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Today’s guest is Ben Chelf. Ben is a founding partner at Elementum Ventures, has been named to ComputerWorld’s Top 40 under 40 Innovative IT Professionals, and is in the Stanford Inventor Hall of Fame. 

He has lived every part of the entrepreneurial cycle and is passionate about sharing his knowledge and experience. As part of this work, Ben also heads up the Venture Lab at Praxis, helping serial entrepreneurs research and develop new organizations from the moment of inspiration to incorporation. 

He has lived both the Faith Driven Investor and the Faith Driven Entrepreneur story, and we think you’ll enjoy hearing him talk about both.

Episode Transcript

Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDI movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

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.

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Today, we’re talking about playing the long game. So many investors work to get as big of a return as they can as quickly as they can. But the two people on the show have a different approach. 

John Denniston and Tom Blaisdell are our resident experts on long-term capital, and today, they’re going to break down the benefits of patient investing, the discipleship opportunities it provides, and how all of this relates to you, the Faith Driven Investor.

Episode Transcript

Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDI movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

Henry Kaestner: Welcome back to the fate of an investor podcast, great episode today we’ve got two awesome guests to help us to understand the concept of permanent capital. And we live in Silicon Valley, which is really the capital of venture capital, if not more broadly, private equity. And it’s interesting that we’re going to be looking at this topic today with two guys that really come from a background of venture capital at the very highest levels, talking to us about a new model that we really all think might transcend the 10 year lifecycle of a fund, as Henry mentioned.

William Norvell: A big thing we want to dig into is you both have a lot of experience in capital raising, both as entrepreneurs and as venture capitalist, as a lawyer, as an investment banker. I mean, I personally think you really redeemed yourself. I mean, going from law investment banking. I mean, that’s where, you know, the magic happens. I know people see them and much, much better light. I like the journey you’ve taken here now, but this permanent capital idea. Walk us through it. What is it? Where does it come from? Is it something brand new? Is something that’s old that people are finding again? What is the essence of it and why are you too fascinated by it? Well, I can start with that.

Tom Blaisdell: I got fascinated by it when I was doing this research up at Tuck and they came at it from two different angles. One was clearly the returns angle. I was always been a big fan of Warren Buffett and Charlie Munger and what they’d been doing, a Berkshire Hathaway, and they had, you know, their famous saying, know, our favorite holding period is forever. And they had this holding company, which is in essence a permanent capital structure for the companies that they’re buying that give them lots of leeway to pursue their growth strategies and their missions individually as well. I also took it from the point of view of the entrepreneur, though, and that’s really where I thought I saw the whole and the market was, as I said, look, I want to get more involved in mission driven entrepreneurs. You know, a mission driven on tour is on a mission. Most of the investors out there that they’re going to pair up with are on a mission to make more money. And this might be a good time to talk about a really important differentiation I make between investors and what I call capital allocators and thinking. I think all the people who are listening to this podcast should be recasting in their mind, thinking to themselves as a capital allocator as opposed to an investor. And the simple differentiation is an investor. Invest money to make more money. That’s what their job is. A capital allocator. Their job is to allocate capital to worthy endeavors while respecting and honoring the value of the capital. Capital is not free. Capital has costs. It has to be respected. That’s what the parable of talents is about. But the capital needs to be allocated to what I would consider you would consider the individual investor a worthy cause. So if you’re thinking of your job as being a steward to the capital entrusted to you, that means being a trustworthy allocator of capital, not just an investor. And I just want to say this is an extra degree of difficulty. Being a good investor is very hard. Being responsible allocator of capital is even harder. Warren Buffett and Charlie Munger had this concept, the too hard pile. Generally, it’s a good idea. Keeps you focused on your specific giftedness or your core competencies. But within your circle of competence, you need to be responsible in what you’re investing in. And one thing I want a big takeaway from this podcast to be is don’t put values align investing in the too hard pile. This is important. This is worth doing. And, you know, John can talk more about how he made that transition to taking that out of the too hard pile and putting it into action of going from an investor to actually starting a business like that.

Henry Kaestner: So I want to get into that a bit and actually dystrophin on what William was just talking about in terms of career progression. John had I think about that T-shirt which talks about the evolution of man. So it starts off life as an attorney, then investment banker and then venture capitalist being a higher form of life and now maybe the highest form of life, being a missional entrepreneur in a permanent capital type of structure. Maybe we might even get some feedback from the audiences, what they think that makes sense or not, or if there’s a next progression in the in the evolution. But I actually really like the way that that’s gone in in that it connotes that there are some aspects of venture capital or private equity that may have some limitations to it. So maybe it can deal with Tom and and Jon. I’d love to get your comments on this, too, when we talk about permanent capital. And I think that I’m glad that you brought Berkshire Hathaway. It’s a model that a lot of people can be comfortable with and familiar with. But what are some of the inherent limitations to the traditional private equity and venture capital model that maybe permeate capital solves for.

Tom Blaisdell: Absolutely. Yeah, first and foremost. Traditionally, all venture capital funds are private equity funds have a 10 year structure, which is, you know, they raise a fun one hundred million dollars, a billion dollars, 10 billion dollars for the big P funds, and that as a 10 year life. And normally they’re going to invest, make new investments in the first three years and then spend the next seven years harvesting those investments. And so a typical model for a private equity investment, for example, is they want three to five backs in three to five years. So they want to put. Money end. They went to work it for three to five years and they want to get the money out. Similarly, on the venture capital side, especially the early stage folks coming into the series A, Series B, we know that out there, the time period from initial investment to liquidity event, which is either getting an M&A getting bought out or an IPO has been extending from, you know, typically used to be five years, seven years, 10 years, 12 years. And we know that’s getting longer and longer. But those are the first two constraints just built in to the venture capital. Private equity models is that 10 year fund life now immediately put that up against the perspective of the Michigan entrepreneur who is building a multi decade or maybe even a multigenerational business to attack a problem that’s very important to them.

You know, what that means is you’re going to have to recapitalize their business every three to five years that they’re using private equity or every seven to 10 years if they’re using venture capital money. And I’m not saying that that model is broken. That’s a terrific model that’s created tons of creative power and financial success for venture capital and private equity. The whole I saw in the market was these longer term thinking mission driven on tourism. I’ll just take one more moment to talk about, you know, there isn’t every entrepreneur mission driven. Sure. They all say, oh, here, here’s our mission. We got our mission. We’ve got a vision. I have to test for what’s my definition of a mission driven entrepreneur. The first question is, and this isn’t I don’t sort of ask this, but it’s what comes out in a conversation. And as you ask what they’re doing right now. And you’re gonna get two answers read and get some that essentially you talk to the CEO of a startup, ABC, or private equity backed startup. They’re either going to need a description that says, this is my current gig. This is what I’m working on right now. And if you talk to mission driven entrepreneur, they’re gonna be telling you about their life’s passion, their life’s work. They wouldn’t know what they would be doing if they weren’t doing this. That’s question number one. Question number two is. And this is more perhaps from the investor’s point of view, but also a lot of funds from the private equity CEO’s point of view is always begin with the exit in mind. I never make an investment if I don’t know what the X is going to look like on the other end. When you’re talking to a mission, you’re an entrepreneur. They say, what’s an exit? We’re not exiting. We’re solving a problem. This is our mission. This is our cause. This is what we’re here to do. And so now you have these mission driven operators that are fundamentally different than the other entrepreneurs. And now if you take a traditional again, let’s go back to that venture capital model. So now you go out, you raise your share easy. And all these people, you need growth, growth, growth, growth, growth.

You raise your series A. Then your series B, then you need your series C, then you need your series D.

It’s hard to find the money in each round. Now find people that have values alignment in each of those rounds. Or even just financial incentive alignment. In each round in terms of what their timeframe is, et cetera. Keeping that alignment, this is almost more than just about the permanent capital. It’s about the alignment of the capital. And that just becomes increasingly impossible in that traditional venture model. And then private equity model, it’s essentially we have a mission for three to five years. We don’t have a mission for 20 or 30 years. We have a mission for thirty five years. And that’s do just start right out of the gate with some serious alignment problems.

Henry Kaestner: John, you’ve been on all sorts of different angles on this from the venture capital world, more permanent capital entrepreneur. How would you respond to permanent capital and make the case for that as something that really helps support mission?

John Denniston: We imagine somebody gives you a choice, an immediate payment of one million dollars or a magic penny that doubles every day for 30 days. Tell me, which do you choose?

Cash upfront, million dollars. I bet you the answer is number two. OK. That is correct. Would you hazard a guess? You can’t put your calculator right now. I’m watching you. Yeah.

OK. If you got a penny at a doubled every day for 30 days, what is in your bank account at day 30?

Henry Kaestner: Tell me what can be more than a million dollars? We know that many of the owners say it’s going to be a big number. Go with three point seven form billion dollars.

John Denniston: Man, are you smart that rounds to the five million dollars that it is, OK. That’s the idea in our minds.

Deusen. Is it five million or five Divino I hinders that billion. OK. I don’t know.

William Norvell: I think I now know we have a recording Henders a billion here. Smart enough to the right answer. But math, you know, still working on it.

John Denniston: Henry thinks big everything specked. The answer is five million dollars. Five million dollars. OK. That is an astonishing phenomenon. It’s wonderful. So wonderful that Albert Einstein called that compounding the eighth wonder of the world. Now, that’s the idea. And so who knows? Ten year convention came in to the private equity and venture capital world, I imagine, in my mind’s eye. The early funds, they find some investors categories that don’t even exist today. And the investor said, well, certainly I’ll get my money back. And so the people raised in the voice, OK, well, 10 years will give your money back. I mean, something like. But there’s no rhyme or reason. Here’s what it does from perspective of Eighth Wonder of the World. It interrupts it. Imagine that you take your penny and 10 days in the compounding stops or slows down for a while, or you don’t get the full 10 days amount because there’s a fee that you pay somebody and then you have to find a reinvestment. And by the way, you’re doubling with the penny that you had. And what you’re reinvested in is not doubling. It’s five percent growth every year. So from a financial perspective, there is a permanent capital movement taking place right now and there’s a lot of the big money coming into it. Blackstone has raised hundreds of billions of dollars on this Apollo. I think roughly half of their assets under management are in roughly the category of permanent capital. Last week, KKR and our private equity firm bought an insurance company. That’s how Berkshire Hathaway began. That was an insight for the purpose of getting more permanent capital. So here’s the point. And now I’m coming around to answering your question. How is that relevant to redemptive imagination? The gospel in the market? How is that relevant? Because the same principle applies. Imagine there is a for profit company also delivering the gospel into the market in some form or fashion chaplains, poverty alleviation, education, health, you name it. Romans twelve says many parts of one body. Right. A lot of different ways to deliver the gospel into the market. OK, well, imagine you have invested in a company that’s doing that really well, making a difference in the world. And compounding the gospel on the market over time at your 10, you’re going to want to keep going with that from a redemptive perspective. And so the idea is to allow the eighth wonder of the world to be realized for both financial return and from a redemptive perspective, both.

Henry Kaestner: So it makes a big impression on me. And I think that also building off of that dynamic, which is not just the concept of compounding interest in financial return and not interrupting that, it is suboptimal time. One of the reasons why Solomon’s Capital Fund, we want to twelve year funds because we saw so much agitation from co-investors in your six and seven. Looking for an exit and then taking less a lower price. But because they had to get out. It just doesn’t make sense if you’re getting the flywheel going on, really figuring out product market fit and really scaling a business to get out just in an arbitrary time doesn’t seem to make sense. Permanent capital headset. But even more powerfully, more powerfully, I think on the spiritual side, when Tom talks about an entrepreneur warm coming about this because this is their mission and their consuming thing, especially if it has a gospel integration to have somebody on your cap tables like I’m with you. I also see this as life mission, and we’re going to go, hey, let’s do this together and let’s not talk about the exit. Let’s talk about the mission. Let’s talk about it. How to reinforce success without any type of artificial, arbitrary type of thing of needing to get out. That would seem to be powerful as an investor and it maybe having a strategic advantage, because we all know if we’re in the fund business, it’s all about deal flow. And it’s the getting the looks at the deals, which means that you need to be able to show an entrepreneur that there’s something special about you and your partnership that’s different. If you can say to an entrepreneur whose life has a mission is going to come on board with you and I don’t need to get out. That would seem to give you an advantage versus a different funding vehicle that says we love you, but we love you for six and half years.

Tom Blaisdell: I saw a great cartoon. It was people sitting across the desk, each other. And one person was saying to the other one. Think of it as permanent capital that you have to get back in three years.

So not permanent capital. So investing, not again, is moving from being ambassador to being a capital allocator. You’re not just investing your dollars for the high to maximize your return, but you’re investing your dollars to solve a problem that matters to God. I picked that phrase up actually from a podcast you guys had recently, I think was Dick Blanc from Cedarville University. Somehow I pulled out from what are you saying? Were solving problems that matter to God. And there may be a terrific investment opportunity around doing the next caffeinated hard seltzer. But is that a problem that matters to God, you know? Or is there something where you’re leaning in and saying, you know, even when times are tough, I can continue to lean in?

Because what we’re doing matters to God. And by the way, if it’s a problem that matters to God, there will be an investment return profile there as well. This is, of course, separated from philanthropy. And I don’t know if you get into that. William and Henry, on any of your other podcasts, have, you know, where is that line? And that’s certainly an interesting topic in itself. But I think what we’re talking about here are real investments with real market returns, capital Honorine Returns. But, you know, it’s capital with a mission, not a deadline. And that’s what we’re talking about with permanent capital. And I do think, Kendry, to your point. It’s a differentiated value proposition.

William Norvell: OK, Tom. John, this may be self-proclaimed self-proclaimed provocative person on the show here. Some here in this. And I’m entrapped. I’m in. I’m actually thinking, you know, why would I ever work for someone that doesn’t have personal capital? Why would I ever tell an entrepreneur to take money from someone who’s not permanent capital? I mean, this is good Kool-Aid here. And Tom, you made a comment earlier. The tenure model wasn’t totally broken, that it had value. But I want to dove in back. I think someone could listen to this and both an entrepreneur award investor and say, well, that’s the only model. I mean, clearly, you’ve made a compelling case. That’s what God would value, is that you’re along for the mission. You don’t have investors pounding on your door. You know, you can build the company as long as you want, you know, and and, of course, God requires companies to sell and opportunities come along. We always have to be looking for that.

But, man, I would never take money from a tenure fund that doesn’t feel God honoring. Let me ask that question. Is that how you guys feel? And you’re welcome to feel that way. I’m just interested in where you stand today as you’ve done this research over so many years.

John Denniston: So I think it’s an excellent question. William, let me offer this perspective.

As I said, there is a growing market for permanent job, but there’s also a growing market for impact, redemptive imagination, startup companies that integrate financial and redemptive for secular impact. There’s the equation that I use to describe the current dynamic in that marketplace of capital and ideas.

See is greater than I. That is to say, the volume of impact capital currently exceeds the volume of great breakthrough impact or redemptive business ideas. That’s a problem, but it’s also a creative opportunity. And Christian entrepreneurs should consider attacking that with all the creativity God gave them in new novel ways to integrate finance and business with redemptive imagination. That’s an opportunity. And we’re in the early days of it. And so the thing that I’ll say about shifting offers impact and permanent. We’re combining the two in this podcast. But on permanent Kamper Watch is a permanent capital investor. Want permanent capital investor wants a high probability of permanence. The penny keeps on doubling every single day. So a demonstrated momentum that, yeah, I’ll put my money in for more than 10 years. But if I’m a university endowment or insurance company or pension plan, maybe 20 or 30 or 50, maybe there’s no limit on it. Something like that. But for me to feel good about doing it, I want to see momentum that just me a strong feel. This has some competitive differentiation and that’s going to keep on going. That’s what Warren Buffett has done successfully, a virtual ask away. The last thing I’ll say on this. Likewise for faith driven investor would like to see the same thing. To make a permanent investment in a redemptive imagination company. See the momentum and the success that gives you a very good feeling that that redemptive activity will continue to compound going forward.

