Richard Cunningham [00:00:00] You’re listening to Faith Driven Investor, a podcast that highlights voices from a growing movement of Christ-following investors who believe that God owns it all and cares deeply about the heart posture behind our stewardship. Thanks for listening.

Host [00:00:17] Hey everyone, all opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. And this podcast is for informational purposes only, and should not be relied upon as specific investment advice for any individual or organization. Thanks for listening.

Richard Cunningham [00:00:45] Well, friends, welcome back to another episode of the Faith Driven Investor Podcast. A joy to have you with us for what is episode 201. If you missed episode 200, it was a joy to have Luke Rausch and Henry Kasner with us, a couple founders of this FDI movement in space, talking all about the history and landscape and kind of where this broader movement has been and where God has taken it. And we’re back with Marks on the Markets here for our July episode of Marks in the Market, joined by John Coleman. And John, we’ve got a couple of heavy hitters with us as we’re talking venture markets today. And Jake Thompson, who runs the venture business at Sovereign’s Capital, and Rob Goh out of the Boston area who runs NextVue Ventures. Gentlemen, this is gonna be a lot of fun talking venture market. We are just off the heels of 4th of July. How is everybody after their Independence Day? Oh man, doing well.

John Coleman [00:01:33] Well, it was a relaxed weekend for the Coleman family, and I feel like with the venture focus, we are doing our version of All In right now, and since JCal gets to falsely claim they’re the biggest podcast in the world, I think it’s safe to say Faith Driven Investor is the biggest podcasts in the word, so Rob and Jake, you make it that way.

Jake Thomsen [00:01:51] Awesome, Booth, you guys, and yeah, really a privilege. All the Thompson kids have all fingers after the long weekend, which is always a success. So we’re excited to meet again.

Rob Go [00:02:00] Awesome. And we had a good long weekend as well. I actually was preceded by my 20th anniversary. So I went away with my wife for about a week before the long weekend. So getting back in the swing of things here. That’s awesome.

Richard Cunningham [00:02:12] Man, that is awesome. Good deal. Well, yeah, the Cunninghams are here in Austin, Texas, where just, you know, worth saying, we are on the heels of some pretty devastating flood tragedy. Oh yeah. I was able to escape away to the Pacific Northwest with some extended family, which is just a beautiful place, but definitely coming home to heavy hearts and a lot of thoughts and prayers for the people around kind of the greater Hill Country area here in Austin. We had a boat swept away in the. Floods on Lake Travis in particular and that is about as small of an issue you could imagine considering what others are going through and just kind of the devastation and loss but shifting back to let’s talk more positive things let’s get into the docket today. Jake Thompson I kind of want to give you a chance because venture markets have been under the microscope if you will over the last few years there was kind of the peak valuations and the venture frenzy of 21 and 22 a little bit of a fall post that. The wave of artificial intelligence is taking off as of recent, it seems like there’s some momentum and optimism back in IPO markets, but we maybe just kind of canvas the venture landscape for us over the last few years to kind of set our conversation today, and then I’ll let Rob chime in after you. Yeah, small question. Yeah, very small, we’re starting small.

Jake Thomsen [00:03:22] We’re starting small. How much time do we have here? Absolutely happy to, Richard. Yeah, you know, even you asking that question just makes me think how resilient and unique the founders are in this season, because you think about these last five years and it’s just been, we often talk about being a venture founder is like being a boxing match where you’re just getting punched in the face over and over again. You’re bobbing, you’re weaving, you’re trying to get some punches in. And this has been a season of a lot of those punches where you start off and there’s relative normalcy right pre-COVID and all of a sudden everything changes, lockdowns, everybody wonders what’s going to happen to these companies, are they just going to sort of shrivel and die, and all sudden there’s unexpected boon with working from home and just a whole lot of optimism, right, as there’s more money out in the system, a lot more people investing in these companies, valuations just shoot up, right. All the fundamentals get very, very positive. People assume big growth rates, low risk rates, and so even as you run the discounted flows of these companies. A bunch of reasons why it just ballooned up and became quite a bubble. And then you get to 2022, you have interest rates start to go up. That just let out a lot of the air from the system and it just got really, really hard to raise venture funds. 2021, early 2022, we saw this kangaroo explosion of new fund managers, oftentimes first time managers getting out there. It seemed like every dollar you deployed was just up and to the right, like, oh, this stuff’s easy. How come not everybody’s been doing this for so long? But then that 2022 came, rates went up, and just everything ground to a halt. You looked at the deal count just started to fall through the floor. You got the amount of money deployed, just so much uncertainty. Then you get to everybody’s capital being locked up in the banks because you had the banking crisis that was soon after that. Everybody got to the other side of that thinking, okay, what kind of sigh of relief can we breathe? Rates started to come down, but then that stopped. Then you had AI, which is just such a fundamental revolution in so many ways. I mean, if you get back to the boxing match, now it’s like a boxing match during earthquake. Where you just don’t even have firm footing as you’re trying to take these punches and give them. And AI today, and we’ll get in more into this, but there’s this term that was in a well-known blog recently that everybody is quietly freaking out, right? You might have money in the bank, you might have venture backers, you may not, which might be its own benefit, and yet everybody’s quietly freaking out because you just don’t know what’s going to happen in three months, in six months, in three years, right. But there are these IPOs now, right, we went about two years with no tech IPOs. And then 2023 started to crack that open with a couple of Clavio, Instacart, a couple others over the next few months. 2024 is better, but especially the last few months, you started to see a decent number of IPOs. And again, we’ll probably get more into that. But these are IPOs that are across a lot of different types of sectors that seem to be validating that people are ready to go back and go public, get DPI, right? Distributed Come back. And yet the fundamentals are still so uncertain, right? Today, capital markets do not like uncertainty. And so you get to where, okay, well, inflation seems to be low, but is that going to jump back up with tariffs, right. Economic activity seems to strong, but is, that can totally change with AI if people aren’t backfilled as they’re acquitting and just, what does that look like? So I think the number one thing that I would say today is there’s just so much uncertainty that the last few years have been this combination of, well, pockets of really good data and fact patterns. Pockets of really challenging data and fact patterns, and a whole lot of uncertainty politically, economically. It’s just a really hard time. And so back to my first point, founders in the season, a really, really special breed. Many of them are fit in terms of the fundamentals of the companies, and yet a really hard time to be running a company and to be investing in these kinds of companies, given some of that uncertainty.

Richard Cunningham[00:07:01] All right, that’s a world-class canvassing. I can see John and Rob both kind of jumping out of their seats to jump in. So gentlemen, I’m just gonna kind of open the floor and say, Jake just opened up the Pandora’s box. What thread would you like to pull on? Rob, go, we’ll start with you.

Rob Go [00:07:13] Jake, that was an outstanding overview of the last few years and description of where we are. So kudos to you for sharing that. So I have this view that it’s easy to think of where we are in the venture markets as sort of like a normal venture cycle, right? By nature of what we do, it’s a little bit of a boom and bust dynamic. I actually think that we’re not in the normal venture circle and that things have fundamentally changed, especially for early stage investors. So bear with me for a little bit. I think that there are essentially like four major shifts that have changed this market and more or less for good. So number one, I think the industry has matured, right? So we went from a world where venture was a cottage industry into a world where it’s much more of a mature industry. What happens mature industry, there tends to be concentration at the top of the market. As the big players tend to compete on scale and scope, and there are small players, but a lot of the economic rents get concentrated. So that’s number one. Number two, there’s been a rise of two unstoppable forces in the venture market. Force number one is Y Combinator, which basically eats up, by my estimate, 10% to 15% of the early stage supply. The other unstoppable force are mega funds. That essentially take up another 10% to 15% of the market with essentially price and sensitive activity at the early stage. And so you basically have this shrinking canvas for early stage investors, because it’s very, very difficult to compete against those two forces. The third is the idea of the power law went from being. Sort of like a non-consensus right idea to be something that everybody believes in and believes in to like the nth degree. And I think that that has huge implications in terms of how the different players in this market are behaving. And the last is we’re at the beginning of this AI super cycle, which has a much longer time horizon than a typical venture boom and bust cycle. This is more of like 20 to 30 year horizon as opposed to a typical, I don’t know, like five to seven year or like. You know, good times, bad times kind of cycle. And so you put those all together and man, we are in a different moment in time than we have been in since I think I started in the venture business more than, you know 15 years ago.

John Coleman [00:09:25] So I’ll try and be controversial on the other side. Jake laid out some of the challenges to the industry. I think this is probably the most bullish I’ve been on venture capital, at least in my career. And I think the reason for that is, you know, venture capital ultimately is about disruption first, right? About the ability to start new companies that have the potential to disrupt or change industries and more mature companies. And about the advancement of technology, because the vast majority of venture capital today is oriented towards either hardware or software. And I thinking if you look at the underlying dynamics of the macro environment right now, we are on the precipice of what could be the biggest … A series of technological changes in human history. So at least since the Industrial Revolution, but I could argue that it’s greater than the Industrial revolution because the fundamental technologies are more advanced and capable of advancing more quickly. So if you break that down, what’s good for venture investing? First is technological disruption. And I think disruption cycles in markets, in business, are faster than ever. I think new technologies quickly overwhelm old technologies. Business models change more quickly. I think there is more disruption in mature and immature businesses alike than ever before, which I think actually lends itself to new models and new businesses that can participate in that disruption. At the same time, I think we’re on the precipice of several different technological advances that would be world-historic in their own rights and actually feed into one another in unique ways, right? The internet is probably the most disruptive thing that we’ve all experienced in our investing career in terms of fundamental change to technology. But I think a series of things around energy production, around artificial intelligence, around robotics, around medical and scientific advances, and maybe some other categories are all coming together right now in a mutually reinforcing way, which means that we could go through a transformation in the underlying nature of the economy, the way that people work and businesses work, that it’s more radical than at any point in history. Now, that is predicated on the continued advances in things like quantum computing and energy, But if you think about it, artificial intelligence is like the backbone of that. But with the artificial intelligence, not only do you get this disruption in every single industry in the way that we have now machines that can perform like humans in terms of thinking, but those actually reinforce the technological advancement in those other areas. You need energy, for example, in order to support artificial intelligence. And so now we’re seeing nuclear markets open. We’re seeing advances in energy production technologies. We’re seeing governments be more open to alternative methods of production of energy, both because of resource scarcity and the increasing needs of AI. You’re seeing robotics advance in a way that, you know, robotics have been around for a long time. But the combination of robotics and artificial intelligence are going to create fundamental advances in those areas, I think, that are different than in the past, right? If you have humanoid robots, if you have self-driving cars or planes, now we’ve got hypersonic jet engines, which are making a comeback and more accessible and cheaper to produce. And AI is able to advance those technologies more quickly than they would have advanced in the absence of that. And that bleeds into things like medical technology, et cetera. And so if I think about just the fundamental opportunity to try and get in on the ground floor of the creation of new businesses that can fundamentally grow into massive businesses in a much quicker cycle than ever before with limited resources, I think that capability is greater. And the ability to dig into these technologies that are gonna influence the way every mature business operates in the world, right? Every single business has to pay attention to robotics, artificial intelligence, energy and other technologies right now. And I think new companies are best positioned to at least start those and pioneer those. And then, Jake, what you mentioned is the other side of the capital markets is now wide open. Rob, you mentioned mega funds. Jake, you mention IPOs. There’s less, I think, constriction on the ability of big companies to participate. We’re seeing Google and Meta and Microsoft done hundreds of billions of dollars into these markets now through acquisitions, acquihires, funding new startups. So, I think we could be on the precipice of a massive, massive technological change. The best way to access that change being through venture investing and venture backed companies. So, that might be the optimist’s view for why now is actually one of the most exciting times to be in the market despite its challenges.

