Jessica Kim: How do we not fall into these trends are dynamics that are real, but how do we fight against that and say, OK, let’s treat this as we’re building something together?

I’m looking for a partner when you’re looking for a spouse, right. You don’t posture. And then all eyes on eyes like you’re looking like, what are we going to build together?

Are we aligned on these things? And to get rid of the posturing, because if there is a match there, then that is actually what it’s going to look like. And that’s your greatest chance of actually making it succeed.

Henry Kaestner: Jessica was awesome having you on the podcast a couple of weeks ago, and one of the things that’s really special about you and your story is that you have these unique perspectives of having been an entrepreneur, having advised entrepreneurs, being on the receiving end of fundraising, being able to help entrepreneurs get funding. And one of the topics that we kind of explored a little bit together on the podcast was just this sense of the status of fundraising, the good and the bad and the challenges. And, you know, we talk a lot about different industries and products that need to be redeemed, but we haven’t really talked a lot about what we might do to redeem the fundraising process. You’ve got some really unique experiences and some perspectives, and let’s refine it a little bit together. Let’s start off just with this. Is fundraising broken? Is there things that are challenging about it? Does it need to be redeemed?

Jessica Kim: Yeah, I mean, I don’t think fundraising is broken, but I think the way we approach it, we’re not being very transparent and real about how some of the tensions that exist and rightly so, can make that relationship something based off of distrust or playing games versus transparency and finding a true partner in this venture that you’re trying to create to impact a world. You know, I think it should be aligned right, because entrepreneurs root themselves in especially Christian entrepreneurs. We’re rooting ourselves in love and purpose. And how do we build a sustainable venture to enable people to flourish? And then investors are there seeking for those opportunities and partnering with entrepreneurs, you know, to do this good work while getting a good return. Right. So it seems like that’s great. But then the reality is some of these past can cause tension. And, you know, for example, if we really dig into fundraising process, a big part of it is specifically figuring out the projections. Are we aligned on projections of big opportunity? How are you going to do it? And entrepreneurs want to be realistic in the goals and projections and operational path, because from the entrepreneur perspective, this is the one venture that is going to impact our personal lives. We don’t have a portfolio of many options. This is the one thing that we’re going all in on. But I remember presenting projections in one of these pitches for this, my latest venture, I Unicare, and the feedback was, that’s just not big enough.

That’s not aggressive enough. And I was talking like 30 million, 40 million in four years and it still wasn’t big enough. OK, first four years of being existant, like it wasn’t big enough. And so, you know, there’s this tension that if you don’t present a big enough opportunity, that is that up into the right, you might not even get that meeting because they want from the investor perspective. The reality is, especially for the v.C model, it tends to be I need one or two out of these 10 to really hit it big. So I’m driven to see let’s get them all to try to be that home run because I just need one or two of them, you know, to work at the risk of eight of them failing. And that for me is OK for my model. But there’s a conflict, though, right? And so I think that’s like a tension that I just feel is not something to get upset about because it’s the way those models work. But I think as Christ centered investors and entrepreneurs, how do we reconcile that where we can look at the bigger impact of what we’re creating and also the relationship and see the other person as a human versus my one chance to get a home run or you’re just my vehicle for money. Right. And I think that’s the conversation we should have that we often don’t even talk about those tensions.

Henry Kaestner: That was very, very good. Said it also up and state maybe on the investor side. And then also the entrepreneur said, what are some different practices in different postures that may be unhealthy and kind of give us an overview of that. So on the investor side is a pressure to the entrepreneur and saying you’re not thinking big enough. And so it’s just kind of coming into like why you’re doing what you’re doing. And if you’re not big, then you just you don’t matter it. Or that there is this kind of pressure of, OK, now I’ve given you the money, now you’ve got to grow so I can get one hundred percent markup on my investment. Mark-To-Market in one year and then you need to show me where you going to be able to raise twice the valuation twelve months from now so I can get that show. That’s my partner. So we can raise next one. Or the most important thing is just to expand. It’s just unhealthy things you see from that side. Because what we’re doing, this is a construct and say here’s the reality, these are messed up. Investors have a wrong mindset, but so do entrepreneurs on the other side. They’re trying to create this kind of false thing of scarcity and their fear of missing out. And I want to give you this first look. And then once the investment happens, then maybe there’s not as much transparency because the entrepreneur continues to try to sell the investor on the things are going well because they want to have an insider led round because the optics of how that works. So why don’t you talk from your perspective about things that are messed up from both sides of the equation, then that allows us to go ahead and. Talk about let’s have an alternate vision for the way this works. Yes, entrepreneurs, investors having these open and transparent conversations where the entrepreneur can be vulnerable with the investor because, you know, there can be times that are really, really hard. If you set this whole relationship up at the beginning with his unhealthiness, where you have this dysfunction dysfunctional in the entrepreneur and the investor, and you’re able to find the one place where the dysfunctions can align. So you can transact. Yeah, you still have a relationship based on dysfunction. So three months into it sums going wrong in the entrepreneurs. I can be honest with the investor and the investor is not going to be honest with the entrepreneur. And meanwhile, the investor has already discounted back the growth rate 50 percent. Right. But he doesn’t share that with you. They want to keep the fire like you showed me something they know full well they can hit that. And this unhealthiness, there’s no partnership, is it only to be redeemed? So to riff on that, yeah.

Jessica Kim: I mean, that’s exactly I think ultimately we have to strip everything away from what the world has created in each of those industries. Right. That it’s so natural for us to fall into. And I’ll talk about those. But to then see it as a true partnership, because after the fundraising process is over, you are partners in it. We have different roles and different perspectives, but you are now on the same team. So like, can we let go of all this posturing and these dynamics?

So on the investor side, I mean and I’ve had so many conversations with investors where the fear of missing out the FAMO is actually a real dynamic. Right? Everyone talks to each other and they want to get in on that, whatever however they define as the hot deal. Right. And then if you’re not in that, you’re not even worth my time to meet, even if I do think what you’re creating is a good thing. Right. It’s like I’m just driven because there’s this pressure. I’ve got to go. I’ll get into Haiti. I don’t want to miss out. And that gives me a checkmark of my credibility as a firm or an investor to find the hot deals. And can we just let go of that? But I know it’s a real dynamic. Right. And on the entrepreneur side, it’s like we just want to get a chance to get funded and we want to show, wow, we do think big. I am going to be that unicorn. I’m going to crush Red Bulls over my head and say, yes, I’m the one to do it. And so we present ourselves that way. But in reality, especially people who have done this before, like you just said, Henry, like investors are discounting what they see and entrepreneurs are also discounting like what is realistic for me to achieve because I have to align all the operations to achieve that. And you’ve been our turn out to see of that unique perspective on both sides. Like, we need to actually follow through on that. And the problem with these up to the right, just to get to the meeting and just posture just to get the funding is when that’s all over. I think there’s another tension of, OK, I funded you for that. You’ve missed your numbers, you missed your numbers. And then the next round of funding is at risk. But you’re spending, you know, and running your operations to hit those numbers. And then that’s where I think actually a lot of the statistics of nine out of ten fail. A lot of them is because they can’t get the next round of funding. So that is broken. I think the fundraising process aligned with actually how we operate is broken. And I think we’re missing out on a lot of amazing opportunities to build incredible redemptive ventures because of this posturing in the beginning that we should just all let go of. And so I think that’s our call. That’s our call is how do we not fall into these trends are dynamics that are real, but how do we fight against that and say, OK, let’s treat this as we’re building something together?

I’m looking for a partner. When you’re looking for a spouse, right. You don’t posture and then eyes on your like you’re looking like, what are we going to build together?

Are we aligned on these things? And to get rid of the posturing because if there is a match there, then that is actually what it’s going to look like. And that’s your greatest chance of actually making it succeed.

Henry Kaestner: OK, so you’re an entrepreneur and you understand that there’s something inherently flawed in many interactions that entrepreneurs have with venture capitalists, and it feels to you almost like a necessary evil. I need the capital. I know this is going crazy, but I want to be able to achieve my dreams. And so I want to make some concessions. I’m going to grow a little bit faster than I otherwise would have thought. I’m going to get out there and do more fundraising because I understand that they need this internal markup. And just you end up making these concessions and you end up losing in the process, adding more and more pressure on yourself and your team. And then you end up finding yourself in the system that’s kind of designed to fail because it’s designed to make you want to raise more money so you can go even faster. And it just that’s why the wheels are falling off. So talk a little bit about then what the solution for all this is. So as you’re an entrepreneur and just like, oh, my goodness, I don’t want that to happen to me.

Yeah, I can’t have that. But does that mean now that I’m not going to play the game and so or can I play the game the right way? How do I find somebody who wants to play the game the right way with me.

Jessica Kim: So that’s exactly it. I think it’s finding that match. It’s finding that partner. And when you approach it that way, as opposed to looking at it as just I want that money right. And I’ll do anything just to get that. Yes. To get that money. It’s about one first being very true to yourself as an entrepreneur of saying, like what? What do I see this path as? And what for me personally, for my team, for the venture. And then there are a lot of different funding sources, as we know. Right. We often talk about these, but there’s a lot of different other funding sources and we’re just accelerating prioritizing revenue. But I think it’s also being honest with, OK, if I take money from this source, then I also have to respect their model and what they are investing me in. So if I take this money, which I have very I know what I’m signing up for in terms of I cannot run a lifestyle business for 30, 40 years and expect that to be a good relationship because that doesn’t meet that structure of that investment fund. Right. You know, so you have to align kind of how funding is so strategic and operational. And we often slap it on later after we’ve looked at our sales strategy, our marketing strategy, our hiring strategy. But it’s just as built into the fabric of how you’re going to operate and what your goals are. And so I think it’s like one really understanding what you’re looking for by being honest how you’re going to run and operate. And then it’s, you know, for me, as I pitch, I’m not looking just for the yes, I’m looking for my partner.

So I’m with my strong conviction, sharing how I see this operating, what we are going to be like in thirty five years and where, you know, what does that look like. Right. And then if they push back, that that’s not big enough. And so the way I honestly have done it, it’s like here’s the upside. I mean if nothing goes wrong and this totally takes off, that’s all of our hope because for us then we impact more lives. Right. So it’s rooted in our mission. If it goes up into the right, this is the potential. And that would be incredible. But let me tell you what the realistic thing is, because one telehealth is in flux right now, too. You know, you talk about these trends are the realities of these challenges that we’re going to face and say, so we’re going to knock it down to do this. And then worst case scenario is kind of, you know, if we do these things right. But, you know, the policy changes in this way or someone so get elected in this change then will look like that. So I think that’s a very realistic and transparent way to say, like, OK, here you go with the big vision. This is realistic, but let’s talk about this scenario. And then a lot of times people will say, you know, I don’t think this opportunities for me and now I’m not afraid to say thank you so much. Like, let’s keep in touch, you know, obviously connected for a reason. But if this is your opportunity, then this is not going to be a good relationship to operate together if we’re not sharing our vision and how this is going to look like in three to five years.

Henry Kaestner: OK, so this has been very good for the secular, pragmatic approach, for just thinking about choosing the right partner. Also a good conversation to be able to introduce the concept of how do you think about whether I should be raising money to begin with? And what I’m getting out here is praying and fasting the spiritual discernment process that actually happens before you decide to go down the right route. Too many entrepreneurs just assume I’ve got a company I want to grow it. So I guess I get to raise capital. And I think that Jessica is appropriately talk to us about what happens when you decide. But I think that we need to talk about that ahead of time.

How do we know, of course, that’s wrapped up in a balanced story, balanced story that we went for 40 venturers. Is the problem there was that we didn’t have the right type of spiritual discernment process. We thought we needed to raise money and we would pray before we go to Redpoint or Sequoia or Battery and ask for a twenty million dollar term sheet. But we never really fast and prayed about the process. Should we be raising money? We just assumed we needed to reality. We didn’t need to we never raise venture capital. Yes, we grew we grew the company a little bit slower, but it ended up being the greatest thing ever. And we miss a very important step. So maybe we talk about that in here about how you go through that discernment process to even get to this point that we’re talking about.

Jessica Kim: I mean, I think that’s actually quite fascinating that that was your journey as an entrepreneur and now you’re on the investor side. And so I’m curious to hear also I mean, you’ve been on both sides.

I haven’t been on the investor side. Right.

And so how do you now, knowing what that entrepreneur journey looks like, how do you assess kind of what you see? And like how do you deal with the dynamics that are real dynamics of an investor? Right. Because you need to see a return like that is a huge part of your job. Right. Is to kind of invest some money and get that back, plus some. And so how do you assess kind of how an entrepreneur pitches or what’s big enough or just anything? It’s like I’m curious to see if I were ever on the other side, how I would either be too critical because I kind of know reality of things or I also see vision. I can believe in it, but I don’t how you reconcile that.

Henry Kaestner: So that’s a that’s a great question. Well, as an entrepreneur, you should never raise money from venture capital. If you’re a venture capitalist, everybody should raise money. Now, I’m just kidding. Of course, you know, from my perspective, what I try to do is I try to share my story. You’re here. You’re looking to raise money. I want you to know my story. My story is that I was also in your spot 20 years ago and I was convinced I needed to raise money. As it turns out, I didn’t need to. And so to be clear, we get really excited about coming alongside entrepreneurs and helping them to achieve all that God has laid out in advance for them to do. It’s what we do. It’s our mission. And we think that there’s a very, very valuable role that capital can play. We also think there’s a very valuable role in having people on board with you to get what makes you tick and can help you with things like distribution channels and intellectual property and supply chain management and all those different things that we do. And we get excited about that. And to be clear, that’s important. But what I want to be able to do with you is to be able to help you to understand whether you do need to raise money. And then also this concept of optimal growth rate. Right.

There is a place where there’s the right type of customer acquisition costs, where you come up with a product and people are starting to like it. And that initial wave of early adopters is giving you validation. And so your customer acquisition cost is very low. Those tend to be your most passionate customers. And then your customer acquisition costs remains low because those early adopters become your advocates and they refer more people in. OK, now here’s the challenge. With more capital, you could grow faster, but you can’t outgrow this pace of natural customer acquisition or the customer acquisition cost is lower. At some point in time, you start to force growth. You can buy customers. Those customers, though, those incremental customers are more and more expensive.

And so the question is, is the capital of that I’m going to bring in going to help you along that optimal growth rate. We’re able to go ahead and bring on board all the customers that are able to really value what we’re doing and then to serve them well, or are we going to artificially accelerate our growth, bringing on board customers? We have to buy their costs more money to bring in. And then they’re also more likely to leave us because we had to buy them. They don’t have the same loyalty. They didn’t seek us out. They don’t value the product as much. And then they end up leaving. And that’s where the wheels start to fall off. Because we have left that concept of optimal growth rate. We’re no longer using venture capital to serve the customers who really see our need. We really are solving a problem with them and to serve them well. We should have been here. And Capital can help you to do that very, very well. But if instead we use capital and we just just start to crank up the growth rate a little bit more, because if we can just get another 20 points of growth, then we’re going to be able to go back to the market in 12 months or 18 months. The venture capital is going to be able to get their mark up. And now now we’re cheating the system a little bit. And that’s what we have to watch for. So I as a partner, need to be able to work with the entrepreneur and help them to endeavor to understand, are we raising money for this? This is our natural growth rate or are we artificially contriving something hundred percent?

Jessica Kim: I mean, that what you just shared is exactly what often does not happen in these meetings. And that starts the partnership, even in the conversation of should I raise money? Do you see funding? You know, you’re partnering with them and even thinking through that. But what typically happens in these meetings is like, pitch to me, let me see. And I’m assessing you and judging you and seeing if you’re going to be one of my chances for a homerun. I’m obviously simplifying it in a more of a crass way, but I’m just saying, like, that’s. Basically kind of the dynamic and breaking down kind of you mean just like easing even that first tension and saying, why do you want to raise money? Do you want to. Is it a good thing for your business? Let’s dig in. And through that, you ask about the dynamics and LTV in the cash and all that stuff. And like you work together to even see should we even try to work together? Do you need this? Do we need this kind of partnership that would change? That is a solution like how you answer. I don’t even know if you realized because that’s probably how you operate, but it’s like that doesn’t often happen. So for like, you know, either an entrepreneur or an investor, like, I think it takes both. Right. And I think that’s the conversation. It’s not about saying, oh, entrepreneurs, you should do this. And so often you’re right. I read these articles. I like top five things. Entrepreneurs should do better for investors. And I’m like, my goodness, it is a two way street because that tension and dynamic, if only one person enters it that way, it doesn’t mean the other point is going to receive it that way. And so if we can enter with that posture together, that is what’s going to make it redemptive. I think that’s beautiful and that’s where we need to do the work.

