The Pied Pipers of CapitalFive Founders, One Playbook, and the Investor Addiction to Charisma

 

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Adam Neumann told the world he was going to elevate human consciousness. He rented desks. James Watt said he was going to tear up the rulebook of corporate Britain. He brewed beer. Elizabeth Holmes promised to democratise healthcare. Her machines did not work. Trevor Milton was going to decarbonise the trucking industry. His truck rolled downhill. Sam Bankman-Fried wanted to earn billions so he could give it all away. He stole the billions instead.

All five of them sold something far more intoxicating than their products. They sold a story. And the story was always the same story, which was this: I am not like the others. I can see what they cannot see. Give me your money.

And people gave them their money.

So it goes.

Together, these five founders destroyed or misappropriated well over one hundred billion dollars. That is a number so large that it ceases to mean anything, which is perhaps the point. When you destroy a hundred dollars, people are angry. When you destroy a hundred billion, people write books about you and you get invited to Davos.

Here is what I want to tell you about these five people: they are not extraordinary. They are ordinary people who discovered that the world will hand you an astonishing amount of money if you are willing to say things that are not true with sufficient confidence. This is not a talent. It is a pathology. But it is a pathology that our financial system has decided to reward, and so here we are.

2

I will tell you about Adam Neumann first, because his story is the biggest.

Neumann grew up on a kibbutz in Israel. He served in the navy. He moved to New York. In 2010, he and a man named Miguel McKelvey opened a coworking space in lower Manhattan. The idea was simple. You lease office space on long contracts. You subdivide it. You put in nice furniture and good coffee. You rent the subdivisions on short contracts at a higher price. This is called arbitrage. It is not complicated.

But Neumann did not call it arbitrage. He called it a movement. WeWork was not a real estate company, he said. It was a technology company. It was a consciousness company. It was going to elevate the world’s consciousness, which is a sentence that means nothing, which is why it was so effective. When a sentence means nothing, the listener can make it mean anything they want.

By 2017, a man named Masayoshi Son committed four and a half billion dollars to WeWork after a twelve-minute tour of its headquarters. Twelve minutes. That is less time than it takes to hard-boil an egg.

And so on.

Son would eventually pour nearly sixteen billion dollars into WeWork through various funds. At its peak, in January 2019, the company was valued at forty-seven billion dollars. It had never made a profit. Its losses were getting larger every year: four hundred and twenty-nine million in 2016, nine hundred and thirty-three million in 2017, one point nine three billion in 2018. The more money it lost, the more money people gave it. This is not how things are supposed to work, but it is how things work.

Neumann himself behaved the way a person behaves when they have been told, repeatedly, that they are a genius. He surfed. He meditated. He spoke about becoming the world’s first trillionaire. He kept tequila in his office. He smoked marijuana on a private jet. He trademarked the word “We” and charged his own company five point nine million dollars to use it. His wife was given the contractual right to help choose his successor.

In August 2019, WeWork filed its paperwork to go public. The paperwork included a made-up financial metric called “community adjusted EBITDA,” which removed virtually all costs to make the company appear profitable. The financial press treated this as a joke. It was not a joke. It was a sincere attempt to redefine the meaning of the word “profit.”

The IPO was cancelled. Neumann was forced out. SoftBank assembled a rescue package. And here is the part that matters: Neumann walked away with one point seven billion dollars.

One point seven billion dollars. For the man who had presided over the destruction of forty billion dollars of value.

And there it is.

WeWork went public later through a different mechanism. Its value fell ninety-eight per cent. It filed for bankruptcy in November 2023. Neumann, meanwhile, started a new company called Flow, which is valued at two point five billion dollars. Andreessen Horowitz gave him three hundred and fifty million dollars before the company had launched. His net worth, as of 2024, is estimated at two point two billion.

He is doing fine.

WeWork emerged from bankruptcy in June 2024. A software company called Yardi Systems became its majority owner. A software company. A company that actually makes money. That is what happens when the storytellers go away and the accountants arrive.

3

James Watt grew up in Fraserburgh, a fishing town in Scotland. He studied law. He brewed beer in his garage. In 2007, he co-founded BrewDog with a man named Martin Dickie.

