Latest / Success Story with Scott Clary / Milton "Todd" Ault III - Chairman of Ault and Company, Inc. | Death Threats & Public Markets

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Milton "Todd" Ault III - Chairman of Ault and Company, Inc. | Death Threats & Public Markets · Success Story with Scott Clary

• 0:00
  I would not wish upon anybody my experience in the public markets.
• 0:05
  Grand Cardone buys real estate. It's not marked to the market every day. So his risk is,
• 0:10
  look, I bought this property, look at it again in five years. My risk is people look at it again
• 0:14
  in five hours. And you could be a hero one minute and a zero the next day. The way it is today
• 0:19
  is so short term with Robin Hood and Wee Bull and the trading of things. There's so no concern
• 0:26
  for what they own. I they've threatened my family, my kids, my wife. It is a cesspool on Twitter
• 0:33
  and stock with say to people you really have to understand what you own or you're a trader.
• 0:38
  You can be both. When you are building your own business, don't take advice from anyone that
• 0:42
  hasn't made a payroll. Never. I get people all the time to say, oh, you're background, you know,
• 0:46
  you've got suit. Okay, well, let me tell you something. If you're looking for people to help you
• 0:50
  that have never had any problems, keep looking. You can get through pretty much anything as long
• 0:55
  as you don't lie to anybody. As long as you don't lie to them, people will want to help you.
• 0:58
  If I were to tell anyone today who is an entrepreneur who wanted to go public and I help a lot of
• 1:02
  people do that, go public is do not do what I've done. It's not for the faint of heart. I wouldn't
• 1:08
  suggest it. Welcome to success story. I'm your host, Scott Clary. The success story podcast is
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• 2:24
  You never take a day off. Is this true? Is this healthy? Is this something you recommend?
• 2:30
  It is true that I don't take a day off. I think there are like shades of gray a little bit where
• 2:36
  when you consider if you're on vacation and you're doing maybe a few hours of work a day off,
• 2:45
  then I guess so, but the answer is no. By the way, I'm the same. That's why I ask.
• 2:50
  Yeah, I don't think it's possible and the reason why is is because in the beginning it was how do you
• 3:00
  get anything started towards the like 10% into it? We're started, but we still need capital
• 3:08
  and then halfway into it were way bigger, but we still need capital and now there's fires that
• 3:15
  are being created by having a bunch of businesses. And now here we are. I'm 54.
• 3:23
  I really started the current venture restarted in 2017 give or take and we were zero dollars and
• 3:36
  16 were going to be 200 million or so we believe in in 24 and that number is exponential. So
• 3:45
  the problems are still there and I don't know that I can psychologically take a full day off.
• 3:53
  I would love to I think, but we're probably past a point where it wouldn't be possible for me to
• 4:02
  not like review a number or read emails or research something that's happening or think a problem
• 4:10
  through, you know, there's this warm buffet conversation where he says that sometimes he just
• 4:15
  thinks, how do you just sit around and think and reality is now is I probably spend half my time
• 4:23
  thinking because I have to come up with a way of dealing with something and then think through
• 4:31
  if I deal with it this way, what ramifications there are. I don't I don't know if you could take
• 4:37
  a day off if you're the actual person in charge of the entire enterprise. Maybe you can I I haven't
• 4:43
  felt it. That's I mean, so you went from zero 200 million and a fiscal year 2024 presumably projected
• 4:52
  out in 14 years. That was that was really and that was all allocating capital. Maybe just walk
• 5:00
  people. No, no, I think it's I think it's six years. It's six. Oh shit. So it was better. Yeah,
• 5:06
  I think she's even more impressive regardless. So six years. Yeah. So walk people through your story
• 5:09
  because you started off on Wall Street, right? Yeah. So my story is one of evolution. I I basically
• 5:18
  at a young age decided I either wanted to fly a plane or work on Wall Street. One of my friends
• 5:23
  from high school, she said to me, why don't you work on Wall Street? You could afford your own plane.
• 5:28
  I thought I made logical sense at the time because my research into my flying career was really
• 5:34
  one of which I would probably end up flying heavy heavy jets, not fighter jets. And so my friend at
• 5:41
  the time thought a flu for federal express and he said to me, the only difference between him
• 5:47
  flying and flying a commercial airline is that he's a bus driver in the sky, but the boxes don't
• 5:53
  talk back. The passengers do. And he really said to me, you will be limited to your your income.
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  And at the time, I think he was a captain. So he was making like 220,000 a year. Now this is
• 6:09
  30 some years ago, right? So back then, that was a fortune, right? You know, he was making great
• 6:15
  money. It was like 20 grand a month being a federal express captain. And I just could never
• 6:22
  see past that money. So I thought, well, that's still good money. But ultimately, I concluded that
• 6:30
  I would like Wall Street better. And there was a lot of the deal making aspect of Wall Street that
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  I really liked. And so I've spent, I spent the first sort of 20 years of my life or more working
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  like specifically for a Wall Street firm or my own hedge fund, but I was always registered broker.
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  So I was always in the mix of the first 20 years of Wall Street for sure. And so then the most
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  recent version of what you've done over the past six years, what was the impetus for that? What
• 7:02
  what got you to the point where you said, listen, I want to build my portfolio up. I want to allocate
• 7:08
  capital to the point where you've built this this thing that is pushing 200 million. Obviously,
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  you're still heavily involved in the day today. So you're not just allocating capital and
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  acting like maybe a traditional private equity firm would just walk me through sort of like your
• 7:27
  thesis for what you're building now. Well, we're for sure not a traditional private equity firm.
• 7:34
  I can tell you that. So I think what happened was there's this driving force initially that I
• 7:41
  believed that I should run a holding company similar to what Warren Buffett was doing similar to
• 7:46
  what Loz does similar to big Laurie holdings similar to a few other holding companies. And
• 7:54
  about six, seven years ago, I just really came to the conclusion that I wasn't really doing that.
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  Still still fatal flaws in my arguments. I'm not going to say that that I had discovered the
• 8:06
  solution, but I really wanted to make this hybrid permanent capital model where my holding company
• 8:12
  was publicly traded. And there was a form of permanent capital in the business.
• 8:18
  You see that now with traditional private equity firms there bringing in some permanent capital.
• 8:24
  Apollo was really big on insurance money. They're one of one of the bigger insurance operators in
• 8:29
  terms of the annuity business to settlement business for life insurance. But about seven years
• 8:36
  ago or so I decided I was not getting any younger and that I needed to make the transition to that
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  sort of permanent capital model. And it hasn't been easy. So what you see is a hybrid of
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  a holding company slash private equity slash venture firm acquiring undervalued assets and
• 8:55
  investing in ideas. But probably a miscalculation on my part about how Wall Street would reward
• 9:03
  the hyper growth of a holding company that was in multiple sectors. So I'm still a Wall Street
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  guy at heart. I'm still a capital allocator at heart. But I've had to learn to be more of an
• 9:15
  operator than I wanted to be because you can't it's really hard to get people to stay with you
• 9:22
  on your course when the equity of your holding company isn't keeping up. So that's a more of an
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  eclectic argument. But we're really more of a hybrid now where we are migrating to a pure
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  either private equity or private credit but held by a public company. So we're still a holding
• 9:43
  company but with a hybrid approach. So I'm curious why and it's probably due to just where you came
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  from in your experience. But when you include the public component to it all of a sudden you have a
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  whole other set of problems problems and opportunities that you can take advantage of or could
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  sidetrack you. So is there a particular reason and it couldn't it could just be your experience
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  that you chose not to just build a holding company that was not publicly traded. There was
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  private there was traditional private equity model that didn't have a public component or even
• 10:16
  venture model or any model really. Well, I would equate something that I would warn everyone
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  about in retrospect. This is the value of hindsight. If you ask me today I would not build a
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  holding company. I would not put any ventures or non proven models in a holding company structure
• 10:38
  as a public company. I would not do things today the same way I already did them. Right. And that is
• 10:44
  when you have something that is not a going concern meaning it's not producing its own cash flow
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  and it needs a lot of growth capital. It's I equate running a holding company today where you're
• 10:55
  a growth company and you need money as you're laying the pavement while you're driving the car.
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  And it is very difficult to navigate the potholes the problems with the pavement uneven. It's
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  very it's very difficult. I will tell you that I probably made it and aily more difficult than
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  it needed to be, but I knew how to access capital to public markets. So I went with what I knew.
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  And because I knew how to access public market capital we've been able to raise hundreds and
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  hundreds of millions of dollars. But that hasn't translated into the value of the holding company
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  model versus the capital race. The businesses are doing great relative to where we want them to be.
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  They're not all perfect. In fact, when you look at the way we built the holding company, it's really
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  sort of like the equivalent of an 18 to 20 businesses, which looks more like venture where you have
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  four or five that are doing well, one that's an outliner outlier and a bunch that are sort of mediocre,
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  right? And unfortunately, since you consolidate the public company, all of those combined up to
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  your consolidated financials. So I would not I would not wish upon anybody my experience in the
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  public markets. If I were to tell anyone today who is an entrepreneur who wanted to go public and
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  I help a lot of people do that, go public is a pure play. Go public is a here's what I'm doing.
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  I'm doing a SaaS model. I'm building software. I'm building a restaurant chain. I'm building a
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  group of mechanic auto repair dealerships. Do not do what I've done, which is this
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  buy everything build a billion dollar conglomerate, which is what I think I'm building.