Henry Kaestner: Yes, yes. And then hopefully that type of dialog at the outset of a relationship allows for post relationship, that type of open communication, because that’s a real challenge. The challenge is, from an investor perspective, is that an entrepreneur and it’s not really being honest with me, they’re always continuing to sell me. The things are going well so that I’ll continue to fund them. And if you can start off with that type of honesty and transparency and vulnerability, even if we are praying before our fundraising meetings and praying again about whether we should be fundraising at all and ask God, God help me to find a funding partner that will understand and validate the different challenges I have. Give me the confidence about what you’ve laid out in advance for me to do and help me to be able to share what we’re doing with confidence, to be clear, but also help me to be able to share honestly with the investor what I don’t yet know. Yeah, because you pointed it out and then with that type of match made, then that’s going to be a sign that you’ve got the right type of partnership going forward. So the three months after the investment, when things go wrong and things always do, yes, we already have that type of repartee.

Jessica Kim: Yes. And that becomes a functional partnership. And that’s when you can build something redemptive.

Jake Thomsen: I think whether you just got a cold email in or you spent a few weeks with an entrepreneur then comes down to encouragement, No. One, humility. Number two, in transparency, you know, encouragement, there’s always something to encourage somebody and there’s always something to affirm. This is kind of classic Dale Carnegie, how to win friends and influence people, that it’s not flattery, but you can do the work to find something that you can encourage them in. And so we always try to do that. Right. Hey, the problem that you’re solving, we’ve seen a few go at it in a certain way. But this is actually the most elegant or we think the most insightful because of X, Y, Z, and your story is a perfect fit for it. There’s always something to be able encouraged.

Henry Kaestner: Welcome back to the faith driven Investor podcast. This is a podcast where we hear from investors and talk generally about investing and we talk about how to steward God’s capital that is entrusted to us. And we’ve got two special guests once, my co-host, Luke Roush. But nonetheless, he’s still a special guest and he’s with us this morning. Partner. Good morning.

Luke Roush: Good morning. It’s good to be with you.

Henry Kaestner: Also have Jake Thompson, partner in Cerberus Capital, great friend, long term partner, long term friend, guy runs the venture capital operations and investments out of sovereign’s capital. Good morning. Good morning, Alisyn. Be here with you guys. OK, so we’re going to talk about a topic that a lot of people would think, gosh, I just pass this over, right? They’re going to talk about how to say no to entrepreneurs. I mean, how hard can it be? Right. And yet it’s something it’s incredibly important as we were just thinking and planning this and just brainstorming on it together, a good investor will end up saying No. Ninety eight or ninety nine times out of one hundred. And for something that takes that much activity, it’s something we should probably be spending some time on. One of the things that we’ve always looked at at sovereigns is that they’re five or six different things that you need to do. Well, when you think about investing, you need to be able to fundraise. You need to be able to negotiate deals. You need to find deals. You need to be able to manage your deals. You need to do fund operations. And my partners here tell me what I’m missing. But by far and away, the most important thing that you do as a professional investor is the deal flow. If you have great deal flow, everything else kind of solves itself. You come alongside the right entrepreneurs. They’re able to prosper in order to have great deal flow. You end up even hundreds and hundreds of deals that you look at in the course of a month. That means you become very, very selective. You find it very, very, very best. That gives your investors a great return. The problem with that is that to the extent you have great deal flow, that means that many more times that you need to say no. Now, Jake has always impressed this Luke in the way that he’s able to say no, Jake Riffe a little bit about why it’s important to say no. Well, and why you see that as an opportunity to love other people. And can you love other people in the world of investments?

Jake Thomsen: Yeah, we have to hit all three of those. You know, I think’s important for a few reasons. You can think about it almost pragmatically as an investor, right? If you say no. Well well, it’s a way to turn something that’s inherently transactional, a little bit more relational. Right. And that’s good for deal flow networks. It’s good for an entrepreneur kind of second time around when the reason maybe they will be more private then I think much more than that. Saying, Noel, is a way that we do indeed love somebody else, that we can recognize and honor the image of God in somebody else and making the time to do that and really put in the effort to do that. Well, and it’s something, as you mentioned, we have much more Praxis than we ever would want.

It’s the worst part of our jobs. And yet out of the three thousand or so companies that we’ve seen over the last eight years, we’ve only invested in fifty one or so. So almost three thousand times or eight years, we are doing the worst part of our job, which makes you wonder why we would do it that many times.

And yet to be able to do it well is something that is very important to us as a three thousand men and women and since Sovereign’s Capital just invested faith driven entrepreneurs, these are men and women that have come into you really believing that God’s laid something out in advance for them to do is call them to do that. The thing that’s standing in front of their ability to succeed is getting capital. That’s kind of a really vulnerable spot to be in, right? You feel called to do something. You’ve probably left your job and you’ve kind of talked about your business. And yet it’s kind of hard to separate the business idea from the person. So the person you’re talking to has got to take acceptance or failure personally, right?

Yeah, absolutely. And even beyond the professional risk there, probably if they’re married and they’ve got a family, you know, they’re negotiating at home and trying to figure it out, they’re taking a big risk in front of their community. I mean, they’re a whole bunch of reasons why this has a potential to be just a very stressful, difficult process. And most these entrepreneurs, you know, while we say no to that many and only invest in one or two out of out of 100, they’re seeing the same kind of stats. Right. If they can even raise the money, they’re getting told no. Sometimes hundreds of times in the way that that will weigh on their vision, their own personal mental health, just their encouragement, their drive to pursue that vision that God’s put before them. They certainly can weigh them down. And I think we can come alongside them and be able to do that a little bit better.

Luke Roush: I do think venture capital, one of the things that I think has given venture capitalists a challenging name is not just say no, but also the timing of when those come through. Oftentimes there’s a black hole that you’re putting diligence and information in and then nothing really ever comes back out in the way of either feedback on why I came back or sometimes even just to know itself. Right. It just kind of goes into the ether and you wonder where you are. And so I think that part of being a faith driven investor is actually being different from the way the world works. And rather than treating our own time as kind of the most precious asset, being able to put the shoe on the other foot, this is what I seen you do so well, being able to put the shoe on the other foot and actually say, hey, this entrepreneur’s time is very, very precious. And sometimes being able to get to a quick no and also being able to articulate kind of why we’re no and if it’s a no, not never or sort of just a no, not now, being able to articulate why it’s important and maybe instrumental in terms of helping them make some adjustments that help them to raise capital from us in the future, that sovereign will raise capital from another investor. So maybe just talk a little bit about some of the things that you’ve been exposed to that have really kind of made an impression in terms of the timing and also the feedback that you give.

Jake Thomsen: Yeah, well, and some of the entrepreneurs that we invest in, they’re getting all kinds of investors right. So we see through the lens of those entrepreneurs, many of us in our experience in the past, we see that fortunately for future investors, it’s a very low bar that we’re competing with. Right. It’s usually investors that, as you mentioned, what kind of ghost them in the process or maybe over the top optimistic, enthusiastic, and have a very whiplash of a no, because for whatever reason, they’re just trying to retain the option to invest and just can’t quite get there. And so that’s what we’re dealing with. And in terms of how we think about it and how might even structure it, I think can probably break it down to offer a bit of a framework into encouragement, humility and transparency. I think whether it’s a cold inbound or if somebody whose hand that you’ve held for a while, I think those three topics are those three focuses can make that process go very well and very redemptive and maybe unpack some of those. But too, from where you’re coming from, I can remember horror stories that we everything just mentioned our learnings. We didn’t know that out of the gate. I can think I don’t think about these often when I do, I sure cringe, you know, those deals that maybe we got to know the investor or the entrepreneur, rather, for four, six, eight weeks, you know, having a slew of requests and talking with customers. And I just never quite getting. In a couple of times, in the end, we ended up saying no for a reason, that if we were really being honest with ourselves and doing the hard work and not having some worry about missing out, we probably could have come to those conclusions very early on, probably within the first week or so as probably safe to say, at least the sovereigns. Our experience is it’s rare that we are not excited about a deal. And through diligence, we do get excited. Right. Sometimes we kind of think, well, let’s just keep researching and doing diligence and maybe something will excite us. I can’t think of any time that we made an investment and we’re very happy with it that that was the case. Right. It’s usually the opposite. We start off very excited and now let’s go and try to prove ourselves wrong because we just tend to be some optimistic guys. And and so that’s more of the process. And so all that to say we take a long time to get to know when we were excited to be with thought we could be. But getting that quick. No, whether it’s on the spot, it’s in a couple of days or a week or two, if you really dig it in, that’s something that we really hold really is the value of what we do.

Henry Kaestner: And so that would seem to be contrary a little bit to one of the dynamics that you think is big about investing, which is optionality, right? Yes. We’ve heard about the fast yes, the fast know the slow know the slow mo being the worst for the entrepreneur and clearly not a way to love on them. But that’s a little bit countercultural in terms of investing. Right. Because let’s just acknowledge there’s this natural tendency for an investor to want to draw things out to give them more optionality. Maybe the entrepreneur you’re talking to lands a big deal or maybe a whole bunch of different things might happen. That gives you more of an opportunity to really be able to assess the deal. Maybe it gives you a chance to change some of the terms. You see that the entrepreneur kind of gets strung out a little bit. They need to cash that much more. And at the end, they’re willing to cave a little bit more on some negotiating points because they need the money that much more than they did three months ago. But when you talk to them, so how are you able to fight the urge and not to suggest that you have these nefarious tendencies and you’re like, you know, let’s go ahead and string this person. I know you well enough to know that’s not a thought for you. And yet optionality to see how the next quarter’s numbers come in or to be able to assess and look at different things. Optionality is your friend as an investor. And yet that’s not always the best way to love an entrepreneur to talk more about that dynamic.

Jake Thomsen: Yeah, so two things. One, very practical. I don’t know that we’ve ever been in a situation where waiting and we’ve, of course, never intentionally strung anything out. But if we’re part of a process or maybe a lead investor wasn’t honoring the entrepreneur, how we would like them to, we never really seen that work out where a deal came to fruition. That went really well with other relationships intact and the rest we just haven’t missed out on that. There’s probably more fear based than not. And I would also point to the idea that we look to be in the relationship for five, seven, ten years. Right. These are long term relationships and we don’t want to be getting in a relationship by kind of tricking somebody into certain terms right into us. So suffice to say that that doesn’t tend to be that big of a temptation for us in wanting to have that optionality in a way that hurts the entrepreneur. Now, where we do get optionality, I would say, is doing the work to honor the entrepreneur, to build their relationships. I think even the way that you say, no, you can build a rapport, you can show the entrepreneur what type of investor you are and how you will honor them in a way that’s sometimes especially over multiple rounds. We’ve seen, earn us additional looks, earn us optionality, because we’re think about the long game and we’re thinking about the relationship first. And so I think that can actually go over several reps that can work in our favor, because just like, again, I bring up the analogy of marriage so often, right. When you see somebody true character, you end up wanting to have them around. You end up wanting to not kind of miss out on who that person is. And I just getting tricked into something, I would say. So we see an option. I work out the relationship.

Luke Roush: So take one of the things that I think would be really good to talk through is just in full transparency. What are some of the things that we’ve done wrong over the years? It’s over information, things that we’ve learned. But there’s also a bunch of challenges that we’ve had kind of doing things incorrectly. And maybe just to give you a chance to think one thing that I know that has happened at least once, but probably two or three times is when we don’t have conviction on a deal or an entrepreneur, we will sometimes kind of hang around the hoop and we’ll put the CEO, the founder, through some do loops while we’re trying to figure out whether other informed investors are going to put capital in. So at least a couple of occasions I have stalled trying to figure out whether other people have conviction rather than us personally having conviction. And that can really drive people nuts because they feel like, gosh, do you really want to date me or do you want to see if other people want to date me and then you want to date me, like, what’s the deal? And I think a big learning that we’ve had is trying to get to our own determination of whether we have conviction to be a partner. If we do, then we should step forward with some amount of courage and declare our interest. If we don’t, then we should free the entrepreneur to find somebody who really is a better fit and has more subject matter expertize. And so that’s something that I think we’ve done wrong. And here in Silicon Valley, we see a lot of others who also maybe don’t have that much conviction, a little more. A herd mentality, sheep following each other around, and that’s something that can really, I think, give our industry a challenging name. But Jake, what other things have we got over the years that would just be good to share with listeners so that they don’t make the same mistakes that we’ve made?

Jake Thomsen: Yeah, I can think of too many of those, unfortunately, too, that come to mind. First one, it was entrepeneur that we got no for a while. In the end, I think we probably said no in a way that wasn’t helpful because we knew that we weren’t going to get there. We didn’t want to tell them over the phone. We thought, hey, we’ve got this guy over three months or so like this really deserves to be in person. And we just we were moving quickly on other things and didn’t really think about it. So invited him to come join us in that case was in San Jose, came down quick conversation telling them, hey, we really appreciate this, let’s buy some coffee, let’s hang out. But we’re not going be able to get to an investment this time and come to find out, he was in Oakland earlier that day, ended up driving an hour each way just to come here. No, right. Because we’re thinking like, OK, this is let’s check this box in our to do list. And it turned a little bit more transactional then I think we would have liked. So that was just kind of weird because we weren’t being very empathetic. We weren’t paying ourselves in his shoes and maybe thinking a better way to do that. I think one that we probably hit more often is just being positive with the entrepreneur. You know, we always want to be encouraging. We’re at our core encouragers as Hobbins, I would say, for the most part.

And so sometimes in the past, it’s really easy to focus on the positive things that we’re excited about along the way and give an indication if we were on the other side, we’d probably think the same thing, but give an indication that we’re very interested. And the default place we might end up is that there would be an investment. And it’s not until later on down the line that we realize, OK, well, our investment committee and where we’ve landed and based on some other experiences and research on the rest for a couple of risk that were there earlier on, we’re just not going to be able to get to an investment. And I think that’s been a little bit whiplash in the past, whereas I think what we do a better job now and hopefully is foreshadowing that a little bit, setting expectations both on timing but also saying here’s we’re really excited about. Here are things that either we’re worried about or we’d have to diligence or if we get tripped up, it might be because of X, Y and Z. And so that’s what we’re going to focus diligence on. And it helps to give a little bit of transparency into our diligence process. And it foreshadows here are some things that may lead to us getting to know. So let’s have a very open, transparent conversation about that along the way. And if one of those risks materialize, our own diligence and we say we can’t quite get to an investment, there’s at least less of a whiplash as more of an understanding that there was a reason there where the expectations I think of the past, we have just tried to retain that option by being really positive and wanting to be those investors that are for.

Henry Kaestner: Well, you know, one of the things is we talk about this sense of the herd mentality that’s actually really interesting. There’s a study that came out of correlation ventures which talked about where the winners are coming from in venture capital. And it’s not any big surprise that what delivers the best returns for the big venture capital funds are the unicorns. I think we all know that, that the venture capital is an industry tends to be focused on these binary bets. And increasingly, there are some firms that are out there that are looking for some of the ground rule double instead of just the home runs. And yet the industry is focused on the home runs and yet correlation ventures found and looking at where these returns are coming from, that many of the deals that the big VCs thought were going to do well were a whole bunch of herd came in and it was oversubscribed, didn’t have any type of bearing on whether the company was successful or not. And so they found out in the research that many the majority of the big winners in venture capital were led by smaller firms, many fewer from financings that were undersubscribed or inefficiently syndicated. And so if your investment premises, let’s hold off and see if some other people really like this company, that actually doesn’t help you to understand whether that deal is going to be successful or not. There’s not any correlation there. And I think that that’s fascinating because otherwise you’re listening to this and saying, well, yes, of course, I want to love my neighbor. Of course I want to love the entrepreneur, but I want to be a good steward of the capital that’s been entrusted to me. And so if that’s part of the negotiating game and that’s what gets me the top quintile returns, I need to do that. But actually, the data doesn’t bear that out either.

Jake Thomsen: Yeah, well, in a lot, I think comes down to supply and demand, right, if you don’t have a contrarian perspective or at least you don’t see the world a little bit differently than everyone else in Japan, a whole lot of capital in their bids up prices, you know, end up getting those returns. And so it’s human nature and the data I think this is one of those cases where they’re often in conflict.

Luke Roush: Now, there’s also some really interesting work that’s been done previously just to understand, like what are all the deals that firms have passed on that ended up being really remarkable in terms of the opportunity? And we keep a list of kind of our entire portfolio, Jake. We’re like, here’s all the things that we said no to.

Henry Kaestner: And boy, we wish we could give back to the original Bessemer Trust and you can Google. The best summer antique portfolio is some of the funniest reading you’ll ever do. If you’re an investor. You care about angel investing, you care about venture investing, about why they pass on eBay or Amazon or just it’s just very, very, very funny reading. And out of that, we’ve endeavored to do the same. Tell us about Orianthi portfolio.

Jake Thomsen: Yeah, you know, we’ve got a bunch I’d say we’ve got a solid half dozen that are just very, very painful when it comes to returns. I would like to think know one thing that we always look at, I should say, and this is probably true at the time, that if we were to make that decision again, based on the information we had at the time, that is our gauge of success of that we made the right decision or not. Right. Hindsight, 20/20, a lot of unexpected things happen, but sometimes I’d say the half that we definitely would like to do differently because there’s something about the industry or the size of the opportunity or the technology that we didn’t quite love. And yet the entrepreneur was just stellar. And we invest in people first. But every once while we think this is an incredible entrepreneur, but in the space that we just don’t have a lot of connection. And it’s also almost especially in the early days, getting a little spooked by a space that we didn’t know and yet not back in a world class entrepreneur. Those are probably more than anything on our entire portfolio.

Henry Kaestner: Do you ever get emails from entrepreneurs as they go public that say, how do you like me now?

Jake Thomsen: I get a lot of people’s raspberries. I say, you better watch out because we are going public. But I’ve never gotten on the other side, I tell you. Yeah.

Luke Roush: Yet I’m gone there yet to take out what is just kind of good tactical and specific. How do you think about closing the loop with entrepreneurs when you have to say no? How do you decide how much time to spend? Because what I hear from other investors and what I felt personally and what I actually you know, you and I have had this debate right. Like, you can get sunk actually saying no and doing a great job with that. And meanwhile, the portfolio that we’ve invested in that we partnered with people is hungry for our time, but we’re too busy saying no and try to be good stewards. Like how have you been able to find a balance between allocation of time to really shepherd those relationships?

Well, to make sure that people aren’t scarred coming away, recognizing that we’ve tallied up a whole bunch of times in the last nine years, how do you think about managing that and maybe just give listeners some real tactical guidance about how you go about it?

Jake Thomsen: Yeah. So maybe I’ll break that down by giving a little bit of our template. And I call it template. Just because we’ve kind of normed on it’s nothing real formal. But I think whether you just got a cold email in or you spent a few weeks with an entrepreneur, then comes down to encouragement, No. One, humility, No. Two, and transparency, you know, encouragement. There’s always something to encourage somebody on, right? There’s always something to affirm. This is kind of classic Dale Carnegie, how to win friends and influence people, that it’s not flattery, but you can do the work to find something that you can encourage them in. And so we always try to do that, right. Hey, the problem that you’re solving, we’ve seen a few go at it in a certain way. But this is actually the most elegant or we think the most insightful because of X, Y, Z, and your story is perfect, fit for it. There’s always something to be able encouraged to, number one. Number two, I think having a spirit of humility is really important, whether an email or in person or the rest. This is kind of considering others better than yourself understanding, especially at an early stage. There’s going to be so many unknowns, no one’s going get it quite right. So we don’t want to have the pride of saying we have the right answers. So we always want to have that humble tone. Henry, there’s a line that still strikes me that I heard you say a few times early on where you approach us so well when your feedback for an entrepreneur, we’ll hear a pitch and they’ll describe how they’re going in a certain direction. And you’ll say something along the lines of, well, I understand and completely get where you go and A, B and C, and you had the experience and you know where you’re going. And I know about five percent of what I need to know to make the statement. But it sure seems like DNF could be pretty interesting, too. What do you think about that? Right. Where Henry probably has an opinion about what they could be doing and yet just positions it in a way that is winsome, that recognizes the number one way to get people to stop hearing you is to tell them that they’re wrong. Right. So how do you kind of go around that and still serve them with humility and being able to deliver truth in kind for saying that a lot of that was just informed by my experience as an entrepreneur.

Henry Kaestner: And I semi famously, almost famously, we went over forty inventor phrases. That means 40 different firms and probably one hundred and thirty five meetings or something like that or two and a half years saying no. And I’ll tell you, I remember a guy and be fun. If you listen to a podcast, I want to suggest you would. But there’s a guy named Erskine Bowles at Carousel Capital who I will remember to this day, said no so well, and it didn’t take a ton of time and doing it, but. He had a way of validating who I was the night before. It was something along the lines of this and say, listen, I got to tell you, I want to bury the lead. I’m very sorry that we’re not going to be able to invest in you. But before I go on a little bit further, I want to give you kind of some thoughts and some feedback on why. I want to let you know that what you’re doing is really cool. And I really admire the partnership that you’ve got with David. And from what I can gather about the team that you’ve built. You got something really special there. I couldn’t get my partners to a couple of different key things that help us to get unity around, make an investment. But ultimately, you guys get a lot of courage. And I think that you’re going to be successful and I’m going to be hoping and praying that you are. And I just want you to keep on going. And this is probably another one of those data points where it’s going to be kind of maybe frustrating. I would have loved to have seen us be able to make an investment and we’re not going to be able to do that. But you guys have something special going on there. And the way that you’re thinking about solving this problem is really interesting. And I think you have an opportunity to refine it over the next couple of years. And I’m going to be really eager to see how you guys work versus some of the other times where we had two different venture capitalists fell asleep during meetings with us. It’s reasonably hard to do. I mean, unbelievable.

Luke Roush: Or when David was talking or you were talking. He was talking.

Henry Kaestner: Well, you know, I mean, because it was me was me talking. And there’s some funny stories about how some of those things ended that you may know that probably not great for prime time, but you had some of that. But also you’d have some of the just the canned things like we can’t invest right now. But as you progress, you know, give us a look. You know, keep us in the loop. Let us know how you’re doing and the thought of from the entrepreneurs to times like. Yeah, sure, pal. I mean, you just said no, you wasted all this time. And as soon as we have the big win, I hi5 my partner about the big win. And we’re thinking about calling you right away. It’s never going to happen. And so I think that part of to whatever degree that I say we do it well is because we’ve been on the receiving end and have seen it done so poorly. But I’ll tell you, Erskine Bowles was such class and it just didn’t take him that long to do. And I’ll never forget it. And this is 20 years ago that he did that. Yeah.

Jake Thomsen: Yeah. And even that point you mentioned jumped out of me. Or I think you have the opportunity to refine some things. Right. There’s transparency where he wasn’t given the timings wrong or let’s just pick it up later. There’s there’s actually a reason that he may have given not necessarily a whole lot of detail, not necessarily try and make it a conversation, but just giving you some indication of where they’re coming from and why. So I think with that encouragement, humility, transparency, that doesn’t take that much time when you do it, a number of reps, when you kind of have a bit of an instinct for doing that did build over time in some ways. I think Amy Minnick has been so wonderful, insightful and talk about gleaning and investments. I think whether it’s spending time saying no to entrepreneurs or there are some other activities like that, that in some ways is some sort of gleaning to say it does take some time and that’s the way to honor others, somebody else and to lift them up. And yet we find that as you do it more and more, it doesn’t take all that much time to be able to do it. Well, as long as you’re encouraging being humble and having some transparency to.

Luke Roush: Well, I think also one of the things that’s really important for faith driven investors is that it’s not dissimilar to the role that pastoral staff or congregation has in the church know when you have someone come in and sort of try out and interact. We all know folks who have been burned by bad experiences. They had a youth group or a church or whatever. And so to the extent that the gospel is going to be front and center to the work that we do as investors, it just raises the bar considerably that those who we come in contact with, particularly those that we don’t end up progressing into some form of partnership with, have a good taste in their mouth. And, you know, one of the things that I’ve seen done well by others is the entrepreneur. Even when they get to know, they do genuinely feel like the person is in their corner. And we’ve tried to adopt this at times. The times have done it OK. At times we’ve really blown it. But the entrepreneur really feeling is that we are for them. We want to see them be successful. If there’s folks that we know in our network and our advisory network or in our investor network or other secular or faith driven firms, to the extent that we can connect them to folks who can break down obstacles or help them, even if we have no horse in the race whatsoever and have nothing to gain to the extent that particularly for entrepreneurs who are, you know, great folks and a great idea, it’s not the right fit for us to the extent that they see us being willing to sort of leverage our network for them, even though we have nothing to gain. I think that’s a way of them really believing that we are practicing what we preach in terms of really demonstrating a care and a belief that God has equipped them to do something special, even though it’s not for us to be a partner with them in that that we’re trying to do other things that we can’t help them.

Henry Kaestner: And I think it’s really important. You know, there’s a market dynamic, particularly with entrepreneurs that are in the 20 or 30 year age group. There’s a lot of research by Bahrain and others talking about some of the dissatisfaction and some of the challenges that they’ve had with the church. And so in light of that, you don’t want to be yet another example about, see, that’s why I don’t go to the Christian community. You know, the church doesn’t get me. And we’ve become another negative reference, and it just takes them that much further away from faith because there’s real harm that can be done here, especially for investors that have identified themselves as Christ followers that will pray with entrepreneurs ahead of time. When we say no, it could be significantly more damaging than if battery, Sequoyah, US venture partners, Redpoint, all of those people say no, that’s not a no from those people, isn’t going to take them potentially further away from their faith. But I know from somebody who shares their faith, who says no may discourage them and just say, you know, the Christian community doesn’t get me. And yet God creates to be in community. So if you listen to this podcast feature investor, a good chance that you’re driven by your faith. And so I think that that’s that much more important that we as an investing community do this well and we at Saffron’s capital do it better than we’ve done in the past.

Jake Thomsen: Yeah, I’ll tell you, it’s been very encouraging for us having even just the FDI marketplace, right. Where even if there’s a no, we might be able to four of them on, I think, the exact mission that that you guys are going for. It’s not just an encouraging word or I’ll pray for you, but, hey, I’m going to tell you now and I’m going forward, John, not just to the podcast, but to a marketplace where you can find capital for us to be able to bring them into the community, a feature of investors to have a whole lot of different types of people that are looking in the marketplace. That’s been a big blessing for us because we can say no and write in a unique way.

Luke Roush: Well, that’s a great point. And I’m glad you brought it up, because particularly in today’s market, there’s not a shortage of capital and there’s not a shortage of ideas. They’re trying to find the right capital for the right ideas. And trying to make that match is very, very challenging. And so it’s a great point for other investors that are out there knowing that the marketplace exists as a way of short circuiting. Maybe what would otherwise be kind of a random process is great opportunity and great kind of offramp to do another whole universe of different investors that have complementary and different skills and what our firm or your firm may have. So I want to close just with how we typically close of what God is teaching you right now, Jake. But before we do that, just summarize three things that investors should be thinking about in terms of how they know the right way and then close by. What got to you right now?

Jake Thomsen: Yeah, I would say getting back to that theme, we’ve hit on getting to a quick no if it’s going to be thinking about their time, right. Being empathetic, they’re no to try to see the image of God in them. That sounds overly theoretical and theological, but really, just how do you see them as a person? And if you were to put yourself in their shoes, how would you want to be treated? How do you honor them? I think even just stopping and praying before interactions, before you write an email, before you sit with an entrepreneur to say no and just have the spirit work on our hearts to try to put that interaction the right light, see it through his eyes. I think those are three things that I would recommend to.

Henry Kaestner: And just tell us what you’re hearing from God through his word. Maybe this morning. It doesn’t need to be this morning, maybe this week, this month. But how do you feel that God is speaking to you in your life right now?

Jake Thomsen: One idea that I’m thinking about these days is just this concept of anxiety. We’re with some entrepreneurs and they’re doing fundraisers and they’re sleepless nights and just more times. And I was reading Philippians about two weeks ago now and it really struck me. Of course, I got to Philippians four, which is like the go-to for anxiety of “Hey, be anxious about nothing but in everything through prayer and supplication lift it up to the Lord. And the peace that surpasses understanding will come to you.” And in one sense I think that’s such an encouragement and the other sense it can be kind of discouraging or even anxiety-inducing, because like us, especially now, we were going through a fundraise. Are you feeling that lack of anxiety? And if not, it’s kind of like you think you got something going wrong. But what really jumped out at me, this is the point I’m getting to is reading Philippians all in one sitting. I got Chapter two where Paul essentially has this riff, where he has his missionary friend and Aphroditus, who got really sick. The Philippians didn’t know he was sick. They thought he might die. And so part of the letter, Paul wants to let them know, hey, he is OK, I’m going to send him to you. And it kind of talks about we’re all very anxious about this. Aphroditus is anxious. I’m anxious about it. And the only way I’m going to solve it is by sending him to you so that my anxiety can be reduced somewhat. And it seems as though it would be saying we do experience anxiety because of the brokenness of the world. And sometimes Paul at least was looking at the circumstance. And even when he was trying to address the circumstance, I didn’t quite get him told to that peace that surpasses understanding. And yet he gets to Chapter four and says, this is what we strive for. And so I don’t have a clear takeaway from all that. But that’s what I’m wrestling with, kind of looking at from different angles with God. And I think I’m landing just on the side of the “Already – Not yet” right. God has already accomplished the victory and it is not yet fully here. And so how do we live into that kingdom that is still coming? It’s still on its way, and yet we know what that faithful living is like. And maybe some layer of anxiety sometimes doesn’t necessarily mean that we’re doing something wrong, which is that we’re in this kind of following world in a tough spot and I don’t know where to go from there. But that’s what I’m thinking about.

Henry Kaestner: That’s a good one. That’s a good word already. Not yet. And then that leaves you in this place of faith believing in it.

Luke Roush: Hey, man, I’ll say thanks, Jake, for being with us often to hear your thoughts. I think this is such an important topic because it occurs so frequently in the lives of investors and being able to say know the right way is just fundamental to being able to be a witness and testimony in our faith, how we interact with others. So thanks for your thoughts.

Jason Illian: Listen, I grew up in Nebraska, and it used to be it just jumped on your tractor and now the tractor drives itself right now. The soil is monitoring itself. And now we’re using next generation technology to fertilize it and keep track of it and measure it. And so technology and breakthroughs are happening everywhere. And we believe as part of it is we want to be part of that. Doesn’t matter if you’re in Silicon Valley, if you’re in Israel or if you’re in Cincinnati. You know, we want to back those best entrepreneurs and learn from them, be a true partner.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast, this is the podcast for you as you endeavor to understand what’s a community of believers talking about, thinking about what’s going on as people come to understand how they might stored the wealth that God has entrusted them with. And every week we talk to somebody else that has a new perspective, a different story about how God is using them. And the hope, of course, is that you’ll come away from this time understanding and knowing God a little bit more fully by talking to somebody else that shares your faith and is intentional understanding how to bring faith into the investment world as you are and that you’ll just be encouraged by the broader community of people that are looking at this space. And we’ve got a great guest today. We’ve got Jason Elián, who’s got such a really, really cool background that I hope that he’ll share with us, but then also great perspectives and experience and what he does right now as he allocates capital and is driven by his faith as he does so. So, Jason, welcome to the program.

Jason Illian: Hey, thanks for having me. I’ve been looking forward to this.

Henry Kaestner: So with every guest, we like to understand a bit of their background, who they are. A quick autobiographical sketch. I know enough about your background to think that this rather than just kind of just doing a quick flyover of 90 seconds, that this is worth spending a little bit more time on. So do that. Who are you where do you come from now that I’ve intrigued our audience like that?

Jason Illian: Yeah. Yeah. Well, first of all, thanks for having me. You know, it’s interesting during the day, right? It’s Jason Allen, one of the managing directors at Koch. But most of the day I’m being known as either Alicia’s husband. Right. Or dad to my three kids, rogue, rain and sage. And so my three kiddos, they’re almost 13, 11 and 10. Their names are all biblical names like Rain Comes from Isaiah. Forty five. We’re talking about how the Lord reigns and how he’s going to tear down mountains and do things in his name. So that’s where his name comes from. And Sage is for the Lord’s wisdom comes from Zephaniah. And then my youngest is named Roeg. And Roeg is as is set apart for the Lord. Before I knew you in the womb, I set you apart. And his name’s Roeg and so is really important from us, my wife and I, from just the word go to say, hey, they’re dedicated to the Lord. This is what our family is going to be about. And and most of the time, like I said, I’m known as Alicia’s husband. And if you’ve met my wife, you realize you have the wrong one on the podcast. Right now, I’ve clearly outputted my wife. We could switch you. She really should. Lifeline a lifeline. Yes. This is where you phone a friend and get her on the line and you get much more interesting biblical insights than you get from her husband. But I met my wife speaking actually at a church about fifteen years ago, and she just finished writing a book called Chasing Perfect, which is helping Christian women get through the noise to really have a personal relationship with Jesus. And so we met fifteen years ago, kind of taking a step back to hear just a little bit more from me as I ended up going to school at TCU and Fort Worth, Texas, came to know the Lord when I was 17 years old at an NCAA football camp. I thought I was going to the camp so that I could show my great athletic prowess. And they were giving an award for somebody that exemplified the most Christlike behavior. And I was thinking, well, that must be me. And if you’re thinking it’s you, it’s definitely not you. Right? And so they had this kid come out and pray for us. And as he was praying, I realized he had something I didn’t. He had this relationship with the creator, God Almighty, and it was real and it was authentic. And he had this piece about him. And I based a lot of my identity on what I could do right. And playing football and doing well in school. And that just shifted it completely and came to know the Lord there. And then I went off TCU played college football, Texas Christian University go Frogs’. I know we have some other Bama and Baylor guys around. That’s OK.

