclosures FTX would never dream of. And it even has SOC 2 security certification.

    An exchange like Coinbase is a real, grown-up company. FTX was an amphetamine-fueled commune in a questionable jurisdiction.

    But hey, why not trust them with billions in your investors’ money?

    I expect to see a lot of the funds that did business with FTX shut down. It’s hard to trade when all your money’s gone.

    Investors big and small should be careful about who they do business with. Stick to companies in reputable jurisdictions with the right controls in place.

    It turns out the brave new world of crypto is a lot like the old world: full of scammers. Buyer beware.

    After the implosion of FTX, who do you think is next? Leave a comment at the bottom and let me know!

    More on tech:

    How SBF’s Hedge Fund Imploded

    Is SBF Headed to Prison?

    FTX Blows A Massive Hole in Tiger’s Portfolio

    Note: I have no affiliation with Coinbase.

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: FTX CEO Sam Bankman-Fried