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  And go through the pressure of what you I've experienced. It's not it's not for the
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  faith of heart. I wouldn't suggest it. No, I have no doubt because venture is already
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  super high risk. I mean, even for a sort of personal experience, I've never played at the level
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  that you're playing at and maybe one day I will and maybe I'll just learn from them.
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  I suspect I suspect you will. I suspect you will play at that label with the social club and
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  what you have going on. I suspect you'll be at a bigger level than I am. But anyways,
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  I appreciate it. Maybe we'll do some stuff together, but regard doesn't matter. We're not
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  this is not a competition, but the point is even venture, private venture that I've put money
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  into. I've lost significant amount. So then I moved to just as an as a as a as an angel as an
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  individual investor with no affiliation with a fund or a firm that I moved into. We talked
• 13:27
  about this last time on your show. I moved into private equity, which is really just looking at
• 13:33
  historical PNLs and just seeing that the business has some run rate and some proof that it can
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  actually sustain itself in the market and then there could be some profit there too if you're
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  lucky and fortunate. So this is just I already did risk. So not only are you adding the market making
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  and the regulatory and the market sentiment of a public company now you're combining the risk of
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  is the company even going to work out if you have part of the portfolio venture early stage.
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  Do you have pre-rev? We have some pre-rev companies that we don't do them anymore,
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  but as of right now we don't do any more pre-rev companies, but we've done a lot of pre-rev.
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  What I would say is that when you are a public company, you're on a 90-day shot clock.
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  Michael Dell talks about this 90-day shot clock every quarter. But more importantly,
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  when one person invests for one reason, my discovery is, and I never want to bash investors,
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  but my discovery is investors follow exactly what they think they're following, meaning
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  I had we, you know, we're a Bitcoin miner. We've invested in Bitcoin. We mine a lot of
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  Bitcoin now. That's one of the holding companies just for clarity, right? That's right. That's one
• 14:46
  of the portfolios. Yeah, it's inside the business called Scent to them. And when we were rallying with
• 14:51
  Bitcoin, Bitcoin was parabolic from say 5,000 to 70,000. People would trade us, and then later on,
• 15:00
  when we announced we bought hotels, they're like, wait, I bought a Bitcoin miner. And they
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  clearly didn't read our financials. They didn't read our intentions in 2017. They did not read that
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  we were going to become a holding company. So then I alienated a whole group of investors who
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  were like mad, like you're doing all this other stuff, Todd, why are you doing this? And I said,
• 15:22
  well, you know, did you read what our plans were? And the answer is no. And when we went from
• 15:28
  just I'm just going to get a pick of price. This is, I'm going to give a big disclaimer here
• 15:32
  for financial purposes. This is just a guess as to what things look like. I don't know this to be
• 15:37
  factual. But let's assume the stock was like 30 cents and it went to $10. And I think that actually
• 15:43
  happened in some of these pre split issues. People bought into the momentum of what we were doing
• 15:49
  and not the whole picture. So we went from to 50,000 shareholders back to 10,000 shareholders.
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  And on the way down when Bitcoin went back down to like 15,000 from 69,000 people sold us off so
• 16:02
  much that we had to reverse the stock. And it wouldn't, didn't matter what news we had. In fact,
• 16:07
  just a few days ago, we reported a first quarter of profit and sales up, I believe 55% the stock went
• 16:14
  down. The stock went down. So I don't know what to say to anybody. I'm the most perplex I've
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  been at ever. And we have an AI data center in Michigan that has 30 megawatts live that's going to
• 16:26
  go. We believe the 300 people are discounting it to zero. So I would say the ramifications of being
• 16:35
  public, you said it, are it's the investor perception. It's actually what's happening with the
• 16:42
  market. It's actually what's happening with the company employees that work there. See the price
• 16:48
  down. And so there's so much different about being public. And I want to make a point here. And
• 16:55
  that is, I'm going to use a guy named Grant Cardone. Grant Cardone buys real estate. It's not marked
• 17:01
  to the market every day. There's not a daily quote. So his risk is, look, I bought this property,
• 17:08
  look at it again in five years. My risk is people look at it again in five hours. And you could be
• 17:14
  a hero one minute and a zero the next day. Now, I'm not looking for sympathy, but that's not something
• 17:19
  that I thought would have existed the way it is today. It's so short term with Robin Hood and
• 17:26
  Weeble and the trading of things. There's so no concern for what they own. And there's also a form to,
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  they, they've threatened my family, my kids, my wife, they've taken pictures of my family. They
• 17:41
  put my sons picture up with, they put fake pictures up of people. It's just a, it is a cesspool
• 17:48
  on Twitter and stock, which is a cesspool of made up stuff. People call me all kinds of names
• 17:55
  that aren't even fundamentally true. They just make stuff up. Now, I'm not saying that to get
• 18:00
  sympathy, I understand the marketplace now more than I did before. And I would do it differently,
• 18:07
  but I'm grateful for where I am and the people that are stuck with me. We still believe in the
• 18:11
  company. We have 700 plus employees. We're very happy with where we are. We're just, the public
• 18:17
  markets can be really a dangerous place. And I would encourage everyone to think more about
• 18:22
  a singular play than I would be this sort of global macro play that I was working on.
• 18:29
  So so many different places to take is it just wild. It's wild. You have to go through this too
• 18:35
  and the attacks and whatnot. And people see the difference is when things are private,
• 18:40
  you're dealing with investors that understand the game. And like you said with Grand Cardone,
• 18:44
  they're not looking at percentages every five hours, right? Or points every five hours.
• 18:50
  So with you, you're looking at people that maybe put in a little bit too much money,
• 18:53
  or they're not educated investors, even if they by definition are and they don't understand how
• 19:00
  the market moves or how this piece of news is on Twitter maybe isn't even true. So you have all
• 19:05
  these different factors that are impacting. So sort of two questions because there's a question
• 19:10
  for the person who wants to invest. And then the question for the founder or even yourself that
• 19:15
  wants to play in public markets. So for the person that wants to invest, what noise should they
• 19:21
  listen to? I think they should really read the management's descriptions and the 10Ks and 10Qs
• 19:27
  and really read what's happening and look at what businesses they're in and decide whether they
• 19:32
  want to be part of that and understand that the riskiest part of the capital stack is being
• 19:37
  a common shareholder. So if you look at our public company today and I'm not soliciting anyone by
• 19:42
  our stock, this would be clear. But if you look at our preferred stock, which pays a 13% dividend
• 19:48
  on the $25 face value, it's never missed a payment and it's trading at a premium
• 19:55
  to the price we issued it out. We issued it at 2450. It's trading, I believe today at 27.
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  So the 13% coupons on 25, this thing traded down to like 10. So you got the preferred trading
• 20:08
  at a premium value, money good. And then you have the common trading, what I consider to be a
• 20:15
  giveaway, but way below book value. And I would just say to people, you really have to understand
• 20:22
  what you own or you're a trader. You can be both. I don't think you can trade. And I mean,
• 20:30
  you possibly could understand what you own and decide to trade it. But my instincts are
• 20:36
  is like what this meme thing that happened after COVID, the we got to kind of got a caught up in
• 20:43
  that. We're not ignorant to the fact that we did get caught up in that. But what we are not
• 20:47
  ignorant to is that we told people what we're going to do. We did exactly what we said we were
• 20:52
  going to do. And then people are mad about it, which we said we're going to raise a lot of capital.
• 20:56
  But listen, I'm not complaining. It sounds like I'm complaining. I love, I love the company.
• 21:01
  I love the people that have been supportive. And it is the journey we decided to take. And would
• 21:06
  I do it differently? Probably would. Yeah, I would. Would you would is there an option for you?
• 21:12
  I get I think this whole this whole podcast has to be filled with disclaimers that these are not
• 21:17
  actions that you're taking. But I'm just curious from a strategic perspective, like advice to people
• 21:22
  that were on the come up that want to do something similar or adjacent to what you're doing.
• 21:26
  Is there opportunity to divest companies and focus on just one particular category or
• 21:33
  industry? Is that a smarter play? Is that like a less stressful play? Think about it as a hyper
• 21:38
  niche down investment thesis. So we have divested our our EV charging business and was our
• 21:47
  defense. We have a small defense EV charging business called turn on green. We divested that
• 21:52
  and I think we divinated out 140 million shares and 140 million warrants to shareholders over
• 21:59
  the last year. And we have told people we probably will divest more stuff. There's more companies
• 22:05
  that will be divested. But we've mainly got this down to around, you know, we have a data center
• 22:12
  business and Bitcoin mining operation. We have a lender, we have a hotel portfolio, we have a
• 22:18
  crane business, we have a global defense business. Those five businesses are now
• 22:25
  doing really well for us. And so we're kind of staying the course right now.
• 22:31
  We want to give our staff time to catch up with all the changes and
• 22:35
  financing we've done. Get a bunch of reports under our belt where, you know, we just were
• 22:40
  profitable for the first quarter. We want to take our time with any changes. We're not raising
• 22:44
  money on an ATM anymore for 20, for two, it's 2024. We really minimize that. My parent company,
• 22:52
  Alton Company, which owns Alton Alliance, has invested $44 million. We went out and raised
• 22:57
  money to invest in the company. We're now the largest shareholder. So we're really taking our time
• 23:04
  because we're going to focus on the things that are EBITDA casual positive or EBITDA positive.
