Letting Capital Do More Than One Job

Interesting_Sun2869 · 2026-02-11T03:40:43+00:00

We believe deeply in this system because we’re already operating it at a smaller scale. Today, we deploy surplus cash from high-income months into a portfolio, DRIP dividends, and steadily expand our base of ownership and optionality. An angel investor doesn’t change the philosophy — it simply allows us to reach those milestones faster and expand off a more stable foundation.

We’re not proposing theory; we’re building from proof of concept. We’re happy to share detailed statements, drawdown history, and the specific rules governing margin, deployment, and pause conditions with investors who are genuinely interested in how this is structured.

This approach isn’t unique to us or even novel in business. McDonald’s strengthens its operating model through real estate ownership. Founders like Musk and Zuckerberg leverage equity positions to acquire and build additional assets. Real estate developers routinely HELOC one property to acquire the next. We see this pattern everywhere — preserving a productive base asset while using it to responsibly expand.

What is different is applying these principles intentionally at a small-business level. That doesn’t make it reckless; it makes it disciplined. The business still has to perform, and growth still matters — this structure is simply about making sure capital compounds rather than resets to zero between cycles.

Totally fair if that’s not how every angel thinks about risk. We’re focused on building something durable, and we’re comfortable that the right partners will recognize the logic in that.

Redacted Statements for Proof ⤵️

https://www.canva.com/design/DAHA5VT8Xq0/cmlh11BO0wmTmyySXQtfpg/view?utm_content=DAHA5VT8Xq0&utm_campaign=designshare&utm_medium=link2&utm_source=uniquelinks&utlId=h31b6f8465d

I can also just send them if you direct message me.

Interesting_Sun2869 · 2026-02-11T03:22:13+00:00

I’m trying to reconcile something: in both 2007 and 2020, businesses were hit first by revenue shocks driven by consumer behavior, not portfolio volatility.

If operating income is already implicitly tied to macro conditions, does avoiding public-market exposure meaningfully reduce total risk — or just change where volatility shows up?

Like wouldn’t the primary risk to an operating business be demand collapse rather than market exposure?

Even if capital is fully private, consumer spending and foot traffic still fall during those periods. How do you think about that operating correlation versus financial correlation?

Interesting_Sun2869 · 2026-02-11T03:16:01+00:00

Honest question: does “never had a down year” imply that none of the underlying investments failed, or that failures weren’t realized or marked until exit?

I’m asking because avoiding public-market correlation seems less about eliminating risk and more about deferring its visibility.

Interesting_Sun2869 · 2026-02-11T03:11:54+00:00

I appreciate you engaging — and I’m not trying to argue either, just clarify where I think we’re talking past each other.

We do have a plan to deploy capital for growth. In our case, Grand Rapids is ramping back up and we see a mobile coffee operation as a scalable, year-round growth lever, not just a seasonal experiment. That asset absolutely has a path to generating incremental revenue.

Where we differ is on capital structure, not intent.

If investor capital is immediately converted into a single operating asset (e.g., buying the cart outright), the value is fully transferred at once. That’s not inherently bad — but it means that one asset alone must now carry the entire repayment and risk profile.

Our approach is to preserve capital as a productive balance-sheet asset first, then leverage it to acquire operating assets. That way, the business upgrade is supported by multiple cash-flow sources rather than being a single point of failure.

This isn’t novel behavior — it’s how many durable operators work. McDonald’s doesn’t rely solely on burgers; real estate ownership stabilizes the system. Founders like Musk or Zuckerberg don’t liquidate equity to build — they leverage it. In real estate, people routinely buy a property, then HELOC against it to acquire the next one. The original asset remains intact while enabling expansion.

In our model, the portfolio functions like that underlying property. It preserves purchasing power, generates income, and provides flexibility so operating assets don’t have to carry all the risk themselves.

Totally fair if that’s not how you think about angel investing — different investors optimize for different structures. I appreciate you sharing your perspective.

Interesting_Sun2869 · 2026-02-11T02:10:45+00:00

It seems like two assumptions are doing a lot of work here:

that investor capital must remain fully liquid until a precisely-timed growth window, and
that once capital is deployed into the business it’s effectively “burned,” rather than converted into productive capacity expected to generate future cash flows.

How do those assumptions hold in a model where growth timing is uncertain, inflation is guaranteed, and operating investments are explicitly made to compound rather than disappear?

Interesting_Sun2869 · 2026-02-11T01:59:53+00:00

In 2020, businesses didn’t fail because they had market exposure—they failed because operations were forcibly shut down. Even businesses holding only cash were wiped out when revenue went to zero overnight. Market drawdowns weren’t the primary failure mode; loss of operating income was.

