When you’re exceptionally good at spending money, stick someone else with the bill
The mansions, the yachts, the parties, the models. How does Dan Bilzerian, the globe-trotting, cash-stacking, gun-toting, Instagram-boasting partying playboy do it? Or, more to the point: How does he pay for it all?
Like any good businessman, it seems Bilzerian sticks someone else with the bill.
For example, the lease on his home in the ritzy Los Angeles hills is $200,000 a month. But Dan Bilzerian does not pay this rent. The house and everything else — the models, the flights, the yachts, etc. — is charged to the corporate tab of Ignite International Ltd., the company Bilzerian founded and serves as CEO and majority shareholder, according to Curtis Heffernan, Ignite’s recently ousted former president.
An enormous marketing machine that didn’t really sell anything
Ignite International, burned $50 million in cash last year. Ignite “made” money in three ways last year. The company received $25 million from “proceeds of issuance of shares,” $19.9 million from “convertible debt,” and $23.7 million from a “short-term promissory note.” That is, Dan Bilzerian’s company has (had) a lot of other peoples’ money.
In 2019, Ignite lost $43 million on operational costs alone, mostly marketing and promotion, leases on offices, and compensation for staff and executives. Ignite also hosted lavish parties, threw events, and did all kinds of stuff a company flush with cash does.
The company’s shareholders appear to be footing the bill for Bilzerian’s personal lifestyle — not only paying for his lavish parties but also paying him a salary in the process. Bilzerian, who owns at least a stake in other companies headquartered in Montana and Nevada, according to public records, also used Ignite as an ATM. Ignite cash went to pay salaries, licensing fees, business expenses, and travel expenses for companies “owned by the CEO”.
A toxic financing spiral to decimate the company’s shareholders
The uncertainty of Ignite’s ability to achieve profitable operations and its success in raising additional capital funding casts significant doubt on the company’s ability to continue as a going concern. That same prognostication — failure is imminent — was also the analysis offered by the accounting firm that reviewed the company’s books. If the company winds up surviving, it may have to enter a toxic financing spiral that could decimate the company’s shareholders further than they already have been.
It’s a shame no one ever told Bilzerian about the shenanigans that public companies commonly use to trick shareholders. Until he learns those “secrets”, he’ll have to continue sticking it to his shareholders the old fashioned way: siphoning money out of the company while diluting retail bagholders whose only “due diligence” is poring through Bilzerian’s Instagram photos.