• 23:08
  And the ones that are not that are those either pre-rev or the revs are generating,
• 23:15
  they're moving forward, but they're not properly. Those ones will ultimately be probably become
• 23:20
  pure plays. I think that we've conveyed to the market that we want things to be able to be
• 23:25
  sort of on their own. But there's a large, there's a lot of companies in there. And so it's
• 23:29
  hard to explain that as a public company. You really don't say anything until you've pretty much
• 23:34
  done it, right? So we've talked about our plans, but yeah, careful. Yeah, we've talked about
• 23:39
  our plans, but we do focus, we do plan on focusing in a couple key areas. We obviously are big
• 23:45
  believers and lucky to be in the data center business. We have two facilities in Montana and
• 23:51
  one huge one in Michigan. The one in Michigan is the Holy Grail of our portfolio. It is
• 23:58
  34 and a half acres, 14 acres under roof expandable to a million and a half square feet or more,
• 24:04
  currently 617,000 square feet, currently 30 megawatts live, mining Bitcoin, converting to AI,
• 24:10
  we actually have built out 100,000 square feet of the AI data center. So that business is ramping,
• 24:17
  our crane businesses, EBITDA positive, our lender, our lender just reported a profit for the
• 24:22
  first quarter. So we're, I'm getting a lot more comfortable. If I were to say anything,
• 24:26
  you're getting some breathing. If I were to say anything, seven years, six and a half years into
• 24:32
  it, things are a lot better and a lot easier to manage than they were before. But this goes back
• 24:38
  to there's not an overnight success. You know, we thought this was going to be more overnight.
• 24:43
  We laid out a 10 year plan in 2017. I didn't think it was going to take 10 years.
• 24:49
  And I look okay on camera right now, but I saw some pictures over the weekend and my hair's gray
• 24:56
  really kind of white actually. So this has been a, and once again, not looking for sympathy,
• 25:03
  I'm a lucky guy, you know, married to the right woman, four great kids, a bunch of great
• 25:08
  employees and partners, but it's not been easy for everyone. It's really you have to be prepared
• 25:14
  whether you're in a holding company with multiple holdings or where you're in a single peer play.
• 25:20
  It's, it's trench warfare. Is there a, is there a, is there a difference? Because now you've done
• 25:28
  these acquisitions and you've been doing them for a while now. Is there a difference in what you
• 25:31
  look for in a company that you would acquire in a publicly traded holding company versus something
• 25:38
  you would acquire in a, in a, just in a private acquisition? I don't think there's any difference
• 25:44
  for me other than whether the management, the people that run it are honest with you. It's, it's,
• 25:53
  it's really tricky for, if you don't ask the right questions, I have this lender that's letting
• 25:58
  me a lot of money. I think they probably let me, I don't know, 50 million, maybe more.
• 26:03
  And they, I used to get really irritated with them where they would, they would ask my team,
• 26:09
  they would ask me the questions. Then they would interview my team and ask them the questions.
• 26:14
  Then they would come back and ask me new questions. Then they would interview my team again and ask
• 26:18
  the same questions. And eventually after they asked the same question like six times, I would say,
• 26:24
  you know, you've asked that question a bunch of times, yeah, we're going to keep asking it and to see
• 26:27
  if we get the same answer. And if a person knows that they know the model and there's something hidden,
• 26:36
  they need to tell you what the risk of the deal is. And an honest person selling you the company
• 26:41
  would say, yeah, here's the EBITDA. Here's the company. Here's our history. But what is it I'm not
• 26:48
  telling you? What is the real problem that could pop up in the business? What is the contingent
• 26:54
  liability? And I think it's really hard to find people that want to be honest and not blame others
• 27:00
  for your problems, right? And I say this in the sense that I'm more concerned about the people
• 27:06
  that are running it than I necessarily because the business is going to be good or it's going to be
• 27:12
  bad. And you don't know for sure. But the people running it are either good or bad and that you need
• 27:18
  to know, you need to know whether they're honest and whether when you acquire them, they're going to
• 27:23
  stay and be honest with you about what's happening. Or they're going to say, hey, that was on page 47.
• 27:28
  I told you that, you know, there was a contingent liability. Well, I didn't see it, right? You didn't
• 27:33
  tell me that you were a week away from losing this contract. So I would say people are the number one
• 27:38
  issue. And I used to think that was corny, but people are pretty much all that matters. Now, if you
• 27:43
  got a great product, that's great. But you need great people. You just that really is important. I,
• 27:49
  there's one lesson I've learned is that people who are not honest will blame you for their
• 27:54
  problems, even though they already had them. And I loved that. It's really critical that you
• 28:01
  understand that I, I get upset about things. But at the end of the day, the reason probably we
• 28:06
  started this conversation off with that I work every day. At the end of the day, I believe everything
• 28:11
  is my responsibility, even if someone else messes it up. So, uh, that's why probably I have
• 28:18
  lenders and investors that despite things going wrong, know that I'll tell them the truth and
• 28:24
  I'll get them paid back. You know, I try to do things that allow me to shoot my way out of a problem.
• 28:29
  And one thing I don't do is turn my back on someone that's honest with me. If there's an honest
• 28:34
  mistake, they're going to stay. They're going to work with me. And I'm going to work with them. But
• 28:38
  you know the deception part. I'm sure you've invested a lot of companies and you know that person
• 28:43
  that blames you for the problem versus takes responsibility for the problem. And that's a hard
• 28:48
  thing to do. When you, when you acquire a company, you need to know what management comes with it.
• 28:55
  The issue is that usually that behavior shows itself far too late. It shows it, it shows it later on,
• 29:02
  right? It doesn't usually show it when everyone's feeling good and everyone realizes they're about
• 29:06
  to get a check. Everyone, everyone, everyone wants to play ball when you're, when you're sitting down
• 29:11
  at the table the first time. But you realize six months later. It's not, by the way, we're talking
• 29:15
  about acquisition or investing. But this could be a business partner. This could be even if you
• 29:22
  get a job and you have a city manager and all of a sudden, you realize they're gaslating me. Like,
• 29:28
  this is, this is just the people you work with make a huge difference. It's no different when
• 29:33
  you acquire a company. But I've done it with business partners. I have, I have people that have
• 29:38
  like taken a role with me and maybe they left somewhere else and I tell them how they'll get paid
• 29:45
  and they get paid exactly that way. And then they're mad later and complained to the whole company
• 29:50
  that they aren't getting what they used to get at their old job. Well, I didn't make you come
• 29:56
  more care. And, and, and also when you're then complaining to others at the company,
• 30:02
  you really end up being, those people end up getting fed or doubted anyway. So eventually,
• 30:06
  they ultimately don't work here because they, either they change their attitude or their
• 30:12
  attitude changes where they work, right? Because they're not happy. I just want people to be happy.
• 30:18
  Like I, quoting Gary Vee, don't you want to be happy? Because the reality is is that that is
• 30:23
  the only way that things work out. And people, people will make meaning of things. They don't like
• 30:30
  change. That's another thing too. I tell people all the time to read that book, who moved my
• 30:33
  cheese because they realized like the people that, you know, you've seen this with Steve Jobs,
• 30:37
  right? Where he's in a garage and they're all happy and they're all drinking beer together and
• 30:41
  making a company. But ultimately, you know, my responsibility now, I spend almost all my time
• 30:48
  thinking and structuring the finances of the company. And it's not the same. I don't have the
• 30:52
  luxury of hanging out all night and going to have a beer with people when I got four institutions
• 30:58
  waiting for a proposal from me. And I got covenants. I got a meat and it just doesn't. So
• 31:03
  the evolution of that is is the human condition. And that's where
• 31:09
  it's so much easier if a person's unhappy for them to tell you they're unhappy, but it's so much
• 31:15
  harder for a person to tell you they're unhappy. It's a strangest thing. People tell me all the time
• 31:20
  I'm intimidating. They're afraid to tell me something. Yet I find that I'm the easiest to talk to
• 31:26
  and you can say whatever you want to me. But don't blame me for your fucking problems. Like don't blame
• 31:31
  me for your problems if you accepted the deal. Like you can't blame me for that. And I didn't do
• 31:37
  anything to you. And that's the biggest problem with managing people is they believe that something's
• 31:44
  done to them. And the best people accept what they've allowed to have happen. And they come to
• 31:50
  someone like me who'd say, well, if I did that to you and that was my fault, I apologize. Let's
• 31:56
  fix that, right? So managing people is the hardest thing in the whole world. If I say that to
• 32:01
  anybody, there's anyone who says it's not as foolish. It's so hard to manage people because
• 32:07
  everyone has their own problems, their personal problems, their family problems, and then their
• 32:11
  business life. And by the way, it sounds like to me, if you watch this podcast, you're not going to
• 32:17
  want to start a business. And you shouldn't. You shouldn't. If you're if you're not prepared for what's
• 32:23
  going to happen to you, you shouldn't start a business. Because I can tell you people today that
• 32:28
  your friend will sue you later if you make a lot of money. I've been sued so many times. It's
• 32:33
  ungodly. I got sued by a guy. I think it's still going on five years later. I got sued guy a guy
• 32:40
  who had a $54,000 bill from me and sued me for $6.8 million because I terminated him. He was a
• 32:46
  contractor and claimed that I was going to give him a percentage of the company. None of it's true.
