2021: Best Year Ever!
The world remained mired in the personal and economic cost of the continuing pandemic, but my life reached a new pinnacle with the birth of my son, François Olivier Jean-Paul Grinda, May 18, 2021. I am blessed that not only it was the easiest pregnancy and birth ever, but he is also the most amazing baby ever. He is extraordinarily agreeable. He is always happy and smiley. He is willing to be manhandled and taken on crazy adventures. He never cries and has an awaken intensity that my mother says reminds her of me when I was younger. On top of that we really look alike at the same age.
I must admit these first 7 months have been way more fun and interesting than expected. I cannot wait for all the adventures we are going to have together!
In my 2020 year in review, I explained how Revelstoke pulled at my heartstrings and would make an amazing mecca for winter and summer mountain sports. I had no immediate plans to put that vision into action especially as the Canadian borders were closed March 2020 until September 2021. Back in the day I had chanced upon the one house I felt matched my personal contemporary aesthetics. I had envisioned visiting it when the borders re-opened. However, I heard the owners had received an offer they were going to take. I hastily organized a Facetime visit and ended purchasing the house. I closed in June and was finally able to visit it in September when the border reopened. I admit I was apprehensive as real estate often looks better in photos than in person. However, I was blown away. The house is more beautiful and grander than I expected, and I could not be happier with the purchase. We hastily furnished it and were able to come for a week of skiing the last week of the year and to ring the new year surrounded by snow.
Other than that life resumed its course as we learned to deal with the inconveniences of travel in the times of COVID. I discovered Nosara in Costa Rica. I went to visit my dad in Crans-Montana in Switzerland. I renewed my US visa in the Bahamas. I went to a vegan largely off grid retreat in Formentera. I explored Jackson Hole during the summer. I brought François to meet the family in Nice in July. It was great to go back after almost two years away.
Beyond the travels, I implemented my plan of living in alternance between New York and Turks & Caicos. New York came back to life, and once again became a haven of intellectual, social, professional and artistic stimulation. I even re-started hosting my in-person intellectual salons.
Turks provided the perfect balance by allowing me to work during the day, but kite, play tennis and padel, and really take the time to read, be reflective and recharge my batteries.
In 2020, I hosted a family Christmas reunion, rekindling my grandmother Françoise’s family tradition. 27 friends and family came for it and we had the time of our lives. This year, 43 of us came covering three generations of Grindas from 7-months-old to 85! All the joy and laughter warmed my heart and I intend to continue this tradition for years to come.
I was sad my mother could not join us for medical reasons, so I brought her François and went to see her the week before Christmas to make sure she knew we thought about her, loved her and missed her. I really hope she can make it next year!
Professionally, 2021 was extraordinarily busy. We did the first close of FJ Labs III and started deploying capital from the new fund. We partnered with my former OLX co-founder, Alec Oxenford, on a SPAC and with Greentrail Capital on another SPAC. We helped start 5 startups. We also find ourselves spending ever more time in crypto.
Overall, FJ Labs continued to rock. 2021 was our most prolific year ever. The team grew to 31 people and two of our longstanding employees made partner. We deployed $99 million. We made 281 investments, 180 first time investments and 101 follow-on investments. We had 41 exits, of which 24 were successful, including the IPO of Coupang on the NYSE, the IPO of Infracommerce on Brazil’s B3 exchange, the acquisitions of Drizly by Uber, Returnly by Affirm, and Apostrophe! by hims & hers.
Since Jose and I started angel investing 23 years ago, we invested in 835 unique companies, had 259 exits (including partial exits), and currently have 614 active unique company investments. We had realized returns of 45% IRR and a 4.4x average multiple. In total, we deployed $430M of which $148M was provided by Jose and me.
I was so busy professionally, that I did not have the time to write as much as I would have liked to. My best articles were:
Likewise, I did not have enough time to dedicate to my livestreaming show, Playing With Unicorns, but loved reflecting on what is happening in the crypto world and the technology trends for the next decade. I also had a fascinating conversation with my friend Christian Angermayer where we covered everything and anything: the meaning of life, happiness, spirituality, longevity, crypto, psychedelics and much more.