Jake Thomsen [00:13:55] Yeah, I’d agree with you, Jonathan. I’d say that’s almost two sides of the same coin, because what I hear you saying, I draw a distinction a little bit, there’s the technology markets generally and completely agree with what you’re saying, because technology is being supercharged in all those ways. And some people ask, well, hey, is there still generally the advantage of having venture versus public markets? And to your point, right, there are these category-defining companies. If you look at the 1980s, 1990s with the personal computer revolution. And there’s been research done that says, well, every dollar of revenue for the Microsoft’s, IBM’s, the Apple’s in that season led to about $10 of GDP, right? You have this 10X multiplier of the underlying technology. I’ve got to believe that AI, I mean, it could easily be 10X at, right? For every dollar that is spent on revenue in these AI solutions, could lead to 100X at in terms of general growth of the economy, economic activity, and good companies have always been able to capture the value they create. And so I think we’ll continue to see that. We’ll continue see in the longer term, our performance and venture. And at the same time, it’s never been easier to write code to start a company. We’ve never had so many companies, right? You just look at base 44 acquired by Wix after six months, right, for $80 million, right. To be a venture investor and say, well, it used to be the software that was really hard to develop. And so, I could bet on a good team that could develop software. Well, now that’s the easy part of it. So almost the picking the winners as a venture investor and all the competition you have as a Venture Founder, I would say makes it harder as an individual in that system. And yet the system overall will continue to go in a really exciting direction, because I agree with your analysis there, John, that the market in general will drive forward in really compelling ways. It’s interesting though, that

Rob Go[00:15:36] But there’s this very stark dissonance where I think most people agree with what you share, John, at the macro level, right? Like a huge amount of optimism about the potential of these technologies to be transformative and be, you know, kind of multiplicative in the economy. But at the same time, you have a lot of folks on the ground who are having a really either raising money, building companies, exiting. Lack of liquidity. So that dissonance I find very, very interesting. It’s not that those two things are in conflict with one another, but there are other things going on that we need to get through to enjoy this period of flourishing that hopefully will be on the other end.

John Coleman [00:16:13] The illiquidity in capital markets, particularly because Jake mentioned DPI in his opening comments. I mean, any time you talk to a limited partner right now, they are not getting the money back for the last three years that they expected from their private funds, from private equity, from venture capital, et cetera. And so I do think one of the challenges for the industry is like, how do we shorten that liquidity cycle in such a way that people actually have the liquidity to reinvest? In these markets because the hold times have just been too long for people to get the liquidity to reinvest. And so Rob, I think you and Jake are entirely right. The capital markets are still a little frozen for investors who have traditionally participated in venture because they remain over-allocated into old funds from which they haven’t gotten distributions. Right? And I think the IPO markets and, you know, big companies like Meta or Google or Microsoft acquiring are helpful to introducing capital for acquisitions, but not for funding from the ground up, or at least dominantly not for finding from the ground up except internally. And so there is a disconnect right now, I think, in the capital markets and the opportunities that might be out there if they were.

Richard Cunningham [00:17:17] All right, we’ve got three really intelligent gentlemen going at it here. And then I consider myself the people’s host because then there’s me. And so just to kind of level set, because you’ve thrown out a lot of terminology, Jake and Rob in particular sit in the general partner seat, which is they are fund managers. They go raise limited partner capital from wealthy individuals, family offices, high capacity folks, institutional investors, things, endowments, pensions, foundations, things of that nature. They pull that capital together as venture managers and then go deploy it into Deals, founders, startups, and those folks. And so they kind of have this unique perspective where they’ve got their limited partners they need to care for because they’re stewarding and shepherding their capital. And then they go out and they pour the capital they get into companies they want to take bets on. And so I just want to kind of orient people around to where expectations are. And you’ve got this liquidity issue where the limited partners who have invested in the funds are eager to get DPI. So distributions back to themselves as investors. They’re saying, hey, we need these companies that Jake and Rob have invested in. To exit to generate some type of return so we can get our capital back and go invest in another fund or whatever it might be, or we’re just, we’re liquidity strapped and we need to get some cash back in the door. So just kind of want to get some terminology right there. So Jake and Rob, in that seat you’re sitting in right now, what are you thinking about the most? Cause you’ve got to source new deals, you’ve gotta go find the founders out there. You’ve got the founders you have invested in across your funds. And then you’ve also got the demands of limited partners who are asking you, knocking on the door, Hey, when are we going to get those distributions? I mean, you’re in an incredibly complex role right now with all the dynamics we’ve spoken to. Maybe the question is just how are the founders doing? Like those that you interact with on a day-to-day front that you’re investing in. Jake, you mentioned their resilience early on. What are they thinking about right now and all the founders that you’ve invested in?

Jake Thomsen [00:19:03] Yeah, so it is, it’s a difficult time where I think I’ll go back to what I mentioned earlier of just not quite knowing what things will look like for the next few years, largely related to artificial intelligence. I mean, late 2022, when chat should be first came out. I remember being at a Christmas party and just making Christmas poems from it and thinking, oh, this is going somewhere. This is going somewhere pretty fundamentally potentially changing of everything we do. And yet we don’t know what that looks like. I couldn’t have guessed how I’d be using various LLMs and AI and CLOD today. And I think you generalize that and you say, well, what does that look like over the next few years? And it’s almost a, you don’t know what you don’t t know where so much of technology has been linear, where you can kind of see, okay, the internet, you can track where we thought it would go. Right. First, you had more of a linear progression of everything that was already being done came online. Right. All of a sudden you had the white pages, yellow pages online. And you had Pepsi.com, right? Business as usual is now online, but we couldn’t have foreseen were those internet native companies, social media and others would probably wouldn’t have said this is going to happen down the line and yet those are some of the biggest companies of that era. And so I think the question is, how does it fundamentally change? What does it look like to be AI native to implement these tools? Because if you’re not implementing tools at every level of your stack, if you are not hiring people that are thinking kind of first, how do I adopt the efficiencies of a lot of If you have this framework where there’s perfect competition on one end, venture has always been very clunky, right? Again, the software, trying to get venture investment. Well, it’s becoming more and more increasingly through AI of a perfect competition construct. And you’re going head to head with a whole lot of people. So we see a lot of founders that they’ll raise around, they’ve got 12, 18 months, and they kind of can breathe for a little bit, but they’re already terrified of what 12,18 months looks like because they’re going to build with working hypothesis. They don’t know how that needs to change. So they just can’t. Have a magic crystal ball and try to figure out what that looks like. So it’s just, it’s that uncertainty is what a lot of these founders are experiencing day to day. That’s what we’re seeing.

Rob Go [00:21:02] Yeah, maybe if I can chime in, we were thinking about all the things that you mentioned, right, liquidity, new investing, you know, supporting the companies that have been out there, right? Like the beauty and the curse of being a fund, you know, having multiple funds that are in different stages is you kind of have. You know, I’m thinking about a founder who just raised their first seed round last week and they’re just trying to find early signs of product market fit, and then I’m talking about founders that, you know, they’re 12, 13 years into their journey and they are either thinking. How do I get an exit or like maybe it’s day one and I see another 10 to 20 year horizon here for this company to keep on growing. And how do I be aggressive about that? Right. So it’s kind of funny being a GP, you kind of like live all these parallel lives at the same time. I actually think that there is general optimism, I would say, you know, in our portfolio among the founders, right? Because if you started a new company. You’re hopefully optimistic, right? Like you’re still trying to take the first hill and you build conviction around this problem and this product that you’re building and you’re excited about that. I think for a lot of companies that are in the mid or later stages in life, they just got through this very, very difficult period where maybe they were sitting on a super high valuation, had a lot burn, they had to get fit and get their companies in shape, but they’ve sort of done that. You’ve either done that or you haven’t, you’re not gonna survive if you haven’t done that And now you have this like new substrate of like really, really interesting capabilities that hopefully you’re forward thinking and are applying into your businesses. And you’re seeing really great returns. Like one of the interesting things about AI is that a lot of the returns can accrue to scale players, right? Because if you save, you know, 10 or 20% of costs somewhere. Like it doesn’t matter that much if you’re like a 10% startup, it matters a ton if you are like a, you know, thousand person company or a company of really significant scale. And so, you now we’ve seen a lot of our late stage companies, you have new lines of business or massive efficiencies gained through some of the, you kind of low hanging fruit presented by AI and that’s just really the beginning. So I think that generally there’s actually a lot optimism in the portfolio, albeit with full awareness of a lot the challenges that folks are encountering as well.

John Coleman [00:23:13] Are you seeing a bifurcation amongst type of companies? So like one of the things that strikes me, because Jake mentioned it earlier. You know, we are seeing companies now that barely even exist with people leaving OpenAI or Apple or whatever and getting like a billion, eight billion dollars. Johnny, I haven’t got these crazy valuations. You can build a billion dollar company with a couple of people now that’s software oriented, that’s AI oriented. But we’re also seeing a shift to hardware investing and venture and breakthrough hardware technologies, where obviously the capital intensity of those businesses is greater. So it’s a little opposite of what you guys described, where there’s just so many founders, things are getting created so quickly. You know, to create, you know Jake a cloud seating platform or something like that. You actually need more capital intensity to make that work. But we’re also seeing some of the most interesting companies being hardware oriented now rather than software oriented which I think is a bit of a pivot. Are you guys seeing kind of a break in the types of companies in the way in which founders are acting or VCs are acting at the moment?

Jake Thomsen [00:24:15] Yeah, I’ll chime in and say, absolutely. And I credit that with a couple of different trends. One, because software is no longer the scarce resource, right, we’re investing in things that five years ago, we would have said, well, there’s friction there because it’s hardware, because it is hard tech, because there’s a services component. That friction was a negative back then because you really wanted to focus on the software piece. Now that software is almost interchangeable, all of a sudden that friction becomes your economic mode. And so it’s the way that you protect your positioning. And so we are, I mean, we’ve invested in a handful of companies that wouldn’t have been on the target in the past. I think there’s that piece of it that the hard things are more defensible. There’s also, I love to hear Rob Stotz on this too, but there’s almost a change in the zeitgeist a little bit of kind of what founders are most motivated by. Probably the confluence of whether it’s the elites in Silicon Valley, right? There are more and more, you mentioned all in podcasts, right. And there’s a couple of those guys just have gone a little bit more right and unpack that in ways that they’re being listened to. You’ve always had Peter Thiel’s and Elon Musk and Mark Andreessen with American dynamism, right? You have more of that where there are the cultural elites, you have this almost political narrative, which not to get too much kind of sociological, but the difference in just the tenor of the two different administrations. Right this administration is much more the vision of the good life is quite different therefore the threat we face is quite difficult and that threat tends to be external right it’s different nation states it’s the the future of american prosperity right there are a lot of founders that have been there quietly building that now have a renewed sense of agency and a new voice and so we’re seeing i’ll just give a shout out to the reindustrialized conference right it in its second year up in detroit on this week there’s like discipulous ventures that are all hard tech investors. I mean, Rob talked about Y.C. And the bellwether they are. You know, Gary Tan, just I think it was last week, had said, hey, we’ve really been focused on agents and the rest, like we need to focus on hard tech, too. So they’re making a call for startups all around the hard tech space. And you see, take those two things that the elites, the political narrative and then even the policy where there is more I mean tariffs do lead to reindustrialization in a way that we saw a lot of interest in a company just recently that their thesis was the U.S. Produces the most cotton in the world. And we import the most cotton products, but all the steps in between, right, it’s going all over the world before it comes back. Why don’t we just have technology that are 3D printing for knitting, right? Let’s build something like that. And a bunch of ECs were clamoring to get an awesome entrepreneur. But that is something that wouldn’t have been nearly as competitive a deal even just two, three, four years ago, because you have the type of policy like tariffs that make that possible. You know, the Pentagon launched its Office of Strategic investment right to invest in long term hard tech and that was. Signed under Biden but wasn’t operationalized until just now. You have a lot of things coming together that I do think you’re seeing like cloud seeding, like nuclear small modular reactors, a lot that just would not have been considered kind of core venture that are getting closer and closer to the core just over the last couple years, especially the last year in particular.

