In October 2021, Toby Neugebauer, a Dallas-based oil and gas investor, met with Republican political operative Nick Ayers, biotech investor Vivek Ramaswamy, and Citadel executive Cason Carter to discuss the vision for GloriFi, a company Neugebauer had launched targeting Americans alienated by liberal Wall Street policies. GloriFi aimed to offer financial services with patriotic values and raised $55 million from Republican billionaires and bigwigs.
However, just 12 months later, GloriFi shut down and filed for bankruptcy in February 2023 with $40 million in liabilities and only $600,000 in assets. Neugebauer then sued his former partner Ayers, billionaire backers, and former employees, claiming that they undermined GloriFi’s business and reputation. Neugebauer is seeking damages in excess of $100 million, alleging that the defendants took GloriFi’s ideas, launched competing companies, and destroyed his ability to raise capital for future ventures.
Neugebauer claims that Strive Asset Management and Coign took GloriFi’s ideas for energy-indexed funds and credit card design, respectively, to create their own products. He also alleges that Old Glory Holdings, allegedly cofounded by Ayers, was meant to serve as GloriFi’s banking arm once the investors gained control of the company. Despite denials from the defendants, some former GloriFi employees and sources familiar with the situation supported Neugebauer’s claims.
Neugebauer’s lawsuit faces challenges, as he is trying to bring the complaint under the RICO Act, often used for prosecuting organized crime. GloriFi’s bankruptcy trustee is also countersuing Neugebauer, claiming his sought-after remedies belong to the company’s estate. A trial date has been set for July 24 to determine the validity of Neugebauer’s claims. Neugebauer, worth over $800 million, has the financial means to pursue his legal campaign.
The relationship between Neugebauer, Ayers, and Ramaswamy played a pivotal role in GloriFi’s formation and subsequent collapse. Despite initial success in funding rounds and plans to go public, the company faced liquidity issues due to reckless spending and alleged interference from investors. Outside investigations into Neugebauer’s conduct further complicated funding efforts, ultimately leading to the company’s downfall.
While Neugebauer and his investors had envisioned a lucrative opportunity with GloriFi, the company’s demise and the performance of its would-be competitor, Strive, painted a different picture. Strive, with $1.5 billion in assets, is seeking more equity capital and appears to be following a similar path to GloriFi. The legal battle surrounding GloriFi’s collapse sheds light on the challenges faced by startups and the influence of powerful investors in shaping their fate.
