Episode 46 – What Does the Bible Say About Investing? with Chip Ingram

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Last year’s conference was easily one of the highlights of our year. If you joined us, we’re so glad you did. If you didn’t, we’re glad you’ve tuned into this episode.

At the conference, Chip Ingram opened up with a talk about how Scripture can and should inform our investing strategy. It was so good, we couldn’t help but share it with you here. Go ahead and press play and enjoy all Chip has to say!


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.

Host: Welcome to the feature of an investor podcast, if you’re a fund manager, investor or financial advisor 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 faith driven investor ERG Ford 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.

Henry Kaestner: Welcome back everyone, to the Faith Driven Investor podcast. While Chip Ingram, CEO and teaching pastor, was Living on the Edge, Ministries has been a two time guest on the FDE podcast, this is the first time we’ve had him speak to faith driven investors. Today, you’ll get to hear his talk from the faith driven investor conference. In it, he shares what the Bible has to say about investing as he challenges the bifurcation between giving to Kingdome causes and investing in faith driven ventures. Hear him ask How might God use you to make a new paradigm so that you build businesses? You realize that this is an opportunity to also give generously and invest in Kingdome impact. Let’s listen in.

Chip Ingram: I’m not really an investor, been a pastor for the last 30 years. And, you know, I’ve written a few books and invested a little bit here and there. But I’m here, first of all, to welcome you and kind of kick this thing off. And second, to commend you. You know, there’s a lot of investors that invest well and then they take their profits and are very generous for Kingdome impact. But there’s not many investors who really get that. What you actually build in terms of the marketplace, what you invest in and how you develop that can have as much Kingdome impact as even your philanthropy or your generous giving. And so what I want to do is three things. I want to give you a little biblical precedent for what we’re going to do. I want to challenge that whole bifurcation that, you know, when we give money to Kingdome causes, to church and to projects, that’s the work of God. And over here, it’s you know, we do a marketplace ministry to make money. I’m going to really challenge you to rethink that. And then third, I have a story. I’m not much of an investor, but recently I got to make an investment and everything that you’re going to talk about. I think my story might be a parable for the entire conference. So biblical precedent, a very familiar passage. But I’m going to look at it a little bit differently. Follow along, Matthew. Chapter twenty five. This is the third parable about being ready for the Lord’s return. Verse 14. It says, Ford is just like the man about to go on a journey Jesus is speaking who called his own slaves and entrusted them with his possessions to one. He gave five talents to another two and another one each. According to his ability, the one who received the five talents, put his talents to work, traded them, worked in business and got five more talents in the same way. The one with two talents put his to work and gain two more talents. But the one who received the one talent dug a hole, put his money in the ground for his master’s money. Now, after a long time, the master came back to these slaves and he business term settled the accounts. When the one had come and received the talents, he said, I have five counts, master. I’ve invested them and I have five more. And notice, he says, the master says, Well done, thou good and faithful servant. Very interesting. I want you to catch this. I will put you in charge of many things and enter the joy of your master. Most of you know the story. The two talents received the same commendation and the one with one talent is sharply criticized and his one talent is given to the other because he’s irresponsible with it. Now, I don’t want to teach this whole passage, but there’s a handful of observations in this passage that I think are of biblical precedent for Faith driven entrepreneurs. First of all, a talent here wasn’t coinage. It was a literally like a block of metal with value and. Probably the best way to get it is talentless, usually about 6000 denarii, and that would be are you ready? The one talent person basically got what it would a daily wage for 20 years. Sometimes I’ve heard this Totò and people think, oh, I only have one talent. Now think about not having to work for 20 years. That’s a lot of money. The two talent would be someone who said, how much do you make in 40 years. There you go. Here’s a block of money. I want you to invest it. And the five talent son was given literally enough money that if he worked every day, he wouldn’t have to work for one hundred years. Here’s my point. They all have very significant amount of money. Second, it’s each according to his ability. You know, it’s not egalitarian. God intrust different things to different people, according to their ability. And then he evaluates and rewards them. Not based on how much, but what did they do with what he gave them. Third, there’s a dual role in the ancient Near East. During this time, when Jesus is talking, a slave would almost become like a partner. Yes, he’s a slave. Yes, technically he was owned, but there would be a very familiar relationship. And so as he goes off, he has two roles. One, he’s a steward. This is your money master. But you’ve entrusted all this to me. Second, though, he’s an investor. And don’t think when he says he invested the five talents, don’t think like he he put it in a 401k or he put it in some financial institution because of the way this is written and the time and the group. In other words, he created a business. He had to invest in a business. So he had the dual role of steward and investor for the observation is notice the reward. His reward isn’t, wow, you had five talents. Here’s five more. Here’s more money. He says, I’ll put you in charge of many things. In other words, you know, when you’ve built a business, when you invest and when it grows, the reward is the impact, the platform, the extent. And what he’s saying to them is your trustworthiness has allowed me to give you an extended impact. And, you know, if you when you invest just like all of us and whatever we do, when you’re made for it, when you think you pray, you invest in this person, you help them along the way. You give insight here. When it grows, there’s great reward. But then notice, not only is there a horizontal thing that happens in terms of extent of impact, more responsibility, but there’s a vertical one now enter into the joy of your master. What I want you to get here is that investing, building a business, taking money that God has given to you and creating it in businesses with people that can really make a difference, that provide goods and services, that create jobs that make an impact on employees lives that are goods and services that that blessed the common good of other people. That’s very significant impact. By contrast, I’m a pastor, and so my only investments are, you know, most workers are like me and say you have A 403 B, right. And so I’ve put a little money out of my paycheck for 30 some years. And, you know, it’s a fidelity or a principle or this or that. And they send me a bunch of papers. And yes, by now I do have a financial planner. And I by the way, we need you to go into your website in Large-Cap SmallCap. I have no idea really what I’m doing. And I don’t know whether fidelity or principle or any of those groups, you know, I know that we’re not investing in immoral stuff, but I’ve seen investments in my life just as I need some money for later. I’ve never thought ever in my life, where are you putting that money? And could your money in investments have a kingdom impact rather than just I’ve taken my money and I’ve had a great chance to give an Kingdome causes. So I want you to really think this. How might God use you to change your whole new paradigm so that as you build businesses and as you coach people and as you develop people, you realize this is an opportunity not just to make money, not just make money even to give, but both in. Yes, make money so that you can give generously for Kingdome causes. But what if you invested in things that had Kingdome impact by the virtue of the actual investment? Now, here’s the story I want to tell you. And you know, many of you, obviously, you’ve invested lots of money and millions of dollars and and I’m a pastor. Right. But over the years, I’ve been debt free and and I’ve written a few books and I made some pree decisions about what to do with that money. And probably like many of you, when I was young, I learned to tithe and then I learned to do kind of proportional giving. And in the last maybe eight or 10 years, I’ve had a handful of times where God has allowed me to make a six figure gift and to the church building program missions living on the edge. And it’s been just an amazing joy to see God provide resources I never dreamed I would have and to see it invested in books in China or missions, things. And, you know, it’s been really exciting because I never saw myself ever as a major donor. And yet over the years, I’ve gotten to be a bit of that here and there. Well, about must have been, I don’t know, two, three years ago there was a young man who I really believed in. And it’s a long story, but it was an investment in a group. And my wife and I, as we prayed about it, had it prompting from God. Now, I’ve never invested in a company. I’ve never invested in a startup. And if you knew the whole story, you would know maybe why we were prompted. But I won’t go into that. And so I’ve kind of come to at this stage in my life where, yes, I want to put some money aside. But at the end of the day, it’s numbers on a piece of paper. I don’t want to die with a bunch of numbers on a sheet of paper. And this young investor that I really believed in, I took one hundred thousand dollars out of my savings and he couldn’t go full time on his startup. And that allowed him to go full time on a startup. Now, because he was related to Henry and got coached and mentored by Henry, he was going to be a faith driven right entrepreneur. And so built into his strategy was, we’re going to have ministry, we’re going to have a kingdom impact built into his concepts, for these are our values. Every time he does an off site, he tells the story. This is what God has done. These are what our values. He’s hired both Christians and non Christians. Another part of his story was it has to do with cars and repair and software and stuff that I don’t really understand. But part of it was we want to help people as a part of our you know, we have a dashboard of success and one of our dashboards is maintenance for moms. We want we want to help moms, single moms in desperate situations. And whether that’s repair, well, OK, so he got his first round of funding and that did really well. And and I was glad because there was a big part of me that thought, well, you know, I really believe in that guy. And if I never see that, it’s not like I have a lot of money laying around. But I thought God told me to do it, so I did it. Well, then he got a second round of funding. And it just what you know, like off the charts. Well, here’s what I want you to get. I got to be a part of his first emails. You know, when it’s family and friends, we would meet over coffee and he would talk about, these are my dreams. I got to do a little coaching just just now and then from a distance. Not the business side, but just the heart side. And then little by little by little, I watched him as he just championed his faith every month for, I don’t know, the last six, eight, nine months they have given a car, given a car to a single mom, but not just the car, but with discipleship, with meeting with her friends and family every time it’s actually in this building that I’m in right now. When they do the car, all the employees come out and they gather around and they give the car and then they pray for, well, now he’s got a group of people and one of the Eastern European countries and 15 or 20 or 30 people there. And it was a lady there. That’s a part of that company that had one of the only one or two outreaches of there’s all more abortions happening in that country than anywhere in all of Europe. And so now there’s ministry there. I’ve looked at first it was 30, then 50, then 70. All these people now have jobs. Here’s the virus. All these people, they have jobs, they have a ministry, and then he has these off sites and he keeps championing. This is why this is what God says. And you know what I realize I’m really glad when I’ve been able to give a six figure gift to ministry in China or ministry to help build a building at a church or ministry over in this place or that place.

But when I look at the investment that I made, I’m looking at all these families being changed.

Now, one of his employees lives very near to me, and I’ve seen the evidence in his life. I’m seeing moms get minister, too. I’m seeing international ministry occur. I’m seeing a whole group of people with a testimony to all their clients all across the country. And by the way, when needed, did that second round. I just thought to myself it’d be kind of nice to at least get my money out of it. I’m not sure where it’s going to go. The return on my investment was unbelievable.

Unbelievable.

And what I want you to know is that as you all start this conference, I want you to really be thinking about not just here’s my investments, how do we make money? And to be generous with it, I’m going to challenge you and you’re going to have great speakers to know all about this. I want to challenge you to be that kind of servant who says I’m going to give generously out of my profits, of course, but I want to be a part of marketplace ministries with faith based entrepreneurs that have a kingdom mindset so that the impact in the marketplace is not just money, it’s not just a return on my money, but I mean its lives and it’s transformation. And you invest your money in people. You know, when I read this little parable, I thought to myself, you know, think of the Jewish culture. Do you think the slaves went out and cut a deal with Rome in a business or with some gentiles? What did they do? They met some other Jews, people they trusted. They built a relationship and they built a business. And pretty soon he had one hundred years worth. Right. Big, big money. Now he’s got two hundred years worth of in. All right. And he did that because he built relationship and ministry and investment in people and saw the kingdom impact not just in the profit, but in the actual process.

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 Doug. 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 equipped you on your journey, one that you’re proud of and one that you’ll share with others. This podcast, it would be possible without the help from many of our friends. Executive producer Justin Forman, program director Johnny Will’s music by Carl Chigwell. You could see and hear more of his work at summer drag’s dotcom and audio and editing by Richard Burley of Cornerstone Church in San Francisco.

Episode 47 – Moving Generosity from Obligation to Opportunity with Daryl Heald

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Today’s guest is a friend of the podcast, someone we look up to and respect, but someone we’re also happy to call a friend. Daryl Heald is the Founder of Generosity Path. For more than twenty years, Daryl has traveled internationally sharing the message of biblical generosity. 

In his role with Generosity Path he focuses on mission-related activities: strengthening and developing relationships with champions, facilitating Journeys of Generosity (or JOGs) and trainings, as well as encouraging businesspeople to be generous. 

He’s here to share his personal story, to give us a primer on what it means to be generous, and explain why you never meet an unhappy generous person.


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.

Host: Welcome to the feature of an investor podcast, if you’re a fund manager, investor or financial adviser 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 faith driven 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 guests 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.

Daryl Heald: The big idea here is for us to see it as opportunity, not obligation. Right, so we kind of think that when you say investing, giving generosity, the investing side implies opportunity, right? Because we all like, hey, here’s a great opportunity. It’s right. Everything every deck built on that. Right. Every pitch is built on what’s the opportunity. Right. What’s the potential? What’s the upside? How much am I going to make? What’s the game? Right. Well, if we really understand scripture, which is why I ask you the why question on your giving.

So it’s not about the tactics of giving. It’s about why and why is the answer and why is important because the answers to the why question our beliefs.