I was not as prolific a reader as I usually am, but the favorite books I read this year were:
Last year, I worried that negative real rates with aggressive expansionary fiscal policies, while necessary to stave off an economic disaster, were fueling a bubble across every asset class. In 2020, it was most visible in SPACs and public markets. This is starting to correct as the expectation of interest rate rises is leading to multiples compression. The SPAC bubble burst in 2021 and 40% of stocks on the Nasdaq are down 50%+ from their 52-week high. However, I am still seeing a lot of frothiness in late-stage tech investing and a full-blown bubble in art NFTs.
In 2021, as the economy started booming and inflation started taking off, I worried that policy makers would not have the gumption to raise rates leading to a repeat of the 1970s, especially as some were calling for price controls which both economically damaging and ineffective. To some extent these worries have abated. I am more hopeful that we are going to be able to control inflation while keeping unemployment low as it reached 3.9% in December, near the 50-year low of 3.5% reached in February 2020.
This is not to say that we are necessarily in for a soft landing. The extraordinary levels of public debt accumulated will have to be dealt with. In the near term, historically low interest rates are making the record levels of debt manageable. However, the massive debt overhang will require delicate macroeconomic management to avoid a massive financial crisis. Governments and public attention are a bit like the Eye of Sauron: it can focus on one thing at a time. For a long time, it was Trump, then it became COVID, with a sprinkling of inflation and supply chain disruptions more recently. At some point that focus will switch to managing the public debt. How we deal with it will probably set the stage for the macroeconomic conditions, good or bad, for decades to come. As I mentioned in Welcome to the Everything Bubble, there are many ways out of a public debt crisis. There are precedents for managing it effectively as the US did after World War II, however worse alternatives are also possible.
It is worth mentioning that while the emphasis is on economic policy, we are not sheltered from geopolitical risk and its economic consequences. An accident with China over Taiwan or Russia over Ukraine, while low probability, remains a possibility.
Crypto may also be in for a shock. The recent correction in crypto prices suggests that crypto is still highly correlated with other speculative asset classes and sensitive to US interest rates. Everyone in crypto expects a crypto winter. This has become consensus to the point the contrarian in me suspects it may not happen. However, there may very well be endogenous shocks (the collapse of Tether? Busting of the art NFT bubble?) or exogenous shocks (general macro shock? counter-productive US regulation on stable coins?).
We are still seeing supply chain disruptions as Americans have switched from ordering services to buying physical goods at an unprecedented level, especially when coupled with under investment in our infrastructure. I had hoped that COVID would be over by now, but it was not to be. However, Omnicron being so contagious, yet less deadly is accelerating the transition from pandemic to endemic. I am hoping that in 2022, we can finally put COVID disruptions behind us and return to a semblance of normalcy. An increase in the consumption of services would alleviate supply chain problems and help lower inflation. Technology can also play a role. Ryan Peterson, the CEO of Flexport, one of our portfolio companies, notably made many suggestions to remediate the situation.
Beyond that, as COVID moved our lives online, we are seeing an unprecedented wave of innovation in categories heretofore untouched by the technology revolution with strides finally being made in education, health care, public services and B2B. It is amazing that we are finally able to bring to bear the deflationary power of technology and its better user experiences to more categories than ever before. I am ever more convinced that we are going to rise to the challenges of the 21st century and use technology to tackle the three main issues we face: climate change, inequality of opportunity/social injustice and the mental and physical health crisis. It is also amazing to see more people choosing to become entrepreneurs and creators to lead a more purposeful life.
I am extremely grateful for the year I had, with the birth of my son, countless adventures, and to participate in helping create a better world of tomorrow. I am hopeful that 2022 will bring more extraordinary adventures. I am looking forward to seeing my son grow over the next 12 months. It will also be interesting to see what I think of my new distributed life between Revelstoke, Turks, and New York, with a month in Nice in the summer. 2022 should finally mark the end of my renovations in New York. I am excited to move back in!
I am also excited to return to Burning Man and to start training for a 2023 cross-country ski adventure to the South Pole. I am also hopeful that my little family will expand by a new member this year. I was devastated by the loss of Bagheera in 2017 to the point I could not envision getting another dog. However, I feel that the time has come. With a little luck, I look forward to welcoming Angel, a white German Shepherd in my life, in the summer of 2022.
I am privileged to be presented with so many amazing opportunities personally and professionally. In 2022 I need to get better at saying no to focus on what truly matters.
Happy New Year!