Rob Go [00:27:15] I’m going to take a little bit of a contrarian view here. I think this is a point of view that like software is commoditized because of AI. I don’t think that’s going to be true. I actually think that great products will still distinguish themselves. I think that crappy products will be commoditize, but I think really great software products will still stand out and you’re going to build amazing companies around that. I think that there is a couple smoke screens on the two extremes, right? Like the 10 person billion dollar startup. I don’t know if that we’ve seen that yet. I don’t know if we’re actually going to get there. There is a billion dollar valued companies with 10 people, which are essentially acquihires. But like, you know, are 10 people going to build great products that customers use and pay for and are defensible? I don’t really know if thats going to happen. On the flip side, I think the hardware thing… We have some hardware companies in our portfolio, and so I’m not going to knock that, but I think it’s a little naive to think that like, okay, like things are just going to be easier for hardware startups today. I think there’s two forces going on. I think one, we’re in a boom cycle within sort of AI robotics and that sort of thing. And so capital is just flowing there more easily. I think the second is that like because it’s been a hard period in sort of traditional software or, you know, software exits, there’s the sense of like, If I’m not going to get a decent outcome from a software company, I may as well bet the farm on a crazy hardware company, right? And by the way, the mega funds have a ton of capital that they’re pouring into these things. So I’m probably going to getting a markup or my chance of getting a markup is just as good, right. As a software. But like when this is all said and done, like what are the best companies going to look like? I think there’s still going to. Look mostly like software.

John Coleman [00:28:58] Can I ask a second question to you guys? So, I remember a very contrary intake I heard, gosh, nearly 20 years ago now, 15 years ago maybe, from Peter Thiel, where he was arguing that basically there hadn’t been much scientific progress since the computing revolution, that most of the new technologies that are really exploded. Were not actually human advancement in the way that cars were, industrial technology were, like social media, which I would argue has been arguably one of the only tech advancements that’s been like a net negative for society, at least in the ways that it’s impacted individuals for human flourishing and on, you know, metrics that we can measure, there are a lot of problems as a result of that. It strikes me picking up what Jake said with this tenor of American dynamism, solving hard problems, and maybe Elon was a part of this or others were. That a lot of entrepreneurs now are thinking about impact more than they were in the prior cycles. Like a lot people rather than just saying, I’m gonna create the new social platform or a new dating site or whatever, are really leaning into structural problems that humanity faces, whether that’s manufacturing. Defense technology, energy production, weather influence, things like that, where they can define what they’re doing in terms of the positive ways it will impact flourishing in society and represent more fundamental scientific and technological advances. Am I just like an optimist about the environment right now or are you guys seeing a similar vibe shift, so to speak, amongst founders? Like how do you see that versus maybe 10 or 15 years ago?

Rob Go  [00:30:30] So embedded in that question would be the thought that 10 or 15 years ago, founders maybe were less ambitious or saw less of a connection between what they were building and sort of like the meaningful problems of the day. I don’t think that’s the case.

Jake Thomsen [00:30:47] I agree. I think the founders that do really well, you’ve got to have that conviction that you’re doing something for a very good outcome, not just financial outcome, to put yourself through this kind of wringer. And I do think this maybe is a bit of vibe shift just more recently than 10, 15 years ago. And it’s a gross oversimplification. But if the prior spirit of the age was almost like seeing the good life is a bit different and therefore the threat’s a bit different, I think there was almost a sense of the threat is internal in some ways. And the way that people, not both what they built, but also how they built I think was very much aligned with their value system, right? This is where you got to a lot of, how do you think about who we hire? How do we think about addressing some of the problems in society through various structures and systems, right. A lot of just the conversation of the last few years, you saw that as a big conversation in the tech community. And so it’s almost like the problem that was being solved more recently, might’ve been different than addressing that threat externally, a little bit more of like, hey, we’re addressing the threat in our systems and structures. So that there’s always, I think ever since the beginning of Silicon Valley, where you got all the hippies going out and saying that we’re going to build new things for society, I think that’s still there. It just takes different shapes over time.

Rob Go[00:31:56] I also think that companies like over time earn the right to expand their ambition. And that’s not really a problem. And sometimes you have companies that go out with huge ambitions out of the gate, but it’s just not practical or, you know, it’s more narrative than it is reality. One of the things that I really can’t stand in the market right now is this concept that like, you need to have this infinite narrative in order to be a successful startup company. And I think that that’s just like so backwards. Like we’ve totally lost the script if that’s what we’re telling founders at this point. Because like, I think building great products and solve real problems is like the ultimate narrative. And if you have success and scale that earns you the right to expand the narrative down the road. And in an example of that in our portfolio, we’re investors in this company called Whoop which is a human health and performance company. We’ve been in this country for 12 years. You know, I think Will is a very ambitious founder, but it had a very narrow goal around trying to understand rest and recovery for elite athletes, of which he was a part of and he had connections to those type of people. And in the last year, they’ve expanded the vision of the company beyond what originally was around human performance to lifespan and healthspan and longevity. And I actually think that this is a company that they could have gone out with that mission out of the gate, and maybe that was in the background, but they had to should earn the right to be able to do that and to do it credibly. Instead of just being a business that like, okay, we’re saying we’re going to do this great thing, but like, do we really deliver outcomes for our customers? Or are we just like, you know, trying to feed into an infinite narrative so that folks will fund us down the road? I don’t know. I just don’t like that.

Richard Cunningham [00:33:32] All right, shifting gears a little bit, wanna go into the performance conversation some. Both of you guys, Jake, Rob, John, you as well, I mean, you’ve been in market raising funds, private market funds in particular, and the MAG-7 went on such a run. How was it defending private markets investing to limited partners who were just saying, hey, if I just put money in the S&P 500 or the NASDAQ, whatever it is, it just goes up into the right and this is easy. Like, why on earth would I tie up money for long periods of time in the liquidity window? Where are you at sentiment wise? What are you recognizing in the market as people kind of LPs in particular look to the private markets, ventures specifically, with kind of this private versus public and how folks are kind of reconciling that conversation and just kind of the overall performance of the asset class.

Rob Go[00:34:19] So this goes back to the point I had around the power laws consensus. And I think we’ve really seen the power lot work over the last few years, not just in early stage investing, but across all stages of investing, right? So you talk about the mag seven. We don’t hear that as much, but what we do hear is, boy, I could have just bought late stage SpaceX or, you know, shouldn’t I have just like bought Nvidia stock and like, how are you going to beat that, right. We’ve seen this like concentration of performance in a very, very small number of companies. And so if you’re, you know, because when you buy venture capital, the whole idea is you’re trying to buy alpha, trying to by like outperformance while absorbing a greater amount of risk. And, you there are other ways to do that. I think that in the last few years, that’s actually been a very compelling argument. It’s hard to actually argue against that. My view, though, is it goes back to sort of where we are in the innovation cycle. I think that we are in the very baby step ages of the super cycle around AI, which over the arc of the next 20 or 30 years, I think, that you’re going to continue to see our performance from early stage private and liquid investing in the application layer. But early on, you actually don’t, right? If you think about the early days of the internet, most of the outperformance comes from a very small number of infrastructure and sort of enabling technology players, right? And that’s where we are on this innovation wave. Or, at the end of the last cycle… You know, all the performance is concentrated in a couple like big, big mega late stage companies. So we’ve been in this like moment in time where I’d say early stage venture is almost destined to underperform. But I think if you look over the arc of several decades, there’s reason to be optimistic because, you know the stage that we’re in is not going to last forever.

Jake Thomsen [00:35:58] And that question, too, is a little bit of selection bias. If you knew the Meg 7 were going to be the Meg 7 number of years ago, well, yeah, it makes all the sense in the world. And if you knew, the hottest venture names are going to the hottest names, and you bet on the fund that had those, I mean, you’d drastically outperform the Meg seven. So I think one of the benefits of a venture capital is you do have professional managers that are going out finding these companies, that you have a distribution that the median is still going to outperform. You can’t always pick the winners ahead of time. If you invest. If you take that view now, only time will tell. But if you have a basket just in the mag seven, who knows what that’ll look like over the next three to five years, especially compared to the up and coming private companies that venture would invest in.

John Coleman [00:36:38] In a couple of macro comments, and Rob touched on this, the outperformance of public markets generally has been enormous, particularly since the great financial crisis starting in 2008, 2009 after the collapse. We have been in basically an uninterrupted bull run with little dips around COVID and some other things that’s like historic in relation to public markets and one of the biggest bull runs in the history of public market. A lot of that outside of these Mag-7 was fueled by monetary policy, honestly. You dump trillions and trillions of dollars into an economy like you did after the great financial crisis, like you do during COVID and after COVID probably too long, and you’re going to inflate markets. That money has to go somewhere. Public markets are going to go up. U.S. Public markets are the biggest destination for capital in the world right now. U. S. Public market are the flight to quality. They’re going to go up. And so the return to the S&P 500, particularly for the last 15 years, since the great financial crisis or a little bit longer, have been an historic bull run, even outside the mag seven, even without selection bias, which I agree with Jake, private markets over that period of time, still outperform public markets, but by less than they used to And I think one of the things that Rob and Jacob already mentioned is the number of new GPs in private markets has exploded over the last 10 or 15 years, particularly that COVID bubble where in 2021, we were just seeing a radical expansion of the venture capital industry. But what that’s led to is a bifurcation between the best venture capital firms and the worst. If you look at top quartile venture and private equity firms, they’re still blowing away public markets. If you look at the average or the median. It’s a little bit more compressed because the bottom quartile performers significantly underperform public markets. I mean, the gap between a bottom quartel and top quartile venture firm is like 2,000 basis points, right? It’s not, you know, 100 basis points. There’s a huge difference between the quality managers in this area and those managers who aren’t consistently able to produce quality. And so I think… You know, we do hear that a lot. I mean, you know, the famous example, the Buss family is selling the Lakers right now for $10 billion. It’s the biggest sale in the history of American sports. He bought the team for $68 million in 1979, got $10 million for the family here in 2025. If he had invested that $69 million in the S&P 500 in 1979 it would now be worth $13 billion, right? I mean you know you get these anecdotes all the time. But I do think, look, bull markets don’t last forever. I think private markets still outperform. I think particularly with the winnowing of GPs that’s come over the last four or five years where the number of new funds started has declined, that you will see better funds continuing to kind of outperform public markets, particularly as they plateau. And the only question mark now is, do we now live in a winner-take-all world where the mag-7 or the top 10 or 20 companies in public markets that are massive, that have tons of cash, whether that’s Apple or Google or Microsoft or Tesla or maybe OpenAI, once they public, etc. Are just so scaled and better able to compete in this new environment because of the capital at their disposal that they can continue to accumulate the vast majority of returns in public markets. And Rob, you mentioned like late stage SpaceX, like 50% of the returns of the S&P 500, not the alpha, the returns to the S& P 500 have been the magnificent seven over the course of the last, I think it’s like three or four years, right? 50% of the returns of 3,000 stocks have been seven stocks, right? And the question I think some people are asking is, is this just the new normal where it is more of a winner-take-all in public? And that is a question, I think, but I think the average performance of private markets versus public markets is likely to be a bit better going forward, and particularly if you can get an above-median manager or top-quartile manager, their outperformance has actually been pretty steady over that time and will continue to be.