Watt understood something important. He understood that the beer was not the product. The story was the product. And the story was: we are punks. We are rebels. We are fighting against corporate greed. The customers were not customers. They were “Equity Punks.” The investors were not investors. They were revolutionaries.

This is a very clever trick. When you turn a financial transaction into an identity, the financial transaction becomes immune to rational evaluation. You do not subject your identity to a cost-benefit analysis. You do not run a discounted cash flow model on who you are.

Over seven rounds of crowdfunding, BrewDog raised seventy-five million pounds from more than two hundred thousand small investors. For roughly five hundred pounds each, they got shares in a private company, a discount on beer, and the feeling that they were part of something.

In 2017, a private equity firm called TSG Consumer Partners invested two hundred and thirteen million pounds. Watt and his co-founder cashed out roughly a hundred million pounds between them. The punk who railed against corporate greed had banked nine figures.

And here we are.

There is a detail that most of the Equity Punks did not understand, and it is this: TSG’s investment came with preference shares carrying an eighteen per cent compound annual return. In any sale, TSG gets paid first. By 2025, the amount owed to TSG had grown to over eight hundred million pounds. The company’s net debt was two hundred and thirty-nine million. Its cumulative losses over five years totalled one hundred and forty-eight million. There was nothing left for the punks.

The two hundred thousand Equity Punks who believed they were revolutionaries were, in fact, holding worthless paper. The revolution had been structured, from the beginning, to benefit the generals and abandon the foot soldiers.

In May 2024, Watt stepped down as CEO. He gave himself the title “Captain and Co-Founder.” In January 2025, he announced a television show where he would invest two million pounds in startups. In December 2024, he asked LinkedIn whether he should delay his wedding to save on taxes. More than a thousand people replied.

He is doing fine, too.

I should tell you about the employees, though. In 2021, more than a hundred former BrewDog employees published an open letter. They said the company had a “toxic workplace” and a “culture of fear.” A significant number said they had developed mental illness as a result of working there. Watt said he was “sorry” and promised to “listen, learn and act.” These are the words people use when they have no intention of listening, learning, or acting.

A BBC documentary amplified the allegations in 2022. Watt was accused of inappropriate behaviour with female staff, which he denied. It emerged that he had hired private investigators to spy on people he believed were smearing him. The punk had become the paranoid corporate boss. Ofcom later dismissed BrewDog’s claim that the documentary was unfair.

BrewDog launched an “anti-sponsor” campaign during the 2022 Qatar World Cup, condemning the tournament on human rights grounds. They also screened the matches in their bars and sold beer in Qatar. There was a gold can promotion modelled on Willy Wonka. The “solid gold” cans turned out to be brass. Watt said he had “misunderstood” the manufacturing process. A man who built a billion-pound company did not understand what his promotional cans were made of. That is either a lie or something worse than a lie.

In 2024, BrewDog dropped the real living wage for its staff. It lost its B Corp certification. Staff from the flagship Waterloo bar wrote another open letter saying nothing had changed since the promises of 2021.

And so on.

4

Elizabeth Holmes dropped out of Stanford at nineteen. She founded a company called Theranos. Her idea was genuinely wonderful: a device that could run hundreds of blood tests from a single drop of blood. If it had worked, it would have changed medicine. It did not work.

Holmes wore black turtlenecks like Steve Jobs. She spoke in a baritone voice that colleagues said was fake. She assembled a board of directors that included Henry Kissinger, George Shultz, and James Mattis. Not scientists. Statesmen. The message was: this is an institution. Institutions do not lie.

Theranos raised over seven hundred million dollars. The Walton family put in a hundred and fifty million. Rupert Murdoch put in a hundred and twenty-five million. Betsy DeVos put in a hundred million. At its peak, the company was valued at nine billion dollars. Holmes was named the youngest self-made female billionaire in America.

Here is what was actually happening. Of the more than two hundred tests Theranos advertised, its machines could perform very few. The results were unreliable. The company was secretly running most tests on conventional machines made by Siemens. Patients received wrong results. Some were told they had diseases they did not have. Some were told they were healthy when they were not.

