Henry: [00:03:01] Welcome back to the Faith Driven Entrepreneur podcast. We have yet another special edition this week as we interview a really key pastor in the life of Faith Driven Entrepreneur. When we think about a short list of folks that have really spoken into the strategy and just the mission in the coin and the vision of Faith Driven Entrepreneur. Todd Wagner is right up there. Right with the folks we’ve had on before. When I think about Chip Ingram and Tim Keller and JD Greer and as many of you know, he is the senior pastor, Watermark Community Church in Dallas, Texas. He’s a great man of God. Very thoughtful about what it looks like to be a Faith Driven Entrepreneur and Investor. So much so that he and his elder board have graciously offered to host the first ever Faith Driven Entrepreneur in faith to an investor conference that’s happening a watermark this September. So we’re so glad you get a chance to partner with you, Todd, and the team there in advancing the conversation further. And we’re grateful to have your voice of encouragement in these crazy times. So welcome to the program. [00:03:59][58.4]

Todd: [00:04:00] It is a pleasure to be with you. Thank you, Henry, so much. And it’s it’s exciting that we’re gonna get to be together like a bunch of the guys that usually on this podcast. And we are grateful for the opportunity host. We’re glad that we can. And let’s get this corona virus outta here so we can make sure. Get done. [00:04:13][13.7]

Henry: [00:04:14] Amen. I want to start this podcast, though, before we talk about what’s going on this particular season. If you haven’t figured out by now, we’re recording these special editions in the Faith Driven Entrepreneur podcast at a time when Corona virus is really hitting the country hard. In March of 2020. And yeah, I think you to find that the context of this podcast is timeless. Right. Talking about how do we rely on God and how do we make most of the opportunities of Faith Driven Entrepreneur to know and serve him? One of things we always do on a podcast, of course, is to understand a little bit more about our guest. And so I want to start this podcast, Todd, by talking a little bit about your life pre watermark. And if I’m correct, you’ve not always been a pastor. You started your life as a lawyer. Is that true? [00:04:57][43.2]

Todd: [00:04:59] Well, not exactly, but I never thought I’d be a pastor. In fact, I used to tell folks that if you told me I was going to be one, I’d be taking a swing at you just because I had no idea really honestly what it meant to know Christ and the churches that I was around. Even from a distance as a nonbeliever, there were not churches that I saw doing anything really relevant. I saw men running a lot of very average weekly meetings with a bunch of bored adults. And I certainly whatever I would do with my life was not to lead average weekly meetings with a bunch of bored adults. So it was not too late by the kindness of God came to see the goodness of who he was. And then I got around his word. And then, by God’s grace, a few places where I saw men leading well, that he really captured my heart. Prior to that, I was headed to law school. And so that’s what I really thought I was gonna do. So, you know, just all the things to get my ducks in a row for that to happen. And then when God captured my heart, you know, really late in my teen years, the college years before, I was going to actually step into law school environment. I just found myself actively doing ministry. God just continued to grow my heart’s passions for some other thing. So I don’t think my passion ever decreased for what I would say is the faithful work of the Christian in the workspace, the largest made it clear to me that probably the best use of his life for me was going to be to convene, to equip and encourage the saints in the role that I’m in now. [00:06:27][88.1]

Henry: [00:06:28] But it would be possible for an attorney to be redeemed and become a pastor. [00:06:31][3.2]

Todd: [00:06:32] Well, let me just say this. My friend Kelly Shackelford, which if you are around that church and law space, Kelly argued cases before Supreme Court has a lot to defend religious freedom. Kelly wanted to be a pastor. I was gonna be a lawyer. He end up graduating number one from his class in law schools. And he was actually working as a volunteer at a ministry I was leading at the time. He said to me, I really think I want to be a pastor, so. Kelly, let me just tell you something, buddy. If God’s calling you to be in vocational ministry, I mean, I even don’t even like that term because all of us on this podcast are in vocational ministry. I might be only one that the world calls a pastor. We know, but we’re part of the kingdom of priests. And I have to tell you, Kelly, Kelly, we need godly law clerks. We need godly, you know, he clerked for federal judges. We need godly lawyers. And I had no idea when Kelly was 20 that he was gonna go on to be one of the leading advocates for religious freedom that was out there. [00:07:27][55.4]

[00:07:28] He probably had no idea that I was going to one day have the privilege of starting a church that would turn into what watermark is by God’s kindness has turned into. So, yes, God can redeem lawyers and God can redeem guys who think that life is going to be richer if they go into places where they can get earthly riches. And so my story is definitely a little bit of that. [00:07:46][18.0]

Henry: [00:07:46] The high end. And to be clear, as much as I love a good lawyer joke, it is amazing what folks have gone through three years of law school and see that as a vocation to be alone make really an incredible impact on policy and helping redeem all sorts of different aspects of society. Think about immigration law. I think about justice and some right with you on that. OK, so back to the things that I know a little bit more about. Let’s go into this. What’s going on right now, which is this COVID 19 coronavirus epidemic has continue to spread and it seems like the end of pandemic may even be in sight right now. You’ve written a few articles about it, one for the Gospel Coalition titled Should Christians Be Anxious About Coronavirus? And I’d love to hear about why you decided to write it. [00:08:28][41.7]

Todd: [00:08:28] Well, you know, it’s so funny. I wrote it right there at really the beginning of March. And as we can all look back now, just three weeks ago, it wasn’t that big a deal that very few people were that worked up about it. But I’d begun to hear some whispers. And so, you know, as a pastor. Folks usually let you know what they’re thinking about. And I had heard enough of this that I just decided to sit down and begin to shepherd myself and shepherd others by how we’re to think biblically about that. And so that’s really what the article was about to sit down to just find out a few thoughts that I’ve been a little surprised how much traction this court and how long it’s been a trending article in the Gospel Coalition. But when we look out there in the world today, well, it’s the Coronavirus, just a general sense of economic instability or just the fear of what might tomorrow’s going to look like. We all know that anxiety is well on the rise. In fact, what’s really interesting is I think two thousand eighteen, it was the first time. That for three consecutive years, the death rate or should be the life expectancy in America had gone down. And the reason it went down were all because of issues that are around this topic of worry that we’re going to talk about me because of suicide. Certainly that that was at an all time high and so it reduced the life expectancy. What’s interesting, too, before I finished the other two is the last time that America had a dip in life expectancy was in 1919 during the Spanish flu. Mm hmm. And so we went almost 100 years ago with life expectancy accelerating until the 2015 to 2018 timeframe. And it is because of suicide. It was because of cirrhosis, which we know is due to alcohol consumption and because of a spike in opioid deaths, which people looking to numb their pain and escape from their reality. So this issue is not related to the Corona virus. It’s been around for the last three years in a way that, you know, anybody who cares about people just needs to learn to talk about it now. [00:10:30][121.6]

Rusty: [00:10:31] Hey, Todd, you know, entrepreneurs just by our nature probably live with a certain case of paranoia. Right. I mean, we’re just like paranoid just to start with. Are they really going to turn out the way we thought? Are we going to hit the plan that we have in front of us? Will we get that next round of funding? And will we be able to hang on to that team member or get that team member or land that next deal? And there’s a sense of paranoia that comes with all of that that can turn into worry. And you mentioned worry there a moment ago. Can you dig into that for us and give us from a theological perspective, how should entrepreneurs think about worry? [00:11:11][39.1]

Todd: [00:11:12] All right. A couple of things. You know, it’s so funny when you said that Rusty and you just talk about how entrepreneurs are prone to that sense of paranoia. You know, I’m a bit of an entrepreneur myself, and I’m prone towards real optimism. You know, a general like with a can do spirit. That’s kind of what I think is innate in a lot of us that are creators and designers and developers. But part of being a responsible designer and developer is you’ve got to think through how am I going to finish this and take into account the cost. And so certainly there’s a sense of burden. So here’s a couple of things that I should say that we should think about, whether we consider ourselves an entrepreneur or not. If we consider ourself a person of faith, we just want to be individuals that are marked more by strength than we are fear. Proverbs, 24 10 says he was slack in the day of distress. His strength is limited and may never be said that God’s people don’t have what it takes at any given moment, because we know that our God is never shaken. And the scriptures would encourage us to once we experienced peace with God. Right. Therefore, having been justified by faith, we have peace with God. The scripture then says, if we will continue to keep our mind steadfast on him, will keep us in perfect peace. Or to use Paul’s words in Philippians, we are to be anxious for nothing because in prayer supplication with Thanksgiving, we let a request be made known to him. We keep our eyes focused where they should be, and it says they will not have just peace with God, with the peace of God. [00:12:37][85.8]

[00:12:38] And so let me encourage you with one little story that I actually heard. I’ve got a friend that last night was listening to our Dallas County judge who issued a shelter in place, command that goes into effect today. And he was just sitting there and he was watching this graph that this guy was showing that literally to make his case, said that there was gonna be half a million deaths, half a million deaths in our area if we didn’t do what he was suggesting we do. And he felt the blood pressure inside of him began to rise a little bit. And then he looked out his window and took out his iPhone. And he began to just film the birds that were out there. And the reason he did that is because you’re in that very moment, you know, his eyes and mine is the eyes of his mind. Went back to that little text of scripture in Matthew chapter six, where Jesus is just encouraging folks to not worry. He even talked about the birds of the air and how God takes care of them. And so don’t you know that you’re more valuable than the birds that are out there? He said the birds were not concerned about what the county commissioner was talking about. Right. You know, they were out there singing and they were flying about. [00:13:47][69.1]

[00:13:49] Somebody might say that’s all fine and well and good, but they don’t have 500 employees. They don’t have a bunch of investors that they use all their personal relational capital to get them to invest with them. And so this is my moment. So I’m not a bird. I’m a man and I’m an entrepreneur. So what should I do? Well, if you’re a man of faith. All right. What you should do is exactly what God tells you to do. Right. First, I want to say this to you. No temptation is coming to you as a man who started a business you start to fund. Was employees looking to them. No temptation is coming to you. But such as is common to man. That guy that works for you is wondering if the business is going to work. So you’re not to carry that guy’s burdens. And I’m supposed to carry you’re only supposed to let the Lord carry your burdens. And I just wanna remind you and one of things I said in that article was worry doesn’t really accomplish anything except creating weakness of heart and head. I love the story of Corrie Ten Boom, who, as we know, was one of the righteous among the nations, which is what the Jews called gentiles that did what God wanted them to do in a time of great persecution of the Jews. When you were a gentile and cared for the Jews, you got treated like a Jew, which is exactly what happened to Kaori and her sister. They ended up being locked up. And, you know, she just talks about how she realized and learned right then that worry didn’t empty tomorrow of its sorrow. It just emptied today of its strength. And so as a leader, one of the things I would just tell you is you lead your company is it’s going to hurt your ability to do what you have to do with your employees and your investors are expecting you to do if you use your energy to worry about tomorrow’s troubles. That’s why the scripture says, you know, don’t be anxious for tomorrow. OK, folks. And today he says enough trouble of its own. So your job is to do what you should do today and not to worry about what might happen tomorrow. It takes the same amount of energy to praise. It does the worry. So it would be a man of prayer and prayers. And just like God, please show up and do this for me. Prayer is meditating on what God’s word has said and then to be attentive to that word so that you might do it. And so rather than fret, what you want to do is just say, Lord, you tell me if in trials and we’re certainly in trials and as a leader, you’re going to be in trials, a what it says, if any man lacks wisdom, he should ask of God who gives to all men, and he does it under grudgingly OK, and so God is ready and willing to help you. But she can’t help you when you’re spending your time worrying about what might happen as opposed to seeking what you should do. And so, you know, if God tells us to do anything you said once you worry about how you need to love people. Well, because that’s your job. As my ambassador, as my appointed servant leader that you have as a member of that company. So what I would say is your prayers should be Lord. Scripture tells me to trust in the Lord and do good to dwell in the land and cultivate faithfulness. So what this faithfulness look like for me today. And that’s where you want invest your time, not with worry. [00:16:51][183.0]

Rusty: [00:16:53] That’s good. That’s such a good word, Todd. And something that I think that’s not only relevant today, but for Faith driven entrepreneurs. Right. Is everywhere and should be at all times. And, you know, I think in moments like this, a lot of us try to look back at history and try to learn and bring forward. And there’s been such great words. And I know my e-mail box has been filled with C.S. Lewis and the atomic age. And his you know, his statements about that. And more recently, you know, I’m starting to see things and I know you’ve written about this and talked about it. You know what Martin Luther actually went through during the plague. And it’d be awesome to hear you talk a little bit about that, because that seems really relevant even today from a long, long time ago. So, yeah. Talk to us a little bit about, you know, what Martin Luther was going through and what we can learn from that. [00:17:40][47.7]

Todd: [00:17:41] All right. Well, this is great because you know Martin Luther lives in the 16th century, so the fifteen hundreds. And we know that the bubonic plague was something that was wreaking havoc in Europe for centuries, in fact, in the 14th century. So it’s been 13 hundreds. I think they estimate 60 percent of the population of Europe died. OK, that’s not 25 percent unemployment that we’re talking about right now on our economic forecasts. That’s 60 percent of the population of Europe died. The bubonic plague is a whole lot worse than the Corona virus. The plague would create not just high fevers, but large what they called weeping boils that would be on you. And even worse, because of some of the lack of medical development, the time there were doctors that would be propagating information that would say that you’re going to instantly die if the spirit of sickness that’s in somebody who has the bubonic plague even looks at a healthy person standing there. And so the conventional wisdom was, stay clear to sick, get out. Right. In other words, care for yourself and do what you can to survive in that particular moment. And so in the midst of that environment, we got him. John Huss wrote to Luther. He was another reformer in Germany. And in the 16th century, Luther actually had been commanded, if you will, by his government leaders to get out because he was a bit of a price leader. And they said, we want you to get out. His wife was pregnant at the time. So I want you to imagine this. And this is where Luther responded with this amazing little statement about what we should do. And I think there’s relevance for here for guys that are leading businesses, because when you are a leader of an organization. All right. You are responsible not just for the well-being of your family, but you are responsible for the well-being of others. And so when you think about what God wants you to do in that moment, you can’t just think of yourself. You can’t think about your reputation. Only you can’t think about your financial security. Only you can think about how you’re going to come out of this and maybe get people to invest in your next deal, because believers. And again, this is a faith driven investor podcast. Right. We’re believers. So we do nothing. We do nothing from selfishness or empty conceit. But with humility of mind, we consider others as more important than herself. We don’t really look out for our own personal interests. We also look out for the interests of others. I read a Harvard Business Review article that we might even get to hear a little bit later in our conversation. That was just helping business owners rethink how they might act in this. But let me just finish what Luther said. He just said this. This is an answer to the question that just asked him. And the answer the question is whether one might flee from a deadly plague. This really great application, not just for pastors, for what believers do in troublesome economic times or in a time of turmoil. He said this. He said, very well, then, by God’s decree. The enemy is sent a pestilence. So let me tell my faith driven investors this sometimes that pestilence is a contract that didn’t actualize. [00:20:44][183.4]

[00:20:45] Sometimes it’s an employee that was unfaithful. Sometimes it was a guy that led you on that he was going to execute on our business plan that you had that he’s not. That can be a pestilence. All right. And so what Luther said is, I shall ask first of all, then God for mercifully to protect us. Right. So if it’s a situation where you caused the plague or the pestilence, then the first thing you need to do is own it. But a situation where you feel like you’re a victim of it, like let’s say we all are with the Corona virus or in this case, Luther was with the plague. You should just say, God be merciful to me. This is not a surprise to you. Right. And so my job is to be faithful in it. You would not have brought this to me if you did not want me to faithfully represent you in it. That doesn’t mean I’m going to get to always have it spin around and turn around. Just be this great Silicon Valley success story or this great Wall Street success story. It means I’m going to be faithful and faithfulness is success. So Luther says I shall administer medicine and take it. In other words, do the things you need to do to care for yourself. Make sure you’re practicing sound fiscal policies. Make sure you’re walking with integrity. The medicine of a businessman doesn’t change in times of crisis. And if you’re going to be in a world filled with some pestilence, the first thing to make sure you’re doing is locking down your own actions and being excellent in them. He said I still avoid places and persons where my presence is not needed in order to not become contaminated and thus perchance infect and pollute others. If people in a city were to show themselves bolded faith, he says, when a neighbor’s needs so demands and cautious when no emergency exists, and if everyone would help ward off contagion as best he can, then he says in this instance the death toll would indeed be moderate. But and this is the key. If we are too panicky and desert our neighbors in their plight, then the devil will have a heyday and many will die. And so what Luther was saying is we have a responsibility not just to care for ourselves, but to not deserve our neighbors and their plight. And when I would just tell you, as a business leader, we do have a responsibility to our investors and to our employees and to those that place their trust in us. But your responsibility is not to be the messiah. You’re not God. You need to go to bed when it’s time to go to bed. And then you need to wake up and be diligent and have the mindset of Psalm 127. Unless the Lord builds the house, they labor in vain to build it. OK, so that means that we have to build a house. Doesn’t say pray God to build a house. All right. It says, unless the Lord is involved in this, it’s not going to work out anyway. OK. And so my job is to do what I’m supposed to do to frame this thing that was solid foundation to follow the blueprint. And then every good thing in my life is because of the grace of God and all that. Anybody who invests in me or who looks to me for leadership should want to see is that I’m doing everything that a man entrusted with the privilege of my position should do. And that’s your job is not to be a savior and not to save anything, but to work humbly, to work diligently, to work well in teams and to work in a way that isn’t just to further your best interests, but to honor God in all things. [00:23:53][188.0]

William: [00:23:54] Amen. William here. Thank you so much for walking through that. And as we think about this, I’m captivated by this specific virus where so far the number one thing they’re telling people is to stay home. Right. And to stay away from people. And so I think you did a great job walking us through the idea of listen and take care of yourself and do what people are saying. [00:24:14][20.6]

[00:24:15] But as churches are being canceled, as in-person gatherings are being taken away, and as that is the best way that we’re kind of hearing that we can love people, it seems like an odd dynamic where typically you would run and run to people you would want to be there, especially in the hospitals. I think about I’ve heard some terrible podcasts, right. I mean, a lot of these people are passing away with their loved ones, not their right, because they can’t be there. It’s just a very tough situation. And my wife and I were struggling with, you know, what does loving people well, look like right now. And as you have all have looked at that from watermarks perspective and your congregation’s perspective, what is the loving others look like while avoiding contact with them in this season? [00:24:57][42.6]

Todd: [00:24:59] So, yeah, we’re having to innovate, right? We all know that necessity is the mother of invention. And so we are having to innovate right now because listen, part of being a good citizen is asking how my actions are going to potentially affect others. We’re seeing a lot of the blogs that are out there right now. Is that the younger generation who is always fearless in the face of any kind of warning from any kind of authority they like is not that big a deal. A big I guess it’s just kind of a bad flu in my age group. Is that particularly at risk? Well, that might be well and good, but your age group interacts with other age groups and other age groups are a little bit more susceptible to probably some of the more adverse effects of the flu or specifically of the Corona virus. And so you have to be wise. And so again, Luther said this I would avoid places and persons where my presence is not needed or to keep myself being contaminated. Because I don’t want you to take a chance and in fact, and pollute others. I don’t know. Like Henry talked about how much we want to make this really about the Corona virus. But you know, the issue with this, the big flattening the curve ideology that’s out there is because of the fact that our nation is better supplied with hospital beds and ventilators than any nation on earth in terms of number. But we also have 300 roughly million people and we got a million hospital beds. So the entire at risk population is exposed to this virus, which they’re more likely to be exposed to it the more that they interact with carriers. And we don’t know who the carriers are. That’s what’s so sinister about this thing that our cavalier ness could put others at risk. So we don’t believe that we’re being good neighbors. If we just act like it doesn’t matter if I get it and it doesn’t matter if I give it to somebody else because I might give it to somebody else who puts people at risk, it won’t really get the care that they need at a particular time. [00:26:49][110.6]