• 32:51
  And and yet here I am, I did not want to be a stipend for lawyers. So I basically defend myself
• 32:56
  and I do not, I do not settle a case ever unless it's gone a long ways for me to understand
• 33:04
  their claim. I am not a stipend for lawyers. I just don't sit here and let people sue me. And I'm
• 33:10
  not afraid. I'm a battle hardened litigator. And I'll litigate. If you're going to try to
• 33:14
  wrong me or my company, I'll litigate. And a lot of people are afraid of that. They're afraid of
• 33:18
  lawyers. They're afraid of the IRS. They're afraid of their rights. Of course, we're in a country
• 33:22
  now where our rights are a little weird. But that's a whole different conversation.
• 33:29
  It's funny. By the way, I've noticed that because that's a very, I find that a very American thing
• 33:35
  using, I've never been, I've never been sued by an employee until I've come down to the US
• 33:41
  or a contractor or anything. And now it just seems like people just use it as a tool.
• 33:46
  It's like, it's like, it's like any other business tactic in Canada. I don't see it as much.
• 33:53
  I see it as more of a, if you have been financially wronged in Canada, you get sued. But
• 33:59
  you let somebody go in the US. And I mean, it sucks letting people go. But this happens when
• 34:04
  you're building a business, suing and having to let people go and firing people, terminating
• 34:09
  whatever, it's going to happen if you build anything significant. So yeah, it's tough. But the added
• 34:15
  tough is when there are sales rep, they don't hit their numbers, you terminate, and then it come
• 34:21
  after you for nothing, like literally nothing. But they think that for whatever reason,
• 34:27
  you're going to fold and you're going to settle. And most people do. Most people look at
• 34:31
  as a cost to doing business, I simply don't. I made it. If you look at our financials, you'll see
• 34:37
  our legal fees, I just defend everything because I'm not going to be a stipend for lawyers.
• 34:42
  I made a decision five years ago. And I have, I have three full-time lawyers that work for me,
• 34:50
  General Counsel, Deputy General Counsel, Associate Counsel, and then two outside law firms,
• 34:55
  one litigation firm. And I just, I don't sue anybody unless they need to be sued. I do not usually,
• 35:02
  I am not the, the aggressor generally. I would say 95% or more of the time, I am not the
• 35:11
  person suing, I'm the person getting sued. And when they sue me, I look at the case very seriously,
• 35:19
  and I generally will fight it, if I believe, if I, if we did something wrong, we'll try to settle it,
• 35:24
  if we did, if we thought we did something wrong. But the people that have been with me a long time,
• 35:29
  especially lenders and investors that know me know that I've paid everyone back. And anyone who
• 35:34
  stuck with me in any period of time, I don't know, I got to probably put 400,000 disclaimers in this
• 35:39
  possibility. But if you've invested directly with me, not bought my stock in the open market,
• 35:44
  but if you've invested directly with me, you put money to work with me, you wrote me a
• 35:48
  trick for a private placement. I don't think that there's any five-year cycle where you're down.
• 35:53
  I think there are, there's big drawdowns. I had a lot of people that took the drawdown
• 35:59
  after 2009, and they participated with me in a private deal that went public open first trade
• 36:05
  for 3.3 billion, and they got all their money back plus a return on their investment. So I,
• 36:11
  generally do not leave a dead body behind. If, if I feel like I starting something and I owe you
• 36:16
  money and you put some money at risk with me and it didn't go right, I try to put you in a deal
• 36:20
  that helps you make that money. So listen, am I perfect? Not even close. You know, I, when you,
• 36:26
  when you look at my background, you probably say, wow, you got a lot of stuff in your background.
• 36:32
  And it's true, but the only way you kind of get that is to do deals and things go wrong and
• 36:41
  things go right. It's just, it's the nature of it. It's, you don't really see these stories out
• 36:46
  there. Maybe Scott, you have, but like Mark Zuckerberg starts the Facebook in his, in his dorm.
• 36:53
  But look at even that resulted in tons of litigation. One of his, what it was parsing,
• 36:58
  one of his partners, one of his roommates, the, the week of I, all these things, you know, they,
• 37:04
  it's the nature of business. It's just the nature of it. And as a public company,
• 37:08
  you get a lot of scrutiny for, um, you know, there's a lot of keyboard warriors and say a lot of
• 37:13
  stuff that they don't really know what they're talking, but that's the nature of being public. And
• 37:18
  I don't want to dwell on that. I feel like I've dwelled on, no, I think it's, it's, it's difficult.
• 37:23
  I think that even if you're private, you're going to get this stuff happen, uh, to you and to your
• 37:28
  business. So I think actually the takeaway is, uh, first of all, anybody can figure it out and
• 37:34
  deal with it and survive in spite of it, but it's not going to be easy, but that's okay because
• 37:39
  anything we're doing is never going to be easy. But I also think it's good to have conversations
• 37:43
  like this because then it normalizes what's going on in someone's life. So someone who doesn't
• 37:49
  have a mentor could be from maybe not a big city, USA who's killing it, who's getting their first
• 37:54
  lawsuit. That's, that's super stressful. And it shouldn't be that stressful. And there's different
• 37:59
  ways to work through it and maybe don't let lawyers take advantage of you either, but the point is
• 38:03
  this is part of, this is part of what we're doing here. This is part of business is part of life.
• 38:09
  And be an ethical, good person and always do things that you know are right and honest. And I
• 38:16
  think that's how you sleep good at night, even if somebody else is trying to take advantage of you.
• 38:20
  It sucks, but it's like you have your success story podcast. What I would say to people is
• 38:24
  it's taken me a long time to learn this, but I inherently figured out how I got here and that was
• 38:30
  I would endlessly learn you hear these statements about endlessly learning. But like if you,
• 38:35
  if you were to watch every podcast that you put out, but person did that made a commitment to say,
• 38:40
  I'm just going to listen and get something I found that I could always get something from every
• 38:47
  single one of your podcasts, which is that if I listened to what the person did, I could apply
• 38:52
  some of that lesson to what was happening with me. And you need to constantly be reminded
• 38:57
  every couple weeks. If you're on the journey of entrepreneurship or starting your own company
• 39:01
  or buying a company, you need to remind yourself that this is happening in other places and there
• 39:05
  are creative ways of getting out of it or working around up to the problem. The problems are different,
• 39:11
  but they're all the same. You just have to listen to enough people. And with with your
• 39:17
  podcast, since you're not really being spoken to in the sense that you're paying for it,
• 39:22
  you're able to listen to it. There's a lot of free information that can help you. And that's
• 39:26
  probably what's changed for me is I spend a lot more time listening and learning than I do doing
• 39:33
  because I can apply it, right? Like I, I try to, so I'm one of those guys that looks at Edgar as
• 39:38
  public companies, almost every deal that comes out on Edgar, I try to read what the transaction was.
• 39:44
  Who did the financing? What was the investment bank involved? How did they raise the money?
• 39:49
  What was the structure of the deal? What kind of EBITDA that they have or cash flow? Who did that
• 39:54
  private equity deal? Why did they do that? Well, that's in my world. I need to know that stuff,
• 39:59
  right? But I promise you, if you're going to start anything, you can watch one of your success
• 40:03
  podcasts or a few of them and go, okay, I can, this person's something something similar.
• 40:09
  You've got to absorb that. You know, you've got to, if you, if you can't afford a mentor,
• 40:13
  you can't have paid for a consultant. You can get a consultant, right? You can, you can watch
• 40:17
  your podcast and and then eventually you will find that answer and then it'll, you'll dig more
• 40:24
  and you'll dig more and you'll go down that rabbit hole and you find yourself learning. That's
• 40:28
  what I tell people all the time. It's just, it's not, it's not overnight. You don't just start
• 40:34
  Facebook and you're rich. It never, never happens like that. It just doesn't exist.
• 40:38
  Success story is part of the HubSpot podcast network. In the network, there are other incredible
• 40:42
  podcasts like the Ops Authority hosted by Natalie Gingrich. Every week on the Ops Authority,
• 40:47
  Natalie discovers actionable strategies to move your business forward and transformational
• 40:52
  stories of powerhouse business owners who value operations. You can't ignore backend
• 40:57
  pieces that have to work together and flow smoothly in order to build a brand, grow a movement
• 41:02
  or disrupt an industry. If the operation side of your business is a mess, putting out fires will
• 41:07
  always take priority leaving no room for creative innovation, visibility or networking with powerhouse
• 41:14
  peers or even wannabe powerhouse peers. You've got to get your house in order and to do that,
• 41:19
  you have to listen to the Ops Authority wherever you get your podcast. You know, but you, you've,
• 41:24
  I've heard you say this a few times and I'm curious about your opinion on this because
• 41:27
  the internet has lowered the barrier to entry and this increasing amount of bullshit that people,
• 41:32
  people talk online and I have a theory on who you should listen to and who you shouldn't listen to
• 41:38
  and I like people to talk about the worst shit that's happening to them because it just feels real.
• 41:43
  So when someone tells me, hey, this happened, I got sued and they get really real and raw as opposed
• 41:50
  to like sugarcoting everything that's happened in their career. That's somebody that I have a little
• 41:53
  bit more trust with and somebody that just assumed that since they were 20, it's been all up and
• 41:58
  to the right. So when you pick your sources for learning for education because again, you're very
• 42:06
  real person, you know, it's no bullshit. You just, you say like it is just good as the kind of person I
• 42:11
  like. How do you vet what, you know, information to learn from? I start off with one major,
• 42:19
  one major thing that I think is a criteria for anyone you listen to and that is,
• 42:28
  I would never really take advice from anyone that hasn't had to make a payroll and what I mean by
• 42:34
  that is. So I at one point in my life when I was 28 or 29 years old, that three Harvard MBAs that
• 42:41
  were older me, that worked for me. And I thought the answer was I'll hire people smarter me and it
• 42:46
  is the answer, by the way, but careful who you hire the smarter than you, right? The answer, the answer
• 42:52
  is if I got an MBA from Harvard and I went to work for General Electric and I ultimately moved up
• 42:59
  to being a general manager of a division with a thousand people. I may have had to cut expenses.