Richard Cunningham [00:40:48] Good reflections. Thank you, guys. Hey, let’s go around the horn one last time before we get into our final question and just, hey, what’s that last thought kind of thing on top of your mind that we didn’t get to, I got my eye on the clock, that you’d want to share maybe just a quick kind of comment on the venture markets you’d like to leave the listeners with. Rob, we’ll start with you.

Rob Go [00:41:03] I continue to believe, and actually it’s validated with folks I talk to actually know a thing or two, I think, about the technology, we are much more likely to underestimate the impact of AI than we are to overestimate it. And that’s easy to say now, I guarantee you, in two years or so, it’s going to like an AI wasteland because these markets have this sort of boom and bust dynamic. So just remember, when we’re in the bust period, sometime in the next couple of years, even when we were optimistic, we were underestimating how great this is gonna be. So that’s my last thought. All right. Jake, what do you got?

Jake Thomsen [00:41:42] That’s a great thought and totally agree I might take a little bit different perspective just given this subject matter we have around faith. We’ve had a lot of conversations recently about technology and at what point are we playing God and we’re all kind of nervous around this and how do we think about it faithfully and I just love that the simple framework as believers where we can look to scripture we can say okay where’s technology show up in scripture well a couple of illustrative examples right you got God quite literally prescribing technology right you read in early and assess where he gave. Most advanced maritime technology, like quite literally the schematics to go and build tech, right? So, so God has prescribed that at times. You go to the Tower of Babel where there’s this construction technology able to build something, but for all the wrong reasons, well, God decided to step in and actually thwart something that was going in the wrong direction for his overall plan. And you look even further on and you can see where he repurposes technology. I mean, the Cross was quite literally, the most advanced kill chain technology of the Romans. And we all know that that took something that was so awful and horrible and turned in the most beautiful day three days later of all of history. Right? So God can prescribe technology, can thwart it, can repurpose it. And so we don’t have to be afraid, I guess, to the point. We serve a sovereign God. We are His hands and His feet. We can go and develop thoughtfully, right? We can build. We can use products. And I think we can have an optimistic perspective of technology and of investing in technology, even from the fundamentals of our faith.

John Coleman [00:43:05] And I just want to build on both of those comments. Rob, I think you’re 100% right. I mentioned it earlier. I think we’re underestimating the technological change that’s coming. I mean, the only thing I can think of that’s even remotely similar would be the Industrial Revolution, which fundamentally changed humanity. I mean GDP per capita now is something that one or 200 times what it was for the 3,000 years prior to the Industrial revolution, right? And I think this change that’s coming, you know, absent some sort of intervening force. Technology continues. We are in for as radical a transformation of the human experience as the Industrial Revolution, maybe even more so now. And there’s reason for optimism. Rob, I think every technology everyone has ever been afraid of in the history of humanity has worked out better for humanity. There have always been anti-technology movements, they’ve always been wrong. However, you know, there are visions of the future you can paint now where we have humanoid robots and artificial intelligence and people are out of work. Disruption cycles like the Industrial Revolution lead to abuse. They can last for decades, not months or years, right? And so I think particularly as people of faith who care about individual human flourishing, we have to be optimistic because of our sovereign goddess, as Jake articulated, but we have be uniquely attentive to what is changing about the human experience and how can we as investors and people help to shape that in a positive and constructive way and help the people who are struggling with this adjustment find their purpose, meaning their way of life through that, right? Because you can picture this going bad and us ending up in idiocracy or wally, you know, this terrible vision of humanity where we serve the machines or the matrix or the Terminator if you’re really, really negatively inclined. You could also picture like a Star Trek future where all this technology enables us to explore the stars, to learn more about ourselves and the universe, to really uncover something beautiful about humanity. And that choice is going to be not ours to make. We have a sovereign God, but we have an influence here as people of faith, I think. In the way that humanity navigates this transition. And if Rob is right, that this is gonna be bigger than we even anticipate right now, I think we have to be more attentive to what that does to individual people and how we as investors and technologists shape that future such that it can be a continuing positive story rather than an era that we look back on and say, wow, there was so much that was broken then, there were so many people who were lost, there were many people that didn’t navigate it, right? And so. That’s one thing I think about a lot is like, this technology is coming. No one can stop it. Absent God in a Tower Babylon moment, no one can stop it! How can we navigate that in a way that the average person’s life gets better, not worse, and that humanity in the future looks better, not worse.

Jake Thomsen [00:45:50] If I can, not to extend this too much longer, but let me just pick up on that. It’s been so encouraging, you know, at Sovereigns, we invest in faiths and founders. And this weightiness and this sense of stewardship that you’re talking about, John, it’s so cool to see the body of Christ stepping into. And there’s this felt sense that we kind of missed the boat in social media, right? And there wasn’t a strong view of human flourishing in a lot of the companies that really shaped social media. And we kind see what happened with mental health and depression and the rest. And there was this felt of sense of We can’t miss a boat with AI. And so believers have to step in. We have to build with excellence, but we have to built with the meta narrative and view of what it means to be human, like what it mean to flourish, right? And that’s been a really cool thing to see from my vantage point of the way that we are the hands and feet of Christ, even in technology and to see the charge that a lot of faith from founders are taking. I’ve been encouraged by that and just values driven founders for that matter, right. It doesn’t necessarily have to be from faith, but that’s cool to see.

Richard Cunningham [00:46:45] Well, Rob, your comment was so profound that it caused John and Jake to misbehave and jump the gun and start giving a kind of a scriptural spiritual reference before I ask the question. So we’re gonna give you the final word on anything God’s been teaching you and then through his word lately, it would take us home.

Rob Go[00:47:02] Yeah, so there are a couple of things that I’ll tie together and I’ll make a couple of recommendations to while I’m at it. So we’re investors in this company called Hallow, which is primarily Catholic focused, but really it’s an app that I use every day and there’s a bunch of different types of content that you can consume there, but anyway, so this morning the scripture reading was around Jacob wrestling with God. And one of the things that really struck me about that passage was how kind of like in awe and fearful. But also anxious, but also amazed he was to have had a direct encounter with this being. His response is both like, he’s fighting with this person. He’s like, wait, who are you? Tell me your name. Oh my gosh, I can’t believe I survived. It’s just like this amalgamation of emotions because of how rare and unusual it was, I think, for him to have this direct encounter. So that really struck me. I’ve also been reading a book by Greg Boyd. I’d previously read a book of his called Cross Vision, which is pretty dense. He essentially created a, like, 120-page, easy-to-read, good parts version called God Looks Like Jesus. And his basic thesis is, you know, it’s very hard to understand the God of the Bible unless you think of Jesus as the full reflection of God’s person and character and the ultimate reflection of that. And when I put these two together, the reflection that comes to mind is just, like how privileged we are that we live in the era of post Jesus, where we don’t need to. Have an encounter with God that feels so mysterious and weird and unclear where we have a person that is a more complete reflection of who God is and then that person invites us into a relationship with them. And so it’s just like such an amazing privilege that we can have that intimacy and a reminder that we didn’t always have that. So that was kind of the thing that was on my heart today.

Richard Cunningham [00:48:51] Perfect word. Well, folks, what an epic edition of the FDI pod. Thank you so much for joining us. Jake Thompson of Sovereign’s Capital, Rob Go of Next View Ventures, what a treat to have you guys on. For John Coleman, I’m Richard Cunningham, and we will catch you next time.

Host [00:49:07] We are grateful for the opportunity to serve this community and see listeners come in from more than 100 countries. Faith-driven investing can be a lonely journey, but it doesn’t have to be. The best way to stay connected is to join a group study with other investors looking to get the same answers to questions you have and find great community as they do so. There’s no cost, no catch. In person or online, you can meet an hour a week with other peers from your backyard or the other side of the world. You can also stay connected by signing up for our monthly newsletter at faithdriveninvesting.org. This podcast wouldn’t be possible without the help of many of our friends. Executive producer Justin Forman, intro mixed and arranged by Summer Draggs, audio and editing by Richard Barley. Our theme song is Sweet Ever After by Ellie Holcomb.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. We’ve got a really special guest today, a friend of mine, Andy Mills. And I’ve been looking for this episode for a long time. Andy is great leader in the marketplace. Here a little bit about his background here in a second, about what he’s done in all different aspects of financial services. He’s been, as you probably heard in the intro from Rusty, part of the theology and work project on their board. He started something called Faith in Financial Services, which I think is super cool. He’s been a leader in the Lizanne movement and just a very thoughtful guy, said he’s an ex rower and continues to get out there on the concept two rowers. So we’ve got that in common. But the most important thing, of course, we’ve got in common is a great shared faith and an intentionality about using the different places that God has put us to work for God and his glory, which is actually, of course, the thing that we’ve got in common with our audience as well. So, Andy, thank you very much for being with us this morning.

Andy Mills: It’s great to be with you. And looking forward to our conversation.

Henry Kaestner: Me, too. And there are thousand different ways we could take this. And what I’d very much want to make sure that we get to toward the end of this interview is a project that you’ve been working on for a long time about the public reading of scripture. And I think that that’s unique. I think you’ve been very thoughtful about that. And then a lot of things around that. Then I want to get into. Well, before we do that, I’d like for you to walk through your background. You’re a professional in the financial services space. You’ve been in there for a long time and no different facets of that. And just bring the reader up to date. Talk to us about who is in e-mails and then from there will launch in a faith in financial services and all these other things would be great.

Andy Mills: Well, let me first just give you a little bit of the biography. And then if I could, I just want to give you a little bit of a spiritual biography. And I think those three things will give you a good sense of who I am. I’d like to say first, I’m a family man. I live up in Boston with my family. My wife is Gail, 37 years. We have two children. Fortunate enough to have three young granddaughters who completely whined me around that little fingers. I just love him so dearly. We’re very close as a family. My wife and I also spent a lot of time as foster parents. We did twenty years of foster parenting and had over 40 children in our home during those times. And so family, as you can say, is really important. And being close, particularly at times like we have today, is so very important. I grew up in England. So for those of you thinking, what’s that strange accent? It’s a little bit of Boston, but it’s a lot more of England. I grew up there. I went to university there, still took my first job in London selling textiles. And then after a couple of years, the company said, go over to the U.S. and sell textiles for us over there. So I landed in New York in the mid-70s, did a couple of years there, and then went up to Boston for grad school because I love being in America. So very much joined the Boston Consulting Group out of grad school late 70s, early 80s was a great time to be at BCG. A lot of very innovative work being done, great organization. But, you know, I knew consulting was not for me long term because I like playing the game, not just advising or consulting. And I found a small company that was kind of going out of business in the information space. The financial services, a company called Business Research Corporation. And I joined that and we turned that around. Some of you in the financial services business have been in long enough will remember. First of all, that was our major product and the business was acquired back in the early 80s by the Thompson Corporation. And then I had the opportunity to build Thompson Financial that many people will remember.