[00:26:50] So I think we have to be wise. We have to again do nothing from selfishness or conceit. But at the same time, we don’t want to live in fear. I mean, a frightened world needs a fearless church. But let’s not use our fearlessness as an excuse to be reckless. OK. And so the Bible rewards obedience and faithfulness, not risk taking. And as a businessman, sometimes you take calculated risks. You step out what you would say in business faith. Would you look at the analytics and you look at the opportunities before you and you do your cost basis analysis as best you can and then you go? I think it’s worth I think I see a market opportunity is not guaranteed, but part of you using your intellect and your skills, you take some steps that are a bit of a risk, OK, and always have different risk profiles. Let me just say this to you. My point here is that in the midst of this, we don’t want to do anything just so that God has to show up. We want to walk with a God who’s already present in a way that other people look us to go. That was wise. That was insightful. That was selfless and not motivated by greed. [00:27:56][66.6]

Henry: [00:27:57] That’s a fascinating topic about the juxtaposition of obedience next to risk. And what I’m hearing and picking up from you is that there’s a lot of nuance around rescue, not saying don’t look at opportunities and seize them and don’t knock off into battle when there’s clearly a battle that to be fought. But wanton risk is not something that the Bible talks a lot about. And I think that’s interesting for our audience to hear because so oftentimes we think that entrepreneur equals risk. If you stay in your salaried position, that’s not risky. But if I’m an entrepreneur, I’m stepping out and I’m going to go ahead. I’m a lean forward into risk. And I think that’s really interesting. And I think that it’s a great opportunity for entrepreneurs that are listening this to pray through. [00:28:39][42.0]

[00:28:39] What does that mean? Am I ever taking risk at the expense of being obedient on this podcast? I think we’ve talked in past about the good kings of Judah who went off and then took some risks and didn’t seek God and things went poorly for them and they were the good kings of Judah. Bad trade deal went off in a war when they weren’t supposed to. So what does it look like for us as entrepreneurs to be obedient during this time but all times? And are we ever erring on the side of taking risk? Because that’s what we think we supposed to do and entrepreneurs and leaving obedience by the wayside. I’d love that. [00:29:13][33.3]

Todd: [00:29:13] And one of the things I’ll just add, especially as Christians, words really, really matter. The Bible tells us all that God’s opposed to the property gives grace to the humble. It says, Your younger members submit to your elders and all of you clothe yourself in humility with one another. [00:29:27][14.3]

[00:29:28] And so as a leader, I would really encourage you to be very careful when you say things like, well, I really believe God wants me to do this. Sometimes I hear guys say this and I’m like, well, look, if you believe that God wants you to do this, then it’s not risky to do it. It’s risky to not do it. OK, because again, I want to just oppose, as you just said, risk from obedience and faithfulness is obedience. And so we have to ask ourself this. Did God tell me to do it? If God asked me to do it? And I’m his, then. I should even ask people to pray about it with me. But I think most of the time when we mean when we say that, you know, is a habit to kind of throw this out there, and maybe if it doesn’t work, then, you know, it’s not my fault because I was just trying to be faithful with God called me to do well. God is not a man. He’s a liar, son of man. He should repent, the scripture says. And so God’s not going to make mistakes. And so if God tells you to build a boat in the middle of a desert where there’s never been a rain inside the earth’s environment, that’s not risky. But you better know that God’s called you to do something. It’s also OK, though, to say, hey, guys, I as best I can as a man who’s studied and worked and gotten more proficient in analysis and leadership assessment, I believe there’s an opportunity here. And I really this is what businessmen do. They ask others. To have faith in them that they assess the situation correctly. And look, we’re not always gonna get it right. And the one thing that we can’t say to people when we’re talking in the business environment here. If you obey God’s word, you’re always going to get it right. But as it pertains to a business decision, one of the things that people will do is they want to follow individuals that will invite them into the process and not act like they’ve got all the answers they can share, why they believe this is the right thing to do, the analysis and the work. OK. They’re not just some slick salesmen. There’s not just a deck out there that tobi’s gonna be impressed with, but that you can come and lay before them your thoughtful work and then not intimidate them or even feel rejected if their risk assessment is different than yours, and that environments would love them by bringing them an opportunity. And if that thing is supposed to work out, it will. And if not, you did your best to try and create the opportunity and the pitch. Investors, I think and you were telling me that you get solicited a lot. Right. You say no to 9 out of 100 folks. And that’s not because those ninety nine did know God’s will. It’s because for that thing to happen this particular moment, you’re not gonna be a part of God’s provision. And men should walk away from you, not with bitterness or with a sense of disgust or some sense that you don’t trust me, but a sense of a Henry. Thank you that you gave me thoughtful consideration and loved me enough to believe I was even worthy of the conversation. And would you just pray that I see if this is not something I should do, or that God would give me the strength and perseverance to continue and then Godspeed. On we go. And we’re brothers. So I really mean, this is an interesting and fascinating conversation because God doesn’t guarantee us anything but that he’ll be with us and that each and every day we should consume ourselves with a desire to be faithful. And faithfulness is not to make success for ourselves. Success and prosperity scripturally is that this book of the law would not depart from my mouth. So I’d be careful to do according to all that is written in it. So faith based investor, invest deeply in your faith and just don’t slap it or God that the outcome has to be what you thought the outcome would be. Go to bed knowing that you were faithful and that you weren’t pursuing idols or trying to force God into your wonderful plan for your life. Follow him. [00:33:16][227.8]

Henry: [00:33:17] Yeah. That’s a theme we talk about a lot and it’s great to hear you look at it from a different angle here in terms of obedience. And we talk a lot about the difference between being willful or faithful or as kipping. I’m talking about whether we’re striving or contending, striving, being on your own power by contending, being with God’s power and in God’s power. I think there’s a lot about obedience in here as well. [00:33:39][22.0]

Rusty: [00:33:40] Todd, I love that whole idea. And what Henry was saying, too, about risk and obedience. Can you just dive in further on obedience for us? Because it’s such a hard thing so many times for us to figure out, are we really being obedient? And I think it’d be really helpful for all of us and me personally during this time. [00:33:58][18.3]

Todd: [00:34:00] Well, one of the things that we, you know, want to be as just individuals that are aligned with our sovereign king and you know, we are I tell you guys all the time to BYO that I want to go down for me as a servant of Christ and a steward of the mysteries of God. And that would be true if I continue to my legal career or if I go into business one day. I just want to say to my friends that are listening right here and just reminds you, we are a part of the royal priesthood together. We are a holy nation together. We are people of God’s own possession together. This clergy laity distinction is as unfounded biblically as the secular spiritual divide that some people have with the way they act on a Sunday or what they think about on a Sunday. And then Monday through Friday. You know, when they deal with Wall Street and investors, they go away. This is business. OK. Well, our business is always to be servants of Christ and to be steward of the mysteries of God. And so you want to just make sure that you’re not walking in the way the way you’re standing in the path, the center sitting with the scoffers. But your delight is in the law of the Lord. And on that law, you’re meditating day and night. So all of your principles need to be governed by who you say you are. Not on Sunday. But when you made a decision that Jesus was your king. All right. This should affect you in every aspect of your life. So worship. We don’t call our large gathering at watermarked the worship center. All right. If this was a video podcast, I would be pointing to my chest right now and say, this is the worship center. Right. My life is to use the words of Paul and Corinthians is the temple of God. All of us are worshipers. Jesus and John Ford just said, hey, there’s going to be a day when you can worship me on this hill or that hill, but you going to worship me in spirit and truth. You don’t need to have a central temple idea of worship or the sacrifices made because your life now I’m quoting Romans Twelve. Your life is a living and holy sacrifice which is responding to the sacrifice of Christ. That was once and for all made. So the temple sacrifices are necessary. And so that is our charge and our call. And so I and every large corporate gathered at watermarked with this little phrase that now it’s become hagwon. I saw a bunch of high school kids wear t shirts and then text messages with hashtag hagwow. And I go, what is hagwow? They laugh and go Todd, it’s what you say every single week when we get ready to leave. It stands for have a great week of worship, right? HAGWOW. And you know, that idea is when we leave our corporate time of remembering the goodness of God and reminding each other to respond to him. That’s when worship really starts. Well, we just got through was corporate celebration, corporate encouragement and equipping. But now we’re going to goby worshipers. And so what we’re going to do at work is worship. Work is worship. We say it all the time, right. In these environments that the work of the church is the church at work. So my job is to, if anything, as a pastor to encourage you and reminds you that God made you a businessman for a reason and be the best kind of businessman that is consumed with honoring Christ and everything. You know, I don’t wanna quote more Luther, but he’s got an amazing quote about a cobbler and the way the kind of shoes that he makes. I heard. I think there’s bread and manning. That said, you can be sure that there were no cricket chairs coming out of the carpenter shop in Nazareth. Right. And so there should be nothing crooked about the way you are leading your company or the way you’re making decisions. [00:37:41][221.0]

Rusty: [00:37:42] That’s really great. So we can now say it again. HAGWOW. Have a great week of worship. Great. So we used to have BHAG’s and now we’ve got HAGWOW I love it every day. [00:37:53][10.8]

Todd: [00:37:53] Hey, I like you better make sure you BHAG’s run through the HAGWOW grid. Right. Go ahead. I think it’s goal to honor Christ in all things as a worshiper. [00:38:03][9.3]

William: [00:38:04] Hey, before we get on, you were mentioning an article that you read in the Harvard Business Review recently that had some great truth in it about our current time and also about how we can do business as well. [00:38:15][11.2]

Todd: [00:38:15] Yeah, I’ll tell you why this is worth maybe pointing to. And so, you know, I’ll just share this with you. I don’t get to spend a lot of time with the hard news review, but I do have a friend that said, Hey, Todd, you would like this article. So, you know, I source articles lots of different ways. Sometimes I’m reading on my own time times a guy pay me. This is one that my buddy Jeff Ward, who is such a faithful friend here, who was a lawyer and is now on our staff team, he’s the one that turned me on to this. But the title of it, it was just written, gosh, three days ago. It’s called the Corona Virus. Christus doesn’t have to lead to layoffs. Now, here’s why I’m pointing you guys to this. [00:38:45][29.5]

[00:38:45] Whenever you read an article in the Harvard Business Review or any book by anybody, you want to read it in the same way that Paul and Luke said that the Bryans listen to him preach. Right, because you are being influenced by what you meditate on. And we should bet, Ted on the word of God. But we should absolutely be unafraid to be in conversation with people who bring across different ideas. I just wanna always test those ideas up against the word of God. So the Breen’s and Act 1711 says they were more noble minded than those who were deslonde icons because they listened to what Paul was saying and they tested it or they took it to the scriptures to see if those things were so. So when you read a Harvard Business Review article, what you want to do is just go, huh? Some of these suggestions that are in here, not only do they seem to maybe make sense, they’re also aligned with what we just got through, talking about what it means for me to be a servant of Christ, what it means for me to be a worshiper in the way that I lead in this particular moment. And so these guys did a decent job of just saying a couple of headlines in this thing. We’re like, hey, communicate openly. In other words, too many leaders assume that if we show any weakness and we tell our employees or our investors that we’re not really sure which is going to turn out, they’ll see us as a weak leader and they’re gonna want to abandon us or look for a different company when in fact, the very opposite is true. They love the openness. I mean, the scriptures say that. So here’s where I would say that idea is biblical, where it says that the goal of our instruction is love. A pure heart and a good conscience and a sincere faith. I’m not managing information. To you, I’m going to be open about what I’m wrestling with and what I see potentially coming and what I’m doing to mitigate against a myriad of circumstances. The job of a leader is to anticipate what is coming right and is to define reality. And so one of the ways that you can help your employees is to just say, hey, listen, I’ve seen four or five potential tomorrows, not worried about them, but faithfulness in my role would be to consider how each of these could impact us. And certainly we all see certain things. Here’s some of my thinking about it. Here’s some of my concern and some vulnerabilities that I think we have in light of these things. And then the article goes on to say, one of the things that you might want to do is in the midst of being open and sharing, the plan is considering to crowdsource different ideas, which biblically is exactly what God’s word will tell us to do. I mean, he who isolates himself, the Bible says, seeks his own desire. He calls against all sound wisdom. And so there are ways to just ask others. Right. You want to wage war with wise consultation. The scripture says that the fool is more wise in his own eyes and seven men who give a discreet answer. So listen to other people and just say, hey, help me think through this. Here’s my plan. I’m not just numbed in activity, but I’m also not going to confuse motion with progress. So what do you think of these plans and what are some ideas that you have? So anyway, there’s just a number of different things that I saw these guys in this article talk about that I go, that is good advice because it lines up with what I see in the good book. So you should read every Harvard Business Review article, every Jim Collins book, and you should listen every Todd Wagner message at Watermarked Dawg the same way and just say, is it true? Is it founded in scripture? I love the way the article ends because it mentions and I can’t speak Swedish, but it ends with just that a leader should have ice in his belly and they use a phrase from a proverb in the Nordic countries that just talked about how a leader doesn’t get upset because his stomach is in effect strengthened and cooled by ice in his belly. [00:42:30][224.6]

[00:42:31] I would tell you that the scripture says the same thing, right? But that he was slack in the day of distress. The strength is limited. And as I said a while ago on the podcast. Far be it from us as God’s people that we should read more marked by fear, insecurity, anxiety and despair than by faithfulness and hope in our tomorrow. Even if that doesn’t turn out the way that we wanted to. From an investment standpoint or a future wildly successful career for me, if I’ve done what I should do with integrity, it’s successful. [00:43:07][35.9]

William: [00:43:09] Amen. Well, unfortunately, we have to bring the podcast to a close here. I would love to spend more time going through some of these topics and hopefully move some time on another podcast. But as we do come to a close, we always like to bring our Faith Driven Entrepreneur and our faith driven investor audiences into what God is doing right now in your life and in the life of our guests. It’s amazing how God’s word shapes itself through our listeners and through our guest. And so if you wouldn’t mind telling us maybe where God has you in his word. It could be in the season leading up to it. It could be this morning, something he may have placed in your heart and what he’s teaching you through the good book. [00:43:45][35.3]

Todd: [00:43:45] Well, my mind competed right then for five different places in the scripture. I was hanging out a little bit earlier today, but I think I want to go to this one. It’s at the very end of Deuteronomy right now. Kind of by reading through the Bible. I’ve been in Deuteronomy much. And so at the very end of Chapter 4, this is what it says. And I use this one because I think it’s just a good reminder for us all to have in season and out of season. That’s what the scripture means in Timothy when Paul says it. Timothy. We’re not just Christians when it’s convenient and we don’t just give God glory and honor when everything is up and to the right. Right in season and out of season. I want to be a man of the book. All right. So, by the way, in Deuteronomy Chapter 8, God says, hey, listen, I’m the one who gives you the power to make well. He’s also the one that gives you the ability. Now, I’m quoting from Philippians for. To do well in seasons where it’s not turning out the way that you had planned or had hoped. What I want you to know in the midst of every season and whether you’re in the midst of plenty or want, whether you are well-fed or hungry. Paul has learned the secret of contentment. And that secret was learned by Moses and Moses, who trying to remind the people of Israel to it. So this is what Moses says in Deuteronomy Chapter 4, and I’ll paraphrase the first part of this section of the end. And then our region specific parts. But basically in verse 32, he starts by just saying, just go back and remember who I am. So for the Christian, go back and remember what Christ has done for you in Romans 8 says you did not spare his own son, but deliver him up for sale, will you? Not also with him freely. Give us all things. So man was wonderful that he split the sea for the Israelites as they came out of Egypt. It’s wonderful that, you know, he covered the mountain fire. But what he’s done for you is even more wonderful. So remember the things that God has done for you. He says in verse 33, has anyone ever heard the voice of God speaking in the midst of the fire, as you have heard, and survived? Guys, we have the Bible in our hands and we can open it up to read every single day. And then a verse 34. He goes on just the list and the different things that he has done. But this is what I want you to hear. OK. He says, listen. Verse 40. So you shall keep the statutes and his commandments, which I’m giving you today, so that it may go well with you and with your children after you and that you may live long the land which the Lord your God is giving you for all time. This is what I would love our business leaders in this day and age to know there is something called gospel blessing. It’s what Paul is talking about in Philippians 4. And it’s very different than the perverted prosperity gospel. The Prosperity Gospel says that going well with you means you’re never going to get sick, which is crazy that your business deals always going to work out. You’re gonna be healthier, wealthier, wiser than you’ve ever been. Well, the wiser part will be true, but the wealthier part, I don’t know. Some faithful men. The Bible says we’re sworn in, too, and we’re fed to the lions. And sometimes God shut them out of lions. And sometimes you delivered people from certain death. I don’t know what your tomorrow is going to be. I just know that God is going to let you have his peace and whatever tomorrow brings. If you walk with him. And so that phrase in Deuteronomy, chapter four, verse 40 that it may go well with you is not to be distorted, to mean that your business is going to work. It means that the way you work in your business is going to end with you hearing the words. Well done, good and faithful servant. Sometimes God might love you just enough to let you be tested with a trial. He did that with Joe. And if anything, there’s not a health, wealth and prosperity trajectory for godly men. There is. I’m going to put you in situations that no men can continue to sink raises for me. Just to show that you love me and not things. That was certainly what he did with Job. [00:47:39][234.0]

William: [00:47:44] Amen, thank you so much for the good work. Todd, thank you for sharing your time with us. I know it’s a crazy time and I know you have a congregation that you’re chaperoning and for you to pay off in time to shepherd our congregation as well as just a true blessing. [00:47:58][13.5]

Todd: [00:47:58] Well, hey, guys, it’s a privilege. I really am grateful for you men as business leaders, the way that you are putting your faith to work. And through this podcast, through your ministry, through your gathering of guys and the fact that we’re doing to do it in person, September is going to be really, really exciting. So I’m humbled that you thought this was a good use of your time. And let’s just pray the Lord uses it to encourage people. [00:47:58][0.0]

Henry Kaestner: [00:01:47] Welcome back to the Faith Driven Investor podcast. It’s really good to be with you all. This is a special edition recording that we’re doing with a good friend of all of ours. James Cham. It’s infrequent that we have a guest on the program that Rusty knows well. William knows well, I know well. And so it’s a great joy to have James Cham of Bloomberg beta with us on the Faith Driven Investor podcast during a crazy time and what’s going on in finance and investing in the economy. James, thank you very much for making time to be with us this morning. [00:02:15][28.3]

James Cham: [00:02:15] Of course. Of course. I’m glad to be with you guys. I always look for excuses to hang out with all three of you. [00:02:20][5.0]

Henry Kaestner: [00:02:21] You know so many people that there’s a good chance that every listener in his podcast knows you, but on the off chance that somebody doesn’t tell us. Who are you? Where do you come from, what you do? [00:02:32][10.4]

James Cham: [00:02:33] Yeah, I’m a seed-stage investor with a v.c firm called Bloomberg Beta, where we invest in the future of work. [00:02:39][6.0]

[00:02:39] But more importantly, I’m a person who started as a software developer and then became a v.c a few years ago and struggled a lot about what that actually meant and why it might be important. And as a Christian, I think I’ve spent a bunch of time trying to figure out what is the actual role of an investor in God’s kingdom. [00:03:00][21.2]

Henry Kaestner: [00:03:01] Mm hmm. So that notes to some extent, of course, that that faith is a part of your life. Have you always been a believer? [00:03:07][6.3]

James Cham: [00:03:09] You know, I grew up in a Chinese church in the San Gabriel Valley of California. [00:03:13][4.8]

[00:03:15] And it was a vital part of both how I thought about myself and how I thought about the world. And, you know, I was lucky enough to get involved with Intervarsity in college. And it’s meant a lot to me. And so it’s been a vital part of my life for a long time. [00:03:29][14.6]

Henry Kaestner: [00:03:30] As you were a software engineer and then now as an investor, how do you see this faith that you’ve had? There’s been a big part of your life. How do you see that come to bear? Is it something that Sunday’s you go to church and it’s been a part of your intervarsity background and all that, and then Monday you’re just kind of coming in and just bringing home the bacon? How have you seen faith work into your life vocationally? [00:03:50][20.2]