• 43:06
  I may have to have it work in the organization that is GE, but I didn't have to start it from scratch
• 43:13
  and I didn't have to make a payroll, right? They had the money. When you've had to make a payroll,
• 43:21
  it changes everything about who you are. When you're responsible for other people getting paid,
• 43:26
  it completely changes the narrative and I would never, I see all these people mastermind groups
• 43:34
  all the time and I think to myself, did they have to make a payroll? Like did they just become a
• 43:41
  consultant? Like really understand who you're getting advice from is what's went wrong for them?
• 43:47
  Because if it's not went wrong for you, I could care less. I just don't pay attention to it. Now,
• 43:53
  some of the operational advice for best practice and ways of
• 43:59
  streamlining your business and looking at cutting costs once you're established,
• 44:04
  there's nothing wrong with consultants that can share ideas with you. But when you are building
• 44:09
  your own business, don't take advice from anyone that hasn't made a payroll. Never. I wouldn't do
• 44:13
  it. Ever. That's just my opinion. I want to say something too that's important because
• 44:18
  people gloss over something about Grant Cardone and even though Grant and I aren't really friends
• 44:22
  anymore, I will tell you something about him that if you really dig in because I know you've
• 44:27
  interviewed him before, he was sued after doing a reg A and allowing nonaccredit investors to
• 44:34
  put money into his fund. And he was sued for something super petty. I read his
• 44:39
  perspectives. They were accurate. It was all nonsense and he spent millions of dollars defending
• 44:44
  it and he ultimately won. And it was trivial. The person put in 5 or 10 grand and the media made a big
• 44:50
  deal out of it. All these people on YouTube were experts were saying Grant Cardone FBI is going
• 44:56
  down. He's this. He's that. And who knows whether that was ever going to happen or not. I can't
• 45:00
  speak to the other parts of his business. But it's so much. It's so easy for people to bash grant
• 45:09
  and not report what actually happened that they make it up like he's under investigation and
• 45:15
  his real estate's a fraud. It's not true. You didn't have any information to say that. I read
• 45:22
  some of these financial guys. I undercover the financial facts and they report it like it's a
• 45:27
  fact on Grant. And you see Grant, he's had to be battle hard and people tried to take him down.
• 45:33
  And yet I don't see anyone reporting right now that Grant was vindicated and that that lawsuit
• 45:38
  was nonsense. You know, and I'm not saying that nothing had ever happened to Grant in the future.
• 45:43
  I don't know Grant's business. But that's an example of a guy who is delivered checks
• 45:48
  monthly to people opened up the door for them to be in real estate that they could otherwise not be
• 45:53
  in and that people who are haters bash him and say stuff that's not true. They ultimately don't
• 45:58
  report the facts. The fact is is that Grant beat that case and he spent money and I've listened
• 46:03
  to his interview saying I spent the money to prove a point. I wasn't going to settle with this guy
• 46:08
  for 10 grant. Grant has that sitting in his pocket. He could have gave the money back to him.
• 46:13
  But he didn't. And that's what I'm saying the same thing I do. I'm not going to settle for something
• 46:17
  that I have Grant messed up. He would have gave the money back. I promise you if Grant made a mistake,
• 46:22
  he would have wired the guy the money back. And I've seen Grant do that. I knew a guy who was an
• 46:27
  investor with Grant. And he started questioning Grant all the time about his investments in Grant.
• 46:31
  Why are the money back to him? So I don't want your money. So we live in the world now even with
• 46:36
  Grant not being public. He's like public because he gets bash publicly. Now you could argue the hey,
• 46:41
  if you're going to raise money from the public, you're going to get public criticism.
• 46:46
  But what reality is in this country, you can say whatever you want about someone and the facts
• 46:50
  don't have to be real. But in my world with the SEC and grants world, if your facts aren't real
• 46:56
  ultimately that audit isn't really they're going to catch you, right? Yeah.
• 47:00
  Um, so you also have that even as a private company. If you're a public figure, you're going to
• 47:06
  have haters that just they'll be your biggest promoters. But they're also do crazy stuff. And over
• 47:11
  in the pandemic time, I when I saw what people were doing to Grant, I, I felt bad. I know the guy.
• 47:18
  I'm not saying we agree on everything. But he's, you know, and he's exactly who he says he is.
• 47:23
  Um, it was an example of him being, you know, attacked pretty viciously by people that
• 47:31
  aren't really in the game. They're not really in the game. They're not really making payrolls.
• 47:35
  They're not really, they're one guy on a podcast. They're really not, they're not making a payroll.
• 47:41
  I don't think the loudest people are the people that have their own businesses that are making
• 47:45
  payroll. I don't believe that at all. You get, you get death threats. You get death threats on
• 47:50
  social. Oh my God. If you come to our office, you better be armed. I'm not kidding. You see,
• 47:58
  we, oh, yeah, we, we, there are, we have can still carries all throughout this office. We have
• 48:02
  armed guards here. I've gotten so many death threats. Are you kidding me? At any given time,
• 48:07
  I'm carrying. That's why I moved to Vegas. You come to my house. You're going to get shot.
• 48:12
  You go, you come on my property and you're, and you're basically not welcome there. And you
• 48:16
  propose a thread. You're going to get shot. There's no question. We, that we, we take it very
• 48:21
  seriously here. We have security. We protect our employees the best we can. We have, we have,
• 48:27
  doors that are magnetic and all this other stuff because yeah, you get, we get death threats all
• 48:31
  the time. I get them all the time. People want to kill me all the time. And I, and no one's gotten
• 48:36
  to me yet. Why? Why is it like what? At first of all, is anything serious that it ever happened?
• 48:41
  No, no, not really. I will tell you that the, the issue is that this, this actually makes me
• 48:48
  really troubled. I'll tell you why it makes me troubled. I don't mind that people threaten me.
• 48:53
  I'm, they're mad about something. The stock went down. I get that. But I didn't ask them to buy it.
• 48:58
  There's nobody out there that can, can show me any, anything I've ever done where I said,
• 49:03
  please buy my stock. Doesn't exist. I've never, I report the facts that I see them. I report what
• 49:09
  I think is accurate. Have we made mistakes? We've always, there's no question we've made mistakes
• 49:13
  in our judgment of our investments and what we thought was going to happen when we give forward
• 49:18
  indications. We tell people what we think would happen. They don't always happen perfectly
• 49:22
  forecasting is an imperfect science. But I get messages on my Instagram where people say I put
• 49:28
  my life savings in this. I put my kids life savings in and I say to them, why? When, when did we ever
• 49:35
  say that you should put your life savings in one of our low price stocks on the New York Stock Exchange?
• 49:40
  We've never said that to them. We, I would never condone that to anybody. But yet they want to have
• 49:47
  someone to blame. And in fact, I can tell you why I know they're not paying attention because they
• 49:52
  say I'm the CEO. I'm not even the CEO of all the lines. There's another CEO. I'm the executive
• 49:57
  chairman. I haven't been the CEO for three years. I, I, I allocate capital, right? And yeah, I'm a
• 50:04
  public figure. But listen, it's part of the game. You know, the employees here at the corporate
• 50:10
  office have accepted the fact that we, you know, we live in Nevada and we protect ourselves and we
• 50:15
  don't think anything is ever going to happen. But we take it seriously. But it's my understanding
• 50:19
  that a lot of people get death threats. A lot of public CEOs get, you know, good death threats,
• 50:24
  especially when their stocks are not performing ours. Unfortunately, it's not performed like we
• 50:28
  liked it. And case in point, that's why I bought so much of it back. You know, I, and I telegraphed
• 50:33
  that. I told Cheryl, Hey, if you're going to bombard our stock to zero, we're going to end up
• 50:38
  buying it back. And we, we at Alton company have bought a lot of all the lines by investing in
• 50:44
  the company. We could already told people publicly we can, we intend to take our investment for 44
• 50:49
  million to 75 million and continue to invest in the company. And we will. But like you asked about
• 50:54
  death threats. Listen, do I think about it all the time? No, but we're conscious of them. We pay
• 50:59
  attention to them. We have an extensive group and outside agency that reads every single post. Believe
• 51:06
  it or not, this has gotten so ridiculous that we read every single post ever posted anywhere dark
• 51:13
  web, regular web. And then they review them and they do a threat analysis. We've, we've went,
• 51:19
  we've had sheriffs go to people's homes and we know who they are. We've contacted them directly.
• 51:23
  So it's, you live in a universe nowadays where it's not hard to find people anymore. If you're
• 51:28
  going to go online and say something, we're getting, you know, I never knew there were so many of
• 51:33
  these kind of groups out there that could find who were saying it. So if you're a sleuth and you
• 51:38
  know how to say it without anyone catching you, be my guest. But we have an outside agency that
• 51:43
  reviews all of them and I, and we spend the money for it. And people, and people don't realize that
• 51:47
  because I'm a public figure in an officer of the company, the company has to cover my security.