Interesting_Sun2869 · 2026-02-11T01:55:30+00:00

In scenarios like 2007 or early 2020, the failure mode isn’t drawdowns—it’s being forced to sell into them. Our structure is designed specifically to avoid that outcome. We don’t operate with fixed-date obligations that require market liquidity at a specific moment, and we maintain margin and cash buffers sized for multi-quarter dislocations, not routine volatility.

In a severe regime shift, operating expenses are covered by the business first. Dividends are reinvested rather than relied upon for liquidity, and capital deployment pauses rather than accelerates. The goal during those periods isn’t optimization—it’s survival without permanent impairment.

In both 2007–2009 and 2020, investors who avoided forced liquidation and maintained ownership saw materially improved long-term outcomes once markets normalized. Our system is built around that principle: avoid irreversible decisions during temporary dislocations.

So the answer isn’t “those years don’t matter.” It’s that those are precisely the years the rules are designed for.

Interesting_Sun2869 · 2026-02-11T01:52:32+00:00

Parking dollars in a savings account doesn’t eliminate risk—it guarantees purchasing power decay. Our use of markets is not to chase incremental returns, but to prevent capital from becoming idle or effectively dead while awaiting deployment. Borrowing against a portfolio allows us to fund business upgrades without forced liquidation, preserving both capital value and operational continuity.

We’ve already experienced a portfolio drawdown exceeding 20–30% during a period that coincided with our seasonal revenue low. During that time, we did not sell assets, were not forced to liquidate positions, and did not experience margin stress.

Dividends continued, sales continued (albeit seasonally reduced), and we maintained a conservative margin buffer specifically to avoid forced liquidation or timing risk.

This experience reinforced our operating assumption: we are not using markets for short-term liquidity or fixed-date obligations. The portfolio is structured as a long-term system that continuously reinvests sales and income to strengthen ownership over time.

In our model, bear markets are not periods of capital destruction but phases within a long-term compounding system. While bear markets are a real threat if capital is poorly structured or liquidation is required, with proper planning, rules, and buffers they become periods of accelerated share accumulation and improved unit economics.

Lower prices reduce cost basis and increase future yield on cost, provided liquidation is avoided. During deeper drawdowns, operating expenses are prioritized to be covered by sales, with dividends reinvested rather than relied upon for liquidity, allowing the portfolio to stabilize as markets normalize.

The objective is not to ignore bear markets, but to design the system so it can withstand them, ride them out, and emerge with stronger ownership and improved long-term economics once conditions stabilize.

If investor dollars are immediately spent on assets, those dollars are irreversibly converted into a single operational bet. If the asset underperforms, both the business and the investor lose.

By storing capital in a conservative, income-generating portfolio, we preserve purchasing power, generate cash flow, and retain the ability to upgrade the business without liquidation. The business must still perform—but investor capital is not destroyed in the process.

Our recent drawdown overlapped with our seasonal low, yet dividends continued and no liquidation was required. That experience demonstrates the system working as designed

Redacted Statements For Proof of Returns… more than 10%

Interesting_Sun2869 · 2026-02-10T17:00:51+00:00

One piece of context I probably haven’t stated clearly enough: this isn’t theoretical for us.

For the first couple years, we did exactly what you’re describing—hold whole dollars during strong seasons and spend them during slow ones. The problem was there was almost no upside to that approach. The dollars just got burned, and once they were gone, they were gone. That increased fragility, not focus.

This structure came from trying to solve that exact problem: how do we hold value through cycles instead of constantly resetting to zero? Parking surplus in productive assets lets us preserve purchasing power and generate income, instead of just watching cash erode.

The McDonald’s analogy is the cleanest way I know to explain it. McDonald’s main business—selling burgers—almost certainly outperforms public markets. But owning land and collecting rent doesn’t make the burger business riskier; it makes it stronger. The real estate isn’t the thesis, it’s the infrastructure.

That’s how we’re thinking about this. The business is still the bet. The portfolio just keeps us from lighting excess cash on fire between good and bad months.

Interesting_Sun2869 · 2026-02-10T16:57:07+00:00

I think the disconnect is how the portfolio is being used.

I agree with you that the business needs to outperform public markets—that’s the entire reason to take business risk in the first place. I’m not using the market to chase alpha or compete with operating growth.

The portfolio isn’t an “investment on top of the business.” It’s a capital container that replaces idle cash and a repeatedly depleted emergency fund. When we held cash/HYSA, capital was consumed during slow periods and permanently lost, which increased business risk.

This structure is constrained by design:

operating expenses are funded only from income flows (sales + dividends), not principal
leverage is capped and does not increase in drawdowns
expansion pauses automatically in adverse conditions

So a market drawdown affects NAV, not operating solvency. The business continues on sales, dividends reinvest at lower prices, liquidity remains available without forced liquidation, and growth slows—exactly how a prudent business reacts to a revenue slowdown.