James Cham: [00:03:53] You know, it’s interesting because when I got right out of college, I worked as a software developer. But more critically, I ended up living in a house with a bunch of other Christians, many of whom were involved in our local college fellowship. [00:04:06][13.3]

[00:04:07] And that meant for me the way that I thought about my work. [00:04:10][3.1]

[00:04:10] Getting my life wasn’t quite as sort of clearly separated that those things all melded together. [00:04:16][5.6]

[00:04:17] And I think that’s been quite helpful for me, even though I worked in sort of totally secular workplaces. That’s meant that that’s always been part of the discussion and part of the way that I thought about things. [00:04:27][10.4]

Rusty Rueff: [00:04:28] Hey, James, it’s awesome to have you here. You know, we probably should mark this moment in time because our listeners of the Faith Driven Investor podcast could be listening to this years from now and not know why the audio quality is a little off and what’s going on. Well, this is a moment. [00:04:44][15.6]

[00:04:44] It is March the twenty sixth of twenty twenty. And most of us on the line here are in shelter in place as we go through the COVID-19 pandemic. And you know, we wanted to have you on James, not only because of your background and what you do as an investor and a faith driven investor and how your faith informs that, but also to give your insight about what you see going on around us, particularly in the investing world. And like, how should an investor be thinking in this time both strategically and actually tactically, right. Because we’re struggling a little bit here and we want to get your words of wisdom. [00:05:24][39.7]

James Cham: [00:05:25] Yeah. You know, sort of these are the times. So I’m glad I’m not a public market investor. Like I have no idea. [00:05:29][4.3]

[00:05:30] So they’re how they should be thinking about the market or how they think about the world. But I think for an early stage investor and critically for early stage founders, this is such an important and unique moment. There are ways in which for many people they have felt like they’ve been made for moments like this. I think for normal people like me, you know, there were kind of freaking out and we’re trying to figure out what to do day to day. But I think that there are sets of people right now for whom their entire life has been made for a moment like this, when the rules have been broken and thrown up and suddenly they get to try to create something different or redefine things. And I think there’s an openness right now that’s just going to be unique. And the people who are able to understand that and, you know, not to be too theological about it, but the people who’ve been created by God for this moment of whom. It’s not everyone, but they’re just a few. They will be able to do things they would have never been able to do before. It is now the time for like this 17 year old who’s has no right to command the stage or the 60 year old who’s been sort of thinking deeply for a long time. [00:06:39][69.0]

[00:06:39] It’s like their chance now to really sort of take advantage of this moment. And I think it is so hard to sort of imagine that and think about it, but it’s just right there. And I think that’s really exciting, even amidst the terror and all the ways that this is going to be really bad and really hard to give us some more specifics on that. [00:06:58][18.7]

Henry Kaestner: [00:06:59] As you look at your portfolio as a private investor and you’d look at different sectors and you think about what the economy might look like and whether it’ll be the same or different coming out of this, where are some of your observations? [00:07:10][11.6]

James Cham: [00:07:11] So I think that it is easy depending on how you feel to go swing wildly between “We’re going to be in a sort of depression for 10 years or we’re to have a time of unprecedented growth.” [00:07:22][11.1]

[00:07:23] And I think it’s just very hard to know. But what that really means is that the cone of possibility, you know, sort of the range of what’s possible right now is so wide. And so that is both terrifying and exciting. And I think that that means that for the portfolio companies I talked to, they’ve got a plan in both places. Right. There’s a way in which even as companies are going through and figuring out what lay offs are going to look like or how they’re going to extend a runway at the same time that that’s happening. There’s also this chance where they have to dream and say to themselves, you know what, actually my relationship with my customer or my relationship, my partner, could be fundamentally different because I might be in a position to serve them differently or better. My partners might be open to new opportunities. And I think that way of thinking is so hard to do. But for the best entrepreneurs that I’ve dealt with or I talked to, they aren’t thinking that way right now, that they are living in all three places at once. They are thinking right now about, you know, gosh, I’m going to have to renegotiate the lease and I’m going to have to lay off these 10 people. At the same time, they’re saying, you know what, actually, this means that I could actually sort of offer this service to a customer who in the past would never been open to it. And at the same time, they’re saying, you know what, I should now be reaching out to, you know, those 10 people who I’ve talked to three years ago who made some difference in my life and just sent them to quit Texas quick. No. And I think that, Mark, it’s so rare and it’s so hard. But when you see that, it’s an incredible blessing. And it’s incredibly encouraging to me. [00:08:57][94.3]

Henry Kaestner: [00:08:58] As some of your portfolio companies are coming back to you and talking to you about liquidity and obviously some of the reactions you’ll have to that are that in some cases they need to lay some people off. How are you thinking about capital structures right now? How are you thinking about companies and their ability to access debt or more equity? Are you finding that this is a time to think creatively about shoring up the balance sheet where some options? What are some of the discussions you’re having right now with some of your portfolio CEOs? [00:09:26][27.8]

James Cham: [00:09:28] What’s fascinating is that the answer yesterday is gonna be totally different. The answer tomorrow that the capital markets are so fluid. Right. And, you know, we’re at a point right now where there is a massive stimulus that I think may have just been passed and the implications of that. We’ve got a number of folks who are trying to figure that out. I mean, remember companies and what that looks like could fundamentally make a company. Right. And I think that’s what’s weird about this moment, is that there are so many things that are possible. We were joking earlier about the fact that we were having trouble with our videoconferencing system and it exposed the fact that although we call it a cloud, it really is a bunch of servers, right? It’s a bunch of. People servers are going to be overloaded right now because everyone’s using it and it sort of exposes sort of the actual underpinning of what actually works and doesn’t work in the. [00:10:17][48.9]

[00:10:17] It’s almost as if, you know, when you watch The Matrix is a point in the movie where you realize everything’s a simulation and you realize all the pieces are working and grinding together to make the system work. And we’re seeing the same thing across the board in lots of different ways. Right. We’re seeing that also for the financial markets where there are a number of people who thought they had a lot of money to invest and suddenly don’t. [00:10:38][20.6]

[00:10:39] But at the same time, we’ve got a bunch of people sort of who sort of are sitting on piles of cash or eager to play. [00:10:44][5.6]

[00:10:44] Right. And I think that that ability to sort of adjust quickly to the shifting reality and to see the world as it actually is, that’s hard. And so I’m reluctant to make sort of grand pronouncements, but it is definitely one of those cases where I feel like as an entrepreneur and investor, so much of your time now has to be just keeping your eyes open and sort of not using the old rules of thumb that you had. Right. That I have a whole set of like pat answers to things that may no longer apply. And that’s both the fun and the terror of the job. [00:11:13][29.0]

William Norvell: [00:11:14] Hey, James. William, here I want to shift gears to a little bit as your job as an investor in sort of finding new companies to come along, and you mentioned earlier you glad you’re not a market investor, but as you look at what your day to day looks like, are you open for business, looking for new businesses to invest in or are you a pause as well and kind of taking some time to see everything shakes out? Help us kind of get into the world of a venture capitalist or you specifically during the season. [00:11:42][27.4]

James Cham: [00:11:43] Yeah, I think that, you know, I was a software developer in 2000 and then I was a new investor in 2008. And of course, now so I’ve seen a couple of versions of this. And of course, this is totally different from anything that we’ve seen before. [00:11:58][14.9]

[00:11:59] So that’s the first part. And I think that as far as like the generic answer is that seed stage guys are always later to react to macro events that as a seed stage investor, I’m running such small checks, you know, sort of in the grand scheme of things. And also, I’m looking so far ahead. Right. So I’m not expecting to sell a company or sell my position in a company in six months. I’m thinking about it in terms of six to 16 years. [00:12:24][25.5]

[00:12:25] And so as a result of that, you know, the timing is totally different. So that’s the happy talk version of it, which is, yes, we are indeed open for business. [00:12:31][6.1]

[00:12:32] We’ve made a couple investments just even this week. The other part of it, though, is that the world is so uncertain now that now more than ever, like my hypotheses or ideas of how the world will turn out. They’re all up in the air and my ideas about how to think about valuations and what’s valuable. That’s all up in the air. And so that does mean that in some ways my normal theses are changing right now. And I think we’re all trying to adjust. [00:12:56][24.6]

William Norvell: [00:12:57] Well, that’s good. That’s good. Could you go one layer deeper. And you’ve been looking at the world in a certain way, predicting that is sort of your job, trying to predict what will happen and invest in, you know, the world changers. Could you talk about how you got to thinking about that? And this is a point in time. We’re not going to hold you to what could be changing, what should be shifting, what is in question for you right now. And I know you don’t have all the answers, but maybe just minor investors in there right where you are right now. [00:13:24][27.3]

James Cham: [00:13:25] Yeah. You know, sort of I invest a lot in enterprise software and I love enterprise software. I believe it transforms the world. But also, there’s a way in which it is also fundamentally corrupt. It is corrupt in the sense that the people who buy enterprise software oftentimes really are buying it so that they can keep their job or so that they could get promoted rather than they could actually improve the life of a company. And I think that there are a whole bunch of products that were hard to sell in the past because they would require too much wrenching change inside an organization. And if we are indeed looking sort of at a prolonged downturn, then I think there’s a perverse way in which willingness to change is totally different. And so the willingness to adopt new technologies can be different than it has been for the last 10 years. You know, the stereotype of the cool innovation team with the guys, with the purple glasses, you know, sort of that’s how people used to think about new technology. And now the way to think about new technology is something that might actually make a huge difference. And then the implication there is then the buyers are different. The way they buy is different. The way that we think about selling is entirely different. [00:14:33][67.2]

[00:14:33] And I think all those sorts of things we’re trying to figure out right now and it is partly about predicting the future, but it is mostly really about finding the most interesting entrepreneurs in the world who are living the future right now. [00:14:46][13.2]

[00:14:47] Right. And so that’s the way that I actually think about it. [00:14:50][3.2]

Rusty Rueff: [00:14:51] And James, what do you tell the entrepreneur who right now is like at that precarious moment, like about to go raise, but was a couple of months away? But, you know, as the time goes by, they’re burning. And so their burn is up. How did they approach you at this point? Very tactically, and then is there something that you can provide as advice about how they go back to their current investors? Because in normal times, you’re running out of cash and you’re going to hit a wall. You know, you might be able to raise. You just need a little more time and you might go back for that bridge loan that can sometimes feel predatory. In some ways, just give them a little bit of advice on what to do if they’re in that precarious moment. [00:15:35][43.9]

James Cham: [00:15:36] So this is the time for over-communication. I think that if I were just to look at the best founders in my portfolio, they’re just spending a lot of time with what you could generically call investor relations. Right. That they are trying to figure out what’s the position of their various investors. Where are they? How are they doing psychologically? What’s the position of the firm? And I think that involves just lots of conversation, whether that’s over text or email or Skype or phone calls. And I think there’s a way in which the only way that can work well is if you’re connecting with other people. And in part because of the pandemic, it is both easier and harder. It’s obviously harder because just like right now, we can’t see each other face to face. You know, the zoom meeting skips and you can’t tell whether someone’s frowning or whether they just got frozen. Right. So that whole piece becomes harder, but it’s easier because there are so many different ways to connect. Now that there’s so many different ways you can connect with people. [00:16:29][53.8]

[00:16:30] And also in part because this pandemic is so universal, you could connect with people in authentic, deeper ways than you’ve ever been before because everyone’s like worried about their grandmother or they’re sort of stuck at home by themselves. And that chance to connect just gives you visibility. And, you know, sort of from a pragmatic point, it gives you visibility into what’s going on. But also from an eternal point of view, it lets you create relationships that are just going to be important forever. [00:16:57][27.7]

Rusty Rueff: [00:16:59] Yeah. And I got to think that on the flip side of that, as an investor, you know, you probably also got this sort of nervous moment, too, where you don’t want to over ask, but the same time you want to be communicated to. So that over communication piece is a great piece of advice because as an investor, I mean, I’d like to hear before I have to ask. That’s right. And again, that creates confidence. [00:17:22][22.5]

James Cham: [00:17:23] That’s right. And, you know, sort of the essence of that is over communication. But also, it is genuine conversation and it is hard to get genuine conversation just in general in life in the sense that I actually talk to someone. I get a different reaction. I hear something back from them. I react to that and that sort of interplay. I think the best entrepreneurs are able to get there right now very, very quickly. But it’s just hard to do because it’s hard to get people off of their generic positions or to actually think about the situation they’re in the middle of right now. Because I don’t know, as of v.c, I might be on sort of today 15 different 30 minute zoom calls. Right. Plus a couple of blogger meetings and just that ability to transition and think and be present. That’s a huge opportunity. And it’s so, so hard right now. [00:18:11][48.2]

Rusty Rueff: [00:18:12] Yesterday, I was on a call with one of the companies that’s in my little portfolio of investments. Day before yesterday, actually in one of the co-founders wasn’t there. And I said, you know, hey, what’s going on? He goes, Well, I got bad news. He’s very sick, is covered 19. He tested positive. He’s 40 years old. Right. 40 years old. And the other co-founder. You can tell he’s scared. Like he goes, we’re leaving him alone. Fortunately, his wife is a physician’s assistant, but she’s sick, too. And they’re trying to kind of work through this. And you know what it does? It also gives us an opportunity to say, hey, you know, I’m a person of faith. Would you please pass to him that I am sincerely not just making it up. I am praying for him. He goes on my prayer list. So there there is that moment for authentic that we can actually go even a little further in the authenticity of how our faith plays out. [00:19:05][52.6]

James Cham: [00:19:06] Yeah. And I think this is also you know, it’s interesting. This is the moment for Jesus. Right. That this is the moment where it’s only going to be by paying attention to the Holy Spirit and being finely tuned and not getting distracted on Twitter. Right. For you’re going to be able to think that instead of be prompted. And I feel like it’s amazing to me because, you know, the best entrepreneurs have so many distractions and so many like the places where they get information and that ability to step back and actually hear right here what’s important. [00:19:41][35.2]

[00:19:42] That’s beautiful to see when that actually happens. [00:19:44][1.6]

Henry Kaestner: [00:19:45] Indeed. And, you know, I think James, you pointing us to Jesus is super important. [00:19:49][4.3]

[00:19:49] I know I’ve had some actually some very rich conversations with people that share faith over the course last couple of days. Many of them are in the health care space and they are very, very concerned about the impact that this has on the general health population. And of course, it makes sense as their perspective. It’s their flock. It’s for guys uniquely equip them to do with their their talents and their experience. On the other hand, my background is more of being an entrepreneur or even more so than being an investor. And so I feel a particular sensitivity for my flock, if you will. And those are small to medium sized business owners who are going through some real challenges and questioning whether the treatment is going to be worse than the actual disease. And yet again, on the flip side, the health care, people are looking at health care systems being overwhelmed. And I think that the answer for all of us is that we need to look to guide and understand the guy to sovereign and guy cares about the health care and cares about health care professionals. And he cares about the economy and jobless claims and small to medium sized business owners. And the thing that unites us is something that’s we really need to rely on. We need to rely on our shared faith and understand that God is sovereign and that we if we lean on our faith first, it will then give us the grace to be able to engage with other people who might have views that are different than ours will be able to rejoice in what we share in common more than the differences that we have. And it will allow us to then be able to be a more effective witness and testimony to others that are trying to figure out what they think and why they think. This just really strikes me as just an incredible time for us all as believers to be able to speak into the different sectors in which we have been given the special privilege of being able to speak into. And I think as investors, that’s super important. My sense as an investor right now, the conversations I have or the next two months about why I have the hope that I have, the perspective I have will clips that that I had in all of 2019 and probably will have an of Lord wine on all of 2021. And it’s a conversation, hopefully of encouragement to the entrepreneurs that are in our portfolio that are laying people off. It’s an encouragement to our is to be able to help them and understand that with their money that they’ve entrusted us with, that we’re looking to be faithful stores of that and that we’re playing the long game that we’re looking to love on great enterprises and great leaders who we have chosen invest in not so much because of their idea or because of what they’re can hit next quarter or the following quarter, but because of our assessment in their talent to be able to see what the market is giving them and to be able respond by adding value to the overall economy. And I just I hope that we all lean into that. And it’s daunting. It’s not easy, but it does, I think, make us rely more on God. And so this has been a very spiritually rich time for me. [00:22:35][165.9]

James Cham: [00:22:36] Yeah. You know, it’s so interesting because, of course, it’s not going to be all good news. Like, I feel like I’ve maybe I’ve sounded too optimistic in this conversation. There’s going to be a lot of pain and a lot of people’s lives are going to feel like they’re gonna be destroyed. And it’s really, really hard. There’s a way in which, you know, sort of for the younger entrepreneurs, they’ve never seen a downturn. Reagan sort of they’ve got in the job market in 2008, and they’ve only seen it go up since then. [00:22:58][22.3]

[00:22:59] And I think this idea that bad things could happen to people who are capable or people who are good will have a difficult time getting a job. [00:23:07][8.1]

[00:23:08] That idea is actually going to be really hard for a bunch of people to understand and to process, especially for those who’ve been incredibly blessed and incredibly successful. And I think that that that humbling process, you know, that’s going to require deep character, but it’s also going to require like deep theology. I think there’s a way in which all the theoretical things that you’ve learned in Sunday school, all the ideas you’ve got around the Trinity, all the ideas you’ve got around redemption. Sort of God’s role in this world, they’re going to be tested now, and I think and I hope that the church is ready for this moment. [00:23:42][34.5]

[00:23:43] And that’s, you know, to us I am partly praying about now, but I’m also partly praying that we as a set of institutions and a tribe of people that will be resilient for the long term and not sort of fall apart because of, you know, various disagreements or discussions over the next couple days, because we were still thinking in terms of days. I feel like we should be thinking in terms of months and quarters and years. And so that’s the thing that I pray about. [00:24:11][27.7]

William Norvell: [00:24:12] Amen. James, I’m interested in how when you talk about people that are not in a downturn, I just think that’s such a pressure conversation, especially in Silicon Valley or in the broader, you know, early stage technology world where I think it’s been especially good. Right. I mean, if you’re a good engineer, there’s ten job offers. People are e-mailing you on LinkedIn everywhere. There are no layoffs. It’s just even further out to the right. As you see, your company potentially have to deal with layoffs. I’m wondering a couple of things. One, are companies in the early stage tech space, do you see some layoffs coming, too? Do you see in 2020 budgets being readjusted? I think there’s also a mindset out there that are you know, once they open the doors, all are going to go back to normal. Mehta How are you counseling your company there in 3D? Do you see a fundamental shift maybe out in the early stage tech sector where people are going to slow the pace a little bit, maybe go more towards optimal growth instead of crazy venture capital feel growth that has been sort of happening over the last decade. Like and I know Megan needs a couple of different predictions and I wondered how you see it this time, you know, potentially changing those things. [00:25:21][69.2]

James Cham: [00:25:22] You know, it ranges. So why the…I will admit that I’ve tried very hard to bite my tongue and to let the entrepreneur tell me what’s going on first before I come over because it really depends on the sector right now. And I think the only thing we know right now is that that, yes, there are going to be lots of layoffs in certain sectors and it’s going to be really, really painful. And lots of very good people are going to be in a position where they’re going to face financial insecurity for the first time in their life and sort of being able to process that and being there for them, it can be hard. I think the other things is gonna be true, that layoffs are going to happen online. And, you know, layoffs are already inhumane. It’s so difficult for both parties but to have to lay off 100 people or 150 people over video conference like that’s crazy. And that’s never been done before. I think that for certain types of companies, they’re going to do very, very well in this market. There’s certain ones where companies are you know, investors are banging on their walls because they’re especially suited for remote work or for automation. There are other companies that sort of, let’s say, companies in the travel industry. Right. Or companies that are reliant on sort of Face-To-Face interaction as part of their value, where they’re going to have to like shut down basically for months and months as everyone figures out this pandemic. And I think the reality of that is just it’s just so hard to look face on and understand. So that’s part of it. And then I think the broader question of will things be different? Yes, things will be different. But it’s not like gods told us how things will be different three months from now. The way that things are we different. We are highly dependent on sort of the decisions that individual entrepreneurs and leaders and pastors. The pattern is that they set right now could sort of set the pattern for the next couple of decades. And I think that’s both encouraging and terrifying, right. That right now, when we’re already distracted and worried about our kids or our grandparents at this moment, when we are hampered, the decisions we make are going to set down for a long time. And it’s only by the grace of God. Right, that we’ll make the decisions. And I think spending time sort of just holding your breath a little bit, stepping back and praying and sort of in a world where there’s infinite amounts of information. Right. Sort of being able to focus on the things that are really important and that sort of actually should influence your decision. That’s the challenge, I think, for investors and entrepreneurs and everyone right now. [00:27:42][139.9]

Henry Kaestner: [00:27:43] James, anything else that may have not come up in conversation or anything else? And there is a need to be we cover a lot of ground, but is there anything else that you think that our audience needs to know about? [00:27:52][9.2]

James Cham: [00:27:53] So, you know, I come from a strain of Christianity that’s mildly charismatic. Like we’re not, like, super charismatic, really mildly charismatic. [00:27:59][6.3]

[00:28:00] And I’ve been convinced for the last couple of quarters that revivals around the corner. [00:28:07][6.6]

[00:28:08] You know, there’s a secular historian named Jill Lipoor, who writes about American history, who the other day said, you know, America’s overdue for a revival, like a religious revival. [00:28:16][8.5]

[00:28:17] And I thought, oh, my goodness, here we have a secular historian and she has more faith in me. What’s wrong with me? Right. And I think that there’s a way in which, you know, there’s going to be revival and it’s going to come out as like something out of jail. But it’s going to be the dreams of old men. And it’s can be the prophecy and work of young people. And I think there’s a way in which, like as a 46 year old, you know, sort of my dreams are different than the actual work that’s gonna be required. And so I’m very hopeful about this entire generation of like teenagers and 20 somethings who are gonna talk about God differently and they’re gonna be raised in a totally different environment and their ability to communicate. And our ability is like sort of investors or older people to recognize the value that they create and encourage that. I feel like that’s the challenge for me. [00:29:04][47.3]

Henry Kaestner: [00:29:05] That’s a great encouragement. That’s a great word. [00:29:07][1.4]

William Norvell: [00:29:07] Amen, such a great word. Thank you for coming on sharing your wisdom. I love how you framed the last couple of moments of just that. This is a big time for people to lean into the Holy Spirit, to lean into Jesus, to try to understand what he’s calling us to in situation, and that those could have big impacts moving forward. And so in the midst of that, I’d love to ask you, you know, whereas God have you right now, potentially this morning or over the last few weeks during this crisis, where did he have you and his word? What name is coming alive in a new way? You just mentioned a great pass from Joel. So maybe a little bit more on that, but it’s something else. Where did he had you maybe walk us listeners through where you are experienced? [00:29:47][39.2]

James Cham: [00:29:48] Here’s where I really am. You know, I have a little bit of a cold I’m sort of a little paranoid. I’m sitting in my grise. I’m worried about like my family and my friends in my portfolio, you know, sort of I’m trying to not look at Twitter, you know. [00:30:00][11.7]

[00:30:00] So that’s where I really am. And at the same time, I’m also sitting here at a time when it feels like I don’t know the institutions that proved to be effective and good now are gonna earn credibility for decades and decades. [00:30:14][13.1]

[00:30:14] And I just so pray that those institutions will be Christian ones like, you know, sort of led by people who are going to follow Jesus and Senate example for people for a long, long time. And so it doesn’t have to be me. It doesn’t have to be someone listening on this podcast. But it’s got to be someone and I pray so hard that sort of God will raise those men and women up and that they’ll help them create these institutions that really could last for a long, long time. And so, you know, that’s my hope. That’s my prayer. And sort of like that’s my blessing to you guys. [00:30:47][33.0]

William Norvell: [00:30:48] Amen! Thank you so much for spending some time with us during the season. [00:30:52][3.8]

James Cham: [00:30:52] Indeed. Yeah. Hey, feel for your brother. Yeah. No, my pleasure, guys. You know, God bless you for your work and hope to see you guys physically soon. [00:30:52][0.0]

[1692.0]

Henry: [00:01:55] Welcome back to the Faith Driven Investor podcast. It is awesome, as always, to have you with us. I’m joined by my co-host, William. And we have a really special guest here that’s made a big impact in the way that both William and I have thought about this larger faith driven investing lens and ecosystem. Jerry Boyer here. And we’re going to get right into this. Jerry is very thoughtful about many different aspects of faith driven investing. He’s thought about it, about what God says. I listened to a talk that he gave several years ago about how he looks at some Old Testament stories like the sons of Issacar and what they meant for this age. [00:02:32][37.3]

[00:02:33] And so, Jerry, I want you to take this conversation the way you want to. We were talking before the program started today, and you were like, you know, ’cause there’s so many different podcasts that talk about God owns it all. And we’re going to get right in this and just validate all that. We understand that there’s an increasing awareness of Christ followers, that there’s an opportunity to worship God with the money entrusted us to, and that we need to be vigilant for greed. That is a very important part of this overall piece. And yet it’s just a little bit of a piece. You’ve done some really interesting work in going back into scripture to endeavor to understand what did Jesus say about invested in? What did Genesis say about investing in Genesis is an easy place to start. Is it the beginning of the Bible? What is your reading of Genesis tell you about how we might think about investing in a way that honors God? [00:03:21][47.5]

Jerry: [00:03:22] Well, I think if you look at the Book of Genesis carefully, and the easiest thing for us to do is to take our best thinking and hang it on a biblical text or to take our arguments or our debates or even our questions and bring them to the Bible and tell the Bible, “answer my question, Bible.” And I happened, actually, my wife and I together decided to look more closely at the Book of Genesis several years ago. It was actually after a health crisis. I know you had a health crisis. You ended up in the hospital unexpectedly. So did I. And I was laying in that hospital bed and I thought, OK, God, I think this is a good chance to get closer to you. And I was already a Christian, and I think I would have considered myself a serious Christian, and most people would have said the same thing. But maybe I need to get more serious. [00:04:10][48.5]

[00:04:11] And I thought, well, what’s God’s love language? Well, God’s love language is scripture, mostly Hebrew. So I said, okay, God, I think what you’re calling us to do is to get deeply into the scriptures. Let’s start from the beginning. So what my wife and I did is every night, my wife and I would read the creation account in the book of Genesis in Hebrew together, and we would do Genesis 1. And then, you know, that would take a couple of weeks. And then we go back to the beginning of 1:1 again. And then we’d go and when we that Chapter 2 the next time through and we just kept going until it was like Genesis 1 through 9. [00:04:49][38.3]

[00:04:51] And after about five years of that, an archbishop who had ordained me, who was also the chancellor of a university, asked me about my personal study. Jerry, what are you studying in your personal Bible study? And I told him about the Genesis work and he said, well, I think that’s a master’s degree or we call an STL. And if you enrolled and wrote an 80 page thesis on that, we think that could be a degree. Me being a deacon, him being an archbishop, I thought, I guess I better do this. So I did it. And it was 240 pages, not 80, spent about a year and a half on it. And so there’s a lot there. So I don’t really think we can cover the 240 pages, which are basically a commentary on Genesis 1 through 3 Hebrew text. But a lot of stuff jumps out in the Hebrew text and it’s really not about what we bring to it. And what most Christians bring to the text of Genesis is our fight with Darwinism. And we have a fight with Darwinism and it’s understandable why. So we want to know what can Genesis fit with an old earth or a young earth? [00:06:04][73.0]

[00:06:04] We’re bringing our questions to it. But God didn’t write Genesis 1 through 3 to refute Darwin. He wrote Genesis 1 through 3 to tell us something. So throughout we said, What are you telling us? In other words, we ask the Bible to tell us what questions it wants us to ask it rather than bringing our best questions. Two thousand years ago, the church fathers brought philosophical questions. Now evangelicals bring scientific questions. And we concluded that even though it has scientific or philosophical implications, it’s not mainly about that. And we said, OK, God, why did you write this to us? [00:06:43][39.1]

[00:06:44] What are the questions we’re supposed to be asking? And that’s the work on Genesis. So we stop there and see kind of where you want to go from there. Because it’s such a broad topic, it’s really kind of hard to know what part we should focus on. Yeah, we could go a thousand different ways there. [00:06:57][13.2]

Henry: [00:06:57] I’d love to talk about the difference between reading the Bible in Hebrew versus English and I would like to go in all that, but we probably can’t with this. What I’d like to go to specifically is as an investor and you speak a lot about investing, what does your reading of Genesis tell you about the way that you were to Steward Capital and to invest? How are you a better investor because you read through Genesis 1 through 3 exhaustively? [00:07:21][23.4]

[00:07:23] I wish exhaustively. I exhausted myself. But, you know, just as of yesterday, there’s something else that popped out at us. It’s really amazing. It’s probably the densest piece of writing in human history, except maybe some of the gospel accounts. All right. So what do I take away from that? I take away from that that this is a book about apprenticeship. God is the Emperor and Adam is the prince in waiting. And Adam was put in a garden to learn how God did things. And then at some point, when he was sufficiently apprenticed, he and his wife were to be given a ceremony, were to be given authority, and then sent out into the world to make the wilderness, the land like the garden. [00:08:05][41.6]

[00:08:06] So that this is basically the story of a dynasty. What’s called a co regency, where you have a senior king and a junior king or king in waiting who is watching and studying the ways of the palace so that someday he can rule together with his father, not replace like we have with human kingship ships, because the senior king, the emperor is eternal. But there was an under-agedness to Adam, which was not supposed to be permanent, and he was supposed to learn the ways of Elohim, learn the ways of God, and then go out and make the world that way. And the world was made to be remade, but the world wasn’t finished. The garden was finished. But the wilderness was not finished. The garden was the model. The world was the clay that Adam was supposed to shape to make it more like the garden. And he was supposed to learn wisdom through an apprentice model. [00:09:00][54.2]

[00:09:01] So the world was made to be changed. And it yields over and over again what has created created as Baraa and made as Osei. So you have Osei God made, and that’s similar to the word yield. Yield as an investment word. Well, the reason that we can have yield in investments is because yield is built into the creation. The creation is made to grow. When we interact with it and that growth or growth potential in the creation is the reason that yield is legitimate. Aristotle didn’t think interest rate or yield was legitimate because he thought it was sterile. Marx thought it wasn’t. A lot of medieval theologians didn’t because they saw a static universe. Pagan economics just basically saw the universe as static and whatever god there was as either stingy or uninvolved. [00:09:46][45.4]

[00:09:47] But we have a God who’s generous, and if God’s generous, then I can lend you money and you can make money and you can still pay me interest because it grew faster than the interest. A generous God is a God where investment is possible, where me getting a dividend or an interest payment or a capital gain is not at your expense. Cause there’s enough growth for the investi and the invest store to be partners with one another and grow together. Because the Hebrew universe is a seed in itself. Things multiplying universe, whereas the pagan universe is essentially a dead no growth universe. [00:10:23][35.8]

Henry: [00:10:25] So the first lesson from Genesis is that investments, looking to get a return on investments, is something that was part of the initial design. [00:10:32][7.2]

Jerry: [00:10:33] Yes, you can argue that God’s making of the garden is an investment. He expends labor to create a physical plant environment. In this case, the garden is basically a school. It’s job training for Adam and his wife to become, you know, the earthly king and queen of the universe. God spends of himself first to get a return later. So he himself is an investor. [00:11:01][27.9]

Henry: [00:11:03] OK, so things didn’t go where it was just this beautiful investment with just yield year in, year out the way that it might have been their fall happened. Presumably that impacted not only the Garden and Adam, of course, irreparably, forever, but it also included the type of investments that man then made from that point going forward. Talk about that. [00:11:25][22.4]

Jerry: [00:11:26] Yeah, well, God made an investment. And Adam and his wife were essentially the stewards, kind of the managers of that investment. And they ripped him off. And, you know, that’s a problem that comes down to us today. Economist call it agency risk. If I’m the owner and I put assets under your care. Are you gonna follow my interests? Or are you going to follow your own interests at my expense? Are you gonna give yourself an expensive corporate jet or engage in political virtue signaling or just mismanage or grow out of a psychological need rather than, you know what’s really wise or fail to grow, you know, whatever your thing is. Are you gonna be a self dealer or are you gonna be a faithful steward? [00:12:06][39.7]

[00:12:07] See, this idea of stewardship goes right back to Genesis. It’s not something introduced in Jesus’s parables. Jesus as parables are genesis based parables in many cases. It’s why there’s so agricultural. So God made an investment and the stewards of his investment essentially ripped him off. Now God came back in and rescued it, but he had to rescue it. And one of the ways he rescues it is in some sense by making it tougher on the stewards. The curses in Genesis after the fall tend to be weakening and confusion, curses, not just like punishment curses. So Adam’s strength was his work, but now he sweats, right? Adam’s strength again was his labor. He was supposed to conquer the world. You know, the wilderness. But now he gets thorns and thistles. The woman’s role was to help him in that and to help him. You know, one of the ways was bring children into the world, but that’s where it goes wrong. [00:13:03][55.9]

[00:13:03] So every place where the man and woman were strong, their strength was decreased a little bit. And so we live in that fallen world of we work and it’s hard and there’s sweat and we work and we intend one thing. But another thing comes out that’s thorns and thistles. We think we’re planting wheat. And what we end up getting is things that really don’t serve our purposes. So in addition to the challenges of being a faithful steward of God’s resources, which Adam had, we now have the additional challenges of not being able to be trusted completely with the power that man originally had and to have that power. In some ways, Kirst and turned down a little bit because if things were too easy, we’d have too much room to get into mischief. Human nature is such that we can’t be trusted with as much power as we’d like to be or even as we were before the fall. [00:13:58][54.7]

William: [00:13:59] It’s really interesting. Jerry, William here. I Love kind of going back through the word of God. I mean, we try to do that a lot here on the show because it does just reveal so much about God’s character, who he is and what he wants us to do with our resources and our capital. And I love how you’re kind of reframing maybe some common thoughts about a story, especially here, the creation story, and kind of bringing it back to, you know, what is the scripture actually tell us if we take away our world view that we’re bringing to it. And I’d love if you would maybe dove into, you know, a topic or two more. Another passage to a scripture where maybe you’ve heard it used for the faith driven investing movement where you think, you know, hey, not that people are going to go wrong here, but maybe they’re not seeing the full picture here of what God story is trying to tell us and how we should steward our resources. [00:14:47][48.2]

Jerry: [00:14:48] Well, yeah, I think that may be one of the things that we’re missing or gets too little emphasis is that the main purpose of mankind is to glorify God by filling the earth and subduing it. The main purpose of man is not avoiding sin. And I think the evangelical conversation in general, and that includes the evangelical financial conversation can easily fall into the idea that the Christian life is the life of sin avoidance. And you certainly are supposed to avoid sin. I mean, the very definition of something you should avoid and God did give a limit. God did say guard the garden. Adam failed to guard the garden. And the serpent came in and ruined everything. We can come back on that if we want. I don’t think the first sin was the eating of the fruit. I think the first sin was letting the serpent in. I’ll just put that there is a marker. You want to come back? You can or we can just kind of move on. [00:15:42][53.7]

[00:15:43] Adam’s job was primarily a positive one, which was fill the earth and subdue it. And however, Adam, I’ve got a restriction on you. There’s a tree you’re not supposed to eat from. But Adam’s main job was not to refrain from eating that tree. Adam’s main job was to fill the earth and subdue it and guard rails around that are one of the things you shouldn’t do is eat from that tree unless I tell you you can eat from it. And I think what happens is that we get focused on sin. And arguably it was in fact too much focus on sin that made the tree so appealing when we’re supposed be busy about the business of glorifying God. How do we glorify God? Well, how did he say to glorify him, fill the earth and subdue it? Exercise dominion over the birds. They are the fish of the sea and over the beasts of the field. That’s the job of humanity. And that’s largely what businesses. So that mandate is never removed. It’s never turned down. It’s never rescinded. It is, in fact, reaffirmed in Jesus the second Adam. And so that’s mainly our job as entrepreneurs and investors is to fulfill that. And yes, of course, along the lines, sin messes it up. So avoiding sin is ancillary to the main goal, which is glorifying God in this case through dominion over the earth, glorifying it. [00:17:07][83.9]

Henry: [00:17:08] So I love that from a couple of different angles. One is that a lot of times in our investment, we talk about sins that we see in our portfolio companies. In this one, I mean, we prefer sins of commission rather than sins of omission. We’d like to see leaders who will take action and error on that side. And I think it really comes to the subject really of taking risk. Since there is no specific example of exactly, here’s what you’re supposed to do next is not open, nor there’s some risk involved of going ahead and trying different things towards an end goal in mind. And yet we have to take risk. If we’re just focused on sin avoidance, then that’s almost a risk avoidance. Absolutely. Maybe I’m reading into it too much. [00:17:46][38.4]

Jerry: [00:17:46] Now, I know you’re not. That’s right. If we’re focused exclusively on sin avoidance, then what we will tend to do is we will get paralyzed. And I think this is part of the message in the gospels of the various paralytic that Jesus runs into, that a lot of society had become essentially paralyzed. I can’t touch anything. I can’t go anywhere. I can’t do anything. Everything is unclean. Everything is bad. Or if it’s not bad, it’s debatable. And the Pharisees just added rule on top of rule on top of rule. And it was never enough. And you’ve got one group of Pharisees who come along and at some commands and then other Pharisees come along and say those other Pharisees, they’re really soft on sin. Where the real pure ones. And then they add more and eventually you get the scenes. They have to completely withdraw from society. But even Knake Sin goes with them. You know, to the Kumaran community, right. Even though they’re basically hermits, they’re still sent in the world. And it’s a paralyzing thing. And Jesus comes along and just breaks all those barriers down. He’s touching unclean people. [00:18:46][60.2]

[00:18:47] Does he become unclean? No. They become clean. When Jesus touches a dead body, does Jesus become ceremonially unclean, like in the Torah? No. Why? Because the Torah was wrong? No. Because Jesus is contagious holiness. He’s contagious life. So he’s touching lepers and he’s touching women with a mission of blood. All this unclean stuff. And also morally unclean. He’s dealing with tax collectors. He’s dealing with prostitutes. And he’s getting criticized for it by the people who want to take no risks. So when in doubt, do nothing. Jesus is very active, taking all kinds of risks and getting criticized for it constantly. He is investing himself, even at the risk of being seen as being far too close to centers. [00:19:32][44.5]

Henry: [00:19:33] So this is fascinating. You’re heading right into a big, big, big topic that’s going on a feature of investing, which is how do we think about screens and negative screens? How do we think about companies that are doing things that would bother us as Christ followers? Maybe they’re involved in pornography, maybe they’re involved in tobacco. Think of the different things that would make us uncomfortable. And so on one hand, as someone who’s driven by their faith. You don’t want to presumably be a part of aiding and abetting somebody who’s a known distributor of pornography. And some people would say that’s what we do when we invest in a company that has that as a major part of their revenue. On the other part, you can see another angle, and I love to see just how you balance these two, which is if Jesus was out there talking to the prostitute into different people, tax collector and people who are thought of as unclean at the time, do we just run away from all those things? So how do we appropriately engage but without being in a spot which would make us fall into sin? So I think that everybody’s following what you’re saying. Make it real in the world of investing through this conversation about negative screens, please. [00:20:41][67.8]