Henry Kaestner: Thanks, everybody, for joining us again this week on the Faith Driven Entrepreneur podcast. Our guest today is a friend of the podcast, someone we look up to and respect, but more importantly, someone we’re also happy to call a good friend. Darryl Heald is the founder of Generosity Path. For more than 20 years, Darryl has traveled internationally, sharing the message of biblical generosity in his role with generosity path. He focuses on mission related activities, strengthening and developing relationships with champions, facilitating journeys of generosity or jox and training, as well as encouraging business people to be generous. He’s here today to share his personal story, to give us a primer on what it means to be generous and explain why you never meet an unhappy, generous person. Let’s listen in.

Welcome back to the future of an investor podcast. I’m here with my great friend, business partner, confidante Luke Roush. Luke. Welcome back. Good to be here. Dude, we got a great guest. You know, a lot of times when we have guests on, I do some amount of prep. A lot of times I don’t. But most of the times I do. And I’ll be honest with you, I didn’t do any prep because I knew we had Darryl. And Darryl is one of our best friends in the world, is a guy that if you’ve listen to this podcast or at least a Faith Driven Entrepreneur podcast long enough, you know that there are two major foundational faith moments in my life. At age twenty eight, I came to know Jesus through God, speaking to me through his word in a very patient associate pastor. And then at age 38, I got introduced to this guy named Darryl Heald. And Darryl came to know me and endeavored to understand some of my story. And then he stopped maybe two hours into it and said, hey, I think I’m following this. But why do you give? I talked a little bit about why I was talking a little bit about some of the different ministry things that Kimberly and I were involved in at the time. We were given probably 20 percent of why we thought there’s a special place in heaven for the double tither. You get box seats at Angel games or something like that. There’s something in it for me, undoubtedly. And that simple question from Darryl sent me, Raylan, and sent me back to Scripture and allowed me to just have a completely different and renewed relationship with God. And I’m forever grateful to Darryl for that. I wanted to get involved in the ministries that he was running. He’s a co-founder of Generous Giving, founder of Generosity Path, and he loves bringing the biblical message of generosity to people as they come to know God more fully. And it’s a great message. And I love our friendship and our partnership in ministry and so many other things. He formative in the starting of sovereigns, capital and his journey with us through every step of the way. And it is an embarrassment and an oversight that we have not had him on the program, any of our programs. So I’m really grateful. Thank you for join us. Maybe we’ll start off by talking about a ministry that is really important to you at this time of year that has nothing to do with generosity or actually it has everything to do with generosity, smoking for Jesus. What is it?

Daryl Heald: I don’t get some smoking for Jesus. All right. We’re diving right in. This is one of my favorite topics. Well, I’m a Texan and I think it’s just in our blood to smoke meat. And I tell you, it was I mean, just one of these amazing gifts twelve years ago that God gave me a friend here in town, man named Big Kenneth Johnson, who also loves to smoke, mate. He’s a Tennessee. And and, you know, through God’s providence, he brought us together. And we are at lunch one day. And I said, you know, Kenneth, what’s your dream? And he said, you know, there’s a lot of people hurting out there.

And, you know, I like to help him.

And his brother’s a great preacher and things like that because I’m not a preacher. He’s I just like smoked meat. And I said, I think we got something like we got something there. And so we started smoking for Jesus and we just started would take our smokers and we’d go into some of the housing projects and. We said our smokers just brought the aroma of Christ, and if you want to draw a crowd said, you know, you got three components that will always draw a crowd smoke, fire and meat, and you will draw a crowd. And sure enough, he did. And he was the oldest of 13 kids, no father. He grew up in these different housing projects back in the civil rights era and 10 years older, me, one of my mentors and best friends, he went to be with the Lord last year. A huge loss for me there. But we continue the ministry. We just smoke. Two hundred and forty turkeys for Thanksgiving takes us about forty two hours of continuous smoking. We’re hoping to do three hundred at Christmas and it was very interesting. We took Kenneth, we just had a notebook and his distribution system is he would call up different people he knew. That worked with refugees or worked with widows or worked with homeless people, teachers at school that knew kids that were in trouble and needed help, it was just a hand ledger. And so for 12 years, we have his notes from these hand ledgers, and that’s what we went off of this year. His wife, Connie, just worked off that ledger and called all the people and said how many turkeys you need? And they would say, well, I need five. I need eight, I need six. And we welcome and that’s our gift to the community and we feed. Well, covid has been a terrible year for us. Last year we had twenty seven events and fed well over ten thousand people a year. And yeah, just a simple history of loving people this way and being able to do it with our past and we just stay up all night smoking butts.

And what meat would you say most resembles the aroma of Christ?

Well, so we always have this, you know, people that know barbecue, which I just said, I’m a Texan. He’s a Tennessean. The big rivals here are brisket versus pork butt and pulled pork versus the brisket. So I’m a beef guy. And so, you know, we didn’t argue too often, but basically I did the beef and he did the pork and it was a good teamwork.

Luke Roush: That’s awesome. Body of Christ in action.

Henry Kaestner: That’s right. So we started talking at the outset about the impact you’ve had in my life and in others lives. And it comes down to this concept that I think is really important for the faith driven investor. And on one hand, somebody might say, what is investing have to do with generosity and at one glance kind of their distant cousins? Yes, they have to do with money. And yes, there’s faith in there somewhere. But I think that we’re coming to understand with time that it’s all kind of lumped up into the same concept. And I’m hoping that you might be able to help us unpack that a little bit and refine it a little bit, because my sense is that it’s a similar DNA and similar heart posture that allows for somebody to be a good faith driven investor as well as a generous person. And maybe you can help us sort through that. What’s a heart posture? What’s a mindset? Somebody is listening as podcast and saying, what does it mean to be a feature investor? Where do I start? How would you help them with that?

Daryl Heald: Yeah, well, I don’t think they’re distant cousins at all. I think they’re the same. But I think the big idea here is for us to see it as opportunity, not obligation. So we kind of think that when you say investing, giving generosity, the investing side implies opportunity, right? Because we all like, hey, here’s a great opportunity and. Right everything. Every decs built on that. Right. Every pitch is built on what’s the opportunity. Right. What’s the potential? What’s the upside? How much am I going to make? What’s the game? Right. Well, if we really understand scripture, which is why I ask you the why question on your giving.

So it’s not about the tactics of giving. It’s about why and why is it answering? Why is important?

Because the answers to the why question our belief. And so none of us act on unbelief. We only act on belief. But here’s where I want to make the connection is it is all about the investment because it’s all about our stewardship. One hundred percent. Right. So we have a hundred percent that whatever God has entrusted to us as a steward. But the big idea is not like, well, now you’re obligated as a steward to do well and you better do good. Otherwise, I’m going to you know, I’m going to get you know, it’s really about the opportunity I’m giving you to be the steward. And so it’s about allocation. Right. And so it’s all about to me, investment is the same. Meaning whether you’re investing in a for profit or you’re investing in a ministry in the kingdom, right. Because to me it’s all about queendom investment. And so then it’s allocation into different types of asset classes on this, and that’s where I think we hurt ourselves when we bifurcate it, because then we think differently. We allocate differently. If I’m saying, oh, this is a for profit investment and this is my type of return, and then I have this conversation, oh, this is now a different conversation. If it’s to a ministry and this is right pocket, left pocket, never the twain shall meet.

Henry Kaestner: And just the whole process is different when you’re suggesting that it’s not it’s the same type of fundamental process to endeavor to understand how do I steward and how do I lean into this opera? And I think you mentioned something really important there is that I think the two oftentimes people think, well, it’s an obligation. And I think that there is an element of us being held accountable. But that’s not the way God designed a guy designed us, gave us an opportunity to participate in the work that he is doing in his kingdom. And we can participate alongside. And you’re suggesting there’s that type of mindset that can guide both our giving and our investing?

Daryl Heald: That’s right. Well, I think we have one hundred dollars and how we choose to allocate that in a stewardship side. Because here’s the fun thing is a lot of the different entrepreneurs that we see here in the US that are faith driven, we see globally that are faith driven, the lines have begun to blur, actually, even between what is traditional ministry, what is a traditional investment, you know, from a philosophical side or learned a lot from a friend that works at the Omidyar Network, Randy Newcome, and he told me how the Amedi are set up their investment. They said, look, this is not, you know, so typically you go looking for money from the Omidyar’s and you say, well, if you’re a for profit, you go talk to these people. You’re not for profit. You go talk with these people. What beer are figured out is Nagas know, I want great people with great ideas and in the continuum of capital, I’ll figure out what type of capital I need to allocate to it. But I see it all the same. And I think that’s where we’ve kind of traditionally bifurcated this. I think this is all about Kingdome investment here, regardless of whether it’s a not for profit or for profit entity.

Luke Roush: So as as you think about some things that are maybe better capitalized with for profit dollars and other things that are better capitalized, and what’s your methodology? Darrel’s you think about kind of what goes into what bucket, because the concern might be that you got something that really should be for profit, but somebody just wants a better valuation. So they end up kind of cassin is kind of a non profit deal or vice versa. How do you think about that just in your own practice?

Daryl Heald: Well, I think there can be. This was the interesting thing that I actually learned again from the middle class is there’s this continuum of capital. So you can take a great person with a great idea that in some ways sometimes has started maybe as not for profit, maybe in the in some of the early, early stages. It might have done that. There are actually a number of what I’m beginning to see are actually either for profits or not for profits, attaching the complementary organizational structure to it. Like, for example, news story has started a venture capital fund, which is a not for profit, but they’ve created a for profit venture capital fund to fund innovation in the building space, because if their big idea on the nonprofit side is to solve the homeless issue, provide great housing to people globally, they realize that in some ways you almost can’t get to it in the traditional nonprofit way. And this is where my experience, too, is the difference between, like you have again, this bifurcation. You have two pocket books of what I have to give to a ministry and what I have to invest in a great deal. Well, what I’ve seen is it’s typically a huge multiple of what someone’s willing to invest in a great deal versus what they’re willing to give.

Henry Kaestner: Yeah, well, you know, there’s something there that I think is really powerful and I want to make sure that we don’t pass over it too quickly because otherwise we might go onto a different subject. You’re suggesting that there’s a big difference between a bottom up approach, which is the way that most crossfires think about versus a top down approach. So here, what a bottom up approach means. OK, I have a certain amount of money that I’m going to give this year and have a certain amount of money I’m going to invest this year. OK, how am I going to invest it?

Where am I going to get the return? And then you’re saying, no, no, no, no. Top down. What are the causes? What are the things you care about? What are the problems you’re trying to solve? Start there, go to people, find out what’s the best way, what are the best ideas that are out there. And if you do that, you start based on where God is calling you, whether it’s justice related or whatever it is, maybe it’s housing related, whatever this space is, if you’re looking for the best ideas, if you get ten of them, you can come back and there are going to be. Investment ideas, and they’re going to be giving opportunities. That’s right. Let’s start off with the cause and the passion you have first, and that’s the top down approach.

Daryl Heald: I like that as well said. Yeah, it is.

Luke Roush: Whatever. So, Daryl, just to kind of ask a follow up to something that we let off with, in your experience, what’s kind of the number one thing that keeps people from being generous?

Well, I think it’s fear. I mean, there’s a number of different other issues, but I would say at the base, a lot of it, it’s fear and it’s almost like fear of the unknown.

Henry Kaestner: Maybe you could share some stories about some of the people that you’ve worked with that have given too much money away and are now living despondent and homeless. Paint the worst picture for us. How many times have you seen that happen where people say cash gave away too much money three years ago? I really regret that.

Daryl Heald: Yeah, well, I do remember actually being in Northern California, guys. I do remember being there in Silicon Valley in the late 90s. And for those, they’re all still old enough to remember that time. I mean, everything was just going crazy up, up and up. And I remember I met with a venture capitalist, a young venture capitalist, and, of course, everything he’d been given, which is multiplying like crazy. But I had been in this conversation with him about his giving. And so I said, well, OK, great. So you’re making all this money, has your giving. And he goes, have you not heard me? He goes, I chilliness, I’m killing. I’m making 70, 80, 90 percent on my money. Why would I give it right now? Why would I give it right now in an badami in these early days, I was like, well, OK, but I said, here’s the risk you run right, is what we think is one since the great temporal investment. Right. And he was making a good point. Hey, how much do I let this kind of run before I do give it? And I said. You know, that’s legitimate, right? So I get a bigger number to give later, and I said, yeah, the only risk I see in this is that we are at once competing against maybe what a kingdom return is, which we know from a biblical size thirty six to one hundred forty three thousand six thousand ten thousand percent. So when he was, I think, very confident about what he had, but I do remember a follow up conversation. And as you all remember what happened in two thousand. Right. The incredible intimately crash. And it was a very interesting, sobering conversation. But to his credit, he’s like, all right, I get it.

I get it. Now, he said, look, maybe I was riding this a little too strong. And he said, I do regret not giving.

Henry Kaestner: No, because is interesting, you said the thirty six hundred fold and that is that OK, so you are so confident in your ability to make money that, by the way, that’s probably the first sign that the wheels are about to fall off in the market or whatever you get going on, number one. But number two is that that presumes that the rate of return that you have in human or earthly terms is greater than the spiritual return of what that money or that investment might mean in something that’s more attributed to the kingdom of God. So if it’s at school that you’re investing, that you might otherwise give a donation to in Ghana. Were that a new class of high school seniors might come to know that there’s a God who loves them and transforms the trajectory of their life, they’re just different types of spiritual returns. And you miss out and it’s what you’re doing is you’re missing out. And it’s not the obedience, it’s the opportunity. Yeah. You think that the opportunity of making the money in the market is greater than the opportunity of participating in what God is doing the world? Now, let’s come into a related and very important topic, which is, does investing with a kingdom mindset necessarily mean that we need to get ready for just mediocre returns and we’re just cash? We need to just prepare ourselves for single digit returns, lots of losses. What does it look like to have a when you go ahead and you talk to the and they find the problem that they want to solve or they see the opportunity in a particular region in the world, how do they invest that with excellence? What does that look like? And can it include the spectrum from philanthropy all the way to market returns or market returns? There’s just no place for that, because if you’re doing market returns, that means you’re exploiting something and that necessarily is bad.

Daryl Heald: Now, I think it’s part of what we’ve been discussing here is I think we have to broaden our spectrum here and realize in one sense, what are we trying to accomplish? What are we trying to solve and creatively figure out how that’s going to be done. And that’s that’s in all the different ways. Right? We’re looking for great people with great ideas. And then irregardless, however, they’re incorporated in what they’re doing and how we allocate those, whether it’s philanthropic capital or investment capital.

Henry Kaestner: Well, you’ve been involved in deals like Grab and CloudFactory and in others where you’ve seen where somebody comes out and says, I’ve got a mission. I want to be able to bring safety and transparency to a vulnerable population in Southeast Asia. Know, Anthony Tan starts off his business not as a business. It was a ministry. It’s going to be five Wannsee three. It just so happened that the easiest the best way for him to accomplish his mission after some counsel from some others ended up being a business. And it’s a business worth 14 billion dollars plus. Right. And so when you look to solve a problem with excellence, that doesn’t necessarily mean that you’re not going to be able to deliver financial returns to. I think about Ashoka’s Kandarian wanted to be able to love on single moms that were trying to get their cars serviced and being able to provide software to auto shop owners. And he just took in a fifty million dollar investment from Bessemer. Right. Then maybe that’s a sign for us, too. So coming back to what you’re saying before, start off with the idea and then be open to work out what leads you. Then you talk to these entrepreneurs that say, here’s the problem I’m trying to solve, then you can come alongside them and in the marketplace you can actually get good financial returns.

Daryl Heald: Right? Absolutely.

Luke Roush: How do you think about so if what you’re really looking for, Daryl, is people who have passion, incompetency about tackling something, then you’ll figure out kind of how do you blend the right mix of at market capital and concessionary and or grant capital? But part of what we’ve seen make really good relationships is where when we as an investor fall in love with the entrepreneurs idea of where they want to go. Let’s make sure we don’t fall in love with our idea. Make sure we fall in love with their idea within the context of an investor really sensing a call from the Lord about where they might be called to engage or how they might begin the process of engaging in things that the Lords put on their heart. And they go out and kind of find the right people who are also called in that direction. Any tips maybe from when you talk to first time to Henry or others about kind of discovering their passion for why they give? I know there are some specific kind of missional focal points that came out of that discussion between you and Henry, you know, 20 years ago or whatever it was. Any kind of tips for how we might individually discover that with a Lord? You mean what a particular focus or passion would be? Yeah, because, you know, you can go everywhere, right? There’s a million different there going on in the world, the thousands of deals. How do you decide kind of how does someone individually discern where they might go?

Daryl Heald: Yeah, that’s good. Well, maybe one of the simple things that I’ve always used to help me discern. God, what are you asking me to do? And John Scott talks about discerning the will of God in a calling, has two components to it. One is a push and the other one’s a pull. And so he’s saying you need to be aware of contextually aware that if God is pulling you into particular conversations, you’re meeting these people and then all of a sudden some of the dots are connecting. Be aware of that. Right, because none of these things are by accident. Right.

It’s not randomness and it’s not by accident, but it’s is God’s sovereignty operating to either push you out of a place of comfort and pulling you into this new place and then obviously with prayer and then with the word of God and then the Council of Peers and some friends that can help you discern that, too. But I think to me, one of the things that’s been helpful has been those two components, like internally just being aware. Well, you know, I’m getting this pull and I’m seeing not by accident that this person’s about this this person is about that. It seems like we’re all having the same conversation. Then I should be really aware of that. That’s good. So, Henry, at the beginning of the program, you were saying that you have this transformational experience. When I ask you the question, can you elaborate on that a little more?

Henry Kaestner: So today came to faith and I knew that there’s a God who loved me and that changed everything, but when I started thing, when I thought about money, money from me was something that was a requirement of me. OK, so God has blessed my business should probably be more generous because there are other people who are not as successful in business and they need finances to run the orphanage or whatever the case is and so can win. I should give more money away and maybe the tide is the right level for us. And then we started getting more generous. We saw some more needs and we thought, gosh, you know, God bless us a lot. We probably should give more. It was a responsibility and an obligation and it was a way of us giving back. If you had asked me at the time what you did, why do you give? I may have even said I want to pay it forward or something like that. Would transform for me, and I think that it does have everything to do with the way that I think about things as the fate of an investor now is that my motivation for giving became one of a sense of gratitude. So when you ask me that question, it wasn’t like this all sudden, this light bulb and everything, just like, oh, my goodness, that changes everything. It was over the next six months, every passage in Scripture having something to do about money. It was amazing. It’s unbelievable. And listen to this podcast probably can identify with some of that and those passages like God taking five loaves in two fish and feeding five thousand. What does that have to do with money? Well, it had to do with the fact that up until that point in time, I thought that God actually needed me to underwrite the five loaves and two fish. Wait a second. He can take something out of nothing. He doesn’t need my lousy money. He just wants me. And then it would be messages just simply about just the gospel and the fact that I came to realize that, you know, why I might give is out of gratitude, not an obligation. And, you know, it took me from this life where faith was important, the real ramifications to just being alive and having a sense of joy. And I get a sense of gratitude. But, you know, with time and over the course, the last 10 or 15 years, especially as I’ve looked to invest more and more, it’s really motivated by the sense that you mentioned before, which is opportunity. And it’s it’s a special privilege. It’s a special, amazing thing to participate in the work that God is doing in the world, not because he needs my capital, but he invites me in. And it’s an opportunity to commune with the living guy doing some things that are really, really important. I love the stories of the entrepreneurs we get a chance to invest in, and I love the stories of the funds we get a chance to participate in. It gives me great joy. You know, I’m an investor. Luke and I are both investors. We invest in pattern recognition. OK, so there’s a good amount of selfless ambition that drives me now with how I think about generosity and more specifically, faith driven investments when I invest in something has some level of spiritual integration in it, and even better yet, a gospel proclamation element of it, particularly overseas. When I do that, I feel joy. You know what I’m all about getting more joy in my life. And I find that when I’m in line with God’s plan for my life and so I want more of it, I get more joy from participating in some of these funds, particularly some of the ones that are emerging now in frontier markets that have got spiritual migration and really making a difference overseas. I just get 20 times more joy than I do for my Vanguard index fund. And so, again, I invest in pattern recognition. I’m going to do more of that. And it’s just that’s the difference. It’s the first way is out of an obligation and now it’s an opportunity.

Daryl Heald: I love it. I love it. Yeah, it is is. I mean, joy. Yeah. We’ll keep moving into joy. Right. Everyone wants a little bit more of that. See, that’s some of the fruit.

You know what I think sometimes to how we kind of misunderstand giving because we think what we’ve given is gone and like there’s no inurement in actually the way God has his designed it is that there’s actually there is some future sense of however he’s doing the math of laying up treasure in heaven. Right. For Matthew six. But there’s actually a Daubert, you know, force here even presently to even described. This is part of, you know, this gratitude and this joy. Right. But so there are some other things that when you look at the grace of giving and we look at the and what’s doctrinally what that means, some of the other things that are new to us when we’re willing to invest in the things that are unseen, which are eternal, when we’re investing in the kingdom, then, you know, things like favor, things like rest, things like lack of fear, lack of anxiety, grace, you know, reward worship, all these things.

These are like true promises in scripture. And that’s why he said, you know, move into this. That’s why he says it is more blessed to give than receive. That was awesome, dude.

Luke Roush: That was very good. Very good. That was brilliant. That was really awesome. I want to ask a question, Dara. So one of the first times you and I really actually spent some time together was when you brought the journey of generosity to Indonesia. And I had a chance just to kind of see a number of people that I knew well really transformed through that experience. And then, of course, you know, the journey of generosity is really taken off since then in Indonesia and in the region. I’d love just for listeners to be able to hear and get a sense of the scale of how God has worked through those events to be able to just convict people on their hearts, what generosity means to them, and kind of a reframing as you’ve done with us. So, you know, how far is gone, how many people have been touched. So you’ve got to be an encouragement.

Daryl Heald: Yeah, thanks. I still remember that that was the first one we had done in that country. And as you know, because you lived there, the Indonesians are fun, man. They love to talk you. So when you’re facilitating this, I mean, sometimes you’re wondering, OK, or people are going to talk, are they going to share and so on. I mean, every time we threw a question out there, every. And around the table wanted to share, everyone wanted to talk, but the scope of the movement now, so we started generous giving in 2000, the global work started in 2012, and we’re in seventy four countries in thirty two languages now. So it’s just a testimony of God’s word. This is God’s message and his movement is how we’ve always seen it and what I’ve always stated and what he intends for his church. Right. Because here’s the other big idea of, you know, a lot of times, too, we have talked about bifurcation. Sometimes that investment and, you know, the difference between for profit, not for profit investing versus giving. And we also think between the West and the east and, you know, the developed countries and the developing countries. Right. And socioeconomic status and so on. But ultimately, we all have been created and designed to be givers and receivers. And one of the most exciting things that we’ve seen in this movement globally has been generosity, stories that I could share with you from Venezuela and Zimbabwe and Romania and India and Nepal and places that we would normally think, OK, wait a minute. Like I just got a letter the other day from a guy from Sudan and he’s been taking the journey of generosity to Syria and Yemen and in Iraq. And I was like, OK, those I never thought we would have, you know, the generosity movement, OK, might go, you know how many countries you like. I just unfortunately, I typically was thinking we go to the more Western wealthier countries. And I mean, my mind has just been blown the last several years, just seen how guys like my messages for everybody. And this particular the generosity message is not about, you know, socioeconomic status for everyone because we’re all givers and receivers. If we understand this, then we all, again, have the opportunity to not only be givers. And so we shouldn’t have these kind of hardening of the categories between people that are you know, they live in this country and they have this type of GDP or something like that. Certainly they receivers and I just been blown away with that. That’s the fun part. That’s the fun part. Again, it just kind of flips the whole deal on its head.

Luke Roush: Yeah, well, you know, something that clicked for me is that we might have something to learn actually from the marketers of the world. The marketers of the world aren’t focused on old rich people and younger people who are potential customers for the next 30 or 40 years. And maybe there’s something to be learned from that. As you think about let’s really invest in the next generation and said demographics are destiny. And there’s some truth in that. In a country, like you said, you know, if you can really see something with younger women in a country that’s as young as Indonesia is, is just one example. The legacy of that is multi multigenerational and it’s not counting down in terms of population, the way Western Europe or Japan or maybe even the US would be net of immigration.

Luke Roush: That’s awesome. Thank you for. Yeah. Yeah. Like 60 percent of India’s under the age of 35.

Henry Kaestner: Now they’re going to be more entrants into the job market in Africa over the next 20 years than India and China combined. So there’s something really promising about this next generation. I love the way that you’re investing in them. So tell us if you’re trying to figure some more of this out, what are some ways for people to get plugged in to this generous journey?

Daryl Heald: Yeah, thanks. Well, you know, we’ve had to pivot this year and develop all of our experiences online, so typically when we you know, I’ve mentioned the word journey of generosity that we commonly referred to as a jog. And we’ve also developed the giving plain retreat coming out of the journey, transformational experience to be able to apply it. So we’ve developed those online and we’ll be happy to to help guide through one.

Henry Kaestner: They’re really, really good. I did want the fact that you’re now doing them online aloud, Kimberly, I because we get kids at home. Otherwise, typically a journey of generosity happens at a really nice hotel. Somebody pays for it. This is always a very safe thing. Nobody ever asked for any money. And it’s really usually at a really nice hotel. But Kimberly’s never been able to go to one before. And so this actual format allowed us to do it as a couple. And it was really awesome. And I’d say it was every bit as powerful as the in-person version.