This is the part of the story where I must remind you that the other founders on this list destroyed money. Holmes endangered lives.

A journalist named John Carreyrou figured it out. He wrote about it in the Wall Street Journal. Walgreens, which had opened forty wellness centres and invested a hundred and forty million dollars, walked away. The SEC charged Holmes with fraud. In January 2022, she was convicted on four counts. She was sentenced to more than eleven years in prison and ordered to pay four hundred and fifty-two million dollars in restitution.

Forbes revised her net worth from four point five billion dollars to zero.

And there it is.

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Trevor Milton founded Nikola in 2014. He promised to build hydrogen-powered semi-trucks. He was going to be the Elon Musk of freight. He had the beard and the swagger and the social media presence.

Nikola went public in June 2020, during the pandemic, when millions of new investors were trading stocks on their phones because they were bored and stuck at home. On its first full trading day, shares hit seventy-nine dollars and seventy-three cents. The company’s market capitalisation briefly exceeded thirty-four billion dollars. That was more than Ford. General Motors announced a two-billion-dollar partnership.

The trucks did not work.

In January 2018, Milton had published a video on Twitter showing the Nikola One semi-truck driving under its own power. It was not driving under its own power. The truck had been towed to the top of a hill. Someone released the brakes. The truck rolled downhill. The company filmed it at an angle that made it appear to be driving on flat road.

I want you to think about this for a moment. A company valued at thirty-four billion dollars. And the foundational evidence of its product’s viability was a truck rolling downhill.

And here we are.

In September 2020, a short-selling firm called Hindenburg Research published a report calling Nikola an “intricate fraud.” Milton stepped down within days. Federal prosecutors found that investors lost between six hundred and sixty-one million and six hundred and seventy-four million dollars. Many were retail investors trading for the first time. Some lost their retirement savings.

Milton was convicted of securities fraud in October 2022 and sentenced to four years in prison. Nikola filed for bankruptcy in February 2025. Its shares, which once traded above seventy-nine dollars, fell below one dollar.

And then, in March 2025, President Trump pardoned him.

That is a true thing that happened. A man faked a video of a truck, defrauded investors of hundreds of millions of dollars, was convicted, and was then pardoned by the President of the United States. If I had put this in a novel, my editor would have told me it was too implausible.

Hi ho.

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Sam Bankman-Fried founded FTX in 2019. He was twenty-seven. Within three years, his cryptocurrency exchange was valued at thirty-two billion dollars. Sequoia Capital invested. The Ontario Teachers’ Pension Plan invested. Singapore’s sovereign wealth fund invested. Bankman-Fried’s personal fortune reached twenty-six billion dollars.

His story was the most audacious of all. He said he was an effective altruist. He believed in earning as much money as possible so that he could give it all away. He wore cargo shorts and a t-shirt. He slept on a beanbag. He testified before Congress about responsible crypto regulation. He donated millions to political campaigns.

The costume was different from Neumann’s surfing mogul or Holmes’s turtlenecked visionary, but the function was identical. It said: I am not motivated by greed. You can trust me with your money.

You could not trust him with your money.

Bankman-Fried was secretly funnelling at least eight billion dollars in customer deposits to his trading firm, Alameda Research. The money bought luxury real estate in the Bahamas and funded political donations and venture investments. When a CoinDesk report in November 2022 revealed Alameda’s precarious balance sheet, a bank run followed. FTX collapsed in a week. More than a hundred and thirty entities filed for bankruptcy.

The trial lasted four weeks. The jury convicted him on all seven counts. In March 2024, he was sentenced to twenty-five years and ordered to forfeit eleven billion dollars. The judge noted that he had shown no remorse and had perjured himself during the trial.

Sequoia Capital wrote its investment down to zero and deleted a fawning profile of Bankman-Fried from its website, which tells you everything you need to know about how Silicon Valley processes embarrassment.

There is one good part of this story. A man named John Ray III, who had previously unwound Enron, took over the bankruptcy. He managed to locate enough assets to repay FTX customers at the dollar values from the time of the collapse. This is extraordinary. But it owes nothing to Bankman-Fried and everything to the bull market that followed.