Jerry: [00:20:42] Yeah. I’m happy to. But let me just kind of say that I’m happy to talk about that. But I do notice. I guess that’s the big topic, right? So we sort of have to talk about it. But I’m bothered that it’s the big topic because I don’t think it’s the big topic in scripture. I think it’s there, but it gets so much more conversation. The Bible does deal with these issues. The Pharisees criticizing Jesus. Then later, the Judy Isaiah’s and also some of the weaker brethren were concerned about meat being sacrificed to idols. Right. So you have those controversies. But those are almost side issues as Jesus goes about his business. And then later, as Paul and the apostles go about their business, their about their father’s business. Right. And then these issues come up and someone accuses them and then they answer and then they get back to their father’s business. So, I mean, in the providence of God, the evangelical conversation has largely been about sin screens, which I find unfortunate, but that is God’s providence. So we kind of have to work with that. So what I would say is, first of all, if something is not a faith, that sin. So the Bible is perfectly clear that if you think something is morally wrong, it violates your conscience. You’re not allowed to do it. So even though you have the freedom to eat meat sacrificed to idols, if you don’t know that you have that freedom, if you think that it’s wrong, maybe you’re a recent convert and you still have feelings of religious piety towards the false idols. When you eat meat sacrificed to idols, maybe it understand how much liberty you have in Christ. Maybe it’s a real stumbling block for you. Then you definitely should not eat. And screeners and financial advisers can help you with that. You know, you can tell them what you’re scruple is and they can say, OK, well, we’ve got a fund for that or even we can set up a separately managed account so you don’t have that. So I strongly affirm that people who have a conscience issue with a particular investment. [00:22:30][107.6]

[00:22:30] Nick Stonestreet, my friend likes to say, let’s say somebody who’s a child was killed by a drunk driver. They don’t want to invest in alcohol stocks. Honor that. They think it’s wrong. Honor that. And an adviser who helps them honor that is in my opinion doing righteous work that should be praised. But to go the extra step, which is to say that your social associations, which include your commercial associations, mean that the sins committed by someone with whom you are associated or dealing even with a financial tie become your sins too, that they you’re appropriating like you touch a dead body. And your ceremonially dead, I think, is not the teaching of the Bible. I think the biblical teaching is your sins or your sins. And if I associate if you’re doing some sin, Henry, and I know you are. Because we all are. If you’re doing some sin and I associate with you, your sin is in mine and my sin isn’t yours. And if you have business dealings with somebody, if you buy a product from a company and something company does something sinful, their sins aren’t your sin. Sin is not transferable along commercial associations. [00:23:44][74.0]

Henry: [00:23:46] But some people and I think you’re very right, when you started it, when we started going down this rabbit trail, you said, you know, do we really want to go there? And if we go there, is that the risk of consuming what a lot of people are talking about right now, and yet they’re missing a much bigger picture. I need to be very clear. I absolutely want to move on quickly from this to get onto the much bigger picture, because I think people are missing the positive aspects of how we might invest. I think that’s important. I do want to just ask you this question, those clarifying things, some people, listeners might think, well, is it different, though, when we’re investing in a company that’s about adult entertainment? Is some aspect of debt financing or equity financing actually helping them to accomplish a goal or a mission that is counterproductive to society in the first line of society? And therefore, while we’re not actually engaging in that pornography by investing in them, we’re participating. Is that a dynamic or if that’s too thorny, we can move on. We can go on to the positive side. [00:24:41][55.0]

Jerry: [00:24:41] But no, no. We can take it on. Like I say, I think that once we start with what are the limits and what am I allowed to do? We’ve already started the Pharisee’s conversation. OK. And that conversation already kind of arcs the Pharisees direction. And that’s why those are the kind of questions that came to Jesus. Generally, they didn’t come to Jesus with. I mean, there’s one who said, well, what’s the law and the prophets? And he said, while you’re close to the kingdom of God. With that answer. But generally it’s what are the limits? How much can you do on the Sabbath? Who can you touch? Who can you eat with? And I think if that is the starting point of our conversation. And let’s start off with hardest cases to find out whether there are any lines at all. Then we’re already staring at the tree of the knowledge of good and evil and saying, well, we can’t eat it. Can we touch it? Can we eat the other trees? We’re already starting. In my opinion, the conversation that then the Hosch wants to have, which is just how many commandments has God given you? And he seems to give you a lot of commandments and he seems to be a very restrictive God woman. [00:25:45][64.1]

[00:25:45] And she kind of goes along with it. She says, yes, we’re not allowed to eat, nor are we allowed to touch. So I’ll just put it this way. Where did Jesus put the limit? Who was Jesus unwilling to deal? With who was he unwilling to eat with? Who was he unwilling to have financial dealings with? He 8 with tax collectors and prostitutes. So where are tax collectors were so hated that. I mean, you think about ancient religious leaders. One thing religious leaders they like to do is they like to accept donations. Tax collectors were so hated that they were singled out as a group you couldn’t even take donations from. So religious leaders who live on donations like. Yeah, but not from tax collectors. And Jesus constantly ate with them. [00:26:31][45.2]

[00:26:31] Some of them are dependent, but there’s no sign they all repentant. They still ate. They bought him lunch over and over and over again. And in fact, Jesus, his critics even saw that. What did they call him, a glutton and a winebibber because he was living off of the ill gotten gains of the tax collectors. So I’ll just turn it back. Let’s look at the life of Jesus and let’s find out where Jesus put his the limits on his relationship. I’m not seeing it. He deals with the rich young ruler. Right. The rich young ruler is corrupt. You can read an essay I wrote about that. I don’t think he’s just greedy. I think he’s corrupt. [00:27:01][29.4]

[00:27:02] But who walks away? Does Jesus walk away or does the rich young ruler walk away? The rich young ruler walks away. Jesus was hanging in there. So when did we become the walkaway people? When did we become the first people to walk away? When did we become the people whose whole conversation is about? How long before we walk away from the Sanhedrin member or the tax collector or the center? No doubt there is some kind of limits and we can talk about limits. I think the limits are. Are you, in fact, yourself sinning? But let’s get rid of any idea that having lunch with Zacchaeus, the tax collector catered by Zacchaeus with his dirty money, didn’t make Jesus unclean. So let’s keep going back to the life of Jesus and see where he put the limits, not where I put the limits. It’s where he puts the limits. [00:27:51][49.5]

William: [00:27:52] That’s good. That’s good, Jerry. I want to switch out of a little bit and want to talk about that. I’ve heard you say before it’s similar lines, but now I’ve heard you talk about Jesus never gave instructions on where and how to invest. One of the most famous investing parables, the parable of the talents. People bring that up a lot in these talks when they talk about faith driven, investing in a love for you to give us a little bit of what your study has shown you about that passage and how that translates into the everyday investor and how they should think about how Jesus thinks about stewarding our money. [00:28:27][34.5]

Jerry: [00:28:28] Yeah, I’m happy to. But, you know, I hate to be this guy who’s always like critiquing the question because I love you guys. But I want to let the text tell me which questions to ask, not me. Say, what does this mean for investors? Right. And like so once we let the tech speak to us, once Jesus delivers his economic message to us, then we reflect on it. We chew on it like a cow chews on cud, and then we start applying it to our lives. So I don’t want to go so quick to how do we apply this? I think we pre apply. We don’t necessarily drink deeply and reflect over a long period and then apply. So I mean, it’s that’s part of the general conversation. What’s Jesus doing all this money stuff in the Bible? I mean, the Gospels have an enormous amount of material about money. [00:29:14][47.0]

[00:29:15] And the really weird thing is that Jesus, who’s supposed to be, according to a lot of the academic scholars, leading some kind of peasant revolt against business and against markets and all the rest of it seems to. Over and over again. Right. These little business stories, these little case studies, these parables in which the good guy is the investor and the unfaithful steward is the bad guy, a guy who’s leading a peasant revolt against private property. And, you know, kind of like Jesus as Che Guevara or Fidel Castro, which became very hip in the 70s and 80s. And academic theologian circles. The way they had to do that is by basically saying Jesus didn’t write those parables. They were added later. Well, you know, because Jesus couldn’t have known all this stuff about finance. So therefore, these aren’t from Jesus. Therefore, we can rescue Jesus, the revolutionary. Well, all right. That’s wrong on so many levels. First of all, Jesus was financially sophisticated. How do we know? Because he grew up in Nazareth. And Nazareth was a small town, but it was a suburb of a large town, which was the financial center of Galilee called Sulfurous. There we have. We’ve dug up the banks. Jesus would have grown up around financially sophisticated people. So these parables are not beyond his ability, beyond the ability of the Jesus that we thought. We know the archaeology. Mel tells us that Jesus would have been around finance a lot. And he’s telling stories in which the investor is generally the good guy. So I think that’s a big part of just approaching Jesus as old money and his Jesus holds money. Conversation number one, he knew what it was talking about. He wasn’t a country bumpkin. Number two, he seemed to have an investor’s point of view. Number three, related to this, the economy of Galilee was very different from the economy of Judea. Galilee was a very entrepreneurial economy. I’ve just I’ve I’ve read the archeological reports almost on a nightly basis. Almost every Galilee in town had several shops. You had builders, you know, like Joseph and son. You had industrial they stone jar masons at Cana. Wedding at Cana rings true to history because they did make stone jars. There you have industrial fishing going on, not subsistence fisherman Peter and James and John. This was an industry. So Jesus grew up in an entrepreneurial area. [00:31:26][130.7]

[00:31:27] Down in Judea, it’s very hierarchical, very old money, very politically connected. What we might call a crony economy. So here’s something important to remember. Jesus does not have a single confrontation over wealth with any wealthy individual in Galilee. Not one. Every single confrontation with wealthy individuals is geographically near Jerusalem, the political capital, and socially near in that the confrontations are with a rich young ruler. Senator Zacchaeus, the tax collector and the moneylenders who had a monopoly from Herod. So Jesus. Only makes financial critiques when he is in places where the economy is largely a top down extractive as opposed to an entrepreneurial economy, and he only does it with people who are members of the extractive class. [00:32:20][53.4]

Henry: [00:32:22] I follow that. This has been super helpful for me. And, you know, whenever we get ready to do this podcast, we come in with just a whole bunch of different questions we’ve been wanting to ask you for a while. And what you’ve done is you’ve changed the paradigm for me. And I hope that for a number of our listeners, which is what are the questions we should be asking and I want to get back into that. And before we go to wrap and I think Lord One, this will be first of many, many installments. I love the way you’ve been very thoughtful about all of this. And I know that you gonna be come out with a book, this simulator in the spring. There’s so much more we can revisit on this. But before William asked you the final question, we always asked our guests. I want to ask you, what’s another question that you see? Investors that endeavored to follow God was the question that they should be at. We know the questions are asking. Right. We’re just as Sally said now, you just grain all those different different types. Then what can I invest in? What I can invest in? And I think that you’ve put together a very good point about why those are the wrong questions. But I’m curious about what’s a question you see that investors should be asking but aren’t. And how does the text answer that question they should be asking but aren’t? [00:33:27][65.4]

Jerry: [00:33:28] Let me first mention the one that I want him to stop asking. You know, I used to be a Christian radio talk show host, so I kind of got a sense of how Christians thought. And we did, you know, shows on Christian entrepreneurship a lot. And a woman called in and she said, well, we’re entrepreneurs. My husband, I own a business. But for, you know, a year and a half, we wanted to be business owners, but we didn’t know whether we were allowed. So we talked to our pastor and we read books and we studied the scriptures to find out if we’re allowed to be entrepreneurs. And they ended up believing that they were allowed to be entrepreneurs and they became entrepreneurs. And I was glad they landed there, but my heart was broken by that conversation. So what I would say, I mean, I almost want to scream it from the rooftop. Stop asking potential Christian entrepreneurs. Stop asking the question. Am I allowed? That is so much the wrong question. I’m telling you right now, you are allowed you are encouraged to by the example of God himself, is the creator of the universe and Jesus who came from an entrepreneurial family and an entrepreneurial culture and start asking God, how should I do it? [00:34:40][71.5]

[00:34:40] How can I do it with excellence? How can I be the best? Oh, and along the way, God, please help me avoid sin. But how can I glorify you with excellence so that people say, look at the excellence of this person’s work and look at the wisdom they have. I want to talk to them and see where they get that wisdom from. Stop asking. Am I allowed? Stop starting off with what am I not allowed to do? And start asking God, what would you have me do? What is your command for something for me to do? Not focus on whether I’m allowed to be an entrepreneur at all. I took away from that conversation the idea that at least in the subculture of that particular Christian Christians had a year and a half disadvantage. They had a year and a half thinking about whether they’re allowed to move and innovate, which non-Christians didn’t have. I would rather we have a forward culture when it comes to entrepreneurs where we entrepreneur earlier and faster and it becomes part of our culture and entrepreneurial culture. And of course, don’t sin along the way. [00:35:39][59.0]

Henry: [00:35:40] OK, so that’s very helpful. I completely get it. I’m right with you. I see it all the time. So tell us, what does it look like? Where did the questions that we might be asking more generally of scripture that might lead us to being able to innovate and invest better and more quickly than rest of secular society because they’re looking in the wrong place and they’re asking the wrong question? [00:35:59][19.1]

Jerry: [00:36:01] Well, I’d say one of the things I would hearken back to a conversation you had with Trae Stephens and I look at the example of Peter Theil that the Christian philosophy of Renesmee rhade enabled that shop to have an advantage over others. They were able to set aside rivalry, what Gerard would call mimetic rivalry and ambition, and get through the tech burst at a time when others couldn’t get through the tech bearse because instead of trying to make their enemy lose, they tried to actually do something. So they had a positive goal and their goal was not mainly. [00:36:36][34.9]

[00:36:36] This is something Peter likes to say. You know, the goal is not to disrupt. The goal is to provide a good or a service in a profitable way. Now, if it disrupts, all right, so be it. You know, that’s in God’s providence. So I think if Christians start to follow the example of Jesus, I’m really key into Jesus. I don’t mean the word Jesus. I don’t mean say the name Jesus. And then recall all the sermons you’ve heard about Jesus where people hung their best thinking on that. You know, Jesus says Gandhi or Jesus as Che or Jesus as Confucius. Wait. We got all these Jesuses of our own making. I mean, actually reading the gospels carefully and just kind of get Jesus in your gut. I mean, that’s literally what we do in our Eucharist, right? I mean, theoretically or whatever, symbolically different conversation, but just begin to just think like Jesus and you will be a better entrepreneur because he was the most successful. I don’t want to, like degrade him by saying he’s much more. But he was he invested everything and he won everything. And entrepreneurs, in some sense, I don’t want to do the Jesus CEO thing because Jesus is bigger than any business enterprise. But risking, loving, risking, serving, being willing to lose it all is not something that Christians should maybe be skeptical about. It’s in the very nature of the Christian walk. And if we do that, we will in general be better entrepreneurs will be less afraid because we don’t love money and don’t worship it. We’re more able to risk it. [00:38:04][88.1]

William: [00:38:08] That’s a good word. And as we do come to a wrap, the center said, I would love to find out a little bit about where God has you. So you’ve taken us through an amazing journey of God, Scripture and his lessons. What does he have you chewing on right now? That maybe would be fun for our listeners to hear about. Oh, you mean like with a day job rather than this sort of thing, like the quantitative analysis kind of thing? Yeah. Well, or just in God’s word, right. I mean, something else that he’s kind of put on your heart, you spent so much time in Genesis, you got a book coming out just. Is there anything else that’s coming alive in a new way, maybe in your daily devotionals? [00:38:40][32.5]

Jerry: [00:38:42] Well, I’m continuing to find new stuff in Genesis that would kind of take a while to get us to the point where he could talk about it and certainly more and more about what we see with Jesus in the Gospels and how he’s interacting along economic lines and all of the rest of it. I mean, he really, really all the treasures of the wisdom of God were hidden in Jesus. And if we’d stop skimming over the details, the details matter, place names matter. It matters that Jesus was killed in Jerusalem, not Rome. It matters that Jesus ascended from Bethany, the house of the poor. And, you know, not from Jerusalem. It matters that he was born in Bethlehem. Not Jerusalem. The story of Jesus. If we really believe in the incarnation, we believe that all of the story of Jesus is for us. And what you’re going to find is every time he’s in a city and every time the Bible tells us the name of the city. And then you compare that to Jesus’s commentary there about wealth or about anything else. Jesus knew where he was. He wasn’t giving the standard stump speech or if he was, he was varying it from place to place. You know, you’ve got the Sermon on the Mount, Matthew. But then you have the sermon on the plane and Luke. And they’re different from one another. Right. So scholars say, oh, it’s a contradiction. Sermon on the plane is given to a Judean audience, much harder on wealth. All of these little details matter. And we’re so used to reading them spiritually, we skip right to spiritual. But Jesus didn’t come as a spirit. He came in flesh and blood. So we can’t skip just the spirit and skip over all the flesh and blood stuff we see Jesus doing. And, you know, we could spend hours and hours talking about how those details matter. But let me just convince you now, all of those details matter. There’s no unimportant parts of the gospels. And if something Jesus says doesn’t make sense to you. Or it’s weird to you as it is to me, the Bible isn’t weird. I’m weird. And the Bible will make sense to me when I stop being weird. And so we have to adjust our way of thinking to the Bible’s rather than our own. And please stop taking our best thinking. And sometimes it’s really good thinking and try to find a verse to hang it on rather than look at the context of the verse and let God give us his best thinking man. [00:40:52][130.6]

Henry: [00:40:53] So that’s very helpful. A big takeaway for me and hopefully the investors that are listening is how important it is that we don’t have the primary way that we engage in God’s word through somebody else who goes ahead, puts her own spin on it. One of the things that you’ve told me is that you don’t want it, not that you don’t listen to sermons in other pastors. I’m sure you do. And yet you wanted to go ahead and spend time in God’s word and you wanted to do it in the language in which was written and going in and asking God to speak to you through his word without being necessarily influenced by the questions of the day, whether it’s science. And we would have that one hundred years ago, or whether it’s negative screens now as a feature of an investor. [00:41:30][37.9]

Jerry: [00:41:31] Right. And let me make this clear. It’s not that I’m reading it alone, but what do I read? I read Josephus and others from Jesus’s time. I read the Roman historians. I read the rabbis at the time. If so, I don’t want to get stuck in modern evangelic. Sure I listen evangelical sermons, but I already think like an evangelical because I’ve been in evangelical for 35 years. I need to learn to think like a first century Jew. And that’s what we all need to start doing it for real. And once you do that, you will be amazed at how the storehouse, you know, how the treasure house, the thestories opens up to you. [00:42:03][31.7]

Henry: [00:42:03] There’s a book in there. There’s a podcast in there thinking like a first century Jew. I love that I would subscribe. There’s no doubt about it. We got a taste of it today on the podcast. I think it’s going to make us think differently about investing. I do absolutely know that. Jerry, I want to have you back. [00:42:17][13.8]

[00:42:17] I’m grateful for the time you spent with us. And yeah, I’m grateful. [00:42:20][2.9]

Jerry: [00:42:21] I’m grateful for you and for your mission and for what you’re doing in the world and as being a leader in this space. [00:42:21][0.0]

[2379.8]

Henry Kaestner: [00:02:34] Welcome back to the Faith Driven Investor podcast. You know, we haven’t spent much time at all talking in either the Faith Driven Entrepreneur or the Faith Driven Investor podcast about what some of us do during our day jobs. And a lot of that’s been neglect. And just thinking that other people’s stories are really interesting because they are. In part, that’s also because we’ve never wanted this to be anything that would be self-promotional. And yet we very much do feel called by God to do the work that we do at Faith Driven Entrepreneur in Faith Driven Investor and at Sovereign’s Capital. [00:03:06][32.4]

[00:03:07] And for those of you don’t know, Sovereign’s Capital is an investment fund that Andre Mann, Luke Roush, who’s our guest for today, and I started about eight years ago coming out of the experience that we collectively had in running faith driven enterprises and believing that there is an opportunity to have aligned capital coming alongside and encouraging the entrepreneur to be able to love their partner, vendor, customer or employee in a way that might have some level of marketplace witness and transformation. And so we started Sovereign’s Capital, which is a fund to do that. We did it eight years ago and over the course of those eight years have invested just about 45 companies in the southeast and in Asia and along the way have brought onboard just an incredible staff to include William Norvel, frequent co-host and co-founder of Faith Driven Entrepreneur. So it’s been with the Faith Driven Entrepreneur podcast and Faith Driven Investor podcast since the beginning. Many of you may not have known what he did. You may have thought that he was a color commentator for Alabama football or basketball. But no, actually, he is a full-time investor. [00:04:07][59.9]