Henry Kaestner: It’s if the world you know, as I’m thinking about this, I’m thinking of venture capital and private equity are getting a little bit potentially of a bad rap. Now, to be clear. Part of me looks at this through the lens of an entrepreneur. Most of my life has not been as an investor, has been as an entrepreneur. And I know how it’s really encouraging when you’ve got somebody alongside strapped in mass with you. Just like I’m in it with you. And I’m nothing about exit, but it also makes me think about the role that venture capital plays in. I’d be remiss if I didn’t talk about that with two guys who spent a lot more time in venture capital than I. But I think that there’s maybe an occasion, I think particularly in both. Have you made significant investments overseas in emerging markets? John, you’re living that out right now. But as I think about deploying capital overseas in places like East Africa where they need startup capital, and you look at and say, gosh, there’s a generation right now of entrepreneurs that need capital, but this can be another generation of entrepreneurs who get a new capital seven or eight years. So if I have a certain amount of money to invest, if I invest in these people and it’s tied up for 30 years or 40 years, then I’m not able to invest in the next generation. But it strikes me that you won’t invite those entrepreneurs into this partnership. Like, here’s the money Amen invest in you. And to be clear, my model dictates that I don’t need to get this money back out six or seven years. I get a 10 year fund because you’re going to participate. The returns that you have are going to be part of what provides the startup capital for the next generation of faith driven investor in Nairobi. That’s why I’m looking for an exit, because we want to continue to invest in. And you going to be a part of that story before we completely and I want to get back to permanent capital to be clear it, before we completely dismiss all of venture capital in its redemptive purpose. Do you want to either you want to riff on that and comment on that?

Tom Blaisdell: Absolutely. Henry, and you’re exactly right about the role. Venture capital plays a very specific role. Right. And if you think about it in the typical sense, you’re putting that venture. It’s venture money. It’s very risky money at a very early time, at a point where that company’s going to be growing like crazy. In fact, there’s a metric out there for SAS companies. Software’s a service company right now, which is a triple, triple, double, double, double. Right. So in the first two years, you triple your revenue and then after that, you’re doubling your revenue. These are amazing growth rates, right? So say you do a million dollars and you’re supposed to do three million dollars, which was nine million dollars and 80 million and 36 million and seventy two million dollars. That is a rocket ship, right? A rocket ship takes a different kind of fuel. And that fuel is the venture capital because they’re investing in these hits misses. And some of those rock chips are going to get, you know, escape velocity and go into orbit and be amazing. And a lot of you are going to blow up on the launchpad. And so you’re invested in that super risky period of the company, which is that first 10 years and really more like the first three to five years of the company. Right. So that’s the role of venture capital. If you sort of zoom out, though. Venture capital is only a appropriate fuel for a tiny segment of all the companies that are going to get started in the world. Right. So every thousand companies that get start, including the local bagel shop or a car wash or a paving company, they don’t need venture capital. Right. So already we’re talking about out of 1000 companies, one of them needing venture cap. Now, within that world are the same people, again, as I had defined as these mission driven opener’s building, multi decade or multigenerational companies. And maybe they’re trying to build it on a more sustainable path. They’re not going to do the triple, triple, double, double, double, but they’re going to try and get profitable sooner. There’s something called the Evergreen Journal, which has specifically been de Borten is building this community of evergreen businesses that are, you know, sort of safe and sane, profitable growth businesses.

And that’s a terrific, different way to go. And then I’ll finally just fall back on the fact what I said at the top of being a capital allocator versus an investor. It’s hard. So I came out, you know, bright eyed, bushy tailed, come out of the academic world. I’m going to go to permanent capital. Right. William And the next thing I know, I’ve got three or four angel investments in a series seed going out to raise the series A, Series B, you know, it’s who I am. It’s where I live. It’s the network I have. It’s the model that I know works. And, you know, obviously, we’re very important Vestas to have in that ecosystem as well. And to have at least one investor on your cap table who’s able and you know this very well from sovereigns cap. And even just having one mission driven, faith driven investor in your cap table is a huge encouragement to the CEOs. I’m still working at this coal face. Henry of. We get more of that permanent capital to actually, you know, extend out to more of those companies that aren’t the traditional targets gonna triple, triple, double, double.

Henry Kaestner: Makes me think about something from in and out burger, like a menu item before we come back into permanent capital. From your perspective to what you see as the redemptive purpose of venture capital.

John Denniston: Yeah, I think that the question of redemptive verse is venture capital. They’re both good. So venture capital has provided the fuel for a great many discoveries and innovations that have done good in the world.

A great many. Now, there’s a current debate about is all of that good?

I don’t want to get into that, but you can read about that every single week or day in the newspaper. Get into it. So what did the focus on hypergrowth. Is very good and helpful. Or if it’s just.

Well, the purpose of the company to begin with and its method and its integrity and and and and all of that. All of that, you can read about it. I’m not taking a side much, but, you know, so. Yeah, sure. Is hypergrowth required? Are there different ways to go about growth that, you know, all of that. But it’s a hard growth, but also what’s the purpose of the company? And redemptive companies are declaring some of them a dual purpose. Financial return. Yes. But also redemptive return through their imagination. A dual purpose.

Henry Kaestner: Tell us about that redemptive and mental purpose that you’ve got it shared. We didn’t spend a lot of time at the outset talking about that. But what of your last five years been? Was it look like as you’ve sought to provide investors that have come along side? And just in a quick disclaimer. We’ve done some convincing to get go done some co-investor together with Tom as well. And we are a shareholder and shared ex and one and without having an exit in mind. But talk to us about the five years that you’ve had and what share tax does is you blend the redemptive purpose and the financial purpose.

Was it look like. Yeah, well, first and Rick, thank you for your confidence and faith in us. And actually, let me just riff off of that. One of the great joys over the past five years has been just the great, amazing set of impact, faith based other investors that are looking to do this, to looking to do this. And so we have investors from North America, South America, Europe and Asia. A lot of different categories, including faith based. And it’s been marvelous, really just one of the great parts of deciding to embark on this adventure. So here’s the Shattuck’s. We’ve designed what we call an inherent impact business model, which is to say that the financial model that we have designed inherently produces impact in lifting smallholder farmers or deploying regenerative responsible farming methods. And correspondingly, the fact that we are doing good in the world itself brings financial benefit because the market wants more of that. It’s in the data. Consumer markets, work or markets.

Capital markets are all there’s this triple up shift and demand curves for purpose, and it’s gone largely unseen under cover of darkness over the past five or 10 years. And so companies that decide in an authentic way to come in to combining the two have a very good surprise in front of them, which is they’re going to be embraced to some degree by the triple up shift in those demand curves. So the question that I want a bridge off that a little bit, when you find investment vehicles like yours and others that have a redemptive purpose in them and where somebody can be brought into the mission. Do you ever see a danger with capital sources coming in and possibly distorting the market? Give me an example. Company comes out and there’s some redemptive part of what they’re doing. And it’s a feel good story. They’re providing employment or they’re feeding people and because of their redemptive purpose on the economic side. So maybe they’re doing a million dollars of top line. Maybe they’re going at 20 percent and they come out and they say, well, we’re going to raise two million dollars and we do that at thirty five million primary valuation. That would seem to be at odds with where they are in terms of their numbers. But it’s a really good story. People love the impact they’re making. Do you see any danger there? How do you think about pricing those deals? It’s a lot of the people they can be listening to. This is like I get it. I get it. I’m listening in favor of an investor podcast motivated by my faith. I want to see a redemptive edge in what I’m doing. But I also want to still be a really good investor. And how do I think about valuing these companies at the entry point? I get what you’re saying in this episode of the podcast you’re talking about. Let’s not focus so much on the exit, but how do I think about the entry and how do I provide counsel to the entrepreneur about the right entrance valuation riff on that bit?

Sure. Short answer is the market determines that. And.

Henry Kaestner: Lynette, but so the market determines that at a particular time, so if a company is raising a million dollars and you’re saying I’m going to raise 20000 kids from five different people in your practice, have you ever seen a situation where they are able to raise money at an out of market valuation that then hurts them longer term, that it took them too long to grow into that valuation?

John Denniston: I’m sure that happens. I’m sure that happens as it does in the venture capital world. I’m sure it does. And so, yeah, just that put a risk if, you know, there’s a down round and that company’s future. Definitely. So that poses a risk for both conventional and a redemptive company. And I’m very sure that happens.

Henry Kaestner: Yeah. Tom, talk to us about entrance valuations, whether it’s in venture capital, but then especially in permanent capital, when you find a business that’s aligned on impact, but because they’re not so much focused on, hey, here’s how you’re going to get triple your money back in four years, we’re gonna be building this for long term. How do you think about entrance valuations?

Tom Blaisdell: Yeah, I think the term that comes up all the time is concessionary returns. Right. Are you willing to accept a concessionary return? So if a venture capital investment supposed to return 20 to 30 percent IRR, you know, on average, should you be willing to suggest that, you know, you’ll do 15 percent or 10 percent?

Tom Blaisdell: And is that okay? It’s so case dependent. And I think this also gets to, you know, how many people have to come around the table. If you have a pool of Perman capital and you can go in and you can fund the series A and B and the C and keep pure people around the table, then this becomes much less important. Right. It’s just we all decide how much equity needs to be in the hands of the employees and how much equity needs to be enhancing investors. Once you start getting multiple entities around the table, that’s where the alignment issues really start to perk up. I think this is also. And again, this is why William Perman capital isn’t the answer to all the problems right now, because while there’s a lot of permanent capital out there, there really is. It’s not in structures that are very easy for entrepreneurs to tap into. And I know that’s probably one question I want to talk about is where can you go find this permanent capital? But I think one thing, if you think of one source of Perman capital, especially in the faith driven investor movement, it’s going to come from family offices. Right. Family foundations, family endowments, high net worth individuals. And those people need to be more active in aligning, you know, the why of how their money is being invested. There’s a general problem in economics and investing called the principal agent problem. Right. Which is that the principal, who’s the one who’s putting up the money and the agent who say is the general partner in the fund have different incentives. Right. In terms of like how quickly they put out the money, how much they charge for fees, how quickly they sell the company and, you know, decisions they might make internal to the company about sharing the wealth with employees and how they treat their communities and things like that. So there’s a principal agent problem. I actually see that sort of expanding into a principal agent, agent, agent, agent problem, which is, you know, you have the high net worth individual who has the estate planner, who hires a money manager, who puts it into a fund of funds, who puts it into a venture capital fund, who hands it to a general partner. You now have five agents in that chain who are all making different alignment choices. So, Henry, when you said his venture capital, good or bad, I think that all too easy answer is it’s very simple for venture capital to be a moral right. It’s just it’s neither good or bad. This is what it is. And normally what’s said when the money is given is maximize my value, maximize the return on my investment within the bounds of legality.

That’s the guardrails. Don’t break any laws, but otherwise maximize my return.

That’s how you know, clearly something like Jewel, the vaping company, can get funded and can make a ton of money for investors. And it’s within the guardrails. It’s legal. But is that what that principle? All the way back at the beginning, that change is now with the principal wanted to do. And that’s why I think the principals are the ones that have to take the responsibility or to pull that chain back in and say, I want to be in direct communication with the agent, whether that’s Henry and William, sovereign’s capital or somewhere else.

And I want to make sure we’re on the same page about where our guardrails are, which are gonna be different than what the guardrails of society at large are.

Henry Kaestner: That has got to be an episode on podcasts. We’ve got to unpack that. The principal agent, agent, agent. Do you think about some of the the very large venture capital funds that have been known for saying you want to know what our investment thesis is and how we invested seven deadly. You want to know why we made investment? Jordache. That’s easy. SLOSSON Gluttony. Well, it did. All the LP is all the people who provide that money behind the investment. Did they know that or is that a victim of this whole principle agent, agent, agent thing? There’s a lot there. We need to come back to that.

Tom Blaisdell: I think the people listening to your podcasts here are interested in having their capital solving problems that matter to God. And if you’re listening to this podcast and you care about your capital, you’re stewarding, working to solve problems that matter to God. You’re going to get closer to the agents that you’re working with to make sure that’s happening.

William Norvell: That’s a great point, Tom. And yeah, it’s a great lead on. It’s the same in the public markets, right? You give either through a money manager or either through an ETF or most people have no idea what their money is in. And there’s people out there trying to solve that problem to at some level. But it’s a similar issue that I think God obviously all of us here agree. I think they got cares about that right. At some level. Probably each of us have different levels of where we think that matters. But so we did open a big topic. We had 45 minutes to get through permanent capital. How it impacts entrepreneurs, the pros, the cons. It’s a huge idea. I’ve really just thank you both for doing that with us. I would encourage anyone to read Tom’s paper. I think it does a great job in three to four pages of talking about the pros and cons, transaction costs and return thresholds and and all these different things that come about the structure and a really eloquent way. So I know we’ll link to that. And as we wrap up, one of our favorite things to do is connect our listeners to our guest through the word of God. And so if you wouldn’t mind sharing a quick bit on maybe where God has you in his word, that could be this morning. Something you read or heard. It could be a season that maybe God has you in meditating on a specific verse or story. Can any of those things we loved know what God’s word is and how it’s coming alive to you during this time today?

John Denniston: Yeah. Thank you, William, for me. I recently have been reflecting quite a bit on Matthew 13. The parable of the sower and the seed that falls on good soil yields one hundred sixty thirty fold. And so for me, I think spiritually seeing that in a new and fresh light. But also, this is true of a great number of Jesus parables based on agriculture, farming, because people could understand it. So, I mean, and actually a shirt ex were working on yield enhancement as one of the things that we do. So, yeah. Matthew 13, the parable of the Sower. Good word.

Tom Blaisdell: We recently just wrapped up an eight week sermon series actually stretching all the way back to Easter on Hope, which was really terrific and so timely for so many reasons. Just a timestamp. This we’re in month five of the pandemic, the Cauvin pandemic now. And in California, we just went back into a more tighter form of lockdown.

One of the key learnings for me in that series was that in Jesus’s day, hope would have been considered a character flaw, wishful thinking, by most of the mainstream religions and philosophies of the day. But the burse that we keyed on throughout the entire series was Romans 15, 13, made the God of hope fill you with all joy and peace as you trust in him so that you may overflow with hope by the power of the Holy Spirit. So Paul is calling God the God of hope. For Christians, hope is a virtue, not a flaw. It’s a feature, not a bug. And so hope is very different from optimism, of course. Optimism is just the expectation that things are going to turn out well. Hope, as explained in the sermon series, is a combination of imagination, desire and importantly, belief. Its trust in God. Right. And so Psalm 27, some trust in chariots and some in horses. But we trust in the name of the Lord, our God. When your revenue goes down 97 percent. Who do you trust and where is your trust? Where’s your hope? Right. It’s not in your bank balance. Not your contingency plan. It’s not your all star board or your reseize. Nobody can or should have had a business contingency plan for this kind of havoc that’s going on in the market right now. It doesn’t matter whether you’re an ant or a grasshopper all summer. Right. When your business literally goes to zero or all night, whether you were putting away stuff or whether you were playing, when your revenue goes to zero, it doesn’t matter. So where is your hope? And so the path is it’s been speaking to me is Isaiah 40 31, which says that those who hope in the Lord will renew their strength, they will soar on wings like eagles. They will run and not grow weary. They will walk and not be faint. We’ve been called to a mission that’s much greater than our personal comfort or sustainability. And so, again, I just close with don’t put faith driven investing in the too hard pile. Invest in just causes. Because it’s our joy to do this work together.