Ran ll the legal publishing acquired West publishing and then an interestingly enough, in 1996, about to have a change of leadership for the whole Thompson Corporation. My name was in the hat among other people. It’s an interesting story, but I just decided that even though that’s what I wanted to be ever since I was a kid, the CEO of a major global corporation, it just wasn’t right for me, largely because of family issues I was having being on the road 200 days a year. And so I stepped back from that. And after a couple of years, I left Thompson and began a kind of fifteen year not for profit saga working in different areas, theology of work that you’ve mentioned. I started a social enterprise fund in Africa and Uganda called the Mango Fund. I was the chairman and president on several occasions at the King’s College in New York City. And I did a lot of speaking about theology of work and faith and work, and I assume that would be the rest of my life. But God had different plans. I met Bill Wong, who many of you know, just a great investor under the famed Tiger Cubs and Bill and I. He’s a great Christian gentleman. And Bill and I just loved each other’s company. We love the word together. We spent time in the world. We talked about faith and work. And so six years ago, he asked me to join him to help run his private family office and his foundation called the Grace and Mercy Foundation. So that’s kind of the potted history. One thing I would say is when I grew up in England, I went to church on a regular basis. This is my spiritual biography. But I think it was just more. That’s what you did on a Sunday morning. And I never saw any evidence of really faith in my family and my parents. And so I went, but it didn’t really mean anything. And as soon as, of course, I went off to college. I didn’t know anymore. And it became, you know, I always believed in God, but I somehow never really thought much about that. Definitely the unexamined life, I would have to say. And every so often, I felt the need to go to church and I’d kind of go to church and I’d really enjoy it. And I enjoy the liturgy and the music. But then, you know, there was always something better to do on a Sunday morning sometimes. So I kind of slipped away again and left it for another year or two before I went back again. And then three things happened and God really got my attention. Firstly, I sold the company that I was talking about to the Thompson Corporation. And that’s kind of what everybody wants to do is the American dream. You build a company, you sell it, and it just felt totally meaningless to me. Was this what I’d really been working so hard for? What was the meaning in this? That was a really hard thing to think about. It happened at the same time that my father died and my son were born within two weeks of each other and fortunately, they never saw each other. My son has my father’s name. And that led me to a whole sort of existential question about what is a human being? You know, are we the Disney circle of life or is there something more important to being human? And then the third thing, which was the killer blow, as I came home one night and my wife told me that she’d become a born again Christian. So once you, you know, wipe me off the floor and tried to figure out what had happened to my otherwise rational wife.

We started talking about faith in a serious way. And I had to first really serious conversations about faith. Who is God? Who is Jesus? What’s the Bible? And I realized as a smart guy, I had no answers. I just had no answers. And so my wife just challenged me to stop studying it because I’m a kind of analytical type of guy. And so I started studying. And over an 18 month period, God showed himself in so many powerful ways that, you know, I got to that place where it would have taken more faith to have rejected him than to have accepted Christ as my savior, frankly. And so you would have found me on Christmas Day 1988, kneeling in the snow on a bike ride, accepting Christ as my lord and savior.

And, you know, two things really changed dramatically from that point. I mean, obviously, one, my eternal destiny, which is something we all need to really think about. But the second thing is my work, because, you know, even though I was a very immature baby Christian, I just had a strong sense that God was simply asking me this question.

You’re a CEO, but now you’re a Christian. What difference does that make? Because I had a strong sense that if it didn’t make any difference, what was the point? And so that’s really begun, Henry, I’d say 30 plus year now journey for me, exploring God’s word, exploring with other people, mentoring, speaking, studying the theology of work, all of these kinds of things, and then putting these things to practice in the workplace.

And it’s been a most fascinating time. And one of the great joys I have is sharing some of these ideas that I and others have kind of you know, it’s now that we’ve discovered or made, all we’re doing is understanding what God’s word says and then bringing them up to light and then challenging people to think about. So what does that concept mean for your work? And obviously, everybody has to respond differently with the body of Christ. But it’s a fascinating discussion. So hopefully that’s a little bit of my background for those of you that know the EPL. My home was Newcastle. I’m an avid supporter of Newcastle. United, I believe, black and white. So away the lads, America.

Henry Kaestner: That’s very good. I don’t know that we’ve ever had a Newcastle fan on before, but maybe we have. I do know this. We’ve never had anybody that’s had such a cool accent on before. And for that reason, maybe our audience will permit us to go a little bit longer on this episode. And I want to get into a bunch of different things. But you’d spoke to some things there toward the end about putting your faith into practice in the business. So take us back. You’ve kneeled in the snow, you go back to work. Presumably you don’t have a well articulated thought through theology of work on day one back at work, but with time, of course, and the work that you’ve done with messenger at theology of work, you’ve developed that once you talk to us a little bit about that and then bridges in to how you see that play out in the financial services industry and maybe speak a little bit about the faith and financial services movement.

Andy Mills: Yeah, there’s a lot in there. So if I’m missing some stuff, keep guiding me.

Henry Kaestner: You mean it’s not fair to ask you five questions in one?

Andy Mills: You know, I’m getting old. My short term memory is not that good. Henry you know, when I became a Christian and God challenged me with that question, you know, what does it now mean to be a Christian as a CEO? The first thing I did is, you know, what we do as business people is we go out and we ask questions and we find people who are in the same place and we learn and we think about best practices. And so I went out and spoke to a bunch of people who were in leading positions as Christians and companies. And it was fascinating that the summary of I think what I heard was he had to do two things. Number one is you’ve got to work ethically. And number two, you’ve got to be prepared. If anybody wants to talk about faith and Jesus, you’ve got to be prepared to talk about Jesus. And look, those two things are wonderful. And you’re not going to hear from me that you shouldn’t do either of those things. But the question that came to me very strongly was, is that all? I mean, we’re spending all this time at work. I mean, is that all we’re doing is just make sure you work ethically. And if someone’s talking about Jesus, you’re ready to talk about Jesus. And so I started reading books because that wasn’t really satisfied and there weren’t really any very good deep books on.

You know, there are people who are talking about their own lives and their wonderful stories. But there was not a lot of what I would call theology. In other words, that’s a big, highfalutin word. But what is God’s say about this particular thing? Because that’s what I wanted to know. Right. When you’re a newcomer to the kingdom. The only thing you care about is what is God? So, you know, I’ve been introduced to the father. I want to sit at my father’s feet and I want to hear what my father is saying. And so the only place I could go then was back to scripture. All right. Because there was nowhere else to go. And interesting enough, what I found in scripture was that there are really three great mandates in scripture.

That’s the great commandment, right? Love the Lord, your God with all your heart, soul, mind strength and love your neighbor as yourself. And that’s the greatest commandment. Jesus says that’s greatest commandment, no question. The second commandment, most of us think all the time is the great commission, right, Matthew? And that’s obviously the mandate to evangelize. But, you know, when you open Genesis 1 and 2, you find another mandate. It’s called the cultural or the creation mandate, which is we are given, you know, the earth and all of God’s creation to steward or to look after or to manage. And as I began to think about why people talked about doing what was right and or helping people learn about Jesus, what I recognized as those were those first two mandates. There was the great commandment and the great commission. And when you think about what happens at church, that’s primarily what gets talked about a church. The great commandment and the great commission, you know, personal holiness on the one hand and reaching out as a church to evangelize and bring people to Jesus again, wonderful things. But the church almost never speaks about the cultural mandate, which is living every day in the workplace, which is where all of us in the congregation live for the majority of our time. And yet the church is kind of silent on that. So you get this sort of, you know, one sided Christianity focusing on God and focusing on personal holiness and focusing on evangelism, but not this whole aspect of work. And it’s not therefore surprising when you talk to most Christians in the workplace, they’re really kind of confused, you know, why am I working? What’s the purpose of my work? Is it just to make money? And if so, how much money is enough? You know, those are the kinds of questions you get into. But there’s really not a deeper sense of what’s the purpose of work. Why do we work a lot of discussion about how, but not a lot of discussion about why. And so that’s really where I started my thinking and my research basically coming out of Genesis Chapter 2. And you know, in Genesis Chapter 2, most people start with to15 that says then God put man in the garden to tend and work to God. And that’s clearly a work mandate and a cultural mandate. It’s kind of interesting because if you go a little earlier to 2 5, the creation exists. But it says in 2 5 that nothing was growing. Nothing was happening. And it gives two reasons for nothing being productive. One is there was no water and we kind of figured that out. So what did I think growing we get? But the second thing is this there was no man to work in. And, you know, that just struck me. And he obviously solves that problem in 2 6. He brings water from the deep etc rain. And in 2 7 he obviously creates men from dust. So there’s a problem in 2 5. It’s not productive. He solves the two problems in 2 6 and 2 7. But I started to think about that and I said, wait a minute. God could have done this creation thing any way he wants to. But we as human beings, he’s created us to be an integral part of his creation. And those without us, his creation doesn’t move forward because don’t forget, we start in the garden. We finish in the city. Right. If you start Genesis 1 2 and you end up in Revelation 21 22, you end up in those perfect places and community with God. But we’re not going back to the God. We’re going to a very complex city with many, many people. And this is what God is doing. His creation is progressing to the benefit and flourishing of humankind as we go along. And we as humans are part of that process. In fact, we are vital to that, because without us, it doesn’t happen. And all of a sudden works suddenly moves me from being a thing that you had to do as a utilitarian kind of exercise to be able to make money to do whatever.

Or more often, unfortunately, it’s an exercise in idolatry. Right. Look at me. And it was for me, it was it was an exercise of idolatry and pride as much as anything else. But we’ve moved from that to being a fundamental co-creation with God of the progression of his creation from a garden to a city. And when I started to figure that out, I mean, it changed everything. That’s one of the stories I wanted to tell everybody who fits my garden to acidity that story and how fundamental and important that work is a creative exercise that we’re doing in partnership with God for the flourishing of humankind. And all of a sudden, when you think about it that way, you know, you understand things like calling. I mean, it becomes so much more deep and so much more powerful. And then something else. And so then when you think about that, you know, how does one create you know, you create with products, you create an environment, you do that inconsistently with God’s commands. You think about the way people are treated. You think about the way creativity takes place. You think about how you serve. You serve customers. You serve stockholders. I mean, all of those things start to come together in a much more sort of creative sense.

William Norvell: That’s good. It’s funny, I don’t know if you’ve read this, but have you ever read Garden City by a pastor named John Markhommer?

Andy Mills: No, I have not.

William Norvell: It’s real good. I mean, it’s this whole premise. And he sort of pulls it out in. The first half of the book is about work. And the second half the book is about rest. But the overlaying architecture is about how exactly when you. Exactly what you laid out, how we started in the garden and we’re going to a city and we’re going to have jobs and we’re going to have things to do and you know, there will be farmers, but all of us won’t be gardeners. Right. That is not where we are heading. And it’s a book on faith and work. And he just has a really excellent job, in my opinion, of laying out some pieces of what you walk through.

Andy Mills: Yeah, I think a lot of people are a little worried about heaven because they go, and how can I do eternity sitting on a cloud with a harp in a white dress? But no, we’re actually going to return to work and to society. But it’s gonna be without sin. And, you know, it’s impossible for us to actually appreciate that.

Henry Kaestner: I have a question on that. Will there be financial services in heaven?

Andy Mills: You know, I think there will be, because financial services are the medium by which goods and services gets transmitted, delivered. It’s really the matrix of the building blocks of society. And so I know that was another part of your question is how do you relate that to financial services? And so, you know, the way I think about financial services as God writes about money all the time in the Bible.

Right. I mean, money is a very necessary medium in the Bible. And it’s very clear how moving away from a barter system to a financial monetary system has developed, you know, systems of commerce and has allowed us to develop so much more quickly. It’s allowed specialization to take place. If you go back to Adam Smith and all these kinds of things, you know, without money, none of those kinds of things happen. And also then without things like lending, whereby I take, say, excess that I’ve got, I provided to somebody else who needs to apply it to create more value and environment. They are working in a business they’re putting together so that they can create a new economic engine so that out of the benefits of that, they can then repay me with some, you know, interest level to allow me to want to be able to do that. So it’s an important measure of how we do commerce. But on the other hand, the accumulation of wealth also allows us then to borrow and to lend in such ways that we can actually create more productive assets more quickly. And to me, that’s as a financial professional, that’s really important. We know we’re public investors, so we invest in companies that are bringing products and services to bear in the marketplace. I spend a lot of time in Africa. You know, it’s undeniable the value that, for example, drugs and medical products have had in Africa. It’s undeniable the impact, for example, of cell towers and cell phones. And so you think about companies that are doing that. And on the one hand, you can say, well, they’re just producing a cell phone. But on the other hand, you can look at how they are changing the way societies work and people work by having better information, more safety, being able to understand markets, better bring products to the right marketplace to get the best returns for their labor. I mean, when you start to see all of these things, it’s really exciting to be able to invest in these kinds of companies because we’re investing in companies that are moving flourishing forward.