William Norvell: [00:04:08] Honestly, the color commentator for Alabama basketball is pretty bored. In fairness, I might get that job one day. [00:04:15][7.2]

Henry Kaestner: [00:04:18] Luke, welcome to the podcast. You have never been—have you ever been on the show? [00:04:21][3.4]

Luke Roush: [00:04:22] I have not. Long time listener, first-time guest. [00:04:23][1.8]

Henry Kaestner: [00:04:24] It’s awesome. What do you think? [00:04:25][0.7]

Luke Roush: [00:04:27] Thrilling. [00:04:27][0.0]

Henry Kaestner: [00:04:30] So why don’t you do this, why don’t you take us back to the beginning and tell us what Sovereign’s Capital does, what’s its theory of change? Why does it do what it does and then just bring us up to speed? And then as you do that, I’d love for William to chime in a bit as well, because the funds have matured and gotten bigger and there’s been more opportunities. We’ve seen other niches in some of those are ones that Williams involved in particular. But take us through again the problem we’re trying to solve, the theory of change, all that. [00:04:58][28.8]

Luke Roush: [00:04:59] Yeah. So just to back up a little bit before that. My background was really as an operator and I think that Sovereign’s was really born out of our experience collectively as operators and we had seen the impact that capital can have on the direction that corporate cultures and corporate values take. And my background is really in medical devices and healthcare consumer products. And I had seen the impact that venture capital had on companies that I’ve been a part of and started to have, you know, what I would call just a holy discontent around the disconnect that I had seen between my own faith and who I was on Saturday, Sunday and who I was during the week. And I hadn’t been involved in anything unethical or anything crazy, but I just really felt a sense of real sacred secular divide in my own work and my own faith. And I had a desire to try to figure out how to bring those two worlds together, something the Holy Spirit put on my heart. And he also put some people around me that I think pushed me to better understand how those two worlds might intersect in a way that was winsome and relevant. And so our real theory of change at the beginning of Sovereign’s Capital, which has really persisted over the last eight years, is that people who are leading companies and building businesses are ones who are truly shaping culture. If you think about the entrepreneurs the last fifteen or twenty years, they’re all impacting the way we work, the way we play, the way we interact and communicate with one another. The way we live, the way we work. And there’s a huge opportunity in the midst of those enterprising businesses to be able to really create new culture and define the way people interact with one another. So we really felt as though the opportunity as an investor to come alongside entrepreneurs and to be able to speak into their journey in both who they were in terms of their identity, but also how they thought about using their businesses to be a blessing to others and impact culture in positive, redemptive, restorative ways. Just a huge opportunity. We weren’t a hundred percent sure what that looked like, but we knew there was something there and that was kind of how our journey began. [00:06:54][114.8]

William Norvell: [00:06:55] Thanks for taking us through that amazing journey from where you guys got started. I’m sure it’s an amazing effort to have the world’s greatest co-founder, not just next to you, but along the journey around, it’s good to have Henry on board. [00:07:07][12.3]

Henry Kaestner: [00:07:08] Who’s that? [00:07:08][0.3]

William Norvell: [00:07:09] Yeah, yeah. that’s you. [00:07:10][0.7]

Henry Kaestner: [00:07:10] That’s a shout out to Andre Mann right there. [00:07:12][1.9]

William Norvell: [00:07:13] Yeah. I hope Andrew is listening. But Luke that’s an ambitious goal. You know, you guys set out on an ambitious journey here. There were like you said, it’s kinda shown itself to work. I’m sure it wasn’t that easy, though. I’m sure you learned a lot of things along the way to our investing audience. I feel like most investors. Right. You go out trying to prove a couple of big things, right. You think they’re true. That’s why you rally support. That’s why you raise capital. That’s why you build a team. That’s why you go out to make investments, to try to make a market return, but also make an impact in the world. What were those three or four big things for you guys as you started and how those play themselves out of three years? [00:07:49][35.9]

Luke Roush: [00:07:50] Well, one of the things that we really were hoping to be able to prove out was something that you just said, which is we hope to be able to deliver both an at market rate of return, but also see businesses be salt and light where they were planted. And, you know, I grew up with this two part gospel of we are sinners and we need a savior. And that was really the extent of a lot of what I heard on Sunday mornings. But there was also, as I came to better understand this creation narrative in the early part of the Bible and then a restoration narrative in the latter part of the Bible that I really came to believe were central to the journey that many of us as business people were on. And so now we had this idea that many thought was really crazy at the time because the prevailing winds back in 2011 and 2012 were that there was a tradeoff between sacred returns or spiritual impact and secular returns or at Market Alpha or better than at market real achievement of Alpha in terms of investment results. [00:08:42][51.9]

[00:08:42] And so we had this idea that actually biblical values generally correlated with good business principles and we wanted to be able to actually test that out and to evaluate and prove in the context of a professionally managed fund, not an investment or a company, but actually a portfolio of companies that both spiritual returns and financial returns could be pursued in parallel, not at the expense of one another. But in some part because entrepreneurs had a clear sense of who they were and what they were trying to do in and through their companies and were able to instill that belief in that ethos within their employees who ultimately extended that into, you know, customers and the entire ecosystem that a business operates. So that was one of the big things that we wanted to prove out. [00:09:21][38.5]

Henry Kaestner: [00:09:21] Do you ever find any conflict in that? [00:09:22][1.3]

Luke Roush: [00:09:23] Absolutely. Absolutely. So, you know, particularly when you think about short term, medium term, what’s going to happen this month, what’s going to happen this quarter, what’s gonna happen, you know, in the next year or two? There are absolutely some Zero-Sum games to be played in that timeframe. [00:09:39][15.8]

[00:09:40] But our view, my view, is that over a longer time period. Call it four, five, 10, 15 years to the extent that you make businesses that really value employees. And then those employees are able to make decisions to value customers and to develop things that customers love. It affects the economic engine of the business such that you’re able to acquire customers and retain customers way more cost-effectively than your peer group. And so over a long haul, we actually. To the integration of gospel into core business practices has actually correlated positively with returns, not at the expense. But you’ve got to take a long view. Short term is definitely some sacrifices. [00:10:17][36.9]

Henry Kaestner: [00:10:18] Are there enough companies out there to invest in? [00:10:20][1.6]

Luke Roush: [00:10:20] Well, so there was another big thing that when we went around and actually spoke with folks about this is kind of what we feel like. That’s been our hearts. We’ve been operators, but we want to transition over into being investors. What a lot of people said is that’s great. You know, there’s likely to be five or 10 world-class entrepreneurs over the next five years in the U.S.. Good luck on finding as many as you need to be able to find to generate that many well-qualified deals. [00:10:44][23.4]

[00:10:44] Because the general rule in venture investing, which our first two funds were really more focused on venture capital style investments. General rule is you got to look at 100 deals to be able to find one that actually passes muster. And so, you know, if you want to find, you know, 10 companies or 15 companies as we had and found one, that means you got to find fifteen hundred or a thousand entrepreneurs that meet the criteria. And nobody really thought there were that many out there. In fact, I think even those of us on the team had some questions about are we can end up with a portfolio of seven or eight, which is going to make us a little bit overindexed and over concentrated. [00:11:16][31.7]

[00:11:17] Are we really gonna be able to get 15? And what we found was actually there are a boatload of believers who are also building companies, many of whom have been largely underground because secular capital doesn’t really understand these entrepreneurs, which is something that we believed and also saw proven out over time. [00:11:33][15.8]

[00:11:34] Many of them are actually just kind of underground in their faith and they hadn’t actually come up and become visible in terms of being a Faith Driven Entrepreneur. They’d been living really a dual life, much the way I’d done much of my professional career. [00:11:46][12.6]

William Norvell: [00:11:47] Well, that sounds like it was just an easy journey. You found a lot of people who believed in you. You got everybody together. But how was raising money? So we’re an investing podcast, right? There’s a couple of different parts of it. You just talked about finding the companies and that was, you know, a little bit easier. Maybe in the numerical sense. I want to hear how you actually found them. So maybe it is that I’m sure it’s more difficult than it sounds. But what about raising money? What about convincing others? You said the team even had questions. How was the fundraising trail? [00:12:13][25.9]

Luke Roush: [00:12:14] Yeah. So, you know, you would think. Absolutely. And both Henry and I and Andre and Tom, all the folks that were really around the table in the early days, believed that because of some of the entrepreneurial successes, that we would have to be really easy to go out and raise a $20 million fund. In fact, we had alloted ourselves 90 days to go out and raise 20 million dollars, which we thought we would then put to work over the ensuing 12 months, and then we’d be able to raise a follow up fund about 18 months after the initial inception of the fundraising process for fund one and then raise fifty to a hundred million dollars as a fund two in short order. Mind you, and what actually happened was that fundraising process originally supposed to be 90 days turned into 18 months and we ended up after we called literally everyone in our family Rolodex. We were able to scrape together 12 million dollars of investable capital. [00:13:05][51.1]

[00:13:06] And, you know, again, just something that is now actually a real blessing. But at the time, we were just like, you know, hand slapped face. We had 75 LP’s. We had to have 75 people invest in the fund to be able to get the twelve million dollars. Now, as fund one has had some success, I can tell you that there is infinitely more joy in sending out 75 distribution checks to individuals, mostly individuals, infinitely more joy in that than sending out 10 distribution checks to, you know, some fund manager in Connecticut. So what we originally were incredibly frustrated with has actually become one of the great moments of joy, particularly the last two years with a fun one. [00:13:47][41.2]

William Norvell: [00:13:48] That’s great. That’s great. And look, just thanks for walking us through that. And one of the things I always love and you get into investing is really looking at a few specific companies. A few examples, if you would maybe walk us through a couple of companies you invested in where you can really show what not only what the company has done and what God has done through them, but what you think Sovereign’s has been able to do as a unique niche investment partner along the way. And then potentially as well as share one that, hey, you met an entrepreneur who loved the vision everyone bought and you invested. But the story, wasn’t one of wild financial success, but it was something else. And maybe the company didn’t work out because that is the nature of investing capital is some of these companies don’t work out. And God still teaches us so much through those investments and through those journeys. [00:14:33][45.3]

Luke Roush: [00:14:35] Yeah. So maybe the first company I’ll talk about is Cloud Factory, and I think Mark Sears has been a guest on before, and so you’ve heard parts of his story either through FDE or FDI podcast. But you know, Mark’s story and what God really called him to in Cloud Factory is a unique one. And what really resonated with us was the scope of his vision. So this idea that there are a million workers around the world who want to be connected with work and are prepared to actually work hard and produce, but really just need access to work that needs to get done and being able to pair that source of labor with demand for labor in developed countries where work cannot be efficiently outsourced and whether it’s machine learning or whether it’s artificial intelligence or big data analytics. There is an amazing story that has been written through Cloud Factory. The work that that country has done, not just now in Nepal, but also in Kenya and in other countries around the world. And so, you know, that’s an example of like an early stage company where he needed a few things. He needed an investor that was going to both understand and resonate with where God had called him in terms of Ezekiel, 37, of the valley of dry bones and what he was called to do in and through that workforce. We understood that vision. We supported it. We’re excited about it. We actually were looking to help him even reinforce that in ways that he maybe hadn’t thought through. And I think that really resonated with him. The other thing that he needed was some amount of patient capital. This was not a story—at the time that we invested, they had, well, less than $400,000 in revenue—I think about one hundred or one hundred fifty thousand dollars in revenue. So there was enough success in customer product market fit to be able to reinforce, but it was still really, really early. And so he needed somebody to be able to come alongside and be patient with them over the long haul. And the last thing he needed was somebody that was willing to just think a little bit differently, whether it was currency risk or whether it was sovereignty risk. And some of the environments he worked in, particularly in the early days where there was less of a cushion, because one of the other things that we wanted to be able to set out prove—back to an earlier question, William—was this idea that almost any company can be a biblically oriented company. There are no Christian companies. There are Christian leaders who lead companies, and that can be done in almost any context. [00:16:43][128.5]

[00:16:44] And so just to give you an example of a different kind of company was an organization called Lock It, which we invested in in Southeast Asia, which was focused on effectively making live events safe and transparent, both for the organizer as well as the attendees, as well as for a government who were trying to assess how people are getting in, getting out. And, you know, if there are problems, who do we contact? And so the entrepreneur there had seen some real challenging things in the live ticketing industry in Indonesia and had a vision to really bring a Livenation type business model to that country. And we got excited about his vision for impact and were able to come alongside and encourage and support him as his first institutional investor. And ultimately that company sold to another company. And now he’s got an opportunity to impact a much broader universe in the company that acquired him. So it’s a good example of like how do we think about investment, but also how do we think about exit? Ultimately, these are not companies that we’re going to own forever. There are companies that are going to own for a period of time. We’re going to help to shepherd and steward for a time. And ultimately they’re going to end up either as a publicly traded company or as a part of a larger entity. And as that happens, oftentimes the ministry platform that existed pre acquisition actually expands. It doesn’t contract or go away. It expands after a company’s bought. So there are a few examples. [00:18:01][76.6]

William Norvell: [00:18:02] That’s great and it’s a great segue. Let’s switch gears just a little bit. Investing is a relationship driven business, as are most businesses. But specifically, you took up a pretty unique mantle here when you were starting Sovereign’s Capital with Andre, Henry and Tom. And you actually moved your family to Jakarta, Indonesia. You just mentioned a few Southeast Asia investments as that might throw some people off. Talk about why you did that. As the legend goes. You made the decision about two hours from what I hear. I don’t know if that’s accurate or not? We can ask, Brooke, if that’s accurate or not. But I would love to hear the story of why you did it and what you learned through it. What was true, what wasn’t true, being in the place, fully immersed in where you’re investing. And tell us about that story. [00:18:45][43.1]

Luke Roush: [00:18:47] So we had this idea of like, wow, wouldn’t it be interesting if we could come alongside entrepreneurs who are motivated in their faith and wanted to live that out in the work that they were doing and also had a desire to really build sustainable economic engine companies. And so as we were talking through just the convergence of 10 40 window and emerging middle class, we started to actually do a little bit of a boil the ocean. So we spent time on the ground in Middle East, spent time in Eastern Europe. Andre took a trip down to Latin America. We looked at parts of Africa and ultimately decided the through process of elimination around the demographics, local demand, geopolitical risk, instability. We ultimately decided that Southeast Asia was the place that we wanted to focus. And as we got further into Southeast Asia being the right place to begin, specifically a focus on Malaysia, Singapore and Indonesia. We had this awkward conversation when they were like, well, you know, we all know that the lifeblood of any deal of any fund is deal flow. How are we going to source deal flow in Southeast Asia from Durham, North Carolina? And I always remember the old tobacco warehouse where we had our office in originally. And it, I think, hit us all at once that it was going to be very difficult for three white dudes who were in Durham, North Carolina, to try to come in every month or two or three to Southeast Asia and actually get access to the best deals. The only way you get access to great deals is being in community. And as we became more aware of what was going on in Indonesia specifically, we realized that there was no western venture capital money on the ground. There were a number of people that had tried to do it. Living in Singapore, living in Hong Kong or living in Tokyo. But nobody had actually like moved to Indonesia and done it in so in a relatively short order. We had this conversation as a partnership. I went home, talked to my wife and then about it wasn’t two hours, it was about 45 days later, we got on a plane and moved to initially to Kuala Lumpur and then ultimately to Jakarta. And then Andre and his family joined us about six months later. [00:20:45][118.7]

[00:20:46] It was the best decision we ever could’ve made, but it didn’t feel that way about six months in because six to nine months into that adventure, we had yet to find a single deal. There wasn’t really anything that was even in our pipeline of things like we might do at some point. And so you had those moments in life where you really start questioning what are we doing here? And if I wasn’t having these questions, my wife was definitely having those questions. But by God’s grace, in the three months after that, we ended up finding our first couple of deals and we got going and ended up in an amazing four year run. [00:21:19][32.6]

[00:21:19] And that continues today with full time staff that are Indonesian that that really shepherd those investments and are also making new investments. [00:21:25][6.4]

William Norvell: [00:21:26] Amen. Okay. Let’s switch gears a little bit. We’ve talked about fundraising. We’ve talked about funding investments. I’ve got about 45 of those in the books now. We’ve talked about the niche of sovereign’s capital investing in Christian led businesses. What does that look like? We’ve talked about it as a spiritual integration. What is that look like coming alongside and being a part of this journey? Practically right. Could mean a lot of different things to a lot of people. What does it mean at Sovereign’s to come behind Christian led businesses and encourage them in the work that they are doing and called to by God in the marketplace? [00:21:57][30.9]

Luke Roush: [00:21:58] Yeah. So one of the things that we’ve learned is that one size fits one. And there are some things, though, that we think are consistent across the body, the portfolio, and that for anybody who is tracking content on faith driven investor Web site, you’ll see some things that I think we’ve posted in blog posts in the past. But there are really five characteristics that we look to reinforce as we come alongside entrepreneurs. The first is that we want to make sure that they’ve got a real clear sense of identity and who they are. It’s one of the things that we see most often corrupted amongst entrepreneurs is that the narrative of the world in the narrative of most venture capital, private equity, is that it’s all about you as the CEO of a fast growing startup that’s, you know, getting a whole bunch of attention and creating a lot of value, at least on paper. There’s a real easy and slippery slope to get on around, just a mistaken sense of identity and ultimately were know children of the king and that’s who we are. But even though we know that to be true on the journey day to day, that something can get warped. And so we really want to try to focus on that as we get to know an entrepreneur and make sure that they in their heart know who they are so that we then have permission to be able to remind them of that on a regular basis. [00:23:10][71.7]

[00:23:10] If we end up investing, the second thing that we really care a lot about is business excellence. If the product that we produce is not high quality, then the quality of the testimony that we have is compromised. So we’ve got to make sure that we’re producing high quality products or services. Otherwise, we run the risk of potentially being a negative witness. The third thing that we focus on and we think these are things that can apply, by the way, to every business. This is not a one size fits one thing. This is one size fits all. The specific manifestations of each of these things are actually quite different depending on the nature of the business. The third thing is that we want to make sure there’s a real theology of work. Who owns this business ultimately? [00:23:47][36.8]

[00:23:48] Who do we report to? We report to a board of directors or, you know, a set of investors. The best entrepreneurs in our portfolio had a real clear sense of a holy calling and a holy ambition that they work mightily and heartily under the Lord. Now, they are thoughtful in terms of how they surround themselves with the right advisors and counselors, but ultimately they don’t report to me as an investor. And in the last two things we intentionally put last, but we think they’re really, really, really important. And the fourth is ministry indeed. And then the last one is ministry in word ministry indeed looks a lot like what corporate social responsibility typically looks like in the world. So how do we love our employees? How do we love our customers? How do we engage with our community in ways that are winsome and relevant and loving? And we feel like we need to. Demonstrate to people that we truly love them, irrespective of where they are on their own faith journey, because we do not believe in the idea of creating holy huddles inside businesses. We got to be able to recruit, retain, promote and celebrate the best and brightest, irrespective of where they are and anything other than performance and the quality of their work. But we do want to make sure that we demonstrate through ministry, indeed that we really love them. In the last one is ministry and word. When we’ve done the other four things well, we ultimately believe it’s important to be able to share the hope that we have and why we do what we do in four. Again, the best entrepreneurs in our portfolio have a tremendous platform to be able to provide a winsome testimony as to why they do what they do. And so those are the five marks of how we engage with our entrepreneurs on the spiritual element. [00:25:22][93.6]

William Norvell: [00:25:22] That’s great. That’s great. And it’s fun to see how they work at every company, you know, in different places and different formats that one size fits one mentality. I think it’s really good just on that for our listeners to remember, you know, there’s not a playbook at Sovereign’s, you don’t sort of get your chaplain after you get your investment and then you get this next thing and then, you know, there’s not this thing that’s handed to you. It’s really significant to understand what God’s weaving through each person, each company, each geography individually. [00:25:50][28.2]

Luke Roush: [00:25:52] Yeah. And, you know, it’s one of the things that we often have requested of us is like, show us what your score card is or, you know, a real formulaic approach around metrics in evaluating where each business is in terms of spiritual integration. And there are some things that we can measure, particularly around prayer and, you know, scriptural reference in how scripture underpins core business practices. But one of the things that we have learned is that we don’t want to be formulaic in the kinds of tactics that make sense, because what makes sense, you know, in a country like the US or a company in California versus North Carolina can be pretty dramatically different. And certainly when you look at some of the US or Nepal or Kenya or Indonesia or Singapore, what’s acceptable and what’s culturally appropriate can be quite varied. We still think that those five elements are true in every business, but the specific game plan, depending on size and stage in the style of the leader or the founder. Very, very important to try to get that right. On a 1 to 1 basis. [00:26:49][57.9]

Henry Kaestner: [00:26:51] So it’s been eight years since you raised that first fund and a lot’s transpired since then and a lot of development and team in Indonesia. And then along the way, though, you found an opportunity not just to invest in fast growth companies, companies that are growing at, say, 10, 15 percent month over month, but also in the lower to middle markets, companies, companies that might be going through a level of generational transfer. And that’s really where William comes in, too, because that’s part of the team that he helps to lead. Walk us through that transition and how you’ve seen opportunity to stay doing some of the things on the fast growth side, but then to merge that in with some the opportunities you’ve seen with some businesses here in the United States that more of us might be familiar with. [00:27:32][40.9]

Luke Roush: [00:27:33] So one of the other things that I think is really important and is just a lesson that we’ve learned, particularly in the first four or five years of investing outside the U.S., is the importance of having local partners. [00:27:43][10.0]

[00:27:43] And one of the things that we’ve been pitched on any number of times is entrepreneurs who live in the U.S. who have grand plans of being able to take their business either to Southeast Asia, to Africa, to Europe or wherever. And what we’ve seen on the ground is that in different countries, each country’s different. [00:28:00][16.2]

[00:28:00] Investing in Southeast Asia, which I’d put in air quotes if you could see me, is something that’s not a good idea unless you’ve got a really huge fund, because what it looks like to get capital into and out of Indonesia is completely different than Malaysia or Vietnam or Cambodia or Singapore. And so contextual awareness as investors put capital to work is really important because the people who really understand what ministries can be most effective on the ground in emerging markets and also understand who can be trusted in business and also understand how to ethically in a Foreign Corrupt Practices Act context, navigate the governmental authorities. You have to be on the ground to be able to understand who those men and women of peace are. And that’s something that was a really important lesson that we learned in the early days of Indonesia. It’s something that we continue to apply today as we think about, you know, our work with Fund Three just in terms of our work with lower middle market sector. One of the trends that we observed of the last four or five years in that we’ve had a lot of conversation not just with our own team internally at Sovereign’s, but also with our limited partners, is that on a comparative basis, venture investments have gone quite a bit more expensive over the last four or five years. And at the same time, what we’ve witnessed with the baby boomer generation here in the U.S. is that there’s well over a hundred thousand businesses that are going to go through generational transition in the next 10 to 15 years. Many of those businesses don’t really have any idea about what that transition is going to look like in terms of leadership and in terms of continuity around the culture and ethos of the business. So as we’ve waded into now our third fund, we’ve become a lot more focused on businesses that we would describe as generational transition or tightly controlled family style companies that are in the lower middle market sector. And so our focus has really been on the southeastern part of the U.S., although these businesses exist everywhere. And, you know, on the venture side, we oftentimes are talking with entrepreneurs about what it might be like some day for them to have 50 or 100 or 200 or 300 employees on the lower middle market side. We’re talking about businesses that already have 50 or 100 or 200 employees and oftentimes have tremendous witness and testimony and impact in communities where they’ve been planted for 10 or 20 or 30 years. And so a big focus in our third fund has is coming alongside these entrepreneurs and providing long term think 10 to 15 year plus hold periods aligned capital that celebrates where they are in terms of values. We’re okay being a minority investor and we value, particularly in the current economic climate, the ability to maintain low leverage. So we think about return on equity, not as a leveraged ratio, but as a straight ratio. [00:30:46][165.8]

William Norvell: [00:30:47] Now that’s I mean so one thanks for branching off into that market so that I have a job. [00:30:51][3.5]

Luke Roush: [00:30:51] Wait, let me ask you a question. So, William, what gets you excited at lower middle markets? Like what other kinds of businesses that you get really ginned up on? [00:31:00][9.1]

William Norvell: [00:31:01] It’s fun. I mean, I I get excited that I get to be a part of Sovereign’s Capital because I get to hear about venture stage companies. Right. That’s exciting. You read about them a lot. I think they have the potential to be cultural change agents in really unique ways. These are companies that end up on the cover of Time magazine. Right. And do really world changing things. I guess for me in my life, I’ve never been a home run hitter. I love a good single right between the first and second baseman. And I feel like that’s a little more the way my mind works. And so when you talk about one size fits one, what I think it’s the same for investors, right. So my investment philosophy is I love seeing a business that has been an anchor tenant in their community for a long time, they’ve been kind of on this long obedience in the same direction mentality, just continuing to get, you know, half a percent better every single day at what they do. And we had a guest on Don Flow who said one of my favorite lines that I keep repeating the other day. And he said, you know, when someone entrust their scarce labor capital to me, I take that very seriously. And in contrast to, not that this is bad, it’s just different. In contrast to the moving around nature of startups where you work in a barge and you kind of try new things. And a lot of these companies in lower middle market and in these communities, people entrust their scarce label capital for 25 years. I mean, they go to work at this company and they never leave if it’s done well and if it’s done right. [00:32:26][84.8]

[00:32:27] And while you’re unlikely to end up on the cover of time and you’re unlikely to have, you know, five, ten thousand employees, because that’s probably not the scale of the company that you’re going for, you are likely to have a really impactful vision into a company in the community. And for me, a lot of that comes from my personal story. My dad more or less ran a small business. It was a small unit of a bigger business. And he probably had eight to 10 employees. And I just grew up seeing the impact he had on their lives and that just God planted a seed in my heart to be a part of that. And I saw what happened when he left and I saw how they were treated afterwards. And eventually the office actually closed. And so I saw the impact that leadership could have. And Stauber, my holy ambition, my highly ambitious life is to be a phenomenal number. Two, to visionary entrepreneurs and leaders of well-run small businesses. And being able to come alongside them in unique ways is great. And lastly, I’d just say the way my mind works to think about different investing is just I’m really good at taking a canvas and making it better. Having 10 20 years of data to build on had in that to make decisions on is just the way my mind works. I don’t work as well with kind of the blank canvas and come up with something out of the blue. [00:33:38][71.0]

Luke Roush: [00:33:38] Good. Thanks for sharing then. [00:33:41][2.2]

William Norvell: [00:33:41] And as we come to a close, you’re going to get the hot seat question that everybody gets. It’s amazing to see how God’s work continues to move through us and through our companies, but specifically through us and then therefore through other people. [00:33:53][11.7]

[00:33:53] And so would love, if you would tell us maybe a portion of scripture that has come alive to you in this season of life, maybe something you’ve been meditating on for a while or even this morning, just something, God’s word that maybe you could share with our listeners that’s impacting you and how you do your job as an investor. [00:34:09][15.7]

Luke Roush: [00:34:10] So it’s a great question. And one of the things that I’ve been doing in the last couple of years is actually reading through the Bible on youversion. And at the end of each day, you can actually go through all the verses that you read and then you can highlight and then copy paste. So I’ve been building this note’s file over the last couple of years and then over time I hope to be able to actually pass effectively a Bible off to each my kids that has all the scripture that has spoken to me and then some notes on how that scripture spoke to me at the time that it found me. And as we know, the Bible is alive. And so one of the things that I’ve just observed is the rediscovery of scripture and what it said to me ten years ago or 15 years ago or 30 years ago. As a kid is oftentimes common, but sometimes different. But I was doing a devotional with my son and one of his friends at a football combine down in Southern California a couple of weeks ago, we were going through proverbs, as I’m prone to do periodically when I’m just looking for something quick. I’ll go to whatever day it is. And then the proverbs. You know, if it’s March 16th, it’ll be Proverbs 16. [00:35:11][60.9]

[00:35:12] But we were going through Proverbs 16 on this day and I highlighted the verses most important to me. And and my son and his friend did the same thing. Just really interesting. The narrative of these three verses from different parts of Proverbs is proverbs 16 to 9 and 10. And in 16, I won’t read ’em in sequential, although note to listeners that there’s some other scripture between each of these, but all persons ways seem pure to them. The motives are weighed by the Lord in their hearts. Humans plan their course, but the Lord establishes their steps. The lives of a king speak as an oracle in his mouth does not betray justice. How much better to get wisdom and goal to get insight rather than silver? And one of the things that has just been a great joy in Sovereigns is both the partnership that I’ve had with William, you and Henry and Andre and Tom and Jake and Michael now and others that are on our team. It’s been an incredible joy because our hearts are prone to corruption and our hearts run after things that are not always the Lord’s design. And so the joy to be able to do things in partnership and also to have our hearts start to chart our course, but also having people around us that can try to make sure that the Lord is speaking directly into decisions that we make, knowing that the heart is deceitful and trying to build up a hedge of protection around that through both fellowship as well as God’s word and prayer. That’s something the Lord’s been teaching me lately, in part based on my own failings. So that’s what I’d want to share. [00:36:38][86.1]

William Norvell: [00:36:39] Amen. Thank you so much for joining us. Thank you so much for sharing the Sovereign’s story and what God’s been doing for so many years and just highlighted someone who’s got to be a part of it. Catching a vision from the Holy Spirit and taking one step forward and seeing what happens and then taking another step forward is something I see and you and Henry and Andre and Tom and something that investors should be thinking about as they get into faith driven investing. This is not mapped out. This is not a clear strategy on what to do in every situation. [00:37:11][31.7]

[00:37:12] So thank you for sharing that story of how you guys just kept putting one foot in front of the other. Trust in the Lord, exactly what that verse said and continue to learn along the way and humbling yourself to what God’s plan is. [00:37:12][0.0]

[2027.7]

Henry Kaestner: [00:02:44] Welcome back to the Faith Driven Investor podcast. It is a distinct pleasure to be back on with my co-host, William Norvel, and then also with a good friend of ours, Greg Lernihan. We’d like to think and maybe it’s because we’re involved in the production, a show that we get a great chance to talk to a great number of our friends, not just people who are guests, but people who have done some level of life with and have some kindred spirits with. And I can think of no better example of that than Greg. I have not known Greg for very long, but I’ve known him long enough that he’s made such an impression on my life that there are few select people that I have put in this kind of almost macabre document that is to be open in the event something bad happens to me. And I’ve told my kids about this and told my wife about this because I really want to make sure that my three boys in particular get a chance to learn about different things from people who I know and trust, who are subject matter experts at a whole bunch of different subjects. But one of them is the topic of faith driven investing as the Lord might put them in a position to be able to steward his investment assets. I want them to learn well and I want them to learn from somebody who will be able to share with them their experience. And so I’ve put in this document. If something bad happens and I want you to learn about faith driven investing, I need you to call Greg Lernihan. And that’s what we’re gonna be doing today on this episode. We’re gonna be talking to Greg Lernihan, somebody I personally admire, somebody who’s thoughtful about this space and to talk to him about the way he thinks, the framework that he leads his family through, how he places investment capital, what’s important to him, how his faith drives, what he does. Maybe one of the other things that really gravitates me towards Greg is the fact that we have very similar backgrounds. We both care a lot about college basketball. Different teams, but we more importantly have an entrepreneurial background. God used this to build different companies and both have had some degree of exits coming from those companies that has afforded us an opportunity to be thoughtful about stewarding resources. So Greg, with that, let me just say first off, give you a chance to say hi. It’s awesome to ave you on the show. [00:04:48][124.0]

Greg Lernihan: [00:04:49] Thank you. Very thoughtful, Henry. And obviously an honor to be part of the team. I’m a consumer of the faith driven podcast and part of this community. It’s a pleasure. [00:04:58][9.2]

Henry Kaestner: [00:04:59] Well, super grateful to have you on. As we get started, tell us about that background. It starts with an entrepreneurial background. It’s creating wealth. It’s creating a company. It’s growing value in that undoubtedly informs also, of course, the way that you think about investments. But tell us about that story first. [00:05:16][16.9]

Greg Lernihan: [00:05:17] Yeah, I worked for Siemens for about 20 years, which is a large Fortune 100 company and various leadership capacities. And then in 2001, end of 2000, my co-founder and myself decided to start an electronic security integration via life safety company. It’s called Convergint Technologies. And so what that means to the listeners is when you walk into a building and swipe a card, it allows you to go to certain parts of the building and there’s cameras watching you. We design service, then install those types of systems for very large companies. Now, globally, the banking industry in the entertainment industry, Fortune 500 companies, airports, things like that. And it’s been an incredible journey. We now have over 5000 colleagues across the globe. And what I’m proudest of is the culture that we built. Henry and that we really have a tremendous culture. We have people join us only for our culture and we give back to the community. We make it an environment that everyone feels special, very empowered. And it was a real delight to build that company still carrying on today. I’ll tell you this story and how I got into faith driven investing in that in around 2011 or so God put on my heart Haiti. I really can’t tell you why. Only thing I can think of it was on TV a lot from the earthquake in 2010. And so in 2012 I took 31 other colleagues to Haiti, which was my first trip to a developing country. I’d never been part of that. And so I was emotionally wrecked from the experience, the lack of infrastructure, the depth of poverty, the living conditions were deplorable. And of course, we’ve all seen that on CNN. But when you’re in the environment and you’re speaking to this people and they’re so religious and thankful to God, it really, really changed my life. And it’s kind of like a halftime moment, which is a book written by Bob Buford, where it was time in my life to go from success to significance. It really was clear to me. And at that same time, we were actually in a process and selling majority interests of our company to a private equity firm. And so I had to figure out how we were going to steward these new financial resources that were coming our way that we really weren’t prepared for. So I decided to leave day to day operations still on the board. I’m still an investor involved in strategy, but day to day I’m not. And it was a really challenging time for me to leave a company that I co-founded. And all I knew was that I wanted to have purpose in my life. I wanted a purpose. Well, I think back to a quote from Steve Jobs, and you may know this from John Sculley. And I was it was in the 80s when Steve Jobs was young. And you need a gray-haired guys to be on the leadership team. And he goes to John Sculley and CEO of PepsiCo and says, Do you want to sell colored sugar water the rest of your life or do you want to come with me and change the world? And I can remember that resonated with me when I was young. A boy would I love to work for a company that’s actually changing the world. And so I committed myself when I left to using the resources God had entrusted with us and our family. And I was going do something purposeful with it. And so that’s my entry point now into impact investing was from that perspective. [00:08:25][187.7]

Henry Kaestner: [00:08:27] So expand on something I’ve come to know from many of the talks that you’ve given it, just about how you think about the assets you stored. So you think about generosity, for instance, and you’ve come to understand that we were served this generous God and think that a step towards faith driven investing begins with seeing the resources as his. And being generous with me modeled that out. But tragically, for a lot of our conversations, people will circle the subject of giving and focus on that and not so much. It invests things like they’re focusing on the left pocket of giving and come to understand increasingly that guidance at all. And they can give away and and as they give, they come closer knowing God. And that’s awesome development that’s been happening in the global Christian church as the church becomes more generous, but not so much on the investing side. So a lot of people might think I’ve been in this kind of framework that I make as much money as I can on my investments over here in my right pocket. And then with all the money that I make from my investments, then I can go ahead and give it away. You, of course, have come to a different thought, different place where you’ve come to understand that the very process of investing your capital might advance some of the same goals that you feel that God has put on your heart as you do with your given goals. But I don’t wanna put words in your mouth. How do you process that relationship? [00:09:40][73.2]

Greg Lernihan: [00:09:42] Well, it’s complicated. First, after resigning from day to day operations, I actually thought it was gonna go into the nonprofit space and use my time talent resource the best I could to help the nonprofit world. [00:09:52][10.6]

[00:09:54] Then the first thing I looked at was how much capital is going into that space. And it turns out this past year, 2018 was 428 billion dollars. And the challenge with that is that had grown less than 1 percent net after inflation. It’s been basically same over last 40 years. And there are 1.5 million nonprofits trying to get a piece of that pie. That’s pretty much stagnant. So I happen to be on a trip that I went to with Bob Lupton and Charity Detox, also toxic charity author. And he talked to me about this in his book. You Can’t Serve a Community Out of Poverty. And I remember sitting there saying that, you know, God had blessed me with some leadership skills and business skills, skills to communicate effectively with people. My brain was wired to be more in the for profit side. So I felt if we’re going to make an impact. I had to look at the capital assets. And it turns out that the investable assets in the U.S. are 200 to 250 times more Finance Square that we’re giving away. So if we’re gonna solve these social issues that we’re facing, both in the US and globally, we’re going to need other capital matter if you grew that by 50 percent. There’s you maybe from wealthy ones sustainable development goals for 2030, where they talk about all major issues facing the world, whether it’s poverty, health, education, and they have goals for every one of them. And they estimate that will take two to three trillion dollars each year for the next 15 years. So impact investing started to gain traction. And the reality is, if we’re going to make a difference in this space, we can’t do it with just care of capital. It’s not even up for discussion. We need both investable capital plus charitable capital. And fortunately, this impact investing market is emerging and trying to fill a space that has been doubling over years. There’s now 500 billion in market size and all predictions are it’ll be 3 trillion the next five to seven years. And people are pouring money in from foundations, from private equity firms, from investment banks. And so now we have more capital coming into the space. We need better deal flow. But I want to make sure that I comment that I’m not talking about not doing granting. This is in addition to we have to do granting. We just can’t rely on social and government programs and grants to solve our problems. We need more capital from the outside world. So that’s why I focused my time. [00:12:17][143.5]

Henry Kaestner: [00:12:18] So I think that that’s incredibly important. I think of, you know, just set box of Tic Tacs and all of them, they’re kind of like allocated for being able to achieve the different goals that we might all have with this U.N. Millennium Development Goals or whether it’s goals that we have that are driven by our faith. But one of those tic-tacs is giving three or four of them are government spending plus giving. But the rest of the entire box of those tic-tacs are all units of investment. And so if we really want to move the needle, harnessing the power of the rest of our Tic-Tac box, and it’s just a lousy illustration, but you’ll see it from the slide in show notes is super important. And yet you’re saying, of course, as important as it is, it’s also really important to give as well. Tell us about as you have progressed in your giving, in your investing. What are some of the aha moments that you’ve had? What are some of the things that have been kind of several places along the road where you’ve made some shifts, maybe some pivots to kind of get where you are right now? [00:13:15][57.0]

Greg Lernihan: [00:13:16] Yeah, there’s been a few of us here. When we started back in 2013, we had this philanthropic focus and then also added onto it a family fund that we were gonna start investing and impact investing I’d say I entered the space from a secular perspective. I wasn’t really familiar with or connected to this emerging faith driven movement back then, but it started reaching out to people and connecting and we ended up going to some Christian conferences, one of which being the gathering. And there’s where we got connected with leaders in this space, specifically from Praxis, which was a light bulb moment for us because their thought leaders and everything they were presenting was challenging the way we were going to steward God’s capital. So over the next year or so, I would say we finally got exposed to social, spiritual and financial returns. Up until that point, we were just social and financial. [00:14:07][51.0]

[00:14:08] And this was an aha moment that we can literally go out and invest in entrepreneurs and companies that are going to disciple and make more followers of Christ. But the biggest moment for our family, I would say, was when we figured out that these really aren’t our resources. Henry, I’d like to say that we’ve known that for our entire lives have been a Christian my entire life. But it wasn’t until we prayed on it. We had excess capital. We didn’t feel good about it. And we finally understood. [00:14:37][29.1]

[00:14:37] It took years because I literally wrote in my prayer journal. Lord helped me to get comfortable with giving all of these assets away and that these are not ours. And the steward them as you would want us to. And I remember, not wanting to write it in my prayer journal at all. But my wife talked me into it and then slowly praying on it, it came to be and now we were very comfortable. [00:14:58][20.8]