Henry Kaestner: That’s a great word, guys. I’m very grateful. Pray to you. Thank you for spending time. Thank you for your leadership in the movement. Thank you for being with us today.

Tom Blaisdell: Thank you so much. And Ray, William, Tom, thank you so much.

Henry Kaestner: As we finish up, we like to spotlight a ministry that is locking arms with our listeners. We know that many listening to the show are business owners and entrepreneurs looking to live out your faith in the marketplace. So this week, we want to make sure everyone knows about the faith driven entrepreneur. It’s a weekly podcast, a monthly newsletter, a daily blog, along with other video Bible studies and events that help you get provisioned for. Journey you are on. Check it out at Faith Driven Entrepreneur, dawg.

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Kingdom Advisors is setting the standard for what it means to be a Christian financial advisor. They provide encouraging content and community that is building up the collective body of believers, and we’re so glad to point you to their work today. 

Rob West is the President of Kingdom Advisors and in addition to sharing their origin story and mission, he shared interesting insights into specific investment vehicles that Faith Driven Investors should know about. Check it out today…

Episode Transcript

*Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDE movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

Henry Kaestner: Rob, it’s awesome to have you on the show, thank you for joining us, Henry, so glad to be with you. This is super cool for me because, you know, you’ve done and to be clear, we haven’t done very many of these across Faith Driven Entrepreneur and feature an investor, but it’s infrequent that I find somebody who is a guess who’s done infinitely more of these than we have. And you’re a radio guy and you’ve done this a long time. And I got to tell you, it’s a little intimidating to talk to a guy who’s actually a radio host and interviewing him.

Rob West: Well, with podcasting these days, just about everyone is doing this kind of thing. So you’re right, though. I do host a radio program every afternoon, but I’ve really been looking forward to this conversation and so excited about the work of faith driven investor.

Henry Kaestner: Well, thank you for joining us. So I know a lot of our listeners and we’ve heard this feedback already. A lot of our listeners are financial advisors. A lot of our listeners are their clients, but a lot of people who have as a profession to help people understand how to steward the wealth that’s been entrusted to them. So this is a big deal for us to hear from you today. But to start talk to us about this program that you’ve got and the platform that you have. And what is Kingdome Advisors?

Rob West: Yeah, well, I appreciate that question, Henry, and, you know, I would start by saying King of Advisors is really leading what we call an industry of Christian financial advice. We have the privilege of serving about thirty one hundred Christian financial advisors in the U.S. and Canada. Really one of the main objectives there is to provide advocacy for these advisors who we like to say are specialists in bringing biblical wisdom to bear alongside competent financial advice.

We also issue a designation, as you know, Henry certified Kingdome advisor, which is really positioned in the market as the gold standard for biblically wise financial advice among believers and those who want to align their faith with their financial decisions at a professional level. We also provide community for these financial advisors through more than 250 study groups that meet in the US and Canada. These are small groups of advisors and right now they are happening virtually, even though typically they would be mainly in-person meetings. We do an annual conference every year, which we say is the industry gathering. And we could talk about that a little later in our time together today. And then, of course, we offer training and tools where we deliver a step by step process for advisors who want to be confident in bringing this biblical financial advice to their clients. And then to your earlier mention of the radio program, we also have another ministry under Kingdome Advisors called Money Wise and Money Wise. Media is really our ministry where we share these principles with the public through our nationally syndicated radio programs. We’re reaching about a million Christians a week and then many more through the podcast.

Henry Kaestner: OK, so I want to ask a lot of that, but I want to start with the Origin story. So Kingdome Advisors has obviously been around for a while. If you’ve got thirty one hundred people coming to that annual event, by the way, I’ve been at some of your events there worldclass. Tell us about how it all got started.

Rob West: Yeah, well, so we’d have to go back to nineteen ninety seven, Larry Birkhead, the late Larry Birkhead, who’s most well known for the books that he wrote, he had a radio program that was probably one of the first in the space of about a thousand radio outlets. And Larry brought together 16 Christian financial professionals and they formed what was called the Christian Financial Planning Institute with a commitment to delivering biblically wise financial advice. Well, fast forward a number of years and really they expanded their vision to create a new organization that would really be responsible for taking the lead and reaching the Christian financial professional community. So at the time, they reached out to Ron Blue, who’s a friend of yours and mine. And Ron, of course, an author, was the founder and is the founder of Rodell Blue and Company. Ron had built what is today still the largest Christian financial planning and wealth management firm anywhere, and with about 90 advisors at the time, the certainly larger now they were helping Henry. Many Christian families steward their resources. But what was fascinating was their clients were giving away tens of millions of dollars annually to Kingdome causes. And I think the reason really was that these advisors had a real sense of calling the Praxis was their ministry. They saw it that way. There was tremendous cultural reinforcement, if you will, within the organization. And they demonstrated that biblical financial wisdom worked at a professional level. And of course, it would, because it comes right out of God’s word. Well, Larry, and these 16 advisors approached Ron and asked him to take over as CEO of what would later become Kingdome Advisors with this expanded vision. And really the rest is history. We now have these 30, 100 advisors that we serve and the organization is really growing significantly.

Henry Kaestner: Salamat understand the difference. So you’re your customer.

You’re somebody who’s been entrusted with wealth at any level that’s listening to this and you’re trying to figure out what does a Christian financial advisor give me their second wouldn’t. So presumably a secular financial advisor wants to help you plan for retirement and college planning and things. You might need a medical emergency. How is that different from a Christian perspective?

Rob West: Yeah, and we serve really financial professionals in one of five disciplines, if you will. So the financial planners, the investment professionals, but also CPAs and accountants, also insurance folks and then finally estate planning attorneys. But you would expect from every adviser, of course, experience, integrity, competence, and we measure all of those for our designation. We have an experience requirement and they have to abide by a code of ethics and the statement of faith. And we require pastor and client references and regulatory review and the like. But really, to your question, you know, I think I can read the difference from their secular counterpart is in the ability to bring advice that aligns with the values and priorities of Christians know there are real planning differentiators.

When you lay a biblical worldview on top of financial decision making, it changes how you approach accumulation and lifestyle and legacy and wealth transfer and generosity. And to our conversation today, investing as well.

So an advisor who understands the heart of God related to money through the more than 2000 verses on the subject, in God’s word. Well, he or she can ask different questions and really assist the client in being a faithful steward of all that God has entrusted to them. You know, I think the other difference, though, Henry, is that a certified Kingdome adviser, somebody who’s really a specialist in this area, understands that money issues are ultimately heart issues. We talked about, Larry Briquette really founding the Christian Financial Planning Institute, which later became CSPI. Larry used to say that the way we handle money is the clearest indicator into what’s going on in our lives spiritually. It says where we placed our trust, it says what we value. And if something is going to dethrone God from first position in our lives, it’s most often going to be money. So I believe the Christian advisor really can help clients hold what they have loosely understand that their financial journey in many ways shapes their spiritual journey and really underscore Henry the importance of giving generously.

Henry Kaestner: So you mentioned something along the way I thought is really important in the 2000 verses to talk about money and investing in the Bible. And I would imagine that one of the greatest challenges that any financial advisor has is in working with a couple, a husband and a wife who may have different views of money. And if you’re just looking at a secular perspective with kind of a, you know, a relative truth perspective, it may be very difficult to be able to bring a couple together around how to think about how to steward money or how to think about generosity, et cetera. But it’s got to be really helpful for that financial adviser to say, listen, you know, one of. This brings us together is this belief that there’s a God who loves us and that he has this handbook, if you will, handbook is not the right way to probably talk about the word of God. But nonetheless, there’s this great scriptural reference to help you as a couple to process through things like generosity and wealth over the generations, et cetera. To that extent, I suppose maybe it’s easier for Christian financial advisor to help people.

Rob West: Yes, well, I think you’re exactly right, and especially right now, through the times in which we find ourselves in the midst of a pandemic, I think advisors and clients alike want to know that they’re receiving advice. They’re delivering advice that’s rooted in something transcendent, that it’s bigger than them. And as Ron Blue likes to say, you know, biblical wisdom is always right. It’s always relevant. It’s never going to change. And we know that’s true. But you bring up a really key point here. And that is as to the couple, you know, this is really critical. We’re big fans of the work of Jeff and Shante Feldheim, who just completed a three year long study on men, women and money and wrote a book about it. And we just I interviewed Shauntay a couple of weeks ago on it. And, you know, she was uncovering this idea that 70 percent of married couples have real difficulty communicating about money. And one of the top reasons for it is there’s a misalignment or a misunderstanding of how their values connect to their money. And so this is really the opportunity for the advisor. And I would say even more so for the Christian advisor to be able to lean into that and say, let’s work together, husband and wife, on uncovering your values. What’s important to you? And how can money as a tool be used as an expression of those values? And that brings them together instead of driving a wedge in the relationship?

Henry Kaestner: Yeah, it’s powerful. I’m completely with you, especially in the context of giving how much is enough? What’s our finish line starting with that? And then, of course, from then so many other things come in tax planning and succession planning and how much to for the kids, etc.. Let’s get back to you. Talked about Ron being a key part of picking up the mantle from Larry Birkhead. We’re huge fans around here. You mentioned he’s a friend. He’s been a great adviser to us for the last dozen or so years. And pretty much anything that I’ve done and I know continues to be integral in the work that you guys do, a kind of advisers. How is his influence affected you? And just, you know, perspective a guy that’s been doing this for 50 plus years, the larger faith driven investor movement, and it doesn’t sound like he’s slowing down.

Rob West: No, no, it’s it’s amazing. He’s actually busier than ever, doing really important work through the round words do, but still very heavily involved in Kingdome advisors and the work that we do and as a monthly contributor to money wise and money wise radio programs as well. I don’t know how he does what he does to his influence on me personally, Henry. I would just say he’s been one of the most significant mentors in my life. So Howard Dayton is another giant of the faith. And Ron Blue, it’s just been incredible that the Lord has allowed them to speak into my life in the ways that they have. Ron’s an amazing visionary. I’ve learned so much from him on that. I think probably the most significant thing that has stood out to me about his life is just the integrity with which he has conducted himself and his ministry over the decades. He is who he says he is, and he’s the same guy, whether he’s on the stage or he’s at home with his wife, Judy. So he is just an amazing man, that God is used in significant ways and continues to. But his influence on this space has been enormous. He, I would say, is the founder of Christian Financial Planning. You know, his work to pioneer the delivery of biblical financial advice at the professional level is really the foundation for all of the training we do today. Kingdome Advisors. Although Ron’s work was really focused in the planning areas, he was really clear from the very beginning that this idea of faith based investing was really a conviction or a conscience matter that Christians needed to wrestle with. And I really think that as the faith driven investment space matures with now so many world class investment solutions being created that are uniquely designed for the Christian advisor and ultimately investor, there’s a true industry of Christian financial advice for these investments to live within. That is a direct result of Ron and his work ethic.

Henry Kaestner: So tell me more about the you mentioned in industry. So it’s much more than just a conference. There’s actually there’s many aspects to it. You talked before about five different kind of professionals that come in from attorneys all the way through. Tell us more about this growing industry.

Rob West: Yeah, well, it’s really one of the most exciting things that has come out of our work at Kingdome Advisors in the last five years. Henry, we’re just thrilled that there now exists today a true industry of Christian financial advice. And you would think about it, as you could call it, a specialty. But we really refer to it as an industry because there’s so many different pieces and parts of it. Of course, it’s a subset of the larger financial services industry and some of the components we’ve now got. Fifteen hundred certified Kingdome advisors. So we’ve got these thirty, thirty, one hundred members of Kingdome Advisors we serve more than fifteen hundred have earned the designation to be held out to the public last year. Forty eight. And Christians searched for a local certified kingdom adviser to connect with in their community, and so there’s a growing demand on the part of Christians for this, datelined advice and investment solutions. Fifty firms have now approved certified kingdom adviser. And if you know anything about what’s happening in designations in the financial services industry, there’s less and less of them that are being recognized. And so the fact that 50 firms, including some of the biggest firms up and down Wall Street, having approved for use and some of those major firms even approving Scriptura to be used in financial plans by these advisors is just a huge step forward.

You know, we’re seeing significant coverage of the Christian financial industry in the financial media. So we’ve been featured in The Wall Street Journal and Financial Planning magazine and FDE magazine. I mean, it’s Yahoo! Finance. You know, there’s a real interest in what’s happening across this space.

One of the most exciting pieces of this industry, Henry, that’s taken off in the last several years because of the work at not only Kingdome Advisors, but the ROMBA Institute is the number of Christian universities that are now bringing this training into their financial planning degree programs so they can train up and graduate future financial advisors that are ready to enter this business as a specialist and then biblically wise financial advice. And so we’re thrilled about that. And then I could point to many more evidences. But the last one I’ll mention is just, I think, directly related to our conversation today. And that is just the incredible number of investment solutions that are being created, uniquely suited for the Christian advisor in this whole faith driven investing space that are just such high quality investments and the growing number of them, even just in the last couple of years. I think it’s just real evidence of what’s taking off in front of us.

Henry Kaestner: So tell us a little bit more about some of the things that you’ve seen. What are some of the new funds that are out there, the new vehicles?

Rob West: Well, you know, one of the things that’s been helpful for us is to really think about these faith based investments in three categories. And so there would be, of course, the investments where we embrace certain things. So we’re screening in companies that have either a social or Kingdome impact. Perhaps you can call it a triple bottom line in some cases where, you know, looking through the investments and options out there and these, you know, investments are then bringing in companies that really are making a difference in the world. And, you know, there’s a growing number of those in both ETFs and, you know, private equity and mutual fund and obviously individual investments as well. Then in the second category of avoid, obviously, the growth in this area of the screening tools that are available and the number of growing solutions that are available to advisors who their clients really want to make sure that they leave out those companies that would in some way conflict with their values and priorities. And then this whole idea of shareholder engagement engages that third category. And it’s really been fun to see just a growing number of investments and firms that are really helping their clients, who are owners in companies, engage companies around their values and let their values be known and to see some of the differences that are being made as a result of that. And then just the quality of these investments that are winning industry awards and being recognized for not only just being high quality, but having stellar performance. You know, we didn’t see the number of investments, certainly not the quality of the investments that exist today, even just a couple of years ago. And so I think it’s really a new day for advisors who want to lean into the space with their clients.

Henry Kaestner: So I know it’s probably awkward for you because you represent this larger industry to single out any particular mutual funds or mutual fund families. And so I’m not going to put you on the spot for that. But I know of several. And and this is absolutely something for somebody to listen to his podcast to be able to talk through with their financial professional. It doesn’t take much research to find some of the ones that are great tortas about. You mentioned private equity. Traditionally, we think about some of the brokers that I used to back in the early 90s, worked at Merrill Lynch. So some of the wire houses are able to offer certain products that may be different than some of the independent financial planners and some of the independent financial planners may have access to be able to present some things with a little bit more latitude and maybe some wire houses. Like, for instance, I’m thinking now about some of the new investment opportunities that are going on in Eastern Europe, where there is investment in things that are bringing about God’s kingdom in Eastern Europe or in Africa. I think maybe about a couple that might come back from a missions trip to Rwanda and having encountered just really compelling entrepreneur, that’s got a great opportunity for agricultural investing. Tell us about the nuance or the different levels of the industry and where some advisers can get involved in some things and maybe some other ones can.

