Investors Ruin Most Things

I’m an investor and I still say we ruin most things. Not out of sheer negligence, cartoon-level incompetence, or naked self-interest. We ruin them because we believe our own hype. We think spreadsheets are crystal balls, market comps are gospel, and if we can read the signals, we can tell the operators how to run the show.

That belief creates the negligence, the incompetence (outside of Excel), and the self-interest.

I’ve been guilty. Hell, I’m probably guilty this week. But I like to think I’ve gotten better. Knowledge can be taught; wisdom can only be learned — usually the hard way. My education came in the form of four years as an operator, which taught me one thing above all: I am not an operator.

It also taught me:

·        Investors aren’t as smart as they think they are.

·        Showing up every day and running a team is a different sport entirely.

·        Buffett was right — invest in good businesses, run by great operators, and then get the hell out of the way.

It took me 30 years to really believe that.

None of this means making bad deals, overpaying for companies, or skipping diligence. There is always a need for deep diligence, properly valuing a business, setting structure to align incentives, and having good shareholder rights in place. Once that is done, we should stay in our lane, help when needed, keep everyone accountable to shared goals, and trust people actually running the business.

Private Equity: The Debt & Ego Special

Off the top of my head I can name 3 people that sold their businesses to PE in the last decade, only to watch their businesses crater within 3 years. One guy has bought his business back twice and fixed it. These buyers weren’t idiots, just arrogant, over levered, spreadsheet jockeys.

A recent sampling PE notches in the belt:

·        Bankruptcy bonanza in 2024: A record 110 PE- and VC-backed firms filed for bankruptcy—especially in consumer and healthcare sectors. Blame the economy or geopolitics, but these companies suffered from high levels of floating rate debt that was put into the company to benefit investors at the expense of the business itself.

·        ConvergeOne: Taken private, went on a buying spree, then collapsed under ~$1.8 billion debt—with just $21 million in the bank.

·        Instant Brands (Instant Pot makers): Bought for ~$600 million in 2019, bankrupt by 2023. Creditors claim Cornell Capital pulled out $345 million in dividends before the ship sank.

·        Mobileum: Telecom analytics provider filed bankruptcy to shed $529 million in debt; PE owners HIG and Audax are now deadlocked in court over profit exaggeration allegations.

·        Marelli: Automotive parts supplier was acquired by KKR in 2019, started restructuring debt in 2024 and ultimately filed for BK with over $1 billion in liabilities in 2025.

The pattern from the above is actually the PE playbook:

1)      Buy a good cash flowing company with other people’s money

2)      “Fix” the operations (translation: fire a bunch of people)

3)      See cash flow spike

4)      Load up on debt, based on juiced up cash flow

5)      Pull out cash for investors

6)      Hope the smaller, poorer, more leverage company can still grow

7)      Exit via sale, or brankruptcy court

Venture Capital: Growth Addiction & Burnout

VCs are sold as the visionaries driving humanity forward. In reality, most are just running a high-stakes lottery with other people’s money, 99 duds for every moonshot. Heck, a lot of their current winners (not exited, but marked up) are just cash inferno, ponzi schemes, dressed up like the next Apple.

Yes, risk is part of innovation. But spare me the TED Talk about AI/Web3/the metaverse/cybernetic immortality. You’re not building it — you’re betting on it, hoping one win pays for the bonfire of cash.

The “great visionaries” like Jobs, Gates, Musk? I’ll give them credit. The VCs who were “early” and dine out on it forever? Not so much.

The Emperor Wears No Clothes Frauds

·        Theranos: Raised $700-$800 million of money, had a peak valuation from all the “smart” people at $9 billion. Turns out a complete fraud, nothing there but smoke and mirrors.

·        WeWork: Raised over $22 billion, by subleasing office space to tech companies, claiming they were a tech company too. Valuation peaked at $47 billion, filled BK in 2023 at a valuation of $44 million.

·        FTX: Estimated to have raise $200+ million, no peak valuation available, but it imploded overnight, turned out to be a complete fraud.

Big Money for Growth, No Real Business

·        Quibi: Raised almost $2 billion in money, pre launch. Launched as a service in April 2020, flamed out by December that same year. At least is failed fast…

·        Jawbone: Raised nearly $1 billion between VC and debt. Company was liquidated in 2017 due to operating losses and vendor disputes. Other players with good products, and true differentiation have survived.

·        Katerra: Raised north of $2 billion to vertically integrate the construction industry. Built massive factories, built a big team, couldn’t execute on anything.

The frauds were not created by the VC machine, they were never businesses, just exploiters of the system. The others were victims of the system. Could they have survived or thrived if they weren’t forced to grow and burn through cash, instead just focusing on customer needs and execution, we’ll never know…

Black Swan: Self Funders

Obviously, there are a lot of companies that have been bought by PE and taken VC money that have gone on to be extremely successful. There are also those companies that built over time, kept it all in house and continue to succeed across economic cycles, political swings and fads. These rare birds shunned investors in favor of control and usually conservatism. I admire these companies for their values and longevity.

·        In-N-Out Burger: Simple menu, family owned for 70 years, the best burger in California and the only place my entire family can eat for under $30 anymore.

·        Publix: Employee-owned, ~$60 billion in revenue (2024), almost zero debt, nearly 1,400 stores. Highly engaged staff and sustained growth.

·        Others: WinCo Foods, Robert W. Baird, Recology

Where Do I (ARP) Fit In?

It’s not an existential crisis I’m asking the LinkedIn community to help me out with, it is a call to action for me. I exist, as an investor, to help mission driven owners build or continue their own legacies.

I’m not the smartest person in the room. I’m not a ruthless PE assassin from New York or a delusional VC guru from Sand Hill Road. I’m just a financial plumber — moving capital from excess supply to deserving demand.

My job:

·        Find good businesses at fair prices.

·        Set up a structure that aligns everyone to same, shared goals.

·        Invest in the people running them.

·        Hold them accountable.

·        Shut up when I don’t know what I’m talking about.

It’s the best job in the world for me.