Learning To Build

[learningtolearn]

“1/ If I were starting another company today I’d probably build something around social networks. I think we’re at an inflection point with the legacy platforms, but still lots of open space for upstarts to figure out what’s next. Rationale for why and thoughts on how 👇”

[learningtolearn]

Join Me?

Taking the enthusiasm generated while brainstorming with Will and Habib I went home and started to write my ideas down. Writing about just WHAT this thing could be, why I thought it should exist, and why I was a good person to start it. I dug into what I thought about the last year of crypto and where I thought the next year would go. 

My ideas ended up being more comprehensive and complicated than I thought they were. I wrote my entire pseudo-intellectual manifesto out in longhand on a yellow legal pad like the kind I’d used in college. It ended up running several pages long. I wrote it all at once over the course of coffee and a couple of hours in my kitchen. Then I retreated to my room and typed it all out as a post on my ‘Getting A Grip’ Blog and titled it: The Year in Crypto Speculation. I looked at it and liked what I’d written. I copied the entire thing and put it into an email draft. I changed a bit at the end and transformed the idea from a general meandering think-piece to a call to action. I added two additional paragraphs mentioning my preliminary research on the creation of an LLC and suggested the formation of a partnership. I ended the message saying that I was “Not guaranteeing that we make a million dollars, but this should at least be fun.” 

I entered the email addresses of some of my closest friends who I’d either already helped with crypto related issues or investing, or who I knew were intrigued. Will and Habib were givens. Nahan, who’d planted the seed for the idea was next, followed by Aravinda who’d already mentioned the concept over the phone to a couple of days earlier. I included Patrick, Frankie, and Danny who’d I’d given advice to in the past. I added my college friend Kody as we’d chatted about crypto in the past together. And I left her name off this initial email but planned to talk with my girlfriend, Miriam, about the idea in person. 

I put the question “Join me?” in the Subject line and hit send at 1:30pm on December 29, 2017. 

[learningtolearn]

I Can Do This.

After I left Nathan to go home that evening the idea he had given me had stuck in my head. Could I create some sort of company or fund to invest other people’s money in crypto? How could I do it legally? Could I figure out a way were I didn’t feel totally on the hook for the potentiality of losing other people’s money? 

So I went where all searches for information begin in the 21st century: Google. After doing a few searches about ‘starting your own hedge fund’, or ‘investing other people’s money without a license’ I finally started to find some results that seemed useful. The answer was something called an “Investment Club.” There’s a great deal of online resources that filled me in on the idea. A group of people could pool their money in order to make investments in stocks and securities together. And people have been doing if for decades. The idea was that the organization had to be a partnership, composed of “active” members. It is when investors are passive and leave investment decision up to an individual that many more regulations begin to come into play and you have to worry about getting licensed to invest on behalf of others. I looked deeper and there were a couple of different ways that an investment club could be organized. The first was through a simple general partnership. This would require almost no formal structuring, just a partnership agreement and a bank and brokerage account. The second was with the formation of a limited liability company. The third structure would require creating a corporation. 

I took my time and read the experience many other people have had creating and operating investment clubs of different sorts and read the germane regulations on the SEC website. There wasn’t much to it. So I decided that this was something I was going to do. And what made it even better was that it was something I could create with my friends. 

Shortly thereafter I met with my friends Will and Habib to have dinner and grab some drinks. I had thought of nothing but the investment club so I was exploding with my ideas the entire time we were together. They were both in right away. I’d helped Habib get started with crypto investments a while back and he had since far outstripped my own holdings. Will didn’t have any money in but been intrigued. 

The three of us spent the night brainstorming and daydreaming about the future of our creation and eventually settled in on trying to create a name - we quickly hit a wall. The name had to be just right. I liked the name “Bridgewater” as a model. Ray Dalio named his hedge fund Bridgewater back in the 70s. I thought it was perfect because it was short, sounded strong, and was completely vague. Just from hearing the name one would have no idea what the hell Bridgewater did. We threw around dozens of possibilities. Trying to think of something that was relevant to us, to Virginia, to our friend groups, to our interests, to our goals, to crypto. We started to look into different languages, especially old ones; Ancient Greek, Latin, Japanese, Swahili, Native American languages. We didn’t settle on anything, but one word Will had found stuck with me: Lucrum. It meant something like “wealth” in Latin. And it just sounded so darn cool.  

[learningtolearn]

‘Why Don’t You Just Make Your Own?’

On the last working Friday of last last year, just a few days before Christmas, an old colleague and a friend of mine came to the Hill to visit me. I’d worked with Nathan years before on a congressional campaign in Northern Virginia, and we’ve stayed in touch with one another over the years since. Nathan’s a smart guy who lives a life pretty different than my own, but we have pretty similar core values and beliefs so we’ve always gotten along really well. 

The office closed at one to get the holiday break started early so we did what any political hacks would do; we drank. We first stopped by the Monocle, a kind of stuffy Hill haunt that’s always felt sort of off limits to me. A place more suited for members of the United States Senate than their staffs. But I knew that no members were in town, so thought it would be a fun place to stop by. We grabbed a drink (I got a beer, Nathan got the “Grand ol’ Punch”). Then we moved on to one of the standard staffer bars, Union Pub. We had our drinks and I was planning to call it a day. Nathan suggested we try one more bar, maybe over on the House side. I suggested Hawke & Dove. 

On the walk over to the other side of the hill Nathan asked me what I’ve been thinking about recently. My mind naturally went to cryptocurrency. I learned that Nathan didn’t know too much about the space we he asked me to elaborate. He’s also a smart and curious guy, so he understood the complex ideas as I explained them, and kept asking more questions! I was in heaven. For the rest of the walk over and through our drinks we continued to talk crypto. Then Nathan asked me if I actually had any. I explained that I actually had invested a little bit of money a while back, had seen it mature really nicely as time went on and had even helped some of my friends make their first forays into the space, including helping a coworker buy his first Litecoin on Coinbase earlier that day. This is what really got him fired up - and rightfully so! - the growth of cryptoassets in 2017 was nothing short of amazing. 

Nathan quickly jumped to asking me if I would invest his money for him. I immediately responded “No.” Firstly I wasn’t sure that that was even legal, and secondly I knew that I certainly didn’t want to be the reason he lost money. He set to working on me. Nathan knew of my interest in finance, especially from a macroeconomic perspective, and now he knew of my interest in crypto and suggested that I combin the two - and start my own “hedge fund.” I scoffed at the idea. I knew that I didn’t have the money or the access to capital that would allow me to run a hedge fund, and I’d never been entrusted with the investment of other people's cash like that. He asked me if I’d ever wanted to work at a hedge fund and I responded that “Yes, that’d be amazing.” So he said “Why don’t you just make your own?”