On a Clear Day

All of this started because they called me a “smart guy”. I was plodding along a comfortable career at perhaps the best branded capital markets company in the world, when I got invited into a strategy meeting. We were considering a significant acquisition and I was asked to join to share my thoughts.

True to form, I shared my thoughts with blunt honesty: at this price we would be making a mistake. I can build the same offering we’d be acquiring. If you just give me a small team and a couple years I can build us an even better version of what we would be buying.

“Ok”, the CEO said to me, “let’s call that the ‘smart guy approach’. You’re a smart guy, and you hire some smart guys, and maybe you pull it off. But maybe you don’t. If we buy this company I know what I am getting”.

They made the bid. And I think about that often. He was right, of course. He was right, if the acquisition cost - which was substantial - is taken out of the equation. And it hit me: why would I have built it for them when I could have built it for myself and sold it back to the company as soon as they “knew what they are getting”? How could I expect them to take a chance on my ability to execute if I didn’t take that chance myself?

So began my startup journey.

It hasn’t been an easy road. History is told by the winners, and everyone loves to hear a podcast or a fireside chat with a unicorn founder about how they pulled it off. Less popular are the fireside chats from the founders who failed. And most founders fail.

There is a universal assumption that everyone in startups is doing well. We’ve got great titles and are making funding announcements and it’s all glamorous to the outside. In reality, most are scraping by, deferring to the big payday at the end of the rainbow, struggling with uncertainty and unknowns. While friends assume you can pick up the tab, that you can lend them money, that you are on top of the world, startup employees are trying to see how they can scrape out another year or two until a liquidity event. It is humbling.

I’ve been there, and I’ve been humbled. It’s hard to pinpoint rock-bottom, but it’s somewhere around the launch of the reverse-cap ETF (now trading as $YPS). I have failed plenty in my life, but I could usually point to a lack of effort and motivation for the excuse. But in this case, I threw everything I had into popularizing this fund. I put myself in uncomfortable positions doing media I would never have dared to do beforehand. I made friends where necessary, and picked fights where necessary too. I held nothing back, I put every ounce of energy I could muster onto the battlefield. And it all fell completely flat.

I found myself in New York around that time and I needed to take the subway from Brooklyn to Manhattan, but I couldn’t sit still, not even for the half hour ride. I was a ball of rage and anger and embarrassment. I just started walking instead, and kept walking, and eventually got to the Brooklyn Bridge and decided to just walk the whole way.

I remember looking out from the bridge at the skyline. It was a cloudy day. A dark day. I could barely see the tops of the downtown buildings that were right in front of me. I could barely see anything.

We would eventually find the right pivot to become an ETF subadvisor, and we had some minor successes which led to a sale of the company to Toroso Investments.

I immediately took the opportunity to relaunch with a clean cap table and no company debt and a better plan to modernize parts of the securities lending business. But I ran into Covid like a buzz-saw. I failed again.

There’s this idea about startups that I can’t shake. The idea of creating a money-making machine out of thin air. The idea of providing jobs for employees and wealth for investors and utility for clients. I had found my calling. I had unfinished business.

Around this time I started talking to Jake Cohen and Patrick Kelly about what they were building at Signal Advisors. If a company is as strong as it’s founders, this was the strongest company I could find. Signal is reinventing the IMO function for annuity distribution, but what they are truly building is even more impactful. They are building advisor efficiencies, and a collaborative corporate culture, and integrated technology, and doing all of the small things that I had perhaps overlooked.

I had some expertise with investment products that I was able to help them with, and in return I got the chance to learn about financial technology and how to scale a company from 15 to 100 employees in just over a year without losing any of the defining company characteristics that fueled the growth.

But I also got to see something else. I got to see how allocators sourced and traded ETFs from their seat. And it was a revelation.

Sure, I’d been involved in ETF trading for 15 years, but things are changing quickly. Decisions are being increasingly outsourced to model providers, to TAMPs and to automated trading algorithms. It’s all being centralized. And centralized allocators need to prioritize liquidity in a way that is driving assets into only the most liquid funds. Allocators would select the best funds only after filtering for the most liquid funds. This is a problem. It’s a problem that I know I can fix.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” -Nassim Nicholas Taleb

There are inspirational entrepreneurs planning big things all around me. I’ll highlight a couple that I get to work with up close: John Armstrong and his team at Civex are going to change how investors think (or don’t yet think) about proxy voting. Justin Goldberg is launching Armada ETFs to build better REIT funds. Both firms are in that moment of anticipation before launch. Marathon runners waiting for the opening gunshot. I need to be running that marathon too.

I am placing an irresponsibly big bet on myself, and I am going to finish what I started. I have announced the launch of atNav, which is going to solve what I believe to be the biggest issue in capital markets today: the friction between buyer and seller, between buyer and fair price, between issuer and liquidity.

I’ve got a plan to build a base in the short term, and a vision to grow off of that base into a unicorn company. And this time I have learned some critical lessons I didn’t know before: the value of the right strategic partners, how to listen to the customer, and the importance of leveraging technology. And how to have fun putting it all together. If you are a strategic partner or investor that wants to take this journey with me, reach out and connect. It’s time to build.

Shortly after I made the announcement I found myself back in Brooklyn, and again heading to a meeting in Manhattan. And again I had too much going on inside my head to sit still for the subway ride. Only this time I was a ball of optimism, of ideas, of excitement.

I again walked over the Brooklyn bridge and I looked towards Manhattan and it was a perfectly clear day. I could see the whole city, and I could see beyond. I can see years and years in front of me.