Rob West: Well, you’re exactly right. It really is going to depend on what type of firm they have, how they’re registered, what firm they work for, or whether they are truly independent as a registered investment advisor. So obviously, those that work at firehouses are going to have certain constraints as to the types of investments that are approved for use with their clients. Obviously still a plethora of solutions, all that they need to serve their clients well, including in this area of faith based investing among the big firms. And that’s one of the things that we’re so excited about as this industry continues to grow, is the number of really household name warehouses that are proving C.K. and allowing these faith based investment solutions to exist on their platform. But when you get into some of these private equity deals and you get into investments that are unregistered or require you to be accredited, you know, obviously those are going to be reserved in most cases for an independent advisor, either who has a broker dealer who’s willing to allow these solutions to be used or whether they’re truly just an RIAA making their own decisions, using a custodian, but ultimately able to then, you know, use and have access to a greater variety of unregistered securities, of course, for the right type of investor that meets a certain minimum net worth and so forth. So depending upon where the advisor is in this industry, he or she may or may not have access to the types of investments that you’re talking about. But clearly, there is a trend toward independent in the industry, which would mean simply that a growing number of advisors would have access even to the type of exciting things that you’re describing.

Henry Kaestner: So a couple of things come up for that. But first of all, I ask is on the SEC side, you’ve got 1500 now. Presumably there’s a place on the King of Advisors website where you can go and you can find out how you can find somebody.

Rob West: Absolutely. Both that kingdom advisors, dotcom and money wise, ERG. Like I said, just shy of 50000 Christians search for a certified Kingdome adviser in their city last year, and we’re seeing similar numbers this year.

Henry Kaestner: OK. And on that site, you’ve got a section that’s dedicated to biblically based response to market turmoil. Titus, through that a little bit, it’s been a crazy time. And what are some of the things that somebody might find on that section?

Rob West: Yeah, we are really excited to be able to put that together in response to covid-19. We just knew that it was a unique season for advisors and the clients that they serve. And so they went through kind of this triage phase, as so many advisors did in the early days of that with the incredible market gyrations, just needing to contact advisors or clients. And, you know, one of the real challenges of this particular crisis was that in other times of crisis, you know, we would come together in community to process it. Know, I remember right after 9/11 going over to my parents house and meeting my siblings there, and we just kind of all sat around and debriefed. And, you know, one of the real challenges here in the early days of covid and now to some degree still today was that people were isolated. And so it just created, you know, the fear really led to a rational thinking and behavior. And so much of that, you know, was realized in the form of irrational decision making in their finances. So these advisors were just really trying to come alongside their clients and triage the situation. And now they’ve kind of settled into a new normal, if you will, you know, with lots of meetings and just reacting and responding to what’s going on around them. But we created this resource that king of advisors, Dotcom’s covid-19, where we wanted to offer just spiritual encouragement to these advisors. That’s a big part of what we do for this community that we serve to bring industry thought leaders to the table. That could just be a real source of trusted counsel and insights. And then really in this third area, help them navigate client conversations as they really bring to bear this time tested wisdom into the conversation and help them lean into this role in which they serve as counselor or coach, you might say.

Henry Kaestner: So what’s it like for a Christian financial advisor in a time like this? covid is meaning that you can’t get together and look at a bunch of charts together with your clients. I imagine that some part of that makes it more efficient, but some part of that makes it less relational. What are you hearing from the folks you serve?

Rob West: Yeah, a couple of things. I mean, just from a real practical sense, obviously, as in just about every other industry, there’s just a lot happening virtually through video conference. And so, you know, we’ve heard from some advisors that are building Zoome studios in their offices and thinking about how do we create a unique experience, everything from the audio quality to the lighting to, you know, how do we engage?

Because that’s probably one of these. Changes that’s going to stick where there’s some segment of the client base that is going to want to choose that option to meet, you know, moving forward and a greater percentage. And so that’s just one of the practical sides of it, obviously just managing through it as they have a remote workforce and just all the implications related to that. But then I think, Henry, as it relates to just the way in which they serve their clients, you know, we talk at King and Advisors about the four roles of an adviser, that of adviser, of course, that of leader, that of counselor, coach, and then finally disciple maker. And I think there are unique opportunities in each of those during this season. I mean, certainly as an advisor, I think one of the greatest things they can bring is just perspective, reminding them that God is in control and that he cares for them and that he is their provider and just kind of putting all of this uncertainty and unrest in a proper perspective, I think in the area of leader just bringing that biblical financial truth, that transcendent wisdom that transcends time and tax codes and markets and all of it, and really just reminding them of those bedrock principles, if you will, in the area of Councilor Koch. I think there’s a unique opportunity for these Kingdome advisors to listen, to acknowledge the feelings of their clients, to help them process the fear that they have. And I think, you know, for many of their clients to replace that with faith and really just lean in to that unique opportunity. And then finally, the opportunity for disciple maker just to really kind of help them process this on their own spiritual journey. So there’s a unique opportunity, I think, here. And so many of our advisors are encouraged just really about the doors that the Lord is opening, even just in the area of prayer, just as they find this as a season where they can pray more regularly with their clients, perhaps, than they have previously now.

Henry Kaestner: So you guys are known for an incredible gathering. I mentioned it before. It happens in Orlando each year. And you’ve got a number of other gatherings, some of which I’ve been to one in Nashville last year was outstanding. You introduced me to the world of Matamoras music and saw forever be grateful. I was outstanding. What does it look like for you all this year as you’re doing gatherings, or are you also moving to them? What are you going to do in Orlando?

Rob West: Yeah, so great question. And we obviously are doing a lot of things virtually. We have a remote workforce right now. So our team at Kingdome Advisors and money wise are all working from home with the exception of just the daily radio broadcast and a team of producers and coast graders and engineers that make that happen. But everybody else is working from home.

And so there’s just a real practical reality of how we’re working as a team, but it affects how we serve our members as well. Fortunately, the certified Kingdome advisor educational program that we offer, which is the training prerequisite for the Kingdom Advisor designation, which is a 50 hour program, is an online program offered through Liberty University, Indiana Wesleyan University. So those cohorts continue to go on on a self-paced basis and are instructional mentors, are working with them remotely, as they always have. I mentioned these 250 study groups that we offer around the U.S. and Canada. These are small groups of advisors that come together every month around original content that we produce in our studio and send out or stream. And they usually meet in person and around a 90 minute meeting to watch and discuss the material. Well, that’s all happening virtually. So that’s obviously a big change. And then, yes, this big annual gathering we do we were expecting between 1800 and 2000 Christian financial advisors in Orlando next February. And because of covid and the social distancing, we had to make the decision this summer. And we’ve just actually recently announced this publicly, that we’re actually moving to a virtual event this coming February. So our 20 21 conference will be an online experience, but it’s going to be anything other than perhaps what you have in your mind when you think of an online conference. It’s going to be the best of what Kingdome Advisors brings to the table. And this really is one of our unique competencies to create remarkable moments and really to deliver a world class conference. It’s going to be the best of what we deliver, but in the most accessible format ever. And so we’re actually really excited about it. We’re going to be planning for every bit of eight months. We’re going to be the best speaker lineup we’ve ever had. There’s going to be ways for this growing number and we think will be between three and four thousand advisors that will participate in it to search on a very granular basis for other advisors that have similar interests or practice types and connect with them. It’ll have the largest virtual exhibit hall we’ve ever had. There will be interaction with all the breakout speakers live. There’ll be a real engagement opportunities and a variety of other areas worship. So it’s going to be great. And I think, Henry, as much as we love to be together each year and we. Can’t wait to be back together in person in the future with the industry. Christian advice, we think this is a unique season for 20 21 to actually through this virtual conference to expose many, many more advisers to this industry than we ever have before, because there’s a certain number that just have never taken the trip to Orlando. And once they get there and experience it, they always come back. But until they experience it, it’s really hard to describe it. So I think we could really exponentially grow this community this year through this virtual gathering that’ll happen February 17th through the 19th of 2021 was that it comes up we want to do our part, making sure people know about it.

Henry Kaestner: Rob, one of the things we like to ask any one of our guests on any one of our programs is what you’re hearing from God personally and his word. Maybe it’s in a study group. Maybe it’s with your wife, maybe this morning. But what’s something that you’re hearing from God speak to you about from the Bible?

Rob West: Yeah, I appreciate you asking. You know, I’ve been studying recently the book of Mark and the Gospel of Mark. And, you know, this particular thing that just jumped off the page to me recently, Henry, I think relates directly to what we’re talking about here today. And it won’t be unfamiliar to you. It’s Mark four and it’s the parable of the solar. And what’s fascinating to me is just, you know, when the disciples are questioning Jesus around really the implications of this story that he’s just told about this parable of the sower, and they wanted to know what these various soils represented. And, you know, when he describes what choked out the word from burying a 30 60 hundredfold return in the soldiers lives, he says that it’s the worries of this life, the deceitfulness of wealth and the desires for other things. And I think that’s just so fascinating, because if you go back to what I was saying earlier at the kind of the beginning of our time together is that, you know, the love of money has the potential to be one of the most common things that will dethrone God from first position in our lives. And I think that’s exactly what this passage in Parable is speaking to, is that the worries of this life, the deceitfulness of wealth and the desires for other things, which probably is going to in many cases be material possessions, that has the potential to choke out the word from bearing fruit in our lives. And so God has just really been impressing upon me the unique opportunity we have to think differently about what God has entrusted to us. And I think that really underscores, if you will, the opportunity of the Christian advisor as well.

Henry Kaestner: That’s a great word and a great one to end on. Rob, thank you very much for joining the program, looking for the next time we get together. And it sounds like we’ll have an opportunity to participate virtually in February and hopefully will connect before then. Thank you for being on the program.

Rob West: It was a joy. Henry, I appreciate the invitation and I’ll look forward to be back with you again real soon.

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Today’s guest is Eric Kim, Co-Founder and Managing Partner of Goodwater Capital. As early investors in Facebook, Twitter, Spotify, and others Eric and his team know a thing or two about the tech startup world. 

But that’s not the limit of Eric’s expertise. He’s done some great thinking about what spiritual integration looks like in their firm and how his faith guides him as he’s part of stewarding a portfolio of over a billion dollars. We’ll let you hear the rest from him…

Episode Transcript

Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDI movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

Henry Kaestner: Everybody gets the Faith Driven Entrepreneur podcast. We’re glad you’re back. Today’s guest is Eric Kim, co-founder and managing partner of Goodwater Capital. As early investors and Facebook, Twitter, Spotify and others, Eric and his team know a thing or two about the tech startup world. But that’s not the limit of Eric’s expertize. He’s done some great thinking about what spiritual integration looks like and their firm and how his faith guides him as he’s part of stewarding a portfolio of over a billion dollars. I’ll let you hear the rest of it from him.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. Today is super cool for me because we’re on with a good friend of mine, a guy that I’ve been able to be in in a Bible study and community group of sorts over the course of the last couple of years.

A number of us who are serious about our Christian faith and who got his place in the world of investing have gotten together just to encourage and challenge each other in our pursuit of knowing God and honoring him through our vocations. And it’s with Eric Kim that we’ve got today on the call and been looking for this podcast for a while. Eric, thank you very much for joining Henry.

Eric Kim: And Tim, thanks so much for having me. That’s a real honor and a blessing to be here with you on your listenership today. Appreciate it.

Henry Kaestner: So we have a love that is the official title for listenership that esteems our audience, which needs to be esteemed. Awesome. People were celebrating the fact that we’re now and something like seventy five different countries. But it’s been super encouraging to hear people come back in with great feedback and just great affirmation. So thanks for acknowledging that. And one of the things that you probably know and everybody in our listener base knows is that we like to hear the stories, the personal stories of the people that are on an episode with us. We want to get into some really neat things about the mission and the vision and values and how you think about things like a shadow mission. Today, we’re going to find out what in the world is a shadow mission. And then we’re also going to find out a little bit about the role that consumer technology plays in this post, covid or current covid world. But tell us about who you are, where you come from. And then in the mix of that, I want to know, what is your favorite piece to play on the show?

Eric Kim: Oh, I love it. Thanks for bringing that up. Well, guys, again, it’s just an honor. A pleasure to be here with you all.

So my parents immigrated from South Korea to New York City in the early 70s, which is where I was born when I was quite young. I moved to St. Louis, Missouri, where there weren’t a lot of Koreans where I grew up. I was there through high school. I grew up as a pretty serious musician and went to Yale for undergrad, actually, initially as a music major. And it was actually at Yale where I experienced the power of consumer technology and faith.

And a really interesting way when I was a senior, 9/11 happened. And I think everyone will remember where they were when they heard about the atrocity that happened. And for me, it was particularly painful. I had interned at a hedge fund that had some brokerages associated with it that were completely wiped out by what happened on 9/11, hit particularly close to home, being on the East Coast at that time and during that experience learned about the power of music and technology and community, because we came together as a group to host these benefit concerts. And I was a cellist on campus and we pulled together other groups in the way we advertised through that was through social media, kind of the version of that back then. What was social media where these kind of chat boards and I see a key messenger kind of environment and we advertise these benefit concerts. We saw the community, the network effects of getting the word out.

What inspired that kind of action at that time was kind of a rediscovery of my faith during college. And I talk about it later.

But a number of really influential kind of forces in my life at that time, everything from Campus Crusade for Christ to grab as a Catholic to St. Thomas Moore Chapel on campus as well. And by that ecumenical dialog and being at the intersection that really forfour. He had a really interesting kind of faith calling to come to service, and I bring up the 9/11 example because that carried with me throughout my career, going to McKinsey, working on a couple of startups, working at a large fund called Maverick, but ultimately feeling call to start with Tiwa, my co-founder in 2014, Goodwater Capital, which we believe is a value space to faith driven, purpose driven venture capital firm, which we’ll talk more about. But again, myself in a nutshell, kind of Midwest kid that now is here in Silicon Valley to try to do what we can do through venture investing to have a positive impact on the world.

Henry Kaestner: So if I remember a bit and we didn’t talk about this in the conversation leading up to the podcast, but if I remember back to 2014 and I had known to for a while, but it just started to meet you, there’s a faith story and how you guys got together. Can you share that?

Yeah, you know, there is a number, but God just kept having us meet each other.

Kind of it was serendipitous kind of flukes of nature at the beginning, but we would literally start running into each other. And we are obviously friends before. And we had gone to business school over fifteen years ago together at Stanford GSB, because when you’re ahead of me and then kind of as we were both thinking about starting our own separate firms at that time, God just found ways to bring us together. I remember one day at the Rosewood Hotel, kind of quintessential, you know, Silicon Valley shock.

William Norvell: And you ran into him there. I can’t believe I at the Rosewood.

Eric Kim: I know. I know. But it was like kind of in the thick of both of us thinking about an entrepreneurial venture. He was at Kleiner at the time. I was at Mavericks at the time.

And we had just had a conversation before. And like literally within that, I don’t know. Twenty four to 72 hour, we met again and then had another serendipitous conversation about, hey, what would it look like to start a firm together? And we kept doing that. And then the number of stories around the investors that we would literally meet at the airport that got delayed because the plane got delayed, you know, and then we happened to sit down at the same pizzeria. They were kind of these countless very serendipitous things that happened and, you know, couldn’t help but think that, you know, God’s kind of handprints were all over that in many ways. But it was really cool to see how that came together very organically at the beginning.

Henry Kaestner: Yeah, I remember that she was doing something about it, really endeavoring understand how to go proceed. And as he was doing that, all of a sudden out of the blue, you called and it was just really cool, made a real impression on him. And you guys have grown together and grown. Have fun now that I think is past the billion dollars of assets under management. So God has blessed your partnership and it gives you a lot of success. Your fund that focuses on consumer technology taught us a bit about what it is that you guys do in the fund and bring it into today’s environment. Why is what you do particularly important today?

