Hi {{first_name}},

Last week a call came through while I was in my office with our director of IR. It was a small business owner who I’d worked with multiple times. He’d already invested with us across several vehicles.  He had a bigger picture question this time. 

Because he'd graduated to a new interesting problem.

He wanted to think through how to allocate additional capital across different asset classes. This time with new layers of intention.  He'd lived with illiquid investing long enough to know how it works. Patience, the long timelines, the satisfaction of seeing your capital at work. 

What he wanted now was to make the pieces work together, like an orchestra.

“I know what I own. I just don't know what each piece is supposed to do."

That’s when I realized we need a fresh lesson in how to build a blueprint with each asset class in mind. And truly understand and define the individual jobs each asset has before throwing them together. 

Even accredited investors who have been at this grind for years need to intentionally stack assets and map out how they work together. You can’t cross into private markets and assemble holdings the way you'd grab groceries without a recipe. You need a map.

I've spent many years building inside that framework. It’s about time I wrote it down and shared the sequence for building your five asset layers so each one compounds toward your goal.

That's what this issue is bringing to the table.

Let’s roll out the blueprint. 

— Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

Inefficient markets pay better than efficient ones. That’s an argument for private markets. But it only holds if you know which inefficiency you are buying, and why.

U.S. advisors and investors hold $1.9 trillion in private markets today. It’s expected to hit $3.7 trillion by 2029. More capital is moving into alternatives at a rate that is faster than at any point in the history of private markets. And the majority of it is being deployed by investors who don’t think too much about what the capital should be doing. 

When you hear "alternatives" from an advisor or a fund manager, a financial news outlet or another investor, you are being handed a single word for five completely different assets. 

Private credit. Real estate. Energy (Infrastructure). Operating businesses. Growth capital (Private equity). 

They share a category and not much else. Each one runs a different job, on a different timeline, with a different tax profile and a different risk structure. Treating them as a single allocation means deploying capital without knowing what you are asking it to do.

The institutions never made that mistake. The sovereign wealth funds and the family offices compound across generations. They built their frameworks decades ago and have been running them as stacks ever since. During accreditation you are handed a subscription to a private markets database and a lot of due diligence requests. The map is something you are left to build yourself. It's built in layers. 

Which is why it’s helpful to view other maps for context. We shared the Capital Velocity Stack earlier, the engine that moves capital between layers so the whole runs hotter than the parts. Now it’s time for the map that engine runs inside with all five layers, and the order to build them in.

Layer 1: Private Credit | The Income Engine

Private credit's job is to generate contractual yield. You lend against cash-flowing businesses at conservative loan-to-value ratios. Large banks don’t operate as much here since the economics stopped working at their scale. The yield is written into the loan terms. It arrives on a schedule, quarter after quarter, independent of what equity markets are doing that week.

The premium exists because you are operating in a market the big players exited.

Private credit sits at the base of the stack generating deployable cash. The quarterly distributions from a well-structured private credit position are fuel for every layer you add above it. It’s tempting to skip this foundational layer and go straight to sexier real estate or operating businesses because those feel more like traditional upward investing. Private credit feels like sitting in a parking lot. But that’s often an expensive oversight.

Layer 2: Real Estate | The Compounding Asset

Real estate's job is appreciation, with cash flow paying you to wait and the tax code working alongside you.

Depreciation is a non-cash deduction against real income. The IRS lets you write down the value of a building over time even as it appreciates. That gap is an advantage in the U.S. tax code and available only to owners, not to index fund holders. Add rental yield, then the refinance-and-redeploy cycle that lets you extract equity without a taxable event, and a single asset compounds on several tracks simultaneously.

The more sophisticated version of this layer looks at multiple properties, or a whole geography. You concentrate in one market that you understand better than anyone, pricing it from the outside. 

Real estate belongs in the middle of the stack because it compounds slowly and builds the net worth base that creates borrowing capacity downstream. The income from Layer 1 funds the equity. The equity builds the balance sheet. 