And so on.

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Now I want to tell you about the pattern, because there is a pattern, and it is the same every time, and nobody seems to learn from it.

First, there is the origin myth. Neumann was the kibbutznik. Watt was the fisherman’s son. Holmes dropped out of Stanford at nineteen. Milton was the small-town entrepreneur. Bankman-Fried was the genius who slept on a beanbag. The myth says: I am an outsider. I see what the insiders cannot see. The myth is never a lie, exactly. It is a selective truth arranged for maximum emotional effect.

Then there is the redefinition. The founder tells you the business is not what it appears to be. WeWork is not real estate. It is consciousness. BrewDog is not beer. It is punk. Theranos is not blood testing. It is the democratisation of healthcare. Nikola is not trucks. It is the Tesla of freight. FTX is not a crypto exchange. It is effective altruism made manifest. The redefinition inflates the valuation and insulates the founder from scrutiny. If you judge the company by conventional metrics, the founder says you are missing the point.

Then there is the cult. Neumann held company events that looked like revival meetings. Watt created two hundred thousand Equity Punks who identified with the brand so deeply that criticising the company felt like criticising them. Holmes surrounded herself with statesmen who lent her credibility she had not earned. Bankman-Fried built an ideology around his theft. The cult makes scrutiny feel like betrayal.

Then there is the cash machine. The narrative becomes so powerful that money flows without resistance. Masayoshi Son commits billions after a twelve-minute walk. Andreessen Horowitz writes a three-hundred-and-fifty-million-dollar cheque before the company has launched. The Equity Punks hand over their savings. Sequoia invests in a twenty-nine-year-old in cargo shorts. Rational analysis is replaced by faith.

And then there is the reckoning. But the reckoning never arrives for the founder. It arrives for everyone else.

Neumann walked away with one point seven billion. He is running a new company worth two point five billion. Watt cashed out a hundred million and is planning a television career. Milton was pardoned. Holmes is in prison. Bankman-Fried is in prison. The consequences are distributed unevenly, with no logic beyond political connections and the technicalities of criminal law.

The investors lose. The employees lose. The customers lose. The pension funds lose. The retail traders who started buying stocks during the pandemic lose their retirement savings.

The founders do not lose. Or if they do, they lose less.

And there it is.

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I want to explain why investors keep falling for this, because it is a reasonable question.

The first reason is that venture capital is a storytelling business. You do not invest in what a company is. You invest in a story about what it might become. This creates a structural preference for founders who tell the best stories, and a structural disadvantage for founders who are merely competent. The best pitch artists are often the worst managers. This is not a coincidence. The traits that make you a great storyteller—supreme confidence, willingness to exaggerate, ability to ignore inconvenient facts—are the same traits that make you dangerous when you are in charge of other people’s money.

The second reason is fear. In venture capital, a single investment can return a hundred times its cost. The partner who passes on the next Google is finished. The partner who funds ten disasters and one Google is a legend. This makes investors rationally biased towards saying yes. Better to back a fraud than to miss a revolution.

The third reason is that once you have given someone your money, it is very difficult to admit you were wrong. SoftBank did not invest sixteen billion dollars in WeWork all at once. It invested in stages, each new cheque partly to protect the previous one. The Equity Punks invested their money and their identity. Admitting that Watt was not a punk revolutionary meant admitting they had been fooled. Human beings will do almost anything to avoid that admission.

The fourth reason is the most important. The consequences for founders are negligible. Neumann destroyed forty billion in value and is a billionaire. Watt presided over a company that may wipe out two hundred thousand investors and is now planning a television show where he will advise other entrepreneurs. Milton was convicted and pardoned. The system has told these people, clearly and repeatedly: do it again.

In any rational system, repeated destruction of value would lead to exclusion. In the venture capital system, destruction of value is rebranded as experience. The founder who has destroyed billions is considered battle-tested. The founder who has never destroyed anything is considered untested. This is insane. But it is how things work.

There is a fifth reason, which nobody likes to talk about. The investors enjoy it. They enjoy the proximity to charisma. They enjoy the parties and the private jets and the feeling of being part of something historic. Masayoshi Son did not invest sixteen billion dollars in WeWork because of a spreadsheet. He invested because Adam Neumann made him feel something. And feeling something, in the world of institutional finance, is a rare and addictive experience.

