Behind the Brand With Mike Novogratz

I’m not sure what that “stay thirsty, my friends” guy from the beer commercials is doing now, but I’d like to nominate Mike Novogratz as his successor. Novogratz is one of those guys with some really crazy stories, from his youth to his time as a helicopter pilot in the Army to reaching billionaire status. We opened our chat talking about his love for vintage Planet of the Apes movies while he rocked comfortably in the most elaborate, unique, custom leather-embossed chair I’ve ever seen — a gift from his wife on Novogratz’s 40th birthday. His brains and wits have kept him at the top of his game for more than three decades, even after the devastating financial crash of 2008. Novogratz isn’t just tough, he’s smart, he’s savvy, he’s in tune with himself, and he’s creative.

Novogratz grew up in Alexandria, Virginia, in a large Catholic military family. He is the third of seven children, and his family is full of high achievers. His sister Jacqueline Novogratz (married to TED Conference founder Chris Anderson) is the CEO and founder of Acumen Fund. His brother Robert Novogratz is a designer who’s been featured on Bravo’s 9 by Design.

Novogratz grew up wrestling, and he credits that with giving him a thick skin and determined nature. “Wrestling is a brutal sport,” he tells me. “I mean, you just get the crap beat out of you day in, day out … and even the best wrestlers get beat. And so, it teaches you a couple of things. It teaches you how to be tough, because it just takes toughness … It teaches you in some ways not to be scared. That translates into business, it translates into your relationships, it translates into everything.” 

Novogratz’s wrestling career earned him a spot at Princeton University, where he was the captain of the wrestling team and was first team All-Ivy League for two years running in his weight class. He qualified for the NCAA wrestling championships the same two years. He earned a degree in economics, did a brief stint in the New Jersey National Guard, and worked as a helicopter pilot in the Army before landing at Goldman Sachs in 1989.

Novogratz started in sales, and he spent seven years living in Asia, first moving to Japan in 1992 and working out of Goldman’s Tokyo office. Eventually boss Jon Corzine convinced him to move to Hong Kong and work on the trading floor. The transition from sales to investment trading was an intimidating jump for Novogratz, but this star athlete welcomed a challenge.

“It was a scary jump [to trading], though I realized that traders made a whole lot more money than the salesmen,” he says. “So I took the risk and really suffered through learning how to make money by looking at charts and prices. I was a macroeconomic investor, which is really trying to understand trends in the world.”

Novogratz continued to succeed at Goldman and was elected partner in 1998, and eventually went on to join Fortress Investment Group in 2002. He joined heavy hitters Wesley Edens, Randal Nardone, Robert Kauffman, and Peter Briger Jr. and took the company public through its 2007 initial public offering. Fortress was the first company in the hedge fund private equity space to ever go public, and it was no small feat for Novogratz and his team. This IPO was his self-described rock star moment that was 18 years in the making. Unfortunately, the high was short-lived, as the market crashed the following year, and by the end of 2008, Fortress’s stock had fallen from $30 a share at its opening to just $1.87. 

Still, Novogratz didn’t let the crash get him down for too long. He tells me that wrestling has taught him that when something is hard, you just keep going because that’s the nature of pain. His background has given him a unique understanding that battles hard-fought have sweeter victories when won.

“I think [wrestling] teaches you grit. Leadership comes from toughness, and it’s kind of an internal toughness. It’s born of discipline and hard work. I really do think wrestling permeates everything I do.” That internal toughness caused Novogratz to just keep moving and not give up. Since the market crash of 2008, Novogratz has stayed busy. He continued his work with Fortress through 2015, helping to pull the company out of the slump of 2008 and back into a more profitable place over the last decade. 

There’s more to Novogratz than just finance, which may account for why he’s so happy in his life. Novogratz is interested in more than just what the market is doing. He’s invested in human things like how we teach happiness and life skills to students; how we get to know ourselves; how we can reform the prison system to truly rehabilitate rather than traumatize. To Novogratz, philanthropy seems to be just as important is finance. He even backed an indy doc film on psychedelics that became one of the most successful projects at Sundance. 

He sits on the board of directors for the Hudson River Park Trusts, and he is chairman and founder of Beat the Streets, a non-profit that brings the wresting to New York City’s public schools. He is the honorary chairman of the USA wrestling foundation. He also sits on the board of NYU’s Langone Medical Center, Princeton Varsity Club, Boards of Creative Alternatives of New York, The Jazz Foundation of America and he even founded and serves as chairman of the board of the School for Strings.

It’s hard to imagine a life getting more diverse and interesting than that, but Novogratz is just getting started. In the last two years he started Galaxy Investment Partners, a firm that works in cryptocurrency. “When I think of my life right now, it’s the circus guy with seven sticks and plates spinning on them,” he says. “I really enjoy doing lots of different things. This is as exciting of a time for bitcoin, blockchain, crypto as we’ve seen ever, and so that’s taking a ton of my effort.”

Novogratz is said to have made $250 million in cryptocurrency in 2016 and 2017 alone. He has stated that 20% of his net worth is in bitcoin and Ethereum. I ask Novogratz about cryptocurrency, because it’s not something I’m really familiar with. He tells me that the thing he likes about it is that it’s a separate entity. There’s no governing body, no political affiliations.

“It’s a decentralized system,” he tells me. “The spirit of cryptocurrency. The spirit of the blockchain revolution was, F you to the man. We don’t trust centralized authority. Blockchains allow a permanence. If I tell you I’m going to pay you twenty dollars in three years and it goes on a blockchain, it’s programmed in and it goes in three years. And I can’t erase it. It’s up there permanently so it brings transparency and some egalitarianism to the system.”

While bitcoin and blockchain is relatively new within the financial market, Novogratz is confident that its value is becoming increasingly more evident. “This revolution in payments, in finances is going to happen over the next ten years,” he says. “And you’re going to see what banks make, and the tax banks take from individuals go from here to here.” (He gestures large to small with his hands.)  “I think in ten years you’ll start noticing that things have changed a lot.”

There’s so much to be said for hard work and intelligence but Novogratz has another factor going for him that I think has contributed to his success. There’s a confidence in him that he really knows himself and likes himself, and it seems to be the product of many years of trying new things, making mistakes and learning from them. He tells me that he’s just now getting back financially to where he was in 2007, but he feels much more comfortable where he is now and even stronger in his leadership abilities. 

“Most people don’t start the journey [to knowing themselves] until they screw up,” he tells me. “They get divorced, they lose a job, they become an addict, they do something really bad. They get arrested and they’re like, well, how did that happen? So, they get a shrink, or they go on that internal journey. And I think for me, ya know, things were on the fast track, it was all good, and each time I screwed up, it forced me to start that process of looking in, and I think [as the years pass] I’ve just done a better job at it–I haven’t made it to the promised land by any stretch, but I have that muscle and that ability to slow myself, think about things, and not get caught up in this story of who I am.”

More on my conversation with Mike Novogratz here: