by Vip Vipperman

Wealth and influence – it’s a topic that comes up regularly in the business and nonprofit worlds, whether it is expressly mentioned or just thought about silently at networking events.  It’s important in the world, whether you are a believer or not, and it’s important to God.

And with this importance comes questions. What do we do with the wealth and influence we have? How can we get more of both? Are we wrong to want more? And ultimately, what would God have us do with both the wealth and influence we have and our desires for more? 

Using Wealth and Influence for Good: a Biblical Example

Throughout the Bible, we see how God calls people to use their wealth and influence to achieve His purposes. Most people know the stories of Abraham, Moses, David and the 12 disciples, but you might not know about Barzillai.

Hidden in the chapters of 2 Samuel is the story of a wealthy man named Barzillai, a believer in God and a supporter of King David – even when it wasn’t convenient or beneficial to be a supporter of the King.  In this portion of David’s story, he and his entourage are running away from his rebellious son, Absalom, who had staged a coup against his father and taken over Jerusalem.  But Barzillai remained loyal and hosted David and his men during this trying time, which was risky and expensive (2 Sam 17:27-28).

Eventually, Absalom died, and the rebellion ended, leaving David ready to head back and take his place back as the rightful king in Jerusalem. But before he crossed the river to head home, he paused to invite his patron Barzillai to come back with him so he could be given the royal treatment for the rest of his life.  Who wouldn’t want that?  Actually, Barzillai.  He already had wealth and influence.  He was content with where he was, and all he wanted was to return home to his land and his family and rest in peace.

However, he didn’t just decline the invitation and move on. Rather, he decided to use his influence to elevate another, his buddy Chimham, and made a move that changed Chimham’s life forever. He asked David to allow Chimham to take his place, to receive the place of honor David had offered to Barzillai.  In a way, Barzillai became a sponsor for Chimham’s career, opening up doors that he never could have opened without Barzillai using his influence on his behalf.

Barzillai’s influence and sponsorship of Chimham placed him in a position of wealth, prominence, power and influence unparalleled as one who sits at the table of the King. Chimham crossed the river with David and headed back to Jerusalem as one of the King’s inner circle.

Wealth, Influence and you

So, let’s bring this to present day.  How does this apply to us?

If you are a Barzillai – an investor or someone established in your career – you have an opportunity to lift up entrepreneurs in business and nonprofit worlds as well as those in the beginning stages of their careers, to introduce them to patrons, to share your influence and network so that they can be propelled and accelerated along in the process of growing their businesses, establishing their careers and impacting the world for Christ. 

For those who have recently exited a business, there is an opportunity to stay engaged in business after “retiring.”  Consider being a part of lifting a future leader up, taking them under your wing and allowing them to benefit from your wisdom, experience and influence.

If you are a Chimham – a new entrepreneur or someone just starting out – be praying for and actively looking for those potential Barzillais that might be a sponsor for your future, and don’t forget to pay it forward as you become more established. We all have something to give, no matter the season we are in.

So, how will you be a Barzillai to the Chimhams in your life?  How will you leverage the position, experience, power, influence and wealth you have gained over the years?  It’s an important question to consider because we know we can’t take it with us when our time here is done.

We asked a question at the beginning of this – what would God have us do with our wealth and influence? This story only partially answers that question by giving an example of what God has done with wealth and influence in the past, but Barzillai is just one story. We all have something to offer, and God will do something with what we offer Him.

So how will you use what God has given you to lift up others?  And how will your wealth and influence be remembered in the footnotes of these pages?  Will it be remembered as a tool to increase your own status and glory or a tool that lifted others up and brought honor and glory to God?

If you want to learn more about how you can be a Barzillai, contact vip@thelionsdendfw.com

This article was originally presented at The Christian Economic Forum 2018.
Check out CEF for other quality content!

The Christian Economic Forum hosts a world-class Global Event each year to connect the top industry leaders and experts from around the world with other individuals who are compelled to act upon the principles of God’s economy. The following paper was presented at CEF 2018.

— by Henry Kaestner

The concept of the buy-out fund has been around for decades, if not centuries. The latest flavor of the buy-out fund, the “search fund,” has garnered an increasing level of press over the past few years. This is because of its ability to provide better investment returns than other flavors of private equity funds, but this is not the only thing that should make us all take notice. It’s the unique way in which “searchers” discover and acquire companies that make it a great model for marketplace transformation, and with time it might prove to be a very effective way to put money to work for God’s Kingdom while looking for solid investment returns.

When we started Sovereign’s Capital (a venture fund family in the US and Southeast Asia), it was because of our belief that like-minded capital invested in a faith-driven entrepreneur might result in a company better equipped to love on its partners, vendors, customers, and employees in a way that pointed to something more significant than the manufacture and distribution of “widgets.” We believed, as do so many of you, that entrepreneurs fueled by the creation mandate and with their identity deeply rooted as a beloved child of God (not as the wunderkind of 20% month over month growth), might be a force for marketplace transformation on one hand, and on the other provide great financial returns for like-minded investors.

Through the grace of God, I think this thesis is being proved right. Don’t get me wrong—it’s too early to declare victory from the rooftops (other than THE victory). Still, we have seen that an entrepreneur whose hope is in the Lord can tap in this nuclear-like energy and lead businesses that scale, compete, and win in the marketplace.

We’ve seen this in Grab! in Southeast Asia, in CloudFactory in Nepal and Kenya, in FiveStars and ManCrates in the US, and in over 30 other businesses. What’s common among all of these businesses is what they are: fast-growing, venture-backed companies with valuations that are, at times, unbelievable.

Another commonality is what they are not: traditional, mainline, positive cash flow businesses that provide the marketplace and cultural fabric accompanied by valuations that can hold up at any stage of the economic cycle. It’s an issue of what is often thought of as dull/ boring versus exciting/new businesses. The point of this white paper is that we (Sovereign’s) and a whole lot of others (as price is a function of supply and demand) have missed how traditional, “dull” businesses are such a great force for the Kingdom. We started our venture fund to help cultivate the Kingdom-affirming culture while the DNA was being set in the early days, then help that company and DNA scale to impact more lives and markets. We’ve come to realize that a complementary need in the marketplace is to find companies that have already scaled such DNA and are impacting lives in traditional companies, and invest with an eye toward maintaining those cultures that affirm human flourishing as founders exit.

Thus we intend to be a part of a larger group that aims to fix this, and in so doing, invest in a new generation of high capacity, faith-driven leaders. This also means investing in the businesses and communities in which they serve, all with an eye toward building enterprises for God’s glory, seeing hearts transformed by the gospel, and doing so at entrance valuations that allow for more cultural impact per dollar invested. Just as importantly, we believe that investing in this class of business can provide risk adjusted returns, at or above venture.

Search Funds: Better Returns and Spiritual Integration Because of a Unique Staffing Model

“Search funds” are fueled by “searchers”; typically these are newly minted MBAs who are looking to forgo the management consulting or investment bank tracks in favor of being a CEO of a company on day one. Not all new MBA entrepreneurs become searchers. Some young entrepreneurs, inspired by a new problem for which they feel uniquely situated to solve, head off to start the next big new SaaS business or Hyperloop competitor. We see these folks on the venture side of things where thousands of venture capital funds are eager to learn about (and then bid up) the next Uber or AirBnb. Others, however, are more interested in more traditional businesses—those whose value is established rather than aspirational. These are the entrepreneurs we are focusing on in this paper and in our new fund. The businesses these entrepreneurs will run come in all sorts and shapes, anything from restaurants to light manufacturing to distribution. Searchers understand and value a company whose product market fit was established decades ago, and who has shown a long history of delighting customers, providing meaningful employment and who has a history of being a valuable member of the industry and the village/town/city where it’s based.

How a Search Fund Works

Searchers typically raise funds to fuel their search by selling units in their new fund (effectively selling units in their career). This provides the searcher with a modest salary and expenses and gives each unit holder the right to convert their investment into equity in the new company as well as an option to purchase more, which provides the equity capital necessary for the acquisition. The searcher typically then ends up with 20-25% of the newco with the balance being split between the search fund investors and a small option pool for key employees.

Why It’s Better

The advantage of this model versus the more traditional buy-out fund is that it’s the searcher who finds the deal and establishes the all- important relationship with the seller/founder/ outgoing CEO. This is the searcher’s dream job. They’ve found it and are therefore more likely to stick with it, perhaps dedicating their entire career to this company. The early relationship with management means they better understand the business they are buying and have relational equity with the outgoing leader. This provides mentorship as well as a smoother transition than would occur from a buy-out fund that recruits a new CEO post-transaction. The searcher then typically spends the next year learning from the former CEO and the senior management team before making changes too early that might compromise the standing of the company. The company then benefits from a searcher who knows the business and has new energy and ideas to grow the company.

We believe a model like this is a great solution for the tens of thousands of faith-driven business owners who are looking for an exit after decades of hard work, but who don’t want to give up the faith-driven culture of their businesses. These are men and women who are experts in their industries and leaders in their communities. With some level of earn out, they have every incentive to see the new owner prosper in the business. With the right type of Kingdom-minded seller, they should have additional incentive to invest in the discipleship of their successor as they are eager to see their business have the type of godly legacy that hopefully motivated them for their career.

We are committed to this model. We think there’s an opportunity to take it to a new level by bringing on board a team or cohort of searchers (perhaps 6-8) who can unite and take encouragement in shared purpose, combining the best attributes of a fellows program and its focus on discipleship with a YPO-type group that can provide community and encouragement both during and after the search process. Additionally, we believe that a fund (or a holding company for a more permanent capital model) that invests in searchers can provide additional benefits—from deal flow generation to procuring the networks of advisors—that can help the searcher through the transaction and beyond. Imagine a world of intergenerational friendships driving business forward around the globe for God’s Kingdom.

Read the whitepaper in its original form here.

With the help of faith friends from our gathering of Faith Driven Investors, we’ve begun drafting a set of Unifying Principles. Our hope is that we can begin to come together under these thoughts and ideas to work toward a more full vision of what it means to let our faith drive our investments.

If you have thoughts, questions, concerns, things you’d change or add, please let us know! We’re relying on you, our community, to make this resource the best it can be.

Christ followers have become known for what we are against—no alcohol, tobacco, adult entertainment, gambling, etc. While acknowledging the good negative screen funds that exist, we desire for our movement to be more known for what we are FOR in how we place our investment capital—things like human flourishing, job creation, redemptive businesses that restore the world to God’s original design in the garden, etc.

The focus is less on which negative investments to avoid and more on where resources can be positively stewarded to do the most good. Of course, this is not a movement that is about delineating what Christ followers should or should not invest in. Some investments may be clear to avoid (those that produce and distribute pornography as a material part of their business model might be an example), and others may be less clear (those that make some food products that our doctors would tell us to avoid).

Regardless, we look to what Jesus said about His disciples—that they would be known by their love. Jesus didn’t send His disciples into the world to be known by the things they avoided. Yes, some things are worth staying away from, but that is not the focus of this movement. Instead, we search for the places and investments that we can lean toward.

Jesus sent believers out to live and love intentionally. Financial resources act as vehicles for this type of lifestyle. Instead of being known by what we don’t do, our investments focus on the mission given by God for humans to do good, serve others, and love well. While God has given many “Thou shall not” commands, this movement focuses on what God says “Thou shall do” to make God’s name known and to reveal His glory.

When we are engaged in a problem, we are committed to understanding the ins and outs of the community affected and always strive to come up with a solution that serves everyone involved. Instead of avoiding the problems and sins that plague this world—real as they are—the Faith-Driven Investor movement hopes to take an active and engaged role with what God has put in front of us.

Using Scripture as Our Guide

• Ephesians 5:11 Take no part in the unfruitful works of darkness, but instead expose them.

• Galatians 5:22-23 But the fruit of the Spirit is love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness and self-control. Against such things there is no law.

• Proverbs 16:8 Better is a little with righteousness than great revenues with injustice.

• Matthew 22:37-39 Love the Lord your God with all your heart and with all your soul and with all your mind.’This is t he first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’

• Proverbs 13:11 Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.

• Colossians 3:2 Set your minds on things above, not on earthly things.

• Matthew 28:19 Therefore go and make disciples of all nations.

• Hebrews 13:16 And do not forget to do good and to share with others, for with such sacrifices God is pleased.

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Faith-Based Employee Resource Groups. This term may be new to you, or it may be something you’re already participating in. Either way, this episode is for you. Christeen Rico is leading the conversation around ERGs, and what she shared in our conversation was both informative and insightful.

If you don’t know, ERGs are groups within companies that foster community and conversation among like-minded people. Companies like Apple, Google, Facebook, Toyota, and many more are creating these types of groups, so we’re grateful that Christeen dropped by to give us the inside scoop. 

If you’re an entrepreneur looking for ways to foster faith-based conversations within your business, Christeen will tell you exactly what it takes to form these groups. Or, if you’re an investor looking to get involved with companies that already have ERGs, Christeen will help you understand why these groups are important and how they add value.

Apart from that, Christeen was also a fun person to spend time with, and we think you’ll find this episode one worth listening to. Enjoy!

We’re so excited to have Aimee Minnich on the podcast this week, and in preparation for her interview, we thought we’d share something she wrote about gleaning. In addition to being on our first podcast episode, Aimee was one of the presenters at our recent event for Faith Driven Investors, and she was gracious enough to share a copy of her talk with us. Below is a transcript of her presentation about the concept of gleaning. If you like this, look for her episode being released tomorrow!

by Aimee Minnich

Brittany Underwood built Akola from nothing — each item of jewelry handmade in Uganda and distributed through their warehouse in the States where most jobs are held by women recently released from prison. It’s an unlikely story for a company whose jewelry is sold for $300+ in Neiman Marcus and has been featured in Vogue and People StyleWatch.  With 70% margins and contracts with other major retailers she’s poised for growth and needs both a line of credit and an equity partner. A top VC firm in her industry was offering favorable terms and promising to help make the company even more profitable. Earlier this year, she sat across the table from them and turned them down. Why? Why would someone do that?

The difference between 70% and 80% profit margins the VC firm wanted would mean eliminating jobs that our young entrepreneur worked hard to create for women coming out of prison. The impact of those jobs for the women and their families was worth more than an easy equity raise and more revenue.

Brittany’s company Akola is modern example of gleaning — when an investor or business owner leaves some monetary gain on the table to provide access for a group that society has largely left behind.

Brittany’s decision may appear counter-intuitive, even to those of us pursuing faith-driven investing. We want to move up and to the right — that’s success, right? More profit, more impact. And often that’s the line that secular impact investing keeps feeding us. A major study by the Global Impact Investing Network suggests there’s no trade-off between profit and impact. 

Does that need to be our definition of success too? Or does our faith compel us to a different standard? In Scripture we see at least 4 uses of capital commended. We are familiar with the first three — charity, tithing and traditional investing for return. To be clear, all of these are worthy of our effort and money. I love investing for market-rate financial return and many of you could do a much better job than me discussing those issues. But I also believe it deserves more attention.

I’ll focus on gleaning since it is one of the most unaddressed and important uses of capital.  

Remember how Ruth gathered at the edges of Boaz’s field? Boaz was following the command from Leviticus to allow for gleaning.

 The Theology of Work Project explains:

“Gleaning is a process in which landowners have an obligation to provide poor and marginalized people access to the means of production (in Leviticus, the land) and to work it themselves. Unlike charity, it does not depend on the generosity of landowners. In this sense, it was much more like a tax than a charitable contribution. Also, unlike charity, it was not given to the poor as a transfer payment. Through gleaning, the poor earned their living the same way as the landowners did, by working the fields with their own labors. It was simply a command that everyone had a right to access the means of provision created by God.”

Our economies may not be as ag-centric anymore, but gleaning nevertheless is instructive for all of us because gleaning has to do with “provision” rather than harvesting crops.

 In fact, there are plenty of you in this room practicing modern-day gleaning within your own businesses. One of you has a business inside a prison, providing jobs and dignity and reducing recidivism. One of you operates a cattle feed lot, slaughterhouse, and distribution business in Ethiopia to provide jobs and access to the global economy for local families.

I’ve observed that it’s sometimes easier to practice gleaning within our own companies than it is to understand how to do it as investors. For over a decade I’ve worked with generous families of wealth helping them steward their philanthropic capital for maximum positive effect. What about these families, for whom the “field” that they’ve been given to work is managing philanthropic capital? How are we to think about the concept of “gleaning”?

I think we many are afraid to consider “investment gleaning” because it seems that accepting less than full market rate return is the purview of the unsophisticated. If I lend money at 8% when everyone else is getting 15%, doesn’t that make me the fool in the room? Others fear that it provides an excuse for lack of excellence from the entrepreneur.

Those things certainly could be causes of poor returns, but that’s not what gleaning entails. True gleaning involves excellence, access, work and sacrifice.

In ancient times, a farmer leaving some of his fields unharvested meant he had to be even more efficient, more effective with the portions he was working. In order to make enough to feed their family and follow the command to leave room for the poor to glean at the edges, God’s people had to be the very best farmers around. Excellence is always a hallmark of gleaning.

The next two items go together. Gleaning means access for the poor and marginalized. Access isn’t the same as a handout. Access to the means of production means wages for work. I would never advocate for eliminating charity, but I do fear that if we aren’t creating pathways to employment through our philanthropic capital then we may be doing more harm than good. If you’ve been to Haiti, you’ve seen this first-hand. There are instances where aid given to the poor and marginalized can create access – scholarships for education or career training are a great example. So is aid in the context of a disaster or mass displacement. But at some point we need to begin asking when “access” looks more like a job than a gift.

Sacrifice is the last hallmark of gleaning. It’s also the scariest. What looks like sacrifice to others often feels like simple obedience to the person making the sacrifice. Maybe its time to rethink our risk/return paradigm. If God is omnipotent, His return horizon is eternal, and we’re just His money-managers, then really the only meaningful risk we encounter is disobedience. When we get to the pearly gates, I don’t think He’s going to ask us whether we got a 15% IRR or beat our benchmarks. I am confident, though, that the ways in which we provide for His children who are poor and marginalized will be remembered.