William Norvell: I’ll speak slowly for you guys in North Carolina this year. Let’s not leave him. Yeah that’s true. They showed up this year.

Henry Kaestner: Thank you, William. The essay did Mack Brown.

Jason Illian: They brought their game so I wouldn’t play ball out there. And my goal had always been to go play NFL football, but had some injuries there. But really what I found is when I got there, I became part of the FCA. I’d never really led any Christian ministry before, but the FCA grew from about 40 or 50 kids to at the time when I left about five hundred and fifty. And that guy just blessed it. Right. And God gave me this amazing opportunity at TCU to grow athletically. Intellectually, my background is international finance as well as spiritually. Just put amazing godly men around me to help form the type of man I am today. I owe a lot of that to my time at TCU. My degree was finance. So I went to the London School of Economics, got recruited at Strong Capital Management. They did investment management had about forty five billion in assets under management.

And when I was there, this was late 90s, early 2000s. We were tracking all these companies in this tech space and some of my friends were like the first non founding member of Napster. We’re building a company called Friendster. One of my friends had their distribution rights to this small company called the Amazon, and I was watching these things in my real interest was the Internet back in the day, used to just be flat. You just went there for information. And what was happening is it started to become transactional and even more importantly, started becoming relational. And when I saw that you could start to build relationships potentially over, this became really intriguing to me. And so I ended up being in finance for four or five years, moved back to Dallas and ran a company called Gadhia, which was the first Christian video site. And one month we had twenty thousand users. In the next month we had two million and it really grew that fast.

Henry Kaestner: One that feels like kind of like how our podcast is exploded with with our listener base.

William Norvell: I mean, you know, it’s it’s a little bit I mean, I think we’ve eclipsed most of that at this point, but yeah.

Jason Illian: That those are small for you guys.

Henry Kaestner: Twenty thousand to two million. That’s unbelievable.

Jason Illian: Yeah. I want to say in the early 2000s, for a couple of months, we on the fastest growing websites on the planet, we just grew tremendously and would love to take credit for that. But the reality was, is it was content that people were really hungry for. Right. They really wanted to have the Google centered content that was safe for their kids. And, you know, we had a few videos that just went viral. And as they went viral, it just grew and grew the site. And we later ended up selling the site to Salem Communications, started another company called Bookshop, which was an e-book company. And then I ran that until twenty seventeen and sold that to a private equity group and then decided that I was going to take some time off. So my wife in her wisdom said, hey, you’ve been running hard. And as you guys know from the type of people you interview and work with this building companies and building startups is hard, right? It wears you out physically, emotionally, spiritually. And my wife said you should just pray about this and take a year off. And so I was at my home in Dallas just playing with my kids, you know, swimming, mowing the lawn, doing Bible studies and driving back and forth between Wichita to see my wife’s family from time to time. And through those connections and some other God ordained introductions 10 years earlier, I got to know the team at Coach and Chase Koch, who is the president of our division and the son of Charles, our founder. So he was getting ready to start a growth and venture arm for Koch Industries and asked if I want to be part of it. And so my wife and I prayed about it and we thought about it and decided this is where God would have us be. So we sold our home that we’d lived in for less than a year and moved to Wichita, Kansas, which is where I am today.

Henry Kaestner: So this is the faith of investors, most definitely not the faith driven reality show participant, but some of our listeners are going to know a little bit about that story. And presumably, as you’re coming out of FCA, motivated by your faith, you see that there’s an opportunity to live that out in a way that actually made quite an impression on a lot of people because it was a great witness and testimony. You were on The Bachelorette in your faith, came to play to spend just a second on that. What that looked like. As you know, you’re in an environment now where you’re doing something that’s unexpected is countercultural. And I think that maybe there are aspects that shouldn’t be presumptuous or prescriptive, but there’s things that you might have an opportunity as an investor to be countercultural. But this won’t be the first time that you’ve been countercultural. You’ve done that before. Just speak briefly to that.

Jason Illian: Yeah. You know, one of the things that’s really interesting about life and how God has it is our paths aren’t linear. Right. And his ways are greater than our ways. His thoughts are greater than our thoughts. And he’s just asking us to be faithful in whatever moment that we’re in, in whatever situation that we’re in and how do we live that out. And so that’s certainly played out in my life many ways. And one of those was through being on this reality television show, The Bachelorette, which was it was like the second season I was on. So it was still relatively new to this. And how it came about was even throughout this story that I just told you, this narrative of my life, I’ve continued to be involved in ministry. And I came home one night from speaking at church and I flipped on the TV and The Bachelor was on. And while I was making dinner, Jesse Palmer, who is now on ESPN, he was on the show and one of the girls asked him, why are you here? And he said, well, you know, I get tired of waking up every morning with a different girl, not knowing her name where I am.

And I just stopped and said, where do they find these idiots? Like he’s doing more damage in ten seconds on television than all of the things that we’re trying to talk about our faith and how do we should live out purity and how do we push towards traditional family and marriage? And I was telling one of my friends about it and he said, well, if you think you can do better, why don’t you send your application in and almost out of a dare? I just did. So I sent it and I didn’t think much of it. About three or four weeks later, I get this call and it was so and so from ABC’s The Bachelorette. And I thought it was my friend. That is give me a tough time, so I just gave them a tough time, I gave this person a tough time for like 10 minutes on the phone. And I’m like, yeah, sure you are. And I’m the pope. How can I help you? And I just kept going on and on until I finally realized that it was them. And I said, I’m really not a fit for your show. I’m like, I’ve seen the type of people on your show. That’s not the life that I live. It’s not a lot of the things that I believe in from a faith perspective. And they said, listen, just come on the show and just interview. There’s like five rounds of interviews and you may not make it through anyways, but we’d love to talk to you. So I did. And, you know, you do on camera interview and do in person interview. And there’s one where you fill out, I don’t know, an inch thick of background paperwork. And in there they asked, you know, all the people you’ve slept with. Well, it was a virgin at the time, right? I was saving myself for marriage, so I just left it blank and I turned it in and they brought it back and said, you missed the section. And I said, no, I just hadn’t slept with anyone. And when I said that, you could have heard a pin drop in the room, right. It was like they just cast a serial killer on the show or something. Right. They just couldn’t fathom why anybody would do this. And so it just started this ongoing conversation of my time throughout this television show, just saying, listen, what I believe and what God has for us and at the highest level of intimacy is matched at the highest level of commitment marriage. I said that’s how God has designed our family structure. And so I got a chance in front of ten million of my closest friends to have this conversation on national TV with Gen Sheft, who was The Bachelorette at the time. And it was because of that conversation that I got voted off. Right, because she didn’t believe that was very lovable. But what most people don’t know is I got thousands, hundreds of thousands of emails and calls from people that just said thank you. I said we need more examples of this and said I didn’t go on the show necessarily to make a point. Right. I didn’t go there saying, hey, I’m going to pound my hand on the table and here’s what I’m standing for. I’m just honestly just living my life as I feel like God’s called me to that. And, you know, God’s provides those opportunities. Right? He did that with The Bachelorette.

You know, I wrote a book early on called MySpace My Kids, when MySpace was just roughly a million users that was helping Christian families just understand this thing called social networking. It seems so basic today, but back in the day, we didn’t know what we were about to embark upon. And so when God opens those doors, I just try to be faithful. It’s not that I had this master plan. I’m sure God does, but I don’t see it clearly. And just take those moments to be faithful and try to have an impact.

Henry Kaestner: So that’s and an obvious question. And maybe we’ll go there, which is that was, as I said before, it’s countercultural for you to talk about celibacy on a show like The Bachelorette. Do you see opportunities to be countercultural and what’s going on right now in the world through what you do right now? So you’re managing director of Koch Industries for Disruptive Technologies. Yeah, and I’m going to ask a two part question. One is, some people are going to say, what in the world is disruptive technologies? But then also, why don’t you riff a little bit about how your faith in your worldview impacts the way that you see your job?

Jason Illian: Yeah. Yeah, it’s a good question. So maybe to back up just a little bit, Koch Industries, if most people don’t know. Right, we’re roughly one hundred and twenty dollars billion privately held company and it’s really a number of companies that are put together. So if you have a cell phone, this components in that cell phone from one of our companies called Molex. If you are living in any type of house or building structure, it’s probably has Georgia-Pacific Materials, which is a Kochcompany.

Henry Kaestner: So it doesn’t apply to people living in teepees.

Jason Illian: But if you live in a house where the tea is made of toilet paper, then yes, because that’s also Georgia-Pacific, right? So, yeah. Yeah. So basically, think of it this way. Right. We’re in sixty five countries. We have roughly forty thousand trucks on the road at any time that have Kochmaterial in them. And you know, if you popped open the hood of Koch industries, what you’d really realize is it was built by entrepreneurs for entrepreneurs. Right. So one things that Charles has really done is saying I’m going to align incentives, push decision rates down to the bottom and let people create products and services that will make people’s lives better. And we want to do it at an affordable and efficient way. And so as the company continues to grow, they said, hey, we need to build a growth in venture arm so that we don’t get disconnected from those people that make transformative change. And that’s really what birth certificate. And so day one, there was two of us here chased Koch and myself as one of the founding members. And we built a team of about twenty five investment professionals, including three in Israel. And we’re a stage in industry agnostic arm, so we can write a check as small as a couple million and as large as a few. Million dollars per check and it’s a greenfield fund, right? So it’s all of our own cash on balance sheet, we can do 15 investments this year. We can do one investment. You know, we’re only really bound by what we deem to be something that will truly be disruptive. And so what does that mean? I mean, what is disruptive actually mean? Well, I look at it. Is is it a platform? Is it something that is going to make people’s lives better, more efficient, cheaper change the way that they live their life? So I remember the first time I heard a pitch for something like Uber, right? It was people like, hey, one day random strangers are going to pick you up in their car and take you to where you want to go. And people were like, are you crazy? I’m never getting in some stranger’s car. And now that’s just what we do, right? You guys know with grab I mean, you guys are that’s you understand. But this is a lot of the things that sounded crazy back in the day or just the way we do things today. Airbnb is another example, right? You’re going to stay in somebody else’s house on their couch, like who’s going to do that? And so these are transformative companies that change our behavior in the way that we live our lives. And a lot of those came in consumer areas to start with. But they’re also now coming across be to be industrial manufacturing, a number of other areas as well. And so, you know, we invested in a company called Desktop Metal, which prints three D metal parts, which are being used by Jewelleries, like Tiffany’s, are being used by BMW for parts. And so we look at all those types of various technologies and really invest in the people, because at the end of the day, you’re investing in the people who are building those types of technologies. And yeah, we put about a billion dollars to work over the last three years and I think we’re just getting started.

William Norvell: Wow, that’s fantastic. So when I think about the rise of entrepreneurship has just been incredible, I think over the last 10 years, you know, we talk about that our entrepreneurs are cultural change agents. You know what Elon Musk is to our generation? Mickey Mantle was to my dad’s right. And it’s just amazing how that’s continued and continues to spread across the country. You know, Henry and I are here in Silicon Valley or maybe that was a thing 20 years ago and we’re obviously biased. But I grew up in Alabama where when I go back home in my small town of 60000 people, I see, you know, coworking spaces and tech hubs and, you know, of course, in the bigger cities, Birmingham and Huntsville, it’s just it’s all anyone can talk about. And from Wichita, Kansas, I would imagine, you know, that name doesn’t scream innovation and entrepreneurship to most of our listeners, maybe screams fantastic college basketball first. But could you let us in to what you see? So you’re around the world now, but specifically maybe from the Midwest perspective of what do you see happening in entrepreneurship and in sort of how that is part of society and how God could be using that to bring his visions into the workplace?

Jason Illian: It’s a good question. And I think what people in you and Henry can probably speak to this better than I can. But what happened in Silicon Valley didn’t happen overnight. Right? It was decades and decades of building on top of one another with defense and semiconductors, Internet and mobile. It grew into what it has become, right. It became that melting pot of great ideas and ways for people to interact and take new risks in terms of building next generation platforms. And I think what you see happening is that’s starting to happen all over the country and all over the world. Right. So look at what Brad Feld has built in Boulder, Colorado. Right. It used to be you walk down downtown Boulder. Yeah, I maybe grab a bite to eat, but that was about it. Now you walk down there and there’s tech companies and people all over the place building next generation technology. Same things with the Walton family’s done in northwestern Arkansas. That has become a vibrant tech hub where people are wanting to move. They want to raise their families there. They can look at anything from mobility services to next generation data companies. And then I think what you’re seeing in Austin, too, right? I think you and Henry had the way to make a sound in the media. You may be the only thing left in California because our base moved Austin. Right. And so what’s happening is you’re starting to see great entrepreneurship. And it’s one of the reasons we’re friends with Eric Schmidt. And what Steve Case is doing with Rise of the rest is there’s all these ecosystems that are starting to grow up and there can be great entrepreneurs anywhere. Right. Great entrepreneurs don’t want to guarantee. They just want an opportunity. Right. So how do we find those and give them an opportunity? And so, you know, Steve Case made this bet before covid hit. And I think Ovid’s only accelerated that to say, yeah, you can talk about the Austins and you can talk about the boulders. But what you’re starting to see is what’s happening in Cincinnati and Miami and Minneapolis and hopefully Wichita as well, that we can start to think of ourselves as a place where we’re giving people new opportunities and those new opportunities. Without a cap on them in terms of what they want to grow and what they want to build, but with that comes the need for capital, right? Need for community. You have to have the people and the right skill sets around you and also just the knowledge sets that you’re going to need to bring in there because problems become more complex as we break into new areas. But listen, I grew up in Nebraska and it used to be it just jumped on your tractor and now the tractor drives itself. Right now, the soil is monitoring itself. And now we’re using next generation technology to fertilize it and keep track of it and measure it. And so technology and breakthroughs are happening everywhere. And we believe as part of it is we want to be part of that. Doesn’t matter if you’re in Silicon Valley, if you’re in Israel or if you’re in Cincinnati. You know, we want to back those best entrepreneurs and learn from them, be a true partner.

William Norvell: Now, that’s great. And did you give us a sense and I don’t know, you know, do you have a sense for our investments in those areas? I’m trying to play the cynic here. Right. You know, I read a report this morning that, yes. You know, tech hubs are growing, of course. But if you look at the data from last year, you know, the venture capital dollars in San Francisco still outstrip L.A., New York, Seattle, Portland, Austin combined. Right. That’s just a data point, is it today? Right. That’s a balance sheet metric. But I’m interested in what you’re seeing out there in the field as you invest and sort of come alongside rise of the rest. I mean, is it working? You know, are we in inning three and we’re, you know, five innings away or they’re still unknowns out there about whether it’s going to work? Or is it just exactly what you said about San Francisco right now? We just got to keep building layer after layer and it’s clearly working.

Jason Illian: Yeah, I mean, listen, there’s not one answer. That’s a broad brush that works in every community. It’s working in some places better than others, and some are more mature than others. And so at the end of the day, if you go to Austin now versus Austin 10 years ago, it’s working significantly better. Right. Wichita still has some work to do, right? We’re not as far along. But what I would say is what covid really did is kind of lead just five years into the future, 10 years into the future, and you’re starting to see even just the prices and cost of living like living where you live versus living where I live, you know, where your kids can go to school. The other amenities and things that you want to have covered has taught us we can work remote. And so what’s happening is it’s causing people to spread out. And you’re going to have these events where there’s a black swan event or just technology accelerating that creates these communities around. And, you know, people sometimes forget that MailChimp, which is one of the largest privately held tech companies, is in Atlanta. It’s not in the Bay Area. Right. A few of our big investments have happened in Denver because people have said, hey, we’re going to leave the Bay Area, but we want to be in Denver. And I just think there’s great people everywhere. Now, it may not have the concentration of Silicon Valley yet, but that’s not to be expected overnight. We got to continue to build on it. And Chicago’s a good example. You get something like Groupon that’s successful and those founders spread out and create more companies and they invest in other great entrepreneurs and that ecosystem continues to build.

Henry Kaestner: Tell us about Israel. So you’ve got a guy on the ground in Israel. I’ve been to Haifa before. I seen some of the dynamism there listening to this podcast. Are you going to be interested in just what happens in a kind of a special geography that’s politically charged? It’s got a spiritual foundation, but there is something special about what’s going on in Israel. Maybe you can comment on that a little bit.

Jason Illian: Yeah, you know, it’s interesting. Israel is a leader in technology, in building platforms. And part of this comes because everybody’s trained in the military over there. Everybody has to be trained and a lot of them have technology backgrounds that they’ve actually been trained in. And I also think you’re willing to take risk goes up when you live, you know, fifty miles from somebody willing to shoot a rocket at you at any time. Right. So you live in an environment that you realize that taking risk building a tech company is not as risky as getting shot by a rocket or by somebody that doesn’t have the same belief system as you do. And so what Israel is built is this really robust ecosystem of great technical entrepreneurs. And they’re coming up with all sorts of great technologies. And you can talk about companies like Mobileye which have help helping autonomous driving. But even our first investment as a company called Tech and we invested over one hundred million dollars in this company, does noninvasive focus ultrasound on people that have essential tremors or Parkinson’s? So the first time I saw this, a gentleman was shaking so bad that he couldn’t write his own name or hold a cup of coffee. So he lays in an ultrasound machine, special helmet, and it uses ultrasound waves to ablate the part of the brain that deals with the shakes. He stands up two and a half hours later in the shakes are gone and it looks like magic, noninvasive, like no cutting the skull open, no peeling your head back. This is hey, what if we use the ultra? Sound waves, and we pinpointed them at a place that we could kill whatever is causing that to happen. We’ll take the next step. What if we can use that for cancer? What if we could use that for blood clots? What if we could use it for all sorts of other things? This is an Israeli company, right? So our thought is like, listen, once again, there’s great entrepreneurs all over the place. How do we help connect to them, help you, that connective tissue? Because we’re in different countries and a big part of our investing mandate is not that we can just deploy capital. I think there’s a lot of really smart investors that do that. But how can we come alongside them as a partner? How can we help them accelerate the growth of their platform and those entrepreneurs that want to do well by doing good. And they need a real partner to do that. That has capital. You know, we may be a good place for them.

Henry Kaestner: So as you talk through this and you talk about technologies that can and maybe I shouldn’t get overly biblical about this, you know, it’s in the Holy Land, Jesus was healing people that had leprosy and others. And there’s kind of a two thousand years on, you know, walking with tremors and you walk out without it. It’s almost miraculous and almost feels that is you’re in this space. And we all have found ourselves kind of in this world of these disruptive technologies and investing in them, that if you have a propensity towards a God complex, you get involved in inventing technologies like that or and financing technologies. You know, there’s a temptation to kind of feel like, you know, Alec Baldwin in the movie Malice, which talks about, you know, you want to know if I’ve got a God complex. Well, who is the person saving your life at 12, 30 am an emergency or operating room for when you talk about the technology you just talked about? I think about Kalikow, which is this initiative to end aging. Right. That’s the final frontier for us to become godlike, immortal. And yet you’re talking to people, entrepreneurs and technologists every day that see that aging might end. Right. How does your faith come to bear in all of that?

Jason Illian: Yeah, I think you’re asking a really important question that we haven’t asked ourselves enough in the technology space is we often ask what we can do and we don’t ask why or what are our boundaries are on this like. So why do we want to stop aging, right? Or why do we want to change the financial system and what are the repercussions? So we’re seeing the repercussions of social media right now. We wanted a better way to communicate. Now, what we’ve got is we have partizan division. We have people being blocked because of this. We have some large tech conglomerates that are starting to tell you what you can and can’t say. Right. So, you know, I’m not a conspiracy theorist by any stretch, but somewhere between nineteen eighty four and brave new world things are happening. Right. And we see this in China with the social credit system. What happens when all of a sudden technology can become used to monitor everything you do? So it’s very important that we’re investing in those entrepreneurs that one have a sense of humility, that they’re not leaning towards this God complex of taking over the world, but they want to do well and they know their limitations. Right. I think it’s very important that we are investing in entrepreneurs that know their limitations and are also putting other great entrepreneurs and investors beside them. Right. Scripture says plans fail for lack of a council, but with many advisors they succeed. So how do we put people around ourselves, just like we should do in our own personal lives, to have people point out our blind spots left to my own? I’m going to step into the ditch where the ditch is on the right or left hand side of the road. I’m going to hit one of the ditches unless I have brothers, advisors, counselors, mentors helping remind me of my limitations in the team that we put in place. And so we want to invest in those entrepreneurs. Right? We certainly want to invest in those entrepreneurs that know their own limitations, build great teams around them, but also have what I call cognitive flexibility, ability to take different mental models and know when and where to apply them, because there are new challenges that are coming up in our world and we need to know how to approach them as believers and have a stance on those. Right. A lot of people say we got to defend the faith. The word defend doesn’t resonate well with me because you don’t need to defend a lion. You just need to unchain it and let it defend itself. So we just need to be bold in our stances and we need to be honest. We need to be intellectually faithful to know what we believe and how to apply that. And we need to give other believers by standing up the courage to stand up and say what they believe as well. And I think that as people that invest in technology in the future, in these next new platforms, if you are to invest the next Facebook or Twitter or go beyond communication platforms to whatever. Her new medical technology. We have a responsibility beyond just the shareholder responsibility to make money, to know why we’re doing this and how this benefits society in a positive way that ultimately points to our creator and savior.

Henry Kaestner: You’re out there, you’re talking to some of the most exciting entrepreneurs in the world. Do you ever get a chance to share your story? You know, everybody, whether they’re in Israel or Silicon Valley or Wichita, has a world view that kind of directs them towards what they’re doing. And I’m wondering if any of those folks that are developing some of this disruptive technology. I know some to be clear. I did. I’m an investor, so I know some, but maybe not at the scale that you’re looking at. Do you see any that are motivated by their Christian faith? You see that any that are open to that, any that are as they go about inventing, they’re trying to figure out why they’re doing it and what’s the bigger metanarrative here? I don’t want to overly spiritualized what you do every day, but I am curious about these personal relationships that you end up developing with some really, really interesting people about what are they thinking and does that ever give you an opportunity to kind of be in a relationship with people and maybe not the same way that so deliberately countercultural as it was for you on The Bachelorette, but what does that look like?

Jason Illian: Yeah, I think sometimes we over Spiritualized sharing our faith. I mean, really what that means is building relationships and valuing the people that are in your life. Right. And as you value people, as you listen to their story, they want to know your story as well. And so I take every opportunity or I attempt to take every opportunity with any great entrepreneur to ask what they’re building, why they built it, like, what are your challenges and tell me about your family. And what happens is we build this personal relationship and then it becomes a conversation right here. I want to know what you believe. Tell me what you believe. Give me your world view. How are you seeing this world? And then can I share my world view, too? Because I would love for you to understand how I look at the world. In my world, view is a biblical world view. Now, I’m very fortunate because here at Koch, Koch are not necessarily a Christian entity, but they have what we call market based management mbm in the market based management. A lot of the philosophies around that align very well with biblical framework. Right. And so it gives me that opportunity to engage people where they are. And when you engage people and you share your story with them and they show you, you start to understand the type of people you want to do business with and live your life with. And as you know, many of these companies take years and years and years to build. And we’re going to be sitting on the boards and we’re going to be sending Christmas cards to each other and we’re going to have dinners together. You want to work with people you like, trust and respect. And that doesn’t mean they’re going to share the same Christian faith with me every time. And that’s OK, right? It’s an opportunity to build a relationship with them. But I will say there are a lot more believers in the trenches that are trying to make a difference for the kingdom than you know, and it’s an opportunity to encourage them when you run into them. And so it’s either an opportunity to share, encourage, but no matter what, it’s an opportunity to build a relationship and then see what God has with it. Things don’t always change overnight. It may be 10, 15 years down the road when somebody comes back and says, I remember this conversation I had with you, and those are wonderful conversations to have. Or when an entrepreneur calls you and said, I’m having a tough time with my wife, I’d love for you to get some feedback. Great. I’d love to share. Matthew, 18 conflict resolution with you. Let me tell you what works in my family and let me tell you all the ways it’s gone wrong. When I approached my wife like this and just to be honest, right. Believers make all the same mistakes that nonbelievers do. We just believing there’s grace for that and that, you know, God’s given us a path to that redemption and how we should interact with others.

Henry Kaestner: Now, it’s beautiful. And, you know, for our listeners, there are a great number of men and women really driven by their faith that are leaning into technology in this time. And of course, we both know the Anthony Tan story. Grab and Mark, seriously, CloudFactory. And there are many, many, many more that’s really encouraging.

William Norvell: Absolutely. And yeah, love sort of some of the concepts you talked about. I think from a code perspective, which we talked about a little bit, I read good profit years ago. I think a lot of kind of what you’re talking about is sort of espoused in there and just some incredible wisdom on how to treat people well and build transactions and deals that honor both parties and of course, a lot of their management, the MBM process you took as well. So it’s a good read for sure. If anybody finds himself needing to read about one of the largest private organizations in the world and how they become who they are.

Jason Illian: Yeah, and I think one really interesting thing is, you know, we’re told that a tree is recognized by its fruit. So I can tell you what kind of tree it is by the fruit that it’s going to show. And Charles Koch is eighty five years old. And he still is as active as he was when he was 40. Right. He is still using his opportunity and his platform to make people’s lives better. And he still comes to the office. He still gives back tremendously to things like criminal justice reform and, you know, next generation education. And I can go down the list of like 15 things that he is spearheading because he’s not sitting on a beach somewhere. Right. He did not make a ton of money and say, I’m checking out. He’s like, I have this opportunity to give back. And those are the type of men I want to work for. I want to work for those that are going to the grave, trying to help make other people’s lives better. And I feel very blessed and fortunate to do that.

William Norvell: Women and men. And as we come to closure, this section of the podcast, we always love to invite our guests to share with our listeners where God has them in scripture these days. And that could be something you read this morning. It could be something you’ve been meditating on for a season, but just maybe a story or a verse or whatever God has brought to the forefront of your life through his word.

Jason Illian: You know, I think all of us, anybody listening to the podcast and ourselves included, 12 months ago or so, we did not know we were going to be hit by something like covid, which I think’s changed all of our lives in various ways. On top of that, we went through one of the toughest election cycles that I can ever remember. I feel like we have a country that feels very divided. We have racial tensions. We have all sorts of challenges that as believers and as the church, we need to step up and lead through. Right. And so a lot of where God has been moving on my heart are just things like Joshua five, right. When Joshua is sitting there in the Angel of the Lord appears to him and he says, hey, which side are you here for? Right. Thinking like if you’re with me, we’re said, if you’re for our enemies, we’re in trouble. And the angel replies, Neither. I’m here for the Army of the Lord, saying, I’m here on behalf of God. I’m not taking sides. I’m coming to take over. Right. I’m coming to take over. So that’s when he bowed down and realizes my first thing is to worship God. Right. My first things to be at his feet. And that’s reflected again in the second chronicles where, you know, Solomon could have asked for anything and he could have asked for anything to you could ask for wisdom. He could have asked for riches. He could ask for anything. And what he really asked for is, God, give me wisdom to lead your people. How great is your people? And I need the wisdom discernment to lead them well. And because of that, everything else was a symptom of that primary ask because he desired in his heart to lead God’s people well. And that’s the same desire I want to have. I just want to have this desire to lead God’s people well, not that I’m leaving a legacy of money or how many deals that I’ve done or how successful. Hopefully those will be great symptoms because I lived my life appropriately. And it comes back to just the Sermon on the Mount of where you said, you know, blessed are the meek. Right? So I’m doing a Bible study with my kids every night. So we do a devotional every night together. And so we have to read over something again that you read over a thousand times. It makes you stop and reflect upon it. And we’re so blessed are the meek for they inherit the earth. I ask my kids, what is meek mean? And then I thought to myself, I don’t know if I know it. Right. And as we started talking about this and looking it up and what really it is, it’s power under control. It’s power under control. Right. And what we need is we need men and women that are willing to worship and recognize God is who he is. And Joshua to ask for wisdom, to lead God’s people well and then be meek. We don’t need to be shouting from the rooftops. We don’t need to be screaming on social media. We just need to know what we believe into Henry’s point early to build relationships with those people. Right. The outcome is going to be based on how the Lord wants that. I’m not in charge of the outcome any more than I was in charge of winning every TCU football game. I had a role to play. And if I caught passes and made blocks and hopefully at the end of the game, the score was in my favor. But when it wasn’t in my favor, then I got to walk away with something to learn. And in my house, my kids learned through the sports that they’re in. We either win or we learn those are our options. And so every day, just meditating on those scriptures, bringing them to the office, knowing that I’m going to have a dozen amazing potential entrepreneurs and people I get to interact with, how can I help make their lives better and value them so that they will go out there and do that to others and that virtuous cycle will continue to replicate itself. And if it does, I happen to believe lives will be changed. We’ll make money doing it right. New technologies will make this world a better place and overly hopefully it will bring us all together and make us realize that these differences that we’re fighting about, some of them are completely perceived and the other ones aren’t as wide. We think they are we just need to be able to sit at the table and have a civil discourse on most of them, Amen, Amen, that’s one of my favorite words.

I love it. I love Mique. So glad you brought that in. And also, I totally empathize with reading the exact same stories over and over. My three year old is currently obsessed with Nayman. It’s his favorite character. So we read about Sickness Amen and Healed Neyman. That’s a great story over and over and over again. And it is. It made me read it again like multiple times and it’s amazing.

So my son just asked on this exact story because I think name is a perfect example that he wanted to do something miraculous. He wanted to do something big in his simple thing was like, hey, just washing the Jordan is like, wait, I don’t want to do that. I wanna do something big in your name. He’s like, just be faithful where you are. And that’s that’s what I tell my kids is like, just be faithful where you are. And when I tell them that I’m always looking in the mirror being like, am I being faithful or I am, I’m just telling my kids this, but I got to live it out. And so what you guys are doing and how you’re continuing to have this impact through podcasts and your network and stuff is tremendous. And so thank you for what you do. And I’ll certainly be praying for all that you do. Thanks for. Thank you, brother.

It’s great being with you. Yeah, likewise, guys.

Ben Chelf: It’s about the heart posture of the investor, it is about recognizing that God is constantly working on us, teaching us things, sanctifying us to use the big term.

And honestly, that’s all that’s required, paying attention to the way that the Lord is directing, being really intentional about looking for what God wants to teach you in any given moment, the way he wants to apply the gifts and talents and resources that he’s given to you, all the product on the shelf, all the different options. Look, there are tons and tons of ways, both, quote unquote, faith driven and not to deploy capital. And God can use all of it. And God does use all of it.

Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast, I’m here with my partner and co-host, Luke Roth. Luke, good morning. Good morning. Good to be here, Luke in from our virtual studio and Sweet and Spy and Nash, Vegas and Nashville.

Luke Roush: How does it feel to be in that it’s our new home? It’s a cool thing. Everybody’s doing it. Come on out. Water’s warm. That’s right, everybody.

Ben Chelf: Don’t do that. Don’t do that. Come on. San Francisco Bay Area. There’s hope. There is.

Henry Kaestner: Yes, there is. Ben isn’t there? And Ben is our special guest. Ben is with us in San Francisco. As you may have just gathered and I am in the South Bay down in Los Gatos. And we are going to be talking and Ben, about a whole bunch of different things today. There’s just a myriad of things we talk about. We can talk about entrepreneurship. And I think we well, a bit we’ll talk about investing. He’s a partner Elementum partners. He’s also a venture partner. I think that’s your official title. Maybe a Praxis talk about Praxis a lot because they’re really, really good at what they do as they work with us on thinking about the redemptive frame of entrepreneurship and investing. And our hope is that during today that you get a sense of, again, just a broader sense, a more textured sense, maybe, if you will, of the way the guy is working in the marketplace out here in Silicon Valley, but through investments and that you might leave your time with us today, encouraged and that you might feel that much more clarity about how you might store the wealth and the resources that God has entrusted you with and how you might participate in the work that he’s doing the world, how your interactions with entrepreneurs might be advanced and richer for you and for the entrepreneur, and that you’ll feel closer to God. That’s our hope. That’s our hope with every episode. And then it’s great to have you. We like to get a biographical sketch of every one of our guests. Who are you? Where do you come from? Why do you like baseball so much? Anything is fair game. So bring us right through, including your entrepreneurial career, including snowboarding and snowboarding. A long time. I’m asking you about it. OK, so who are you? Where do you come from? Please weave your faith. Of course, because it’s the faith driven investor. Weave your faith into that too. You grew up in a Christian house.

Ben Chelf: Yeah, well, you asked about baseball. I guess we’ll start there. That’s the most important thing, I guess. I grew up in Indiana. How did I get into baseball? It started in first grade when I’d come home. There were really only four channels on the TV at home, the major networks and WGAN, which is Chicago’s local station, where they played the Cubs games and White Sox games and whatnot. And so I come home from school. And because Wrigley Field didn’t have lights at the time, all the games are played during the day, come home from school, flip on the TV, there would be WGAN and the Cubs would be playing. And I got used to watching the Cubs after school every day. And in fact, they just happened to be on a home stretch.

And so there were a number of days in a row where was true. And then I remember the first day I come home and I flipped on the TV after school and the Cubs were playing and I was really distraught. And I asked my dad, like, where’s the Cubs game? And that’s when he taught me about baseball schedules and the fact that they travel around. And that’s kind of how I got into baseball from a very young age. My mom and dad met in seminary. And so that gives you a bit of window into the church environment at home. Tons of church in home, Sunday morning, Sunday night, Wednesday night, the whole nine yards. But like a lot of people, my own faith had ebbs and flows throughout, you know, definitely grew up in the church, learned a ton about God and a ton about Jesus. But when I went to college. Faith kind of took a backseat, didn’t rediscover it until graduate school. And then kind of from there, my faith matured as I became an adult, kind of interweaving the life stuff. I did come out to California for college. I like to joke that I’m a Silicon Valley cliche in every way, except for that I have faith in God. You know, I went to Stanford, I dropped out of Stanford, I started a software company. I started another company. I became a venture capitalist. I mean, I don’t know how you draw it up any differently as cliche as it comes out here, but yeah. So that’s a little bit of the personal track in the faith track.

Henry Kaestner: So tell us about that software company. You know, we also have a sister podcast for those of you don’t know, called the Faith Driven Entrepreneur talk to us about that software company dropping out of Stanford. It must have been a pretty good opportunity.

Ben Chelf: Yeah. So I was working on some new technology in the research lab there that would analyze software, looking for problems, quality problems, security problems and really, really tough stuff to find stuff that’s difficult to find in Cuba and whatnot. So oftentimes problems that would manifest themselves out in the field. And we started getting a lot of inbound requests from folks who wanted to use this technology. So we smelled the market opportunity and we decided to start a company based on that. And we productize that technology. We started selling it in the market. We grew that business to about three, four hundred fifty people before it was acquired in twenty fourteen.

Luke Roush: How many partners did you have when you got started?

Ben Chelf: And yeah, there were four of us in graduate school together and we kind of all jumped out of school over that first year to start the thing full time. And then of course our professor was involved. So we had technically five co-founders. It was a really robust group of co-founders which allowed us to really grow the business. In a cash flow positive way, actually, before even raising funds, so we bootstrapped the thing for five years before doing just a single round of financing anything, here’s the big pithy kind of cliche type of open ended question.

Henry Kaestner: Anything about God that you learned through your process of running a company and growing a company, exiting a company?

Ben Chelf: That’s just such a big question. It’s hard to come up with an answer to that question. But Faith Driven Entrepreneur.

Henry Kaestner: So let’s start with us. So you’ve got a bunch of partners. Yeah. And you’re out there. Any of them share your faith?

Ben Chelf: Yes. One of them in my first company did.

Henry Kaestner: Was prayer a part of what you did? Was your faith ever brought in a question? Did you sense that there’s a holy ambition of what you’re doing?

Ben Chelf: Yeah. So I’ll kind of describe a company one and company to the second company was in the entertainment industry and we were developing software and other tools for doing story development in a new way. And I would say with the first company, I was still in that mindset of sacred secular divide and plugged in a church service in junior high in ministry. Did my Bible study all the things that you would do? But at work there wasn’t much talk about that. And I felt like we should do a good job at work. I should build this business. Your question about what did you learn about God? It was so clear that God was just opening doors and providing opportunities. But what was interesting is as I got more wrapped up in that business and my identity was as Silicon Valley co-founder or founder or tech startup founder, from a character standpoint, I started putting God making God smaller and smaller. And it was more about me and me and my company and us and much to my own detriment, and took years to kind of realize that because it started small and then it kind of creeps up and creeps up. So while I think the work we were doing was good work for other people who were writing software, and there was certainly a care for those people and wanting to make their lives better that I could see God in and God blessing, I allowed my they didn’t get too wrapped up in that one. And so coming out of that experience and then thinking about what to do next and how to do it, I did kind of have a real come to Jesus moment for lack of a better way of putting it and saying, all right, Lord, I want to do better this next time or from an ongoing standpoint. And so how can I kind of keep the priorities straight? And so we built the second business a little bit different way and kind of made sure that from an identity standpoint, I didn’t have everything in me kind of wrapped up in that. And I tried to keep my identity where it was supposed to be.

Luke Roush: And how much gap between kind of company one and company two to one or more of your co-founders come over to Company two with you, or was that just a totally Denovo experience?

Ben Chelf: Yeah, totally start over from scratch and back, basically, because it was in the entertainment industry, I kind of left Silicon Valley. We built the business here, but it was much more of a Hollywood type of thing than it was a Silicon Valley type of thing. So we had different network of people, different co-founders. And it was about nine months from when I left, when I started having the inkling for the next company. And then another six months after that, when I kind of had the cool founding team and we got incorporated and off to the races.

Henry Kaestner: So when you talk about the second company being a little less about the secular spiritual divide and a little bit less like a smaller guy, just for fun, that a little bit. Tell me a little bit more about what that look like, and especially now as you work with Faith driven entrepreneurs through your work at Praxis, what does it look like to be more intentional about weaving your faith in.

Ben Chelf: Yeah, so I talk to some folks at church about a year ago on the intersection of faith and work or the integrating your faith into your work as I think is a common phrase. And the point I made there and this is you know, this is a bit of a bold statement, but bear with me. I said, look, if you’re trying to integrate your faith into your work, you’ve probably already missed it because it is not about this puzzle that you’re trying to, like, put the pieces together. It’s rather your faith should be so foundational to who you are and what you are and what you’re trying to do, that pretty much everything should flow from that. And that’s obviously an aspiration that Jesus did perfectly and we will never do perfectly. But I think that when we try to just start manipulating things or orchestrating is such a OK, I’m going to pray at this hour, during this day at work, because that’s how I’m integrating my faith into my work. I think we’ve we’ve kind of missed it.

And I’m learning these things through the years as well. I always say when I first started getting really intentional about integrating faith and work, it was a little bit more of that. It was like the Ben-Chelf-integration show as opposed to the Lord fueling everything that I do and giving me the energy and me being rooted in that and just letting the work be the work. And so I think one of my favorite verses is first. Thessalonians, five 17, pray without ceasing. I think it’s just an incredible concise call to the kind of relationships we’re supposed to have with the Lord, and that’s obviously not to me. We’re just on our knees talking to God 24/7, but rather the spirit of that continual communion that he is always present in every thought and everything we say and everything we do.

Luke Roush: So when you now as an investor at Omentum, when you work with portfolio companies, how do you counsel? What I hear you saying is that it’s not so much prescriptive sort of here is this tactic or that tactic, but it’s more descriptive of kind of where the heart posture and posture kind of indwelling of the Holy Spirit in somebody’s life. How do you counsel one of your business leaders in a direction that isn’t sort of some kind of a forced integration or both on spiritual integration, but actually kind of dwelling? How do you counsel them?

Ben Chelf: Yeah, good question. One of the things that I notice is that so much of the entrepreneurial journey, I mean, is the life journey is kind of about self-discovery. Entrepreneurs are constantly learning about their businesses, about market share, but about themselves in the process. And, you know, one of our founders, Christian Guy, was exposed to Praxis, became a Praxis fellow. And what it did is he got to see other Christians working out their faith in their businesses and their lives. And he kind of came back with this new excitement about faith that he hadn’t had previously and just could see how, you know, there could be a more holistic view of faith as it pertains to life and work and whatnot. And I simply told him, pay attention to that, pay attention to what you see in others and what you see, like in the energy that you have. You know, this brings to you to be considering, you know, the way or your faith can play out. And so I think a lot of it, in terms of counseling, to answer your question more directly, is pay attention to the work that God is doing in you and work on that more than anything else.

Henry Kaestner: So that’s some great counsel, particularly for those listeners that are angel investors working with entrepreneurs. I want to shift gears just a little bit and focus on a faith driven investor ministry a bit. And I want to turn back the clock to the beginning of faith driven investor. And there’s this working guy that maybe twenty five or thirty of us we’re all working on together, which is the sense of, well, you know, there’s probably a community out there of Christ followers that are in the investment world and venture capital and private equity. And what’s it look like? We come together to encourage each other to share best practices. And if we can do that, what’s a mission and a vision? What are the problems we’re trying to solve? Where are the things that we’re for? And in that, one of our hypotheses was that there wasn’t a lot of selection that at times we described the movement like walking into a Russian grocery store in the 1980s, and it’s not really a lot of product on the shelves. And what does it look like to get out there and to encourage the formation of other funds that are in real estate and private equity and public equity, domestic and overseas? And actually, interestingly, over the course of last 18 to 24 months, we found dozens and dozens of funds, some that already existed, a whole bunch that are new, always spiritual integration. But the problem that we really saw was that there wasn’t a lot of selection on the shelves. And I’ll never forget you looking at that and saying, nope, that’s not the problem. That’s not the problem. What do you mean it’s not the problem? You know, the people want to be intentional about how they store their capital and they want to be able to find funds that they’re going to be able to see some sort of chaplaincy or some sort of faith driven employee resource group kind of work into the fabric like, no, that’s not it. The formation, the foundation of the movement needs to be about something else. What was that something else?

Ben Chelf: It’s about the heart posture of the investor. It is about recognizing that God is constantly working on us, teaching us things, sanctifying us to use the big term.

And honestly, that’s all that’s required, paying attention to the way that the Lord is directing, being really intentional about looking for what God wants to teach you in any given moment, the way he wants to apply the gifts and talents and resources that he’s given to you, all the product on the shelf, all the different options. Look, there are tons and tons of ways, both, quote unquote, faith driven and not to deploy capital. And God can use all of it and God does use all of it.

And so I think if we just had Christians who are just 100 percent sold out to all right, Lord, I want my balance sheet to look exactly like you want it to look. I want my pencil to look exactly like you want it to look. I want my cash flow to look exactly like you want it to look. And I’m willing to sacrifice I’m willing to lay it all out there for you to teach me things and. Reallocate things according to what you need to teach me in any given moment, whether that be very safe positions like cash or more speculative things or more impact things, you know, he can lead us. And I think to the Lord, these are just the tools he uses to grow us closer to him and to love us, because that’s the bottom line. It’s about that relationship with him, his love for us and our response and love to him.

Luke Roush: Maybe share just a little bit about from your personal story. I mean, I think one thing that you and I have talked about previously is a loan that you made to a ministry in San Francisco, just kind of responding to the holy Crompton’s call, Holy Spirit’s prompting on your life, maybe shared just for a little bit on that.

Ben Chelf: Yeah, yeah. I want to keep the details vague enough for public distribution. Sure, sure. Sure.

But look, they’re going to be times where you take a look at a circumstance and there’s a clear need. And in this case, you know, it was an organization who, due to the circumstance, there was a threat to their real estate situation. Right. And they were renting before. And suddenly that was not going to be an option. They were going to get evicted unless they were able to purchase the property. And these things happened in this particular case, it happened very quickly because there was a family inheritance involved and there was another buyer lined up and so on.

And this was one of those cases where, you know, if you looked at it on paper and we talked to our quote unquote financial advisors, we talked to our financial advisors about it, and they said, now this is this is a little bit beyond the pale of what would be responsible just in terms of the size of the loan relative to our balance sheet. And but, you know, again, using the gifts that God had given me, I felt like I could do at least a cursory analysis of the business to determine if it was a reasonable loan. I’m not a banker. I don’t know how to underwrite loans technically. But, you know, I could do a little bit of math and do my own guess as to is this a fundable thing in the medium term if they had more time.

And so I sat down with the people of the organization and I looked at their books and I did the best I could. And my wife and I, we prayed about it and we just felt like God said, hey, you can help here, so help. And we structured a deal that, again, it was it was extra risk. Right. It was a risk that we didn’t need to take from a purely portfolio management standpoint. But we could help. And, you know, in this case, it was a happy ending. Right? We made them the kind of bridge loan they bought the building within. I think it was three or four months. They had a bank do a real mortgage. And so we were paid back and it was then we could just use that capital for something else. But yeah, I think as an example of just being open to things that go a little bit beyond the norms in terms of asset allocation. And honestly, we had to be prepared for it to end badly where either that capital got locked up or we ended up having to foreclose. I mean, there was all sorts of ways it could have gone wrong, but maybe a little bit on that, which is, I think in my own observations, is we can play things pretty safe where we can isolate ourselves from the mess.

That’s one temptation that wealth can afford, is ability to isolate ourselves and not take risk and not get in the messy details of relationship and life. And the Lord just wants us to be in community. He wants us to love and serve other people. And guess what? That’s messy. I guess there’s there’s risk in that. And so if you use your wealth to eliminate all risk, chances are you might not be all the way putting yourself into these relationships and a sacrificial mindset.

Luke Roush: Yes. What you’re speaking to just in that example, but also in what you were sharing earlier, is this idea of the entwining. The Holy Spirit in the context of business oftentimes needs to be unscripted. You know, we sometimes have a bunch of debate within our partnership and with others externally that are like, hey, you know, what are the programmatic elements that every one of your portfolio companies does to manifest scripture in the context of business operations? And we wrestle with that internally. We get pushed on it in some cases appropriately, externally, to understand what the KPIs are across the portfolio. But how do you think through just on the one hand, when it’s unscripted, it can feel mushy, it can feel kind of situational, can feel even like convenience. That’s really convenient, that it’s different for every company. But maybe just speak to how you’ve navigated that an element of.

Ben Chelf: Yeah, that’s a really hard one, and I’m lucky enough, the my partner is that element and we share the same faith. And so there’s a a trust element to each of our own discernment with respect to that, where our goal is to always use the intellectual capabilities, the rigor, the data, all the stuff that God has given us to make decisions, to use all of that and kind of intention with that sometimes is the kind of prompting of the Holy Spirit, the just like what is our gut telling us how we should operate from a faith perspective, we’ve seen it work a couple of ways where we’ll make an investment that we think has certain upside from a data standpoint. But it might be, say, 70 percent of what we would normally like to see. Right. But then there’s a strong spiritual component to it. Or we might make a decision to, in some sense, be a really good actor in an investing scenario and follow on rounds happen. And that’s not necessarily the best move financially, but it is the right thing to do. And what’s been interesting, and I’ve been at this with elements and for just over five years now is almost without fail when we feel like we’re quote on quote sacrificing or when we feel like we’re maybe conceding something, it turns out we’re actually not.

It turns out that ended up being the more financially savvy thing to do or the better upside thing to do. And I don’t know if that’s God blessing the decision or, you know, a lot of times just these ideas of love. Your neighbor work out to be really good business practices to.

Henry Kaestner: So, Ben, you’ve been an entrepreneur, you’re an investor, you’ve been involved with Praxis. You have an opportunity being where you live to just kind of reflect on what’s going on in the world. And because you’ve been really good at challenging us, as we have looked to with others, grow the movement. What are some of your reflections about what is broken and what might need to be redeemed about the investment, space and world? What would you like to see happen over the next five or 10 years? As you say, this is a healthier ecosystem, but maybe there’s too much in that because it maybe it’s the fact that maybe the ecosystem in the way that investors work with entrepreneurs isn’t broken or that it’s not healthy now. So maybe you think it is. But just what are your reflections on where you’d like to see the industry go and how people think about investing? Yeah. Is it broken? Is it not broken? What do you think?

Ben Chelf: There are a lot of broken things, that’s for sure. I think, honestly, one of the biggest ways that it’s broken is both investors and entrepreneurs are not brutally honest with themselves. I think having been an entrepreneur a couple of times, there’s a certain amount of optimism that you have to have. There’s this like almost blindness to reality, you have to say. Right. And that’s fine and good. Right.

That’s that’s why stuff gets started. Otherwise, nothing would ever get started. That being said, I think there are a lot of companies that just kind of meander along for and should just be cut off, should be done.

But for lack of on the part of both entrepreneur and investor, just being really honest about the opportunity and not being afraid of saying, hey, we tried, we could swing and we missed. They’re going to be other at bats. But in this one we took a swing and we missed. I think that’s one of the big things that’s broken. I think a lot of times in the faith driven world especially, we can be a little bit conflict avoidant. We can be afraid of that conversation because it might be seen as not the Christian thing to do, to just cut something off, especially if there’s a maybe an investor has a perspective. That’s right. That the entrepreneur doesn’t and says that or the other way around or the entrepreneur or the investors really want the entrepreneur to keep trying and giving, potentially providing more funding. And the entrepreneur knows it’s like, well, I guess I could, but it’s really just not going to work. I think that’s the biggest thing that I would love to see. Just more conversation about more honest rigor on both sides to try to address more specifically to the investor. I think the brutal honesty for investors is to just truly recognize where they have expertize to deploy capital and where they don’t. And that heart is great. But I did some angel investing before becoming a C, and there’s a big difference between investing as a hobby and investing as a profession. And, hey, look, it’s great to have hobbies and it can bust a lot of people with your hobbies. And we’ll talk about snowboarding in a minute. But yeah, I think to really be honest, OK, I invest because it’s a hobby. I have these objectives. And to recognize that there can be some danger as someone who deploys capital as a hobby for the companies you’re investing in. So those are some of the things that come to mind.

Luke Roush: So maybe just a couple of like with our name and. Names, specific examples where you feel like you’ve done a good job to speak the truth in love, right, because there’s a relationship, particularly if there’s a lot of faith between an investor and a company. Right. There’s a desire to kind of love them. Well, even when you’re telling them something that they don’t want to hear, any specific examples from your own experience, maybe just encourages with.

Ben Chelf: Yeah, look, we ended up kind of doing an asset sale of my second company, which from a financial standpoint wasn’t a home run that everybody was hoping for. And I think that’s an example where not to toot my own horn, but I think we did that well. We tried a number of different things, always in conversation with the investors. When my co-founder and I when we decided to wrap it up, it was a mutual decision between the two of us. Obviously, the staff was very sad. It was a very hard couple of months to do all of that and to end it as well as we could end. And then in the conversations with the investors, you know, obviously we’ve been keeping them appraised of everything through the years. And, you know, one of the key angel investors, when I asked him about it as we were wrapping up, after I kind of told him and look, I think it’s time to call it, he said, Ben, you tried everything you said you were going to try. You worked really hard at this for years and it didn’t work. I’m satisfied. Like you lost money and this wasn’t a Christian guy. So I think that’s kind of what I’m talking about is just that critical eye towards things. And, yeah, it’s not easy to do that. It’s harder, but it seems like the right thing to do.

Henry Kaestner: And as we come to a close here, I do want to hit on just a couple other things. One is the concept of Sabbath. And so, yes, we talked about snowboarding. Talk to us about seasons of Sabbath. Talk to us about what it looks like for somebody to worship their work. And just reflections on work versus Sabbath.

Ben Chelf: Yeah, I’m pro Sabbath. I think you took an incredible Sabbath Sabbath that I wish I was getting somewhere along the way. Yeah. So when I left my first company, I knew that I needed a break and not just I take a couple of weeks in Hawaii and then you’re better.

And so there is a whole confluence of things with respect to my girlfriend now wife that led to actually just having this time where I could be away. But I decided to move to the mountains, so I moved up to Tahoe for a winter. I’d snowboard for exactly one weekend in my entire life before I did this, but I decided I’m going to actually learn to snowboard. I’m a serial hobbyist. I love picking up hobbies and learning new things.

And so that winter, I just decided I’m going to spend three or four months learning to snowboard. I thought that was the primary goal of that time. But in reality, the primary goal of that time was for me to really connect with God in a much deeper and wonderfully holistic way, which was kind of born about I’m going back to honesty, me being really honest with God and airing some things that I had been thinking about for years that I had never really voiced to him or others in terms of my own wrestling with faith and why things were the way they were.

And much of what we’re talking about today in terms of my perspective on investing and faith driven investing and why it’s a hard posture thing was born out of that time in the mountains, going to snowboard every day. And so it’s kind of funny how the Lord uses uses our own wiring, our own desires to kind of catch us in different ways and teach us different things. But yeah, so I spent I guess it was four months living up in the mountains. It was really sabbat I mean I didn’t work at all. I mean unless you count getting up and going to the mountain to snowboard and try to learn. My time was cut short by a couple of weeks when I dislocated my shoulder, taking a jump too high in the park, but otherwise it was an amazing time.

And so my own view on the Sabbath, and that’s a very long winded way of getting to that. But my own view of Sabbath is it is not one of balance. I think people will talk about balance like, OK, I want to have good balance in my life of work and rest. I don’t think that’s quite it.

I think there’s a certain intensity to seasons that require just being all in starting companies is so hard that the idea of, oh, I’m going to have two or three hours every day carved out to rest or I’m going to have a full day, a week carved out to rest. It just might not happen. I might regret saying that on a podcast, but I think looking at the balance of a month or a year or whatnot, and if you can’t identify the places where you stopped to rest, like the Lord stopped to rest after creating the universe, then something’s off. Right. And so I think for me, what that’s look like practically, it’s meant three kids. Everything is a little different now that I have a couple little kids. But pre kids, it was at least one ten day period every year where I had no outside communication, no Internet, nothing like that, completely unplugged for ten days. That was kind of the yearly rhythm for me. And from a daily rhythm standpoint, I have when the season affords. I’m a big fan of Friday night after work to Sunday afternoon after church, kind of that window being the key either unplugged time or you’re really trying to let your mind rest from other things. For me, a lot of it has to do with digital connectivity. If I’m on email or on my phone, that’s not restful. I think that’s another thing for Sabbath is you really have to figure out what is rest. A lot of people will flip on Netflix, myself included, or browse the Internet on your phone or you kind of have these rest ish things that aren’t actually rests.

So when you’re going to take the time to Sabbath, I’d say actually take it, even if it’s just going to be a few hours on a Saturday afternoon or Sunday afternoon. But yeah. So those are some thoughts.

Henry Kaestner: So I’m grateful for you. I’m grateful for what you have taught us and our listeners about our posture. It’s become really the anchor bedrock value is we talk about faith driven investing. If you’re a listener to this, it is about heart posture. Faith driven investing is not prescriptive, non presumptuous. There are all sorts of different things you can do across now, all asset classes, all different types of geographies to really have spiritual integration. And even a gospel proclamation is a part of the investments that you make. And yet it’s about our posture. It’s about getting down on your knees, as Ben did with Cam back after an exit and just saying, God, how would you have us use the resources you’ve given us for your glory? What does that look like? And you may come out of that experience. Out of that exercise. Out of that time with God and feel that you are absolutely called to invest in solar farms in the Nevada desert, and that is equally valid, of course, then somebody who wants to invest in entrepreneurs in Africa or Eastern Europe or whatever, fill in the blanks. Ultimately, it’s about an opportunity to participate in the work that God is doing the world and commune with him. And so then you early on were very helpful to get us grounded in that and speak in the movement. So thank you. One of the things the thing rather, that we like to do is we close out every episode is to ask our guests what they’re hearing from God in his word recently. How do you feel that God is speaking to you now? Maybe it’s something this morning, though. It truly doesn’t need to be. It could be over, of course, last week, over the course of last month. But what do you hear God speaking to you now?

Ben Chelf: Yeah, it’s always such a good question. I’m working on kind of a new experience for Bible reading and leave it at that. It’s still kind of under wraps and in development, but I’ve been tinkering a lot. So my desk is full of wires and gadgets and all that stuff about reading scripture. Yeah, well, you can’t tell us about it. Yeah.

Among other things, maybe in like six months when I get a kick started going, I’ll tell you about it or we’re going to look at this seriously.

Yeah, exactly.

So I’m in full on tinkering mode right now, which is fun. And again, like I said, I always have a hobby. I always have something I’m working on inside and I’m using some twenty three is kind of the text that I’m testing with a lot. So I’ve been looking at Psalm 23 every day the last couple of weeks, and in verse three there is a phrase that’s just says he restores my soul and that phrase is just kind of really resonated with me.

That is the promise. If you put your faith in God, that makes all the anxiety and the things we worry about and the world. And what a year, right? This last year with everything that’s gone on. But he restores my soul and it speaks to the brokenness. Right. We only restore things that need to be restored, that have some sort of brokenness. It speaks to the simplicity of it. And so, yeah, I’ve just been relishing those four words this week. He restores my soul.

Henry Kaestner: That is awesome. That’s very good. That’s a very good word. Look, how come we don’t have been on every week?

Ben Chelf: I think we should. I think we should, actually.

Luke Roush: So, Ben, thank you so much for taking time. Grateful for your insight. I always find your perspectives to be helpful and informed and reflective of just a lot of contemplation on your end and listening to what God is telling you. So grateful for your friendship and grateful for your insights. I think our listeners really enjoy it. Thanks, Ben.

Ndidi Nwuneli: You know, seeing the face of Africa, the hungry child makes me angry and I believe we can change that narrative as Christians and as people of faith. And so that propels me. I started LEAP Africa because I was angry about the concept of leadership and the conviction that everybody could be a leader. And leadership is an act, not a position. And but a lot of people in positions of authority were rulers and not leaders. And that we had to change that message was something that propelled me to start an organization called LEAP that is now 18 years old and works in six African countries. So I think that anger stimulates an emotion that propels me to want to do something about it. And I think a lot of us are angry, but we just complain. We point fingers, but we feel powerless about actually effecting change.

Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast. It is great to have you back. I’m here in the virtual office in studio with William Norvell. William, good morning.

William Norvell: It’s good to be here. Good to see you.

Henry Kaestner: And also, we’re going we’re going international today. We’re going all the way to Africa. We’ve gotten to know Ndidi over the course of the last several months as a number of different trusted contacts we have in Africa have pointed us to her and her very, very, very compelling, very widely viewed. Ted.com talk about what it looks like to be a Christian in Africa and boldly and courageously sharing her faith in her personal witness and testimony. And if you’re going on a run or if you’re sitting down to a family dinner and you’re looking to do a family devotional, this is something I highly recommend. It gives you just a really good sense of a woman’s story and her journey and just a glimpse into what it looks like to be a Christ-follower in Africa, in the marketplace. And so it’s a special treat for us to have you with us on the phone and on the podcast. And what I want to be able to do is we get started and hopefully Ndidi you be able to help me to do this as I want to be able to just paint the picture, if you will, the canvas of what Africa looks like. I think that as we start this podcast and someone’s listening in and they’ve got a picture in their mind about what Africa means, and for some people it means game parks and for some other people it means extreme poverty. And some of the people and maybe it means opportunity. It can mean a whole bunch of different things. But if I’m honest, as I thought about Faith Driven investments in Africa, I thought of the fair trade coffee deal. I thought of giving African farmers a fair wage and selling those wares in church. I had not thought of the dynamic and bustling economy and marketplace that have come to understand that Africa really is. And it wasn’t until I went to Kenya probably I guess it was 18 months ago and was just really just captivated by the energy of the marketplace in Nairobi. And I’d been to South Africa many times over the course of the last decade. But I thought that maybe that was just kind of a one off. But I was ashamed to have just had such a small view of the opportunity in the African marketplace. We had sovereigns had been focused on Southeast Asia and some of the other economies, but came to see just a really vibrant market, SAS companies, innovations in technology and medical devices and cloud computing, artificial intelligence, machine learning. And it gave me just a completely different view of Africa. And as I started looking more and more into that, as we wanted to support the work of Faith Driven Entrepreneurs in Africa and Faith Driven Investing, we came to understand that there is a massive continent that most of us have missed. And the world is littered with the stories of people that have lost money in Africa or have been reading books like Dead Aid. And yet people, I think, in my estimation, haven’t really persevered to get the sense of the opportunity in Africa. Ndidi, I want to get your sense on this, but one of the things that’s really captivated me, too, is that during this time of pandemic gives us some time to reflect on economies and markets. That’s what we care about in the Faith Driven Investment world. And we’re looking at a time where seven of the 10 fastest growing economies in the world are in Africa, Ethiopia, Uganda, Ivory Coast, Egypt, Ghana, Rwanda and Kenya are seven of the 10 fastest growing economies in the world. So I think that maybe we’ve missed this a bit. One of the people that connected to Ndidi is Efoso Ojomo, who is the coauthor, along with Clayton Christensen of The Prosperity Paradox, in which he portrays a broader picture of opportunity in Africa, talking about the fact over the next 20 or 30 years, there will be more entrants into the marketplace, into the job market in Africa than India and China combined. So Africa is something altogether different than maybe what we had thought of. And as we think about where God might call us to steward his assets for his glories over the next 20 or 30 years, Africa probably needs to be a place we need to look at. And Ndidi how would you help us to think about the continent in which you live?

Ndidi Nwuneli: Thank you so much. And I’m just so excited of your passion and interest in the African continent. So just starting with the size of the African continent, it has a land area of thirty point three, seven million square kilometers. That means you can put the United States, China, India, Mexico, Peru, France, Spain and counting almost every country in Europe into Africa. And you still have space. So Africa is huge. And most maps that we’ve been conditioned to see from our childhood don’t represent a massive scale. So 80 percent of the world’s arable land is on the African continent. Africa also has one point two billion people and it’s projected to double by 2050. So when you think about the number of consumers on the African continent who wants to eat and have to eat at least three times the. They have to work clothes and shoes. I mean, this is a huge market and 70 percent of the population is under 35. So it’s a vibrant young market with lots of energy, talent and skills. Africa also exports much of the world’s natural resources metals. We all know about cocoa when you have a chocolate bar, 70 percent of the world’s chocolate is sourced in Africa. And we all love chocolate. But it’s not just commodities. It’s chemicals. It’s natural resources. It’s vibrant, vibrant ecosystem around mining. And also, when we think about the African continent, I often ask people, how many billion dollar companies do you think we have in Africa? And, you know, people say one or two. And a McKinsey study revealed that there were over 400 companies making billions of dollars. And so we often don’t realize that we have this many business. In fact, it’s four hundred and thirty eight businesses with over a billion dollars in annual sales. Some of obviously some of them have multiple billion dollars in sales. And this was in 2018. So I’d argue that today we even have a larger number. So the African continent for me is, you know, an emerging continent but has such diversity, 54 countries where we think about these 54 countries, their language, diversity, cultural diversity, but tremendous value. And the great thing about the continent is that it is dynamic. And with the Africa Continental Free Trade Agreement, we are also starting to trade among ourselves. Historically, we’ve traded mostly with Europe, Asia and North America. But now there’s a lot more internal trade on the continent, which for me will not only grow the market, but ensure the competitiveness and the growth of the ecosystems and make us obviously less dependent on the rest of the world, which in my own view is actually positive because, you know, when a continent looks internally like Europe has done to improve the competitiveness of your products, your markets, but also see yourself as one entity which allows you to take on the world in a more cohesive manner.

Henry Kaestner: One thing I want to point out now, you and your husband have also gotten to know, know a tremendous amount about agriculture and food. And with 80 percent of the world’s arable land, Africa is not in a great spot to be able to actually to feed itself, but also to help feed the world. Some of the starvation we know about comes from what we hope to be a decreasing amount of strife that comes from military issues. So you know about that. And I want to talk about that to be clear. But there’s also a tremendous amount of innovation around telecom, some of the most creative and innovative companies in the world. And I mean, that’s not just the best in Africa coming out of Kenya, but the best in the world are coming out of Africa because of their advanced mobile communications technology, Safaricom and PASÓ, the ability to transact online and be able to have ewallets and fintech startups and telecommunications. All these things exist in Africa because of Africa’s ability to leapfrog traditional technology infrastructure. And I see that pace accelerating. And I think that that’s probably a new perspective for investors to look at as well. I want to go backwards a little bit and I want to hear about your story. Who are you? Where do you come from? You’ve got such a great story. And I alluded to that before when I was talking about this telecom talk that you’ve got out there. But tell us about who you are, where you grew up, what led you to the work that you’re doing today? And then, of course, what role faith played in all of this?

Ndidi Nwuneli: Yeah. So I am proudly Nigerian. I was born in Enugu forty five years ago. My mom is American and my dad is Nigerian. And they met at Cornell University and moved back to Nigeria in nineteen seventy four. I was born in nineteen seventy five. My parents were intellectuals. They actually did not believe in God actively actually discouraged us from going to church and it was actually university students on the campus where we lived who came to our house to invite us to church, where probably one of the few families that didn’t go to church on Sundays because we grew up in the southern part of Nigeria, southeastern parts where most people are Christian.

And so I turned 10 and my mom asked me what I wanted for my birthday and I said I wanted to be baptized. So all five of us, me and my four siblings got baptized on the same day. We actually got to pick out a godparents and we ended up going to church. And it was an amazing experience to get introduced to God as a young age and actually gave my life to Christ officially when I was 13 and, you know, answered the call to become a Christian, and what changed for me when I became a Christian is just a boldness and courage about my faith and a desire to live God’s way and to draw others to Christ. And I remember my classmates teasing me because, you know, during tests they would want to copy from my book. I’m sure many of you remember people saying, what was it? You know, I need the answer to this question. And I actually decided to give my life to Christ, started covering my paper so nobody could actually peek.

William Norvell: And that’s amazing.

Ndidi Nwuneli: It was actually really difficult because my sister had gotten the highest scores in the entire country two years before. And so we had been on strike for six months before this major national exam. And all the teachers pointed to my table and said she’s a local copy from her sister, got the highest scores in the whole country. And I had to cover my book. And I actually got threatened by people saying, you’re covering your book, keep your papers open so we can copy. And that boldness and courage to say, you know what, I’m a Christian, I’m sold out to God and even money, but then God will see me through. And whatever happens with this exam, it’s my name on it.

And so I think that boldness and courage came from really the Holy Spirit, and that has actually stayed with me throughout. I moved to the U.S. when I was 16. I went to a prep school called the Clarksons School and then went to the Wharton School of Leadership, Pennsylvania and Harvard Business School and worked at McKinsey and throughout my time in college was very active in the Christian fellowship and the gospel choir. And, you know, when I look back at working at McKinsey and actually starting a prayer group at the Chicago office of McKinsey, I can’t believe that I did that at 20 years old because, you know, America is not a country where people profess their faith very openly.

Henry Kaestner: Do they more so in Nigeria? Talk about that a little bit.