[00:14:59] So all of our internal discussions with our family are stewarding his resources, and we believe God wants us to not only steward them well, which is by everybody’s definition, what well is we can discuss that, but to take risk. These are God’s resources and to take risk and then to completely trust him. And that’s the journey one. And that’s possibly the hardest part, because when you’re looking at investment, you really don’t know whether they’re gonna be successful or not. And when you put a faith lens on, it gets a lot harder. And you have to. And we’re learning and growing from this to trust him. [00:15:31][32.3]

William Norvell: [00:15:33] It’s amazing. William here, thanks so much for walking us through that and your story. You know, it’s funny. I do want to share one quick story I ran into the other day, though I don’t think I’ve shared with you yet. We’re talking about Convergint. You talked about the culture and how much that meant to you and how much you thought about that and spent so much time. Well, I ran into a business leader who’s in a similar space as yours. [00:15:53][20.0]

[00:15:54] And unprompted, I was talking about, you know, where you get people that are kind of getting going a little bit. So they’re taking people from other companies. They’re like getting people from those places. Just this one company. No one will leave it. We call them all the time and no one will lead this company. And it was Convergint. They just said, you know, we feel like we can get anyone we want unless they work for them. And they were like, we don’t know what they’re doing over there. [00:16:20][25.7]

Greg Lernihan: [00:16:20] Well, that’s a great compliment that I get to receive today. We’re proud of the culture. And as you know, people can work for anyone and they choose to work with. We never say they work for us. They work with us. And we use verbiage that matters to their colleagues are equal. They’re not employees that work for me or anybody else that comes. That’s that’s a real compliment. [00:16:40][19.4]

Henry Kaestner: [00:16:41] I want to expand on it a little bit. If you know, of course, that we also have the Faith Driven Entrepreneur podcast, which is a sister podcast. And there’s a lot of there’s a good amount of overlap. And so on one hand, you say, well, this is just about investing, you know, Henry, just stay to the script. And yet as investors, we’re investing in other companies. Angel investing through funds, et cetera. And maybe one of the biggest things that you might be able to impart to some of these entrepreneurs that are starting and running their businesses that you’re now investing in is how to help them to understand how to think through a framework of culture. Culture leads to more employee retention, which is what William just spoke to. And that leads in turn to better investment returns. So I think that maybe it is helpful if you just spent just a minute or two. What is the framework that you went through a conversion that led to this culture where Wayne says nobody would leave? [00:17:29][47.6]

Greg Lernihan: [00:17:30] Well, as I mentioned in the open, he worked for a Fortune 100 company for 20 years and were very well trained on business processes and leadership in growing PNL. And we had responsibilities for it across North American. When we started our own business, the first thing we did was just stand and myself, we were in the basement. We wrote down all the things we liked about big companies, professional think about growth, no such thing as not thinking about growth, well-trained, strong leaders, things like that, all the things they’re not good at, not necessarily giving back, not necessarily treating people the way you become a number of not very family friendly. You don’t know everybody. It’s more of you’re just there to get through with your day. And then we went to small companies which are small companies do well, president answered the phone in the middle of the night. They’re easy to do business. They have the easy button. They’re never hard to do business with. They’re always local. Hyper-local tough side is very normally live. Lifestyle businesses. You know, if they’re successful in Birmingham, Alabama, they have no reason to go to Florida. It’s just hard. I don’t know how to do it. They’re generally smaller in size. They generally don’t spend as much money on training because they try to cut corners. What we did was we knitted those together and came out with a company with the infrastructure and body of a Fortune 500 company with professionalism growth. But now we added in the ease to do business. Local president type of mentality. And so what we ended up building is this company now that can serve customers globaly, but very decentralized. So our culture was about I am converging. I own my position on the team. You pick up the phone, you own it. It doesn’t matter who you are. We’re all equals. We just have different sets of responsibilities. We expect to be our customers best service provider no matter what business we’re in. That’s a standard that no one can really meet. So we literally say to our clients, well, we’re at other companies, we’d say a one to 10, a scale of one to 10. He’d sit in a room going it went from 8 to 8.2. Aren’t we doing great? And then our company is. Are we your best service provider against Amazon, against the painter, against whoever you’re dealing with? Will you give us the mark that says Convergintis the best. And if they say no, we can accept that because we don’t skew to any of this. We want the real truth. And what that drives is a culture of accountability, empowerment. And I read this book. Our whole company read this book called Founders Mentality, where they studied that only one in ten companies grow their EBITDA, their profits for more than 10 years and convert. We’ve been blessed with 18 years of record growth each year, even through the difficult times. And they said two or three things. And number one is you have this enemy. They call something else in the book. But it’s where you are. In our case, it was the big billion dollar companies that we wanted to go and beat and we wanted to be better, more professional prepared. They wouldn’t be able to tell the difference because we had capital and knowledge and expertise. And the second one was ownership and we shared equity. Henry, William, quite a bit of equity, but really it’s also shared ownership that they own the success of those offices like president’s. And then the third one is it’s very decentralized and we allow our colleagues to make all the decisions. So our decisions are on the edge. Nothing came back to Dan or I. If it’s a customer issue ann you’re in San Francisco, you know what you need to do you’re empowered to do that. So I’d say putting all that together now, 18, 19 years later, people join because they like the empowerment. And then we have one last volume. We have 10. I go my last value and belief is fun and laughter on a daily basis. So our whole culture is it’s OK to make fun of ourselves. It’s OK to have fun. We constantly are doing events and dressing up as rock stars at our national meetings and anything we can do to make the environment a fun work environment. [00:21:19][229.1]

Henry Kaestner: [00:21:20] What rock star did you dress up as well? [00:21:23][2.7]

Greg Lernihan: [00:21:24] That’s a very good question. In my case, since I was the leader of the company at that event, they were kiss rock stars and I was more the director. But I’ve been a Cookie Monster before and I called booking Monster and I had the Cookie Monster outfit. We’ve had all types of things. I’ll just leave it at that. But the kiss one is actually one of our famous ones, all just in full gear. We didn’t short suit it either. [00:21:46][21.7]

William Norvell: [00:21:47] That’s incredible. Thank you for going on that tagent with us on that will shift back a little bit. You bet you if you’d ever terms on the show. We tried to get into these terms with a lot of people. Of course, you know different people to find them differently. You mentioned impact investing. You’ve mentioned faith driven investing. How do you define these terms? How do they work with your investing strategy, with the assets and resources that you’re stewarding? [00:22:10][23.4]

Greg Lernihan: [00:22:11] Well, there is some differences in the interpretations of each and from the impact investing side. Boy, I would say there’s broad agreement across the entire investing spectrum or impact spectrum. That Global Impact Investing Network, which is known as GINE, is the central repository for these types of things. And everyone’s accepted the definition of investing in enterprises with the intention to generate measurable, beneficial social enviromental alongside a financial return. That sounds like a lot of words, but what it really the two key words are intentional and measurable. So for to be an impact investment can’t say that I’ve invested in Yahoo or Facebook and they connect people in world. It has to be an intent. Your intent is to make a difference in the world. Your intent is to drive behavior and then you’re going to measure that social behavior. And in our case, that could be measuring jobs in impoverished areas. What are we paying them? Are there children now going to school? Do they have medical benefits? Those are measurable social issues on the face driving side. Everything starts now with a faith lens. So in our case, we refer to ourselves as faith driven investors. And we start everything from the Christian entrepreneur is that that he or she is faithful and Christian in this case and that they’re going to. Lead that company from a kingdom world view. They’re going to use biblical principles to run their company and the leadership is willing to share their faith openly throughout the company. In the end, we seek a triple bottom line and spiritual impact, social and financial. And so at the end of the day, as investors were investing from Christ perspective, and we’re hoping that these companies will honor God and the way to conduct business and they’ll do business in an excellent way. [00:23:53][102.0]

William Norvell: [00:23:54] Hey, Greg, thanks so much. You know, we’ve been going through the conceptual stage, which is awesome. Thank you so much for walking us through how you architect the assets that you’re steward egg. That’s just so interesting. And it’s one of the best articulations of it that I’ve heard. I’ve got to hear you do this a few times. If you could go a layer deeper for us to be really, I think, great for our listeners to hear maybe about some specific companies and how this has actually played out, both from the leader perspective, the product and then the returns, of course, both in all those categories. [00:24:22][28.3]

Greg Lernihan: [00:24:23] Sure. Let me highlight two. One is a company called Join and they’re based in India and the founders, a person by the name of Mel Murray. And she went and actually moved to India for better part of six years and immersed herself living amongst the poor and tried to figure out how she could use the skills that they have there locally. And so what they could do is manufacture high quality, high end purses. And so she has a nonprofit side called Joy Corps that takes care of all the holistic services for these women that they don’t even know what to do with the capital, that they’re paying them, how to go to work. What are the responsibilities of, you know, having these resources? And then on the other side, she’s selling purses through boutique shops and online. And we bought them for my wife and her daughters. And we’re not buying them because we’re trying to be nice. It’s because they’re really, our daughters and females in our lives that get these, love them. And what we’re doing there, William, is she’s probably between 2 and 300. She may be as much as 400 now people that she’s hired in the poorest areas of northern India. And she got a low interest loan from us. We didn’t do equity. We wanted something that would allow her to start to think bigger and still afford to be able to do it. And so we’ve been doing that for about four years. I speak with her almost on a monthly basis. We’re very connected with her and we’re actually going on trip for the first time. I didn’t tell you that she ends up getting kicked out of India due to Christian beliefs in her company and some other nuances. And she came back to states for a couple of years and then moved back to northern Thailand to ching ry so she could be as close as she possibly could to still living amongst the poor. And she’s kind of a modern day Mother Teresa in my life that really makes us better for just being around her. So the spiritual is she walks up and down the streets and converted people to Christ on a daily basis. Just when you meet her, speak with her and just have the opportunity and presence with her. Our social impact is tremendous with the hiring of the colleagues that we have. The pay we track, the pay, the benefits and those types of things. [00:26:34][130.9]

William Norvell: [00:26:35] That’s a perfect place. Great. So we’ve mentioned a few different types. You said you’ve invested debt. You’ve obviously invested equity convertible notes a couple of times. Then obviously there’s the spiritual financial impact. I’ve seen you talked before about how you think through four different types of investments and how this graph, both from a financial return or a spiritual return, you might walk in our listeners through that framework. [00:26:54][19.8]

Greg Lernihan: [00:26:55] Sure. I’ll do my best to make it easy. A couple of years ago, we started to literally plot out our investment on a two by two, which is on the X axes or the bottom axes is financial returns and on the Y up-down axes of social and spiritual terms. And then you divide that into four quadrant. So in the lower left quadrant would be low social, low spiritual and low financial where you generally don’t want to be. And in our case, we called that buried talents because we studied the parable of talents. We’re all familiar with that. You’re not using those resources appropriately. And then if you go to the right. So now you’re in a high financial still low spiritual, low social. We call that capitalistic. And most of the capital in the world is in this quadrant. These are investors seeking the highest returns. First and foremost. That’s perfectly normal. Nothing wrong with that. But then as you go to the top right corner is normally the winning quadrant because it’s high social and spiritual and high financial. And of course, we had investments in that quadrant. But what we didn’t expect is we had investments in the upper left quadrant, which is high social, spiritual, but low financial. And we tried to understand it, you know, how did this happen? And so what we learned is that these turned out to be some of our favorite investments. And we ended up kind of. These are all internal terms that we use in our family is called spirit led because we couldn’t justify financially why we made investments on this left upper quadrant, because there’s always a better investment further to the right. There’s always a higher return. And so after study in those, William, we learned in the upper left quadrant in particular and how it happened and why it moves us. We found those four things. The first thing we found is it’s biblical. This is we have gleaning going on in here the dignity of work for the underserved. And then we found it. Our faith in God and our faith in the entrepreneur superseded our fear of losing dollars or capital. We were willing to accept lower returns because we believe so much. In this case, Join is an example. If all the business opportunities that we invest in. Look perfect on paper, we said, where are we allowing God to show His Majesty and his power and give them glory and impossible situations? We like that these require God to be successful. The second is we employ the marginalized. This is where all the people are uneducated, lack employable skills, returning citizens in rural areas and predominantly women. And then the third thing was difficulty in raising capital. I’ve certainly heard Henry talk about walking up and down Silicon Valley’s Sand Hill Road saying he got turned down 40 times. Imagine and he was trying to raise capital in the capitalistic square. Now go up and over to a very high spiritual social content, but low financials, it makes that look easy. It’s impossible, difficult to raise capital in this quadrant. First and foremost, because they don’t have any planned exits, there’s no venture capital is going to come in. And most likely by a rural business in northern India, it’s probably not probable or strategic. Most of these are debt instruments in our family. About half of the investments in the upper left quadrant are debt versus equity. And we have used charitable capital, which I’d encourage other listeners to think about. Less than half of our capital net Quadrani from charitable from our daughter advice fund that you can use Impact Foundation or other people to help you invest in that. And then the last thing in that section is scaling is not important, William, to these particular entrepreneurs. Sustainability is they’re not looking to go global. They’re trying to keep people employed and adding. And then the last one, which is why we call this spirit led, is because these entrepreneurs are truly spirit led. The impacting humanity or human flourishing is more important than their return on investment. That’s the honest truth. Most of these investments are with women or minority led founders. And then the last thing is these, whether it’s Britney or whether it’s male. That reference, Sherley are incredibly humble. Leaders have no egos and they’re just there to serve the poor to the best of their abilities. And our family’s very motivated by them. [00:30:56][240.4]

Henry Kaestner: [00:30:57] So great. I think that’s also one of the things that I heard from you. That this upper left hand quadrant is comprised some of your favorite stories, people who have been taking great risk for the gospel, getting out there in very difficult places and their encouragement to you and their encouragement to me and our listeners. One of the things that some people who are listening to this might wonder is, do I have to in order to be able to have a gospel integration to what I do, do I have to find out that all of my investments are going to be in that upper left hand quadrant where necessarily in order to be able to have spiritual impact, to be able to invest as the Bible might lead me, that I have to have a lower financial return or take on higher risk or something like that? What does that upper right hand quadrant look like? Maybe. Maybe it’s not there the way you want to see it right now. But maybe you have hopes. You see developments in the industry so that somebody listens to this podcasts and say, well, I might have investments in both the upper left and the upper right. And the upper right doesn’t necessarily just need to be Fidelity Magellan Fund. It could be some other things that have some gospel inclusion as well. Talk to us a little bit about that. [00:31:59][62.1]

Greg Lernihan: [00:32:00] Well, it’s a good question, Henry. We definitely are fans in favor of companies are in the upper right hand quadrant. We would not expect, orwWhat we learned from this exercise is that in our view, kingdom, impact investing isn’t one quadrant over the other for our families. Both quadrants. And so we actively seek investments in both areas. Those have higher social returns, spiritual returns and financial in the upper right. And then we are willing to sacrifice some financial returns. And we also have funds in both sides. Henry and that we have a great investments, for instance, is a fund that does microfinancing in Southeast Asia and Indonesia, and that’s a very high performing fund, very strong Christian principles and leading it. And at the same time, we have a fund in the left quadrant, which is talented, which is trying to leverage companies in East Africa to give them capital to scale. And so they can go across both. And I wouldn’t want anyone that’s listening to think that it has to be in one quadrant of the other. First, Fortis is a family decision between you and God. And second of all, we’re fortunate that we have investments that look just like a cola or just like joint that are in the right quadrant. And One World Pharmaceuticals, which is this company called OWBP, where they’re actually making a drug. Multiple drugs. One of them is epileptic drug. That’s a branded generic that they make profit high margins here in the states. And then sell it for pennies on the developing world because they can’t afford it. And one of the problems with epilepsy is once you’re on that drug and you create a generic, if it’s not the exact same ingredients, which according to these scientists, it only has to do with eighty to one hundred and twenty percent of the actual brand, it can cause them seizures. So they created an exact duplicate, called it a branded generic, so that, you know, when you take this drug, you’re not going to have epileptic procedure. And so they’re making profit here in the states and then using that goodwill in developing countries. And it has a great opportunity to make good money and change the world. And it’s an upper right hand quadrant investment. [00:34:06][126.1]

Henry Kaestner: [00:34:07] One key takeaway and we can’t go over too quickly is that you said that the process doesn’t lead with a prescription of how much you put in the upper left or the upper right or even if you’re in all the different quadrants. But the prescription, if I heard you right, is it’s the process by which you submit that decision to God and do that as a family and then seek his direction. I think that’s really important that this is a heart posture thing rather than cash. You have that 20 percent in this fund or 10 percent of that fund. How do you do that as a spiritual discipline, particularly with your family? A lot of people, listeners are going to be doing this multi generationally. What kind of format? How do you guys do that in submitting that to God? [00:34:46][38.3]

Greg Lernihan: [00:34:47] Well, you’re right with your answer, Henry, and that it isn’t scientific as much as it’s more heart. We have three measurements that we use. The first thing we use is, are they Christ centered? So it starts with a scale of 1 to 5 and 5 is now and in some cases living amongst the poor. Their entire lives are dedicated to the marginalized. And so they get a higher score and it’s all subjective. Between 5 down to 1 1 would be somebody who’s not necessarily faith driven and they shouldn’t be in investment criteria anyway. The second would be are they employing the marginalized for our family? That’s our number one criteria. If we have a choice, we won’t invest in companies that are spiritually strong and invest in the marginalized. So marginalized to us includes returning citizens, previously incarcerated individuals, one of the hardest to employ. It also includes people that we described earlier in Uganda and also includes people in the south side of Chicago that are under-educated or un employed. And so we write that in and the last thing we write for is the potential for a financial return. And so we arbitrarily go through one through five that some of the funds I referenced earlier have a higher opportunity for higher returns. The debt ones that we’ve invested in the debt companies or companies we provided debt to are always lower. We know that going in. We know that they can’t afford generally the capital, but they can have a good business that’s sustainable, repeatable and can pay us back our debt so that we can redeploy it. And I think some people think if you’re in that upper left hand quadrant, it’s a bad deal. It’s a weak deal. You’re not supporting excellence. We just fundamentally don’t agree with that. It can be an excellent company that can afford a 4 to 5 percent return that’s helping marginalized or underserved community. And we’ll do just fine. [00:36:34][107.3]

William Norvell: [00:36:35] Thank you so much for walking us through that. Unfortunately, as this happens, sometimes we’re going to have to move towards closed now. But will love will likely beg you for more time later. We do that with a lot of people, too, as we’d like to close. Loved to just let our listeners in to your world a little bit. Amazing how God’s word continues to be alive life every day. And we would love to maybe let our listeners know what is God doing in your life through his word in this season, potentially, or today, even maybe this morning. Just where is he taking you? What is he teaching you and what journeys have you on right now? [00:37:06][31.0]

Greg Lernihan: [00:37:08] Well, William mine has has been today. It’s been for weeks and probably over the last year or two. And that’s for me and my family working to be obedient to God’s wishes. In the short scripture that works for me is “apart from me you can do nothing,” which is John 15:5. And I would say I mentioned earlier, I’ve been a Christian my entire life, but I’m not sure I believe that verse until the last several years have really been working, I thought. And even my Convergint days, my hard work, extra hours, motivating people was more my efforts. And I don’t think I gave God enough credit. And I now have completely understood in the past several years in particular that without reservation, I need the Lord. I can’t do this on my own. It’s not from my efforts. And so surrendering and being obedient to his wishes is far and away. The number one thing I’m working on, and that includes everything from small sacrificial things on a day to day to him trying to memorize scripture and make sure that reading the word morning and night praying over every decision we make. And so I don’t think this is going to end in a week or two. I think it’s a lifelong journey. But we’re going to continue to. I’m going to continue to do my best to render complete as well. [00:38:21][73.7]

William Norvell: [00:38:24] Amen can’t think of a better place to end. Just thanks so much for joining us, such a gift, such pleasure. [00:38:28][4.5]

Greg Lernihan: [00:38:29] Thanks, William. It was an honor. [00:38:29][0.0]

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