A professor at UC Berkeley named Jennifer Chatman has observed that it is much easier for investors to see the energy and the vision and the confidence than to detect how a person treats the people beneath them. The charm is visible in the pitch meeting. The cruelty is visible only later, in the open letters and the documentaries and the trial transcripts.

A man named Michael Maccoby wrote in the Harvard Business Review about how narcissistic leaders dream big and chase impossible goals and convince sceptical investors to hand over millions. He meant it as a compliment. That tells you something about the culture.

But all of these reasons are, in the end, rational explanations for irrational behaviour. They describe the mechanics. They do not explain the feeling. To understand the feeling, you need to go deeper. You need to go to the Tavistock.

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There is a school of thought that comes out of the Tavistock Institute in London. It is called systems psychodynamics. It says that groups have an unconscious, just like individuals do. And that this group unconscious drives behaviour that the group members themselves cannot see or explain.

The key figure is a man named Wilfred Bion. He was a psychoanalyst who studied small groups during the Second World War and afterwards at the Tavistock Clinic. He noticed something strange. Groups that were assembled for a clear purpose—a work task, a therapeutic goal—would repeatedly abandon that purpose and begin behaving in ways that made no rational sense. They would become passive. Or aggressive. Or obsessed with hope. The behaviour was predictable. The groups were unaware they were doing it.

Bion said that every group has two modes. There is the “work group,” which is the group doing what it is supposed to be doing. And there is the “basic assumption group,” which is the group’s unconscious operating system. The basic assumption group runs beneath the surface, like malware. It hijacks the group’s behaviour without anyone noticing.

He identified three basic assumptions. I want to tell you about them because they describe the investor-founder dynamic with a precision that is almost eerie.

The first is dependency. In a dependency group, the members unconsciously appoint a leader who they believe is omnipotent. All-knowing. All-powerful. The group’s job is simply to follow. The leader’s intelligence is never questioned. Their judgment is never tested. The group becomes passive, childlike, waiting to be told what to do.

This is what happened with every founder on this list. Masayoshi Son did not invest sixteen billion dollars because he ran a spreadsheet. He invested because Neumann made him feel that Neumann was the man who could see the future. Holmes assembled a board of statesmen—not scientists—because the function of the board was not to evaluate the technology. It was to embody the group’s dependency on the leader. Kissinger and Shultz were not there to check the blood-testing machines. They were there because their presence said: this person is trustworthy. We do not need to look any further.

The Equity Punks were a dependency group of two hundred thousand people. They gave their money to Watt and asked no questions because the entire structure was designed to make questioning feel like betrayal. The punk identity was not marketing. It was a social defence against the anxiety of not knowing whether your investment was any good.

The second basic assumption is fight-flight. When the dependency leader inevitably fails—because no one can be omnipotent—the group does not reflect. It does not learn. It fights or it runs.

When former BrewDog employees published their open letter, the Equity Punks did not say: perhaps we should examine our investment. They attacked the employees. When the Wall Street Journal published Carreyrou’s investigation of Theranos, Holmes did not cooperate. She hired lawyers and accused Carreyrou of conspiring against her. When Hindenburg published its Nikola report, Milton’s supporters attacked the short sellers. The group unconscious converts anxiety into aggression. The critic becomes the enemy. The group closes ranks.

This is why due diligence fails. It is not that investors are stupid. It is that the group dynamic makes critical thinking feel dangerous. To question the leader is to break the dependency. And breaking the dependency means facing the anxiety that the dependency was designed to manage in the first place: the anxiety of uncertainty. Of not knowing. Of being responsible for your own decisions.

The third basic assumption is pairing. In a pairing group, the members believe that salvation will come from a union between two people. The pair will produce a messiah—an unborn saviour who will rescue the group. The saviour must remain unborn. As long as the group is hoping, it does not have to act. Hope is the point. Delivery would kill it.

Now look at the founders. Every single one of them had a pair.