Ndidi Nwuneli: Well, the interesting thing about Nigeria is we’re 50 percent Muslim, 50 percent Christian. And most people, profess a faith, in fact, in our country on Fridays, people close early. They go home early because they’re Muslims. They have to pray. They have to go to mosque. In most meetings, you start off with a Christian and a Muslim prayer because you recognize that both faiths that coexisting and Christians go to church at least three times a week. And that’s why I gave that pep talk to me, because I felt that, you know, for a continent that professes such a strong faith in either Islam or Christianity, we should see that faith reflected in the way that we live. And so, anyway, we are very religious people and it’s a very big part of our lives. So it was quite unusual to grow up in a family that wasn’t religious. And that gave me a boldness and the courage for Christ, which I took into my workplace. And I can tell you that that faith has carried me through and allowed me and enabled me to make very, very bold steps in my life and to live with no regrets. And knowing that with every step being guided by God and that the Holy Spirit is my anchor and that God is my source. And I think that courage and boldness allows people of faith to dare to be different and to speak out with courage and to also take risks that many people view as unusual, knowing that you take this risk. But I always say I don’t know what the future holds, but I know who holds the future. And that courage that with every path God has sent me and because he sent me, you equipped me and see me through allows me to do the things I do.

Henry Kaestner: So that’s encouraging. So you come over from Nigeria, it sounds like you’re slightly astounded by the fact that people aren’t more courageous or more open about their faith. We think as we live the United States, it’s a Christian nation. And so, of course, we’d be talking about our Christian faith. The fact that you are surprised coming in that you didn’t see more of that is challenging. One other thing. I want to introduce you to William here in a second, who’s my partner in all of these things. But one thing before I hand off to William, because I know he’s got some questions he wants to ask, is that there’s a part of you’re talking about your faith that also is interesting, a different dynamic in that you talk about hearing God’s voice through anger, which is also a different take. Tell us about that. To our listeners, that might seem counterintuitive. What was a part of your faith journey that allowed you to hear God’s voice through anger?

Ndidi Nwuneli: So I think humans are motivated by different things fear, love and anger. And even in the secular world, we recognize the power of emotions to propel action. And in my own life, it’s actually always been anger. I actually have. Ted talk called rage for change. So I was quite an angry child, meaning when I get angry about something, I do something about it. And what my faith has allowed me to do is to channel that anger into positive action for positive change. And actually there’s a place for righteous anger. Jesus was angry at the temple. So, you know, there’s definitely a place for righteous anger. And I think that’s what I have is really seeing inequity. I’m seeing, you know, injustice and being compelled to do something about it. In the agricultural landscape, Africa is naturally endowed for agricultural excellence. We have 60 percent of the world’s arable land. And yet when that’s important food, one out of every three children is stunted. I recognize that there’s a fundamental problem and it’s actually a management problem where you have fragmented ecosystems, you have. So what can we do about it? You know, seeing the face of Africa, the hungry child makes me angry. And I believe we can change that narrative as Christians and as people of faith. And so that propels me. I started LEAP Africa because I was angry about the concept of leadership and the conviction that everybody could be a leader. And leadership is an act, not a position, and that a lot of people in positions of authority were rulers and not leaders and that we had to change that message was something that propelled me to start an organization called LEAP that is now 18 years old and works in six African countries. So I think that anger stimulates an emotion that propels me to want to do something about it. And I think a lot of us are angry, but we just complain. We point fingers, but we feel powerless about actually effecting change.

William Norvell: Oh, I love that. I love that. This is William here. What an amazing encouragement, you know, that we got on here to talk about investing. But I just think you’re blessing people with your lived experience of the Holy Spirit and where God has taken you. And just thank you for doing that. I would love to hear about some of your investing experience you just talked about LEAP a little bit. Could you push into that a little bit for us? Tell us a little bit more about what LEAP is and then maybe Segway into its foods and what you’ve been able to do with that organization.

Thank you so much. So, for LEAP Africa, LEAP is actually a nonprofit organization that was created in 2002 to inspire, empower and equip a new generation of African leaders. And when we started, we worked one on one with young people between the ages of 18 and 30, equipping them with life and leadership skills to start change projects in their communities. Today, we work in six African countries and we actually teach teachers to do the right curriculum. And the focus now is 14 to 16 year olds because we believe we can reach that much younger and we equip them with leadership skills, ethics, entrepreneurship skills, employability skills. But we also help them become change agents. So we give them a little funding to start a change project in their community to improve the lives of others. And that’s how they build their leadership muscle. And I’m really proud of the team. I stepped out of VCT management in 2007. I sit on the board and the team continues to thrive and young people are just driving the growth and they are also people of faith, which makes me really proud. Now, in 2008, I started working in the food and agriculture landscape and really felt a leading by God to create a catalytic business that would prove that we could source locally process for the local market, address malnutrition and also displace imports. So my husband and I started ASW Foods, which is an agro processing company. We produce about 16 products that are currently sold in Nigeria and also exported and we sourced from about 10000 farmers. And what we’ve proven through switch is that we can produce high quality food that meets the needs of people. We also have retail products, but most of our business is sold to institutional buyers, companies like Unilever, flour mills, multinationals as well, that sourced products that use them as inputs for their own processing. And then we have products on the shelves and we supply to a lot of fast moving consumer goods companies the prevalence of dominos and all the fast food companies in our region. Many of the brands you will not be familiar with. So as Foods has been such a blessing and I’m really proud of the team and it’s also driven by a young Faith Driven Entrepreneurs who actively seek God’s face. In fact, they actually have a fast at the end of every year to hear what God is telling them. And I’m just so proud of that team. And then my day job is to help consulting where we’re building ecosystem solutions in the dairy sector, cassava seed systems, yam seed systems and creating businesses, commercializing research in the agricultural landscape and creating value. And I’m really proud of all the dynamic teams that I work with across these companies, it’s amazing.

William Norvell: Thank you for sharing that and I’m going to ask you to go a layer deeper on how to think about an investment in the ag and food space. I don’t think we’ve had too many people there. I, for one, am not very experienced there. I’ve seen some of those investments and I don’t really know how to think through them. What’s a proper return? You know, especially from the spiritual side, I assume you can employ a bunch of people and that’s amazing. Good work. But just maybe do you have a framework or, you know, how would our listeners of an agricultural deal comes across their plate to potentially invest in, whether it’s in the US or Africa or anywhere else? How would you think about that from the experience you’ve had?

Ndidi Nwuneli: So I think agriculture is such an amazing sector because it’s very diverse and also has quite a few intervention areas in our context. We talk about from farm to fork and everything in between from primary production to logistics and storage and processing, financial services, technology support all the way down to restaurants and chefs until it gets to your tummy. And so this food ecosystem is vibrant and it requires not only catalytic financing, but also patient capital. And in our context, catalytic financing is critical because you want to bet on innovation Henry talked about in Pessah and how it has transformed the East African landscape. And the same applies to so many technologies in the agriculture and food landscape that do enable leapfrogging. In particular, I would say if you’re coming into this sector, you first of all have to figure out what entry point you want to engage in and what value chain most excites you. There are so many opportunities in Africa, in Niger in particular. If you’re focused on an export led growth, then you’d be looking at cashew and sesame and cocoa and rubber as primary production. If you’re focused on food self-sufficiency, you’d be looking at poultry and dairy, yam and cassava and rice where you’re displacing imports. And then across each of those value chains, from seed production to fertilizer to mechanization, you see companies like John Deere playing in the African continent, Caterpillar, Dupont, Monsanto. I mean, they’re all in the inputs landscape. And we have the local equivalents on the African continent that are homegrown organizations. You also have technology providers like Hello Traktor, which was started to basically be the Uber of tractor and started in Nigeria. And so I think there are exciting opportunities across the board. As an investor, you have to figure out what excites you on what component of the value chain you think can be most catalytic. The second is that you have to pick the right partners. Operating on the African continent is like anywhere else. Who are your partners? Who can add the most value? Who understands the local market and what are the growth prospects? And I can tell you are returns anywhere from 10 percent to one hundred percent returns depending on the value chain. But you have to be patient. You don’t expect to have tremendous profits from day one. The Sahel Capital Team, which is our sister company, looks at about a 25% IRR as that investment returns.

But I would say that some have been more profitable, others have been less. And the beauty of African agriculture landscape is that you have an opportunity to have a triple bottom line impact. Agriculture can employ millions of people ensuring food security, contributing to development. And if you are an investor who wants to change lives while also making money, this is the best factor for you. You can do well and do good. And that’s why the sector excites me and why it’s so compelling to local and international investors.

Henry Kaestner: Tell us if you can maybe a story or two of some specific investments that you’ve seen made to have done well. And then maybe also while you’re at it, maybe some investments that you’ve seen that have not done well. The average listener to this is going to be saying, OK, so I think I hear a little bit of the case for investing in Africa. I understand the demographic play. I understand that there’s increased ability and there’s fair trade. I understand that there’s some leapfrogging with technology. I understand that there’s 60, 70 percent of the world’s arable land is in Africa. I’m getting this now. But, gosh, know, how do I get my arms around this and maybe tell it through stories. So maybe acknowledge the fact that, yes, as with any type of region, there are deals that don’t go well. And maybe you can give some counsel to people who listen to this about here’s some mistakes that I commonly see foreign investors make. You know, they do X, Y and Z. So don’t do these. But then here’s a story or two where investors are able to come in, make a real impact on the ground. And also get a good return on their money while they really impacted the social and the spiritual fabric of a community.

OK, so first I’ll say that I’ve spent the last year working on a book called Food Entrepeneurs in Africa, Scaling Resilience, Agriculture Businesses, and through that created a new business called NourishingAfrica.com, which currently has about six hundred and forty agribusinesses on our platform. And this NourishingAfrica.com Is a wealth of information for any prospective investor in the African landscape, because we have lots of data you can search by value chain. You can also have a list of funders. We have a list of entrepreneurs who are doing amazing things. So I will just suggest that you check out that platform NourishingAfrica.com. To get into some examples. Let me just start off by saying there’s such a range of organizations on the continent. While writing my book, I profiled a few. One is called Trigger and Speak actually operates in Kenya. The interesting thing about the trigger model is that when they started, they wanted to export bananas to the Middle East. That was their interest. But as they progressed, they really realized we have to create a local market to increase the standards of the bananas available. And guess what? They had enough people in Kenya who actually want high quality fruit. So they created a business that basically links farmers to small fruit retailers in the city of Nairobi. And Swagga has grown from 2014. When it started, until today it has raised fifty five million dollars and it’s grown exponentially and it’s already in its third round of financing, but is proving the power of technology to enable leapfrogging, but also efficient and effective delivery where the retailers are benefiting, but also the farmers are benefiting. With your cell phone, you can order produce and within 14 hours the producers deliver fresh from the farm to your shop. That’s what very exciting business that I interfaced with. Another one is called COBOL 360, which has done extremely well. What COBOL 360 does is leverage logistics providers and using technology to track trucks and provide basically a huge burden, which we face is transporting produce across the continent and across countries. And so they carry fertilizer and seeds the farms and carry produce back to the cities. And they’ve done extremely well. Goldman Sachs just invested in them. The IFC has invested in them. They have generated so much interest because of the value that they’ve created in the ecosystem. Cooper 360 operates in Nigeria. Another example in terms of successful exits, they have quite a few from South Africa. In twenty seventeen there was one hundred million dollar fund called Agri VI and they exited from February, which was one of South Africa’s most respected dairy companies. I mean, they had almost three times return on the investment, and that’s just one example. And that’s in South Africa. But there are many, many examples across the continent. So when I think about this sector, I think, you know, the potential to generate wealth, but also to address hunger, poverty and also create value for yourself and for your investors is tremendous. And this book is going to be released in the first quarter of 2021, actually, as you can, preordered on Amazon. But I had hoped that it would be released this year because if covid-19 has shown us anything, not just in Africa but across the world, it’s the importance of the food ecosystem and that food is medicine. You can’t address a health ecosystem without addressing the food ecosystem. And food is so vibrant and important to our livelihoods as human and innovation in the food ecosystem is critical. So I’m just excited about the future of African agriculture, but also the future of cross-sector collaboration and cross country collaboration. And I see a lot more promise when companies in the US get interested in Africa and vice versa. Africa has so much to also teach the rest of the world.

William Norvell: Well, it’s amazing. It’s amazing stories. Thank you for sharing that because it’s so good to pull the layers back on a place that some people are scared, for lack of a better word, to invest in. So I thank you for sharing some of the stories. And and actually, as I hear you talk, I mean, this is the way my mind works. You know, those are very understandable businesses, too. So if a foreign investor was going to come in, it sounds like you can pretty clearly understand the business model, understand what the needs are to be done as opposed to a lot of the other kind of tech or things like that that you run across here, that, you know, you’re really betting on a technology that you really don’t understand at some level. A lot of the early stage investors don’t anyway. So it’s really. Helpful as you look out, I mean, you’ve had an amazing journey, I would love to ask, you know, obviously you’re writing this book. Is there anything else that you have coming up on the horizon that you would love to share with our audience so that we could be paying attention to?

Ndidi Nwuneli: Well, I always want to share when I do have the opportunity that I’d challenge all our listeners to actually check out the food culture section of nourishing Africa. I think a lot of Americans have not enjoyed and truly benefited from the amazing food in Africa. And I think we want to rival Japan when it comes to being on the world’s top speed, when it comes to food. And so it’s not just enough to say I eat chocolates, but what about your rooiboos tea? Your South African wine for those of you who like wine. And what about all the great spices from the African continent? Half, which is Ethiopian is amazing and it’s gluten free. I mean, I would love to see African food on the world stage. And I think it’s up to all of us to start looking for African food as well. That way on a daily basis, you’re also touching the lives of farmers, but you’re also investing in your own nutrition because we have some of the best food in the world.

Henry Kaestner: Well, the Japanese food lobby wants to thank you for their shout out that you just had right there. I hadn’t been thinking about as being some rival for Africa.

Ndidi Nwuneli: No, I think that Japan is not rivaling Africa or Japan or rival Ethiopia.

Henry Kaestner: Well, I think that maybe that will be a subject for another FDE podcast about how Faith Driven investors can get involved in the agriculture and the food industry in Japan. I think Africa runs circles around Japan.

Ndidi Nwuneli: But know why I was saying this, Henry? I just I wrote an article last year. Japanese food is ranked number one in the world, really healthy. Yes. And I was shocked to learn that they’ve actually done it in a very creative way. They position their food as healthy. They draw a link between having the highest life expectancy and the healthiness of their food. And they have launched, a whole marketing campaign around their food, which has driven investment in their food. They also have a certification program for their restaurants all over the world to say it’s authentic Japanese food. So we have learned a lot from the movement to increase awareness. And the growth in Japanese restaurants across the world has been the fastest. It has rivaled Italian cuisine. So I’m just telling you this from an investor perspective, they have been very strategic and that’s what we have learned from them.

Henry Kaestner: But fascinating. I don’t think they fry their food enough. Just I’m just kidding.

And I love the fact that you’ve provided us with a website that gives a primer and an overview for somebody who’s listening to this might want to say, how do I get started? I’m interested in agriculture. I’m interested in investing in the food industry. Where do I get started to be able to chronicle on inventories? Six hundred and forty food entrepreneurs, along with some data and some analysis that gives us kind of a sense about the bigger picture and how to weighed in. So that’s a great resource. Thank you.

William Norvell: Absolutely. And if you can see in Henry’s video, if you can find the best African ice cream, you will get Henry on board. So just throwing that out there, right?

Henry Kaestner: If you’re listening is your thing in fried food and ice cream. Probably don’t need to be taking my diet advice from Henry. And you’d be right.

William Norvell: This is not a diet podcast. That is not why you come here. So not the place to be. Ndidi, thank you so much for spending time with us. We do, unfortunately, have to come to a close. And when we do that, what we love to do is invite exactly the question that you mentioned earlier is what is God doing in your life today? And specifically through his word, through his scripture? We love to see somewhere. Maybe he has you in the season. Could be a verse you read this morning or a story. Just how is he speaking to you through his living word today?

Ndidi Nwuneli: Yeah. So when I think about what God is doing, my favorite Bible verse, which I hold onto, is very popular. It’s Jeremiah 29:11 I know the plans I have for you declares the Lord plans to prosper you and not to harm you. Plans to give you hope and a future. You know, 2020 has been a rough year for so many and people have experienced, loss and all sorts of ways. But the encouragement I have is that when we put our faith and our trust in God, he’s the master strategist and he always, always there a path. And so my encouragement to you listeners is to continue to trust and believe that God, who has started a great work and you will be faithful to complete it. That’s how I have stayed rooted and anchored in every assignment that he’s given me. And every time he gets too difficult, I basically say, you are the one, this is your business. God, come and show yourself faithful. At the end of the day, you will get the glory and that he always comes through time and time again and realizing that I am not on this walk alone, that God is my source of strength, of wisdom and of courage, and that at the end of it all he will get the glory, and that keeps me grounded and focused. And discipline, so I hope I encourage you a little today, and I wish you all the best.