• 51:53
  So the more you make problems, the more expensive it is to just be in business. It's crazy. It's
• 51:59
  not like I'm covering it. I don't have, I can't pay for 24 hour security at the office. We have to,
• 52:04
  we have to pay for it. You know, what's the, what's the, what's the exit plan for you? I mean,
• 52:11
  we started this even talking about the fact you never take a day off. So, Sky, I want to say
• 52:15
  something to you. There's more to this story than you just hear it either too, by the way, in
• 52:20
  this. We are a single source supplier to IAI and the Israeli military. So seven years ago,
• 52:26
  we invested in a company called EnterTech and we make missile guidance systems and other things
• 52:32
  that are top secret for the Israeli military, for the Iron Dome and for Arrow III and Arrow IV
• 52:37
  missiles. And so I get grief on that too. I'm a bad guy because I make military equipment for
• 52:43
  Israel. Anything's possible, you know what I'm saying in terms of what people want to blame you for.
• 52:48
  But I don't hide from it. I'm a defender is Israeli's right, the Israeli government's right
• 52:54
  to defend themselves. And if people don't like that, then don't buy my stock. And frankly,
• 52:59
  they don't like it. They can fuck off. That's the way I feel about it. I agree. Every country,
• 53:03
  every person, every, every, every country has the right to defend themselves. And I'm not saying
• 53:09
  Palestine doesn't have the right to have its own thing. And I know that they've had lots of offers.
• 53:13
  I am not in that political mess. It's way over my pay grade. But you're not going to tell us,
• 53:20
  as a public company, you know, who we can do business with, especially if they're defending themselves.
• 53:26
  And it's a tough call. I know there's people that don't like that and frankly, I don't care.
• 53:32
  You know, you so right now, you look at all the different. I want to see where what your exit plan
• 53:39
  is because it's always curious to me, like when you build something public, there is no exit plan.
• 53:44
  All the entrepreneurs that I speak to, they have the exit plan or they had the exit. And they sold,
• 53:50
  when they exit it, made some money, got a nice check. They could retire to a degree, even know
• 53:54
  everybody who built something meaningful, never wants to retire, which is a whole other conversation.
• 53:58
  I think it's a personality thing. There's slightly delusional and crazy and the personality thing
• 54:02
  that lets them be successful. But I do want to know where you want to take this. I'm super curious,
• 54:08
  especially because it's a lot. I mean, I don't think anybody, I don't think many people that I know
• 54:15
  have the experience of defending a public rate of company dealing with death threats, understanding.
• 54:21
  All the different things that are just sort of weighing on you on a day to day. So,
• 54:24
  want to know where that, where you plan to take it. But when you look, go, no, you can comment on that.
• 54:30
  But I was also going to say, just from all the different companies that you have a hand in,
• 54:38
  and there's a whole bunch now, what's actually very exciting for you in terms of, because you have
• 54:46
  real estate, you have defense, weapons, technology, you have Bitcoin, data centers, AI.
• 54:56
  What are some other exciting verticals maybe in the future? I know you said you have your sort of
• 55:01
  five core, but that would be exciting for you as somebody who can go and acquire.
• 55:07
  We have a more auditorium on new acquisitions. I know you do. We do.
• 55:14
  I would say to you in terms of categories, the categories we're in now we're going to stay in.
• 55:20
  So we have AI, data center business, data center business for hosting for Bitcoin. We actually
• 55:26
  have our own Bitcoin miners, Crane company. I'll probably push the lender to do more public deals
• 55:37
  where we lend to other public companies. That's where we really make a lot of money. That's sort
• 55:41
  of our bread and butter long term. But if you looked at a growth curve, we just recently reported
• 55:45
  a quarter, the AI data center business is just so, so big and growing. And there's no way for
• 55:54
  the other companies to keep up with what's happening with AI. The fourth industrial revolution,
• 55:59
  which we're part of now because of our data center business is just it's screening on fire.
• 56:06
  It's I cannot stress to people how much we're giving the company away. Now while there's a lot
• 56:13
  of money that needs to be invested in our AI data centers, most of that will come from the debt
• 56:17
  markets. We don't really need a lot of equity anymore. We raise the money for that.
• 56:21
  Now could we use a little equity? We always could use a little equity. But we we really have
• 56:25
  said publicly that we plan on issuing the minimal equity possible. We'll tap the debt market. We'll
• 56:31
  tap the preferred market. But in terms of issuing common stock, we're going to try to keep that to
• 56:35
  a minimum and focus all of our energy on the cash generation that's coming from AI data centers,
• 56:42
  from cranes, from defense, from hotels, and from our lender. And we we told the public that we
• 56:50
  thought by the end of 27, we were doing we're at above a 500 million dollar a year run rate.
• 56:57
  And that could just be from the data center business. The data center business that the first for
• 57:04
  power and AI compute and sort of this fourth, this fourth industrial revolution with Novitya
• 57:11
  and what's happening with AMD and and all the different AI companies out there and demand for
• 57:17
  compute is so off the Richter scale. And we we as a country are not paying attention to the fact
• 57:23
  that we need power. People say it out loud. And they say we want to be green and all this is
• 57:29
  but you cannot do what you're doing without power. And we have power. We have 20 megawatts in
• 57:36
  Montana. We believe that'll grow the over 250 around 250. And we have 30 megawatts live live. We're
• 57:43
  not actually a lot of companies talk about what they're going to have. We have it live. We're already
• 57:47
  mining millions and millions of dollars with a Bitcoin a year there. I think we did more than 50
• 57:51
  million last year. I don't think know the exact number. And so if you just looked at us and said,
• 58:00
  are you going to what's your exit plan? I want to run a holding company the rest of my life.
• 58:05
  I'm 54 years old. I'm finally losing weight. I look like I'm a little thinner here actually.
• 58:13
  That's called those epic, right? So when someone said Todd, when you were when you were
• 58:18
  fatter than you are, you put the Ick and exempt, oh, ozempics. So I'm trying to lose a little weight
• 58:23
  here. And that's a miracle drug in itself, right? But I anticipate running a public holding company.
• 58:33
  That could change. But right now we're on the plan of just building out the AI data centers.
• 58:38
  The guy who runs our crane business came from Berkshire Hathaway subsidiaries. This
• 58:43
  very talented guy. The person who runs our our defense business we're very comfortable with.
• 58:50
  We are our hotels are managed by someone second to none in the hotel management business.
• 58:56
  And we're very comfortable with the guy who runs our AI data centers. Jaluni who came from the
• 59:01
  data center business. So we really refined who's running these things. And so we're really comfortable
• 59:07
  with it. We probably will spin off. We've talked about spinning off some of the other assets to share
• 59:12
  holders so that they're not part of our consolidated portfolio. Kind of staying in the sort of the
• 59:17
  major big four big five that we have. But the AI business, the data center business will
• 59:25
  ultimately dominate our revenue. There's not there. It's just like a venture portfolio. You
• 59:30
  ultimately look at all the things you have. And just five things do okay. Five things lose money.
• 59:36
  Five things make a lot of money. And then one or two outliers go crazy. The data center
• 59:42
  businesses could be an outlier for us. You never know. And my suspicion is is that'll drive our
• 59:48
  AI data center business will drive pretty much all of our long term profitability that like really
• 59:54
  matters in terms of scale. And ultimately those businesses are being bought up by people like
• 1:00:01
  digital reality, digital bridge. You know, the big players in that space are soaking up all that
• 1:00:07
  power. So if we got a big enough check, we'd probably take it. But that's the ways off.
• 1:00:12
  Tell me something because you're building out your brand. You have a conference risk on 360.
• 1:00:17
  Obviously you're jumping on podcasts too. Is this not at the level that you're playing at?
• 1:00:22
  Does it not cause more stress for you to be putting yourself out there all the time? It's
• 1:00:26
  just like more eyeballs looking at what you're doing. You're already getting death threats or you
• 1:00:30
  don't give a shit. Yeah, I don't care. Uh, I don't care about the death threats. I don't care
• 1:00:34
  about that part. I care about. So, so the risk on 360 conference what we what we've done
• 1:00:40
  differently with this conference than most of them is like if you went to some of grants 10x
• 1:00:45
  conferences, there was so much pay to get access. It was so expensive. We wanted to lower the cost
• 1:00:52
  of that and really create an environment of like I know we're going to try to get you there. We
• 1:00:56
  want to create an environment where people can know each other and that there's at least a level
• 1:01:01
  of trust of how they met you and that the cost is minimal to be there. Um, and I've had I believe
• 1:01:08
  uh, two of them so far two or three. And we've had like Alice Rodriguez. We've had Damon John.
• 1:01:14
  We've had tons of people Tucker Carlson, RFK Jr. A ton of entrepreneurs guys that have started
• 1:01:20
  businesses, girls that have started businesses. And we know that those people are networking in a
• 1:01:25
  big way. I find out this later on that a lot of businesses being created there. And one of the
• 1:01:30
  things I got out of Grand Cardone was all the people I met there. But the cost was so parabolic.
• 1:01:37
  Then it was like, you know, 50 grand pay to play, right? And I'm like, yeah.
• 1:01:40
  It just the average person can't afford that. And it's not that I don't want the average person
• 1:01:45
  there or that I want people to have a reasonable opportunity to go meet people and network. Right?
• 1:01:52
  And then you've got to you got to fed out, you know, feather out who's real? Who's not? Um, yeah.