Daryl Heald: Great. Well, that’s exciting to hear. We are going again. Holy Spirit does the transformational work. But, you know, you can go to the Generosity Path ERG website and you can contact us and we can help you get into a journey, generosity, experience. So we love to do that for you.

Henry Kaestner: Excellent. We close every one of our episodes off, as you may know, by asking our guests something that they’re hearing from God through their time in his word. And it could be this morning, this week, this month. But what’s something that you feel that God is speaking to you about right now?

Daryl Heald: Well, I mean, one of the unique things is, you know, you and I do a reading group together. And so we’re in the New Testament.

We’re actually in second Timothy right now. Second Timothy, one second, Timothy to both. Paul speaks about sharing in the suffering for the sake of the gospel and for the sake of the ELAC. And he speaks in suffering a lot. But that’s just jumped out to me again, is to in a convecting way. I love buying into, again, all the things that seem good. Am I also willing to buy in and take a share of the suffering? You know, this is really convecting for me, you know, and as I’ve had opportunities to interface with a lot of our Christian family around the world, I mean, there’s there’s a lot of suffering and I see them sharing in that. Well, I’m just personally convicted in my own heart that I need to have more faith and be willing to share in that. The second thing is, is I’ve been convicted on my motives in whatever I’m doing. I guess back in Thessalonians talks about, you know, did you nothing out of selfish ambition or conceit. Mm hmm. And so I’ve found myself now using that as almost like a daily mantra. OK, what what is asking myself, why am I doing this? What’s my motive here now? Is their pride? Is there you know, is I after something that is just temporal? Right. I need to use that as a check and my spirit.

Henry Kaestner: Sorry, sister versus so obviously both of those are great. I will mention that people that might start off in second. Timothy, go back one chapter before the first Timothy six, which is probably my favorite chapter on giving in the Bible. Second Corinthians eight nine are awesome. But first Timothy six. But I’ll tell you, starting to go back through Proverbs with my boys. I’ve got three teenage boys and Proverbs 16, two and twenty one to speak to exactly what you talking about with this Linton’s. And it’s almost haunting to me. It’s all the man’s ways impure to him, but his motives are weighed by the Lord. So gosh, even if I’m conscious of vain conceit and try to steer clear of that and I think that my motives are pure, God really understands how sinful I am, deeper, and it just needs its convicting. And and yet, in a strange way, it’s also encouraging that there’s a God who knows me that well, who must also love me that much.

And that’s a great encouragement for. Thank you, guys.

Daryl Heald: Thanks for having me. I was a real pleasure.

Love, love, love all y’all. 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 Doug. 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.

Host: 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 Chigwell. 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.

Episode 48 – What is Marketplace? with Andrew Firman

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One thing that makes this show so special is the feedback we receive from listeners just like you. Today’s episode is the fruit of your feedback. 

Many of you have talked about how helpful it would be to connect the Faith Driven Investor world with the Faith Driven Entrepreneur world. Well, we heard you. And out of that has arrived something we are beyond excited to share with you. 

It’s called Marketplace, and it’s a space for like-minded investors to find faith-driven deals and funds that help them put real capital to work in a way that makes a real impact. On today’s episode, Henry will share the origin story behind it and you’ll get to meet Andrew Firman, who is helping make it all happen.


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.

Look, we just want to see common grace worked out through our investment capital. We want to see companies that are creating a product or offering a service that is trying to better the community that they are in and is just trying to offer up something to help society flourish and to see the gospel in these industries. So what I’ve loved about seeing this movement grow is it hasn’t just been one little sliver of what’s possible in the investing is going across debt and equity capital markets. It’s been not just in the US, but global. And so it’s just been really encouraging to see how God has really tailored people’s interest to say we’ve got some investments that again, are going to be a little bit more explicitly gospel focused. And we’ve seen other ones where it’s really just what we would think of as quote unquote, a normal type business. But it’s being run by a faithful Christian entrepreneur who wants to bring glory to God in what they do.

Hey, everyone, thanks for downloading seriously. You didn’t have to listen to this podcast, but you do week after week.

And one thing that makes this show so special is the feedback we received from listeners just like you. Today’s episode is the fruit of your feedback. Many of you have talked about how helpful it would be to connect the faith driven investor world with the Faith Driven Entrepreneur world. Well, we heard you at out of that has arrived something we are beyond excited to share with you. It’s called Marketplace and well, you’ll just need to hear for yourself what it’s all about. And now’s the time.

William Norvell: Welcome back to the Faith Driven Investor podcast here with my faithful co-host, Mr. Henry Kaestner. How are you today?

Henry Kaestner: I’m doing great. Thank you for asking. It’s awesome to be with you. It always is.

William Norvell: Amen Amen. It’s a good day. It’s a good day when we get to come do these podcasts with amazing friends from around the world that God has blessed us with and amazing partners like you. And today I’m gonna introduce a special guest, Andrew. But first, I want to frame up this podcast because it’s a little different than usual. We have not in a while taken a time to really explain the ministry aspect of faith driven investor. So a lot of our podcast listeners probably hear some hopefully some phenomenal conversations around investing in the marketplace and how people’s faith impacts their investing strategies and even their investment vehicles and all kinds of things like that. But as we thought about it, we thought some number of our audience may not be familiar with the broader ministry and what other opportunities there are to get involved and to learn and to be part of the greater community and some other content pieces we have and even furthermore, may not even remember, because we haven’t talked about in a while what the actual mission of faith driven investor was. It was birthed out of our Faith Driven Entrepreneur work and ministry, but it has its unique mission in calling. And so I would turn over to you to give a little bit of vision casting for why do we spend time on FDE specifically, of course. And then we’ll bring Andron to talk about what he does with the specific investors.

Henry Kaestner: Yeah, no. Sure. And every organization has its origin story and ours comes out of this kind of joint birth, if you will, from Faith Driven Entrepreneur and some of the work we were doing in sovereign’s capital. And for those of you of listing to Faith Driven Entrepreneur podcast with time, you probably understand how some of that came about. It was that sovereigns we were saying no to ninety nine out of 100 businesses that came to us for financing. We felt really bad about that and wanted to help them out. And that’s what gave birth to the blog and a podcast and the newsletter and the conference and all of those things that have been really a lot of fun to do. More than 150 episodes now of the podcast. And it’s really neat to see how that is grown. And yet one of the realizations we had was that as grateful as some of these entrepreneurs have been and they’ve been awesome, they’ve been super encouraging by sending us emails, by recommending the podcast to their friends, et cetera, that when an entrepreneur is looking for money to really fulfill what they feel, that God has put out an advance for them to do, and he sent them a link to a podcast, you haven’t really scratched the completely. And so that’s happening. And we’re starting to hear that a little bit more was people come in and say, listen, I really appreciate your ministry. I know that sovereigns isn’t a fit for what I am. It’s wrong stage in history, geography or something like that. But surely you must know of others that you don’t want to be able to invest in faith driven founders. And a couple of times we’d make some introductions, but just weren’t great at doing that. And that was starting to wear on us at about the same time that we realized that as cool as we thought Sovereign’s Capital was, and with more than one hundred ten LPs now, it most assuredly is not the only way that a Christ follower might store the capital that God has entrusted them with. And part of that came from an instance three or four years ago where we thought, gosh, you know, there’s incredible opportunity for spiritual migration, real estate. Maybe we should have a real estate fund. Maybe as we contemplated launching Fund three, maybe we should have a real estate fund as well. And pretty quickly, we realized that we’re probably not the right ones to launch a real estate fund. I can’t even calculate it. Kapre, I’m the wrong guy to run real estate fund. But I bet you there are some people who are serious about their faith out there that are in real estate investing. And maybe we should find them. Maybe we should find them. Maybe we should invest in them. Maybe we should tell others about them. And we’ve got one hundred and ten LPs. And, you know, we’ve almost been acting as if if you’re a Christian and you’ve got money, well, surely you should invest in serious capital. And that’s clearly wrong and narrow minded. So maybe we need to go and actually find out what’s going on out there and then try to rally more and more people around this industry in this cause and what might happen. And so that started originally. A small group of us got together after Seven’s capital fund meeting. That was super cool. As you have been following the Faith Driven Entrepreneur podcast for a while, that’s where Tim Keller recorded his identity speech. That’s been the most widely. Listen to a podcast of all those that we’ve done a Faith Driven Entrepreneur show on the annual meeting where Tim Keller spoke the next day, a group of us from Praxis and the gathering at. An Impact Foundation and National Christian Foundation and Trubridge Global and a bunch of us got together and said, what does it look like to be able to bring attention and focus into a broader industry of Christians that are investing their capital in a way that’s consistent with their faith? And maybe we can bridge beyond what is a very important industry of those that look at negative screens, not investing in alcohol or gambling or pornography and things like that. But maybe we can focus a little bit more in kind of this resurgence, if you will, that we hope will happen in a positive stream. How is it that investors might be able to talk about their faith in a winsome way? How is it that they might be able to love on people living in their apartment complexes if they’re in real estate? How is it that private equity funds might be able to talk about chaplaincy, profit driven employee resource groups? What’s the broader picture here and who can we invite into the conversation? So we got together and said, let’s have a little conference just focused on that. And by little, we thought we’d start off with 30 or 40, really, and it ended up being one hundred and seventy five people, Deer Valley two summers ago. And we found out that actually there’s a bunch of things that are going on. And since then, we found out, as we’ve looked into this space, that there are obviously incredible direct deals back to these ninety nine out of 100 businesses that we weren’t helping out. So lots of great men and women driven by their faith with spiritual integration in the midst of what they’re doing as they seek to run a business to glorify God. We expected that there’d be some of that, though not as much as there’s been. But one of the things that’s been really encouraging over the last two years is to really see the number of funds, professionally managed funds, excellent funds, people with incredible track records, really fine. And one of three different buckets. One is a group of funds that already existed and run by men and women that have had spiritual innovation, primarily in real estate. I might say that for quite some time there have been people who have been hiring ministries like Department Life. The second group are new funds that have developed over the last couple of years, people leaving Wall Street, firms that have great track record employing spiritual integration and things like chaplaincy in their funds. And then the third one is a whole group of funds that are being retrofitted. Men and women run in funds that have said, you know what, we’re motivated by our Christian faith. Everybody’s talking about ESG, talking about impact investing. Maybe we need to be thoughtful about how our faith manifests itself in what we do as investors. So that’s really been encouraging people who are already in the investment business. They’re able to bring some of the spiritual integration plan, what they’re doing. So we had wanted to not only tell their stories, which we’ve been doing over the last 30 or so episodes of faith driven investor, but we wanted to also bring people together to continue to encourage each other through the conferences. And then as more and more individual investors, primarily accredited investors, where the rules are a little bit more flexible in terms of the investment opportunities, you can bring them, as more and more people said, how do we get involved in this? We came up with the idea of this marketplace and we’ve been thinking about the concept of a marketplace for a couple of years now. When Justin came on board and left right now, media, after a hiatus as an entrepreneur, we had talked about what does it look like for Marketplace to be able to match these investors with entrepreneurs and what does that even look like? And we’re hoping to encourage other people to do it. But with covid hitting and hearing, just having the increase of entrepreneurs are looking for and financing. And we started off with a shared Google sheet where a bunch of us were starting to invest out of our own personal money, not of sovereigns, but out of our own personal money. I said there’s probably an opportunity here to be a little bit more intentional about a launch of a marketplace that would be Web based, where we can endeavor to find great entrepreneurial stories of people raising debt, capital equity, capital revenue, royalties, and it’d be able to list them and present them to LPs of funds like Cerberus Capital and others, and to say, actually, there are lots of different ways for you to steward your wealth and to be brought into the stories of these individual deals, these entrepreneurs, or to come alongside and define these faith based institutional funders and come alongside as LP’s in their funds. And maybe in doing so, we might be able to advance the conversation and to still encourage a movement of people be more intentional about their faith in the marketplace has become that physical manifestation of that. And so we knew that if we’re going to go ahead, we’re going to build up this e-mail platform with all the bells and whistles that you’ll find if you go on to and sign up for the marketplace. We knew that we needed to have really great river guides, people who understood financial services that had done really well before, who understood a little bit about international markets, because it’s so many of these great entrepreneurs that are in these foreign countries that are doing God’s work. And so we came upon upon our guests today, Andrew Furhman and Andrew had been a vice president at JPMorgan. A CFA had helped to run a family office in Dubai, check a lot of those boxes and was just a super cool guy. And so. Andrew is our guest on the podcast today. Andrew, tell us about how you became such a super cool guy. We loved it. Every time we have a guest on a podcast, we like to hear a little bit about their background, who they are, where they come from, and then why they do what they do. Who is Andrew Fermín or William Shatner?

Andrew Firman: Thank you for having me, Henry. I think I can answer most of those questions, the one about how I became a cool guy. I don’t know if I’m there. So that’s a difficult story. I can give you a bit about my background, though. So I’m here in Texas, I think of an honorary Texan, my wife, and actually just moved back to the US after having lived in Dubai for the past four years. And a lot of what we’re talking about on the podcast today, just really the importance of where we can allocate capital. I think you’re really able to see here in the US and you’re also really able to see it abroad. And I think just beyond that, you’re really able to see how the church and the growth of the church can go hand-in-hand with that. So, as you said, my background has been really all across the financial services industry, JP Morgan Chase for a couple of years time in Dubai, as you said, with a family office, spent some time in investment banking as well. And my love really has been finance and capital markets, which I think it’s funny to hear a Christian say that. I think so often we have this idea that Wall Street in the stock market is bad. But I just think there’s a lot of the Lord’s character that you can see come out in capital markets.

So I think that’s one of my hopes and one of the things that makes me so excited for the vision, I would say God is place on all of our hearts, which is just what does it look like to help catalyze this movement of investors being thoughtful about where they allocate capital? So that’s really what drives me, is just being able to see the Lord working and seeing his glory and how he’s designed a world that’s great and married children to a little more married wife of about two and a half years.

And she is absolutely wonderful. We have a 14 week old daughter. If the podcast listeners are lucky, she might make an audible appearance. So we will see and we will keep you in suspense.

William Norvell: I’m in. I’m in. That’s fantastic. Tell us a little bit about. So you came on board as the marketplace was getting off the ground. Tell us a little about the role you play, sort of shepherding investors and educating them at some level about what we’re doing. But tell us a little bit since your day job and what you’re passionate about doing within the FDI landscape.

Andrew Firman: Yeah, so my title I’m the director of partnerships, working with investors, essentially working with the buy side. So spend a lot of my days just chatting with ultra high net worth family offices, foundations, institutions, and really just introducing them to the movement and what we have going on. I think I can tell you we’re so encouraged by so many of the chats we have, primarily because I don’t think there’s any doubt in our mind that this is not something we came up with.

It wasn’t a great idea we had, but it is very much a vision God is putting on people’s hearts all over the world that have never talked to each other. And Henry and I can tell you, call after call we’ve had where people just get so excited and they say, I thought I was the only one who was trying to think through this. And so my role really is just let be there to connect the dots and share what the movement is doing. In terms of a lot of the more granular parts of those conversations, it really breaks down into one of two categories for a lot of folks. They are more interested with the functionality that an investor can bring to their investment journey. But with a larger number of people, we are really involved in helping to shape the paradigm that they have in their mind about what it means to be a faith driven investor. And so I can’t tell you the number of conversations I’ve had where it’s sort of the Rusty fire where people say I’m all in. I bought into the vision. And what does that actually mean? Do I have to immediately go sell every mutual fund that I hold? Is it a sin if I have an index fund as it is and if I invest in non Christians? Is Christian investing only about certain things I can invest in or there’s certain things that I should be excited to allocate capital towards. So a large part of these conversations are just helping people to sort through what does this paradigm actually look like beyond just the U.S.? And then you get from saying we want to be a private investor. What does that look like on a more practical level? And so I absolutely love being part of those conversations. It goes just beyond my investing. But again, really seeing theologically God’s sovereignty and providence and how he has designed things to operate. So that’s just a lot of my day to day is just going to have a lot of awesome and encouraging chats with investors who feel like God is drawing them to venture into this space.

Henry Kaestner: It’s probably a good time to mention the fact of what faith driven investor is and is not and what we do and don’t do in the marketplace. So we are not a registered investment advisor, so we don’t give investment advice. We don’t charge a brokerage fee or no assets under management. We are a ministry and a ministry whose sole purpose is to advance the industry, the movement of faith driven investing, to encourage people to let them know what is out there and that there’s content and community that they can get involved in. But it’s not to make investment advice and yet is a part of what you do you get. An opportunity to understand what God is doing through the eyes of these investors and how they are called to invest capital and where they have interests, and tell us a little bit about that. Presumably, the range of people you’re talking to, a reasonably diverse you’re starting to talk to people that are coming in and find advice from overseas people domestically. What are you hearing from some of these people as they’re coming in? Is this something they thought about for a long time? Is this new did have general interest? Do they have specific interest? What does it look like?

Andrew Firman: Yeah, really good question. So I would peg a lot of the interest folks have had over the last two to three years, which again, what’s encouraging to me is saying more specific timeline is I think it’s really clear that the Lord started moving a couple of years ago and we’re sort of seeing this groundswell come into focus. So in terms of the interest people have, I’ve also loved it. How diverse that’s been. We have a lot of folks that are in the category of what we might think is a little more typical of a Christian investment. So they want a business that is either abroad, maybe it’s in the 10 40 window, maybe it’s doing a little bit more explicit gospel work within the course of their business. And I think all of us that the FDE team would say yes and Amen and we absolutely love that. And we’ve also talked to some other families that have said, look, we just want to see common grace worked out through our investment capital. We want to see companies that are creating a product or offering a service that is trying to better the community that they are in and is just trying to offer up something to help society flourish and to see the gospel within these industries. So what I’ve loved about seeing this movement grow is it hasn’t just been one little sliver of what’s possible in the investing world is going to cross debt and equity capital markets. It’s been not just in the US, but global. And so it’s just been really encouraging to see how God has really tailored people’s interests to say we’ve got some investments that again, are going to be a little bit more explicitly gospel focused. And we’ve seen other ones where it’s really just what we would think of as quote unquote, a normal type business. But it’s being run by a faithful Christian entrepreneur who wants to bring glory to God in what they do. So, again, a more specific level. We’ve seen folks say I’m incredibly passionate about human trafficking and in some region of the world. And we’ve got other folks saying I’m open to invest in absolutely anything that I want to know that I’m giving my investment dollars to a Christian business owner. And what we want to do, again, as I mentioned, that paradigm is to shape that paradigm to where it encompasses all of those desires that we would all say are good and right. And really what should define what Christian investing actually is.

Henry Kaestner: Some number of people that are listening to this and say, OK, so I think I get this. There’s probably opportunities. I’ve seen people raising money for fair trade coffee at my church or something like that. But this doesn’t really feel like something where I can actually think about market return or that I can put a significant portion of my investments in it. What do you finding as you talk to these different companies? And then also there’s a real emphasis on professionally managed funds. What are you finding out there in terms of what kind of managers you’re seeing, what kind of return profiles? Is it just for the kind of the hobbyist who’s just looking to do fair trade agriculture? Give us the kind of sense of the scale and scope of this is such a key question.

Andrew Firman: And I think, again, that is one of the misconceptions. We’ve seen that in a good way. We’ve been able to sort of talk through and maybe help reorient their mindset. 10, 15 years ago, the Christian Private Equity Fund world, like we looked a little bit different. We have seen more investors just so enthusiastic and encouraged when we talk them through some of the managers that are now in this space. I mean, you and I could both rattle off some of the top investment banks and private equity firms globally, and that there have been some very key questions involved in those firms over the last few years have split off to run their own funds. And if you were to bet on Christian, what is likely going to be a top quartile fund over the next seven to 10 years? They’re going to be right in that conversation. But if you also ask them, can I see your spiritual integration document, they’ll send it over to you and you’ll see a very well thought out document about how the gospel influences what they do.

And when we look at some of their top LPs, they’re very well known names that are not going to aim for second rate quality. They’re only interested in the best. So we’ve just been so excited to see some of the names and some of these top tier managers come into that space. And when you mention quintessential fair trade, Coffeeville, full disclosure, I love fair trade coffee. I just finished up my afternoon cup about an hour ago, so I’m all in on fair trade coffee. I would say Christian investing is definitely not less than fair trade coffee, but it’s certainly more. And we’ve just loved seeing the diversity of industries that these deals have come from. They’re not all revenue deals with very slim chance of succeeding. But these are some great technology companies. I mean, just every sector that you could imagine medtech. And we’ve got some great operators there as well. So on the fun side, we’ve seen some great managers that would likely pass due diligence with a non Christians portfolio that says we want a market rate return. And we’ve also seen some operators that are going to non Christian investors would look at to say I would gladly allocate capital to them as well. So the space really has evolved over the last 10 years or so to where we believe you can spiritually integrate across your entire portfolio of public and private markets, every asset, class, debt, equity, what have you. There is a way to see Kingdom Impact and all of those areas.

William Norvell: Oh, that’s fantastic. Andrew, thanks for walking through that. And so I feel like we’ve gone pretty broad at some level. We understand kind of what’s going on in the greater landscape. So I’m going to ask you a little narrow here and talk a little bit about the FDE marketplace specifically, which is one of a lot of things we do. But it is up there. And I know you’ve had conversations with investors about it. Could you tell us a little about what deals are up there, what type of investors should reach out to you if they’re interested in those types of deals? Just walk us through the I think it’s over one hundred and fifty now, deals that have come on the marketplace that are available to be invested in today. And I believe funds are coming on and mutual funds are coming. So talk to us about that marketplace specific entity.

Andrew Firman: Yeah, definitely. So as you said, yeah, we’ve got just about one hundred fifty deals in funds combined on the platform. Our Beita should be going live here in the next couple of weeks. So in terms of who should approach us to see about the marketplace currently more for regulatory reasons, it is a credit investor only, but really it’s any accredited investor that has a heart posture to enter this space. It could be somebody that says, I’ve got some dry powder and some capital that I want to allocate next week. It could be somebody that says I really have a heart to come into the space. I don’t know when that’s going to be, but I want to explore. I want to see the community. I want to see what deals are out there. So anyone in one of those two categories, which again, those are both pretty broad categories, we would absolutely love to engage with you and share what we’re doing in terms of the marketplace itself. As Henry said, we’re not in our area. We’re not a broker dealer. I view what we’re doing more as a farmer’s market, which is we’ve got this land and we want to invite in all of these people that we’re friends with. So when you look at one of the links on our website, which is a list of our partners, there are a lot of groups that Christians will know of, whether it’s in the entrepreneurial space, the accelerator space, and we view our relationship with them as very synergistic. So we might have an investor, maybe internationally, and they follow one of these accelerators and they say, my goodness, I would love to see their deal flow. Well, that accelerator can come and set up essentially a stall in our farmers market where somebody can sort and say, show me every deal that has come through this group. So we view ourselves really as an aggregator of that deal flow and aggregator of the funds on the platform where if somebody wants to say, I want to see the entirety of the Christian investing landscape and what’s available to me, the marketplace will be the place where you can see all of that deal flow in one place. And so that’s a journey we’d love to walk people through for folks that maybe never navigated private markets before, we have some processes in place where we can see a glide path of helping folks who really don’t know what to do and how to navigate these first couple steps. We’ve given them a few action items to actually get involved and to invest capital. So that is a discussion we’d absolutely love to have. You can go on faith. You’re an investor again. Marketplace can fill out an inquiry form and we would absolutely love to have that conversation.

William Norvell: Oh, that’s great. And just give a sense, I think in the last three or six months, you’ve talked to well over a hundred investment groups that are exploring this at some level. Is that fair?

Andrew Firman: Yeah. One hundred with with a lot more on the docket. And again, since our conference in September, we have just seen people left and right saying, as I said before, I thought I was the only one. And if the only direction that conversation heads is letting them know that they’re not alone and that a lot of Christians around the world are thinking about this, we view that as an encouragement and a success in this space. So we’re just really encouraged to have all these chats. And as I said, I think it’s just more credence to the fact that this is not a vision faith driven investor came up with. It is something where we are essentially just helping to guide something that God is doing in people’s homes.

William Norvell: Absolutely. That’s amazing. You know, as I think back to that first meeting and then the second meeting in Park City and then, of course, we had the conference that ended up going virtual. But I believe a couple of thousand people joined to view the conference and to see things. It’s just remarkable what the Holy Spirit is doing out there. If there is any one that does this podcast knows I love quotes and we get so many of them from our host. But when I hear this, I think back to this old C.S. Lewis quote that says, Friendship is born at that moment when one person says to another, what you two I thought of as the only one. And I just feel like we have gained so many friends and it’s just such a blessing. And I just feel like we get to have that moment with so many people. And you specifically get to spearhead that moment, that day, that moment where it’s say, oh, my gosh, me too. I have been trying to figure this out. And I also want to say and humility, we know that a lot of people have figured out a lot better than we are out there.

And so if you’re listening to this, too, and you say, oh, my gosh, like I hear you guys talking about this, you’re missing this entire section of the market or you you’re not thinking about this the right way. This great book, there’s this great speaker, whatever, whenever, gosh, we are learning every day, we are learning every single day and we know so little. And the Holy Spirit has been moving in the world of investing for thousands and thousands of years. And so please reach out, reach out to Andrew, reach out to me, reach out to Henry. Let us know what you’re seeing out there and if there’s ways that we could be helpful and encouragement to fan the flames of what God is doing in your sphere or something you see that’s important to you. And you think it’s important to the kingdom of God, please reach out to us.

Henry Kaestner: Super was mentioning again, I don’t want to belabor the point, but unfortunately, at this time the marketplace is only available for accredited investors. There are just different rules about how you talk about investments with different segments of society. And yet we know that all segments, all folks have an opportunity to be intentional about their faith. There’s a great group called Kingdom Advisors. It’s out there of people who are serious about their faith, who advise clients. And it’s a great place to get started for those that are in a broader segment of society. And then the other thing is, is that as you look at this or any other investment, to be able to go through it with a professional to make sure that this is something that is right for your family is really important. And that’s not what we are. Again, we’re about a movement and we are about celebrating some of the advances that we’re seeing in the space and some of the players in the some of their stories. But the role of an investment advisor superimportant, we just want to encourage you to that end as well. Andrew, it’s awesome having you on the podcast. William, bring us to close.

William Norvell: Let’s do it. We love to close with the word of God is our listeners know. And so, Andrew, we’d love to invite you into that conversation. Where does God have you today or in this season? What part of his word may be coming alive to you in a unique way here during this time of your life? We’d love to invite you to share that with our audience.

Andrew Firman: Such a good question. Yeah, this is a meditation I have to continually wrestle with in my heart is out of Isaiah. Forty eight, verse seventeen eighteen. It says this is what the Lord says. Your Redeemer, the holy one of Israel. I am the Lord, your God and teaches you what is best for you. Who directs you in the way you should go. If only you had paid attention to my commands, your peace would have been like a river. Your wellbeing like the waves of the sea. And I think what that reminds me of continually is everything in scripture. Every command that the Lord gives us has always, throughout history been for our greatest joy. And I think so often we think of the Christian life. If you think back to youth group days of a list of things that you can’t do, and that’s just not what the gospel presents and presents this journey that is filled with joy. And so even when I think about what we’re doing, I think that’s the promise I want to remind people of, is we’re not inviting you in on a journey of things you can’t do. But we believe we’re inviting you on a journey that has greater joy as you’re able to see how the law works on this earth. So that is a meditation that is continually on my heart because I continually forget. But I think I also remember that we serve a good, kind, loving and patient on.

William Norvell: Amen Amen, thank you so much for joining us, everyone listening. Feel free to reach out to Andrew at faith driven investor ERG if you want to learn more about some of the offerings of the marketplace or explore this in any specific way. So thanks for joining us. Thanks for listening. Grateful for you. Grateful for the ministry and just grateful for everyone listening. Amen Amen. Andrew, thank you. William, thank you. God bless you all.

Episode 49 – The Future of Service Companies with Michael Arrieta

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Today’s guest is Michael Arrieta, the CEO and Founder of Garden City Companies. And while normally, we try to introduce you to our guests, for today, you should read you something that Mike wrote himself: 

“At Garden City, we’re reimagining existing service companies by ensuring workers are radically cared for and truly love their jobs. Service companies where innovation & technology is the norm. My hope is that decades from now thousands of service workers are thriving and together we built the future of service companies.” 

That’s his mission, that’s his vision. Listen in as he walks us through how God led him to where he is 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.

It is more about financial returns. For us, it is about true impact and that is our purpose. That’s our ethos. That’s what makes us tick. So the reason why we exist is for our purpose, right. Which is to honor God and to enrich the lives of working class service workers.

Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast, and I want to set the stage a little bit, faith driven investing, of course, is about Christ followers coming to understand that there’s an opportunity for them to steward their investment capital in a way that advances God’s kingdom, the traditional method. And if this is video, you’d see what I’m talking about here. But in my left hand, I have making investments in Goldman Sachs and in Maverick and Greenspring instead of trying to make as much money as you possibly can over here on your left hand. And then to the extent that an investor understands the biblical message of generosity, then over on their right hand, they try to give away as much as possible. Well, this movement that you found yourselves in a podcast on is about the fact that we believe that the very process of investments might accomplish many of the ministry goals that we’d otherwise just relegate towards giving in this industry we found ourselves in. We have all sorts of different players across, all sorts of different asset classes, all sorts of different geographies. We have real estate. And if you go back into the podcast archives, you’ll see some great real estate conversations. You’ll find conversations with people onshore here domestically. You’ll find people all over the world. And you also have different types of people running different types of funds. I often tell people, especially as we launch this faith driven investor marketplace where we highlight a lot of individual angel deals that are super exciting. Let us know if you’re an accredited investor, want to get access to that. But most people who are waiting in the faith driven investing need to look at funds.

And today we’re talking to a fund manager, somebody whose job their vocation is to go out there and find great investment opportunities that have spiritual integration and have you participate in what they’re doing as God is honored in the different communities that they’re at now. Of those fund managers, not only do you have different types of asset classes and different types of geographies, but you have different types of fund managers. Some amount of what we’ve done in the past is talking to people like Frank Chin at Andreessen Horowitz, who has Andreessen Horowitz, one of the biggest funds out there, and Frank talks about how he brings his faith to work in what is otherwise a very secular world of Silicon Valley. And how he looks to be a faithful witness is he loves on his portfolio companies. We’ve had, of course, Terry Stephens from Founders Fund that invested in some of the biggest deals ever alongside of Peter Thiel. And he talks about how his faith informs contrarian view of investing. And to some extent, there’s some amount of retrofitting in the industry. And these are people who are established fund professionals who are going back in to look at their funds and say, how do I bring in and how do I weave in spiritual integration and what we’ve been doing for decades. On the other side, you have a group of successful business people that have said, gosh, there’s an opportunity to get out there and to have funds that would invest in companies and industries like. I know. And I’m going to start Denovo. I don’t have to worry about retrofitting a fund or an industry. I’m going to go ahead. I’m going to start things out with my new fund, exactly how I’d like to have them intended, completely consistent with my faith. That’s going to be something that’s a driver for me from the beginning. And it is Mike Arietta from Garden City that fits into that latter category. So, Mike, awesome to have you. Thanks for being with us. Thanks, Hennery. First time caller, longtime fan.

So, Mike, you’ll know from having listened before that we try to get really good understanding of the history in the story. Who is the person we’re interviewing before we get into what you do? So give us some background. What’s your story? Who are you? Where do you come from?

Mike Arrieta: Yeah, sure. In regards to who I am, I’ll answer that question by saying that a couple of years ago, I read Pat Gelsinger, his book called The Juggling Act, and it encouraged me to come up with a life mission statement of who I am. So I’ll just recap that Mike Arietta is a beloved son of Christ, knowing that there’s nothing I can do to earn more of his love. I’m a faithful and loving husband to my wife, Veronica. I’m a presence and engage father to my two little kids, Olivia and Lucas. I’m a loyal friend to my family and community. And lastly, I try to keep it. Lastly, not first and foremost is I work to make a big internal impact on the world through business.

Henry Kaestner: So that’s who I am. I don’t William, we’ve done hundreds and hundreds of these. I don’t think anybody’s done that as crisply is. That was definitely one of the preparation of word to start out on a bar that I may borrow, that I may end up saying that my kids are Olivia and Lucas. Oh, was that good? Okay. All right. So tell us about tell us about your growing up, your faith journey as you grew up in a Christian home. Has faith always been a part of your life? Bring us through and maybe take us through your to your first work experience.

Mike Arrieta: Sure. Sure. Great question. I was the first of my family actually born here in the States. So my two older sisters and my parents, they were all born in Puerto Rico. So I’m I’m Puerto Rican.

Henry Kaestner: Did you know that my grandmother grew up in Puerto Rico? You probably didn’t know that. But we share that kind of. Yes.

Mike Arrieta: With disciplinary cases. You’re Puerto Rican.

Henry Kaestner: So I am Puerto Rican. Yes, my grandmother grew up in Puerto Rico, spoke Spanish, and I am. Yeah, absolutely.

William Norvell: And if this was a video podcast, our listeners would be more surprised by that fact.

Henry Kaestner: I don’t look very Puerto Rican, but nonetheless, my grandmother did indeed grew up in Puerto Rico.

Mike Arrieta: Should we do the next phase driven investor conference in Puerto Rico?

Henry Kaestner: I love to do that. I love the old San Juan. Absolutely. I love that place.

Mike Arrieta: So you’re probably more Puerto Rican than I am because I was raised in South Florida my whole life. I had two very hardworking parents who did their very best to provide for my two sisters and I. There was always food on the table and we always had a roof over our head. We were raised in a Catholic church the way probably ninety nine percent of Puerto Ricans and Hispanics are. So we have the fear of God to kind of God somewhere way up high. I don’t know where that way of high is way up there, but we never had an intimate daily relationship of walking with the Lord. And so it was purely a Sunday morning thing. You know, you go get your little wafer and you dress up and you go back home afterwards and then you resume life. Right. So it started and stopped there on Sundays. We moved 10 times and about 18 years growing up on the same kind of town due to our financial situation. My father worked a ton of jobs. He started selling Flon like the Puerto Rican or Cuban. Yeah. You know, he started selling Flon, that kind of of cards. And he worked at Home Depot just in the warehouse. And then I started selling timeshares, worked in furniture store. My mother worked in a retail store, just hourly worker to make matters more difficult. My father had very severe health conditions his whole life growing up since he was two years old, particularly Type one diabetes. He worked around the clock, you know, came home after I was sleeping already ten, eleven o’clock every night. So the constant theme around our home was financial stress, which, you know, in a hard working family automatically leads the marital issues. So they constantly fought and eventually they got separated by the grace of God. They came back together. But that was it kind of growing up, you know. So I’m very grateful for my family, for my parents and looking back. But looking back, my youth was pretty difficult to zero in on myself. I was never a good athlete. Pretty terrible. It was never a 4.0 students. I’m confident that if yes, all my teachers, which of the students they were most worried that would do something meaningful with their life, I’m pretty sure I would be at the bottom of the list. I was just rebellious. I challenged everything. I did not like to be in control, which now that I know I’m an eight on the anagram, it speaks a lot of that at a young age. However, I started realizing that I was naturally really gifted at selling. I was a good salesperson. I just came naturally to me. I would go buy something from someone next door and sell it to someone down the street for fifty dollars more. I would ask my dad to do a garage sale and I would have a whole strategy of how I’m going to sell my Nintendos and only sell that for an inexpensive price. We get a lot higher prices for the games or for the controllers, right? I would buy a little Caesars box for five dollars a pizza box. I bring a knife to school and cut them up into 16 slices and make it three hundred percent return at lunch on a couple of boxes. Right. I would buy baseball cards, Pokemon cards, Beanie Babies and figure out which shops wanted what based on the geography that they were in. So I was a sales guy, you know.

Yeah, that was it. And then the three things really in my life, I would say, were sales, as I just mentioned of the second one was service workers. I was just surrounded by hard working working class people like my family who are trying to do their best to stay alive or survive. But they really didn’t have any dignity or purpose or fulfillment or any calling. It was purely just a paycheck. And probably the third theme was I was obsessed. It’s really weird.

I think boring is so sexy. Right. William and I have talked about this for a while, but service companies have always been obsessed with learning about car washes and furniture store deliveries and dry cleaners and restaurants. I was naturally drawn to them. And so all that was kind of it that I was drawn to.

Henry Kaestner: So coming back to the born and natural salesperson, when I think about all the different organizations that are really focused on being able to be a sales guy, I guess maybe when I was growing up about encyclopedias, sales people, but then very quickly, that was eclipsed by the cutco knives vector marketing. If you’re a sales guy, like kind of the best form for you was to go work at Fekter Marketing, Cutco Knives, and you did that. And so I think about this is like the job for salesmen. And you were like the salesman of all salesmen where you ranked like number one in the country or something crazy.

Yeah. Yeah, it was, yeah. So how many how many nice sales people were there. Are there there bunch. There’s a fifty thousand I think. Yeah it’s that’s, that’s, that’s pretty good. That’s pretty good.

William Norvell: It’s really helpful. One of my best friends was number twenty four along to. And every time he starts bragging about it and he knows Mike, we all went to the same church, I’m like, Yeah, but it sucks for you. I know Mike like, this is not impressive. Like, what is number 20?

Henry Kaestner: Yeah, I bought some nice from Cutco. Great night. OK, so tell us about that. Probably half of our audience has heard of cocoanuts. Tell us about your experience there and what you learned about yourself and what you learned about selling short.

Mike Arrieta: One of the most difficult parts of my story. It was I had a severe stutter problem and I still do. So today. I manage it better. But it turned out to be the biggest blessing of my life because I was granted a state grant by Governor Jeb Bush, which provided me the opportunity to get out of the public school system and go into the private school system. And so my greatest disability became my greatest blessing. Mean that’s where I met my best friend Protagoras, you know, when I was 12 years old. And so I was able to get this huge benefit of experience and a whole new world, this world where I gain older mentors that I looked up to, my friends, parents. Right. I saw the way they live, where they went to college or professional careers. And I just wanted to be like them. It reminds me of that podcast you had Reggie Joyner and Chris Naib that they were talking about were kids in poverty. Don’t make it out of poverty because of education and talent. Two out of every three make it out because of the adults in their life who help them take the next step, what to do and where to go. Right? Yeah, it was my Zach story. My father got very sick and pancreas transplant, kidney transplant, dialysis. My mother got breast cancer. I felt calling to help and ease the burden. So I asked a friend of mine’s father, he said, start selling cutco knives. It’s been around since like the 40s and you could kill it and make a great amount of money. And so I started doing it. So I woke up every morning and I made cold calls. I ask teachers, go to the bathroom and make cold calls during lunch, make phone calls.