Eric Kim: Yeah, so our stated mission when we started in 2014 was to empower exceptional entrepreneurs who are changing the world. And our focus area is just consumer technology. We don’t do enterprise, SAS, security, hardware, biotech, all.

We do our digital horizontal platforms that touch the consumer directly.

And so whether that’s financial services, health care, education, online grocery marketplaces, video communications. Kiwa was an investor in Facebook and Twitter prior to joining him. I Goodwater I was an investor in Kakao Talk, part of Goodwater, which now has ninety nine percent penetration as a messaging app in South Korea.

And you can go into our company there. There’s something very unique about the power of, again, horizontal digital platforms that have network effects that every time a net new user joins in the power of that platform becomes stronger. So whether that’s a Netflix, a Spotify, telemedicine companies, financial services, fintech companies, peer peer payments, one more one more user comes into that community or that app. The whole gets stronger and that’s all we do. I could water the entire billion dollar plus of the assets we manage is just focusing on empowering exceptional entrepreneurs who are changing the world through consumer technology because consumer technology touches billions of lives on a day to day basis, if not hour to hour basis. Whether we like it or not, we are in front of these digital platforms almost every living minute of the day. And so when we think about our mission, our calling, our purpose, we wanted to focus all our energy into what we think is one of the most powerful forces from a secular perspective in the world, which is consumer tech. So we’ve been in early investors in a company called Musically, which is now called Tech Talk, which is Superfriends. Enter the news these days. And we’ve been in other companies as well, you know, all kind of stuff or more questions on this topic and love to explore any area. But I will just leave by saying a lot of those companies end up being fairly controversial also. So what? It’s Facebook about privacy, to talk about privacy or, you know, when and how should telemedicine be adopted or what’s the privacy or the security around fintech platforms?

We as a value investor, actually want to be in the thick of those conversations. We want to be right where the rubber meets the road with regards to secular innovation and where consumer behavior is changing, because we think that even if we change the trajectory of this company by one degree, we will have tremendous impact, hopefully.

So that’s where we’re focused as of today.

Henry Kaestner: So I think that that’s something a lot of people don’t think about. And so many people think of the role when they invest in private equity funds as being a passive player in an overall trend. But the reality is, is that when you come alongside an early investor and get a board seat, you’re now a partner. You have a voice at the table. And you’re right, consumer technology is a wonderful thing. We all use it to be able to have people who are speaking into the lives of the entrepreneurs to encourage them, but then also appropriately challenge them. Is there an example that you might be able to offer up over the course of the last several years, if necessary? You can leave the name out of it where there is this kind of ethical kind of fork in the road where the CEO of a consumer technology company is trying to say, we see an opportunity here, but your sense of values and faith driven, this tries to encourage them in a different direction.

Eric Kim: Yeah, that there are several points to a couple. I’ll start by stating our core values, which today are humility, integrity, transparency, quality, service. And then we’ve added a six one justice and we could talk more about that. But it’s through these lens that first we make it really, really almost painstakingly clear to our entrepreneurs before they sign up to partner with us that those are the values that we’re about. So if you want someone in your cap table that has those values, we’ll work with you day and night through those lenses. I would say, particularly with regards to consumer technology in this day and age. One of the things we’re really passionate about that has come up, frankly, time and time again.

It’s come up before I started. Goodwater, it’s ever more present today is the production of children on these platforms and whether it’s pornography, whether it’s addiction, whether it’s child pornography itself, it’s again, something that is near and dear to a lot of our hearts as parents and as family members, frankly. And we see it. It was something that there was a major platform that we were associated with. I can’t name it, but we had to really pound the table with regard to changing our growth trajectory, sacrificing some initial growth to make sure we safeguarded the children that would potentially be in the audience itself. And it comes up time and time again. But I think what is surprising and not trying to toot my own horn, we fall short in so many ways, but is that we are usually the sole voice pounding the table about these issues. And again, these companies netnet may be seen, but actually is very controversial or very, you know, potentially gray in some areas.

But what we often think about is if it’s not good or who else should sit in that void to make sure there is a voice of values in some of those situations.

So, yeah, it’s come up. It comes up and particularly around the protection of children is something that we’re seeing and we’re quite sensitive to.

Henry Kaestner: Well, as a dad, thank you for that. And William, your dad of a young child as well. So I know that, you know, was one thing when my children are a little bit older, 14, 16 and 18. And that is something that’s absolutely front and center. But you’re investing also in the companies. They’re going to be the leaders in consumer technology in the future to sit that out. When you do have that conversation with the entrepreneur and you’re pounding the table, do they wonder why is you can say, actually, you know, we’ve got this kind of moral compass that comes from something about who we are? What does that look like about why you’re pounding the table or you judge judging or versus that’s a unique opportunity to witness. And yet I shouldn’t be prescriptive even in the asking the question about how that manifests itself. But tell us more about you being the sole person pounding on the table and being completely different than the rest.

Eric Kim: Yeah, I think it comes down to mission and purpose and really getting at the roots of it. And now you mentioned shadow mission, but often we’ll come back to speaking into the hearts and the hearts already there for these entrepreneurs. They want to do intrinsically something really positive for the role. That’s why they risked everything to become an entrepreneur to begin with. But speaking into that side of it. Right. And aligning around what is that remember back what was that original mission you started this company for? It was for the purpose of serving X or Y. What was that original purpose? And as opposed to kind of what I would call often is the shadow mission. And this is popularized by John Ortberg. And John, if you’re listening, I’m praying for you, buddy, and we’ve never met. But you bless me immensely as you. But.

Henry Kaestner: The people you have ever met, senior Pastor Amen, the church here in the Bay Area, great man of God.

Eric Kim: Absolutely. But this message around a mission, I think, is actually where there is light and where there’s an entrepreneur’s kind of intrinsic nature to want to do good. And then on the other side of that is the desire to be on the cover of Forbes is to be a billionaire, is to have growth and to break all these records and to have kind of the accolade associated with it. And if we bring it back, each speaking into it is not from a moralistic perspective like this is wrong or this is right is I actually remember why you started this company to became let’s remember that real mission and take everything else aside. Take aside the case study that you want written about you take aside all the accolades that you want to take, aside the pay and think back about that mission. And that is, I think when the heart becomes most vulnerable for them and we can speak into it and whether they know we’re our faith and we’re not shy about it, we don’t necessarily advertising on our sleeves either.

But it invariably does come up in almost every conversation with the entrepreneurs we work with. I think they understand where it comes from and where it becomes real for them. Whether they are faith or not is that they have this underlying mission, which I believe God has blessed them with, and then speaking it to that and tying it to the reality that they’re faced with to make sure they’re making that choice because they can serve one or two missions in that moment.

William Norvell: Yeah, it’s so good. So good. I actually heard that sermon like eight years ago and it has changed my life and ascended to so many people. It’s just amazing to think about, you know, go in one direction. And then you have, you know, he talks about how you can just be five degrees off. Right. So a lot of times people think you’re 180 degrees off and that’s how you you know, you see your way off the path. But in reality, it’s usually just a little bit you know, you’re probably using the gifts that God’s given you. You’re probably doing all the things pretty close to it, but you’re just doing it for a little different reason. He talks about giving a sermon. He’s like, that’s what I’m gifted to do. That’s what God give me to do, is that in my shadow mission is every day I go to sleep and I wake up and I hope it says amazingly good looking, eloquent man gives incredible sermon once again, right?

Eric Kim: Yeah, it’s. Yeah. Just those few degrees off. But in an extreme sense, the articulation a few degrees off. But those few degrees are in the direction of how and how does that manifest itself for you.

William Norvell: What do you feel like you wrestle with as you were thinking through that paradigm?

Eric Kim: Yeah, I thank you for asking that. You know, when we started in twenty fourteen, Tiwa and I looked at each other and said, this is not my firm, this is not a year for this is God’s firm and kind of made that sacred vow to begin with and had that really strong misalignment.

And I think that what is the shadow mission for all of us.

I’ll speak for myself being as an investor, of being someone that you measure yourself based on the investments you make your track record. Right. The multiple and the IRR that you have created, the wealth you have created for others, take a lot of pride in that.

And I think that the shadow mission is to, as a firm or as an individual investor is to be a billionaire, to raise a certain X amount of funds, to be on a list, to get kind of the accolade associated with that track record that you establish. And when we started, the firm firms like there was never a mission to create a track record. It was to have impact.

And so I think that is the constant battle. And what I love about how Ortberg popularized the notion of a shadow mission is that it’s not to say we’re going to all just be pure and wash ourselves or this is just to say it’s part of us. It is there. We can’t just cut it off.

It’s really acknowledging because part of my pride and my ego is to be the best in investing is to have the best rapper is to be one of the most successful venture capitalists. I know it.

It’s there. But naming it and making sure that that is not what I’m feeding on a day in, day out basis is so important.

But unless I name it up front and understand that that is my kind of natural tendency, I think that is really what has preserved our partnership, which is really important that Goodwater and actually helped it blossom because we’re not looking towards our own self fulfillment. We’re really looking towards the fulfillment of the mission itself. Now, we fall short all the time. I want to be really clear. It is so hard. Right. And it’s just like those magical moments when a brother like Henry with our Christian Accountability Venture Capital Group, you know, can hold you accountable to some of these things and to check your ego. And again, it’s just that constant battle that we’re in that I would just again, encourage everyone who might be listening to this. Like just what is that shadow mission of yours from the investment or from a secular business perspective?

And name it, don’t be afraid of it, but name it in the hopes that you can sometimes check it at just those crucial moments.

Henry Kaestner: I want to dove into that a little bit more because you’re on to something there that, of course, plays all of us as Christ, not just us as fund managers. It’s riffing on Proverbs 16, two and twenty one to all of a man’s ways seem pure to him, but his motives are weighed by the Lord. And every time I read that, I am so incredibly convicted and I have these shadow missions and the danger, if you have some level of success in the world and especially the Christ followers, that you can pretty much justify almost everything you’re doing in terms of trying to create value and trying to participate. And much that might be true. But you might have this 80 percent of what you’re doing can absolutely be defended as I’m investing for the flourishing of society. But when selfishness or the approval of others kind of seep in, it takes us further away from God. And so you’re doing and through the work of John Ortberg. But what you’re really showing here is that you have endeavored what you want just to be that much more conscious of it in the humility that comes with that. Let me just say that that’s different from what you hear from the typical Sandhill Road venture capitalist.

Eric Kim: I have to just thank you, Henry, in particular, because you’ve been a great mentor to me. And I go back and remember one of the most impactful things you said to me, which I think applies to anyone, regardless of where you might be on a wealth scale or where you are in life.

But the metaphor holds true.

And you said to me, Eric, never get liquid because you may have seen, I think, in some other folks lives just what happens when folks achieve some success in the notion of equity. Again, doesn’t matter where you are a scale, that notion is that you suddenly have like this freedom to just do whatever you want because you’ve got this kind of accumulated currency of here on Earth. You can just do whatever you want. And certainly it pertains to the wealthy. And I think it pertains to everyone just kind of mentally from a currency of feeling in need and on our knees for Christ and on our knees because we realize how dependent we are on the Lord and then going to being in a quote unquote, liquid situation. Where to your point, I do whatever we want. I got the resources I can hop on this plane. I can maybe get this really nice kind of luxury item here or things like that. And I’m not saying nice things are bad, not by any means. But at the same time, what happens is we’re disconnected. We’re going from not just being part of this world, but being of this world in that moment. And I just remember back when you told me about that, it’s just like a conversation we can all have and be very real about like what does that mean for us? You know, whether I’ve accumulated that like an extra few bucks through the stock market as a couple bucks a couple of weeks, like, does that suddenly change your mental state somehow and your attitudes towards the Lord and God? And I think particularly it’s just something we have to really be mindful in being in the investment world.

Henry Kaestner: I completely agree. That was very encouraging what you said. I need to give credit for that to Jim Bowen, who is the founder and CEO of First Trust Portfolios, a very early investor in Bano.

On the personal side, he just had set on a ministry board with David and came on board and we went out and met with him and he said, guys? And he dressed and looked a lot like Michael Douglas as Gordon Gekko character in Wall Street. I’ll never forget. He said, never get liquid. I’ve seen it just destroy families. And on the flip side of that, and there’s the cautionary side, the investor that I look to as a mentor, just an incredible class act, really godly man. It’s a guy named Tom Darden. And Tom ran and continues to run Cherki Partners, two and a half billion dollars worth of real estate assets and huge land holdings in India and other places like that, really the best in the world. And what he does, which is to renovate what are called Brownfield’s real estate that has some sort of oil damage or something like that. And Tom rides a bike to work. He has immense wealth. But one of the things that really grounds him is not just his faith, but the fact that he is never liquid. Every single time he has any type of liquidity, he’s investing in the next entrepreneur that comes around. He has hundreds of investments and different technologies that are really making a difference in the world. And he does it every cent whenever they go public, he immediately sells the stock, not immediately. But he’ll tell you, you know, he looks for an opportunity, sell stock and then put it in another investor. And as a result, he never has the liquidity around him to think about buying another yacht. And in the process, because he’s investing in illiquid assets, either a private equity or venture capital fund like you all have, or an individual angel investments, he’s really creating part of the fabric of the enlargement of society. So thanks for having said that as encouragement to me, but I need to give credit to Jim Bowen and then to the guy, his model that out for me, Tom Dart also.

William Norvell: Let’s get. I usually steal John shuttle mission statement, but you already knew about it, so I can’t take credit for it. You’re like the one guy that listen to the deep tracks and, you know, really upsets me. ERG, I want to take one step back. You mentioned a phrase kind of in passing, but I think especially for our audience. Want to go. You said you were faith driven, venture capital firm. You know, and I know we’ve gone around the world a little bit on what that could mean in certain situations. But I want to give you a chance just to maybe from the highest level say, what does that mean to you? Do you look at investments differently? Do you work with your entrepreneurs differently, 100 different things? Do you work with your team differently? Just what does that mean to you? In the essence? Because I think there’s a lot of people listening that either are that or want to be that. And I think you have a really unique lens on what that means.

Eric Kim: Yeah, it’s evolving for us. And in 2014, we launched with this mission of empowering entrepreneurs who are changing the world and did everything we could to serve that mission in 2020. Amidst the pandemic of covid-19, amidst the pandemic of racism, which continues to burn across our nation and world, we added a sixth value of justice to our five preexisting values. And the reason I bring this up is that I would say that we launch in 2014 with our mission in 2020. I feel like we reemphasize or rediscover our purpose itself, and that is to bring justice and healing to the world. Again, the notion of justice is that being inspired by Michael six, eight, how do we bring justice to the world? And I think that is again, where the rubber meets the road for us. That is how we try to measure ourselves as being a corporate faith driven venture capital firm or being leaders of faith leading a venture capital firm. I think those are almost synonymous or I would hope they could be. I hope that who I am on Sunday is the same as who I would be on a Wednesday or Friday. And so that, I think is through the lens of are we really bringing justice to the world? We look at investments through that lens in the consumer techland. Is this really going to bring justice of some sort to the world? We recently looked at a company bringing telemedicine to the mental health space and it’s frankly heartwarming. Inspirers reinspire us every time we meet an entrepreneur that is so mission oriented and it aligns with his value of justice that we can actually bring some kind of healing to the world itself through our investments. It also makes us think a lot about our Elche base. We’ve been, as Henry mentioned, really, really fortunate to be at the scale we are in six years and.