• 1:01:58
  But I ultimately think because the companies will ultimately turn cash flow
• 1:02:02
  positive, even positive. And we expect to produce a lot of cash long term that I like investing.
• 1:02:09
  I've created this thing. You know, I'm so excited about the social club, what you have.
• 1:02:15
  And I encourage I encourage people that are I encourage people that have had an exit
• 1:02:20
  or understand financial markets, private equity, public equity, private credit, public credit
• 1:02:26
  to learn about the social club because I think that these are really valuable
• 1:02:31
  things to put together. You don't all have to be a Tiger 21. If you don't know what I'm referring to,
• 1:02:35
  either Tiger 21 or the social club that Scott runs, then then you probably need to do a little
• 1:02:41
  research. You'll eventually it'll eventually rise up to to where, you know, as an entrepreneur
• 1:02:46
  where you want to be. Um, and there's criteria to get in. I'm not suggesting everyone can be in.
• 1:02:51
  But I've created something not the same, but similar in the sense that I created this thing called
• 1:02:56
  the deal lions.com. And the deal alliance allows people that are credited to just see the deals I'm
• 1:03:03
  doing. And they can join me or not join me. It's the problem I have in with this is that when I
• 1:03:08
  started my career, 34 years ago, when I worked at Dean Witter, I did so many IPOs that I was giving
• 1:03:14
  them out to brokers as a syndicate manager. And I have never really had an opportunity to tell
• 1:03:20
  everyone, here's the private deal or public deal I'm doing. If you want to have access to it,
• 1:03:25
  you got to be accredited. Here's the deal memo. Here's my thesis. Make your selection. Very
• 1:03:31
  similar to Kalanis Jason, who's doing the syndicate. Yeah. Jason, Kalanis and he I'm part of his
• 1:03:37
  slack channel. And he does all of his deals through there to a camera, what is called, but
• 1:03:41
  right. And so, but minor more like structured equity, structured finance yet, some sort of elaborate
• 1:03:49
  transaction that I'm doing. I do a lot of structured finance deals where I want like, you know,
• 1:03:54
  100 people in them, they all put in 50 grand or something, you know. So I do this public stuff
• 1:04:01
  because I believe that ultimately I can help people. And that's why that's why I did your
• 1:04:08
  podcast. That's why I hope you did mine. Yeah. And it's because I like to network with people
• 1:04:13
  and get to know what they're doing. I'm probably more selective on the deals I do now than ever
• 1:04:19
  before. But I do believe that we can ultimately help everyone. There's someone out there to help
• 1:04:25
  every person, no matter how small or no matter how big they are. Well, over over over 150 million
• 1:04:33
  dollar, 200 million dollar company, I'm probably not the guy for you. But maybe you never know.
• 1:04:40
  But you know what, you get somebody start, so you democratize access to deals, to education,
• 1:04:44
  to your years of experience, because you've been in the trenches, which is what people actually
• 1:04:48
  need. They don't need somebody who built a whole audience on social media and the teachings
• 1:04:53
  have to do something that's ever done themselves. Big red flag and that happens a lot. So when
• 1:04:58
  someone like you puts themselves out there, democratizes that access and sort of helps them get
• 1:05:03
  started from a lens of experience, then some people are going to go on to build incredible things,
• 1:05:10
  whether or not they become full-time investors, they find a way to do a deal that gives them the
• 1:05:16
  capital required to maybe take their business at the next level or not take another job because
• 1:05:22
  now they have a nice nest state to sit on for a little bit, whatever it is. More financial acumen
• 1:05:27
  and more financial education and access to deals and you normally wouldn't have access to.
• 1:05:32
  This is what, this is all good. It's all good stuff. So I think that it's just good that you're
• 1:05:36
  doing it. That's my tip. I will tell you that that's what I think attracted me to you and that is
• 1:05:41
  warts and all, you know, you don't want to be doing business with someone in my opinion that's
• 1:05:46
  just a social media popular person that's not ever done it before. Now sometimes the people that
• 1:05:52
  done it before don't really present well in social media, right? So there's a, there's a mix of
• 1:05:58
  me doing this myself to try to explain to people. I get people all the time to say, oh, you're
• 1:06:03
  background. You know, you got sued. Okay, well, let me tell you something. If you're looking for
• 1:06:08
  people to help you that have never had any problems, keep looking, buddy. You know, in 2009,
• 1:06:14
  when I was dead broke after the housing crisis, I borrowed 200 bucks from my mom. I mean,
• 1:06:18
  I couldn't pay my bills. Couldn't, I couldn't put food on the table fast forward seven years from
• 1:06:25
  2009. I brought a company public that I owned half of for more than 3.3 billion. That was the
• 1:06:30
  first trade. It would public and five open to 33. You have to have access to people and my whole life
• 1:06:37
  is based on this risk on philosophy that relationships are the most important thing. They're the most
• 1:06:42
  vital. You have to invest in yourself. You have to stay your own course. You have to know your
• 1:06:47
  competition. You have to own your own mistakes and you have to never give up. But if you start
• 1:06:52
  with relationships that are honest, you can get through pretty much anything as long as you don't
• 1:06:58
  lie to anybody. As long as you don't lie to them, people will want to help you. And I want to
• 1:07:03
  help people the best I can. I need to avoid people lying to me. And so I love the conference because
• 1:07:10
  you meet a lot of people. I met this guy the other day in Bermuda, an 18-year-old kid doing something
• 1:07:20
  called microgreens. I thought, okay, is that really a business? Maybe it is. And then I found out
• 1:07:29
  that he's doing microgreens so you can feed your reptiles. I said to him, hey, the pet space is
• 1:07:35
  huge for this. And I said to him, I said to him, hey, if you create a GoFundMe account,
• 1:07:41
  or what's that thing where you can sell microgreens to get paid? You can sell like your idea.
• 1:07:48
  You know that web kickstarter, kickstarter, kickstarter. I said, he said I only need $10,000.
• 1:07:54
  I said, I'll do the first 10% but you got to ask for 50,000. I'll do the first 10% right now.
• 1:08:01
  So sometimes I like to help people that just have a really cool idea and we'll see where it goes.
• 1:08:08
  You know, I'm a true believer and I'm not a religious guy but I'm a true believer that there's
• 1:08:15
  something bigger than us and the more you give away, you're going to get it back 10 fold. I'm a
• 1:08:19
  real believer in that. And so the conference, we don't make money really much at it. I don't
• 1:08:25
  know that we actually make a profit at the conference really when you think about it but we make a
• 1:08:30
  lot of relationships that turn into things. And so I mean, I don't think you charge for people
• 1:08:36
  on your podcast but you probably get a lot of relationships from it, right? And you're giving a
• 1:08:41
  you're giving away a lot of you're giving away a lot of your time to educate people on something
• 1:08:47
  that I think is invaluable. There's nothing more important than learning whether someone's ever
• 1:08:52
  made a payroll or not and how they made it through it and how they got help because you will be
• 1:08:57
  engaged. But because a person, an entrepreneur, anyone who's starting a business is fooling
• 1:09:03
  himself if they don't think they're going to need help. How do you gauge success? How do you
• 1:09:07
  gauge your success? My wife. I gauge all my relate my my success on the relationship I have with
• 1:09:16
  my wife and my four kids. So everything else is just your business. So now you're probably saying,
• 1:09:24
  well, you had to have some financial success to keep a family. That's true. But she stayed with me
• 1:09:31
  when I didn't have a dollar, never complained, not even for one second. So you'll you'll you'll
• 1:09:36
  you'll feel like I said about the art and relationships. The hardest part about being an entrepreneur
• 1:09:41
  is being married to the right human being whether you're male or female, you have to
• 1:09:45
  you have to have the right counter party with you with the right mindset. My first wife basically
• 1:09:50
  said to me one time, and I wasn't paying attention to this. She she you know, I worked and ran
• 1:09:55
  a hedge fund. And she said, it would be nice if you came on with five o'clock and left your work
• 1:10:00
  behind. And I said, oh, that's never going to happen. And sure enough, a couple months later,
• 1:10:06
  she divorced me. So I wasn't thinking that when I answered the questions, never going to happen,
• 1:10:11
  that was going to lead to the force. And that's probably not the only reason she left me. But
• 1:10:16
  the second time, which is really better, the second time I said to her, you have to accept 50,000
• 1:10:22
  or 500,000. I never know what I'm going to make. And I work all the time. And this is what I'm
• 1:10:27
  committed to. And she signed up for it. And it's been a rocky roller coaster fun ride. But you
• 1:10:34
  said expectations, which is that's the secret. You said expectations early on. I think that's
• 1:10:39
  some people screw up. All right. What did we not go into? Because I went into a lot today.
• 1:10:47
  I just have a couple one one last question to close it out just to tie it and bring it home.