Henry Kaestner: You made Kolka, you left class. You do cold calls from the bathroom.

Mike Arrieta: Oh, it’s crazy. I used to have a schedule that I would know. Today’s Wednesday. I asked my math teacher on Monday to go to the bathroom so I could do it again today. But I can’t do it tomorrow because I can pick up on me. So I’d have this little puzzle of knowing which teacher I would go to the bathroom and what they said to pick up on me. Unbelievable. Yeah. So it was my first real job. I had to succeed. I felt like at least I told myself that. So success was the only option. Failure was not. And so yeah, my back was against the wall. I think your true colors showing your backs into the wall and just something came natural to me. I had a big vision. I didn’t get Bob. I had persistence, perseverance. I had a big vision. I built rapport very naturally. I wasn’t scared to ask for the order. I focused on value, which in cutco value is recommendations and the long game rather than just a transaction. So I don’t care about selling Henry. I rather much so have Henry refer me to William and everyone else, ten of his friends around town, rather than just because I know long term I’ll always have something to eat first if I just focus on the sale and I run out of recommendations now I’m only eating for a day rather than a lifetime.

Henry Kaestner: I’m OK. Bridges through obviously setting up a fund and you haven’t set up a fund to invest in more mature businesses. You said boring. Boring is the new sexy. Williams says that a lot as well. But you didn’t go from knives to starting a fund, so bring us up to speed. You worked as chief of staff at some really, really important businesses. Tell us about your career and more established business. And I shouldn’t say more established somebody from Cutco. Can you hear me right now and think differently? But tell us walk us through your career, please.

Mike Arrieta: Yeah, after college, I went to Silicon Valley and joined a company that the CEO did a recap on called Lies. He gave me an opportunity, which is a great reminder of me to give people opportunities. He said, Alexander the Great Conquer the World in nineteen twenty one. I have high expectations. You’re two years late. Yeah, exactly. Exactly. And so we got acquired by Dell about a year later. At that point in time was the largest payout I’ve ever seen. Right. And I thought that’s the point, that I would be content and happy and have purpose and say I made it. I’ve never felt so empty my entire life. Right afterwards, I got the opportunity to be the chief of staff for the cloud group at Dell. I was traveling all around the world going to World Economic Forum in Davos every year, and I’ve never felt so empty inside. My best friend Brett Haggler calls me and tells me he just got baptized in Atlanta and invites me on a trip to Haiti. And then that’s where my Life 2.0 started. I became a believer in 2013, and that’s really where I started to live on the scales off my eyes and saw the world in a way like I never had before. I was able to love and see and experience in a way that before was no longer I truly Christ who lives and still lives in me. And it was amazing. I started following him that year and I never look back since. That’s where I met William right when I became a believer running the gates there. And so after that, twenty fourteen was a big year for me. I got married. We start a new story charity and I joined this company called DocuSign and I became the chief of staff then at DocuSign to the CEO there. And I was there for six years. We grew the company from one hundred and seventy five people and so I left in February of this year. We were about five thousand people now and the chief market cap of about 40 billion dollars. And yeah, it was a tremendous opportunity. And I realized none of it has to do with our own ability. But really got favorite was with my involvement with it.

Henry Kaestner: So Mike is really interesting. I mean, when you look at a company like DocuSign, Dell Time in Silicon Valley, DocuSign, having that type of growth, one hundred and seventy five employees of five thousand or whatever the case is, that seemed very, very different than where you really feel called now to be involved in kind of more traditional businesses that are presumably growing slower than that, growing profitably, but slower than that. But tell us about what you learned in those six years and how it informs the way you think about your career now.

Mike Arrieta: Yes, during those six years, especially when the chief of staff plays the role spans across the entire organization. Right. So you’re doing M&A integration, equity, fund raising, international expansion, launching your products, recruiting and everything in between. It’s like a little mini CEO role, which I just loved so much. And during my last tenure there, when I was operating a business unit, I missed having a holistic view of the business. Right. I liked actually being one inch deep and a mile wide rather than just one mile deep. And so I was really reading this book called Garden City February of twenty eighteen.

And it just talked about how when God created the world and in it he made us in his image to thrive, prosper and flourish, and he made us to labor and co create alongside him so we could get the kingdom of heaven and we could bring it on to earth and say it is good, it is good. And that’s just really spoke to me about thinking about people like my father and like my family to say how come they have not experienced that kind of culture or that sort of environment here in the city as it will be in heaven. So what would it look like if we met those people? Were there wrath, which is in the marketplace, in those service companies? What if we actually invested in those companies, service companies? And once we were investors, majority investors, we would have the opportunity to build a kingdom culture so we would radically pursue the enrichment of working class through culture. We would enable the business to make it beautiful and modernized and reimagine. And then lastly, we would help them with sales and create new technologies out of the business and everything else in between. So that’s where the vision came in.

William Norvell: We also McWilliam, jump in. That’s awesome. We’ll put that in the show, notes John. Mark Colmer, amazing book. Weingarten’s You Stole the copyright from him and double-Check, that one. But it’s an amazing book. My Faith and ERG starter pack is usually ten killers, every good endeavor. And John Mark Combers, Garden City. I think it’s a great head and heart combo pack. And John Mark really does an amazing job. He’s a guest pastor at the church. Mike and I went at Mike and I met as part of the random Alabama people that happened to be wandering around San Francisco crowd and someone ran into him. And as usually happens, they say, oh, I know a guy that went to Alabama, you should meet him. And I remember that little restaurant off of the street in San Francisco. There we grab a drink and then started, you know, along for. A ship that went through church, that went through Huxley, which we didn’t talk about in the news story in the Garden City, and it’s been tough on brother, it’s been a ton of fun to watch what God has done in your life, but mostly in your heart and in your relationships with Veronica and everyone around you. OK, so excited about Garden City. I know you’re very particular with your phrases, as we saw from your opening, and I know that’s something I always love hearing from you about. And so I want to talk to you about a couple of the terms you use to describe Garden City and let our audience into that, because I know you’re so thoughtful with what each word means. You say on your website, you say in your talks that you are purpose driven, holding company. Walk us through that. And I also know you did a lot of diligence. I want you to walk us through what it means and then why you chose that model.

Mike Arrieta: Sure. Purpose driven goes to exactly what Henry first started with in regards to it is more about financial returns for us. It is about true impact. And that is our purpose. That’s our ethos. That’s what makes us tick. So the reason why we exist is for our purpose. Right, which is to honor God and to commercialize the working class service workers.

Right. In terms of holding company, why do we choose the holding company model? For a few reasons. One of the reasons is shared services. Right? We believe that once we have a good amount of companies in the portfolio, we could be of value add to the portfolio companies by providing the back offices such as our marketing, legal finance, so that they could focus on what they do best. Right, which is providing the actual service and the operations instead of the office stuff which typically box them down. The other reason why we did a holding company model is because we want to share best practices across the companies. But the probably the biggest reason as to why the holding company model is we were not called to do a fund or a fund had an end life. Right. So most funds have a typical year structure of three to five to seven years with a couple of years extension. Right. That’s the way typically fund models exist, especially buyout models. There’s an impending event that you’re being forced to embrace regardless of the performance of your portfolio companies. Right. So in that ticking time bomb comes in, you’re seven years out. So we sat on it for about two years to say what is our approach that when we make investments, we have no outside selling date, so we have a permanent horizon? Right. So we basically modeled it of saying we buy companies and we have the ability to hold them forever.

Right. We never have to sell how that goes.

William Norvell: So that’s one of those things that I hear. And I go, OK, that sounds really great. It’s a fantastic model. I think we’ve already mentioned this your first time. I know you’re not calling it a fund, but fund manager or first time operator of an investment vehicle. Right. Let’s some of our investors. How did that track go out on the trail, raising the money for it? What were the pushbacks to it? What were the critiques? What were the wins? What do people find exciting? What do people not find exciting? Just walk us through how the journey went.

Mike Arrieta: I love these deep, tactile questions. It’s kind of what matters most and put meat on the bone. So, William, there’s I mean, baby boomers started more businesses than ever before in our country’s history. You know, you wrote the search on paper at Stanford, right. And they were the most entrepreneurial generation. Now they’re all in their 60s and 70s and they need to figure out something to do with their baby. I mean, business. Right. And so they got to figure out something to do with their business. Their son became an architect. Their daughter became a nurse, and they run an eight track business. What are they going to do? Right. They’re getting older by the day. The years are taken away. They don’t have a succession plan. They don’t have a liquidity plan right now. You would say private equity funds, private equity funds are typically too large to ever entertain deals in this one to five million dollars of EBITA. Right. They cannot put enough money to work in there. There are some lower middle market funds, but for the most part, they do not like to play in there. So you have a lot of onesies. And these players like great search funders or independent sponsors. Right. But in terms of committed pools of capital, that you can make multiple acquisitions. Right. And you’ve committed pool ready to deploy. It’s very rare to have committed capital in the lower middle market. So what we do is we raised thirty five million dollars from all mission aligned investors and we call down that capital as we find companies to acquire. Once we called on that capital into that company, we take a majority stake targeting anywhere between 60 and 80 percent. We like the owner to hold some equity and do a roll over. It shows us that they still believe in the future of the business. It also still keeps them as part of the team, which we believe is sacrosanct. So now that we have the business, that means we now have control of 70 percent of the cash flow that comes out every year. So this business is already making money, right? So let’s say we bought a business for two million dollars of EBITA. Well, we bought it at four times EBITA. That typically means it’s going to take is four years to get back our investment. That means starting in year five, now we profit two million dollars with no growth. And you’re 60 million. You’re 70 million. You’re at 80 million. Right. That’s the whole model. We buy existing profitable business at a couple times. Iveta, we call our investors capital. Our investors get paid back in a couple of years. And then once our investors get paid back, here’s a big question. How do they make money? We split ongoing distributions in terms of the percentages to investors and to Garden City, and we do that in perpetuity. So it’s more like a yield play. It’s more like a dividend play. If you’re familiar with the commercial real estate investment. Right, that it’s mailbox money, as I call it, it just keeps coming. And as a company compounds and grows, it makes roll ups and tuck in acquisitions or builds new technologies. The checks in the mail get bigger and bigger, so there’s no reason to sell. If you’re investing in Garden City, it’s because you’re OK with the model that we’re going to buy and grow and hold and you’re going to get distribution in the mail rather than when we sell this in five or seven years, because that is not our model.

William Norvell: Let’s get in. And I love what you’re highlighting there because it’s so good, right? There are different models for different people, both what God put inside them like you. And you want to dig into a company for 20, 30 years or so and investor basis who want to be a part of that. And that can be part of their portfolio. Right. I think one of the things we talk about a lot on this is especially the faith driven investment space. There’s not always right and wrong. There’s just different. And God is calling us all to different things. There’s nothing inherently, quote unquote, wrong with the 10 year fund.

Right. It just does mean you will do different things with those companies. You will use debt differently. You will look at growth differently. And to make sure that if you go to work for one of those places or decide to start one, that you understand the trade offs you’re making and understand what you’re going be able to say to these business owners. And on that, furthermore, you made another decision.

You have focused on the southeast specifically. So you have taken the chance. And you said, you know, I actually think God is even I don’t put words in your mouth.

You tell me if you feel like it’s a calling or if it’s just a good business opportunity or both. Tim Keller says ability, affinity and opportunity. But you’ve intentionally focused on that niche, saying this is where I want to build Garden City in the southeast. Walk us through how you came to that meeting and how that story played a little bit on the investment trail. And and if that got people excited or if they invested, even though they’re nervous of that, but they still believe in you or anything like that.