Neumann had Rebekah. She was not merely his wife. She was written into the corporate structure. The S-1 gave her the right to help choose his successor. The group’s unconscious fantasy was that Adam and Rebekah together—the visionary and the spiritual guide, the yin and the yang—would produce the future of work. WeWork’s Summer Camp events had the energy of a couples’ retreat, not a corporate off-site. The pair was generative. The pair was sacred. And when the S-1 revealed how deeply Rebekah was embedded in the governance, the pairing fantasy collapsed. The unborn saviour—the transcendent company—was suddenly revealed as a family business with delusions of grandeur.

Holmes had Sunny Balwani. Her boyfriend and her chief operating officer. The group did not know about the romantic relationship for years, and that secrecy was itself part of the dynamic. Balwani ran the lab. Holmes ran the story. Together, the group believed, they would produce the revolution in healthcare. When it collapsed, Balwani was convicted alongside Holmes. He received nearly thirteen years. The pair did not produce a saviour. It produced two prison sentences.

Bankman-Fried had Caroline Ellison. His ex-girlfriend ran Alameda Research, the trading firm that was secretly receiving the stolen customer funds. The pairing here is almost too neat. The boy genius and the woman who managed the money. Together they would earn billions and give it all to charity. The effective altruist power couple. When it fell apart, Ellison flipped. She testified against him. She described the fraud in detail. The pair that was supposed to save the world destroyed it instead. Bion would not have been surprised. When the pairing fantasy fails, the group turns on itself. The pair does not separate amicably. It detonates.

Watt had Martin Dickie. The co-founder. The brewer. Watt was the story. Dickie was the beer. In the early days, the pair was the company. Two lads from Scotland against the corporate beer industry. But as BrewDog grew, Dickie faded. Watt became the sole face. The pairing assumption requires two, and when it collapses into one, the dynamic shifts to pure dependency. That is what happened. The two hundred thousand Equity Punks were left dependent on a single leader—a leader who had already cashed out.

Milton is the exception that proves the rule. He did not have a visible pair. And his company was perhaps the most fragile of all—a truck that could not drive, a video that was a lie, a SPAC that evaporated. Without a pairing dynamic to sustain the group’s hope, the dependency collapsed faster. Hindenburg published its report. Milton was gone in days. There was no second figure to sustain the fantasy.

What Bion understood is that the pair does not need to actually produce anything. The group’s investment is in the hope, not the outcome. WeWork never made money. Theranos never produced reliable results. FTX never protected its customers’ funds. But as long as the pair existed, the group could believe that the saviour was coming. The quarterly losses were not failures. They were birth pangs. The saviour was almost here. Just one more round of funding. Just one more quarter.

And after the crash? The pairing assumption does not die. It finds new hosts. Neumann pairs with Andreessen Horowitz. Three hundred and fifty million dollars for Flow—the new unborn saviour. The group unconsciously believes that this combination will produce what the last one failed to deliver. The fact that Neumann’s previous pairing produced a forty-seven-billion-dollar bankruptcy is irrelevant. The pairing assumption operates outside of memory. It operates outside of logic. It operates in the part of the group mind that believes, against all evidence, that this time will be different.

And here we are.

There is a concept in Tavistock thinking called “social defences against anxiety.” It comes from a psychoanalyst named Isabel Menzies Lyth, who studied nurses in a London hospital in the 1960s. She found that the hospital had developed elaborate bureaucratic procedures that appeared to be about patient care but were actually about protecting the nurses from the emotional pain of their work. The procedures were the institution’s unconscious defence mechanism.

The venture capital ecosystem has its own social defences. Due diligence processes. Board governance. Fiduciary duties. These appear to be about protecting investors. But in practice, they often function as rituals that provide the illusion of rigour without the substance. SoftBank had a due diligence process. They invested anyway. Theranos had a board. It included a former Secretary of State. BrewDog had crowdfunding prospectuses. They disclosed the risks in small print that no Equity Punk ever read.

The structures exist not to prevent bad decisions but to make the group feel less anxious about making them. They are the institutional equivalent of a nightlight. They do not keep the monsters away. They just make you feel better about the dark.