Thinking about where do we take capital from, are they values align? Do they also align with our desire to positively impact the world? And it’s not just lip service, but something they’re willing to, you know, go to battle on our behalf for and then certainly our employees. I think that we’re a team of about 30 folks here in Burlingame. And how do we think about who we hire? Are they values aligned? And do they share this maniacal desire to change the world for the better? And I think that is our current manifestation. I think this will probably change and mature. But right now we feel like we’re in the thick of the battle right now. And so when we prioritize the various meanings of what a quote unquote, future of an investor could be in our current state, the current chapter in what we’re prioritizing is should be on the front line of really trying to push this impact, to bring justice, to bring healing to the world. That is kind of what is driving us right now and what we’re prioritizing within the spectrum of what that could mean. And then we’re doing it through our investments. We’re doing it through the people we hire and to help capital that we take on.

William Norvell: It’s amazing. That’s an amazing articulation of what that means to you guys and really appreciate that.

And your whole team would think that comes to mind as I try to get a little practical at some level.

As you know, a lot of people here are doing investments and obviously names don’t need to be included in this at all. Could you maybe walk us through a few investments that didn’t meet that criteria?

You know, companies that you saw that you said, I mean, gosh, if we weren’t us to invest in that, that’s going to make a lot of money and it’s going to be a success. And, you know, we may get a call about that from one of our LPs that ask you better have a good reason for passing on that one.

Eric Kim: You know, if this comes up for us in the financial services space quite a bit. So if you think about fintech companies broadly and Henry and I at William with you as well, we have been co-investors in some wonderful fintech companies that are really bringing kind of the banking to the unbanked, if you will, or bringing the access to the financial services, to the broader community, which is wonderful. I think where we’ve said no flat out to certain investments is where we feel like it’s taking an unfair break from the consumer with regards to lending, with regards to some of the interest rates that are being applied, there are rules of consumer protection out there already around what you can charge. But there are companies that get around it, I would say, through some questionable practices. And so that’s something where we have felt like this is a huge business opportunity and it’s very subjective. Right. My view of it is going to be very biased. But what’s quote unquote fair? What’s a fair interest rate to charge someone, for example? That’s what it comes down to ultimately. And I think that’s where, again, the perspective of the entrepreneurs become really clear about what side they are on in terms of where they would like to take things for the U.S. to maximize kind of short term profits, because it’s, again, very easy to justify. Well, if they were going to the black market or to some really suspicious kind of lending sources, it’s better than that. But those companies are in a position to both profit, but also to good to provide better services. I think where we’ve seen this really come in to answer your question directly, is in the lending space, sometimes we’ve had to say, you know, it’s just not worth it because it’s going to be very high, profitable company. But these practices just seem unfair. And again, I know it’s subjective, but that’s just how we feel about those situations.

William Norvell: No, that’s true. Yeah, absolutely. That’s super helpful. And yeah, unfortunately, God didn’t lay venture capital in Romans anywhere right now. There is some things you got to pray about and then you may come to a different conclusion than another investor sometimes.

Yeah. Who’s also driven by their faith. But staying close to you and what do you feel called to do is so unique and what inspires everybody, I think to figure out their own story as we unfortunately come to a close. One of the things we love to do is see how God’s word can transcend between our guest and our listeners. And we find it amazing to see how we hear from people that, you know, they just needed that verse today from that other person’s life and the intertwining of stories. And so what I’d ask you is, if you’d be so generous to share where God has you in his word, whether that is something you read today, something you’re in this season. Michael Jackson. I heard it could be that could be something else just to be great.

Eric Kim: Yeah. Thank you. And there were two things that came to mind when I was thinking about joining you today. And I think that the first is it’s just the Sermon on the Mount.

So take any part of that. But I think what I am constantly impacted is blessed are the. Or and what does that mean for us? I kind of purposely I’m calling this off because we’re in venture capital and kind of in this secular tailwind of investing and things are going up into the right and all these things.

But what does it mean to be blessed are the poor? And I would say that is something that that can mean a lot of different things for different people. For me, it’s to be poor in all things. But Christ. And I think that is just something that I hope that people can reflect about today, and obviously we’ve got a lot going on as a world politically and with the pandemic in among whatever state we’re in, we can be both kind of very sexually rich and also secondly, poor, but still not poor in the way that was being talked about in that survey. And how can we keep our hearts to really be rich in Christ and just to be enriched and Christ alone. So hopefully that makes some sense to folks and just kind of something that’s really top of mind for me.

Henry Kaestner: That’s beautiful. Thank you very much for that. And thank you for your time today. This is why we do this podcast, as you are talking about how you thought through the concept of shared ambition, how you able to listen to a sermon from a pastor and say, what does that mean in terms of my life and what does that mean for my fund, my partnership, my relationship with our peers and new companies to think about the holy ambition that you can have and being a technology investor and how to be able to shape culture and be able to mentor and lead entrepreneurs that are trying to understand what is their value base, what is their north star? Can they pick any North Star or is there actually a one and only one North Star? What does that look like? Your ability to faithfully and wouldn’t similarly witness to that in a very secular world is really outstanding, is unparalleled, and it’s why we do this podcast.

Thank you for sharing your story and it’s been awesome to see your success. And I love you. Also, just as we close out, just the way that you guys got back together at the beginning of the year and said, OK, let’s revisit our vision of values, are we missing anything and let’s celebrate the success we’ve had. And to a certain extent, if it ain’t broke, don’t fix it. And you’ve had a lot of success. But how do we get sharper and how do we pray together about how God would use this fund in our lives? And that’s super encouraging. So thank you.

Eric Kim: Thank you so much. Such a blessing to be with you all today. My partner is listening to this. I just want to call my my brother Kiwa sharpens me every day and again with other folks around us has really been just so instrumental, got used to actually in my life. And I just want to say I love you, brother, and thank you.

Thank you so much for joining us on today’s show. We’re very, very grateful for the opportunity to serve the larger faith driven investor community. Hey, the best way for you to stay connected is to sign up for our monthly newsletter at Faith Driven Investor Dog. And while you’re there, we, of course, want to hear from you. We derive great joy from interacting with many of you. And it’s been very rewarding to see people join the discussion now from all around the world. But it’s also very important to us that you feel like this is your show and that you’ll help make it something that best equips you on your journey, one that you’re proud of and one that you’ll share with others.

This podcast, it wouldn’t be possible without the help from many of our friends. Executive producer Justin Formate Program Director Johnny Wil’s Music by Karl Carl Chigwell. You can see and hear more of his work that summer, Drugstore.com and Audio and editing by Richard Bahle of Cornerstone Church in San Francisco.

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Marcus Stroud’s story is one you might not even believe as you hear it. He experienced ups and downs as his life intersected with people like President Barack Obama and MLB All-Star Torii Hunter. 

There was a time when he lived in one of the wealthiest neighborhoods in Dallas, and times when he was homeless. And while you’re going to have to hear the details from Marcus himself, one thing you won’t miss is the faith, perseverance, and sheer tenacity that Marcus shows in all aspects of his life, including his work at TXV Partners, which he’ll share more about today. 

Episode Transcript

Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDI movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

Henry Kaestner: Welcome to the feature of an investor podcast. If you’re a fund manager, investor or financial adviser, are driven by your faith or want to be driven by your faith, then you’re in the right place. The best way to stay connected in the faith driven investor community is to sign up for our newsletter, Faith Driven Investor ERG. This podcast doesn’t exist without you, our community. One of the things we’ve heard the community asks for is help in finding great deals to invest in. And so we’ve launched Marketplace. It’s a new platform of funds and direct deals, everything from private equity and real estate funds. That’s from philanthropic to market rate deals made in the U.S. in emerging markets. Check it out. At the age of an investor ERG for slash marketplace. While you’re there, please send us any thoughts you have about how this podcast might better serve you or any questions you have about being a faith driven investor.

All opinions expressed on this podcast, including your team and guests, are solely their opinions. Host and guest may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization.

Hey, everybody gets the Faith Driven Entrepreneur podcast. We are so happy you’re here. Marcus Stroud story is one you might not even believe as you hear it. He experienced the ups and downs as his life intersected with people like President Barack Obama and MLB all star Tory Hunter. There was a time when he lived in one of the wealthiest neighborhoods in Dallas and times when he was homeless. And while you’re going to have to hear the details from Marcus himself, one thing you won’t miss is the faith, perseverance and sheer tenacity that Marcus shows in all aspects of his life, including his work at TV Sex Partners, which will share more about today. I’ll let him take it from here. Let’s listen in.

Welcome back to the future of an Investor podcast. We’ve got a special guest with Marcus Stroud today. And as you’ve probably gathered, this is the Faith Driven Entrepreneur podcast podcast where we look at sharing stories about people are really making an impact in the larger faith driven investment movement. And just as a quick recap, as you undoubtedly come to understand, there’s a new model of investing. The old model had been that a Christian might take all their assets and put up here on the left hand. If you could see what I’m doing right now up on my left hand, make as much money as you possibly can. And then to the extent you understand the biblical message of generosity, you give it away on the right hand side. And a collection of us, a movement of us have come to understand that the very process of putting investment capital to work might accomplish the same types of ministry goals that we otherwise had done and are giving. And we don’t have to give up market return to do that. We can do that across geographies, asset classes, different return profiles from market return to gospel, catalytic and in that big player, of course, our funds and private equity funds. And they tend to find themselves in two different categories. One are people who have been fund managers for a long time, many of whom have worked at some really established secular funds and are bringing their faith to work, bringing things like chaplaincy and with their portfolio. And there’s another breed of fund manager that’s coming out, seen a problem and an opportunity in the marketplace, taking some of their background, some of their drive and their passion and starting a new fund, doing it with spiritual integration at the core of what they’re doing. And this interview that we have with Marcus is in that latter category, somebody starting a fund with a great background, great intentionality. Some things we think are super unique and just overall. Great story. So, Marcus Stroud, welcome to the program.

Marcus Stroud: Thanks for having me. Thank you, guys. Big fan of the program and really excited to be here.

Thank you. Thank you. So we’re going to get right into what you do. You work at Tsvi, but before we do that, we want to hand the mic back over to you and give you a chance to share your story. I’ve heard parts of it, but I want to turn over to you and just hear what it was like growing up. Who are you? Where do you come from?

Marcus Stroud: Yes, thanks a little bit about me. Who am I? Where do I come from? I grew up in a small town called Prosper, Texas. Prosper is about thirty minutes outside of Dallas Fort Worth. A lot of people know about Prosper now because we’re about ten minutes away from the headquarters of the Dallas Cowboys. My story, how I end up and prosper. My father was an NFL player from our sports reporter, and when I was young, my father actually watched my mother. And so my mom was a single mother, raised my brothers and I. And, you know, we had a pretty tough background, you know, growing up. But we were fortunate in that she had married an individual who had bought some land out prosper. We moved there kind of before the huge real estate boom that had happened in north Texas. And, yeah, that’s how we end up. And Prosper is a really, really cool time, because in Prosper, there was only like, I’d say, fifteen hundred people. But of the six or seven African-Americans that were in Prosper, five of them were famous athletes like Deon Sanders and Tori Hunter. And so I had a really cool opportunity to grow with some really cool.

Seen and live in a really cool town, so tell us about that, some of these athletes that you came across or any of them role models.

Yeah. So, you know, grow and prosper is cool because, like I said, it’s not that many people there. And so you have to access to these athletes and so you get to live with them and see them on a day to day basis. And so for me, being one of the few affluent African-Americans kind of in that area that wasn’t an athlete, they were always enamored by the fact that my family was well-off, but they weren’t athletes. And so we had many, many dinners where they talked about business with my mother and my stepfather. And it was just cool because a lot of these guys were looking for the next year in their life. And so a Tory would have, you know, a lot of his friends like Gary Sheffield and a ton of folks over. And they’d be asking my stepfather ideas about real estate or about music, and they’d be asking my mom questions about the radio because she was working in radio at the time. And so, you know, it was cool to see my mentors or people like Toriano where people like Deon Sanders growing up and, you know, they all had kids my age. And so we had a very competitive sports background. We had a bunch of Tier one athletes and that led to a lot of folks coming down to recruit. And so so it was just a very, very competitive environment. Super awesome. And, you know, those guys proved to be unbelievable for me later in my life, which I guess I’ll go into. You know, my mom and my stepfather had a lot of success and they were doing really well right before the financial crisis happens. We actually had an opportunity to host President Obama at our house for a fundraiser. And so they were looking for a rural kind of town that exemplified Texas, if you will, you know, that had hay bales and all that out there. And so they chose to come post them at our house. And so it was truly an insane moment, an opportunity for our family, because, you know, you had the soon to be president United States. You have several senators, you have several A-list celebrities. And, you know, you have a guy who’s just telling his story, if you will, and just trying to meet people as he’s running for president. And, you know, that kind of catapulted our family in a way that we then had a lot of celebrities reaching out to, is asking us for advice and want to become our friends. Because obviously, if you’re powerful enough to have the soon to be president, the United States in your home, you know, you must be somebody worth knowing. And so life was pretty crazy for me, I’d say, from the ages of 12 to 14, just because we had this connection, those type of relationships. And then the financial crisis happens, I’d say about eight or nine months into President Obama’s presidency. And we began to lose a lot of things. We had a lot of holdings in real estate and that started to kind of go south. His record label wasn’t doing too well. People were booking shows for a lot of the jazz artists that were his record label, as well as some of the Christian artists that were on his label. And so my step father began to kind of take it out on the family through kind of verbal abuse, eventually some physical abuse with my mother. And then one day it kind of got to the point where he said, Marcus, we’re throwing you guys out. I’m throwing your mom out. You got a choice. You can stay with me in this beautiful mansion. We have all these cars. I’ll take care of you or you can live with your mom. Of course, we’re going to go live with my mother. And so, you know, that was kind of one of the first times in my life I would say I had really had to rely on God is probably the best way to put that. You know, I’ve grown up extremely grateful. You know, my grandfather became a great grandfather was Dick. And, you know, we have several ministries in our family. I was baptized at four years old. I know Jesus my whole life at that point. But I never had been faced with adversity like that, you know? And we just joined the Church of the Family.

And I remember standing up to join the church. The pastor said to us, you know, when you choose to truly follow Christ, when you choose to truly follow Jesus, that is when the enemy tries to attack you sometimes the hardest because you know so much of a threat you are.

And we saw it firsthand.

You know, it was just so crazy to me that you just really dove into your faith. You just joined the church as a family. You just try to believer, as I’m a true believer now you kind of are homeless. And so anyway, after you left, my mom and my brothers and I go, we ended up kind of homeless living with my aunt. She had a two bedroom apartment and it was six of us living there. And so we only had one car. And we commute from her town of McAllen, Texas, to prosper every morning before the tollway in North Texas was built. So, you know, like fifty stoplights. And so it takes like an hour some change to get school. And, you know, we didn’t have any money. And so here we are kind of migrated from living in this beautiful man. Should have a president of United States in your home, having people like Martin Lawrence, you know, downstairs drinking beer with your step that you’re five deep to a car. You know, you’re getting at school. I’d say three thirty four in the morning because your aunt has to be at work in South Dallas by about eight a.m.. A browser to be an elementary, your mom has to be whatever gate she had at the time. And so that was a very, very tough time for me. But it was in those moments where I feel like my faith really became the center of my life.

Henry Kaestner: That’s really powerful. That’s incredible. So tell us what happens next. You go from. Really haven’t at all people looking to you, you probably some level of your identity is coming from the fact of, you know, who’s in your house to really having that all taken away. You lean into your faith and really dedicated committed to your mother, bringing out the other side of that. So you’re being formed. And what I understand some of your life as an athlete, that you’ve worked really, really, really hard in academics, but also just to make the football team and be there, just bring it through as you’re becoming a young adult. What happens next?

