I was going to go out of business or get sued.
I had just started my fund of hedge funds and on our fourth month in business our main investor said, "I'm going out of business and I need my money back." Apparently he had never told HIS investors that he was putting money in a fund of funds and he had promised them their money back right away. I couldn't give him his money back for at least a year. He had given me around $20 million.
I had to do something.
I couldn't sleep at night. My lawyer said, "why don't you just shut down" and I was screaming back, "this is my LIFE! I don't want to shut down." I would wake up and think to myself, "why am I here YET AGAIN!" I would wake up and feel a clenching in my chest and I would think, "can I ever protect my family? Can I just once be happy?"
We all decided to meet in my lawyer's office. The investor had a tic that made his entire face crunch up every few seconds. Like a piece of paper you want to throw out because it's a bill you can't pay. The meeting with my lawyer ended up with the investor throwing a chair at the lawyer and then running out of the office.
He was scared. His CFO quit because he thought the investor was up to illegal activity. Let me tell you something: every hedge fund is a crime. Of the 13 hedge funds I invested in maybe 12 were engaged in some sort of criminal activity when I look back on it.
But I was afraid to go out of business. I had a family to feed. I didn't want this investor suing me, nor did I want to give him his money back since he had committed it for a year and it was now gone, invested in 13 other hedge funds that would not give me the money back for a year (that's standard practice).
So, I kid you not, I bought a book, The Tao of Star Wars. And I re-watched all the Star Wars movies. I think I bought, in total, three books about "The Force". I meditated every day.
It's hard to "surrender". We're not used to that. We go for the FRONTIER. We win wars! When I was a kid we were taught that "the US has never lost a war". Somehow in 12 years of schooling, we never learned about Vietnam. We always seemed to run out of time by the end of the school year.
"Surrender" also has religious connotations. Most people I know went to graduate school of some sort. Grad school warps your brain. There should be "un-Grad" schools that get your brain back into balance. Grad school intensifies your brain into a very specific area, whatever area it is, and that's enforced by the fact that all the people around you are being warped as well. Thank god I got thrown out of graduate school.
But the word "surrender" makes people think of things that are very un-academic, even un-intelligent. Giving up with out a fight.
But I decided to surrender to this science fiction movie. Star Wars. "I can't raise $20 million overnight," I would say. "So I'll do whatever you tell me to do and it will be ok. I give up."
Which doesn't mean I just lied around in bed all day. I did everything I could to raise money. But I wasn't going to stress on it. Every day I meditated and would conclude with, "I give up. I'm going to do all I can do. But I give it up to the Force to get me into the right situation." And I felt better after saying it. I didn't wake up in the middle of the night anymore.
If you were one of my investors you probably didn't know that I relied on a spiritual relic out of a movie made in 1977 to save my business.
But it worked. $3mm here. $2mm there. $10mm there. Bit by bit I got the $20mm. I paid this investor back. Rather than going to jail, he went on to start another successful business.
And you know what I did almost as soon as he as out? I shut my fund of funds down. Everything smelled ugly. Every fund I was in, disgusted me (with 1 or 2 rare exceptions). There were suicides that looked like murders. There was money that got misallocated to Switzerland and was never recovered. There were at least two Ponzi schemes. There were kickbacks. There were lawsuits.
Finally, I got an offer for my Fund of funds. Some bank thought it would fit in nicely with their business. They raised money for companies. So if they also ran a fund of hedge funds that invested in companies they could somehow tie it all together. Good for them.
They made a very generous offer. But they wanted me to sign a six year employment agreement and if I ever left then I had to return ALL of the money. My lawyer said, "I thought slavery was banned a century or so ago?"
My business partner said, "We can't take this offer." I was sad. I wanted to get rid of the business and I wanted the money. I was pacing up and down the lobby of the Chelsea Hotel. "We have to take it," I said. But Dan, my business partner, said, "If you sign this offer then a year from now you're going to be standing on the top of the Empire State Building debating whether or not to jump off."
He knew me pretty well.
So we shut it down. Our investors were upset at us. They still are. The irony being we managed to save them from going through the entire housing crisis with us. If we had even shut down a few months later then they would've gotten 40 cents on the dollar. Instead, they all made money.
And then I surrendered again. My money was starting to run low. I needed something to happen. But I surrendered. I said, "I'm going to start ten web businesses. I'm going to pour my heart into them. But that's all I can do. The rest is up to YOU." Whoever YOU is.
If I ever found myself stressed, I would surrender again. "YOU take care of it."
Most of the websites I started didn't work out. For instance, keauty.com. Or smartorstupid.com. I made a contest site where people could make their own versions of "hotornot". I made site after site. None of them got any traction.
But I started stockpickr.com and it took off. A million plus users a month. Thestreet.com then bought it and I think it's still around but barely. It's hard to really nourish a community while it grows. Thestreet didn't know how to nourish properly.
Now, it's a little over a year since I started this blog. I want this blog to be my life somehow. To be the thing I'm most proud of. But I don't quite know how to do it. So I write every day. I syndicate as much as possible. I read every day. I study every day. I respond to emails and coments. I hold my Thursday Q&A on Twitter. I write books based on the ideas on this blog. I have a comic coming out soon based on this blog.
And I surrender.