Mike Arrieta: Sure. Sure. Yeah. So really, Garden City, it’s like Berkshire Hathaway meets ServiceMaster, right? That’s the way that we see it is we like the approach that Warren Buffett takes by with no intention of selling. Right. Keep things very simple, especially on diligence. Right. Keep your team nimble. Allow them greater autonomy to do what they do. That’s the reason why you’re buying those, because they did something right. So don’t break it then. Also, ServiceMaster, where we love those service companies, as we mentioned, they’re very fragmented in nature, right. That they need some professional misandrist, great opportunities for efficiencies and everything else of that sort and then mix in a culture with Silicon Valley technology enablement. That’s kind of a four legged stool there. But to answer your question about the Southeast, personally, I wanted to focus on the Southeast because I’ve heard horror stories over two years of Prain into the insurance business about how demanding private equity is when it comes to diligence and business development. To me, as I mentioned, to start off with my mission statement, the second most important thing for me is to be loving to my wife and to be present engaged to my children. I knew that if we bought companies in California or Washington or anywhere else, it’s longer. Flights longer or earlier or later calls more time on the road. And so I made the decision up front to say we focus on Southeast. I could go to Birmingham, I could be back the same night. I go to Kentucky and be back the same night. So it was more of a personal thing for my kids family night for the longevity. Second reason is has the largest density of service companies in the entire country and it has the largest density as well of retiring business owners. There’s more baby boomers. They go to the southeast than anywhere else. Right. We also have great seasonality so we don’t shut down for the winter, unlike the Northeast. And then lastly is our network, our network of investors are primarily in the southeast. So there’s great referrals that we get on businesses, make it supports as well and deals.

Henry Kaestner: Can you give us an example? Just walk us through a company that you found what the story was of the founder. Maybe you can speak into the spiritual integration of the companies.

Mike Arrieta: Well short. Two examples. One, I’ll say that the owners and secular owner and the second one, he’s a believer. Right. So the first example of the owner, that is a secular owner, they own a children’s sports camp company. So this company does sports camps all year long. You did about five hundred sports camps that fifteen thousand kids went through last year. He’s. Older and he started this business because he was an assistant baseball coach at a university and he had to make supplemental income, so he started the sports camps 13 years ago. He’s getting older. He no longer wants the calls, the emails. He wants to retire. He realizes his own shot clock. His brother had a brain aneurysm. Right. It made him realize how precious and short life is. Right. And he’s willing to sell at a multiple of a couple of years ahead to get this off of this place so we would engage with him. And on that example, we would figure out which of our advisors are skilled in the sports arena. Right. We would invite them in on that diligence process and we’d say, you know, this is way better than we do. What should we look out for? What are they telling us? That’s true. What are they telling us it’s not true? Or are they not telling us that they don’t know about their own business? Right. And then we put together an offer to see if that works. That was, you know, Henry, it’s months and months of cultivation and there is no impending event for them to sell. Right. When you’re dealing with an investment banker or broker, those are companies that have a for sale sign in front of your front door. They’re willing to sell right now. When you deal with what we’re looking for, proprietary deals, it’s cultivations, building trust of money over time. So that’s one example of a company that has no spiritual integration that we told them, hey, we believe in chaplains, OK? The Senate uses chaplains, airport chaplains, teams, police chaplains. They are so value add every human deals with financial circumstances, marital circumstances, work circumstances. What is the downside of having someone who’s going to love on our people with nothing to gain or return? That’s my permission only. So that’s something that as majority investors, we would want to institute. We want to institute a new training to focus on how the pursuit of excellence. We want to focus on integrity. We want to focus on having fun. We want to focus it on a bunch of things that to us, we call that honoring God. They don’t have to be believers. Right. They do need to agree with the ethos that we have on what it looks like to have a humble pursuit of excellence. Right. Got it. So that’s example. And then there’s other examples that people are already believers and they already have a head, that they may already have a chaplain or have Bible studies. Right. Or tithe out of their profits and so forth. So there’s a wide variety of them.

William Norvell: Well, if Henry’s first love language is telling you his podcast is great, his second, his corporate chaplaincy. So I love chaplains. You are just you are just knocking it out of the park today, Mike. Well, you just you gave a great pitch for it.

Mike Arrieta: I’ll be honest. All the chaplains I was not very passionate about chaplaincy until I experienced it firsthand at a company that we did an on site with. I heard verbally what the benefits were of chaplaincy, but until you experience it firsthand, you could never truly understand and comprehend the impact and the value that it has.

Henry Kaestner: Yeah, I think you did a good job of setting up why you do this. You know, as people if you love unfocussed and it’s something they opt into. And when we roll out chaplaincy at bandwidth, we had a couple of people, senior people in the company saying, listen, we know that you guys are really serious about your faith. I think that’s a little bit too over the top. And when we decided, of course, to continue with it. But when we introduced Jeff, who was our first corporate chaplain, we said, you know, we’ve got a ten thousand dollar bonus for those of you who adopt a child.

But I wouldn’t presume that any of you feel pressure to adopt a child. Right. And so same type of thing here. This is a benefit. It’s there for you to use. And as you ever find any opportunity or need to talk to somebody, know that it’s something you can do and you do it off site. But ultimately, you know enough about our family and our ethos, our foundational values of faith first and family, then work in fitness. We want you to be able to bring your whole selves to work. And if you have to check who you are as a spiritual person at the door, we’re not getting all of you. And that’s just going to be just seeing you as a person in black and white. So we want to be able to afford this to you as something for you to be able to see as a resource. So I love that you’ve picked up on that. And you’re right, you got to experience it. Some of the guys that had pushed us back on bringing on board corporate chaplains ended up becoming some of the biggest believers because they saw the way that these chaplains were able to love on people, on their teams.

Mike Arrieta: As an investor, our responsibility is to be stewards of our investors capital, and that is stewards, both impacts and financially. Right. I believe investing in chaplains through corporate chaplains of America what not that is a financial ERG you could quite literally calculate because you can say, well, what is the retention of this business pre and post? What is the employee satisfaction? How does that translate to customer satisfaction? I visited a dear friend of mine’s company in South Florida, best roofing company. The gentleman’s name is Greg Wallach. He’s had a chaplain there for the past 13 years. I was there in the morning when he did a little quick message to all the roofers, and I had a one on one with the chaplain afterwards. He told me I have four hundred employees that are there. About one hundred and seventy have put their faith in Christ.

And out of that, every time he speaks, his meetings are booked up about two weeks out because there’s such a high demand from people and we love him Amen as we’re coming near close.

William Norvell: I want to switch to this. You have a very interesting as we’ve gone through this, a very interesting. Niche and and focus, and it’s really cool to see how that’s come together manifested itself in Garden City. I know just personally, because we’ve talked a little bit that you found some other people and I guess we’ll call cultural investors for lack of a better term. That also called the vision that maybe had experienced something similar through their own life and journey and maybe the impact they have been able to have on a community. And a Drew Brees, for instance, was one who I think probably really just looking outside in. Right. I mean, what he was able to bring after Katrina to that place, I assume was a big part of why he emanated with your vision. But could you talk us through a few of those cultural investments? Have they been an encouragement to you, maybe some of the stories they’ve shared to sort of put some wind in your sails? Because, as we all know, there’s still a tough journey finding companies to buy as hard work and it doesn’t come easy. And you hear, as you know in your life here, a lot more no’s than you hear yeses in this job.

Mike Arrieta: Yeah, for sure. You’re smiling because you’re sure it’s such a messy, messy world, but it’s beautiful. At the same time, we’ve been very blessed.

It’s funny, William, we’ve known each other now for probably 10 years or a little bit less. And, you know, as an entrepreneur, you’re constantly thinking of things to start, right? You’re always thinking of things to start. But when the Garden City vision came to me on February 20th of twenty eighteen, I knew something different. It was this wind behind my sails. The doors were opening and I knew that we were on a high speed train that was never going to slow down. I knew that it was just a matter of time that God was going to launch us. And I think a big question mark on that was, well, will the investment come through right? First time fund folks in the lower middle market. Will the investment come through? And God has just flooded, flooded, flooded Garden City with Favre, financial Favre from missional and investors. So as mentioned, we’ve now raised thirty five million dollars. We have to criteria’s for all of our investors. One is, are the mission aligned? Right. Ninety five percent of them declare their faith in Jesus. They’re strong believers, right. The other five percent, they are totally aligned. They would love to see the Garden of Eden come into our cities. And then second of all, are they willing and able to be value add? So are they giving us the green light that they will help us in any which way or form introductions, diligence, whatever else it may be? And so they’ve all agreed to that. So, one, it helps us build credibility when we’re talking to businesses like we were talking to a company right now in New Orleans. And I was like, oh, well, Drew Brees is one of our investors. And they’re like, Drew Brees is one of our investors. Are you kidding me? Like, can we quickly go to management on site right now and invite him for Joe? And of course, I tell him that if we’re talking to a company in Raleigh, North Carolina, that Henry Gates, there’s one of our investors and they say, you got to be kidding me. Can we have lunch right now? The Henry Gates or you come to our lunch, right? Oh, my God.

William Norvell: Look, whenever you get to Florence, Alabama, I’m your guy just throwing it out there. I don’t have a lot of pull a lot of places. But I’m your guy.

Mike Arrieta: Exactly. Exactly. We’ll do a whole campaign there in Florence, but they give us good deal flow. They give us great wisdom. They introduce us to strategic people for the investments. They help us with diligence. Like I mentioned, the sports camp deals. So we have great people like Pat Gelsinger at VMware. Right. Maggie Walter. She’s a chairman of DocuSign, Lyft, Tiboni, HP, Tannebaum. I mean, she’s amazing. Just Korell in Kentucky. They’re Horde Chelsy from the Ritz Carlton. Right. The gentleman Lecrae more than you guys. I just interviewed a Grammy Award winning rapper. So just a whole variety of people.

William Norvell: Amen brother, nice cross production value. You gave us their go listen to FDE Lecrae and been Wilsher. Unbelievable.

Great story that Brett Haggler. We’ve had Brett absolutely Paramjit and Marshalsea. That’s right.

That’s right. You’re just you’re just you’ve just given us free publicity now, Mike. And well, and we take that to be very clear. We we happily accept that. Unfortunately, Mike, we do have to come to a close. And it’s always a sad time when I have to come to a close of the conversation with you. But in this one, we want to invite our listeners into where God is in your life today during the season. It’s always fun for us to see how God’s word is alive and living and transcends generations and thousands of years and from a podcast from someone in Atlanta to someone internationally or even in San Francisco.

And so if you wouldn’t mind sharing with us where God has you in his word and what he may be taking you through and teaching you during the season your life.

Mike Arrieta: I remember when I first moved to Silicon Valley, I was part of this. I actually met you there called legends Kleiner Perkins. And one of my friends and mentors, Joie Chen, told me he was a venture capitalist. And he told me every single day he leaves the office around five thirty. And the reason why he leaves the office of five thirty is because he’s exemplifying exercising his faith.

Right. It takes faith to leave the office at five thirty, go home to dinner with your family and then get back on at nine or whatever else it is. And I asked him. How in the world can you do that, you know, like how can you get the best deals and still provide the best returns? It goes well, if I’m only working just as hard as everyone else. But I’m saying that I’m a believer God’s basically just like a cheerleader for me. But I’m not truly trusting in what faith does it take for me to try to be the best investor but to work just as hard as everyone else? So he pointed me to Daniel, and I never really studied Daniel ever since then and probably never spent some time in it until last week. We had a company that we were about to go into Loai with, and last minute he tells me he gets an offer that’s significantly more than ours. And I had a moment to realize what to do. I could either be like the rest of the world and compete on price alone, which the price is all predicated upon debt. If you’re competing, it’s a secular buyout investor or I exercise my faith and I trust wholeheartedly on God. And so I’ve been reading the book of Daniel like crazy over the past five days. I’ve been studying in such a way of how a man trusted that God would legitimately save him multiple, multiple, multiple times, and how he eagerly prayed for God to intervene in his life and all the circumstances that he found himself in. So I am currently in the season of Daniel and just trust in the Lord like I never have before to get a place to trust.

William Norvell: That’s a good place to trust. Thank you for sharing that with us, brother. Thank you for sharing your time with us. Thank you for sharing your heart with us and in your vision for Garden City and just in just how God has placed you in the new FDE landscape that we’re trying to bring people into. And it’s just such a joy to see the different segments and the different pieces, the God’s pulling together across this landscape.

Thank you for sharing it with us.

Episode 50 – Redeeming the Entrepreneur-Investor Relationship with Jessica Kim

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No one likes to be a part of a dysfunctional relationship. Yet, entrepreneurs and investors can often be on completely different pages with completely different goals and expectations.

Today’s conversation between Henry Kaestner and Jessica Kim gives both sides of the story. Jessica shares how setting unrealistic expectations hurts the entrepreneur’s ability to follow through and the investor’s ability to determine success. And Henry talks about the fundraising side of his entrepreneurial journey and what he now sees from an investor perspective.

Both sides are worth listening. Both sides have a lot to learn. Both sides can do a lot better. So, regardless of whether you’re an entrepreneur or an investor, today’s episode is for you.


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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Episode 51 – How to Say No with Jake Thomsen

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Today’s episode features one of the great thinkers in the FDI community talking about a topic that, well, frankly none of us like talking about. And that is “how to say no.” 

No investor can say yes to every deal that crosses their desk (nor should they!), but learning how to say no is a uniquely acquirable skill. Today, Jake Thomsen of Sovereign’s Capital is back after talking to us about Fundraising 101. 

He’s here to walk through some of the practices he incorporates in situations where he has to say no, and how these tips might serve you.


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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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