Layer 3: Energy | The Yield With a Different Clock

Energy's job is to pay you strong income now, with oil in the ground protecting your downside and room to earn more if there's more oil than expected.

Producing oil and gas wells generates cash from day one. Acquiring proven, producing assets means you sidestep the exploration risk that makes speculative energy positions look more like venture bets than income investments. The underwriting discipline is to price at a conservative commodity assumption: our BuildEnergy vehicles underwrite at $71 per barrel. If the commodity cooperates, the upside goes to investors. If it doesn't, the conservative underwrite holds. When oil hit $120 earlier this year, the investors who were already inside the position had locked in their entry economics six months earlier.

Energy earns its position in the stack for a specific reason that goes beyond yield. Its performance answers to a different set of conditions than private credit does. When credit markets tighten, the wells keep pumping. That is a second income stream running on its own clock, providing the kind of correlation independence that matters when you need the portfolio to be durable across cycles.

The tax profile adds another layer. Intangible drilling costs and depletion allowances are among the most powerful tools available to high-earning accredited investors — unlike depreciation, which shelters passive income, these can be applied directly against active income in the year they are incurred. For someone in the top income brackets, this layer does not just generate yield. It restructures the tax picture.

Layer 4: Operating Businesses | The Compounding Equity

This is the engine room of private equity, and the layer with the longest record of outperformance. Over the 25 years through 2024, the Cambridge Associates US Private Equity Index returned about 12% annually net of fees, versus roughly 9% for the S&P 500. That spread comes from buying businesses in markets too small, too complex, or too operator-dependent for institutional money to reach efficiently. And then having the patience to hold them.

Operating businesses don't pay quarterly distributions on a schedule. The return arrives at exit, typically after a five-to-seven-year hold. The investors who do well here have stopped watching for the quarterly update and started asking about the operator's pipeline. Progress gets measured in how the business is growing.

The job this layer does in the stack is compounding equity. Capital goes in, the operator builds, and the value accrues to the owners over the hold.

Layer 5: Growth Capital | The De-Risked Asymmetry

Growth capital is the layer most commonly confused with venture capital and that can be costly. Venture capital is a bit of a gamble. The math requires you to make twenty bets knowing eighteen will likely fail, one to return the fund, and one to generate the carry. That can work at the institutional level, where a large fund with a ten-year life and fifty positions can absorb the failure rate and still generate a meaningful return. But as an individual investor, that’s some roulette. 

Growth capital instead starts from a different position. The company already exists. Revenue is real. The product has already won customers in a market. The capital is going toward scaling something that works. The risk profile shifts accordingly, and so does the expected return distribution.

The opportunities worth taking usually share a specific profile. Established momentum, customers who stay, and an edge that is hard to manufacture. Maybe an exclusive licensing agreement for intellectual property that took years to secure. A proprietary model built through relationships that no money can replicate. Think of a business that already works and fuel (capital) is the only thing standing in the way of progress.

Five layers. Each one is doing a job the others can’t. And a well designed map is the only way to assign the right task to the right asset.

Image: Walker Deibel at the launch party for video game developer, Delphi Interactive

A Live Action Stack 

Proximity was a key factor in my 2020 investment in Delphi Interactive. After years of getting to know the founder, Casper, the due diligence from an investor perspective was already done.  There had already been time to witness the company’s decisions and the rationale behind them. In other words, it wasn’t a traditional pitch that got me to invest capital and add it to my stack, it was first hand insider knowledge.

That closeness revealed that Delphi was sitting on something rare. They held the gaming licenses for 007 and FIFA. James Bond and FIFA, two of the most valuable entertainment franchises. Plus their product was already developed and ready for launch. More than $200 million had already poured into development and distribution deals were signed with Microsoft and Netflix. A finished game was under each license. So not only was the product built but the necessary partners to execute them and bring them successfully to market were locked. 

Further, the pipeline of IP ready for development was deep, but the cash flow to execute wouldn’t come in for a year – a great way to lose the momentum they’ve built – along with the pipeline projects!

What they needed was capital to execute on that momentum. Growth capital would allow them to keep building.