Bion had a word for the individual’s susceptibility to being pulled into a basic assumption group. He called it “valency.” He borrowed the term from chemistry—the tendency of an atom to bond with others. Some people have a high valency for dependency. They want a leader. They want to believe. They want to be told that someone else has it figured out.

I think the entire venture capital ecosystem has an extraordinarily high valency for dependency. It is an industry built on the idea that one individual—the founder—can see the future. That the right person, with the right vision, can bend reality. This is not a business thesis. It is a basic assumption. And it operates beneath the surface of every pitch meeting, every board discussion, every twelve-minute walk that ends with a four-billion-dollar cheque.

The Tavistock lens does not make the story less damning. It makes it more so. Because it says that the problem is not individual stupidity or greed. The problem is structural. It lives in the unconscious life of the group. And you cannot fix a problem that the group cannot see.

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Now. These five founders are not the same, of course. They sit on a spectrum.

At one end is Bankman-Fried, who stole money. That is straightforward. Holmes faked medical results that endangered patients. Milton faked a video and lied on social media. These are crimes, and the legal system treated them as crimes. Milton’s pardon notwithstanding.

At the other end are Neumann and Watt, who occupy a murkier zone. Neumann convinced investors that a real estate company was a technology company. Watt sold a punk identity while personally cashing out a hundred million pounds and hiring private investigators to surveil his critics. Neither has been charged with a crime. The line between aggressive entrepreneurship and fraud is thinner than anyone in finance would like to admit.

The victims are different, too, and this matters. Neumann’s victims were sophisticated institutional investors—SoftBank, Benchmark, JPMorgan—who had armies of analysts and chose not to use them. They could absorb the losses. It hurt their pride more than their balance sheets.

Holmes endangered something more fundamental than money. She endangered health. Patients received wrong test results. Some were told they had conditions they did not have. Some were told they were healthy when they were not. Of all five founders, she is the only one whose deception could have killed someone.

Milton and Bankman-Fried hit retail investors and depositors—ordinary people who trusted institutions that had failed to verify the most basic facts. Watt’s victims were two hundred thousand people who invested their savings because they loved a brand of beer. They were sold an identity, not equity. And the identity turned out to be worth nothing.

The moral severity of these stories does not track with the dollar amounts. It tracks with the vulnerability of the people who got hurt. This is an important distinction that the financial press rarely makes, because the financial press is more interested in big numbers than in small people.

11

As of early 2026, the stories continue.

Neumann’s Flow is forecasting positive cash flow. If this happens, it will be the first time Neumann has run a company that makes money. He also launched a coworking venture called Workflow, which competes with the company he destroyed. The universe has a sense of humour.

Watt’s BrewDog is for sale. His proposed rescue bid could give him half the restructured company. The Equity Punks might receive twenty pence on the pound, if they are lucky. In January 2025, Watt posted on Instagram that he does not believe in work-life balance. This from a man who had cashed out a hundred million, stepped down from his job, and was planning a television career. Self-awareness is not a trait the system selects for.

Holmes is in prison. Bankman-Fried is in prison, appealing his conviction. Milton is free, his record wiped clean by presidential pardon.

Money is more expensive now than it was during the zero-interest-rate era that inflated WeWork and BrewDog and Nikola and FTX. Investors claim to be more disciplined. But Andreessen Horowitz still wrote a three-hundred-and-fifty-million-dollar cheque for a company with no revenue, run by a man who had presided over one of the largest value destructions in corporate history.

The discipline, it seems, is selective.

I sometimes wonder what would happen if an investor walked into a pitch meeting and the founder said: “I have a good business. It makes money. It is not going to change the world. I am not a visionary. I am a competent manager.”

They would not get funded. Nobody writes a cheque for competent management. Nobody flies to Omaha for a twelve-minute walk with a competent manager. The system does not reward honesty. It rewards performance. And I do not mean performance in the business sense. I mean performance in the theatrical sense.

12

Here is what I think.

I think the investor class has an addiction. The substance is charisma. But I want to be precise about what charisma actually is, because most people get it wrong.

We talk about charisma as if it is a personal quality. Adam Neumann has charisma. Elizabeth Holmes had charisma. James Watt had charisma. As if it is something they carry around inside them, like a talent or a disease.

