Luke Roush: So good morning. My name is Luke Roush and welcome to the Faith of an Investor podcast. I’m joined here by my co-host John Coleman. John Good morning.

John Coleman: Luke Good morning. We’re recording this at 6 a.m. Nashville time. I know, so it is an early morning, but you seem delightfully energized this morning. Despite that.

Luke Roush: I am. I am. And we have a wonderful guest this morning. Our guest is Mr. Mark Stoleson, who is the chief executive officer and a partner at Legatum. We’re going to hear more about the firm this morning, but he’s been with the firm since 2006, served in a variety of capacities, including head of group investments. He’s worked with his partners there to incubate a number of the firm’s key philanthropic endeavors, including the End Fund, the Freedom Fund, the Luminous Fund, the Legatum Center for Development and Entrepreneurship at MIT, as well as of the Legatum Institute Foundation in London. So prior to Legatum, Mark was an attorney so he’s reformed out of that practice which is wonderful and he also hails a law degree from my alma mater, Duke University, which we have not connected on previously. So that’s really fun. Mark, welcome to the show.

Mark Stoleson: Luke. Thanks so much, John. Great to be with you both.

Luke Roush: Yeah, it’s really, really good to have you on. I’m a long time admirer of Legatum Mark, as I shared in our lead up to this, But I want our listeners to be able to benefit from some of the things that I really admired as we talked through your background. But just give us oriented in terms of where you all are at Legatum. And so your website has this wonderful tagline of having an ambition to improve people’s lives by increasing prosperity across the world. What does that look like for you guys? And maybe just take us down the walk and journey you all have been on?

Mark Stoleson: Yeah, absolutely. So maybe we could just start at the very beginning. So Legatum actually evolved out of another investment firm and it was a family run, sort of a family office investment firm that was 20 years old. And I work there as a young professional as you said, I’m a recovering lawyer, but a lot of those skills actually were really useful. So one of my jobs was working within our public equities portfolio, working on corporate governance issues, just trying to improve the governance and sort of what we would call ethical business leadership across our portfolio. So that was my start. What I found, and this is a really key part of the story, is that one of the principals in that firm and two of my colleagues all had a faith, and we discovered that early and oriented our friendships and the vocabulary that we use, that our outlook on things. And we wound up working very, very closely, very intensively for a couple of years. And then a shocking thing happened that we had the opportunity to stand out and create our own firm. And the genesis of Legatum happened around the table with all four of us basically saying, what do we want to do? Not just with our business, but with our lives? How can we use this business and this organization as a vehicle for purpose and for meaning, and to kind of focus on what David Brooks would call the eulogy virtues rather than the resume virtues in life. You know, when you cross over, you want to hear well done, good and faithful servant. What does that look like for your life? And that was an active part of the conversation. So we thought, well, number one, we want to keep doing what we’re doing. We want to build and run a world class investment organization. We want to multiply our capital, not necessarily play it safe and conserve capital. That multiply capital. We believe God is a God of multiplication and everything is possible. So with that kind of piece in place and that is part of our aspiration, then it was, okay, now if we multiply our capital, how are we going to use those resources in a way that we think are meaningful and positive and helpful? And that’s where Legatum, mission statement was born. A lot of companies have mission statements. We kind of feel like we carved ours out of stones right at the outset and it has never changed. So we’re 20 years into this and Legatum mission has remained the same, and that is to generate and allocate the capital and ideas that can help others prosper and that word prosper and prosperity for us, just given our beliefs, has a holistic nature to it. Prosperity is like the biblical principle of shalom, prosper, your soul, prospers, prosper to all the ways that are meaningful and in a life well live in your relationships, in the opportunities pursued, in the responsibilities that you have within your family, within your community, within your nation. So that was it. And, you know, that was the beginning of the story. But everything that happened afterwards was an expression of that authentic mission statement that I can go through and tell you about. I’m sure during podcast will kind of unpack what we have done. But the thing that follows now, you know the why and. Kind of what we set out to do and everything that follows. It’s been a journey of just trying things, failing, adapting, learning, trying to do better. A lot of things haven’t worked, but a few have and have really scaled the things that have really come to exemplify that original mission.

Luke Roush: One of the things that I’ve really admired is that you all were contrarian before. It was popular to be contrarian, and there are some bets and some investments that you guys have made in specific areas of the world. You’re a global firm. You said, I think in Dubai, split time between there in London, but you’re active globally. Maybe just take our listeners down a bit of the walk that you all have been on. I think it’s appropriate to start with the why and maybe kind of translate into the what you all have been working on over the last 20 years.

Mark Stoleson: Yeah, absolutely. So because we started and are investors, we can’t help it. We’ve got an investors lens that we use for everything that we do. So we think about capital allocation, we think about return on investment. And so within our investment business, you know, it’s proprietary capital that makes us a little bit unique. Obviously, our mission and our relationships, this partnership with four individuals has lasted for two decades. That’s unique. The mission is unique. The fact that we have proprietary capital is unique. It’s a huge blessing. What it enables us to do is invest with a long term perspective and actually follow that through. And so a lot of people talk about that. We know that, you know, just the power of compounding over time being patience and investments is really valuable, but not everyone can do that. So if you’ve got a fund life, you have to return capital to investors or you have redemptions. You know, you face forced selling at just the most inopportune times. We’re super blessed and fortunate that we don’t have to do that. And so throughout not just Legatum’s history, but our prior firm, we would find that we could make some of our best investment decisions when everyone else is panicking, when everyone else is fearful, when markets are roiling. And you see this major disconnect between the actual value and the price of something. And it requires a lot of discipline. Even when you have proprietary capital, it requires discipline and sort of intestinal fortitude to deploy capital when markets are really shaking. But we’ve been able to do that well. So one example, just one small example was in Covid, where we watched the situation unfolding. We watched not just markets, but nations just panicking. We did our research and when we do it, investors do. We started to read. We started to research and started the thing. And our contention was, I mean, we’re not scientists, we’re not PhDs, but just using common sense, using our own experience, using our faith. We looked at and thought this could be bad, but it’s probably not going to be as bad as is sort of current market prices are reflecting. And so, you know, we always carry some dry powder and some cash and we were down. I mean, our fund must have been down 25%, you know, in March, maybe February, March, April ish. And we had one position that was down over 50%. So we were definitely seeing the mark to market repercussions of all of this emotion and sentiment. But we did something that when Legatum does well, this is how we do it. We went 100% invested and for one of I think, twice in the last 20 years we borrowed money to invest, but we took a little bit of margin and just plowed it all in our existing portfolio. We know those businesses very well. We know everything about them. We know where their value lies. Got high conviction in their ability to create value in the long term. And we just went all in and that was one of our best performing years in the last 15 years was 2020. And so that’s zigging when everyone else is zagging. But that’s a great example of us doing what we’re configured to do. We made the opposite mistake and lost patience, and we’ve lost patience. When things go down too much, too fast and we’ve lost patience when they go up too fast, all of our models get stretched in banks, which we don’t. We like financial services and the price to book ratio goes like eight. In a country like India, even if the bank is growing at 100% for a year, we just, you know, we get rattled by that and sell out to it. And so we’ve made those mistakes over time. But one thing that really has taken root within the firm is the virtue of patience. And patience is the choice. And patience is a discipline. But when you actually use it in investment, it’s like a superpower. And so when we’re doing well, we have high conviction. We have a highly concentrated portfolio, and you’ve got a multi-billion dollar portfolio that’s usually invested across less than ten. Names will go narrow and deep, high conviction and intend always to hold for the long term. So it’s a bit like a private equity portfolio, but 50% of it is in the public markets.

John Coleman: Mark, I love that example, especially during COVID when you guys zagged as everyone else was zigging I guess, or zig when people zagged. What are the examples of that right now in your mind? Either countries where you feel like investors have panicked or have exited sectors? It’s still a pretty choppy economy right now, I think globally with inflation, with rising interest rates, with softness in real estate markets, etc.. And so we’re seeing a lot of places that investors are shying away from. Are there any high conviction spaces where you think people have overreacted now that you’re focused on?

Mark Stoleson: It’s a great question. I mean, just for a second, dialing back the talk a little bit, the whole heritage of this firm is in going places that other people don’t want to go. So, you know, in going places, that would be fashionable tomorrow, but that are out of fashion today, whether that’s a company or a country. And so a lot of the history is investing in Brazil. In the 1990s, no one wanted to go there investing in the former Soviet Union. So from the Czech Republic through to Russia during those years over throughout our history, we’ve invested in most countries. So we’ve invested in China and India and in Europe and in North America, South America. So I think if you look around the world today and ask where is the most out-of-favor country for investors, you know, at least somewhere near the top of the list right at this moment would probably be China. And so you have to look at it, study and think really hard. You’re looking at a situation that is driven by politics and geopolitics in addition to just economic fundamentals. That would be the type of place that Legatum would be monitoring, I would say, in looking for opportunities. China is a huge country, huge population. You know, it’s still growing and has, you know, hopefully its best years in front of it and it creates some amazing companies. So it’s a place that we would probably look. But right now when you start to see fear begin to reach sort of a peak stage, you can take your pick. You can find amazing companies in America that are out of favor in certain sectors, whether that’s within the energy sector and other places. So basically anywhere that’s out of favor is a place that we would be keeping a close eye on.

John Coleman: But one of the things I love about you all is the global footprint of the firm. In fact, here in Dubai, I think is your primary home office. I guess, Mark, I had the privilege of living and working in Saudi Arabia for a while and Afghanistan spent a lot of time in Dubai. Obviously, such a fascinating region. At the micro level. How did you decide upon Dubai and what is working as a faith driven investor look like in Dubai? And as you zoom out, how does that influence and shape you as a firm, that global footprint?

Mark Stoleson: Yeah, great question. So the choice of Dubai for Legatum, it was just really pragmatic. Frankly, we don’t have any investments that we own our own building. So we rented out we have tenants […..] and whatnot. But that is really our only investment in the entire region. So Dubai is a bit of a bedroom community for Legatum, but it served us very, very well over time and what we were looking for and we asked ourselves the question every five years or so like, should we still be in Dubai? Because we could be anywhere. But the key drivers of that decision were, you know, number one, we wanted a place where we could recruit and retain world class talent. So where can you find good schools, a good standard of living? It’s a safe place to raise a family. Then we wanted a place that logistically would serve our global footprint. So from Dubai, Dubai now has the world’s busiest airport. You can fly to Hong Kong in 7 hours, London 7 hours, Cape Town in 10 hours. The US is a little bit further, but you can kind of get a lot of places that we want to be and we love to be boots on the ground. Go visit countries, visit companies and really get a close perspective on our portfolio and on opportunities. So that’s a key part of our strategy. So logistically, Dubai is fantastic. And then third is just a really business friendly place. It’s easy to set up a business, it’s easy to run a business. It’s the legal framework. The infrastructure is fantastic. So, you know, we’ve looked around for other places to be, and some have one or two of those attributes, but very few have three. And so we’ve stayed in Dubai. What is it like to be a faith driven investor in Dubai? It’s awesome. Dubai itself is part of a republic. It’s part of a group of smaller sort of emirates. Or little countries within a country, the UAE, the United Arab Emirates. Dubai only has probably 2 million people in it, but it has 200 nationalities that live within Dubai’s. It’s a very cosmopolitan place, very international place, and it’s a very tolerant place. So you can practice your Christian faith. You know, I live on the Palm Jumeirah and I had people that were renting the home across from us or Orthodox Jewish people or who walk around with the yarmulke, you know, kind of traditional Jewish wardrobe. So Dubai is just a very tolerant, very open, very cosmopolitan place. I belong to an amazing church in Dubai. And we found that that type of openness and tolerance made it easier and made it possible for us to retain and recruit amazing professionals as well.

Luke Roush: One of the things that I think also has just attracted so many people to Legatum over the years and has really built, you know, your brand in a way that I think also reflects the faith of the founders is this idea of prosperity and what that looks like in and through your firm and the investments that you make and then how you select investments. So you talk a little bit on your website around the prosperity model and your prosperity ladder framework. Would to have you just unpacked that model, the framework? I think most firms don’t have a theory of change, how their work translates to change that we want to see in the world. But maybe could you take a couple of minutes and just unpack that for us, Mark?

Mark Stoleson: Sure. Absolutely. So if a God whose mission is to help promote prosperity is to help people prosper again, as investors, we want to do our homework and study like, oh, what? How do you make that happen? What are the component parts of prosperity? And we didn’t know literally when we started, we pulled out. I had a yellow legal pad and we were sitting in a room. We were like, I don’t even know what prosperity means. It sounds like money, but what does it mean? So we I went to the Webster’s dictionary and looked it up, and it turned out that prosperity is really multifaceted. It’s got a lot of things going on. And we realized probably we’re going to need some help. So we visited some professors at Oxford University here in the UK. So I’m talking to you from London today. And we got seven professors together who all had like an angle on what’s prosperity. And we asked them to deconstruct prosperity into its component parts and tell us, how do you do it, what’s it made of? And it’s made of the things that we’ve already talked about. But of course it takes wealth, but also what we call wellbeing, which is all this stuff that makes life worthwhile. It’s the quality of your relationships, it’s the amount of opportunity hope, you know. How do you measure hope and how does that get factored into it? Safety, security, health. All of these things. And after we had these genius professors kind of deconstructed it for us, we thought, okay, well, let’s put it all back together and do an assessment like how prosperous is the UK? How prosperous is the US? And once we started to pull on that thread, we thought, Wow, you can actually compare countries against each other. And gosh, if you can do that, that sort of feels like an index. You could have a league table or an index of prosperity of prosperous countries. And so our Legatum Prosperity Index was born on 2007. And looking back on that document today, which Legatum Partners co-wrote together. It looks really amateurish, really, you know, very basic. And over time, we hired an amazing group of folks to do things called regression analyzes and a whole bunch of other super high tech stuff, too. And I think they’ve got 88 different components to our prosperity index. And it’s a very sophisticated look at what drives prosperity on a national level and what restrains prosperity on a national level. And the idea was if we can create that kind of framework. For national leaders and decision makers. That’s a public service. If you’re a national leader who wants to see your country prosper, this can give you a good idea as to how to think about that and maybe where to allocate your time and allocate your resources. So that’s the prosperity index, the prosperity ladder. One of my partners, Alan McCormick, literally just wrote it on a napkin one day because he realized everything we do and the way that we think is about capital allocation and we understand how to allocate capital in the public equity markets. But then there’s sort of private equity and then there’s venture capital and then there’s sort of angel. We’re all familiar with those sort of different strategies of capital allocation. But we realized we’re doing a ton of work just in philanthropic efforts and charitable work, and that has all of the same attributes of capital allocation. You want to do your assessment, you want to allocate capital wisely, you want to look for a return on investment. You need to monitor that. What does an exit look like in philanthropy? And so we wound up just creating that prosperity ladder that we got some amazing feedback from it because it really does just sort of provide this taxonomy of capital flows and capital allocation in these different to meet different needs, basically.

John Coleman: One of the things I love about what you all do is the diversity of investment strategies you’re involved in. And as you mentioned, that even extends into philanthropy. Luke went through some of those at the beginning of the call, just in the different focuses that you all have as legatum. Could you unpack that a little bit and tell us what are those different strategies and why have you all chosen to get into each of those in a way that influences prosperity as you just described?

Mark Stoleson: Yeah, absolutely. So maybe I’ll start just for 2 seconds on the financial investment business. So the way that it’s configured today, it looks a lot like Warren Buffett. It’s got a little bit over 50% of the public equity markets, and that’s on an unlevered basis. We don’t borrow any money, we’re not shorting anything. It’s long on the highly concentrated portfolio and then we probably have about 40% in private equity. And private equity is probably a better fit for Legatum because we don’t feel like we’re traders or even investors. We want to be business builders, business owners, and that’s our mindset in investment. And then probably about ten or 15% of the portfolio is in venture capital. But venture capital is not our wheelhouse. We wouldn’t be good as a venture capital firm, but we do strategically want to be exposed to certain geographies or certain sectors and need a way to do that. And so we have about seven different venture capital fund partners that we’ve allocated capital to because they’re just way better at it. But we want the exposure. So one of the ways that Legatum thinks about investment is what we call as SBI is simple, big ideas. So if you think India is growing at seven or 8% and it’s got a population of over a billion people, there is an SBI, which is the rise of the Indian consumer, how do we express that simple big idea? And then we’ll express it through kind of the sectors that we like that we understand consumer discretionary tech, maybe financial services and banking. So that’s kind of how we think about our core financial investment business. We don’t think a whole lot differently about philanthropy. We want to look for value. We want to look for an outsized return on investment. And to do that kind of guy, go looking in the same types of places, places that are overlooked. So let me give you an example. Luke mentioned the end fund. The end fund stands for Ending Neglected Diseases. And what the end fund is all about is deworming people. So that story started with one of my business partners reading the Financial Times. He discovered that 1.5 billion people around on planet Earth have one or more forms of worms, intestinal worms. They can kill you, they can make you blind, they can make you lame, they can keep kids out of school, keep people away from work. So it has a major harmful effect on the health of a community family nation. You will only find these diseases in the poorest countries on the planet. So you won’t find them in America, you won’t find them in UK, Japan. Why? Because, I mean, all these diseases are global diseases. The worms are everywhere. It’s because in America we deworm people with a pill and we deworm animals as well. And there are a lot of countries that just don’t have access to those pharmaceuticals. So as we did our research, we discovered that pharmaceutical companies were actually, to a large extent, give you the medicine for free. The patents have run out. They don’t make any money out of it, but give it to you if you have a credible plan for kind of supply chain management distribution. Legatum chose two countries, Burundi and Rwanda, and said something that’s never really been done before is what’s called a Mass Drug Administration program on a nationwide level. We thought if working closely with the ministries of health. Those two countries, we just wanted to figure out if you could do a national process over 7 to 10 years, so long term time horizon to control and then eliminate these diseases. And what we found was the results were just off the charts, exceeded all expectations. We found that in some pockets of those countries, you have like 70 or 80% of a local population infected with these diseases. And with two treatments a year, you could get the disease prevalence down into the single digits, even down to zero in some places. So incredible results having proven the model, having de-risked it, which is just again, the investors lens, we thought, well, we don’t have the capital to roll this out to the whole planet, so we’re going to need to collaborate. And the end fund was born out of that spirit we took the Legatum name off of. It wasn’t the Legatum of Deworming initiative anymore. It became the end fund and we invited other donors and investors to join us. And today the End Fund is the world’s largest privately funded deworming campaign. It did over 200 million treatments last year alone. So it’s just it’s operates in over 30 countries. And to me, that kind of the punchline of that story is somebody has to have the risk capital. Somebody has to go out there and risk failing and prove the model. And once you’ve done that, the other part of the story is taking your name off the door, in some ways, opening it up to everyone else and making it something that people can collaborate on and feel a sense of ownership on.

Luke Roush: So, Mark, that’s remarkable story. I mean, 200 million treatments in the last year alone. Just unbelievable. There’s aspects, you know, when I hear you talk and we had a chance to talk a little bit before this as well, when I hear you talk, I mean, we’re talking with you on the Faith Driven Investor podcast, but there’s also a faith driven entrepreneur podcast, and there are elements of you and your partners and how you think about translating simple big ideas that SBI into reality. That really is akin to what we see in venture capital founders. Maybe speak a little bit about just the transformational potential with entrepreneurship and how you and your partners are wading into that idea.

Mark Stoleson: Yeah.

Luke Roush: Different parts of the world on both a for profit and maybe concessionary capital perspective?

Mark Stoleson: I mean, I think we as investors, we just instinctively love entrepreneurs, love the creators and the risk takers. But as we studied, prosperity didn’t take long to realize there is no prosperity in a nation without entrepreneurs. And these are the people that create the opportunities. They create the jobs. They are the engine that drives the ecosystem of finance and that really they are major servants for our national economy and prosperity. And so. But for us, entrepreneurship is even more. And the reason why we set up this Legatum center at MIT and the way that that works is we realize there are brilliant young folks from really, you know, disadvantaged backgrounds or countries that are very poor, just kids that could get into MIT but can’t afford it and have a bench or a calling to entrepreneurship. And we thought, gosh, if we can kind of come alongside them and just with a little bit of funding, give them access to that level of education and that level of network. And if they go back to their country, they’ll start a business, they’ll run a huge business. They may want to be running the whole country. And if during their time at M.I.T. as a Legatum fellow, if we could also give them a vision for the power and the virtue of entrepreneurship. So if they wind up in a position of political power and authority, maybe they can play a part in sort of removing obstacles and sort of paving the way so the more entrepreneurs will serve that society and drive more prosperity for everyone. That was the thesis behind setting that up. And the reason for that is when we look at entrepreneurs, we feel like and again, you know, entrepreneurs are people and people are are flawed. But big picture to us, entrepreneurship represents a basket of values, right? I mean, these are people who want to be creative and people who will put themselves out there and fail and then adapt and try again. So you’ve got perseverance, you’ve got patience, you’ve got audacity and boldness. There are so many. Character attributes that are so good about entrepreneurs that you just want to see, you know, spread out. You want to see sort of leavening a whole society, a culture of a society. So we love entrepreneurs because they do great stuff and create opportunities and jobs. But we love the idea of entrepreneurship too, because of what it represents in terms of values.

John Coleman: Going back to the global nature of your firm, Mark, in the way that you work with such a variety of people. I mean, you even just described it in things like the end project that you’re working on, where you’re working across countries. This is the Faith Driven Investor podcast from a Christian perspective. But we’ve also highlighted Jewish investors here. We’ve got a muslim investor coming up. You’re working alongside people of all belief systems in the work that you do. Any advice for folks on just navigating that as a person of Christian faith, working well with those who are sincerely motivated by other value systems or in a diverse environment where those value systems are represented?

Mark Stoleson: Absolutely. So Legatum has sort of three basic core principles that everyone signs up to and animates everything that we do. And the first one is excellence and elegance. And the second one is culture of honor. And the third one is flawless compliance. So because we operate in lots of different countries and lots of different cultures and lots of different sectors as well, whether you’re deworming kids in Africa or you’re deploying capital in the Japanese banks, you know, for us flawless compliance means you say, well within the safe zone, the right side of the line at all times, no exceptions. And we’ve got a team that’s, like you said, in London and in Dubai and also, you know, in the US and other places. So that’s really important. But the key, the twin kind of heartbeats of Legatum are really excellence and elegance and a culture of honor. And with excellence and elegance. It’s not just being, you know, masters of our craft, like really always looking to improve, always looking to do better in terms of how we invest and just how we conduct ourselves. The elegance part is we want it to be beautiful, but we want the relationships to be beautiful. We want our work product to be beautiful. We want them got a brand and what it represents to be not just excellent, but also beautiful. And the culture of honor is probably the most important part of what makes Legatum and I think really special and what makes it so effective in different cultures and with different faith traditions, because we don’t feel like it’s our role to tell anyone how to think or what to do. We come to serve it in the posture of a servant of wanting to come alongside people and help and contribute and honor other people. And that starts I mean, it starts at home for us. That means that starts within the Legatum team and within the Legatum family. And so something that we pay a lot of attention to is how are we treating each other? How do we make decisions? And culture always comes from the top. And within Legatum the top is the partnership of these four individuals, and we take a very intentional and disciplined approach to maintaining right relationships with each other. A couple of principles that really stood the test of time for us. One is what we call the power of agreement. And what that means to us is that we want to move in unity at all times. So especially with anything material for the firm, it doesn’t mean that we have to agree on everything. But if we wind up in a situation or a decision that we’re discussing that we need to take and we’re not in agreement, we make the highest priority to be in unity regardless of whatever we decide. And the second is what we call keeping short of counts. And so when you walk a journey with anyone, whether it’s in a marriage or a business relationship for two decades, you’re going to have good days and bad days. You’re going to misunderstand each other, you’re going to offend each other. It’s human experience. But the one thing we can do is keep short of counts and to raise issues quickly, not let things fester, not let any sort of bitterness take root, forgive each other and move on and just be very, very intentional about that. So when you see those principles, really something that we make a big priority with in the partnership, you can see it fed through the entire organization and the culture of honor that we strive to live by.

Luke Roush: I think those are great tips, Mark, and great stories of how you and your partners over 20 plus years have been able to stay together, stay unified, you know, engage in the merits when hard decisions need to be made, but ultimately come out and move in unity. I like that a lot. One of the things that we like to do at the end of each podcast is just take time to hear what the Lord is saying to you in and through Scripture. Sure. And how that maybe impacts your work and leadership of Legatum. So maybe just take a few minutes and share what the Lord is teaching you right now in this season.

Mark Stoleson: Well, I mean, two things that come to mind that are really sort of top of mind right now. And I’m sort of pondering why the Lord is raising these things now. But one is, you know, in Isaiah when it talks about the prophesying, the coming of the Christ is prophesying the coming of Jesus, and it says the government will be on his shoulders and it talks about these attributes. And one of them is that he’s the Prince of peace. And we normally hear those words around Christmas time. But for whatever reason, I feel like God really put that on my heart recently. And I think what he’s saying and I’m still really sort of noodling on this, is something about the importance of just good governance, good governance, good governments, good leadership, and whether that’s in your family or whether that’s in your organization, whether that’s in a nation, there’s this connection between good government, Christlike government and peace. Like if you’re not seeing peace, there’s probably a link to the quality of the government. And that’s really struck me because as a leader and as a leader of leaders within our organization, leaders have different personalities. And some people are more by confrontation, easier calling people out, calling people higher. Other people really are just more wired for harmony and they don’t want to confront things. And it’s something that I’m working on with some of our young leaders is just the necessity as a leader to bring peace. But sometimes you have to bring peace by raising the tough issues, by calling things out, by holding people accountable, by making it clear what you will tolerate and what you will not tolerate as a leader. And that’s hard. That can be awkward, that can be uncomfortable, that can make you unpopular, that can make you lonely. And yet it’s totally fundamental and necessary as a leader. So this link between good government, like Christlike government, I just for some reason I was really struck by that. The government’s on his shoulders and, you know, there will come a time when every new about every tongue will confess that Jesus Christ is Lord. When that happens, we will experience what that level of peace looks like because we’ll be living under his government alone. And it’s awesome. But I feel like it’s part of our role, not just as believers, as Christians, but as leaders to do our part to try to bring heaven to earth, to try to bring some of that within the authority that we have been entrusted with. So that’s one. And if we’ve got time, I’ll give you the second one. Second one, it does go to the power of unity again. And, you know, I’ve been really reflecting just on when Jesus talks about how his disciples will be known, it’s that you will be known not by what you achieve, but you will be known by your love for one another. Yeah, that’s how people are going to know that they’re Christians. That’s how the people are going to see a reflection of Christ those other people are going to encounter. The Divine is through our love for one another. And so even within the bottom context, even though the God him is not an evangelical Christian organization, we have people of all faiths and no faith that work within Legatum, and are very successful within Legatum. But that’s the perfume that I want to see coming out of the God is a love for each other and a love for humanity and a love for our neighbor. And that through that, I feel confident that God will make itself known, that his presence will be revealed if we love one another. But as a corollary to that, I just have noticed over two decades of doing this with my partners that when we are in unity, I feel like something spiritually powerful is unlocked and we can see it in fruit and in the oil of God’s favor in the activities. It’s almost like you get the relationships and it’s almost like it’s not always the case, but it feels like good things happen. And when you’re in disunity and disharmony, it feels like it just at least for us, it feels like it has a a restricting effect or almost feels like a kind of cauterize is God’s favor. And so it’s something that it’s just hugely important to get over yourself, make things right and run. Don’t walk back to a place of unity.

John Coleman: Mark That’s an encouraging word. We’re really encouraged by the work that you’re doing at Legatum and around the world. I’m really hoping to get to visit some time on a trip to Dubai. Luke It seems like we’re probably overdue for a trip out there, but just really thankful that you would come on today and share your insights and the insights of your firm with the Faith Driven Investor podcast and with the audience that we’re reaching. So thank you so much for being here today and for the work that you’re doing.

Mark Stoleson: John Luke Guys, thank you. Not just for this time, but thank you for what you’re doing with the faith driven investor, faith driven entrepreneur, the whole movement that you guys are stewarding. It’s super important. I hope that this is useful for someone out there as they hear it. And you’re both more than welcome in Dubai. We look forward to your visit.

John Coleman: Welcome back to the Faith Driven Investor podcast. This is John Coleman, your host, and I wanted to float something new with you today. Usually we dedicate the first episode of the month to a feature we call marks on the markets. But this month, instead of focusing on the macro investing environment, we wanted to highlight a recent episode released at faith driven entrepreneur between an entrepreneur and investor based in Israel. The tragedy of the Hamas terror attacks, the rise of global antisemitism and the resulting war in the region that made the brokenness of the world even more acute. Invisible. So we wanted to invite some two leaders who had become friends of the faith driven movement. Bader Mansour is the founder of Nazdaq, with the Z, a company that develops solutions in Nazareth. He’ll get more into this, but he comes from a unique perspective as a Palestinian and also an Israeli citizen. But most importantly, as a follower of Jesus of Nazareth, as an executive for a network of 17 churches and one of the founders of a local seminary, Bader is also recognized national leader within the Arab speaking Christian community. Mordechai Weisman is the founder and chairman of Israel First Fruits, an economic development agency for the local community of faith in Israel. He is also the founder of the Messianic Business Fellowship, which is the only national network for Marketplace believers in Israel, both Jews and Arabs. He’s a Jewish Israeli follower of Yeshua Jesus. Like most Israeli Jews, he served in the Israeli Defense Forces. His son is currently serving as well, and we are keeping his son in our thoughts and prayers. Let’s listen to that conversation.

Rusty Rueff: Hey, everyone. All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guest may maintain positions in the companies of securities. Discussed in this podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization. Thanks for listening.

Henry Kaestner: Welcome back to the Faith Driven Entrepreneur podcast. We have a special edition today. I’m here with Rusty. And Rusty and I are going to wade into this amazing scene that’s going on right now in the Middle East. We are not going to be talking much at all about politics. This is not what we do here. This is a podcast that is meant to help the Body of Christ, particularly business owners and entrepreneurs, understand how much God loves them and what he is inviting them to as they participate in the marketplace. There are times when that mission that we were all on might seem relatively easy. It might seem sometimes when that mission is hard, there are times when the yoke is light, sometimes when it is heavy. But for today, we had this incredible opportunity to have this perspective of two dear brothers that we’ve known now for years. As Rusty said in the intro, we featured them on some great video stories for context, and they’ve graciously allowed us to spend some time with them as they process where God has them and how they are seeing him at work. The questions they have, the prayers they’re lifting up, and it’s a special privilege to be with them for their perspectives about all of those things. Hopefully with gold today that we will all know more about how God loves us and we would accept the invitation to participate in the work that He’s doing, building the world when it is easy and when it is hard, when there are clear points for us to follow and when things are a little bit muddier. So today we go to Israel with Mordy and Bader. Gentlemen, good morning. Thank you so much for being with us. I know it’s been a crazy couple of weeks. Mordy, I’m going to start with you. I know that you get a sense this summer we were at the Christian Economic Forum together and you were starting to really feel keenly that something was afoot. You’re troubled. You very eloquently shared with us at the Christian Economic Forum what was going on in Israel. And now we found ourselves a couple of months later in a precarious situation that you and and your friend Bader right in the middle of. And Mordy, what are you thinking about this evening? Israel time. What’s going on?

Mordechai Wiseman: Thank you, Henry. It’s a privilege and an honor to share with the FDE community. Yeah, It always seems like life in the Middle East is pregnant. There’s something’s going on or something’s about to happen. But it’s definitely, for me, at least since really early 2022 even 2021, there’s this growing sense of apprehension in terms of what’s lying ahead. And as you shared really with this latest government and some of the internal processes within Israel, I’ve been feeling grieved at things that I knew were coming but were hard to observe in real time sort of emerging before us. And then this crisis broke out eight days ago. And I think Israelis in general are reeling because we’ve never faced something quite like this and comes after eight months of internal conflict, nine months of internal conflict. So I guess the pressure of feeling squeezed now for a while, feeling like God is moving us in a, yeah, undeniable way towards a certain direction, and then a real spike in pressure. Actually not a lot of fun, but we have to trust that God is squeezing out of us things that He is seeking to either remove or to produce from our lives. I’m just hoping I’m producing light in salt.

Henry Kaestner: As you process all of this. You’re doing this in the midst of a number of family, including your son. You served in the IDF. Your son is in the IDF. What what are you praying for?

Mordechai Wiseman: My first prayer is mercy. The enemy seeks to steal, kill and destroy, and war is his favorite tool. And yet God will use the schemes of the enemy to advance his kingdom. He turns evil to good, and he will. So we have to believe that despite everything that is going on, God is doing something profound. And yet all we can do is pray for mercy. Pray for to be given the strength to stand up under the pressure to be used for good rather than participate in the orgy of death. It’s easy to get drawn into the male storm of pain and suffering and trauma. And to some degree, that’s what being in the world, yet not of it means. It means that we mourn with those who mourn. We feel the pain of our people. And yet we also have a different identity and a different reality that is within us. And that’s easy to say. It’s very hard to walk through. So, yeah, I’m a veteran and actually my son is the fourth generation of our family serving in the Israeli military. And it’s easy to worry. It’s not just.

Henry Kaestner: I would imagine it is.

Mordechai Wiseman: Yes. I mean, I have literally dozens and dozens of my friends serving right now of our tiny congregation of 400 people. Over 50 are under arms right now, either as enlisted or reservists. So it’s easy to surrender, to fear or worry. And it’s that daily choice to look to the Lord and trust him that he is in control. And it’s really not how do I change circumstances, but how do I respond in a way that glorifies God?

Henry Kaestner: Mordy, thank you, Bader I’m going to ask the same of you. Such a privilege to have you, as Rusty mentioned in the intro and your story at the most recent conference. So gave me more of a perspective of what it looks like to be a Palestinian Christian in Nazareth. How are you processing this? What are you praying for?

Bader Mansour: It has been a very heartbreaking situation, you know, being a Palestinian and an Israeli. At the same time, my news feed is mixed with Israeli sources and Palestinian sources for a long time. So first of all, there is the grief and the sadness of all the people that have been killed in the massacre that happened just Saturday, You know, watching the news. Heartbreaking. I have lots of friends that lost loved ones. Also from the Israeli side, it has been very heavy on us here. At the same time being, I have maybe the privilege or maybe the the problem of belonging to these two troubled people, you know, So I am also a Palestinian. I am also in grief for my Palestinian people as well, that first of all, this was something they produced, you know, something horrible like this. At the same time, we are seeing the developments that are happening, the war and that is going on, you know, in Gaza and also the innocent people being killed. And at the same time looking at the whole situation and the whole history, it’s not a you know, this is I don’t see this as event in itself. You know, this is a continuation of my own life. And then before I was born of a conflict, you know, in this country what I am and it has been very heavy. We are praying, Lord, for mercy, you know, on the people of Israel, mercy on the people of Gaza and the whole people of this region, you know, on the Palestinians, also on the West Bank, on the people who are also in the surrounding countries. We are praying that this will not escalate into a larger war. We are praying for our safety. You know, Palestinian Arabs who are Israeli citizens don’t serve in the army. So I don’t have immediate family in the army. But we are afraid. We are afraid. Our prayers are for the Lord to have mercy and to send peacemakers. We need more peacemakers to come and help us. We probably couldn’t solve it ourselves, and we need people to come and help us get this whole Israeli-Palestinian conflict resolved in such a way that maybe we couldn’t do it on our own. We need help. So this is what I am praying for God to send more peacemakers and for the peacemaker himself to intervene and be with us at this time.

Rusty Rueff: Amen. Amen. You know, we live in this as we as Henry said, we live in this complex time. Mordy and Bader, you guys are right in the middle of probably one of the most complex issues going on right now in the world. At the same time, we have a background that’s really developing all over the world around a sense of identity. You know, where does our identity reside? And we’ve mentioned, you know, the two of you come from very different backgrounds, Bader you are Palestinian Israeli, Mordy, you’re a Jewish Israeli. Can you share with us, both of you, how your faith has helped you think differently about those who have different worldly identities? You talk a little bit about that Mordy Do you want to start first?

Mordechai Wiseman: Well, I think, again, just to provide a little bit more nuance. Israel’s home not merely to Jews and Arabs, but actually both on the Jewish side and the Arab side, identities are highly complex. I won’t speak to all the Arab community, but you have Muslim Arabs, you have Christian Arabs, the Bedouins, Druze and the Jewish side. You have people from not only that were native born or born in this land, but who’ve come from dozens of countries. And we have Jews from what we would call Middle Eastern background or Sephardic. We have European Jews, we have Orthodox and so many different identities mixed in that even the idea of Israeli is highly complex. Now, as a believer, I’m not only Israeli and I’m not only a Jew and I’m not only an Ashkenazi Jew and belong within even other subgroups within Israel, but as a follower of Yeshua, I have this sort of overarching identity and we tend to think of things I think in hierarchical. And I sometimes I find that it’s unhelpful to say, Oh, my citizenship is in heaven. So that kind of like vetos, all the other identities, I think that’s not helpful actually in daily life. And we see in Revelation chapter seven, verse nine, that people from every nation, tribe and language will be standing before the throne. God created our ethnic identities, created our cultural identities. And so my kingdom identity, my identity as a Jew who follows Yeshua infuses is at the center of all those other identities, informs them, hopefully transforms them, redeems those and that richness, the diversity that God created and making us so different then gets elevated perhaps through our kingdom identity. And sometimes it’s a veto. Sometimes there’s something in my background that is just wrong. There’s a cultural sin, a heritage that we hold on to that is just not pleasing to the Lord and that needs to be removed. But more often than not, it’s something that needs to be fixed or healed or redeemed because the root of it comes from God. So maybe that’s overly theoretical, but as a believer, for example, I’m a combat guy, right? I’m a veteran. My son serves in the army. There’s a side of me that understands the need to fight against those who have a murderous worldview. And yet, as a child of God, highly aware of my own sin, to recognize that these Hamas terrorists are people who need God, they’re sick in the sense that they were raised on hate. We’re raised to believe that their highest calling is to not only die, but to kill for Allah. And, you know, the highest prayer for them would be that they would get revelation and be saved. Just as Saul of Tarsus very sincerely persecuted the early church. And yet I also recognize that I have a mandate to protect those who cannot protect themselves. And so here I am, a combat veteran. Jesus says blessed are the peacemakers, right? I have a calling to protect those around me, and yet I have to pray for their salvation, even as I have to take a step in standing against them. It’s that complexity in that nuance that is not immediately resolvable in the here and now. And yet I have to see God to, in every given moment, respond in a way that honors him. So that’s how my faith informs my identities.

Rusty Rueff: As beautiful as beautifully said, I mean, I’m really I’m emotionally struck there by what you said about Saul of Tarsus. And I think, boy, I wish we could stop. And everybody just think about that more often, that if you were a Christian at that time. Right. And you’re watching Saul and what he did, that there were people who were praying for him. Right. There must have been people who were praying to God, remove this person. Remove this person. And that his conversion from Saul to Paul, the blinding of the light, could have also been an answer to someone’s prayers. Never would have framed that without you speaking about that. Thank you so much for that. Bader anything to add here?

Bader Mansour: Yes, I think, you know, also my identity is probably more complicated. But, you know, I’m an Israeli and most of my, you know, newspapers or television I watch is Israeil television? I read Israeli newspapers, I speak Hebrew fluently. I’m an Israeli. I have lots of Israeli friends. And so I have lots of love to my country. I care about my country. At the same time, I am a Palestinian. Palestinians in 1948 were scattered. Some became refugees in the Gaza Strip, some became refugees in Lebanon and Jordan and some the West Bank and some stayed in Israel. I am one of them. You know, my parents in 1948 became Israeli citizens. So I am also an Israeli citizen, but yet I am a Palestinian. So I also have this sympathy and love to my people. You know, I love my country, but I love my people as well and feel for my people. And I also, you know, my prayer language or my home language is Arabic. And, you know, I am Christian Arab, but I also have lots of, you know, Muslim Arab friends and some are also religious, some are less religious. And I also read a lot of newspapers in Arabic and feed and have friends everywhere, also in Gaza, also in the West Bank, also everywhere. So to being able to see also the point of view of the Palestinians and trying to understand if there could be anything to be understood about this whole, I would say, barbaric attack. But at the same time, why did it happen and why did these people I don’t think these people came just because they wanted to kill. It’s part of a complex situation that has been going on for a long time with lots of injustice and neglecting the Palestinian cause for so many years by insisting that these people can be there for 16 years in a big jail and nobody cares about them, and seeing the world move on and they are still there, nothing. Nobody cares about them. So I don’t justify what they did. Try to understand what’s going on and what hope these people have and trying to have empathy for the people of Gaza in addition to the people of Israel. So as a follower of Jesus, I look at this in such a way, you know, you know, I’m not trying to give two points of view here. I’m trying to say that, you know, in addition to all this, I am a follower of Jesus of Nazareth, where most people in this country, you know, the 14 million people or 15 million people that live from the river to the sea, both Palestinians and Jews, most of them don’t know Jesus. They need Jesus badly. So what is my role as a follower of Jesus in this whole thing? And, you know, can a few thousand people make any difference in this whole craziness that’s going on? So I see my role as the follower of Jesus is to follow the footsteps of Jesus and whatever I do by showing love to everybody, by showing empathy like Jesus would meet the mother of the dead son, and will go and speak to her show love to these people and these people, and also spread the good news of Jesus that he is the savior of the universe, savior of the world. He loves us and he wants the best for all of us. And this is our calling. You know, it’s hard to do it these days, but at the same time, this is why we are here, to stand up for showing the love of Christ for everybody around us.

Rusty Rueff: So I want to go a little deeper into this because I’m going to frame this in a way when people have differing views and they bring that into the workplace, which we see more and more of happening. I was joking with somebody other day. I said, I’m old enough to remember when we didn’t talk politics or religion in the workplace. Right. And today, which I’m very happy that we can share our faith in the workplace. We also share here in the United States, we start to share our political views in the workplace. And our political views have been divisive in many ways. Yet you all are in a situation where you must live and work together with people who have much, much different views. Views that actually are beyond just opinions have turned into actions. Can you share your insights for other faith driven entrepreneurs about how best to live and work together with those who have very, very differing views and not only differing views for the short term, but for the long term because, you know, we pray for shalom, we pray for peace in the Middle East. And these wars, they seem to you know, they come, they go. They never really go away, but it becomes acute and then it becomes less acute. You have to go back and work together and live together. So you have a unique perspective I think you can share for our listeners on how to work together, live together with very, very differing views. Help us with that.

Bader Mansour: It’s just something about, you know, here in Israel, you know, I’m also a little bit old here in Israel, and we spoke politics and religion at the workplace before you. You know, I worked also in America where we couldn’t talk politics here. We talk politics all the time. You know, it’s part of life here at the workplace. So when I worked in an Israeli company that was 400 Jews and one Palestinian, I was the first Arab to join the company. You know, it was a tough at the beginning, lots of prejudice, like, you know, a Palestinian in our company. Who’s this guy? What’s the story? And lots of heated discussions at work talking about differences. But I think this is where our role as agents of change, as people who are followers of Jesus, comes into the place where we can show a different face of our people, because people don’t know, you know, the Jews I worked with never met an Arab other than maybe somebody at the gas station. So they finally meet an Arab engineer and they talk to him. And I also did not have these close relationships with Jews at the time. So when people begin to talk and I think if we bring the ethics of the kingdom into our discussions where we also show respect, we can make change. It’s probably small, you know, it’s one person at a time or, you know, a few people. But I think this is where it has been challenging. But we grow together. Sadly, when we have war, we go back, you know, the tensions go high. People have very strong opinions and things go back. You know, the relationships can be very hard. But I think if we live together, we know that we are going to work together. We have the same goal and we can talk and we disagree. Like, you know Mordechai and I we can disagree about many things, but we can still be brothers in Christ and friends. So softness, empathy, love to one another. And that could be a way forward, in my opinion.

Henry Kaestner: That was that was beautiful. Maybe 80% of our listeners are listening to us in the United States and wondering what does this conflict have to do with them? And you just showed very much so. I mean, you know, one person of Arab extraction in a larger majority spot and sometimes Christ followers feel that way in the marketplace today. Now, a lot of our audience, most of our audience entrepreneurs and business owners, where they had this opportunity to set the culture. And I also think that in addition to just struggling with what does it look like to share our faith when some way and the reason for the hope we have and amidst a discussion with people of differing views, there’s also, I think, this sense in America of, you know, I just I just want to run my business. I want to grow my company. I want to grow 20% year over year, maybe quarter over quarter and cash. All this political stuff is just really just an inconvenient hindrance to me achieving my dream. Because what I’m really trying to do and I’m casting some disparagement against some folks generally here with hopefully that this ends up being encouraging in this appropriate level of challenge, which is, look, there’s a real battle here and it’s not against flesh and blood, it’s against evil and it’s in the marketplace. And God chose this for such a time as this. And we can see some of these things happen in Bible studies. We see this in our scriptural reading, and yet there’s this reminder that you guys are living through things right now, that there is a world at war and God chose us for a time. Is this and this concept of maybe coasting to our funeral and running our businesses and maybe we have triple the growth and we hand it to the next generation and we go ahead and we retire and we play golf and we move to the beach and God calls us home. You guys are live in a different narrative. You’re not thinking about. Well, maybe I’ll work a couple more years and I can kind of cash out and get that country club on the Red Sea or on the Med. Right. I mean, there’s some beautiful beaches in Israel, but you guys aren’t thinking about that right now. You think that guys put you on Earth for a different type of mission? You guys have both spent a lot of time in America, and I don’t want you to, you know, just unfairly rattle the cages of a Western entrepreneur. But what are you learning about faith and mission and purpose and where God has called you in a way that might be relevant for somebody who’s not in the battle right now? Maybe. But how do you reflect on that? You’ve been in a war zone for so long and yet you interact so much with folks in America and the West that don’t have the same type of perspective? What would be an encouragement or challenge to them as they look to learn more about the living God through their work?

Mordechai Wiseman: Well, let me take a swing at that. Trying to tie the previous question to that last statement, I think they’re linked. Even if let’s say you’re not as informed or as mission driven to impact culture. If you are merely just trying to be successful and close to retirement, you would have to still acknowledge that. In these days, usually wealth is created through people, and people form culture, and politics is merely an expression of our culture. And so when the debate is about who’s right and wrong, and that’s what we’re fighting over, and we believe that actually our propositional truth will achieve victory, convinced someone to come to our side, then we get into all kinds of trouble. And in the Middle East, when we recognize that we could talk all day, we’ve been talking for thousands of years and, you know, necessarily convinced each other that truth needs to be incarnational. So that’s why Jesus showed up in the flesh that my calling as an entrepreneur is to engage people. And in fact, the way I produce value and hopefully the value that I attempt to produce is fundamentally around the flourishing of human beings around them encountering God and his kingdom. I can’t convince them of that. I can’t argue them into that state. What I can do is be curious about them to actually try to understand who they are. Why do they take the way they do? This is really how we have to handle conflict here in the Middle East. We’re not going to win when I walk with my Arab and Palestinian brethren. Our organization of first fruits, our board, our staff and the people we serve are Jews and Arabs and Gentiles. We do not agree on a lot of stuff, and yet we have a commitment to walk together. We have a commitment to care for each other and to care with each other for others. And so truth is no longer a club in the sense of hitting people over the head, but rather truth is incarnational. And truth is how I engage you. And how do I want to understand why you are the way you are, why you behave the way you do? Not so I can convince you that I’m right and you’re wrong, but rather that I could show love, that I could see how God might have called us to walk together. And I believe that entrepreneurs who get that will build better cultures. So it’s not even about politics. It’s about creating a culture of listening, of caring, of engaging people. When we do that, we build not only organizations that are more effective, but we are the outcome that we wish to produce, which is people that care about people, people who invest in people. And then our unity is not about uniformity or agreeing on a set of principles, but rather the choice to walk together, which is what marriage is two people that are different, that don’t agree and yet choose to produce life together, to do life and produce life together.

Henry Kaestner: That was beautiful. Mordy Thank you. Bader

Bader Mansour: Yes. I wanted to be answered a little bit differently about, you know, I think most entrepreneurs here who are, you know, followers of Jesus and also others, I think, have a deep passion to do something a little bit different than just making a successful company. They want to see change in the society they are in at Nasdaq. You know, most of the people here serve in the church or in some kind of para church organization. And we see this is part of our calling, not just to make software and, you know, build the great company, which we are, but also to make change as Christians in our sphere and our society. And I think a lot of people also in America are, you know, faith driven entertainers and others as well who have a deep passion to help others. I like to mention a story that touched my heart. And I actually broke my heart a few days ago. One of the entrepreneur, he’s a Jew and Israeli Jew, one of the most successful entrepreneurs in Israel. Eyal Waldman, he is the founder of Mellanox. Somebody I admire because he has built a very strong company in Israel. And he has been also one of these companies who hired lots of Palestinians also to work in his company. Some of the managers in the company are also Palestinians, which is not taken for granted in Israel. But he also decided to open a branch in Gaza Strip and also opened a branch in the West Bank. And few days ago, his daughter was killed in the barbaric attack during the party and all that was going on near the of the Gaza border. He went and he found his daughter. And I don’t know him, but when I read this, I cried and I went home to sleep, you know, just like I was so devastated. And he said, I still believe in peace. I still believe in peace. And I tried to find his email and sent him a note, you know, just an encouragement and condolences. Lots of people here in Israel, you know, have passion to see a different kind of Israel and a different kind of situation, you know, going on here. We as faith driven entrepreneurs are called to do more on this. You know, I admire my friends at first fruit that are doing excellent work, you know, bringing Arabs and Jews together, working together and you know, others as well. So I think entrepreneurs usually in these places have passion. And I think lots of people all around the world have passion to see change in their societies. Here it’s a bit about conflict and about these kind of things, you know, because we are, in essence, a war zone. But, you know, I encourage all entrepreneurs to take a stand on a subject that they care for and do something about it. In addition to cashing out a great company and going to play golf, you know, the Pacific Ocean.

Rusty Rueff: So I want to switch gears for just a bit and talk a little bit about running a business in these kinds of moments, right, in these moments of crisis. So you’re both entrepreneurs. Just give us practical advice. How do you continue to lead a business during the midst of these situations going on in the background like the ones you’re facing?

Mordechai Wiseman: Well, I don’t know if I can give good advice. I can tell you what I did, which is initially I just gave myself another 10 minutes in bed. I just to collect myself and more seriously, recognizing that it’s so easy to throw yourself in. And in the moment of crisis, in the season of crisis, there’ll be many times that as a leader, you’re called to step up and step into the gap. But if you’re the only one doing that and you’re doing that constantly, you will not be around when sort of there, the key moment arrives. So you also have to pace yourself and you have to recognize you cannot win every battle and you don’t have to be the only person who steps into the breach. As an entrepreneur, you’re called to galvanize, and yet in order to galvanize. So you have to be able to lead by example. You often are the first to step up. You also have to acknowledge, though, you’re human. There’s nothing, in my opinion, more powerful in leadership than a vulnerable leader who, rather than being the He-Man or the she man or she woman or, you know, the one who seems to have all the answers and is always like, you know, once more to the breach, my friends, they first acknowledge that they’re afraid, that it’s hard, that they’re hurting, that they’re frustrated. If you don’t acknowledge humanity, it’s hard for people to follow you. That’s my experience as a military guy in the Israeli army. They do not follow you if they don’t trust you and they don’t trust you, if they don’t relate to you, if they don’t believe that you understand who they are and understand the risks that they’re about to take following you. And so listening, feeling, being vulnerable about our own feelings and expressing our pain, and then when everyone else is stuck and kind of like then stepping up and taking decisive action, being bold in your stance, galvanizing, and that shocks people out of that kind of place of I don’t know what to do and they will follow you. So you have to be first human and then you have to be leader. That’s sort of the pattern that I’ve seen effective in these times. And knowing that the crisis is not going to be momentarily. You need to have good oxygen. You have to assess how long is this going to happen, go on, and therefore pace yourself as well.

Rusty Rueff: I’m going to come to Bader in just a second. But can I just dive in a little bit more on that, you know, being authentic? What about those who might be listening, who are saying, I’m afraid to show that I don’t know what’s going on. I’m afraid to be weak in front of my team. I’m afraid to show that I have real emotions because, you know, they might look at me and say, well, you don’t have your act together. What words of encouragement can you give?

Mordechai Wiseman: The highest form of leadership, in my opinion, is creating a safe environment where people can make mistakes and grow if you are perfect. A No one actually believes that, but b everyone’s going to try to be perfect. You will not be able to learn and every mistake is catastrophic and therefore it all becomes a power struggle over your image. And without naming names or pointing out political figures, those leaders who spend their time working about and worrying about how they’re perceived versus those that step up and say, you know what, we made a mistake, but right now we need to take care of business and fight. There’s a clear I mean, within my culture where we have developed a clear understanding of what effective leadership is, we will not follow those people who are just concerned about their image. It’s clear that they have clay feet. We will not follow someone into death and fire if we don’t feel that they understand really what they’re doing, that they’re actually worried about us versus them. And so my only encouragement to a leader who’s afraid of showing weakness is to look to Jesus. You know, I’m assuming that everyone listening is a faith driven entrepreneur. Jesus showed pain. Jesus showed that he is struggling in the garden, in Gethsemane. He says, My soul is bitter unto death. He allowed himself to experience the pain and express it, and that gave him the reserves and the strength as a human. As he said, my heart, not my wills. But your be done. That wasn’t some sort of, you know, faith on Prozac. That was a surrender of saying, I have faced death in my soul. Now I’m ready to face it with my body. And that’s the highest form of leadership. It may not be helpful, but that’s the model that I have.

Henry Kaestner: It is very helpful.

Rusty Rueff: It’s good. Really good. Butter. Anything to add to that thing of, you know, how do we lead in these times of crisis?

Bader Mansour: Yes. I mean, Mordechai put it in a very good way. I just would like to say that, you know, in companies, what do you have? Crisis? We act as if like families, you know, the families, different people react in different ways. We hug everybody. It’s okay to work for half a day or a day or somebody wants to take a day off or somebody is not producing or somebody is home because his children are not at school or they are crying at nights, it’s fine. You know, it’s part of life. You know, we are patient, we love everybody and we pray for better days.

Henry Kaestner: I’m going to hand it back to Henry, but I’m going to ask the question again from another perspective. You know, Israel’s known as the startup nation, right? You guys, you know, the country actually stepped forward and many, many startups come out of the culture of innovation, out of Israel in this time of crisis. What do you tell those customers and business partners that you have outside of Israel in other parts of the world to manage their perspective of how your business is doing? And you know that there’s there’s stability and can we count on you in this moment of crisis, because entrepreneurs not only have to deal on the inside, but they also have to think about the outside and what’s the outside world looking at. So what are you telling your partners and customers from around the other parts of the globe?

Mordechai Wiseman: Well, I would say that 75 years of Israeli industry has proven that we are both resilient and productive, even during the times of crisis, that when the rockets are flying, we still export, we still produce. I think one of the ways in which Israelis deal with crisis is as much as we can maintain normalcy and not get bunker down, obviously, as Bader indicated and as we’re experiencing, there is a okay, gather yourself. There is a momentary pause where we’re not just doing business as usual, but there’s definitely strong narrative and pattern in Israeli society that even in crisis, we try as much as possible to maintain normalcy and try to move forward and take the next step. It’s not about solving everything. It’s about just keep moving forward and that history, that sort of. Proof that is in the pudding is what a lot of our international partners have come to rely on. And so, frankly, at least in my history, people are first asking, hey, how’s it going? How can we help? There’s actually a lot of care, even from, if you will, hard nosed business people, you know, before they say, hey, when is my product ready? It’s like, hey, is there something we can do? What’s going on? There is a season of favor. And Israelis have learned to, in that moment, gather strength and keep on moving forward. And yeah, I think our track record shows that as a nation, we’ve recovered and grown after every crisis. And I think that’s what the clients and customers of Israeli companies have come to expect.

Bader Mansour: Is our customers are also they all send emails with the troubleshooting problems or sales inquiries with first asking about us. And we usually tell them that we are fine and we don’t talk too much about the problem. We want to talk about the issues that are for them important, which are solving their problems, you know, on the other side. So we try to do business as usual as much as possible because we don’t want our customers to suffer or to think that we are not a viable company that will disappear sometime or something like this. And we have proved, you know, lots of things happened and we continue to do what we are doing on the other side. You know, we have spoken to a lot of our friends and business partners in the business world who are on the Jewish side trying to just send them a note and say, how are you doing as well? Because, you know, it all started with this I would call massacre, you know, on Saturday, you know, like ten days ago, mostly most people who were killed were Jews. And I know lots of my friends have friends that lost their lives or, you know, they are somehow involved. So, you know, in business, lots of people become your friends, even though you just do business with them. But they are friends also. In times of crisis, you ask about them, you just give them an encouragement. And I think this is the least we can do just to like people are asking about us. We are asking about the people that are suffering the most, which are the people of the south of Israel and also our friends in Gaza. But we don’t do business with but we have church relations with the Baptist church in Gaza. And we also ask about them, what’s going on, how can we help and how can we pray for you? So it’s the whole society, you know, people asking about each other, making sure everybody is doing fine in this world. And at the same time, we don’t want our customers to be worried that we are, you know, not strong. You know, we’re not going to be here in the future and we will be here, as we have always proven. And lots of companies, you know, have proven that they can be resilient. You know, they can be strong with all difficulties. You know, we will continue doing what we are doing.

Henry Kaestner: Bader we like to finish every one of our episodes by asking our guests what they’re hearing from God in his word. Maybe it’s today. Maybe it’s or of course, last week. But believing that God continues to speak to us through his people, through prayer and absolutely his word. What are you hearing from him?

Bader Mansour: Yes, lots of devotions. We have lots of prayer meetings. Our church services turned into places of comfort. Everybody’s talking about this. People are turning to God. I wrote down two verses that spoke to me, and not only this week, but in general, but more strongly this week, Act justly Love, mercy walk humbly with God. This is one and another one, though the fig tree may not blossom nor fruit be on the vines, though the labor of the olives may fail and the fields yield no food, though the flock may be cut off from the fold and there would be no herd in the stalls. Yet. I will rejoice in the Lord. I will joy in the God of my salvation. This has encouraged me as day in our Sunday morning service. So the Lord is good. He is with us in the midst of this difficulty. But we need to be acting justly, not only with our people, but with all people and have mercy, Love it, love mercy, and ask God for mercy, but also have mercy on the others and be humble. I think we need to walk humbly these days, just trusting God more and not trusting our own abilities or our own strength, but just asking the Lord to work through us because we are weak.

Henry Kaestner: That’s beaufiful,Mordechai.

Mordechai Wiseman: Well, I deeply resonate with everything that Bader has just shared. Those two verses have definitely been hallmarks of what God has been speaking to me recently. As I said earlier, I’m on the heels of two years of feeling like God is squeezing me. And no matter how hard I try to get the outcomes that I’m seeking, Lord seems to have other kinds of outcomes that don’t fall in my category of success. And actually, a week and a half, I think ten days before everything kind of went crazy on this side, I felt like the Lord asked me if I will give him permission to squeeze me again. And, you know, the question that keeps asking me is, do you trust me? Are you willing to ignore the normal human signals of my favor and just trust me? And that’s a hard one because you just, you know, am I doing the wrong thing? Am I missing your purposes? And this season, I feel like God is squeezing all of us. And it’s not out of a desire to hurt us, but to produce in us something that is unique. And it is a choice for us as children of God on whether we cooperate with his discipline or not. The discipline is not so much about punishing us. It’s not about punishing. It’s about helping us to grow, to become who he’s called us to be and see things as he sees them and respond to things the way he is calling us to respond to them. And anyway, so that’s kind of what God has been speaking to me and a whole bunch of lamentation songs have been extra meaningful to me in this season. And actually that last verse from I think it’s Habakkuk that Bader mentioned very powerful.

Henry Kaestner: Let me pray for you all on behalf of the listening community. Heavenly Father, we lift up these two brothers, these two men. We ask that you would continue to bless them, Dear Lord. We ask that you would allow them to know you, to be protected by you, to be able to be faithful through this ordeal, just as you protect their families, that your will would come about on Earth and Israel Palestine as it is in heaven. Dear Lord, I turn this prayer back on us and ask that these really beautiful, important lessons that you are teaching, Mordechai and Bader, would be the lessons that you’re teaching us. Though the battles may not seem as apparent as maybe they are to Bader and Mordechai this morning, where we are in Kansas City or Seattle or London or Cape Town. But they are there. Dear Lord, I ask that you would allow us all to be able to lead in such a way that we would be real with people, to be able to be vulnerable. And yet with a sense that we’re on a mission. We’re on a mission to advance your kingdom under your power, not ours, but under your power. And that gives us a sense of hope, gives us a sense of gratitude that you’ve created us for such a time as this, with as much brokenness that exists all over the world. Dear Lord, you’ve called your faith driven entrepreneurs, your business owners, to be in the midst of this battle today. Allow us to understand what the times are like […..] allow us to be able to walk in with the full armor of God. In a way that we know that we have a joyful hope set out in front of us in a way that is this countercultural sign of hope and purpose that the rest of the world is looking for. That doesn’t point to us as strong leaders necessarily, but points to you as the healer, as the savior of the world. Find us faithful in Jesus name. Amen.

Bader Mansour: I put this in front of me, a friend of mine, an American, gave me this maybe 35 years ago. It’s known, but I’ll say it. Maybe it can be a good ending to this discussion. If our greatest need had been information, God would have sent an educator. If our greatest need had been technology, God would have sent us a scientist. If our greatest need had been money, God would have sent an economist. If our greatest need have been pleasure. God would have sent us an entertainer. But our greatest need has been forgiveness so God sent us a Savior. We are all sinner, we deserve. You know, the punishment of God. And he sent us a savior.

John Coleman: Welcome back to the Faith Driven Investor podcast. This is John Coleman. And I am very privileged to have with us today Mark Klopp to talk about the topic of Angel investing. Mark is an independent consultant, board member, advisor and investor. He’s focused on corporate venturing best practices. He’s an instructor for Global Corporate Venturing Institute and a principal advisor for Larta and Tech Future. He’s also an angel investor himself and serves as a board member and advisor for several startups and Christian ministries. And I know my partners have known Mark for some time. He’s such an incredible influence on this ecosystem, and we’re incredibly grateful to have him on today. So Mark, welcome to the FDI podcast.

Mark Klopp: Thanks, John. Great to be here and appreciate all that You and Luke and Henry and others are part of the faith driven investor movement and community that’s being built. I’ve gotten a lot out of it myself and happy to share what I’ve learned as well.

John Coleman: Well, we were joking before the recording started here for the audience that our audience knows, I sometimes get into rather eclectic investment topics that maybe don’t have the listenership of angel investing. But angel investing is a very popular topic that I think people will be engaged in, and we’re super excited to learn from you, Mark. You know, maybe just to start this term, angel investing is a little bit broad, right? People mean different things with that, I think. What is Angel investing mean to you? It’s a big topic. How do you define it and how do you think about the parameters of angel investing?

Mark Klopp: Yeah, that’s I think everybody probably has their own definition and mine is not an official one. But I think at a high level, John, that angel investors are really usually individuals that invest their own capital into startups. And usually that’s during the early stages of development. And for that they receive an ownership stake or equity. Sometimes they invest alone and sometimes in a formal or an informal group in order to pool resources and share due diligence. And now these businesses are early. They might not even have customers yet or generating revenue, but they could only have a business plan or a beta product test or a minimum viable product. So some of the capital is used for research and development to help the company formulate its product service, offering even to build a business strategy or identify a target market, depending on how early you invest. And for me, from a faith driven investing standpoint, that’s a subcategory of angel investing. And that means that I’m seeking out investing and mentoring an faith driven entrepreneurs and their teams, and that involves adding value beyond the cash investment in terms of coaching, strategic insights, as well as providing leads and introductions to investors, customers, partners. And the sweet spot for me is a company that has a strategic focus and values and a specific mission aligned with Christ. Hopefully being able to make some kind of kingdom impact.

John Coleman: When obviously angel investing. One of the unique things about it is that it is super early. Typically we know that super early investments are high risk. And so, you know, it is for a particular type of person and is different than the approach most people take, usually investing through professional fund managers or in a diversified portfolio of more mature investments. What drew you to Angel Investing is a discipline, and maybe it ties in to that, being able to counsel people in spiritual impact and those sorts of things. But what drew you to it and why has this become such an important part of your life and your investment portfolio?

Mark Klopp: Yeah, I think it goes back to my initial experience with investing was as a corporate venture capitalist, that was with Eastman Ventures, which is the corporate venture capital arm of Eastman Chemical Company. And through that I got to understand investing in the venture ecosystem. But that was secular and I always had a drive to try to find something that’s more impactful than just financial returns. So that was always been an underlying goal or objective. But I was constrained in what was strategic to Eastman at that time. And since I left there and learn some of the fundamentals and had a network build up in the investing world, I started consulting for corporations on VC best practices, which is kind of been my day job. And then investing also as an angel investor and serving on the boards and advisory boards for private companies, but from a spiritual standpoint. I read the book half time, which many of you may have also read and been influenced by as kind of, you know, what are you going to do to make an impact in your second phase of your career or life? And went through the master’s program at […]. Those have been big influences on my faith journey, especially as it relates to integrating faith and work. And I realize that the relationships, the knowledge, the learnings that I gained in the for profit world could be leveraged to make an impact in Christian ministry and start up arenas. So I started out with before the FDI community had been built by you guys, I was focused more on medical devices, which was my way of trying to make an impact or be involved with impactful investing, because I could understand as an engineer medical devices more easily and I could see where I was helping improve or save lives and many times. But then when FDI came along and kind of opened my eyes to the opportunity to make a kingdom impact beyond the secular play. So my interests as far as industries and application has broadened to more of a generalist with a kingdom impact being the central theme. It’s kind of been a lot of fun to learn about new technologies and industries, kind of keep me on a learning curve. And although many of the principles of investing apply across different technologies and business models, I still try to glean some wisdom from those experts that might be more experienced in the domain or space that may be new to me.

John Coleman: Well, if you don’t mind, I’d love to follow one quick tangent because you brought it up as your day job. And this is not exactly angel investing, it’s corporate venturing. And in my last role, I helped a bit around the edges. It was unique in that we were an investment firm, but as a corporate we were also thinking about new technologies, new innovative companies within asset management, etc. And so we we thought about this as well. And it’s a tough space to navigate, actually. I mean, you know, there are so many different stakeholders within a corporation. You know, you’re triangulating for different purposes with the investments that might be more multifaceted than you would as a pure VC. Maybe just as a quick tangent. Tell us a little bit more. What is corporate venturing and what makes it so both challenging and interesting for the corporations who choose to do it?

Mark Klopp: Yeah, it is. You’re right. It’s a very complicated algorithm to be able to balance the strategic desires of the corporation and the tastes and innovation outside with the startups. It kind of goes to the open innovation theme where corporations have started to realize and it’s becoming more mission critical to reach outside for open innovation and bring in technologies. Then while trying to find things that are relevant to the company to create options or to hedge or to build business intelligence for the company. And balancing that is a very difficult thing. And that’s why there is a need to kind of learn from the past about best practices and how that’s done. So a corporation might have a heavy emphasis on financial returns with a light on strategic. Another corporation may have almost all strategic and very little financial return objectives other than returning their capital. So it really depends on the corporate needs. But in general, they’re trying to do both because building a sustainable corporate venturing effort requires you to make a strategic impact to the company that is creating an M&A option, a licensing of new technology, a partnership or go to market collaboration, a new vendor to enable something or just in competitive intelligence and business knowledge. And those objectives are part of the investing. So you have the filter of what is strategic to the corporation. And you have the filter of a traditional venture capitalist. So many times corporations will co-invest with lead VCs, financial VCs, and just try to fit those deals that make sense strategically and then set up that collaboration almost in a business development role with a core corporate.

John Coleman: Yeah, love everything that you said, and we always thought about kind of you had to almost measure the return of the portfolio in a broader way because we were often investing for some sort of commercial acceleration. And so we might partner. We might invest, for example, with a natural language processing company in order to be their exclusive customer for a period of time in our space, right, in our industry. Yeah. So there were even if the financial return were modest in some respects, if it were able to accelerate a part of your business upon which you were relying, you know, you could think about multiple sources of return. And I think that’s what you’re describing is how do you do that while also, you know, everybody believes that in theory, although people do tend to look at your financial returns pretty aggressively when you’re doing that front line. And so, you know, you can say it’s a balance that everybody kind of wants both.

Mark Klopp: Yeah. When you’re like a 10 billion plus market cap corporation and you dedicate, let’s say, $50 million to a venture capital effort over multiple years, and if you get A5X return, that doesn’t make a huge impact to your now market cap. So you have to have a strategic leverage to that. And how do you measure that? It’s important. And that’s one of the best practices. Also, you’re not going to be around very long as a corporate VC if you lose money, right? So that’s right. The way to position is you’re a profit center inside a corporation that’s also doing innovation. And you can ultimately recycle and create kind of an evergreen fund yourself inside the corporation. And you’re returning more than the average return on invested capital for alternative uses of that allocation of resources.

John Coleman: Well, I could do a whole podcast on this, Mark. We might want to come back at some point, but maybe to return a bit to the angel investing side. You know, I’ve had such long experience here and you talked about deals in the abstract to give people a sense for the space, for the types of companies, for the role that you can play. Would you mind talking us through a couple of your more interesting deals that you’ve done and just how did those come about? How did you find them? What made you invest in them? Just talk us through those deals and give us a sense for what an angel deal looks like in the role that you can play.

Mark Klopp: Yeah, I just at a high level, I typically assist the CEOs on company strategy, financing, business development, licensing, corporate partnering and investor relations. Those are my kind of strengths where I can bring something unique to the table. And on top of that, I try to be kind of a coach or a mentor or encourager and sometimes a cheerleader or even a therapist as needed, since it’s kind of a very lonely and isolating to be a CEO of a startup because they’re looking for someone that can be vulnerable with and they can vent to other than their investors, employees or customers. So maybe a few examples of some deals that are been in the FDI space that I’ve done. One is called FRDM, headed up by Justin Dillon. That was a deal that was led by Tom Blaisdell and I co-invested with him. Justin worked for years in the nonprofit sector to build awareness of forced labor and human trafficking. And he recently was part of a FDI feature demo day type of webinar. So some of you may have heard his story and FRDM story, but they’re really trying to identify that forced labor and human trafficking as well as environmental issues in the supply chain. And he really learned that through his not for profit work, being an advocate in that area, so that right now they’re getting some great traction helping and some of the world’s best brands build transparent and responsible supply chains aligned with their company’s values. So that’s a really good example of one that has a kingdom mission, but also is solving a real problem in B2B. On the more consumer side. This is one where I’ve kind of ventured out beyond my normal focus is a company called Flaire F-L-A-I-R-E, and it’s led by Julia Carter. And this was fueled by her faith and desire for social justice, the work she did with IJM in Uganda. And with flaire, she wanted to build community and social interactions with the Generation Z. And she’s established a great culture. The company that’s one of the things I look for is, is there a cultural goal within the company to have kind of Christ’s values, even if it’s not such a clear kingdom impact, but influencing through culture. She’s building what she calls a friend powered AI that maps where your friends have been and what they recommend while keeping track of your own travel history. Adaptic Health is led by Luke Stewart. This was a deal was actually referred to me by Phil Jung at Sovereigns and something that you guys are looking at for a later stage. And that’s where I like to get some flow from venture capitalists who say, I like this, but it’s a little early. You might be interested in it. And Luke is actually a pastor and a board member at Vive Church, and he’s formed this company called Adaptic Health, which offers a software as a service or SAS platform that helps accelerate clinical development for drug and biotech development from the early stage of design through optimization. And it’s kind of like a copilot leveraging generative AI to streamline collaboration, dynamic literature, review, what if analysis tools and other kind of analytics to improve the efficiency and bring to life drugs that save lives as well as improve lives. Debbie Chen is the founder and CEO of Hydrostasis that provides real time hydration, monitoring and guidance. So from a wellness standpoint or health, dehydration is a universal problem, and that’s three out of four adults, in the US are chronically dehydrated, especially older. One of the lead causes for emergency. I know my mom’s suffered this many times having to go to emergency to get hydrated through IV and she had a monitor. It might alert that problem earlier.

John Coleman: I mean, what you’re describing is a really broad array of companies at a similar stage. Yeah. And you know, what I love here is, as you said, for a lot of venture firms, including ours, even if you’re early stage, there’s a stage that’s too early even for us, right, where Angel often play a critical role. You also you mentioned all these folks by name. And I know a big part of angel investing is that counseling role that you can play the coaching role. Would you mind talking to us a little bit more in depth about what that looks like, like when you come alongside one of these entrepreneurs? What are they going through typically that you can be helpful on? And what is that counseling, relationship or coaching relationship look like between the two of you?

Mark Klopp: Yeah, it varies depending on kind of the need. Many times it’s positioning for the next round of financing as well as rounding out the current round of financing, because I’m coming in many times right after friends and family. I may be one of the first angels. And generally at that stage. So it’s about making sure the structure of whatever their vehicle they’re using, whether it’s a stage node or a convertible or a priced round, is the right one to go after the target audience suggesting who the target investors might be, referring investors that might align with their values, giving them ideas of investment firms and corporates that they might want to think about approaching later and kind of the financing strategy in general. Also, many times there’s a need for a proof of concept or some kind of test evaluation and how to work with the corporation and make that palatable and appeal to the corporation. There’s a lot of insight that I can give. I’ve got a lot of experience with licensing and intellectual property strategy. So we talk about that many times and then just building out a board of advisors, if there’s not one in place or let’s say finalizing the board of advisors and rounding that out. And then just the encouragement, a lot of it’s encouragement and the subtleties of building a business that I try to bring in. Like I said, it’s sometimes it’s just someone to talk with on topics that aren’t comfortable for them to talk about with their investors or employees or customers. Is that specific enough?

John Coleman: Yeah. No, no, no. I think that’s a great overview and it is an opportunity because you’re coming at a unique point in time where, as you said, you’re kind of the first port of call after friends and family and they’re really often looking for counsel, especially if this is their first venture. Now, you have an extensive track record and experience in venture capital through corporate venturing, through more traditional venture. So you came at this with a lot of experience that angel investing is a different beast even than conventional venture investing comes with a lot of risks. It’s a different structure. And I suspect you maybe made some mistakes along the way. You know, as people are thinking about getting into angel investing because we hear about this all the time. I mean, people who have done well for themselves, who picked up great experience, who want to be an encouragement to others, who really want to take some risks. But, you know, it comes with some pitfalls, too. What are some of the mistakes you made along the way that others might learn from?

Mark Klopp: How long do you have?

John Coleman: This is a whole podcast, right?

Mark Klopp: Okay. Well, yeah, what is our time limit, there’s a lot to choose from. And you would think I would have known better in many cases. So let me give you a few examples. Early on in my angel investing experience, and this shouldn’t have been a mistake due to lack of planning, it was me failing to plan or at least accept that I should reserve adequate funds for follow on rounds. And that’s assuming conservatively on the time to return, because as an angel, you’re going to be in for the long haul. The interesting thing is that some of you may be aware of the J curve, which basically means you get the bad news early. And the good news comes later as far as financial returns. So the really good companies are going to take a while to generate a financial return through an M&A or an IPO or some other kind of exit. And this should have been obvious to me because we did that all the time in eastman ventures. And I knew how venture capital worked, but I didn’t plan well. And the other mistake I made in the early days was when I came from a secular. Angel investing standpoint. I many times got enamored with the technology or the application or the business opportunity and didn’t do enough due diligence around the character or the ability of the CEO to raise money or be a talent magnet or even execute on the business. I just got so excited about the product or the market, although, you know, market is important, but ultimately when you’re Angel, you’re kind of betting on the jockey as much as the horse. So as I moved into FDI, one of the challenges I have currently is time management and juggling kind of the day job like I talked about. But let me give you a couple of specific examples where I really messed up. One deal that I did early on before FDI was a medical device that treated emphysema with a less invasive approach. i was the first investor in on a convertible node, played an interim. I actually played an operational role for a period of time, VP biz dad role, and I received additional founders shares for that because I came in really early. So first money in and kind of played a role. So I kind of leveraged up my angel investing with some founder shares and the company did quite well. They were lined up for a Series C and then this is right in the middle of the financial curve, right at the start of the financial crisis. Oh, wow. A Series C came about. They signed the deal and literally everybody was signed up and in the syndicate. And the day of the wiring of money, they pulled out. Wow. Yeah. So the existing inside investors stepped up, but they did our very own arrests pay to play with a reverse split and all these other investor friendly terms. And my founder shares basically got wiped out. And then I had to come up with some money to pay to play and be in line for the liquidation preference. So that was a painful lesson. On reserving follow on zero. If you don’t do it, at least you have it if you need it. And then another mistake I made was on an exit. I invest in a company and advised In Touch Health, which is kind of a telehealth company that was acquired by Teladoc, which is kind of the leader in telehealth now and a public company. It was an all stock deal after the acquisition. During that time, when you’re locked up and you can’t sell. They had a run up in the Teladoc stock price. And once the window opened up that I could sell the Teladoc stock and liquidate some. I took out some like 15% of the shares and gifted some of it to the donor advised fund. And I left the rest right thinking it would go up further or they stay pretty stable because they’re a leader and then use that Teladoc stock as a kind of a holding stock for my source of funds going forward and then sell it when I had the investment opportunity. Unfortunately, with many Covid pandemic run ups, this one went down like 90% and it’s remained at that lower level. So I really beat myself up for being greedy and not contributing more of the stock to my DAF or selling more of it to hold in cash and reinvest in FDI companies or using some type of option to protect the downside. And so that was a very painful lesson and still hurts and one that I hope not to repeat any time with our investments going forward when there’s a stock consideration, take some gains, take more than you think you need, and use that to recycle into other companies.

John Coleman: Well, it’s just a good lesson on venture and public equities being dramatically different. Right. Which I think gets underestimated. You know, we’ve always talked about in the context of a fund manager, for example, people will hire you to manage the asset class. They’ve hired you to manage, not what that might turn into. You know, for a venture firm. Obviously, you want to be intelligent about the way that you exit a position even in public markets position and thoughtful about that. But ultimately they hire us for our venture fund to do venture capital not told public stocks and you know rather than capital to them so that they can diversify. And I think the same holds true when you’re an individual where unless you just have a very strong thesis and conviction around that resulting security, as you said, keeping your powder dry for the activity that you’re engaged in and a more diversified portfolio or these days you even get returns on cash market’s fascinating. We haven’t had that in 15 years.

Mark Klopp: […] Percent on a money market. Who would have thought?

John Coleman: Who knew? It’s like I’m a kid again. Yeah. You know, as you get into that, you touched on this earlier. But one of the unique things about your approach is how you play a spiritual role in the companies that you invest with and you are targeting faith driven leaders. It sounds like companies with redemptive impact. Where do you see opportunities for redemptive impact as an angel investor just for those who are thinking about getting in and, you know, whether that’s alongside teams that are faith driven, whether that’s the types of products and services or markets. You sort of you mentioned like I loved the example of I think it was called Freedom earlier, which obviously has an impact on human trafficking and supply chains, which is redemptive product, redemptive founder. But just talk to us about how you think about redemptive impact in your angel investing.

Mark Klopp: Yeah, that’s a tough one. And you can get pretty deep from a theology standpoint. And I have a lot of learning to do in this regard. For me, it’s a constant battle to avoid the temptation of a focus on financial return, because I’m kind of wired that way as an investor. So, you know, from a definitional standpoint, you know, I believe redemption to a Christian means that Jesus Christ, through his sacrificial death, paid a ransom for us as believers from the slavery of sin. And that’s to set us free from the bondage of sin. So how do you find that in your investing? I do believe that there is a redemptive potential in angel investing when you can find some kind of spiritual, social, economic impact and a results and also some financial returns because you want to be prudent and find a way to return that capital back into the system and recycle it to others that are doing the same on the for profit side or in your tithing or gifting on the not for profit side. So you might have a an investment goal or a theme to support ventures that renew or reshape or restore individuals, communities and culture Now so you can as an angel investor, I think you can not only provide funding to support a business that has a kingdom objective and a culture that models Jesus, but you have that opportunity to kind of get into it from a higher touch standpoint as a spiritual mentor and encourager kind of a Barnabas, as well as provide strategic advice and connections and basically think about how can you help? I always think before I do a deal is can I help this company some way beyond the cash? And what is that way? And have that discussion with the entrepreneur ahead of time. And sometimes that results in an informal mentoring. Sometimes they ask me to be an advisor in addition to being an investor, and I’m formalize that agreement as an advisor and an investor. And then when it’s formalized and we literally outline what I will do to help them in a document.

John Coleman: That’s fantastic, Mark. And I love the structure that you’re bringing to that. You know, I think often we see people without as clear a playbook, especially as they’re getting started. And so the idea that you’ve got these learnings that you can structure that provide a framework which you can interact even on the redemptive side, I think is is incredibly helpful. Maybe to pivot a bit to portfolio construction, we kind of talked about your experience for Teladoc. And you had mentioned, you know, you’ve got redemptive being financial return as a criteria. I presume that not all of your assets are in your angel investing. You’ve got a broader portfolio, although I may be wrong about that, as people are thinking about getting into angel investing. How do you think about that as a part of your portfolio and what percentage of your broader investment portfolio that should be and just how you allocate from your own financial picture knowing that this is a relatively risky asset class?

Mark Klopp: Yeah. And I can tell you what we do, and this is with my wife and I, Meghan, discussing and agreeing because you have to have your partner on board or it’s going to be ugly and you want support and encouragement yourself when you mess up. And forgiveness when you mess up as well as cheerleading when you do well as an angel. So our first priority when we think about investing is actually giving in the tithing standpoint. And we use a donor advised fund as a tool to tithe and then make grants from there to utilize the balance of each year and not have a huge overhang. So we have kind of a given autopilot thing going on with DAF and then we use opportunistically donate when we have unexpected gains. So we’re very involved with supporting on a continuing basis several Christian ministries. And our theme is basic needs, rescue and education. So some of the ones that we’ve supported are opportunity International, which is microfinance edify as Christian schools place in developing countries. IJM International Justice Mission, which is rescuing trafficking, slavery, Fuller Seminary down in Southern California. Jessup University, which is the only real Christian university in Northern California. Teen esteem, which helps kids and parents with making biblical based choices. Shepherd’s Gate, which is Women’s and Children’s Rescue City Team Miracle Messages and Mobilize Love. So those are the ministries that we try to support first with giving. And then on the Angel side, we’ve allocated 4 to 5% of our net worth to direct angel investing. And we kind of think of that as the riskiest and most illiquid part of our investment portfolio. And kind of also think of it like an extension or increase in the tithe that might have the bonus of a recycle and a return component. So when you make a grant, then that goes away and doesn’t come back. But if you make an investment that can come back and if we return at least the capital, then we’ve leveraged that up. That’s the way we kind of think about it. And the principal and the gains can be reinvested. But that doesn’t mean we don’t support not for profits because they’re all part of the kingdom and they have their own business structures and you’re getting eternal rewards. There’s not financial rewards for the grants. And we’re trying to move to something along the lines of what Greg and Tom Lernihan have done a great job articulating and a very evolved investment philosophy where they’ve broken it down into four quadrants with high and low spiritual and social impact and financial returns and kind of bucketing and compartmentalizing those investment objectives. So we’ve got when you talk about our overall asset allocation, we’ve got a rainy day fund, which is really cash that deals with some of my insecurity. And we’ve got about two years in money markets, Treasury bills, two years of runway in case anything ever came about that was unanticipated. And that also gives us a psychological confidence or boldness in pursuing riskier investments if we’ve got that safe investment to fall back on in case something comes about. And then most of the portfolio is a mix of brokerage and IRA accounts invested in diversified ETFs with about an 85 to 15% equity bond ratio. And then we’ve done some private limited partnerships in real estate, VC and private equity, and we’re an investor or a limited partner. And as you know, in the Sovereign’s Capital Access Fund, which is a fund of funds, and we’re excited about that because it’s not only focused on faith driven entrepreneurs and faith driven investors as funds, but, you know, we expect to get a great financial return, but it’s also an opportunity to learn and network and possibly consider direct deal flow coming from that portfolio. So these limited partnerships are also illiquid in the short term, but the goal is capital appreciation in the medium and long term. So that’s kind of the overall structure of our allocation, maybe more detail than we wanted to hear.

John Coleman: No it’s awesome because I think, you know, it’s easy to look at this from the outside as you’re thinking about getting started and really think that others have kind of their whole portfolio in this. And, you know, for some people that might be right. It is a risky asset class. Right. And so being thoughtful about your giving, about the needs of your family, about the way in which you allocate, like you said, can give you some security to chase down some of the more fun stuff that you can do as an angel. I will say your bond portfolio is typically not quite as exciting as your as your angel investing work, but I guess the money markets certainly are. But that’s the goal, is to have them not be very exciting, but to be able to pay for, you know, a bathroom renovation if there’s a roof leak and that kind of thing. Yeah. Mark, those are great comments. In summary, you’ve been doing this for a while. What would you say to those who are looking to get started in angel investing?

Mark Klopp: Well, probably the first thing is pray about it and talk with your spouse. If you have a spouse or a significant other and make sure that you guys are both on board and that you’re willing to kind of move forward in that regard because you don’t want that to create stress in the family and conflict. So that would be the first step. The second would be kind of jointly decide what percentage of your net worth or you’re comfortable risking and allocating for an illiquid investment that might not return in 5 to 10 years or maybe even longer. And then be prepared to understand those risks that you’re going to require a high tolerance for the risk and you should be prepared and really not shocked to lose your entire investment in any one deal if the startup fails or just winds down in some way. And then be prepared, as I mentioned earlier in follow ons, be prepared to include and set aside enough money for follow on investments in case that’s required or desire and maybe to the tune of 30 to 50% of your initial investment. Diversification is very important as a angel like it is in any venture capital. So make sure you invest in multiple startups can help you spread your risk and increase your chances of success and also making an impact. And then when you’re getting started picking an initial focus, if there’s a particular industry that you’re interested in or an expert with connections that you have where you can add value and maybe syndicate or introduce to customers, you might even think about a horizontal focus versus a vertical focus in maybe the kind of impact that you’re targeting, a theme in that regard, and then understand where you can add value and be ready, be willing and able to offer help and assistance in areas that you particularly skilled or experienced in which align with the needs of the company, not just pushing those areas, but having the venture leadership team kind of pull you into that with what they require. So you could have a set of capabilities you can bring and say, which one of these can I help you with? And then once you’re evaluating deals, make sure you do your due diligence and research. And before investing in a startup, you should really get to know the founders and the industry. And if you’re looking as a faith driven investor, convince yourself that the investment in the team aligns with your values and Christian values and objectives. And then as far as generating deal flow, you know, network with other investors and the FDI marketplace where you can find potential investment opportunities and syndication with other investors. You can do that through sharing due diligence and learn from those other experienced investors and FDI community. And there’s a sort of a bulletin board for the FDI community called the Marketplace. And that’s a great way to get exposure as a Christian investor. And then you can look at companies that are coming from Christian based accelerators like Praxis or Ocean and participate in those demo days and get access to what’s going on, because those have been kind of preveted. Prescreened for faith driven investors, faith driven entrepreneurs, and also potential financial return. Those will be some of the areas that I would start with as an angel.

John Coleman: Mark. You know, one way we love to end these podcasts and this has been remarkably informative is to ask people about something they’ve been reading in Scripture that they might like to share with others, something that they’re learning through Scripture or through their own study that they might like to share with others. Is there something that stands out to you right now that you feel like you’re learning that might make sense for others?

Mark Klopp: Well, you know, I’m just hearing the constant whisper from God to devote more of my time and talent and treasure to the kingdom and transitioning from, you know, I’ve got to regarding treasures. My families and friends know that my personal biggest struggle is guarding against the worship of financial security as an idol. And many verses in the Bible deal with that. And the Bible addresses money more than any other topic. And there’s a lot of great FDI content around mana and management and being a steward. So I’m constantly learning and struggling with that. So angel investing is kind of one way I’m trying to battle that worship of financial security by willing to part with some of this security in the form of investing in startups and then recycling those capital gains to reinvest. Another is supporting the church and various ministries. And my wife and I have been involved with the journey of generosity in the past, which made a big impact on our intentional giving plan, giving and tithing. And then I’m trying to back off of chasing consulting fees with corporations, which is tempting on those engagements that pay well. And some of that. Activity kind of allows me to take the focus off of making money while freeing up more time and attention. Apply my talents to kind of give advice, encouragement and make connections to faith driven entrepreneurs, our church and and ministries that we support.

John Coleman: Well, that’s that’s a really thoughtful reflection. I had the opportunity to speak at a breakfast just last week on this topic of what I termed good money. Right. Which is, you know, the Bible warns that the love of money is the root of all kinds of evil. And, you know, we all know that money can be destructive. We also know that money can be a tool for good. And there are some verses about that. You mentioned there are more verses in the Bible about money than almost anything else. I think it’s the research I saw said 2350 references to money, many of which concern its dangers, some of which concern its proper stewardship and the opportunity to create. And I know one thing that you agree with, and it’s kind of become a motto for us sovereigns that all investing is impact investing. It’s just a question of what kind of impact you’re going to have an idea that money is just one more thing in your life. There is a tool that God has given you to steward that you can submit to his purposes and that can ultimately make a positive impact in the world, but only if you’ve kind of let go of it and tried to put those resources at his disposal. And I think that message is a great reminder. You know, we don’t want anyone to take undue risks or do not provide for their family, but sometimes it can become an idol to hang on to things too securely rather than dedicating them to investments in nonprofits or start up companies or other ventures that might make sense for the kingdom. And so I think that’s a wonderful reminder in the way that you live your life.

Mark Klopp: Thank you.

John Coleman: This has been a remarkable conversation. I love how invested you are in the States. How much of a pioneer you’ve been in faith driven investing and your passion for those enterprises and those individuals and just your openness with us today given us a real download on what it could look like to be an angel investor. I know the FDI community is grateful and I hope we get to talk to you again soon. Thanks so much.

Mark Klopp: Thank you. John.

Joseph Honescko: Welcome back to the Faith Driven Investor podcast. Today on the show, we’re highlighting an asset class that we haven’t talked about much in the past. Our host, Luke Roush, will be joined by Trevor Hightower for a conversation on investing in agriculture. The two will talk about how this unique industry brings a ton of potential for positive returns and redemptive impact. Let’s get into it.

Luke Roush: Welcome everybody to the Faith Driven Investor podcast. We are grateful to be here. We have a wonderful guest today in Trevor Hightower, a longtime friend, first time guest on the podcast. I am your host, Luke Roush. And welcome, Trevor.

Trevor Hightower: Luke. It’s an honor to be here. Long time listener and it’s great to be on this side.

Luke Roush: Wonderful. I must say, I’m really excited about today’s call because of the asset class that Trevor and his partners are focused on, which is agriculture. And so, you know, most of the time when people think of investments, they picture urban areas, technology companies, Wall Street. But the team at Macfarlan is investing in ag. All of us eat every day. So this is a subject matter that we should care a lot about. But, Trevor, why don’t you give us a 30,000 foot flyover of what the ag industry looks like and the role that Macfarlan plays in that arena?

Trevor Hightower: Yeah. Happy to. We first got focused on the asset class coming out of the pandemic, and historically, Macfarlan Capital Partners had invested and value-add office value-add retail real estate as a GP sponsor, doing deals deal by deal. Macfarlan Capital Partners always had a thematic focus where we could switch in and out of assets based on the right timing and the right conviction. We had conviction coming out of the pandemic. I think that many people had pretty early to [….] credit that inflation was coming. The other conviction that we had was we had a loss of conviction around the asset class that we had historically invested in, which is the office asset and retail asset class. And so to the credit of the team, when you’re looking for a non correlated asset, an asset that doesn’t trend with other assets on the return profile and as an inflation hedge, it’s not too long before you get to farmland. Just when you look at the historical data markers, farmland has been tracked and [….] index for about 30 plus years. And the asset, as you mentioned, has very low volatility, historic returns that are on par with the S&P 500. So just under 12% returns in that same time with low volatility. And then that really fascinating, historical marker with farmland as you mentioned. And kind of why we got focused on it. Was it being a non correlated asset, one that is negatively correlated with public equities and then has zero correlation, interestingly enough, to other real estate asset classes. And the reason for that is not too complicated to understand. It’s actually pretty straightforward. It’s the macro drivers that drive the farmland asset class, which they’re really redemptive macro drivers that the world needs its food, fuel and fiber. It’s not a surprise to anyone listening that food, fuel and fiber is growing in its demand as world population grows. And then we have a growing middle class. What might be a surprise is on the supply side of farmland, there’s the age old expression to buy land. They’re not making any more of it in farmland. It’s interesting that it’s actually a decrease in supply for new development reasons and some water issues. There’s a pretty rapid rate of decrease in supply in farmland. So when you combine growing demand and decreasing supply, you can see why there’s been a pretty strong secular drive for both the appreciation of farmland and then how farmland generates income is through the yield of its crops, which has had to increase and has done so because of technology. As an investor, the yield is either from a lease. So this is why I call farmland the OG of real estate. Because on leased farmland, it’s essentially a commercial real estate asset. You have, income driven by a lease or a rev share. And then the other source of income is the appreciation of the asset. So that’s very similar to how a lot of real estate investors would think about a real estate investment. You just have, really strong risk adjusted returns that are supporting the farmland asset class.

Luke Roush: I think the analogy of commercial real estate, and this being a different type of commercial real estate, is really relevant to a lot of our listeners who may be really familiar with that asset class, maybe just share a little more on the specifics of how these investments might be structured. And just to orient our listeners.

Trevor Hightower: Yeah, they’re very similar to real estate investments. Again, as I mentioned, let’s just take a farmland asset that is a leased asset. One thing that is a difference between other real estate asset classes is the typical yield that you’d have from a lease is going to be lower than some of the other real estate food groups, whether that be multifamily or industrial or office. You’re looking for leverage at a. Yield in the 4 to 6% range in farmland. So when you add a 4 to 6% yield from a lease with appreciation, that’s where you’re getting that low double digit return. And that’s the historical return profile. You’re just doing it in a safer asset. And that’s what we really liked is a non correlated, safer asset that in a portion of a portfolio investors can get exposure to. But to dive in a little bit deeper, the two primary structures in farmland that you could set up are a lease or a rev share. The lease is going to be very similar to a commercial real estate asset. It’s going to be varied in terms. The one nuance is the full lease gets paid upfront, typically so that the farmer pays the full amount in March, and then you have that lease that will extend for the period of the year, and that will be your income on the asset. The rev share model is taking a percentage of the yield of the crop and exposes the investor to commodity risk and yield risk. So the two factors that would drive the revenue of a farm on any given year is going to be commodity prices. And then the yield based on how much bushels of crop are harvested. And so in a rev share model, the investor is going to be exposed to a little bit more volatility, but be able to get more of a range. And ideally if you’re going to go into a rev share model as the investor you’ve underwritten that you want to take on that additional risk because you think you’re going to, on average, get a higher blended yield over the term of the investment.

Luke Roush: Yeah, that makes a lot of sense. And, you know, you’ve participated in some of the different food groups that you called out previously. I want to go to kind of your interest in this asset class. Like what’s most compelling for you talked about just some of the inherent appeals of food, fiber and fuel, but maybe speak a little bit about your own personal journey, because I think that’s helpful.

Trevor Hightower: Yeah. I mean, so you’ve had great leaders on this podcast that are in the small to medium sized business investment, like [Brent Beshore], and really trying to bring a redemptive solution to what is a major problem that needs to be solved in our country, which is the transfer of ownership of a lot of assets that are going to occur because of what it’s typically called the silver tsunami. But that dynamic of a majority of assets being owned by baby boomer generation. And then in many cases, there’s not the second gen or the next gen behind those assets owners that either have the skill or the will to take on the operation of the asset. Well, that dynamic is absolutely playing out in farmland in a very significant way, in a way that, to me is existential and important to our country and really the vibrancy of our food, fuel and fiber supply. So just to lay out some of those data points. The farmland is a $3.5 trillion asset class that is every bit as large as the US office market or the US multifamily market. The nuance in farmland that’s very different from the other real estate food groups is the the lack of institutional capital in this space. So.

Luke Roush: Which is shocking to me.

Trevor Hightower: It’s amazing. It is shocking. It has been changing and there’s been more capital in the space. But yeah, as you know, Luke, it’s less than 2% institutional capital that own, you know, up to $3.5 trillion of that, just the United States of farmland. So that means that 98% of U.S. farmland is owned by generational farmers, who really have been the backbone of our country. These are amazing men and women. I mean, I have such a growing respect and appreciation for the United States farmer and really what needs to continue as a majority of ownership, continuing to be in these incredible owners, if they have a solution for the next generation to come and farm. The issue is in many cases, the next gen doesn’t have the skill or the will to farm. And so what you’ve been seen as aggregation of farmland by more successful, I’d say farmers who are able to operate at scale and use some economies of scale and use some really good technology and best practices to start to aggregate larger portfolios of farmland that they can operate. And that’s the portion of the market that we’re trying to support, and we’re trying to support the best in class operators that are values aligned, that have a redemptive view of large scale farming so that we can continue to produce really great yields of food, fuel and fiber, but do so and a regenerative way. And that’s only part of the solution. There’s so many other really great redemptive solutions that. Are more micro in nature and those are needed. It needs to be multi-pronged solution to think about how the next generation of farming is going to occur. But that’s what gets us really excited. Effectively, we can be growth equity partners to these best in class operators that are really trying to operate in a way that is maximizing the, financial, but also what’s best for the land and the surrounding communities. And that’s what we found in our first partner and what we love to do with, more partners going forward.

Luke Roush: That’s wonderful. And talk a little bit about just your journey. I mean, you most recently were an entrepreneur or started your own business, and you’ve known the Macfarlan team for a long time, but maybe just talk a little bit about that transition from craft work to Macfarlan and what God taught you in and through that journey.

Trevor Hightower: Well, I really appreciate you asking. And it’s, redemptive story. And I hope it’s one that’s an encouragement to other entrepreneurs out there or other investors out there. To me, it’s a way to highlight and provide a great testimony of Dean Macfarlan and Mac Macfarlan, D. Macfarlan was the largest investor in Craftwork, the company that I co-founded, with my partner, Riley Dean, was an incredible investor in that he was very helpful strategically to the business. We met every month. He got into the details. He helped in so many ways, strategically and tactically in our business and made it very intentional effort to do so. At the end of every monthly call that we would have with Dean, his very next set of questions were around, how are you doing, Trevor, as a husband, how are you doing as a father? How are you doing as a leader in your community? How are you holding up with the stresses of what’s going on in the business, and made it a very intentional effort to both, help steward the business and steward the entrepreneur. The best story around this is actually one of the most difficult, in that there was a investor meeting that Dean had asked me to prepare for, and I prepared for it like I was presenting in front of a a Wall Street bank. I mean, I was ready to go with my optimistic case, my base case, my pessimistic, and I hit that out of the park. I mean, I just I had a really good, convincing explanation of why a Craftwork was going to change the face of multifamily experience and hospitality. And he was very encouraging, had some points of feedback that were constructive and said, okay, Trevor, I’m going to take my investor hat off and I’m going to put my friend of Trevor hat on. And that’s something that I’ll never forget, and really something that if I’m ever in his position, I hope I can replicate to anyone that I invest in. And he asked me kind of some specific questions about my equity, and the company did some back in the napkin math and then just said something that I’ll never forget. He said, you know, Trevor, I am so proud of you for what you’ve done in this company. And he said, I still think that there’s a significant gap between what Craftwork would generate and the opportunity cost you have as an individual, because at that point there’s been some dilution and and also some challenges in the growth of our company. And he was highlighting both. And he said, you can do whatever you want. But I just want to highlight that because the other context was this was the fifth year of the company’s existence, and it had been really difficult on my marriage, and we weren’t growing the way that we really wanted. I just had the burn the boat mentality as an entrepreneur, and I couldn’t see any other path but to march forward. And this, our largest investor, was the one who actually told me to take a step back and see is it the right time that we look at, you know, at that? What would the selling parts of the business and closing the other part of it down? And I have to admit, it was very disorienting. It was the first time that someone I really trusted gave me permission to even ask that question, and I am so grateful for it. It was obviously very rare for an investor to take that approach. It took me about six months to actually agree that that was the right path forward, but it was something I’ll never forget. We then went through a process where we made that decision six months later to start to sell parts of the business and roll the other part down to do what we call a redemptive close down. And we went through Praxis Accelerator, and we’re just huge fans of Praxis, as I know you are. And they have the redemptive framework. And I remember we all just put our hands together and said, we want to with as much vigor and energy and vitality that we did in other parts and other stage of the business. Apply that same level of vigor to how we in the chapter. Which is, was really difficult, but essentially what it meant was what is the redemptive way to take care of our investors, our team, our stakeholders, our vendors in a way that was, you know, sacrificial. And I don’t think that we did it perfectly, but I know that we did that. And the amazing grace behind it all was those were long, hours, long weeks. Didn’t really have a lot of time to think about what was next. It was all in to try to do that well. Which was scary and scary for my wife. And so when it was all closed down, I started to think about what was next and kind of convinced that I was going to have to go back and get a real job. And the amazing grace behind it all was that’s when Mac reached out and asked, hey, do you want to talk? Dean and I just had a really healthy transition where Dean had stepped into senior Advisor and Mac had stepped into managing partner of the firm, and they were both praying for a partner. And you know, the reason why grace is so transformative is it’s undeserved. And it provides that clean fuel, because when you receive it, you just want to give back. And that’s how I felt with even the opportunity to work with Mac as a partner and still have Dean involved as an advisor, was I had known both of these men and really their team for ten plus years. We’d been in the trenches together in different ways at craft work, and I had seen Mac and so many different settings and just I never had to underwrite their character, and I never had to underwrite their heart. And they already had an impeccable reputation. So it just felt like grace. And it’s been why at this stage in my career, I’ve never been more energized. But it was through a lot of pain and a lot of uncertainty, and I wasn’t sure how it was going to all play out. But obviously God was in it throughout the whole thing, even at the darkest time. So God works all things together for good, not in the way that we have planned, but in a way that forms us and forms our character and ultimately makes us open our hands and surrender more to him. And I can attest to that. And I’ll throw out if there’s anyone out there that is in that spot and needs someone to talk to, just reach out to me, because I think the pain and trials that we go through are our greatest superpower. Then to help others once you go through them. So reach out if I can help in any way.

Luke Roush: Trevor, I think you just signed yourself up for at least 20 hours of couch time bringing on investors that need, some formation or entrepreneurs and information. But that’s that’s awesome story. And I love that word of just kind of formation. That is what God intends to do in all of us, not in an episodic way, but in a continual way. And certainly that’s evident in your story and the transition from craft work to Macfarlan. I’d love to wrap just with maybe just a couple of comments on you are very intentional, not just as an investor and some of the things that you talked about with farmland, but also as a husband and father, I’d love to hear your comments on coaching the journey that we’re all on as followers of Christ. And then, you know, there’s a way to tie in kind of the farming narrative and agricultural narrative of kind of crop formation, seeding, harvest. If there’s some way to do that, then you get bonus points. But we won’t we won’t say that.

Trevor Hightower: Oh, I like that challenge. Yeah. I would say, thank you for that compliment. And I will say, you know, the the people to really ask are my wife and kids. And I heard a story of someone who was kind of lauded in the public. He was a pastor, and it was his funeral, and everyone was there and just saying so many great things about this guy. And then his son was there and said, you know, I love that all these great things are being said about my dad. I just I never knew that guy. And that would be a total loss for me. And I think it’s just on my heart that I have a long way to go so that, you know, my kids and my wife are the ones who really get the best of me. But I had a awakening to that reality where I went through a life plan, and in that process, you identified what your giftings were and what your talents were, very much from the Scripture of the talents and the realization, which was really eye opening when I went through this was the bringing those gifts and my work. I was doing a pretty good job of bringing those gifts to my family. I wasn’t it wasn’t conscious that God had gifted me in different ways, that I was using it in my work and in business, that I should be using those very same gifts for my family. And I think a lot of guys and gals maybe miss that, that the gifts that really are apparent and that are making you succeed in business. Think about how you can apply those to your family. If you are a visionary leader which many listen to this that you are, no doubt about it. How how are you bringing your visionary leadership gifts to your wife and to your kids? How are you doing that? If you are an operational wizard, you know, how are you bringing your inner greater giftings to your home in a way that’s blessing your family, and I’m definitely more on the visionary side. Thankfully, my wife is an incredible integrator, if you know those those terms visionary integrator. That’s been a huge blessing to say, how can my wife and I really act more like a team in that way where I’m visionary and she’s integrator, and so I’ve been more conscious to bring that gift into my family, which does look like, you know, how do I come to my wife with more ideas about how we can, you know, bless our kids, bless our family. And so I think it’s kind of surprising, even as I talk about it now, that I didn’t recognize it for so long. But the encouragement is, again, if there are things that you do really well in the work environment, how can you bring those same gift things to your family?

Luke Roush: That’s great. Well, we always end each episode with a question about what God has been teaching you specifically in and through His word. And so I want to give you an opportunity to do that and share what God is telling you and speaking to you through His word.

Trevor Hightower: Yeah. Thank you Luke. This is where I will try to tie all of our passion around farmland and ag land together, along with how I’ve mentioned kind of key mentors in my life. And my mind and heart goes to Psalm one, which is blessed is the man who walks not in the counsel of the wicked, nor stands in the way of sinners, nor sits in the seat of mockers. But his delight is in the law of the Lord, and he meditates on that law day and night. He is like a tree planted by a stream of water, which yields its fruit in the season, and its leaf does not wither. And all that he does, he prospers. So ag land farmland has just so many references in Scripture, and the flourishing farmland is a byproduct of having the right source of nutrients and the source of water. What Psalm one reminds us is that the man who prospers is like a tree, is like a healthy, you know, farmland that is by the source of all things that is true and good and beautiful, which is God’s Word. And I will say just to shout out Dean again, that dude, you cut him and he bleed Scripture. He just has a scripture memorized in a way that it just pours out of him. And I want to be more like that. Terry Luper as well, that the key mentors in my life, I come to them with questions and they give me scripture, and it’s so ingrained in them because they’ve memorized and they studied and they’re like this man, that they are not giving just their own opinion. They’re giving God’s word. I want to be more like that and aspire more to that and be this fruitful tree that is mentioned in Psalm one.

Luke Roush: Trevor, that’s a good word for me, and I think for everybody listening to this podcast. So thank you Trevor.

Trevor Hightower: Thank you Luke.

Joey Honescko We’ve barely made it past January, and we’re already seeing incredible work happening in the faith driven investing movement around the world and across various asset classes. From the conference streamed in over 100 major cities to small group meetings and an intimate gathering of fund managers. God is moving through faith driven investors who are taking on this charge to build, give and invest for God’s glory. So in today’s episode of the Faith Driven Investor podcast, we’re going to talk about the current state of faith driven investing and show how you can get off the sidelines and into the game to be part of this exciting work. Let’s get into it.

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

Joey Honescko Welcome back, everyone to the Faith Driven Investor podcast. My name is Joey Honescko, and I’m filling in for our usual host, John Coleman and Luke Roush today. On a regular time, I’m getting to work behind the scenes as a producer of the show, but today I get to come out and chat with our two guest today, co-founders of faith driven entrepreneur and faith driven investor Justin Foreman and Henry Kissinger. Gentlemen, how are you doing today?

Henry Kaestner Well thank you. It’s great to be with you guys.

Justin Forman Awesome. It’s it’s an honor. It’s great to have you back. I mean, you’re you’re traveling a lot there for a bit.

Henry Kaestner I was traveling a lot. And it is a beautiful thing. More travel than normal. But, you know, we changed the way that we do the feature of an investor conference this year. In the past, of course, we’ve had this feature of an investor live, and we’ve had thousands of people around the world dial in same time. And there’s something really special about being a part of the programing and guest there talking. And just everybody’s experiencing at the exact same moment. And yet, of course, is the movement is getting more global. That gets to be pretty difficult with time zones. And so then we went ahead and we started doing it. So it’d be the same time, you know, say 8:00 in whatever region were in. But most recently we did something that allowed us did have a really neat barnstorming trip through Asia, and that is that engaged host and long term advocates for feature of an investor got in and said, you know, we’d like to host a watch party and cash would be great if some of the folks that are featured in the conference might actually be there for it. So that gave us an opportunity, as we’ve tried to be more and more flexible with that, to be in Jakarta on Tuesday and Kuala Lumpur on Thursday, Singapore was on Wednesday and Manila Friday, Hong Kong on Saturday. So it’s awesome. And what was so encouraging for me is that, you know, ours is a movement that’s powered by 3500 volunteers. And most of them, to be clear on the feature of an entrepreneur side, but a growing number on the feature of an investor side. And they’re just leaning into the fact that, you know, we’ve got space in a church or in my business conference room, and I can invite 15 or 20 folks and let’s get around the table and let’s watch it. So we’ve had watch parties. I think it’s small with maybe 5 or 6 and as big as, I guess, maybe 120 or so getting together and community fellowship. And I get a chance to experience that and eat some phenomenal food. But there’s just something really special about experiencing a movement of God in different cities and realizing how universal God’s love is. Anytime you get to be with God’s image bearers, they come from different cultures. That’s a special thing. And just, is really encouraging.

Justin Forman Yeah, it’s so fun to see it. It’s a local movement, but connected with that shared DNA. But, you know, you’re talking about watch parties of all sizes. It’s fun to see some of the yeah, ten, 20, 30 people in a smaller watch party. But you also had some hosts that had some epic setups. I mean, there were some screens there that, like, belonged in the basketball. Oh yeah. I mean, you had some great setups here.

Henry Kaestner The technology in Singapore was amazing. We had a, I don’t know, a 70 foot wide screen. It was unbelievable. If you sat on the far left of it, just the way it worked, whoever was on the video looked much bigger. And so it’s funny, I was sitting on the left hand side and as I was doing that co-host segment with Luke, it made me look like a giant. It made him look like a little puny guy, which I thought was very, very funny. I took a bunch of pictures of it I sent to Luke is Luke’s, of course, a former football player, and I’m very much not. So I enjoyed my couple of minutes of being physically bigger than Luke.

Joey Honescko Yeah, it’s cool too, because it’s not just in Asia. That’s where you got to go. But you know, we had dozens of folks meeting in Ukraine, was one of the big watch parties. We had, people all over Europe, Africa, in the US. So there were all these really cool things. One of the videos that stood out to a lot of people was this Dear investor, story. And, Justin, we’re going to play the clip here in a second, but I wanted to set you up a little bit because you were kind of thinking about the value of this clip. Talk a little bit about just the vision behind it, and then we’ll play it and talk about it a little bit.

Justin Forman Yeah. It’s a gift to be able to work with such a creative team. And as we’re thinking about some of these pieces with a Dear Entrepreneur video that we did at the Feature an Entrepreneur conference this year, we felt like we wanted to present the issue from a bunch of different perspectives. And so in that piece, we were trying to speak to this wound that a lot of entrepreneurs carry, this feeling like there’s a disconnect in the church. And so when it came to investing, we came to this piece we’re trying to wrestle through, I think really two things. One, like, how do we present this thing that God’s calling us into, not as it got to, but as it get through. And I think internally we’ve talked about like, how do we marry that passion and boldness that we. A friend like David Platt has in his teaching to this contagious joy of like, Nicky Gumbel. And so the people see it’s not like out of compulsion, but it’s this upside down journey, an adventure that’s fun and exciting. It’s living on the edge. And so we endeavor to try to create a piece that did that. But then the second thing that I think that was so much fun was really showing what Henry’s remarking on us is the global nature of the movement, that this is not one ministry, this is not one organization, one fund manager, one pastor, one anything. It is a collective thing. And the snippets of these pieces from voices of leaders in the movement from Africa to Asia to the US, in all different asset classes and generosity in investing and young and old. It was just fun to really kind of pull together a piece that I think is kind of like an anthem cry of saying, okay, what is this really all about? So yeah, it was a lot of fun. We’re so grateful for so many friends that contributed to the piece, and it’s been really encouraging to see how it turned out.

Joey Honescko Yeah, the video is definitely worth watching. It adds a lot with the visuals, but here we’re just going to play. It’s about three minutes. We’re going to play the audio clip and we’ll jump back in after that. It’s time we had.

Video Transcript An honest conversation about wealth. Money has power, and Christ followers are just as enticed by what it offers. We’ve been trained to think that comfort comes from collecting and consuming. We fill storehouses with security and give just enough away to feel good while staying safe. We might check boxes of generosity, but our desires are suddenly focused on prestige, recognition, stability. We don’t have to settle for a casual, comfortable Christian spin on the world’s definition of success. We don’t have to try to balance God and money. Jesus makes it clear that we cannot. We can only serve one master, not two or even one and a half. Money beckons us with promises of power, but then it holds his power over us, makes us operate from scarcity, not abundance. As if God never fed thousands with a willing kids lunchbox, the boy gave up all his power. Five loaves, two fish, 100%, not ten, not 20, or even 90. And it wasn’t about. The tools he held, it was about how he held them, saying, Lord, use what power I have for your good and your glory, not mine. God has given you a lunch box to. He’s equipped you with capital, influence, leadership. And he’s inviting you into an incredible journey where you partner with and see lives changed and communities restored. But it starts with surrender. It’s his plans for your investment, not yours. It’s his reputation that drives you, not yours. It’s his mission that consumes you. Now yours. See, there’s a growing movement of faith driven investors deploying capital for God’s kingdom. And you can be a part of it. As individual investors, fund managers, advisors, ministry leaders. We have different roles. Yet our calling is very similar to glorify God in all that we do. God doesn’t want to guilt you into anything. He wants to invite you into a wildly different way of seeing everything. He wants to bring you on an adventure into an upside down world where you find joy through surrender, where you receive, when you give, and where abundant life comes down from weighing your life down. Every investment has an impact. What will yours be? We want to see God’s will done in every corner of the earth, from every tribe and nation and time under his power and for his glory. Amen, Amen, Amen.

Joey Honescko I think one thing that stands out when I hear that video, and I’ve heard you guys both talk about this a lot, and it’s worth mentioning, is this idea of joy through surrender that this isn’t a trading down or a sacrifice, but this is a trading up that comes from living out the way that God has called us to. So I’d want to give you guys a second just to kind of riff on that particular topic. And then I’d love to hear what kind of stands out in the particular lines that are meaningful to y’all as well.

Henry Kaestner Well, I think there are a bunch of things that are at play here, and I think that one is absolutely a joy through surrender. But I think that it works best when we embrace this theological concept that God owns at all. You’d think that would be very, very bad news for the person who is. Up until now, I thought that they owned 90% of everything and got on 10%. Any day in which you lose 90%. You know, that would be a bad day, you’d think. And yet, the counter cultural reality of the way that God designed the world in us to be in relationship with him is that as we do surrender, we get this joy and we give up this monochromatic life that’s conformed to the pattern of world. And we walk in this technicolor, beautiful life of living with God in and as his steward, rather than the burden of owning and all the things that money can do as the worries of the world and the deceitfulness of riches kind of crops us. When we change that, it is something that’s really powerful, and yet that is amplified when we do it together in community. See, wealth isolates, and that’s a challenge. And it’s maybe the way that Satan would have it. Wealth isolates us. And as people have more and more wealth to steward above and beyond that which they might even need in this lifetime. But definitely in the course of this year, people try to hold themselves out a little bit because they’re concerned that people are asking them for money, and most people do. When we’ve all done that, we’ve all been at different stages in our life. We’ve seen people that have more wealth or power, and so we are attracted to them and we want to we want to invite them into what we’re doing or ask something of them. And so while it tends to isolate, I think one of the most powerful parts of what happens is FDI watch parties is that you get these two things happening together. One is the joy through surrender and the joy and real, with a real emphasis on the joy. And then doing that in community and experiencing that joy together in a non prescriptive, presumptuous way. It’s not like, oh, well, if you’re not investing in this fun, whether you’re not doing this well enough. No, it just is. What is God telling each of us? How do we share best practices? How do we do this in community? And that becomes something really beautiful.

Justin Forman You know, I think one of the things that strikes me about it is what Henry is talking about here, Joy, is I think we’ve gone as far as obligation can take us. I think in the church that this conversation of obligation or obedience or you should versus you get to like, I think that we have to pivot because I think we’ve gone as far as obligation has taken us.

Henry Kaestner I think that’s a good word, you know, because we try to be faithful and obedient. Right? But there’s something on the other side. But what you’re saying, I think, is that we’ve kind of maxed out the whole dialog around money and power and possessions and all those things has been about faithfulness and obedience. And there’s great scripture on that right side of self take up our cross, etc. and yes, we need to be faithful and obedient. And yet so much of the gospel message, of course, is on this other end of the spectrum, right?

Justin Forman Oh, absolutely. And I think it’s you have to get to the other side. And it’s hard to like, even talk about the joy until you get to the other side and taste that joy. And I think that like, it’s what you’re hitting on is, is when you do it in community, people help you get over that gap, that chasm, whatever it is. And once you get into it, it’s I mean, your analogy of Technicolor, some of our listeners might be a little bit too young for that. It might be 720 versus 4K, whatever the analogy is. But the point is still the same. It’s like once you see it in Technicolor, once you see something in 4K, you just can’t go back. And it’s that joy element of it that, you know, it’s like we’ve made it so complex sometimes that it’s so simple. And I think that at times, like when you said that aspect of like, there’s a selfishness in this, in some ways it’s like, I do this because I want to feel God’s pleasure and then experiences joy. But I think it speaks to Scripture where it says, actually, it’s not selfish. It’s like when your prayers are aligned with his heart. That’s the beautiful thing. It’s not that you’re pulling in a different direction. It’s it. You’re praying for joy. You’re wanting joy. And those are the prayers God wants to answer. You don’t have struck by that because. So this week we’re filming a project for faith through an entrepreneur, an investor about prayer, and a friend, Derwin Gray, pastor in North Carolina, spoke to this concept and he let this simple statement said. He said, If God answered all of your prayers, would your life be more holy if he gave you everything that you prayed for? Would it look more like his kingdom, or would it look more like an Amazon shopping list? Would it look like that? It really stepped into what God wants, and I think that’s what you’re hitting on is, is like when we’re pursuing joy, when we’re pursuing that, like God going to step into those moments. And yeah, there’s just something about joy. It’s going to be just, I think, a key piece of this movement for the years to come.

Henry Kaestner I’ve got to answer all my prayers. The Ravens are doing the Super Bowl. I think that’s a great point. I’m so excited about that series coming out. It makes me think about Chip Ingram as a frequent contributor to all that we do. Effort driven. Who talks about the four prayers that God answers being Ephesians one and two. Philippians one, Colossians one two about really praying in a way that is in line with God’s heart, with a hopeful expectancy, that in doing so we will experience his joy. Because that’s the way the God designed us. And yet so much of what we do is it tend to be apart from that. And so it’s this balance. Just to recap, for those of you who are following along, it’s just faithfulness, obedience on one side. Right. There’s this. You know, we hear about the tithe and there are different things that we need to be thoughtful about. And they’re very good points in Scripture. And yet this movement is about taking that that’s already in existence, of course, and then bringing over the sense of joy and gratitude on the other side. So the gratitude coming from the fact that we’ve been given this gift of life and we have it now and forever and just opportunity to participate in the work that God is doing in building the world. So we’re grateful for the fact that we get to do that. And then the joy that comes with bringing that all together and doing it in community and seeing things that are just infinitely more fulfilling than all the things we otherwise would have wanted on our Amazon list. And yet, I’m so grateful we’re doing this this morning, because otherwise, every day, if I don’t talk about this or think about this, or do this in communion, maybe not every day, but on a regular basis, I will drift back into being conformed to the pattern of the world and the deceitfulness of riches. And maybe that’s because of the power of mammon.

Justin Forman Yeah. A powerful thought there. You know, one of the other things that maybe change in conversation a little bit, Henry. I’d love to hear your thoughts on just these moments, these events, these conferences. It’s a fun, like, kind of measure up moment where you can see where the movement has grown. The steps that have been taken. We’re such doers as entrepreneurs. Investors were always thinking about what’s next, what’s next, what’s next. And we don’t have those moments of like pause and reflect and say, man, how far things have come. How much God has been up to. And I don’t know about you, but I was just struck by so many of them. I think two things that stood out to me was one was just the momentum in the conversation with Dallas Jenkins that John Coleman had, and just about the wonder projects and some of the big things happening. And there have been recent news here in the last couple of weeks about the House of David series. That’s going to be a part of that Amazon Prime getting behind it. You just can sense this momentum of conversation that’s happening there on that front and the faith driven investing community really rallying behind that. But I think the other thing that stood out to me was just Tim’s conversations about just the growth and the maturing that’s happened in this phase. I mean, I think some of the statistics that he said in that was that we’ve gone from, what was it, 22 products to 155 with 29 new products and funds, kind of launched in the last two years. And in then he started talking about that, I think mainly first from just a public markets perspective, but then he shifted it into just kind of the whole movement as a whole. And I mean, you’ve been in this I mean, even from the beginning, like, how does that conversation, when you hear Tim talk about the progress and the things that are happening, how does it impact you?

Henry Kaestner Well, I’m encouraged by. There are a bunch of different things to point to. I think that this year we had a feature of an investor conference for professionals and the venture capital private equity industry. So it’s last Friday, and we had 168 of them at the Rosewood Hotel in Menlo Park. And it was so cool to hear about how some of these fund managers are incorporating chaplaincy, or offering chaplaincy up to some of their portfolio companies, and starting to feel better about sharing their faith in a winsome way to their portfolio companies, and how increasingly faith driven entrepreneurs in emerging markets are getting access to capital that is aligned with their faith. So there’s some incremental things that are developments in pretty much every type of industry, real estate. Absolutely. But then, of course, private equity in venture capital now, and also on the public market side. So we have, you know, there’s a first ever ETF that’s investing in Christian CEOs, a publicly traded company. So companies that are publicly listed run by Christian CEOs. And there’s just great work that’s being done by Eventide as they continue to invest in a way that makes a world rejoice. I mean, there’s so many different great things that we hear about along the way. And yet when I hear of people coming away from these conferences, it tends not to be any one particular thing. It tends to be the sense of, wow, I found a community of people that are really wrestling with these things, and the benefit and the joy, and the thing I’m taking away from this was how I just feel much more alive in my faith in this community. And that happens on the watch parties, of course. And I happened at the conference we had at the Rosewood. But it happens with these faith driven investor groups we have. The biggest takeaway is like, I was in this group for six weeks, an hour a week. You know, we go through and learn about some of the things are going on. But I met people struggling with the same things I am. And, you know, can we make money doing this? If you’re talking about feature investing, is it mean that we need to just go ahead and just, you know, give up Alpha and in the name of Jesus or what does this even mean? Am I judged because I do this or that? And just being able to process all of these things together and finding new friends and a bunch of them decided to go to Africa together to find out what’s going on in Africa. So I two weeks from now, it’s a group of about a dozen that are part of Phaedra investor Group are going to go to Nairobi, Kigali and Lagos, Nigeria just like, hey, we’ve all been in this group together. Let’s go talk to some fund managers. Let’s find out if we can do this in a way that makes an impact. Let’s find out if we can actually find some fund managers that actually can provide some good return. And what does it even look like? But I think that in each case, the what’s really drawing them together is this kind of like it’s a I don’t know if this worship is the right word, but it’s this it’s this togetherness, is this community of people just like, hey, we’re all trying to figure out how to steward what God’s given us. Let’s do it together. And the joy that comes from that. I’m really looking forward to hearing with these folks, these 12 people learn when they come back.

Joey Honescko Yeah. What I’m excited about what you’re saying, Henry, is pulling all these different pieces together. We’ve talked about heart change kind of in this early stage with this Dear Investor video, this going from black and white to Technicolor existence. And then you’re talking about the role community plays in shaping that. And I think Tim’s content and some of the other things that we’ve seen here talking about the. Opportunities to really get in the game. And one of the coolest takeaways for me when I was watching the conference was seeing stories like the Germans or the Farrells of these people that actually stepped up and saw, hey, I can get in the game, I can do this. And one thing that I was thinking about, Henry, as you were talking, is in your early investing journey, how did community help you align your faith in your investing? I’ve heard you talk a lot about the way that community in general does that. I’d love to know, just kind of from your own experience, what that has looked like.

Henry Kaestner Well, everything I’ve ever done entrepreneurially it’s always been done with a partner. You know, the most recent example, of course, is Feature of Movements with my partner. Justin is on the line right now with us. And the case for me to answer your question is co-founding Sovereign Capital with Andre Mann and with Luke Roush. And Luke and I continue to talk like once a week as we just process what God is showing us as we steward our own personal capital. But then as Luke, as a fiduciary, and I’ve moved on now I have a full time in the ministry. But just as he and John Coleman are fiduciaries of other people’s money. But I still get involved because we’re looking at these trends about what’s going on in real estate investing and what’s going on in public markets, and how we’re thinking about voting proxies, and how do we have a winsome witness to our faith as we steward capital? So for me, it was when you talk about joining a community started off really just deep partnership. And Luke and I committed. I can never done this by myself for that matter. I could never have done bandwidth without David. I could never have done Chapel of Brokers without Tom hunt. I think I know that God has designed us to be in partnership. Jesus, you know, sent two grown men to go get a donkey. So there’s this opportunity to do things together because it’s otherwise it’s just super hard, super hard for me to do anything by myself. Thank goodness he sent me. Kimberly. I don’t know what I’d be if I didn’t have Justin as my partner of Faith driven, and Kimberly is my partner at home. I don’t know, I probably would be eating wild honey dressed in camel’s hair.

Justin Forman You know, Henry, one of the things that strikes me about that is it’s like, yeah, you’re just talking. You’ve talked about community beginning. Then you broke it down to like, from 0 to 1. You broke it down to that idea of like, what does it take to find that person, that partner, that person for you and your family, that person in different ventures and things. I think that’s one of the things, Joy, that when I look at the stories about the women. And then when I look the one that we did about atomic Angel group. Like, there’s such humility in that. And I just want to just, like affirm, encourage, celebrate that. Like there are people when I think about doing DNA and I think about the humility of that story in like, how Dana just breaks it down to say, hey, we stepped in this major wealth event and it scared me and it paralyzed her. And she tells the story of like every decision, like, do I buy, you know, is it window treatments? Like, is it this car, is it this trip, is it this whatever. And she talks about that. But then she talks about the point where they found another couple. I think it’s April Chapman and her husband that then started this conversation where she felt safe and she felt they both felt safe having these conversations about things that are otherwise off the table in church. And I’m just so grateful for that story because it’s fun to see the progression of the movement, or in some ways, the collective words of the movement go out, and then they come back, and they come back in a form that’s so much richer than the way that they went out. And it’s because of that humility, it’s because of that authenticity. It’s because of that vulnerability that we’re able to say, oh, that’s what this looks like to get in a game that’s more accessible than I ever thought it was, that’s more joyful than I ever thought it might be able to be. And so I’m just so grateful for Bill and Dana in that story. And of course, then the Potomac in January, maybe we’ll get more into that. But it is just fun to see leaders of the movement, the humble heroes, taking this movement deeper by their authenticity, in their vulnerability.

Henry Kaestner I think through the grace of God and great content team, I don’t know, we’ve done 120 stories or something crazy. I mean, a lot. The team has been prolific, by the way. You can find most of our videos on the faith driven, itinerant feature of an investor video library sites, and you can get a sense for this. And yet and maybe it’s just because it’s a recency bias. I think my favorite story that we’ve ever done, definitely a feature of an investor is Bill and Dana Westerman, because it’s so raw and it’s so real, and it talks about being in partnership as a couple. And there’s a line in there. She’s like, and I didn’t want to be bullied, right. Because I see that in my relationship with Kimberly, because we’ve at different times, we’ve been at different places along our generosity, journey and generosity can sometimes get conflated with fate driven investing. And part of that’s good, part of that’s bad. The generosity part is helpful because that’s what taught Kimberly and I both that God owns at all, and that that’s not bad news and giving is a part of that. But then also is investing and so is our lives in our time. But I know that different times I’ve been ahead of Kimberly on the generosity journey, and there have been times when she’s been ahead of me. Where is it point in time where we had a second home that we really loved, and yet we really were excited about making a gift to ministry called Hope International Microfinance. And it was Kimberly that suggested that we sell the house. So it doesn’t mean that I’m always even though this is kind of what my vocation is, doesn’t mean that I’m always the one in lead. In some cases, she’s the one in lead. I was a little bit more excited about holding on to that than Kimberly was, but the investing side is something that is just altogether it’s different and it’s beautiful in there, can be really productive and participate in seeing other things grow fruit on other people’s trees. And that happens too, with giving. But this concept of innovation and taking what’s wrong in the world and using for those of us who come at this with an entrepreneurial background, just the creative process in coming up with an innovation that fixes what’s wrong in the world, either to return us to the Garden of Eden where things were really, really perfect or to bring about the New Jerusalem is something that’s just really powerful. And you get this tension and you get to see the sense at one point in time, Dana was behind Bill in this journey, but then she kind of goes out in front and just is able to just really get the sense of this, the beauty of it all. So it’s just such a beautiful story. I shouldn’t wax so long on that one. But I think that as people go through the series and see that Bill and Dana worked in story, they’ll identify with it. They’ll see the fact that’s so important that we do this together, and they’ll get a sense for just the challenges, but also the opportunities as well.

Justin Forman You know, I think it’s beautiful to look at the power of the stories. It’s beautiful to look at so many partners today would be remiss to not mention so many great ministries and partners and friends in the space. From generous, giving and generous, you have a national Christian foundation and so many the hosts of these watch parties. Nothing. I tend to think what they set in motion by their faithfulness and obedience and catalyzing movement in their city. And so encouraging to see that. I think one of the things that I would also before we kind of maybe move to the kind of some of the next ideas, is like, where were we challenged from this event and where were the things that we felt like maybe we got feedback on and said, hey, where do we go? Further still? And I was struck by one comment that somebody made about just saying, okay, there’s. Some stories and some great things that talked about gospel proclamation and talked about sharing the why, what we do. And I think collectively as a movement and as a ministry, there’s a challenge for us to say, how do we make sure that we don’t just rap, either great results or great impact or social side of things, but we don’t miss the opportunity to share the why that drives us. The story, the words weaving the gospel threads into this conversation. It’s tough at times. It’s tough as in faith to an entrepreneur. And sometimes it’s even, I think, more difficult for the patron investor. But I think that’s a challenge into growth area for us as we tell stories and content. But I think it’s a growth area also for the movement, for us to say, what does it look like to make sure that we don’t work so hard to get to that place and then miss the opportunity to tell that? Why?

Henry Kaestner Yeah, I’m trying to think about you. Get me going with what kind of feedback did I get about the conference and what’s next. And the thing that is really our greatest challenge, I think, in the movement over the course of the next several years is developing the third leg of the stool. So many people want to get in the game, and yet for good reason. We’re working with financial advisors who are trusted, fiduciary, who are working with us to help us to understand our need for income or our tolerance for risk, or the different places where we feel called. And that’s a really valuable part of the ministry. There’s some number of people come out of the faith driven investor group who then go ahead and are able to get right in the game, and they see a list of 35 different fund families that are on the feature of an entrepreneur marketplace. And they’re like, okay, I want to go ahead and pick some that are in real estate, some that are in emerging markets, and some of them are private equity, venture capital. And I’m used to making my own investment decisions. But most of the way that people steward wealth is with working with an advisor, and for good reason. That’s a really important role in society and the economy. And I’ve been encouraged by and this is a difference, I think, between this year’s watch party and conference and the year before is that more financial advisors were hosting and involved in watch parties and are starting to develop those arrows in the quiver and just acknowledge the fact that that’s difficult to do. So many of the ones that are working with wealthy people have been doing this for 25 or 30 years. So for them to change and go ahead and onboard new fund managers and to do the discovery and diligence behind thinking about, gosh, now I’ve got to go ahead and onboard another 5 or 6 different fund managers because I want to have something in real estate. I want to have more arrows in the quiver, so to speak. That’s a lot of work. And that’s the number one thing. I think that the movement needs are more advisors to come in and say, you know what? We see that there’s an opportunity to start an investment capital way that builds God’s kingdom. We’re going to go ahead and do the work to onboard some of these new funds, understand what’s right for our clients, and then we’re going to commit a part of our practice to helping people to understand not just how they can make more money, just to give it away, but how in the process of investing the capital that they need for retirement or for college education or whatever might participate in work, that guy’s burning Kingdom right now. And yeah, some of it could be negative screen stuff, which is, you know, just making sure we’re not investing in pornography and gambling and some of the other things that some of the big name companies are involved in. But more importantly, I think what positive screens, what investments might we make that would allow for flourishing both on the private equity and venture capital side and real estate, but also on the public markets? That’s the key part. That’s what is not completely there. Hopefully there are some listeners to this podcast who like, you know what, I get it. I see that there’s going to be market demand. More and more people are coming out of faith driven investor groups who want to get in the game, and I want to help them be that river guide.

Joey Honescko Yeah. As we come to a close here, I’m thinking we touched on heart change. We’ve touched on the opportunities in the movement. Now we’re talking about some of the barriers of the movement. I would love to end this here thinking about what are the hopes for the movement in 2024?

Justin Forman You know, I mean, that could go so many different ways. And it’s such a big, broad movement that it’s going to be hard to even scratch the surface of the whole thing. But if I were to reframe that and say, what is one of the things you’re most excited about in this season? And to build on some of the things that Henry mentioned when you talked about the partnership and recognizing that this is a decision with him and Kimberly. And then when I think about like what Henry is talking about with the River guides, I think one of the things that we just continue to be reminded of is that this journey to faith driven investing, it’s not a sprint, it’s a marathon. It’s going to take a lot of things, and it’s going to take several key partners. It’s going to be making sure that you’re reunited at home and that you’re connected, united, something different, but something similar with your advisor. And I think that one of the fun things that I’m really looking forward to is that we have this new project releasing, and Brooke and Luke Roush can talk through their journey. And so that they it’s broken and kind of talk through it and just talk through their journey of like being in this space, but then also going there as a family themselves. And I think that that’s going to be just an incredible tool. Do something that couples can go through with other couples individually. But I think it’s just going to be a key step in the movement to uniting a home, uniting a family and saying, hey, this might take some time from us to get where we are from, where we are to where we want to go, where that’s calling us to go. But it’s such a needed one. Like if you want to go nowhere, try and go somewhere alone. If you want to go somewhere far, you know, go together with your spouse. And I think that that season is it’s a fun thing that we’re recognizing that like, these are needed conversations that have to happen. And it’s one we’re right on the edge of.

Henry Kaestner Yeah. And a further that, my hope is that husbands and wives get together on their knees and just ask God how he would have them steward their lives, but yes, their investment capital in their financial resources. That’s the big win. That’s the thing that can happen right now. I remember as we were getting started with FDI, maybe 6 or 7 years ago, as were coming up the idea, I think the first conference might have been five years ago, but a friend of mine named Ben Shelf was looking through the white paper we’re putting together and sort of kind of our plan of action, and one in which we talked about one of the big challenges was that there wasn’t enough supply. Now, five years on, there’s a lot of supply. There’s a lot of fund managers that committed themselves to their faith and written spiritual migration plans and big multibillion dollar funds and new funds and all that. So supply is not a problem. But Ben suggested there was supply wasn’t a problem before either. He said. It’s not a problem of supply and demand. It’s a problem of us just not asking God intently about how he would have a store to camp on. The example that he had, and not a bragging way, was that they had gotten a big windfall from selling a company that he owned, and so he got down on their knees and they said, God, we have no idea how to invest this capital. How much of it should we give? How much of it should we invest? But we know it’s all yours. So we ask that you guide us in the next week. Somebody that he knew who’s on the board of, I think it was InterVarsity or just a larger organization who had had a good presence in the Bay area, was getting evicted from their building that they’re in. So they went ahead and they bought a building to house this ministry. And it was a financial you know, the ministry had been paying rent before. And so they continue to pay rent. And so Ben and his wife were able to make a fixed income type of return in a way that was a great blessing to the ministry. And God answered that prayer. And that’s the big win. The big win is just asking God lead us with hopeful expectancy that he will. But I think that more than anything else, God just wants us to be in relationship with him. And too often I haven’t asked God about how he would have me make any one of a number of decisions, but way too often it’s financial. And when it’s financial. In the past it had been about giving or how much to give, but he did not until recently ever been about how would you have me invest? I just made the assumption that God wanted me to invest and make as much money as possible, and I just I never asked him. And that’s the big win for 2024, is that more and more couples will get down on their knees and ask, God, how would you have a steward of capital? And there are a lot of listeners to this, to be clear, that are single. It’s just that we want to make sure that for those who are married, they don’t go, this, this is not a single player sport unless you’re single and great. Being with you guys always is.

Joey Honescko Always a pleasure. Thank you Henry. Thank you. Justin. Justin, you said that phrase scratching the surface. And I think that’s what this episode did. We’re going to dive into a lot of these topics in more detail over the coming weeks. So keep up with the show. Check out the website for those videos and those resources that we’re talking about. And, we’ll see you in two weeks. The next show.

Joseph Honescko: The faith driven investing movement always starts with heart change, but it shouldn’t ever end there. Christians are called to take action. We put our hands and feet in motion and response to God’s transformative work in our lives. A lot of faith driven investors believe that. But many of us still struggle with the practical question where do we start? We never want this podcast to be hyper prescriptive. But in this conversation, we do want to hone in on some of the themes and ideas. Leaders around the movement have been talking about at various gatherings this year, and we want to give some practical, actionable takeaways. John Coleman will join Richard Cunningham for an in-depth look at how investors around the world can start to get in the game. You’re listening to the Faith Driven Investor podcast. Let’s dive in.

Rusty Rueff: Hey everyone. All opinions expressed on this podcast, including the team and guests, are solely their opinions. Hosted guests may maintain positions in the companies and securities discussed. And this podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization. Thanks for listening.

Richard Cunningham: Well, hello everyone, and welcome to the Faith Driven Investor podcast. We are grateful you are tuning in from wherever you get your podcasts. Glad you’re here. My name is Richard Cunningham. I reside in Austin, Texas, and I have the great privilege and joy of serving on the Faith Driven Investor staff, and I am actually going to be your podcast host for the next season ahead of the FDI podcast. And if you’re wondering, whoa, whoa, whoa, where are my normal guys, my mainstays John Coleman, Luke Roush, Henry Kastner? Not to worry, there’s still very much going to be involved in the life and the future of the FDI podcast. We’re just shifting some things around here internally so we can actually hear more from them. I’ll kind of start manning the host responsibilities, and we’re going to move folks like John Luke Henry into that color commentary, expert insight and kind of guidance role as they have just so many years of experience across this FDI space. And so we’ve got John Coleman here with us today. And John thrilled about this new season of the FDI podcast. And welcome. And I know you’ve been on the road a lot. Everything going well?

John Coleman: Well, Richard, I’m doing pretty well. Although I would say FDI listeners should know that despite Richard’s kind introduction and thoughtful introduction, this is a coup. It’s actually quite tense on the podcast right now. I only wish you knew. Now, Richard, I’m really excited for this season. Obviously, I’ve known Richard for quite some time, and, it’s just such a privilege to get to work with him in this new season of the FDI podcast. And I can’t wait to dig into the topics that we both care about. Invite some great guests on. So I’m very much looking forward to the road ahead.

Richard Cunningham: Absolutely, man. So we’ll call this episode one phase one of the coup. That is our play here.

John Coleman: The revolution.

Richard Cunningham: That’s revolution. So so yeah, recording this at the end of February 2024. And John, today we’re hitting on man, it’s been a red hot start to the new year in the faith driven investor landscape. And specifically there’s been some seminal events that have taken place. So today specifically, I think we kind of want to hit on. Whereas Justin and Henry last week talked a lot about the heart posture themes that came out of each of those gatherings. Today, we want to pull out some of the threads in the themes, specifically from the FDI conference, kind of talk about some of the tactical, practical applications of them. It’s a John. We’re going to spend most of the time teeing up some topics for you. But before we start diving into the conference and some of those threads, just generally speaking, your thoughts on just all the momentum in the hot start we’re off to here in 2024?

John Coleman: Yeah, I’m really encouraged by, you know, I’ve only truly been a part of the faith driven investing community for three years now. I actually just had my three year anniversary at Sovereign’s [Capital] this week, and before that, I was kind of aware of some of the dynamics but not fully invested in those. And I would say there’s been almost a step change in the level of engagement, the quality of engagement, and the breadth of engagement around faith driven investing. You know, the FDI, conference, broadly speaking, was very broad. Tons of direct investors, very global, a lot of high net worth investors and institutions, a mix of asset managers, the FDI fund manager gathering for those not familiar is really about professional investors, fund managers. That was in Palo Alto hosted this year as Richard had a lot of venture capitalists, private equity folks, real estate folks. But this was a session for those who are every single day living and breathing the professional investing world from big firms like some of the mainstream firms that you would know, to specialist firms like ours that are in faith driven investing and in Kingdom advisors. You know, it’s kind of the Super Bowl of the faith driven financial advisor community. And it’s just always an encouragement. They had several thousand people this year. They have this massive exhibit hall. They’ve got these great mainstage speakers, and there you’ve got several thousand wealth managers, financial advisors coming together with asset managers like us with other third parties trying to think through. How do they get their clients in the game for faith driven investing, and how do they counsel their clients with biblical wisdom? Right? Which is also an important part of the advising thing. So I was deeply encouraged on all fronts, although, I would like to travel a little bit less. So if we could have fewer conferences over the next couple of months, that might be better.

Richard Cunningham: Yeah, we we certainly start the year off hot, to say the least. So let’s go specifically to the first of the gatherings we were talking about. The FDI conference kicked off with Luke Roush, your managing partner with you at Sovereign Capital, Henry Kaestner, also Sovereign Capital, talking about this idea of, hey, when you are done with today’s conference, hopefully you’d be able to see that faith driven investors are at work deploying capital in predominantly one of three ways for market rate return, for concessionary and maybe impact investing, as often has been referred to or deploying for philanthropic or just pure giving purposes. And so when you hear that, why was it so important that Henry kicked off the FDI conference kind of through that lens?

John Coleman: Well, I think especially given how much we talk about the values of faith driven investing, anytime you talk about values investing, it’s very important to clarify with those with whom you’re speaking, where you stand along that spectrum. Right, because you do want to be honest and transparent about the return and risk profile that you’re seeking alongside those values. And there’s a legitimate spectrum from pure philanthropy to pure high return investing, whatever asset class that is that you can what you just need to be transparent about where you are on that. I think we’re values based investors, whether Christians or advocates of ESG get into trouble, is when they claim to be investing with the values lens in a way that doesn’t dampen returns. But in fact, there is some structural reason why returns will be lower, and there’s no problem with that if people want to make that conscious trade off. But you got to be conscious of that trade off. And in fact, as professional investors, you then have to be thoughtful about what you can accomplish along each of those points in the spectrum, because I’m a big believer that the private sector can actually solve many of the problems in the world. I think that philanthropy is suited to certain types of problems, but not others. And so we’re constantly trying to think through how can we use market capital to solve the world’s greatest problems rather than philanthropy? But there remain things that have to be philanthropic, right? And it’s important to identify those and figure out how we fund those and put capital against them. And in fact, Jesus called us very directly to engage in those charities, right? For the poor, for the widow, for the orphan, and those those causes still hold true. There are another category of investments that we could get into, things like, charter school financing, for example, maybe low income housing financing and certain constructs that do have a return profile. But you’re making something of a conscious trade off on that profile in order to have the type of impact that you want to have for the risk return profile that you’re getting. And we firmly believe there are elements of the high return spectrum where you’re not at least seeking to trade off returns. You can never guarantee returns, obviously, but you’re seeking high returns alongside a deep integration of cultural values or redemptive mission, etc.. And so we always think as professional investors about where we stand on that spectrum and how we communicate that well to and investors. And I think anyone dealing in values, whether ESG or faith driven investing, really has to be thoughtful about that as well.