And that’s really why I love the financial services side of things, because, you know, it is the medium that accelerates the growth of products and services and ideas that a rapidly expanding globe global population, 1871 billion today, seven point three billion.

And yet we’re living at a much higher standard. All of this, although there’s a lot to be done, you know, with the gradation of poverty, et cetera. But we’re all living at a much higher standard than we were in 1870. So not only has the population multiplied by seven times, but, you know, the standard of living is improved. Pick a number four to five time. So we’re looking at like a 30 times increase in product and services and offerings. That’s incredibly productive and that’s being done through work. And that’s going back to Genesis 2 5, making us as human beings, taking God’s creation, making it productive, using imagination and moving it forward. And that’s exciting.

William Norvell: Amen. And, you know, and that’s a big piece of that Garden City concept right now. But, you know, it’s bringing heaven on earth, right. And those two things will merge into the city one day. And as you think about that and you’ve started a movement of some sort. You know, with faith in the financial services industry, could you talk a little bit about how that’s working? What are the goals and the mission behind that and sort of how that’s participating in building that city that we’re going to live in one day?

Andy Mills: Good. Well, let me just start by saying I am just one of a number of people doing this. I want to make sure that we’re clear on that. This is not a me thing. There’s a great team of people in New York. But this came out of a an observation that there are a lot more Christians in New York City and the financial community than most people are aware of. And most people live an isolated life.

And most people hide the fact that they’re Christians because of, you know, minor forms of persecution by persecution, nonetheless being ridiculed or whatever, and so people kind of left Christianity in the closet. And what then happened is they just became like everybody else in the workplace. They work like everybody else. Nobody knew that they were different. And if they were different, nobody knew the reason why. And they were isolated and get caught up. If you you know, the old one log in, a fire doesn’t burn. But if you have Lenny, they will burn strongly. That that isolation. I really believe is one of the enemy’s great strategies is to divide us and separate us and isolate us. And so the whole idea of faith in financial services is twofold.

Number one is to gather people together so that people begin to form a network. We had an event in September. We just sent out a few invitations that became viral. We had 300 people turn up to a hotel lobby just to gather. And you could see people looking around. People were saying to me like I didn’t realize there were 300 Christians in the whole financial community in New York City. I mean, they were shocked by what they saw. One guy came up to me at a major bank. He said, you know, I’ve just met a guy.

He and I sit 30 feet apart from each other. And we have done for the last 10 years and we didn’t realize we were Christians until we met here. You know? So talk about isolation. And so the first thing is to gather people.

But the second part is, you know, just gathering people, it’s good. But what we need to do is we need to transform folks so that they become impactful for the kingdom within their communities. And we do that by doing two things. And we talked about earlier, which is called the public reading of scripture. So when we gather in groups, the first thing we do is we listen to God’s word, because, you know, we spend a lot of time listening to man or listening to woman. Right. But the reality is we’re not spending enough time listening to God. And frankly, he’s the only person in many ways I want to hear from. It’s kind of nice to hear stories from people. And it’s kind of nice that your listeners will be listening to me. But I’m just a man. And I would much rather you listen to God’s word and just listen to me. And so we listen to God’s word. We take a little time for reflection and then we take an aspect from the theology of work that reflects on the scripture. We’ve just heard. And then we have a discussion about so what in the workplace? So what does that mean for practice? How could we do something different? And so what we’re trying to do is we’re doing spiritual formation, because if you don’t form people spiritually, too many baby Christians right now, but if they’re not formed spiritually, they can’t stand in a tough environment like New York City’s financial services community. And our belief is when people are in community, when they’re being spiritually formed, when they’re being encouraged by each other, and that wonderful linkage is taking place now. People are helping each other with jobs, with ideas or the setting. When we stand together, we can begin to take a stake in the stands for God in the workplace to begin to change the way we work with people, to begin to change the sort of attitudes towards work and time at work and how we think about bonuses. And so all of those things become so very interesting. And that’s what faith in financial services is all about.

Henry Kaestner: Andy I want to switch gears a little bit. You and I have talked a bit about the concept of faith driven investing. And was it look like as Christ followers are starting to understand, of course, that as God owns it on his entrusted assets to us, he cares very much about how we think about giving it. And he cares very much about the concept, I believe, of ownership and in our motivation behind these things. But also, he cares increasingly about how we deploy investment capital and that there can be a mindset of I want to make as much money as I possibly can over my Fidelity account or wherever batteries acquire. Just make as much money as I can so that I can give away as much money. But maybe there’s a concept in that the actual creation of wealth through financial price and services might bring about God’s kingdom on earth as it is in heaven. Up until the time that there is an exit event and you have liquidity to then go ahead and give to things like young life and American Bible society. Fill in the blanks. Riff with us a little bit about that. What are your views on that? What are your hopes and your dreams? What do you think?

Andy Mills: Well, you know, the first thing I would say is I’m always very leery about someone who says to me, my spiritual gift is making money or the idea that I’m going to spend the first 20, 30 years of my career making as much money as I can so that I can give it away, because that’s obviously going to be the greatest benefit to the kingdom.

You know, I’m very skeptical about that because frankly, what I find is mostly that people are justifying the fact that they want to earn a lot of money. And the Bible’s very clear says, you know, he who loves money never has enough. And, you know, if you were to say, OK, I’m starting out at twenty five, I want to make ten million dollars a month, it made $10 million, then I’m going to stop. I’m going to change my lifestyle. I’m going to sort of give it away. And it’s that I never see anybody do that.

If you’re lucky enough or fortunate or hard enough working to get to 10, you know, by the time you got to 10, the numbers 40, by the time you get to 40, the numbers 100. And by the time it’s 100, your life’s over. You know, the story of the rich landowner continually build his bonds and store away is, you know, I think a very provocative parable. And obviously he was called a fool. And I think people are foolish to think that way. And because I think they’re not thinking well enough about the deceitfulness of their own heart, quite frankly. And they you know, they kind of want to do it their way and they want God to bless it. And they think that’s a way to do it. So I’m pretty strong on that, I have to say, maybe more strong than I should be. But I’m not sure that I really met anybody who I think the purpose of their life is to make money so they can give it away.

Because part of what that does is it delays the kingdom part till 20, 30 years down the road. And it kind of gives you a free pass on the now. Yes. And my belief is the kingdom is now. Yes. And that everything you do today is the kingdom. And you can’t have a God. Give me 30 years off and then I’ll get back to you. It just doesn’t work that way. And so even if you’re an entry level person as a Christian, you know, there’s a word in the New Testament, Oikonomides, which appears ten times.

So okionomos as Oikos is home and know Moses law. So it’s the lawgiver of home. It’s the master, if you will. It’s translated many times, but it’s also translated other ways. It’s really the intrusted one one place. It’s translated as the guardian as of a son. And I think we have to think that way. We are economy and of God’s creation. And so wherever we are in our little workgroup, our entry level work group, whatever it might be, that’s the place that God has given us of his precious creation. He loves his creation. He’s given us this part of his precious creation for us to be the Econoline of that, to be the kind of his trustee in that area. And so from the first day you move in, I think everybody should be thinking as OK, as a Christian, how can I impact this place? This place needs to be redeemed. What does that look like? And I’m just not talking about walking around with the Bible and telling everybody Bible verses. I mean, that’s part of the worst way to do it. But I’m talking about the quality of the work you do, how you work in teams, how you encourage other people, you know, all of those kinds of activities and in the investing world to make sure that the investments we’re making are going to places that will add value and, you know, kind of like that about the investment process, because withdrawing funding from businesses that are no longer as relevant as they were or who have gone wrong in some way or who are abusing whatever aspect of life is. And we’re moving constantly towards the new ideas and the ideas that are bringing progress. And that transitioning and that constant movement, I think is something that’s so very important in the financial community. So I just want us to be in the moment doing the best we can with what we’ve got and bringing a kingdom to the place that we’re in right now. In every decision we make, whether it’s a business decision, it’s an investment decision, whether it’s a people decision, it’s a culture decision. All of those just how we’re spending time even, you know, isolated today. Right. I mean, nobody’s watching what we’re doing as knowledge workers. How does anybody know? Well, God knows. You know, how we spending our time doing the best we can, even in the circumstances we’re in today.

Henry Kaestner: Andy I think that was really profound. I think that it’s really important for us to hear that as we accumulate assets with the idea that we’ll go ahead and participate in God’s kingdom in 20 or 30 years. That’s really the workings of, as you called it out of, for knowing that there’s also a different camp of people. And we’ve had some of them on the Faith Driven Entrepreneur podcast, for instance, I think about Alan Barnhart, who goes ahead and freezes how much earnings he makes and he gives everything else away. And yet there’s also a huge maybe where most of us end up being in this place where we look at investment assets, the investment assets in American in the world greatly dwarf that of philanthropy and of giving and charitable resources. How do you think about how those investment assets that are so large and are being deployed by different firms? How do you see them being done in a way that brings back God’s kingdom on earth? Now they’re just anythings as you just observe the financial services industry and say, you know what? That seems to be an approach and a thoughtfulness that’s hastening the New Jerusalem or bringing back God’s kingdom. And that’s a way that isn’t so.

Andy Mills: Yeah, well, it’s an interesting question. Let me just say upfront, I don’t think there is a one answer for everything. All right? We are God’s people. God’s community are all built of different people with different gifting and different calling. And I think that’s really important to understand that diversity. So, for example, you talked about Alan, who feels called to give away a lot of his resources. God bless him for that. And look, there are a lot of wonderful ministries and Mercy Ministries, et cetera, that without that kind of funding, millions of people would live. Horribly worse lives. And so, you know, I have a big category for that. I do a lot of giving myself to those kinds of things.

But I also have the category that says long term, the average quality of life across everybody in the world is being raised by business.

And if you look at Africa, for example, you know, I think you can say philanthropy’s done a very good job on the medical front, but it’s done a kind of a lousy job on the business front in terms of creating economic activity by which people can grow and communities can grow. And that’s being done by business.

Henry Kaestner: Talk to us a little bit about the Mango Fund, because that’s something that you’ve been very intentional about for a long time. I think a lot earlier than people were talking about faith driven investing. You had started the mango fund. Walk us through that paradigm and that dynamic about how you seen investing in commerce in hard places like that is bringing my guys kingdom in Uganda.

Andy Mills: Well, the Mango Fund, like so many things when you’re working with God, is kind of like we had no idea what we were doing. But thankfully, it did. And so it just came out of me traveling to Uganda because my daughter was over there for a missionary semester and she turned 21. And my wife and I said, we’re not going to have our little girl turn 21 without us being there. And I went to Uganda and I’ve never been to Africa before, ran global businesses, but never been to Africa before.

And I looked around Kampala, which is a capital city of Uganda. And I just saw people kind of bartering and trying to scratch a living. And, you know, the old adage is, when you’re in hammer, everything looks like a nail on the business guy. But everything looked to me like a business, right. They needed to grow businesses because if they didn’t have businesses, they’re not producing things that operating wealth. And then I went up to a place called a rule, which is in the West Nile region of Kampala was bad. I mean, a rule was off the charts. It’s a marginalized dollar a day kind of place. And I just felt led by God to keep going back to this place. I had no plan. I had no strategy in place. You know, I’m so enamored by people who have these global rollout strategies. Henry, you’re a little bit like that. I’m not that kind of guy. I’m just kind of go and do and try and be faithful.

And I started meeting with people. You know, when I say someone in the transportation business, I mean, they had a bicycle and I tried to help them think a little bit about how could they begin to grow? How could they do more revenue? How could they hire another person? And the church was very instrumental in introducing me to people like that. By the way, they had a theology of work up there, which is work is evil. Therefore, why should Christians be involved in work? Wow. And it’s not surprising, therefore, that most of the work done up in a row is done by the Muslim community and the Christian community was condemned to poverty. And so, you know, I had to work with the bishop there and all kinds of things. But ultimately, what I realized is this thing called a missing medal and it’s talked about now. I mean, I’m talking ten, fifteen years ago now. But, you know, you have the micro-finance one hundred dollar, one hundred dollars.

And then you have the structured finance from the bank, which may be 50 to 100 thousand dollars. But that’s not where most of people are living. Most of people are living in small businesses with two or three people milling or extracting oils or doing some repair work or a little bit of manufacturing or whatever.

And they have no cash. I mean, there’s just no cash. So even if they have a good idea, there is nothing they can invest in that idea. Their families don’t have money. You know, they can’t go to a bank for money. There’s no lending into that area. And that’s called the missing middle. And so we just decided that because we believe in the theology of work, the people should be productive.

The people should be working. That it does yield returns when done. Well, those returns can be reinvested and grow and multiply, etc. It’s this virtuous circle because we believed in that from the Bible. We started investing in some of these little players and that was the beginning of the mango fund. So today we have about 13 people on the fund working on the fund. We have investments all over Uganda where in about fifty two companies right now I think. I mean, heaven only knows what will happen as a result of this coronavirus. I mean, the whole thing might just die.

It’s possible. But we have seen businesses grow. We’ve seen employment double. We’ve seen just wonderful things take place. And people, when they’re productive at work, you see a change in their lives. You see a change in their attitudes because they’re doing what God’s designed them to do. God is not designed to sit around in the marketplace waiting to be hired. Right. God has designed us to be worked to use our hands, our brains, and to see people beginning to work like that is really just such a joy.

And even as the thing goes away, I’m convinced we’ll start all over again and work with it and try and build that, because I just think that’s so fundamentally important.

William Norvell: Andy, as we come to a close, let’s switch gears a little bit to something Henry mentioned in the intro, which is your it sounds like some of your friends are renewed vigor for the public reading of scripture and God brought that alive to you in a new way and you all really took action on it. Could you tell us a little bit more about that effort in New York and within your circle?

Yeah. Thank you. It’s something we’re very passionate about. And you know, again. Credit for this goes to Bill Hwang. Bill is a pastor’s son who had a hard time reading scripture. He knew he wanted to read scripture, but he had a really hard time consistently reading scripture the way we’re told that we need to get on to it every morning and read fifteen, twenty minutes and be in God’s word every morning just because of his work, but also because of who he was. He had a hard time doing that, so he always says so he went to Amazon to solve this problem. And at Amazon, what he found was some audio drama Bibles. And he ordered a couple of these audio drama Bibles. And he started listening to these audio drama Bibles and suddenly found out that, you know, while he’d listened for half an hour and he’d really enjoyed it and received it the same time he and I were talking together. And I remember once in his office we were opening up Nehemiah Chapter 8 and went as we read the scripture. Bill is such a man of action that he immediately started a Friday morning public reading of scripture session at his office whereby he invited people from Wall Street and anybody wanted to come to listen to God’s word for an hour on a Friday morning. By the way, that was about a 10 years ago. That’s still going on today. So that led us to you know, on the one hand, we had a practical experience that people were really enjoying this and getting something out of it. But at the same time, we then looked into scripture and we said, oh, well, lo and behold, actually, scripture talks about it itself as one of the ways to read scripture. Right. So you go all the way back to here, the public declaration of God’s word throughout the Old Testament, obviously, into the Jewish first century life. And then, you know, this is what Paul talks to Timothy about in first Timothy 4:13, who says, devote yourself to the public reading of scripture, to preaching and teaching. So all three of those things are important. And I think what we’ve done in the church typically is we’ve done a lot of teaching and preaching. We do very little of the public reading of scripture. By the way, when I say the public reading scripture, I’m not really talking about, you know, standing on a milk crate on the corner of a thing with a loudspeaker. You know, in Times Square, just having scripture bleeding out. Also, folks that do that, God bless them. I think that’s amazing. What we’re talking about is communities gathering together around tables in community together to come regularly, to listen to large portions of God’s word and to do it together. And so we do it four times, including faith in financial services in our office. We’re finding churches are doing it more. Colleges and universities are beginning to do it.

So something that happens when we come together. Listen to God’s word in community. You know, that’s something that’s very humble about listening and having someone else read to you because you’re not in control of that. When I read scripture, I’m in control of it. You know, it’s kind of blah, blah, blah, blah, blah. I’m not necessarily putting any emotion in. It’s not really challenging bit. But when someone is a voice actor who’s taking the words and is really putting emotion and emphasis into it, it really has a very different impact on us. And we have to humbly listen to God’s word. And when you’re listening with 20, 30, 50 other people in a room, I can’t explain it to you, but you concentrate harder. You’re listening more. You don’t get distracted. And the Holy Spirit is just so much more powerful. And we just see when people are finished, they just sort of sit there and people writing notes and we’re seeing people get so much more out of this. So this is a practice that we think is so important because, frankly, biblical literacies as low as it’s ever been today. The strategy of go off onto your own and read your little bits of 15 minutes at a time if you can do it is fine. My wife can do it. She’s unbelievable icon. And for the majority of people, the majority of people don’t you know, you start off with a Bible in a year. And by the time we’re in Leviticus in February, you know, it’s all over, frankly. And this is a way of gathering people together to hear God’s word. By the way, God’s word is only 90 hours. I mean, that’s all it is, 90 hours. People are shocked by that. So if you meet a couple of times a week for an hour at a time, you through the Bible and much less than a year. And, you know, you just keep at absorbing God’s word. You’re constantly in it.

And that’s something that happens when you listen for an hour or half an hour as opposed to listening to a chapter or a part of a chapter that you hear at church, because you have no context to it. And there are themes that come through when God is talking to us in these practices and in these chapters that that become so important.

I mean, to read a letter. Twenty three of the books of the Bible are less than 20 minutes. You read the whole letter. We just did. First John and second John, actually, for our latest Faith in Financial Services last week, when you read the whole letter, we had N.T. Wright in our offices and he heard first Peter with us. And at the end of it, he just said, you know, I’m a renowned first century scholar, a New Testament first century scholar. So that’s the first time I’ve ever received this book, the way it was meant to be received in college. You know, as a group read out as a letter outloud. And he was blown away by it. And so anyway, I could go on and on and on. But this is something we’re pushing very hard now with Finding ministries. Prison Fellowship International. Taking it into prisons all. Can you imagine prisoners hearing word in their language and just being able to listen to God’s word? Nobody having to tell him anything. Just let God speak. And that’s really the movement is to let God speak to us again.

William Norvell: Amen, Andy as we do come to our final clause. Sounds like you’re getting a lot of it. Weekly, what piece of God’s word is coming alive to you right now? Could be in the season, could be this morning or something you’ve heard and had read over you. What would you mind share with our listeners? Is God doing in your world?

Andy Mills: Yeah. Well, so much. But I would say a couple of weeks ago we listened to the Book of Roots and we had a very fruitful discussion afterwards about tithing in the 21st century. And how do we use our wealth and how do we help them or marginalized? And then I’ve been struck by acts. Chapter 2 was at 42 and on 45 in particular, which is they gathered together and sold possessions to help each other. You know, we’re in an unprecedented time right now. I mean, the unemployment figures are just coming out.

Businesses are closing. I mean, this is gonna be a really difficult time. And I think for me, those kinds of passages really. I mean, in some ways, I think God was preparing for this. But, you know, one of the discussions I’m having with the elders of our church is, OK, we’ve already got like half a dozen people unemployed in that church that just happened in the last couple of weeks. So how are we going to deal with that? Right. I mean, how do we come together as a community to help each other? And then how do we come outside the church community to help everybody else so that the church can be the church? So I do a lot of work with the Salvation Army. And I mean, they’re having to change the way they deliver food. But that’s so wonderful. They put themselves out on the front line. And, you know, that’s the church being the church. So that’s kind of what’s on my heart right now. What’s on my heart is how do we that have more help with people that have less at a time of great stress like this? And I think that’s what God’s been putting on my heart.

William Norvell: Thank you so much for sharing that. Thank you so much for sharing your time. This has just been a wonderful journey through scripture, through God’s word, through his view of financial services and view of faith and work as a whole in view of just how he’s going to culminate and bring things to work in eternity. And just really thankful for your time and for for spending with us.

Andy Mills: So it’s great. Is exciting stuff, isn’t it, guys? This is really good stuff to get a hold of. And I’m so frustrated by when I see Christians in the workplace just kind of living out the string, if you will, without really thinking about what is God’s purpose for them. And that’s if I had a message at all. That’s that. Think about purpose. We what purpose is God had for you and bring a completely different attitude to work. You know, we can change the world.

Henry Kaestner: Ladies and gentlemen, welcome back to the Faith Driven Investor podcast. This is an episode that I’ve been looking forward to for a long time. When I think about men and women that have really made an impact in the way that I think about being a Faith Driven Entrepreneur and a Faith Driven investor, there are few, if any, that top Wade Myers. He’s been very thoughtful about how he runs his life in a way that brings glory to God at scale and with success. And he’s got such a great story. So I’m grateful that he’s on. Wade, thank you.

Wade Myersr: Oh, thank you, Henry. It’s great to be on the program.

Henry Kaester: So there’s a ton that we can cover today. And I hope that we going gonna get the most out of it. But before we get to that, I want to hear and our audience wants to hear a little bit more of a background in your personal story. So a couple of facts that I’ve heard about you. Can you tell us if any of this isn’t true? But these are the things that I’ve heard, that you grew up in a house that didn’t have electricity or plumbing. That there are only six people in your school and that you worked from 12-8am through high school. And finally, that you once defended thousands of school children in Denmark from a horde of killer fire ants. Are all those true?

Wade Myers: All but the last one.

Henry Kaestner: So tell us about growing up. You had a very interesting and incredibly formative background.

Wade Myers: It was a lot of fun. So my grandfather was a Mennonite, left a Mennonite colony at the homestead in western North Dakota, not exactly the place you’d want to homestead without, you know, the value of services such as electricity and indoor plumbing. And so my mother grew up as a Mennonite. But outside of the colony. And so my father, who grew up Irish, married my mother, the Mennonite. And so we grew up with this Mennonite background. And the religious influence was the Mennonite magazines that we got. There was trips back to the Mennonite colony to visit cousins that had, you know, horses and buggies and bonnets and so forth. And we were in the middle of nowhere in the badlands of North Dakota.

Wade Myers: So the combination of all of that meant there was just no services available. So my parents built our house with a hammer and a handsaw. They had no electricity. Didn’t even have a miter box. They just basically built this humble little home with a dirt floor. So we raised chickens and pigs in the basement in the early spring is way too cold for baby pigs or chicks to be outside who had kind of raised them up until the weather warmed up and they got a large and healthy enough and put them outside. There’s a very interesting way to grow up. You know, no television, no telephone. And it was really a lot of fun. My parents were wonderful. They modeled a wonderful marriage. My mother was very creative and entrepreneurial. And so my siblings and I just went to work at an early age. I started selling door to door at about nine years old, worked in construction, starting in sixth grade and back then and the rural environment to get a driver’s license.