Marcus Stroud: Sure. Yeah. So I felt like my whole life up until that point, I was the definition of an offensive player. I wasn’t super aggressive. I love to get the ball. I was very much a happy go lucky kid who just loved to score touchdowns. And of course, would tease me because I’d never want to be tackled. I just wanted to run and score touchdowns. And I think when that adversity hit my family. I would say football was the greatest place I saw a change in how I approach life. I went from being this really skinny kid who just wanted to score touchdowns to your game to the three thirty four in the morning. You had nothing to do except lift. And I was a skinny guy. And so for me, that was my kind of sanctuary, if you will, was going to that weight room and just lifting and lifting when the coaches around and just kind of getting after it. And we couldn’t play any hip hop music in. Our coaches would get to the way they would get to the office around 5:00 a.m. So I would just play worship music and play old school rock and working out so that worship in that rock just really got me fired up every morning. And I just heard God’s voice. So clearly, Marcus, I am doing some things for you that you don’t know right now. You just have to keep working hard. You have to keep working hard. You have to demonstrate excellence. And I’d always ask myself, God, you know, this guy like, why do I have to demonstrate excellence? I’m the one who’s going home to no home, if you will. You know, I’m the one who when I did eventually get a car from my first car from my grandparents, I couldn’t afford to drive back to my aunt’s house. So I would sleep in the parking lot at Wal-Mart or Whataburger because I didn’t have enough gas to go back and forth between the colony and prosper. You want me to demonstrate excellence? You want me to demonstrate you. But I’m sleeping in my car here at Wal-Mart here at Burger. Then I’m coming in here and I’m getting after it and I’m busting my butt on the field. And I was so angry for so long because I was like, why me? Why me? And then I just stopped asking, why me? And I just started trusting his plan. And so I was always a really, really good student. But I sort of take it to the next level and school for me, I didn’t really care about getting good grades. I just cared about doing well enough in the classroom and doing the best I could on the field to get myself a scholarship to a really good school identically because I had seen my dad who was in the NFL, who did do well after a couple of years in NFL with money and etc.. I see what happened to him. And I said, God, if it’s your will for me to be a professional football player one day, you can make that happen from any school in America. But I know you’re calling me to be an example to other men, especially African-American men, someone who can rise to the top academically as well as politically and build something from that. And so my life kind of at that point was let me be the best I can and everything I do. And so eventually I became the first to your captain in my school history. I became the first four year class president in my school’s history.

It was funny right around the time the four year class president was actually five years. I was president from eighth grade through my senior year.

Yeah, for your class president. And, you know, it was on honor roll everything. President of FDE. I was doing all the right things. I won three presidents community service awards for serving hundreds and hundreds of hours of community service each year. I had one two mock trial competitions as one of the top young my trial attorneys in Texas. And so I was doing all the right things. But I was also working three jobs. I was working at a construction company, a barbecue restaurant in high school and high school. Yeah, as well as Abercrombie and Fitch. And, you know, I just didn’t really have any joy, if you will, because I didn’t really live a regular childhood. I’ll do the working or I was working competitively in sports where I was working academically. And so it was just continuous grind, grind, grind, grind. And I didn’t really understand it at that time, but I knew that God would send me something special. So anyway, my senior year comes around, you know, I’m starting to get some opportunities in football. You know, I’ve been man all state and things are going really well for me. And then, you know, one day we have a really, really big game against one of the top teams in the state of Texas. And I’m going against one of the top tackles in the state of Texas. And the kid beat me up. Basically, he wins the one on one. And I remember my coaches pulling me into the office after the game saying, hey, man, we know there’s not a lot going on, you know, for you at home right now. We know that you guys just lost your house because we got it home. We got evicted from it. We want to help you. And so my coach had offered to help me and, you know, financial ways and connect with people.

And they said, I think all the people we really want you to kind of buddy up with and get to know. Well, as Tori Hunter is just kind of how Tori came in my life. Tori son, always one of my best friends. He was one of our star football players also. But is that really became kind of a surrogate father, if you will? And so Tori and his wife, Sarah, mom, dad said, look, we’re going to take Marcus and we’re going to help your family out. We’re going to give you guys money so you can have some money set aside for a home over the next 12 months. But Marcus is going to live with us, you know, to go from work in ten thousand jobs, you know, busted by the school dealing with all the recruiting.

The tough part about the recruiting and the football thing was, you know, coaches like come to your house when they’re paying you a visit. We didn’t have a home to come to. So I always had to be coach at a restaurant or at my school in a weight room. And so it was so embarrassing. But now that he was in my life that when I was done with these guys, they could come by the house and in all these things. So it’s like my life was transformed overnight and it was just so, so humbling because, you know, you have one of the at at the time. You like the high speed MLB player, you have the highest paid baseball player essentially taking care of you, giving you everything you need, you know, you’re living with your best friends, his kids, and you’re just living this incredible life, but your family still trying to find their way. And so it was kind of a weird time for me because, yes, I was so grateful to have God bless my family through these unique ways, through touring and through other folks that I stepped into our life. But at the same time, I hated the fact that I was living this glamorous life that my family was struggling. So from there, I had the opportunity to actually go play football at Princeton. You know, I was being recruited by them as being recruited by a couple of the schools. And when it came down to it, I prayed about it. And the Lord, it just kind of showed me that prison was a place to go. And so, yeah, that’s kind of where my childhood, I guess, thought, if you will, and the Lord has blessed with incredible opportunity to go play ball at Princeton.

Henry Kaestner: So this is a great time and I should have done this at the outset. Marcus is an incredible story, an amazing story. I should have introduced my co-host for the future of an investor podcast up front. Don’t worry, William isn’t going anywhere. William continues to be part of faith driven entrepreneurs this Rusty. But as we continue to launch the movement, a feature of investing and I think that will in listening land, we can all agree that Luke’s job as emcee of the featured investor conference was second to none. And so with the momentum from that, we’ve asked him to come on board and dysmorphic driven investor podcast he’s on. And this is a great time for Luke to join best friend and business partner, super guy, really serious about the movement of veteran investing. He’s a practitioner in it. He is also a former college football player and had met Marcus and was the one that encouraged us to talk to him. So very appropriate that this is Luke’s debut. Luke, maybe you say a word and then just continue with the podcast, asking Marcus some questions, please.

Luke Roush: Yeah, thanks. Anyway, it’s good to be on. And Marcus could spend some time with you a couple of weeks ago, and it’s wonderful to have you on today. So just jumping right back into where Henry left off. So you graduate, you go to Princeton, you play there, obviously get a great education, then you get to work on Wall Street. Maybe just talk us through that transition. How did that feel in terms of your relationship with your family? And then you end up in this Ivy League school and on Wall Street, like just kind of walk us through what that felt like, what that what that was like?

Marcus Stroud: Yeah, it was incredible. You know, I think going to a school like that opened my eyes to a world I’d never seen before. And it was humbling because, you know, you go to school kids that went to, you know, some of the most prominent private schools in the world, their parents or some of the the biggest titans in their respective industries. And you know, that, er, if you will, becomes unbelievable to you in the sense that, like, wow, if I work really hard, I can achieve these things. But what stuck with me, though, I would say beginning my sophomore year in college, I didn’t like some of the alumni I had met, how they carry themselves. And let me unpack that. I didn’t like the fact that they may have been unbelievably successful. You didn’t see that Godlee there, if you will. It was very much their story. It was very much their identity, their success that that that that that. And I hated that because I saw so many of my teammates who began to follow that path. Also, I need to go to Wall Street to make X amount of money. I need to be rich. I need to be this and that. It just creates so much brokenness and so much just instability long term, if you will, by just having that type of mindset. And so anyway, I said, you know, that is a place I feel like God is called me to be. I feel like my ministry can be on Wall Street. And I’m not saying I can go into a firm and change that firm, if you will, as a first year associate. But if I can be someone who is on Wall Street but is striving to present a godly example, then what about the next Christian young man or woman who wants to be on Wall Street and has a hope and doing it because it’s so secular? What if I am able to encourage him to do it just by my example? And so anyway, that’s what led me to Wall Street. And so I began my career on Wall Street. And, you know, the first day of work, the very first day of work, I’m getting ready to leave my apartment in Tribeca and make my way up to Midtown. And my brother calls me and he’s like, Hey, man, I hate to bother you. I know it’s your first day of work. I know it’s super early, but I need some money to catch a cab. The Praxis right now. Let me catch cab. Do you guys want a car like you don’t have? You guys, last time I checked, your house wasn’t that far from high school. What do you mean you need money? It goes well, Marcus. We’ve actually been living in a shelter the last month. And you got to the point where we’ve been here so long that, you know, we’re going to probably be kicked out soon. You know, we need some help. And I’m starting football today. And I don’t want my teammates know that I’m homeless. And I think for me, like, I get the image in my head when I think about where I was when I got that call, it just shook me up because it’s like no matter how hard we work, no matter how much we sacrifice, no matter how much we prayed, no matter how faithful we think we have been, it makes me think of a story, a job. It’s like we’re still struggling, you know, even though I am, if you will, successful. We’re. Still struggling, even though my middle brother is going to pull out of Purdue, they’re still struggling. And so that’s what it was like, you know, and so I began my career there and I sent them some money. I just got a signing bonus that day, sums of money. And that was part of my time in New York. It was, you know, you bust your butt, you work hard, you’re doing your thing, you’re grinding. You’re trying to be the best young associate possible. But you’re not like your friends. You’re not like your colleagues. You don’t just go home or you don’t just look forward to the vacation. You’re going to take the Turks and Caicos and you look forward to bonus season and thinking about the next Rolex you’re going to buy or the next pair of Gucci loafers you’re going to buy, you’re literally saying, how can I save up enough money to be able to send my family a meaningful amount of capital, but also be able to start saving away, you know, for things like rings when I want to marry the woman I’m dating or just little things like that, you’re just thinking in a different mindset than a lot of your peers. And so that was a very challenging time for me just because a lot of times my head wasn’t where my college head was.

Luke Roush: Yeah, I think that’s sensible. I watched a number of my teammates, you know, when I was playing in college, too, just had not completely dissimilar experiences. And so that can be hard in terms of just kind of building community and feeling a part of what’s going on. So just on the Wall Street front, maybe talk through a little bit of how your faith played out in that world, which is, you know, oftentimes thought of as being kind of a dark, isolated place. How did that play out for you?

Marcus Stroud: Yeah, I mean, I think a lot of people see Wall Street and they think of movies like The Wolf of Wall Street. And I would say, given my youth, a lot of those Praxis are definitely bad now. And you see some of those things that occur in the office the way they probably used to do back in the day. But at the same time, I would say the mentality is still very much there. You know, it was still very much a cutthroat environment. Money was still top of mind for people, not morality. And that’s tough because if you’re not bought into the place to work and it’s just like being an athlete, if you’re not bought into the team, if you’re not bought into the motto and mentality of the team that you’re playing for, you’re not going to be a good teammate. You’re not going to be able to fulfill your potential as an athlete. And I think the same way can be said for Wall Street. At the same time, you need to make money and you need to be successful, you know, to live it. So you try to, in a unique way, be a hybrid of sorts, be someone who is unbelievably hungry, unbelievably scrappy, demonstrating the tenacity that a lot of Wall Street folks look for in to an analyst. But also you’re trying to demonstrate what it’s like to be a man of God while on the trading floor, you know, and that’s being someone that’s kind, someone that’s gentle, someone that’s humble and someone that demonstrates the qualities of a godly man or woman, if you will. And so that was tough because you didn’t really have any examples around you. You know, it’s like when you’re playing sports, you have upperclassmen who you can look at who do things the right way in the way they do things, the right way on the field. And you want to follow that, you know, and then they do things the right way off the field. You don’t see them doing stupid stuff on a Friday night or Saturday night. You know, they’re doing the right thing all around the clock for me. I didn’t really have that, if you will, in front of me at the firm. I was at it. So they’re all really, really good people, but good as it gets to the head of it. And so, you know, I had to kind of go above and beyond. And so I was fortunate that I had teammates who I walk with through my four years in college spiritually, and they now become part of Wall Street also. And they were working at some really cool banks. And so we would get together, we would go to church together, we would have a small group together. We would pray together during the week and we’d say, hey, man, like, how can I be praying for you this week? You know, as you’re working on, these trades are going to be praying for you this week as you had these tough meetings with your bosses or as bonuses and comes around. And it’s very easy to get swayed by the dollar amounts and to lose sight of the fact that God is ultimately going to provide you the provision that you need. And so that’s what it was like for me as a Christian on Wall Street is just continually searching and searching and searching for examples and mentors and people to look to. When I realized at the end, like, hey, man, God hasn’t called you to look for humans as examples of him. He’s called you to be rude in scripture and to get your example from scripture first and foremost. And so that was probably something that really changed my life, knowing that scripture had to be first and foremost for me as I look for resources to be an example of Christ in the workplace.

Henry Kaestner: OK, I want to fast forward now to what you do. You’re an investor. This is the Faith Driven Entrepreneur podcast. And I want to get into what you’re doing, but I can’t do that without telling you about CIC First Clubhouse Investment Club. What was that? What problem were you looking to solve? Bring us into an investment career?

Marcus Stroud: Yes, that’s really my firm in New York. I work for a fund in Austin. Longevity considered as focused hedge fund. Really, really awesome. Learned so. I had a chance to be a part of their one point seven billion dollars class vehicle that was on the advisory board and then a couple other funds they had worked on. And it really gave me a tremendous amount of exposure to the alternative asset class. And just as I was going to go work for another fund, I would say pure fun of the one I was at. Tauri calls me and he says, Hey, Marcus, I’d love for you to be a part of the clubhouse. And so in 2011, in 2010, there was a third party called Broke Town, why athletes go broke and end up being one of the top three players using the release. And a lot of those guys in that theater for 30 Winfried Substory with a bunch of those guys were friends and stories growing up. And so I grew up around these guys. I mean, I knew them pretty well. And so toread created the clubhouse. And that’s required as a way for athletes to co-invest alongside primitivist capital for a premier private equity funds and for some of those guys to be direct LPs in those funds to those guys would kind of bring their money together and have an LP position, because, you know, a lot of these guys figure out how much money they make. They didn’t have enough capital to be LPs by themselves and acquire Perkins’ or a Koslov interest. Fine. But they had enough as a group to be an LP, if you will. And so that was the clubhouse. It’s my job in the clubhouse was I really took it over. So I manage all the relationships with athletes. I manage the relationships with the managers in which the athletes were working with some of those funds. And I helped them get deal flow from CDC. Every A is kind of what we focused on, got the guys really awesome opportunities. And yet I was kind of like a liaison, if you will, between them and some of the top four in Silicon Valley.

Luke Roush: That’s awesome. Thank you for sharing on that. And it had to be a lot of fun just being able to work and operate in that space and also being able to just improve access for some special people to be able to get access to the funds that otherwise wouldn’t be accessible. How did you bridge kind of from that into tech savvy and want to hear more about what you’re doing there?

Marcus Stroud: Yes. So doing the clubhouse was, like you said, it was an unbelievable dream. I mean, I’m literally working with some of the guys I’ve looked up to my whole life on the field and, you know, some of the most well-known athletes in the world. But there is a major opportunity. And it’s like for me, I never had a dream of being entrepreneurial, if you will, early in my life.

I feel like this is one of the first times in my professional career where does tangibly was showing me through people in three things, the path that he wanted me to take, because this was never my dream in my head. My dream was, you’re going to work at a fund, then work with this fund, you’re going to do well, and then you’ll probably end up at a firm like TPG for 10 or 15 years. You’ll see well there maybe stay open. Maybe you’ll try to break ranks there and that’s going to be it, essentially, and then you’ll find other things to be passionate about.

