The Rise Of The Solo Capitalist

For the rest of this week, I want to talk about a trend I think has major significance:

— the rise of the “Solo Capitalist”.

Now, it’s evident from increasingly volatile markets and vitriolic news events that the world is shifting. We are living through a time of great transition. These trends will lead to the creation of a new type of investor — the solo-capitalist. These trends include:

1- A transition away from institutions

2- Increased need for individual identity

3- Decreased friction for audience building

4- Greater focus on a decentralized investor base

5- Increasing desire for removal of communication middlemen

6- A rise in solo-capitalist tools & platforms

Simply, as the world becomes increasingly digital & decentralized, it is ushering us into a new era of solo-capitalists.

What does that mean?

In a sense, we are witnessing a rapid expansion of agency for the individual investor and trader. Day by day we see the arbitrary barriers that locked investors and funds away from realizing the potential of new and exciting advancements. As Central Banks race to the bottom, their monetary policy will push more yield-hungry behaviors, which inherently will increase an appetite for risk.

We’ve seen the complaints that Wall St., and especially technology stocks, are decoupled from reality — absurdly “overvalued” stocks like Tesla and Nikola make those who follow old conventions of valuation shake their heads. But, as I see it, they’re just some of the first to come.

Where I see this trend going is a continued expansion of interest in increasingly risky and speculative ventures. At the same time, the need for individuals to define their financial destiny will become more relevant by the day.

One such recent expansion that is catching fire is a “Rolling Fund”.

A Rolling Fund is a new type of investment vehicle that allows its managers to invest at their discretion in opportunities on behalf of investors (often referred to as “limited partners”).

Investors typically contribute to the fund on a quarterly subscription basis.

Rolling Funds are publicly marketable and remain continuously open to new investors. (Hence the term, “rolling.”)

AngelList’s introduction of a Rolling Funds product in February 2020 brought this concept to the Venture Investing mainstream.

The major caveat here is that, just like STOs, it is limited in who can invest — usually, only accredited investors. That does severely limit the potential of what Rolling Funds could be, but just as I’ve often talked about STOs, it’s important to see their limitations as finite and subject to subversion or outright removal in the near future.

ICOs, STOs, SPACs, and now Rolling Funds all represent the winds of change in this direction — they empower individuals to invest directly in a project, passion, or person without the unnecessary and bloated oversight of corporate middlemen.

After all, who has any right to tell you what you can and cannot do with your own money?

Now, Solo Capitalist was coined a month ago as a companion to that capital appreciation vehicle I just mentioned — the Rolling Fund. While I think it’s a bit myopic to tie a term as broad as “Solo Capitalist” to something as narrow as a single fund structure, the Rolling Fund, the emphasis of both is the ability to run a fund of one person.

In a sense, the future of individual investing agency is looking very bright.

Tomorrow, we’ll talk about this topic some more.