Richard Cunningham: John, you captured it really well. But I want to talk real quickly specifically about the story of Dana and Bill Westerman. And this is a situation where Dana’s father, about 12 years ago, left them an inheritance check, a meaningful inheritance check. That kind of rocked their world. And so, John, I think it’d be helpful if someone in your seat who interfaces often with LPs and investors of all sorts, when you see these kind of liquidity events or windfalls or moments like this across the faith driven investing ecosystem, what steps do people take initially? What pitfalls do you potentially see people fall into? Maybe contrast that a little bit with kind of some of what you see Dana and Bill do in their story?

John Coleman: Yeah, and Dana and Bill are such an inspiration. Right? They’ve been mainstays of the faith driven investing ecosystem. They’re one of those families who really put up risk capital to get into areas that innovate for faith driven investing. And so I personally just have a ton of respect for each of them. And I’m really grateful for the impact that they’re having. You know, it’s not uncommon that people come into large amounts of money. And one of the interesting things, Richard, is that when people suddenly come into big amounts of money, it’s often destructive, right? There are a ton of studies that show that lottery winners, after winning the lottery are more likely to go bankrupt, are more likely to suffer from various mental health challenges, are even more likely to take their own lives than those who haven’t won the lottery because they don’t have the habits, mindsets, values surrounding infrastructure to manage it appropriately. Becomes destructive for them. We see it all the time with things like professional athletes, right? A kid who’s never had financial resources comes into something. Or young person at 19 or 20 or 21 years old, they’re in a millions of dollars suddenly, and they just have no framework through which to manage that. There are people who try and take advantage of them all over, right? And they don’t have the infrastructure, other people, frameworks for investing that allow them to steward that well. I think, you know, if I offered some advice to fate driven investors, I think resonant with what Dana and Bill talked about. The first is to make sure right out of the gates that your heart posture is right with regards to these things. You know, we can talk about it further. The Bible is very clear that the love of money is the root of all kinds of evil, but money itself is just a tool. God actually bless the number of people in the Bible. Abraham was one of the richest people of his day, right? David and Solomon, were both extraordinarily wealthy, which actually led to the downfall of at least one of them over time. But that was a blessing as long as they used it for his purposes. And so really digging into what the Scripture says about the use of money and capital, thinking about the mindsets and values that turn that from a totem to a tool, they turn it from an idol to something that you use for kingdom purposes. That’s the first step, is to get that mental framework right, to really understand what you want to do there. The second is to be very practical about pausing. When you come into those resources and really thinking about what is the level of lifestyle that I need in order to live, and what is the level of lifestyle that I can live when I come into this money. And then secondly, you know, how am I going to steward those resources? I think Dana and Bill laid out a framework. For example, I believe it was 60-40 where they were going to do faith driven investing, where they think maybe I got that number wrong, but 60% of it in philanthropy with 40% of it, I believe, you know, some framework like that where you know exactly what you’re setting aside for philanthropy, what you’re investing for the future, and then within that investment and philanthropic pool, how are you going to determine the framework by which you’re going to distribute that capital, and who is going to be your partner in doing that? And that’s one reason I still think it’s incredibly important for most people to have a financial advisor, for example. Right. Someone who has total transparency to what you have, who can keep you accountable. And I think it’s important that person be values align like I have a financial advisor, even though I’m a professional investor, he knows what my will says. He knows what all is in my portfolio, he knows what our goals are, and he shares my Christian faith and my values. And so he’s equipped to step in and make sure that I’m living up to the standards that I established upfront, as well as offering me wise advice. And, you know, second person is speaking to that. And I think those elements are really important for anyone stewarding capital, but particularly if you come into that quickly.

Richard Cunningham: I mean, that’s really good. And I appreciate you bringing up the leg of the stool that is the outside counsel, the financial advisor, the outside wisdom. Appreciate your humility and sharing about your own. You also mentioned something when you said 6040 and you specifically spoke to faith driven investing versus philanthropy, but you say 6040 to start thinking asset allocation might be helpful to help people orient around this conversation of sometimes people think faith driven investing, they only think alternative markets. And there’s totally a lot of spiritual integration there. Other times they think, hey, it’s screening out sin stocks in the public markets, maybe talk about just for an investor out there listening in, asset allocation, a personal balance sheet and briefly kind of maybe orient people. Like how do you think about an asset allocation. It’s you know, it’s really hard to get to why if you don’t first know where you are at X. And I think that’s something you’re talking about is taking a moment, stopping, pausing and understanding. Hey, God, we want you to use these things. But we first need to kind of reflect on, hey, where are we currently?

John Coleman: Yeah. And you know, Tim McCreadie got into some of this later in the conference as well. So I’ll kind of blend some thoughts from the two of those I think. Yeah, yeah. There’s the basic topic of asset allocation. You said 6040, which is the classic stock bond portfolio that people talk about. Right. People used to recommend the average person should be 60% stocks, 40% bonds, etc.. The truth is that asset allocation is just a framework by which we think about how to put our money in different instruments stocks, bonds, money markets, bank account, cash depository institutions, alternative investments based on a few things. Our risk tolerance, right. Which is obviously quite important. How much risk can we take our timeline for investing? Am I 20 years old or am I 90 years old? How long can these assets stay put where they are and our liquidity needs at the very least, right? Which is how much capital do I need now? Which is why most people aren’t 100% in private equity, for example. Right. Which is quite illiquid. You know, I might need some cash now for daily living, for emergencies, for things like that, or to meet my liabilities over time. That’s the basic type of asset allocation. Usually work through that with a financial advisor or even if you’re an institution like I sit on a couple of endowment ICS and we constantly think about what is the asset allocation that matches our lives. Abilities so that we can make sure that we support the institutions those endowments are intended to support in a proper way. And we have consultants who help us think about that in a very rigorous, analytical and quantitative way. And that looks different for someone with $200,000 or $200 million. But each of us have to pick that. I think in the same way, we’ve all got to think about our asset allocation within faith driven investing to the types of points along that spectrum that you and I talked about at the beginning of this call. I think it’s really healthy to have giving goals, for example. So the tithe, that’s the most basic example of that in the Bible, which Dana and Bill talked about as well. But for many people with a lot of financial resources, you can actually go above that tithe, right? You can set aside a bigger pool of capital, or you could even have a goal that, you know, over time, you want to give away as much as you spent, right? And you set a number for that for your lifetime goal, saying, I’m going to give as much as I spent over the course of my life. So something like that where you deciding what your philanthropic capital is and then based on the capital that you actually need to support your lifestyle versus what’s in philanthropy, you’re choosing, where do I want to play on that spectrum of concessionary returns, of high returns? How comfortable am I taking high risk? You know, typically people with more capital are better able to take big risks, and that has tactical implications. And so you have to start thinking about based on your own profile, where are you going to play. I think that deciding that upfront and pushing yourself to think about impact, equivalent to the financial returns you want to get, is a really important part of that equation, though, because it’s very easy to default into just doing a me two portfolio what everyone else would do. And I think for us, we have to be reminded that we’re called to steward that capital in a dramatically different way.

Richard Cunningham: Yeah, I’m really glad you talked about that, and I’m glad you brought up Tim McCreadie too. So Tim, to kind of catch up here speaks later on in the conference. And he does a wonderful job of essentially kind of making the point that, hey, the product on the shelf, the momentum in the movement, the number of assets that are pouring into faith driven investing, the excuses are starting to go away one by one, for why someone would be hesitant to step into faith driven investing for a long time. And John, I’ll have you riff on this real quickly. It was, well, hey, I’m not an accredited investor. And so for legal reasons, there’s no reason I could ever be involved in the faith driven investing movement. But what’s coming to bear is remarkable opportunities in the public markets for your everyday retail investor to lean into faith driven investing and financial advisors are receiving more and more product outside expertise consultation that shows them well. There is competitively cost effective products with competitive returns for someone in their everyday stocks and bonds portfolio. Speaking of that kind of asset allocation to access faith driven investing, and then I would hope that anyone hears this and says, hey, this is a conversation I can have with my financial advisor or this as I engage at work. Maybe you work in the asset management space or the financial services industry. You can kind of start to push the line a little bit and say, hey, have we thought about mainstreaming, if you will, the concept of investing that is inspired by our Christian values? ESG certainly pushed to the forefront and found its way kind of, you know, at mass, it feels as if because of the number of Christ followers out there, this is something where there can be ground up demand that causes the intermediaries to act.

John Coleman: Yeah. That’s right. And when we communicate that with the intermediaries, I don’t think they’re bad people or anything like that. It’s just this structural kind of momentum of intermediaries. Right. They’re typically cautious and conservative with their clients assets. The ESG or mainstream values investing framework is a helpful one because they’re accustomed to that. They already make exceptions for values based investments within frameworks with which they’re more familiar. What we can now push on is to say, hey, this is just a different category of values based investment. It’s important to me, and I’d love it if we could begin to at least explore adding some of these options to the platform. And it’s easier to start with things like ETFs and mutual funds because they’re more broadly available. But that can extend to private equity, to venture capital, to real estate. And I’ll tell you, Richard, you know, one of the encouragements to me is I am seeing quality, faith driven options now in almost every asset class. You know, one of my propositions coming in with Henry was there are very, very few asset classes that can’t be done with some element of spiritual integration. I’m not sure what that looks like for gold. I know there’s a very vibrant debate about Bitcoin, but you know, for the vast majority of stuff stocks, bonds, real estate, private credit, direct lending, asset based leasing, music, REITs, movie studio content, investment, venture capital, private equity, all these different things that we think about. I’m seeing emerging opportunities to do it in a faith oriented way at one level or another, and I think that’s quite exciting to me as well.

Richard Cunningham: Absolutely. Really well said. Well you tee up a good kind of transition. And so we’re going to move a little bit down the balance sheet here and kind of go from one asset class to the next as we did that in the conference. And so now here we are in the real assets kind of category. Chuck Welden of WeldenFields and his real estate investment company has really spent some time thinking on, hey, what could spiritual integration that term, John, we’ve used number of times look like in our multifamily real estate investing. And so we’d love to invite you just I know Sovereign’s has some real estate kind of activity inside of what you all do as an asset manager. Have you kind of speaking to this particular asset class for a moment?

John Coleman: Yeah, and getting to know Chuck over the last few years has been a joy. Obviously they’ve got WeldenField, but he’s also been instrumental in Lion’s Den.

Richard Cunningham: Oh great. Call out in.

John Coleman: A number of other just pieces of infrastructure in the faith driven investing movement. And in many ways, he’s been right there, shoulder to shoulder with Rob West and with Henry Kaestner and with Ross Robinson and so many others who’ve just been in this for the long haul. And it pioneered it. And so my respect for Chuck as a person, it’s just extraordinarily high. I think real estate is one of the most interesting areas that faith driven investors should be thinking about. If you think about the context of real estate, you are operating in a space where you touch individual people a huge percentage of their time, or in commercial real estate, you know, where you’re getting people or even industrial where they’re producing things. You have this opportunity in the lived environment to be where people are all the time, right? To really people that are one of the greatest callings that we have in the Bible. Is hospitality, right? For strangers, for enemies? We are to extend love and hospitality and greeting to those people. You go all the way back to the Old Testament and just think about the people who were spared because they invited strangers into their homes to provide them protection. You think about the way that Jesus behaved, inviting people in when his followers were gathering. You think about all of these examples. The Good Samaritan, if someone who was willing to take someone in, who was willing to take them to an end and take care of them, another opportunity for hospitality, right? I think real estate is one of these exciting areas where we get to practice our faith deeply in a lived environment that contains people for such a huge percentage of their time. Multifamily, I think, is particularly exciting for that reason, you think about the opportunity to welcome in people who are often in unstable situations, and yet through their lived environment, you can try and provide a safe space. Surround it with people, including the property managers, those who are working the property, even the maintenance staff, the folks working landscaping. You can prepare them to extend Christian hospitality to these people. There are these opportunities to take people where they live, and instead of them having to go seek out hospitality, and instead of them having to randomly run across this idea of Christian love, you can bring it to them where they live. And so I’m extraordinarily excited about that.

Richard Cunningham: Man. Really well said. One of the things to the faith, true investors listening, who maybe aren’t in the real estate space but are thinking, I’d love to see some of these fund managers. That’s John talking about. Or just like, look at a website and see how people are communicating this. That’s the beauty and FDI groups and that’s the beauty. And just kind of poking around our website is you’ll bump into some of these names. And so now we’re talking culture and entertainment. But John, you actually conducted this interview in the FDI conference with Dallas Jenkins. And one of the things you guys talked about is so much of what happens in our world is downstream of what we see in the arts and what we see in entertainment. Talk about that more. And what Dallas Jenkins, creator of The Chosen, has done. But just more broadly, I think when people think of faith driven investing, they think of what we’ve talked about today stocks, bonds, real estate, maybe some one off private equity fund manager. They might think of crypto or something like that, but they don’t think of entertainment or movies or values investing in that regard. So maybe help kind of people look at this asset class.

John Coleman: This is one that’s kind of a personal hobby horse of mine. I’m super impressed. I love it. You know, I think there are very few things that Christians could do to influence the culture for human flourishing. Then create culture, movies, television shows, music, the written word books, you know, all of these sorts of things. You think about it. The United States in particular, exports almost nothing else as much as culture, right? You go everywhere else in the world, and you are listening often to American music and movies and TV. We are surrounded by it. Your kids, between that and social media, are spending hours and hours a day in front of these things. It is having as great an influence on our ability to flourish, our ability to come to know truth, and just the way that we think about ourselves in the world around us as anything else. And again, it combined with social media in particular. And so I think Christians have an obligation to be engaged in culture. I think historically, Christians have done, at least in recent history, a reasonably poor job of that. We often haven’t made product. That’s it, the quality standard of the mainstream product that was out there. And that, honestly, is one of the things that was so revolutionary about the chosen and what Dallas did with The Chosen Dude.

Richard Cunningham: I think I’m betting a thousand on crying during every episode. Just oh my gosh.

John Coleman: And you know, we rewatch all the episodes. We make our kids watch them with us and they love watching them, right? Because they’re really good. And that’s the test, right? When your kids want to watch something with you, because my kids would love to go watch all these other things because they’re good, they’re really good, and we want to make content like that. And I think Dallas has really done that. I’m a huge fan of a guy named John Erwin who’s done that with Jesus Revolution and American Underdog. And I think there are an emerging set of opportunities to invest in that type of culture that are really taking off. One of the ones that we did, and I’m not trying to promote us recently, alongside a number of others, was Help John and Dallas launch a new movie studio called The Wonder Project, which is intended to do exactly that. They’ve recently announced a partnership with Amazon. They’re producing a TV show now called House of David that will hopefully do for the story of David. What the chosen has done for the Gospels is the aspiration. It’s also kind of a cool story. It’s going to be like Lord of the Rings or Game of Thrones for the story of David, which I think is really neat. And we think that just like The Chosen that can reach hundreds, millions of people, the chosen is such a hundred million people. But in order to do that, you need capital because this stuff is expensive. Go look at what Netflix or HBO or Amazon or any of the studios Lionsgate are putting into movies. You know, they don’t cost $1 million. An independent film will cost 15 to $30 million. Some of these giant studio productions are $200 million or more. So they take serious capital. And that’s why I think Christian’s opening that up as an asset class to invest in beginning to Marshall Capital, conscientious, as long as the creators can match that with great creation is an exciting opportunity. The scary thing about the space is a lot of folks have gotten burned there historically because it is a different type of investing, like venture capital. There are winners and losers. You really have to understand the industry in order to do it well. And that’s why I think professional investors who are faith aligned, getting into the space is essential right now, because it is easy to get the economics wrong. If you’re not familiar with the studio system, Dallas and John are obviously quite familiar with that. So they’ve been able to craft something that I think can be positive for investors. Other creators can too, but I think professional investors leaning into the space, starting to raise funds, really learning the system and helping individual investors and institutions get in the game is important. And as I think about the impact investing side, you know, somewhere in between kind of high return and philanthropy, there are very few things I think we could be doing that would touch more people and help to make their lives a little bit better every day.

Richard Cunningham: Man, that’s fun to hear you talk about. And, you know, you mentioned John Erwin’s name, and this is someone we’ve had on multiple faith driven investor events. Speaking of conferences, just so much of what they do is of such excellence. So I’m going to go on a little bit of just a kind of rampage here to close us as I look at the remainder of the conference and just say we went to emerging markets, something near and dear to one of the feature investor founders, Hearts and Henry Kaestner. And we showcase the story of Christeen Rico and how she left an executive level role at Apple and moved to her birthplace of the Philippines to start an accelerator and joined up with the venture capital fund. And then Tim Macready kind of reigned us back in and said, hey, it’s not just about the alternatives market. There is an opportunity, as we’ve kind of hit on here, to think about the mainstream implications and opportunities of faith driven investing in your traditional asset allocation and your stocks and bonds portfolio. As you look to Stewart ETFs and mutual funds as you need liquidity. And Tim did a great job. And we’re going to have him on the podcast here in the weeks ahead. Talking more about his research around growth of the movement, the products available, some of the spiritual integration metrics he’s looking at in his team at Brightlight are looking at. And that was great. We showcased a wonderful story of green hope out of Indonesia with Tommy Tjiptadjaja and Sugianto Tandio, which was just super powerful talking about investing and partnership. And I want to tease this one out a little bit as our final story was a practical hey, what next for faith driven investors? And it was the story of Potomac Angel capital. And we’re going to have Patrick Farrell on our very next faith Driven investor podcast talking about Potomac, the application of investing in community, not going at this alone, and the opportunities at play for spiritual integration as you think of really early stage investing and partnering with entrepreneurs and incubation in the formation of their companies. So with all that in mind, John, before we sign off here, as we think about this next season, season’s FDI podcasts, any closing remarks or thoughts from you?

John Coleman: Yeah, I would just say to this community, first of all, be really encouraged by what’s happening in the marketplace. There is a lot of innovation happening. We talked about some of it today. You’re seeing it at the FDI. I mean, the FDI fund manager gathering, Richard, which we didn’t talk about too much. We had investors from some of the biggest venture capital and private equity firms in the world, CEOs of some of the biggest asset managers in the world who are Christians, who are trying to think about redemptive uses of their capital that may look a little bit different than Sovereign’s. It may not be able to go quite as far in some of those institutions as we would go on the spiritual integration. Inside, but we also have to let a thousand flowers bloom. And it’s important that people get engaged where they are. I think secondly, I would encourage people to not let the perfect be the enemy of good. I think it’s easy to throw up your hands if you can’t do your entire portfolio is faith driven, or if you don’t know how to do that and say, well, I’m just going to stick with what I got, not do anything. And my point of view is like, just dip a toe in the water, get started with one thing, move cautiously and deliberately. Do a second thing once you get comfortable with that. Just get in the game. Start trying to do it thoughtfully. Get an advisor who can help you do that in a way that doesn’t sacrifice returns. It keeps you safe, and then spread the word. We talked about spreading the word to gatekeepers, trying to get them more amenable. We want to get the word out about FDI and FDE, certainly just so more people are engaged in the movement so that more folks are considering doing this with their capital. But spread the word. And certainly as we launch into the next phase of this podcast, we would love your feedback on how to make this as engaging as possible. You know, we want to make sure we’re telling stories that are impactful, that we’re giving people educational materials that make a difference, that we’re making the faith driven investing ecosystem practical for people that they can actually get in the game, Richard. And it’s not just a hypothetical. It’s not just theory. And we want you to push us on who you want to see on this podcast, what topics you want to see, what things are confusing, what we can help clarify, and how we can make this as engaging as possible so that we can be a part of that movement that you all really you all are leading.

Richard Cunningham: Yeah, absolutely. Really well said. John. This is a movement that is led by those of you actually out in the field. And John, you said a key phrase that I’m so pumped that you said because it was the theme of the overall 2024 FDI conference, and that was get in the game. Take that opportunity to go from spectator, go from passively kind of digesting this, like you said in theory and moving it into practical application. And it’s just one fateful step at a time. This is not prescriptive or presumptuous. This is in faithful obedience. And Joey Honescko, our producer behind the scenes, reminded me that, hey, if you ever to John’s point, you have that suggestion, you have that guest we need to talk to podcast at FaithDrivenEntrepreneur.org . So John Coleman, thank you so much for your time today. We will see you folks next time with our good buddy Patrick Farrell on to talk about Potomac Angel capital.

Henry Kaestner: We are grateful for the opportunity to serve this community and see listeners come in from more than 100 countries. Faith driven investing can be a lonely journey, but it doesn’t have to be. The best way to stay connected is to join a group study with other investors looking to get the same answers to questions you have, and find great community as they do so. There’s no cost, no catch in person or online. You can meet an hour a week with other peers from your backyard or the other side of the world. You can also stay connected by signing up for our monthly newsletter at faithdriveninvestor.org . This podcast wouldn’t be possible without the help of many of our friends. Executive Producer Justin Foreman intro mixed in, arranged by Summer drags. Audio and editing by Richard Barley. Our theme song is Sweet Ever After by Ellie Holcomb.