I never thought this early in my life I would throw the entrepreneurial out. And so at Club House, I was meeting some really, really awesome people.

And one of the people I met was a guy named Bret Jones. And Bret was a incredible tight end for the San Francisco Forty Niners who eventually went on to have a really, really awesome, you know, private equity capital career where he started a phone call working capital was at its peak, was a four point four billion fund of funds. And so he had used the scrappiness of being a star 49ers football player to get access to Sequoia in 1992 and Excel and all these other great fun super early on. And then he eventually raise the funds to be helped in those funds.

And so he ended up moving to Southlake, which is a suburb outside Dallas with his wife. Once he got down, lived in the valley, and we were introduced through another NFL player named Steve Wasniewski. And so, Brittny, you know, we got breakfast and then we had coffee and we would just talk about life, talk about what it means to be a man of God in that space and how it was for him starting a foot in one day just kind of said to me, you can do it, man. He gave me kind of that conviction that I could do it. He said, you can start a fight. I think the courthouse is cool. I think it’s awesome. But you’re a unique guy. You’re a type of guy who entrepreneurs love and you’re the type of guy that investors are going to like also. So anyway, after I met with Brett, I said I need to go talk to more people. If I to start a fund, I need to go talk to more people because, yes, the clubhouse is such a cool opportunity. But I know we’re missing something and maybe being a starter fund or maybe it means I should enhance certain aspects of the clubhouse. So we went out to San Francisco, we met with my partner and I met with David Crane, Google Ventures, and you see over there. And he had said, you haven’t it, if you will. He’s like, you’re lucky, guys. Those are the words you use. You’re a lucky guy. You’re one of those guys where a lot of good things happens to you. And those aside, people are going to be really, really, really good investors and become really successful in this space. And his word was luck. My word that I was hearing was favor. And so I said, well, you know, if this man can see from his position that favor the guy that afforded me in my life, maybe I should take the next step. And so we decide to start a fund.

And the reason we want to start a fund is because we saw a tremendous amount of opportunity. As a firm in Texas, if you will, this is right around the time Austin was really becoming the hot alternative to Silicon Valley, we saw a really cool opportunity to start a fund in Austin that could represent the future of diversity. I don’t mean a firm that is like all black or firm. That’s all male or firm. That’s all Ivy League or firm that like, you know, fill in homogenous group, whatever you want there. A firm that truly could represent the future that had men and women of all different backgrounds that invested in some of the most innovative entrepreneurs that we could find and didn’t really care in terms of what color they were, what gender they were just a really unique find that truly exemplified what the future is going to look like. And that’s what I want to start. And then more importantly, I wanted to create a firm that my kids would want to work at one day and that my kids friends want to work at one day that I would have gone to work at and college, a firm that was led by godly men, you know, that were kind or gentle or meek. But we’re still some scrappy some of the guns. We’re still hungry and we’re still going to find some really awesome returns. And we’re going to still to teach investors some of the best technologies alongside some of the children in the valley. That is what we want to create. And so that is why we created it. And so it was tough because early on, you know, my co-founder and I happen to be black.

A lot of people were quick to label us as the diversity investors and as the fund that was focused exclusively on minority entrepreneurs. And don’t get me wrong, I respect funds like that. We need those funds. The fact that women and minorities receive less than one percent of U.S. dollars goes to show that you need funds dedicated to those type of entrepreneurs. But that’s not who we want to be. We didn’t want to be put in a bubble. We wanted to just be some really cool guys that entrepreneurs like to work with that invested in entrepreneurs we thought were best for our fun and contributors. And so that’s our story. So within a couple of months after spin out of the clubhouse, we convinced some the clubhouse guys to give us some seed capital to get going. We started thinking we got a little bit of press. And I would say this is kind of you know, we’ve got has shown some favor in us, know, I would say like maybe two months in starting the fund. We’re sitting behind a white board, we work office and we get a cold call from this random number. And this guy on the other line says, hey, my name is so-and-so from TPG. I’d love to have you guys come in and talk to us. And I’m like TPG, the firm, like the piece. You go like this, guys, it’s possible this is not really cheap, but it was really TVG in that meeting, the founders of the firm and some of them thought it’s a little bit of our story. And what was really cool about that and why that’s relevant to this podcast right now. We got up and we told our story and we did it subconsciously, but we talked about how much God had done for us in our lives and how we felt this was our ministry, if you will, to grow his kingdom and to give back to this space. And you could tell some of the people in the room, a lot of folks who were believers were kind of like thrown off by that. But there were a couple of people in the audience who were clapping their hands and their faces just lit up because how many times have they seen folks in their space come before a room of, say, two hundred and fifty people in their Fort Worth and their San Francisco office and say, hey, we are here because of the grace of God and we’re going to build a fund that reflects that. And so, yeah, that was kind of the moment we knew, like, it’s going to be a very tough, difficult road, but we need to be here.

Henry Kaestner: Yeah. So Supermoto, tell us, what does it look like to build a fund from the get go we’ve got at the center? What does that mean that you do and how are you thinking how TV is different than every other fund that’s out there then TPG So it starts with the thought.

Marcus Stroud: Leadership, in my opinion, always starts at the top. And so it’s about how do you care for people in your firm? How do you care for people when you have a small firm that many people? How do you care with your service providers? How are you being a steward of the capital, your investment trust you with? And so tangibly, how does that look? How often are we talking at team about ways in which we can improve his teammates and as members, how are we handling conflict with each other? OK, we disagree about something. Are we yelling at each other or are we saying choice words or are we demonstrating what it looks like to be brothers in Christ and talk to conflict in a godly way? We’re praying about it. We’re bringing it to elder council and they’re counseling us through it. And so that is kind of how we did. And so every Monday morning at about 7:00 a.m., we all sit down for coffee. We talk about our weekends to talk about kind of what’s on our heart. We pray for each other through everything that’s going on in our lives. You know, we asked you, like, hey, how can I be better towards you? We have candid conversations like that and we go from there. And the thing is, when you do the little things right, it carries over into the big things. So if you do the little things right by talking to your teammates the right way in the office, by talking to your service providers, even though they may have done something that wasn’t good for your firm, but by treating them with kindness and respect. It carries over into how you talk to entrepreneurs and entrepreneurs that eventually do is there’s something about you guys, there’s something about you guys, you know, like I don’t know what it is that there’s something about you guys. Maybe it’s the fact that you’re Texas, you know, it’s actually just such nice people. And that becomes your mantra. And it’s like, yeah, there is something about us, you know, the Holy Spirit is in his office. The Holy Spirit is in each of us, and that’s how we do business. And so I think we try to actively hold each other accountable spiritually, you know, physically, emotionally. And that contributes to the culture of our firm, which eventually, hopefully, as it grows, will be Amen would be something that entrepreneurs can see right away, that these guys are just different. This is not like talking to typical VC private equity fund.

Luke Roush: So, Marcus, you and I had a good conversation just about the journey with TPG specifically. And, you know, the fact that it was, you know, mixed reaction to you bearing witness testimony to, you know, what God is doing in and through you and your business partner. How has that story and that, you know, active testimony played out on the fundraising trail? You know, we’ve had experiences personally and, you know, prior to sovereigns professionally with, you know, that going over like a lead balloon. What’s it been like for you if you’ve borne witness?

Marcus Stroud: Yeah. So I think for us, we kind of hit the mark at the right time. So our fund, we focused supposedly on human performance within his reformist health policies as well as sort of price. And so for us, our investment thesis, if you will, definitely was suited for this kind of time, if you will. And so we’ve been lucky that that’s resonating with people. But I will say that being a young, diverse fun in a place like Texas definitely has its challenges.

And I don’t see it has its challenges because we’re black or whatever. It’s just like this is a state in which this asset class historically has been kind of the bread and butter of the state. And so there’s a reason there probably zero diverse funds in the state of Texas. You know, you have to go probably to Atlanta to the next closest place in the south where there is a little bit of diversity. But, yeah, it’s been tough. I would say. On one hand, we’ve been fortunate to have received the support from folks like Karta, Motley Fool and other interesting and unique strategic groups. On the other hand, it’s like a lot of people, it’s tough for them to, I guess, understand the bigger vision, because when we tell people is we’re not just an investment fund. You’re not just investing in a VC, but you’re not just going to get quarterly updates. This is not just a regular basis upon which you’re investing in. And you try to see that in a way that can resonate with, say, a nonbeliever. And it’s a little bit difficult.

You know, and one of the things that I remember we told of our first investor that resonate with him and why he wrote a check like we have a chance to have an impact on this world in a way that few funds can probably do just given where we are, the timing of the world right now and just some of the folks that the Lord has put into our life. And we were fortunate in that we did a talk, if you will, or I guess an episode on NBC Press here in San Francisco.

And we did that and it got in the hands of a lot of people and we ended up getting a letter. It was address San Quentin State Prison. And when I saw that, I thought, oh, gosh, you know, what’s one of my family members in San Quentin State Prison? And you saw this thing out in San Francisco. I was so worried. I was like, oh, my goodness, what is this? That we open it and it’s a letter from an inmate and it won’t say his name. But in the letter he says, I saw you guys on ABC Press here and I saw what you were talking about and I saw the energy you guys were talking with. And I saw I heard the goals of your firm. And it just gave me so much hope and joy behind these bars. You know, I was framed for burglary and I served four years here. And I take an entrepreneurship class here. And one of the things that I’ve learned is that, like, it’s very difficult to be successful in business, but also be godly. And seeing a young man like yourself, you know, on a platform such as NBC press here in the heart of Silicon Valley, while based in Texas, just kind of gave me a lot of hope that when my time is up here, there may be opportunities to meet people like you who may give me a chance one day.

And that letter kind of just is stuck with me because it’s like you don’t know who the Lord has for you and your life. You don’t know what impact you can give to people. You just don’t know. It just goes to show that you’re playing. It’s not your own. It’s not you’re just a part of this kind of a you’re just a puzzle piece in his creative planet. That’s it. And so I guess between the people, we’ve had a chance to in fact, the folks who’ve been introduced to, you know, it’s been mixed. On one hand, we’ve gotten some, like I said, investor commitments from some of the top unique groups in this country. And then on the other hand, you know, it’s been tough. Difficult to find LP’s that resonate with your mission. And so, yeah, that’s kind of how the country has been.

Henry Kaestner: Thanks for sharing. That’s awesome. Marcus Marcus, one of the things that we always like to do when we close out every podcast is unfortunately, we have to do now is to understand what you’re hearing from God through his word. One of the things we love to point our listeners back to is just how important it is to spend time on God’s word every day. And so it doesn’t for you doesn’t necessarily mean be something that you learn this morning, but maybe something over the last week or last month that you feel has really encouraged and equipped you and and what you and your partner of get going.

Marcus Stroud: Yeah, for sure. I’m excited to answer this question, too. Last week, I turned 27 and I was at my prom school in Akron, Ohio. And when I got there, I met a guy by the name of Aeneas Williams, and this was the Hall of Fame quarterback who is now a pastor in the NFL. And this is an unbelievable man. And this was actually my dad’s teammate on the Cardinals and my mom, my whole life is said to be Marcus. There’s one person I want you to meet in your life. In sports, it has to be a news. WILLIAMS We were in Bible study with him and his wife for a long time. He’s an incredible man. He’s someone who’s going to put a lot of prayer into the second. You mean and I just know God has told me that one day you will meet the needs. So I meet a need is when I met the event last week. And I just really, like, turn around and like God. Oh, my goodness. Wow. The day before my birthday, you really are hearing about it and had been praying, oh, my flight there is like, Lord, show me what you want for me this year. Show me how you want me to live my life this year in terms of through this forum and just through my life. And so when I met with a nurse, we end up getting together for dinner. We have been together for a lot of things. You could tell that God was at work, strategically, put us together so we could talk. And another gentleman that was with a niece, with a guy named Sean Alexander, Sean was a great running back for the Seattle Seahawks. That would be so anyway, Sean and a nice guy just put our hearts to kind of just minister, can’t we minister to these few days and man, the amount of fruit they poured in my life, the amount of just things they blessed me with was just so unbelievable. And it was something that I needed to hear and it was something that I could tell God was just saying clearly to me through them. And I think what I’ve learned is the importance of truly, truly sacrificing things around you to just listen to the God’s voice. And that means, you know, cleaning out your mornings to where you’re not distracted by the work that you’re trying to accomplish before seven thirty. You’re not distracted by all the emails that popped up the night before that you want to get you right away. It’s simply waking up and giving it to God. First and foremost, beginning your day with God, God only. That’s it. Don’t put on any hype music to get you going. Don’t do any of that. Just simply listen to God’s voice. Do it by reading scripture, do about meditating, do about praying, whatever works for you, but just truly giving the first few hours of your day to Christ. And when I tell you, both of them kind of recommend that to me. And it’s been a Praxis I’ve done now for like the last four days, it has been life changing and it has brought me so much joy by just dedicating an hour, not ten minutes, not five minutes, but an hour, hour and a half to Jesus first thing in the morning. And so that’s kind of what he showed me. Just, hey, you know, this is my firm. Your life is dedicated to me. I get to start the day.

Henry Kaestner: And it’s been like, wow, what an incredible witness that you might provide to some of these entrepreneurs that you’re investing in.

You know, being an entrepreneur is one of the most stressful positions in life, and they’re trying to understand the meaning of identity and why they’re working so hard. And that’s one of the reasons why entrepreneurship is one of the biggest areas of mental illness and even suicide. And for you to be able to show that it’s not just kind of a check, the back ten minute thing is I am all too often guilty of doing but real intentional time. I made an incredible impression on me and our listeners. I’m sure it’s going to make an incredible impression on those you invest in.

Marcus Stroud: Thank you. Yeah, I’m so grateful that God kind of showed me that over the last few weeks. When I tell you it has been life changing, I try to encourage all my friends to start doing it. It’s it’s been beautiful.

Henry Kaestner: It’s been a special treat having you on the program. I’m grateful for your time. I’m grateful for your faithfulness and what God caused you to do. I’m excited for what’s next for you. And I just want to pray for your heavenly father. We lift up Marcus and we celebrate the great work you’ve done in his life from the beginning. And dear Lord, we ask for favor and protection. We ascended. You will help him to find the right deals to invest in. We ask that you would help us to find the right investors that would come alongside him. We pray for blessings on this partnership. Said they would work together well, and that gives me great time to reflect and be grateful for the partner that I’ve got and the partners that I’ve got.

Dear Lord, we just ask that you would allow Marcus to hear more from you. His identity would be fully rooted in you and that you would give him opportunity to be able to be a great witness with gentleness and respect, but a great witness nonetheless. And when he shows excellence and shows love to. All of these things in Jesus name, amen.

Host: Thank you so much for joining us on today’s show. We’re very, very grateful for the opportunity to serve the larger faith driven investor community. Hey, the best way for you to stay connected is to sign up for our monthly newsletter at Faith Driven Investor Dog. And while you’re there, we, of course, want to hear from you. We derive great joy from interacting with many of you. And it’s been very rewarding to see people join the discussion now from all around the world. But it’s also very important to us that you feel like this is your show and that you’ll help make it something that best equips you on your journey, one that you’re proud of and one that you’ll share with others. This podcast, it wouldn’t be possible without the help from many of our friends. Executive producer Justin Forman, program director Johnny Will’s music by Carl Cagle. You can see and hear more of his work at summer drag’s dotcom and audio and editing by Richard Bahle of Cornerstone Church in San Francisco.