The Growth Capital Pattern in Action. 

Growth capital is Layer 5 for a reason. It requires patience as the earlier layers are actively building.

In this case, Build Wealth had developed the BuildInteractive II fund to host the dollars that were coming in. It closed in May 2025 just in time for the dual product launches. 

Delphi launched 007 First Light which sold three million copies in 10 days. Simultaneously, the FIFA game went live on Netflix, distributing straight to their ~325 million paid subscribers. 

After six years of building the licenses, games, and partnerships, everything was in place because the capital landed.

Delphi is not an anomaly. Radical Surfaces follows the same pattern. The company has an exclusive contract with Breton for fourth-generation engineered stone equipment in North America. They’ve secured more than $10 million in purchase orders before the factory was even built. Now heading toward a public listing in 2027. 

I invested in a prior round before bringing it to the Build Wealth community. The moat was real before the capital arrived.

I was in Atlanta this past week meeting with what will likely be our next growth capital opportunity. Seeing the same pattern in something brand new. A business with something no competitor can easily replicate, at the moment when capital is the only thing standing between where they are and where the market is pulling them. Of course, when we're ready to share more, you'll hear it here first.

Knowing the five layers and owning them in the right order are two different skills. To close the gap you need to practice them separately and together. 

Step 1: Take inventory first.

Before adding anything new, map what you already own against the five jobs. 

Most accredited investors are already holding Layer 4 without having labeled it. It may be a concentrated stock position, a business recently sold, appreciated equity in a brokerage account. That is compounding equity. This is good news, you won’t be starting from zero when you write your map.

The inventory usually reveals which layer needs attention. Heavy on equity-style exposure, thin on contractual income. It tells you where to begin your journey. 

Step 2: Build the income base.

Private credit goes first. It generates the deployable cash that funds every layer above it. Skipping straight to real estate or operating businesses because they feel more substantial is the most common sequencing mistake. The engine that is supposed to fund everything gets left unbuilt.

Although, before committing to any private credit fund, run these questions. If any one comes back feeling weak, walk away. 

At Build Wealth, this is what BuildFlow I was designed to answer. Collateral first, conservative loan-to-value, a real recovery plan when a borrower stumbles, and capital deployed quickly. That's why it sits at Layer 1.

Step 3: Add each layer when its trigger appears.

Each layer has a condition that signals when it's ready. Let the signal drive the timing.

Step 4: Prepare for a Messy Sequence.

The sequence above is the optimal path. Life rarely delivers it that way. Favorable deals are opportunistic. An energy vintage could close before the credit base is fully loaded. A growth capital position opens before the real estate is seasoned. The sequence describes the logic of why each layer sits where it does, not the order the market will hand you the opportunities. Vintages add another layer of complexity entirely — the year you underwrite matters as much as what you underwrite, and that deserves its own issue.

Work toward the destination instead. Eight to ten years of deliberate deployment, one position at a time, and the portfolio looks as though it had followed the sequence perfectly from day one. The income covers the cost of living. The equity is compounding. The tax picture is working in your favor on several fronts at once. You are not working to generate capital anymore. Your capital is generating the work.

That is what it means to become an allocator.

Charlie Munger said it best: "I did not intend to get rich. I just wanted to get independent."

BuildFlow I is Build Wealth's private credit vehicle. Collateralized loans at conservative loan-to-value ratios, in the small and mid-market lending segment that the large banks have abandoned. It has generated 12.3% annualized returns since its inception. 

If you’re interested in building your own blueprint, this may be the place to start. Learn more and access the deal room at BuildWealth.Investnext.com.

Image: Angels Landing, Zion National Park; Don Graham, Wikimedia Commons.

No single band of rock creates the cliff. Time does, one layer at a time.

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This is not financial advice. Illustrative output of a reasoned thought experiment. Not a backtest, guarantee, or prospectus. Actual results vary based on market conditions, fund selection, timing, fees, taxes, and factors not modeled. Private credit, CRE, and leveraged strategies involve significant risk including loss of principal. Consult a qualified financial advisor.