But if you take the Tavistock seriously, charisma is not a quality of the individual. It is a quality of the relationship between the individual and the group. The group has unconscious needs—for certainty, for safety, for meaning, for someone to take away the anxiety of not knowing what will happen. And the charismatic leader is the person onto whom the group projects those needs. The leader does not create the dependency. The group creates the leader.

This is an important distinction. It means the problem cannot be solved by removing bad founders. There will always be another founder ready to receive the projection. Because the projection comes from the group, not from the leader. Neumann did not hypnotise Masayoshi Son. Son’s unconscious need for an omnipotent dependency object found Neumann and filled him with power. Holmes did not trick Kissinger. Kissinger’s need to be part of something historic found Holmes and made her credible. The Equity Punks did not get fooled by Watt. Their need for belonging found Watt and turned a beer company into an identity.

Bion would say that what we call “charisma” is really the group’s projective identification with the leader. The group places its fantasies of omnipotence into the leader. The leader receives those projections and begins to act as if they are real. This is why charismatic founders become grandiose over time. They are not just inflating themselves. They are being inflated by the unconscious needs of everyone around them. The tequila in the office, the private jets, the talk of becoming a trillionaire—these are not the causes of the delusion. They are the symptoms. The delusion belongs to the system, not the individual.

And notice: the charisma always has a pair. Neumann and Rebekah. Holmes and Balwani. Bankman-Fried and Ellison. Watt and Dickie. The group does not just project onto a leader. It projects onto a couple. The couple will produce the saviour—the company that will change everything. And when the pair breaks, the whole structure collapses. Ellison testifies. Balwani goes to prison. Rebekah becomes a punchline. Dickie disappears. The generative fantasy dies, and the group is left holding the debris.

This is why the aftermath is always so total. It is not just a company failing. It is a pairing fantasy detonating. The unconscious hope that two people would create something transcendent—that hope does not fade gently. It explodes. And the shrapnel hits everyone except the founders.

And this is why the problem is nearly impossible to fix. You cannot regulate away the group unconscious. You cannot write due diligence procedures that protect against projective identification. You cannot design corporate governance structures that prevent an entire room of intelligent people from collectively deciding, beneath the level of awareness, that they have found a messiah. Or a sacred couple.

The structural problem is simple to describe and nearly impossible to fix. The same traits that enable founders to build extraordinary companies also enable them to destroy extraordinary amounts of value. Confidence and delusion are neighbours. Vision and self-deception share a wall. The difference between a visionary and a narcissist is visible only in retrospect, after the money is spent and the damage is done. And even that distinction may be wrong. Perhaps the difference is not in the founder at all. Perhaps it is in the group. Perhaps the same person becomes a visionary when the group is healthy and a narcissist when the group is sick.

The pattern will repeat because the incentives that produce it have not changed. Venture capital still rewards storytelling over substance. Charisma still commands a premium over competence. Founders can still destroy billions and walk away enriched. Or pardoned. And the unconscious needs of groups—for certainty, for hope, for a leader who will take away the anxiety—are permanent features of the human condition. They do not respond to regulation. They do not respond to experience. They do not learn.

There will be another Neumann. Another Watt. Another Holmes. Another twelve-minute walk that costs sixteen billion dollars. Another truck rolling silently downhill. Not because the founders are extraordinary. But because the groups that create them are ordinary. And ordinary groups, under pressure, will always look for someone to save them.

The question is not whether investors will fall for it again. They will. They always do. The question is who pays the price next time.

If history is any guide, it will not be the founder.

It never is.

So it goes.

Sources and References

This essay draws on reporting and analysis from: ITV News, BBC, The Guardian, The Conversation, Yahoo Finance, Fortune, CNBC, CNN, CRE Daily, Calcalist, Forbes, Visual Capitalist, TheStreet, Wall Street Journal, NPR, TechCrunch, FreightWaves, Hindenburg Research, ABC News, U.S. Department of Justice, SEC, Al Jazeera, Harvard Business Review, Rice University Jesse H. Jones Graduate School of Business, UC Berkeley Haas School of Business, and Little Law.