Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!

  • Ramnik noted that people didn’t identify with companies; they identified with people. They might never trust this new crypto exchange, but they might trust its founder, odd as he was, if they thought they knew who he was. “The first thing we asked was can we get Sam on TV,” said Ramnik. “That seemed like a long shot. But Natalie somehow did it.” To help her in her new and unfamiliar role as head of FTX public relations, Natalie had called a New York public relations firm called M Group Strategic Communications. Its head, Jay Morakis, was at first wary. “I thought maybe it was some shady Chinese thing,” he said. But then he heard Sam’s pitch, and watched Sam’s first big public appearance, on Bloomberg TV. “Whatever the closest thing in my PR experience has been to this, nothing is close,” he said. “I’m fifty years old. I’ve had my firm for twenty years and I’ve never seen anything like it. All my guys want to meet Sam. I have CEOs calling me and asking: Can you do for us what you did for Sam?” He’d had to explain, back in 2021, that he actually hadn’t done anything. Sam had just sort of . . . happened.

  • The effect of Sam’s media appearances in the latter part of 2021 exceeded everyone’s expectations. This person who had always kept the world at a distance, and from whom the world had mostly kept its distance, somehow, through media, came alive in people’s imaginations. Inside of crypto Sam was becoming famous; outside of crypto he was still unknown and, therefore, untrusted.

  • Part of Ramnik’s odd new job was to help fix that. “How do you determine something is credible?” he said. “It’s by association. Trust comes from preexisting relationships.” Sam had no preexisting relationships; before about the age of eighteen he’d hardly had any relationships at all; since then, he had come to know a bunch of effective altruists (a lot of whom were furious with him for creating a civil war inside their movement) and another bunch of Jane Street traders (who were massively irritated with him for leaving Jane Street to create a rival firm, and for poaching Jane Street traders).

  • As for the venture capitalists, Sam had no real experience with them: this was an entirely new game. Ramnik watched him figure out how to play it. In early 2021, Jump Trading—­not a conventional venture capitalist—­offered to buy a stake in FTX at a company valuation of $4 billion. “Sam said no, the fundraise is at twenty billion,” recalled Ramnik. Jump responded by saying that they’d be interested at that price if Sam could find others who were too—­which told you that the value people assigned to new businesses was arbitrary.

  • Selling a new business to a VC was apparently less like selling a sofa than it was like pitching a movie idea. The VCs’ eagerness to buy turned less on your hard numbers than on how excited they became about the story you told. It was as if they spent their day listening to stories and picking the ones they liked best. There was no rhyme or reason to their evaluations: English class all over again. Sam quickly figured out that most of the stories these people heard were just not very persuasive. “Most people tell stories that are trivial to falsify,” he said. The story he and Ramnik told was not that way. It went roughly as follows:

  • Global stocks traded $600 billion a day, crypto was now trading $200 billion each day, and the gap was closing. Inside of eighteen months, FTX had gone from nothing to the world’s fifth-­biggest crypto exchange, and every day, it was seizing market share from its competitors. They were now the only crypto exchange making a priority of obtaining licenses and going legit. They were also the only crypto exchange that hadn’t in one way or another offended US financial regulators. Once licensed in the United States, a crypto exchange like FTX could also trade stocks or anything else people wanted to trade and challenge, for example, the New York Stock Exchange. To that end, Sam had already incorporated a business called FTX US—­but was being careful about allowing customers to trade stuff on it of which the SEC might disapprove. “The argument was, ‘Look how fast we’re growing, the market is huge—­and we’re going to be the credible party,’ ” said Ramnik.

  • There was a circularity to their situation. To be the credible party, it would help to have money from fancy venture capitalists. To get the VCs’ money, they needed to be the credible party. And yet it was all so loosey-­goosey. After hearing their pitch, one fund sent them a term sheet and said, “We love you so much just fill in a number.” Sam filled in a number: $20 billion. The fund went quiet for a bit and then, when Ramnik called, said they’d changed their mind. A British venture capital firm oddly named Hedosophia called and offered to pay what Sam asked—­and hand over $100 million for a 0.05 percent stake in FTX. Ramnik hardly knew who they were and so arranged a call with them. “It was weird,” he said. “I felt they didn’t know enough about the business. Basic shit like they didn’t know that FTX US existed.”

  • Even so, the Hedosophia people sent Ramnik a term sheet—­only to change their minds after a mini crash in crypto prices and withdraw it. A guy from Blackstone, the world’s biggest private investment firm, called Sam to say that he thought a valuation of $20 billion was too high—­and that Blackstone would invest at a valuation of $15 billion. “Sam said, ‘If you think it is too high, I’ll let you short a billion of our stock at a valuation of twenty billion,’ ” recalled Ramnik. “The guy said, ‘We don’t short stock.’ And Sam said that if you worked at Jane Street you’d be fired the first week.”‡

  • Even if the VCs didn’t all realize that Sam was playing a video game at the same time that he was talking to them, most sensed that he didn’t care what they had to say. Ramnik came to think that Sam’s indifference to their feelings actually heightened their interest in him. That FTX was profitable and didn’t really need the money probably also helped. In the end, between the summer of 2020 and the spring of 2021, in four rounds of fundraising, they sold roughly 6 percent of the company for $2.3 billion. Roughly one hundred fifty different venture capital firms invested. All of them caved to Sam’s refusal to give them a seat on the board (he had no board) or any other form of control over the business.

  • At that moment, Sam was planning to give $15–­$30 million to McConnell to defeat the Trumpier candidates in the US Senate races. On a separate front, he explained to me, as the plane descended into Washington, DC, he was exploring the legality of paying Donald Trump himself not to run for president. His team had somehow created a back channel into the Trump operation and returned with the not terribly earth-­shattering news that Donald Trump might indeed have his price: $5 billion. Or so Sam was told by his team.