• 1:10:53
  But what would be one thing that we didn't go into that I didn't ask you? Maybe that I wouldn't
• 1:10:57
  know to ask you from all the stuff you posted online. That would be a lesson or insight or learning
• 1:11:03
  that you've experienced in your life. So I did learn to schedule my worry. And what I mean by
• 1:11:14
  that is this is just something that could be helpful and that is I have things that happen to me
• 1:11:20
  every single day that are a problem every day. They're just a problem. My wife says I wake up to
• 1:11:27
  problems as a fireman that people if they experience that once in their life would not recover from
• 1:11:34
  it. And I have it weekly and daily. I have a strategy of scheduling my worry. It's about 15 to 30
• 1:11:41
  minutes a day. I only allow myself to worry that time frame. The rest is all taking action to
• 1:11:47
  solve those problems. So if you can schedule your worry, don't drag it out. Don't tell a thousand
• 1:11:53
  people and I'll emphasize that by if you don't have a business coach or a life coach, I've been seeing
• 1:12:02
  the same shrink for 24 years. I never miss. I've been seeing her every Saturday now by Zoom
• 1:12:09
  because I live in Vegas. I've been seeing her one hour a week for 24 years since my first
• 1:12:15
  divorce. And if you're not talking to someone and you're not if you're not laying your issues
• 1:12:24
  with someone you pay to coach you, you're making mistake. I mean an actual licensed therapist,
• 1:12:30
  someone that can help you with whatever issues you think you have. And they have to be really
• 1:12:35
  able to help you. Meaning they're not giving you the answers. They're helping you find the answers.
• 1:12:41
  And I would I would encourage everyone to read two books and read them completely. The roadless
• 1:12:48
  travel, the original by M. Scott Peck. And it tells you in the first page what the problem is.
• 1:12:56
  And I remind myself of that all the time. And I would read Napoleon Hill's think and grow rich
• 1:13:01
  even though it's written in a way, which is kind of the old English language, it's important
• 1:13:05
  to understand why you're doing something, what you're giving in return, right? If you understand
• 1:13:13
  the difficulties of being a human being and you understand the difficulties of being in
• 1:13:17
  business from Napoleon Hill, you're halfway there. But you really got to understand it. You can't
• 1:13:22
  just say you read it. You got to live it. I would say that's good advice coming from somebody who
• 1:13:29
  apparently reads what 60 to 70 books a year. If that's not a doubt, that's the minimum. I was thinking
• 1:13:37
  about this last night. I was flying home and I was reading a new book called The Fund about
• 1:13:40
  Radalio, the amount of consuming data that I can see. And well, right now I'm on this mission to
• 1:13:46
  watch every podcast you have, which by the way, holy shit. That's going to take me a while.
• 1:13:52
  Yeah. I would you got a couple of trips in you. Yeah, a couple of lights in. Exactly.
• 1:13:58
  Um, be out of mission to consume data, but you've got to take care of yourself first, right?
• 1:14:02
  So you've got to figure out what makes you happy, right? Really, really what makes you happy.
• 1:14:08
  Because if you think somehow there's an ending, I was thinking about this the other day. Like,
• 1:14:12
  I'm a fairly rich guy now. Like I'm not super rich, but I've got access to a lot of stuff.
• 1:14:19
  There's no ending. It doesn't like end. Like you know, like it's just a new set of problems.
• 1:14:24
  Now they're good problems to have, but they're just first world problems. No one cares about
• 1:14:29
  my first world problems. Nobody. You have to care about them, right? And so in your world,
• 1:14:35
  whoever world you're talking to, they have their own problems. Right now, their own first world
• 1:14:40
  problems, right? You got to be able to talk to someone about them. You've got to and not
• 1:14:43
  someone that's going to tell you what you want to hear. Like, you know, someone who, um,
• 1:14:51
  well, we're all psychologically damaged to some extent, right? And so do we actually tell
• 1:14:59
  ourselves the truth? It's probably ourselves that we like to the most, right? I think having a good
• 1:15:03
  therapist, someone you can trust is a good start. And a lot of guys won't do this. They won't
• 1:15:10
  have a therapist or someone they can talk to. And I'm not talking about paying a guy a hundred
• 1:15:15
  grand for five sessions. I'm talking about a therapist, someone you can talk to about your
• 1:15:21
  issues and find the right person. It's hard to do. You've got to find the right person.
• 1:15:25
  Because if you're going to be, if you're going to be an entrepreneur, if you're going to make a
• 1:15:29
  payroll, it's going to be a lonely space for you to be in. But I think that's super important.
• 1:15:34
  And I think that the, the classic issue with entrepreneurs is they think they're smarter than
• 1:15:38
  everyone else. Oh, yeah, they do. And then either. Yeah. Yeah. If you're, if you're going to be
• 1:15:42
  an entrepreneur, you're going to get your teeth kicked in. Sorry, it's not easy. There's
• 1:15:46
  occasionally the guy that gets lucky who this, everything goes swimmingly in his dad mom lend him
• 1:15:51
  two million dollars. And, you know, but he hadn't, he didn't really have to make a payroll.
• 1:15:58
  Please, you have to make a payroll. Make a payroll. Make a few of them. You'll figure it out
• 1:16:02
  very quickly. Where should people go to connect with you? What's the website, socials, all that?
• 1:16:08
  For a conference for, for anything really, your podcast. Go to riskon360.com. I have a website
• 1:16:15
  totalt.com, t-o-d-d-a-u-l-t. I have the deal lines.com. On social media, I'm totalt the third,
• 1:16:23
  so one, two, three. I'm verified on Instagram. I think there's like two million followers there.
• 1:16:28
  It's not hard to find me. There's a couple of bogus accounts. But go to the ones that are verified.
• 1:16:33
  I'm everywhere. You know, I try to post everywhere always. I'm a pretty transparent guy. But
• 1:16:39
  it's really easy to get ahold of me. Or you can type, you can, you can, I think you can,
• 1:16:46
  you can text ROI to 31798, ROI to 31798. I think you'd even text totalt to 31798. I've got so
• 1:16:55
  many, so much access. You can text TDA, the deal lines, TDA to 26786. I'm pretty much available
• 1:17:07
  everywhere. It's all over my social media. You can't miss it. Okay, so people, people will find you
• 1:17:13
  somewhere and put some links in the show notes too. Okay, last question, which I think is,
• 1:17:20
  you know, you've gone through so many seasons in your life. You grew up, you grew up in,
• 1:17:26
  in a HUD housing. So you grew up poor. You grew up very, very poor. So you look back,
• 1:17:34
  what would be one lesson? I know you've given tons of insight, but just pick something though,
• 1:17:38
  humor me. One lesson you would tell your 20 year old self. You don't know what you're talking about.
• 1:17:44
  I grew up in HUD housing until I was 13. My mom married a guy who adopted me. I took his name.
• 1:17:52
  People confused something about me. Here's an antidote. The company's not named after me.
• 1:17:58
  I was adopted by my dad and my grandfather, who was my adopted grandfather, gave me $1,400,
• 1:18:07
  which I paid him back to start the company. And when I was 18 years old, I wrote in my yearbook
• 1:18:13
  that I would start this company when I was in high school. And my 20 year old self would,
• 1:18:23
  this is by design, I will tell you, you asked probably the perfect question. I would not think I
• 1:18:28
  knew all the answers. I would tell my 20 year old self to go and get a mentor or someone I could
• 1:18:35
  learn from, go work for someone that I could understand and read and study. In the beginning,
• 1:18:42
  the first probably eight or nine years of my life, what I became a business person, I did almost
• 1:18:47
  no reading and studying. I didn't really understand. It was till I failed the first time that I
• 1:18:54
  really understood that I didn't know what I was doing. And you don't really know what you're
• 1:18:59
  doing until you've had to make a payroll, produce financials, and have credible financials,
• 1:19:06
  meaning financials. There's a guy named Tillman Fatita that I had the privilege of helping
• 1:19:12
  bring his company public when I was a very young guy. Believe it or not, Landry Sifu was public
• 1:19:16
  for a short time. He hated being public. He went private later. But one thing he used to say that
• 1:19:21
  I thought resonated was you must know your numbers. Don't be arrogant enough to be the boss and
• 1:19:28
  tell people I don't know the answer. You need to know the answer very quickly. And the arrogance of
• 1:19:35
  being 20 was my downfall. The arrogance of thinking I knew better was my downfall, right? The
• 1:19:42
  overconfidence in my expectations on how quickly I'd grow and what I could sell, right?
• 1:19:50
  So I would probably tell myself that I need to learn a lot more. The idea of going to get your
• 1:19:54
  education in college, really today, unless you're going to be a scientist or a doctor, is about
• 1:20:01
  you starting something and completing it. I have a son that went to UCLA. He came out a much
• 1:20:07
  more educated guy than I thought he would. Really brilliant kid, right? Who learned in college?
• 1:20:16
  Go learn something 20 year old Todd. Learn it. Don't act like you know it. Don't fake it to
• 1:20:21
  you make it. Learn it. And just admit you don't know. That's what I would tell myself. And that's
• 1:20:26
  what I would tell all these entrepreneurs. I see them out there buying cars and lambos and they're
• 1:20:30
  doing social media stuff and they're getting endorsement deals. This is all going to go away. Hey,
• 1:20:35
  you guys are all fools. You think you're all going to have these social media deals that happen
• 1:20:40
  forever or you're going to be Kim Kardashian. You're not going to be. You got to be yourself, right?
• 1:20:46
  You can learn from other people, but be yourself. And that's a hard thing to do. Like I'm 54
• 1:20:51
  years old. I've only recently accepted that I am who I am, right? In the last probably 10% of my
• 1:20:57
  life so far, last five years, I've ultimately accepted that that while I wanted to be like Warren
• 1:21:03
  Buffett, I was not, right? He was he's always sort of been my he Kirk Kirk accordion and Carl,
• 1:21:09
  I kind of been my sort of like financial mentors that I've really Kirk accordions probably the
• 1:21:16
  most I align myself with. I would tell yourself to learn and that you don't know what you're talking
• 1:21:23
  about yet. You don't know it 20. I promise you. You don't know.