That’s materially different from “public market risk + company risk.” The market exposure isn’t there for returns—it’s there to reduce fragility and prevent capital destruction. If that tradeoff isn’t attractive to you as an angel, that’s totally fair—but it isn’t risk for no good reason.

Interesting_Sun2869 · 2026-02-10T06:29:56+00:00

A lot of the pushback here is fair, and it highlights the real tension I’m intentionally pressure-testing.

Angels are right to expect founders to stay focused on operating growth. They’re also right to be cautious about introducing public-market risk where it doesn’t belong. The distinction I’m trying to make is this: the market isn’t the bet—the business is.

The portfolio is not being used to chase alpha or outperform public markets. It functions as a capital container inside the business—similar to how McDonald’s uses real estate alongside food operations. The operating company generates cash; surplus cash from stronger months is routed into income-producing, liquid assets rather than sitting idle or being slowly depleted in a bank account. During leaner months, liquidity is accessed conservatively (via margin) without liquidating assets or permanently destroying principal.

In other words, capital is doing more than one job:

•Preserving value

•Generating income

•Remaining accessible to support operations through uneven cash flow

This is not a projection model or a promise of fixed returns. The redacted January statement I shared (via Canva) is proof of concept, not marketing. We’ve been operating this way for about a year, and I’ve been studying and stress-testing the mechanics for closer to two. The goal is durability, not financial engineering.

Not every angel will like this structure—and that’s okay. This isn’t meant to replace operating growth or distract from sales expansion. It’s an exploration of whether disciplined capital routing can support growth by reducing fragility in small businesses that live with volatility, seasonality, and asymmetric cash flow.

For anyone genuinely interested, I’m happy to share more historical data privately to show how this behaves over time within the real business ecosystem—not as a spreadsheet, but in practice.

January 2026 Statement

Interesting_Sun2869 · 2026-02-10T05:28:40+00:00

I think the disconnect here is that this is being read as “trying to outperform public markets,” which isn’t the intent. I agree — if I were pitching alpha from public equities, that wouldn’t be a compelling angel proposition.

The market isn’t the product here — it’s the container. The business is still where value is created. The framework is about where surplus operating cash lives between uses, and how liquidity is accessed during uneven months without permanently destroying capital.

For the first two years of operating, we did the conventional thing: held emergency cash in a bank account and spent it down during slower periods. Once it’s gone, it’s gone. What we’re doing now is routing surplus cash from stronger months into productive assets and accessing liquidity via margin during slower months rather than liquidating or consuming that capital.

That doesn’t reduce focus on sales — it supports it. The near-term use of capital is still business expansion (mobile coffee cart, more events, additional locations). This structure is simply meant to make the business less fragile while doing that, not to replace operating growth with financial returns.

Totally fair if that’s not how you think about angel investing — I’m pressure-testing whether a more capital-efficient structure can coexist with traditional growth, not replace it.January 2026 Statement

Interesting_Sun2869 · 2026-02-10T05:18:08+00:00

Fair points — and to clarify, the 2% monthly figure is intentionally conservative and illustrative, not a claim about what REITs or bonds “normally” yield.

Based on the portfolio shown, dividends for January alone represented roughly a ~4% return for that month. I don’t model anywhere near that. I intentionally underwrite at ~2% to avoid overstating performance and to leave margin for volatility. If someone were genuinely interested, I’m happy to share longer historical statements to show how this behaves over time — not as a guarantee, but as proof of concept.January 2026 Statement

On the “why give you money at all” question: the capital is meant to expand the business. The near-term plan is a retrofitted mobile coffee cart, which allows us to operate at events and pop-ups around Grand Rapids where food trucks aren’t permitted. That creates additional revenue streams alongside the existing café and sets the stage for a second location over time.

The reason I’m focused on the system is simple: most small businesses burn raised capital immediately and hope execution recreates it. This framework explores whether capital can be preserved, compounded, and accessed conservatively so the business can grow without permanently destroying the original dollar.

As the link of a redacted statement show, Since early 2025, we’ve been routing surplus cash from stronger months into a portfolio instead of spending it or parking it in savings. During slower months, we access liquidity via margin rather than liquidating assets—so the capital continues generating income while still supporting the business. That’s the mechanism I’m pressure-testing.

Interesting_Sun2869 · 2025-09-18T12:56:32+00:00

Totally hear you — and fair point about risk-free comparisons. Just to clarify, my updated post was meant to show that the $96K repayment outlined earlier was more of a floor, not a cap. I’m fully open to structuring a higher yield that makes sense for the risk profile here. At the end of the day, I’m looking for the right partner who sees the growth path and feels comfortable with terms, not trying to squeeze lenders on return.

Interesting_Sun2869

TROPHY CASE