You could start driving at a very early age. It was like a rural kind of driver’s permit and you get a regular driver’s license at 14 and started working. Right. So that was kind of life growing up. But it was wonderful. You know, we blasted coal out of the side of a creek and burned coal in a furnace and burned wood in a furnace. We had a cookstove in the kitchen and an icebox. You know, we’d bring in ice and all that. And we had a pond that my father put in and we had muddy pond water kind of pipes into the house. And so we had one faucet that, you know, you might get a salamander out of the end of the faucet or mud. That’s kind of how much rainfall we got. But it was a really neat way to grow up.

Henry Kaestner: Wow. So and you worked through high school. I mean, you’d worked nights.

Wade Myers: Yeah. So what’s interesting is I was always trying to find out how to make more money. And so the roofers helper kind of roofers assistant job in the sixth grade was 50 cents an hour. It wasn’t very much. But when I was a freshman in high school or maybe as a sophomore, they put on a big truck stop up on the hill by the interstate. And the interstate had gone through only a few years earlier. And all of a sudden there’s this big truck stop and tons of big fueling stations and 18 wheelers would come through. And so I thought, aha. So some of my friends in school that were older got a job there. And so I got a job there as well. And it was funny because you kind of start off as the newest employee on the dog shift, right. So midnight to eight was the hardest shift for them to start. And usually guys by myself. But it was you know, it wasn’t that busy. So I think we had eight fueling islands, which meant 16 trucks, maximum, you know, one on each side. And, you know, I had to change tires in the back on the big 18 wheelers and change oil as well as, you know, fuel and take care of the trucks. But normally, you only had two or three trucks at a time. And then we had truckers showers and truckers sleeping rooms. And so what I could do is as soon as I got off at eight o’clock in the morning when the manager showed up, I could grab a quick shower in a trucker shower and run over to school, which is only like a quarter mile down the road and make the morning bell. And then but I’d drive home to our little farm and just crash at three thirty or four and a half there. Just exhausted. It was really fun. And then once in a while, I’d pull a double shift and weekends were kind of crazy, but I had a blast. I would have my textbooks laid on the counter and run out to fuel trucks, you know, ring them up. And that was a neat experience. And I really enjoyed the work ethic of helping contribute to the family and helping our family farm survive and all that.

Henry Kaestner: So coming back to this show, this show being about investors, we talked to a lot of entrepreneurs as well. You are both. Tell us about the venture academy.

Wade Myers: Oh, yes. So the Venture Academy was a series of videos just under two hundred videos that I did several years ago. That was kind of a basic training for entrepreneurs. So what happened was whenever I spoke about entrepreneurship, oftentimes people would say, I’d love to be an entrepreneur. I’ve got this idea. But they didn’t really have the skills or training to be an entrepreneur. There there’s just a lot of holes missing. Oftentimes, there may maybe a mid career executive or, you know, had experience and just operations would say, and they weren’t broadly experienced and started up in strategy and, you know, H.R. and service and technology and all the things that you sort of have to manage as an entrepreneur.

Wade Myers: And there’s just really misalignment between kind of, hey, I feel God calling me to be an entrepreneur and have my own business. But they didn’t have the skill set. So I kept spending a lot of time explaining the same things over and over again. I thought, well, I’m going to make that scalable and repeatable. So I put on the event where I had about 75 people in the audience set it up, styled it like a Harvard Business School MBA classroom. Right. And then taught think it was a 13 Harvard Business School case studies and did a bunch of lectures and produced, you know, 200 odd videos that were just kind of basic training. Hey, here’s the basics of sales, the basics of marketing, the basics of how to raise capital, et cetera.

Henry Kaestner: 200 videos is. A lot of videos.

Wade Myers: And many of them are kind of, you know, two to four minutes, maybe 10 minutes, just sort of popping by topic. And we kind of had processes and I had principles like here’s seven key processes about marketing. Here is, you know, six key marketing principles you need to know. And then at the end of those lectures, I think sales and marketing is like 30 lectures, then we had case studies. Here’s a Harvard Business School case study on sales. Here’s one on marketing. And so it’s a wonderful program. We videotaped at all the twelve person film crew. And now that’s being distributed worldwide by right now media as well as by Crown Financial Ministries.

Henry Kaestner: Gotcha. Gotcha. We are huge fans of right now media and Crown. Chuck Bentley, just a super friend. What great distribution partners to have, so that’s some pretty decent scale.

William Norvell: That’s great, Wade. Thanks so much for walking us through that. William here. I’d love to shift a little bit to something. I know you work a lot with business owners and entrepreneurs to think about exit planning, and that’s a topic that invariably comes up. As I often say, every business in the world either gets old or dies. Those are kind of the options eventually. But it’s a topic that people don’t really want to talk about a lot. And specifically in the Christian landscape as well as you set out on holy ambition that you feel like God has led you to to start thinking about what that could look like either if you’re investing in a company or if you’re starting a company can be a little awkward. So I’d love for you maybe to give us a little bit about how you work with both sides of those equations, maybe take the investor first and the entrepreneur second and walk us through how you encourage people to think about exit planning.

Wade Myersl: Sure. So Capital Works is the companies flash technology platform that I built to solve this issue. So what I learned as over the last 25 years, I’ve simultaneously been an entrepreneur and an investor and have just made kind of small angel investments and built up to where I made larger investments and have a seed capital fund I’m part of, and always was spinning up entrepreneurial ventures and always doing a lot of acquisitions of other small business owner operator businesses for those entrepreneurial efforts. So, for example, one company I started here in the Dallas Fort Worth area 16 years ago, we’ve done, you know, 40, 45 acquisitions of small businesses from other small business owners to bulk that company up to where it’s now one of the largest in the industry. So for 25 years, I’ve done all kinds of investments, acquisitions and startups and, you know, own businesses, et cetera. And I kept seeing the same issues from both sides. Right. Investors are looking for high quality investment opportunities that fit a specific investment thesis. And the same with lenders. I’ve also done some high yield lending and, of course, worked with a lot of banks on lending. So it’s the same with lenders that are looking for a specific lending thesis. And in terms of a faith based investor, you’re looking for great companies led by a faith based management team that live by certain principles. Right. But that’s just kind of let’s call it a demographic feature. But in terms of your investment thesis, it might be a private equity firm fund might say I invest in turnarounds or distressed companies. And there’s a lot of that activity going on right now given the current recession. There might be ones just to do it. Minority growth investments take a minority stake and so forth. So they all have a specific investment thesis. Typically, they write that into their LP agreements and investment memos and they create the fund, if it’s a family office, oftentimes are looking for acquisitions that fit the family office structure. Hey, we might be experts at automotive parts. That’s how the family, you know, made their money initially. So they’re looking to acquire automotive parts companies underneath the core family office assets, that kind of thing. So I always would see these very specific, you know, strategies for investing and lending. And I could just call that generally capital providers. So whether it’s a family office or a fund or a bank. Right. And on the other side, the nurses, entrepreneurs that are always looking for some sort of capital to seventy nine point one percent of all middle market companies. And when I say middle market, I kind of think of a million in revenue to a billion in revenue, give or take, you know, not the small roll micro businesses, but kind of called a million to a billion. There’s about a million a half a million, six companies of that size in the U.S., seventy nine point one percent of them have debts, for example. So they’re always trying to get capital, mostly working capital debt. And so any entrepreneur in any room, we just had our big Lion’s Den virtual event this year in Dallas Fort Worth area. You know, entrepreneurs are almost always seeking capital. Right. And so here we have this issue. You got entrepreneurs looking for capital or maybe looking for an exit. In any case, they’re looking for some kind of transaction typically. Right. And then you have investors and lenders and family offices looking for, you know, opportunities to deploy capital. You go with it. Why is it so hard? Why is it that between family offices and private equity funds and, you know, overseas foreign direct investment, that there’s like six or seven trillion of, you know, dry powder looking for deals? Right. Roughly a trillion or so between family offices, corporate acquisitions and private equity funds, plus another three or four trillion of foreign direct investment from Europe and China and so forth looking for U.S. deals. So here we get all this money looking for deals. And on the entrepreneurs side, you get all these companies looking for some sort of cap or transaction. And, you know, it’s just like this is just a mess. And every time I entered into those kind of transactions, it was always kind of like a process that was, you know, typically not done well. Everything is sort of ad hoc. Everything looked different. And so over time, I developed a set of analytics style of analyzing. And it became really apparent that whether I was advising a company, whether I had invested in a company, owned the company, or just advising them whether I sell on a company, buying a company, invest in a company is kind of the same. Core analysis is same or analytics that you used every time. So as Capital Works, we put together all the software in the marketplace to say once we do this. Now, whether the company is trying to get a construction bond to grow their construction firm, whether they’re trying to get a loan, whether they’re trying to get a minority growth investment or trying to exit or form a strategic alliance, whatever it is, that same core set of analytics is really central to any kind of transaction. But the problem then became was every company’s financials and information was different and customized and every company thought they were super different and special and unique. And every investor kind of had their sense of that. So then it’s just a matter of standardization and codifying that to where we built the process. Well, we just kind of. Or in the company’s information, on one side, the outcomes of standardize profile of exactly what the company is looking for. Same exact analytics for every single company, whether it’s healthcares, marketing, services or manufacturing. Doesn’t matter. And now we can match. Now we can match the untapped capital supply with the unmet capital demand and match that along just hundreds and hundreds of dimensions, including demographic dimensions like this is a faith based management team looking for faith based investors or there’s, you know, whatever the social or, you know, might be a veteran owned business or whatever it is, as the demographics are just sort of one of the pieces that provide that match. And so in this way. So this is a faith based investor podcast, right. So investors are just looking for deals that fit well and they want to reduce the amount of diligence and the number of failed deals. As an investor, we all know that there’s tons of deal fatigue. You’re just trying to get the information from the company. And as soon as you get it, it’s usually not as clear as you’d like. And it kind of begs a whole bunch more questions. Right. And so you kind of getting this process of kind of Q&A and the Östberg is sort of worn out and says, when will this ever be over? Right. And meanwhile, as the investors say, wow, now that we see what you gave us, we got some more questions. And so this process usit goes on for about nine or 10 months. I think it’s like nine 1/2 months on average for a typical exit or buyout transaction to take place. You go, wow, that’s just painfully difficult. And many transactions result in failure. About half of loan applications don’t get funded. About three fourths of companies that are trying to get sold never sell. And only about 20 or 25 percent of all letters and the Tander term sheets that funds, you know, sign ever get closed. And so, you know, there’s a myriad issues there. But that’s what we’re trying to achieve, is to say we’re going to bring velocity and efficiency to this process. So it has had an amazing impact so far. So we’re we’re thrilled with that. That’s kind of been some of my lessons learned and what build up to how we’re trying to help this problem of helping out faith based investors and faith based entrepreneurs.

William Norvell: That’s great. Thanks for walking us through that Wade, I really appreciate that. And I feel like what I wantask next is I feel like that’s a great overview of some of the pragmatic business issues that face people as they come around thinking about exit. Could you walk us through you? Seems that you just get to work with a ton of people facing this decision, maybe the emotional side. Could you let our audience into, you know, what an investor would likely see as they approach a business owner and maybe what a business owner would be feeling as they’ve built a business for either two years or 20 years? Right. Or sometimes 40 or 50. How do you walk people through that process? Get them ready for that. Help them think about God’s stewardship of the business to this point. And now what will happen to the business, the employees? All those things as well as, of course, obviously what they can do with the capital and how to balance those things as they approach this kind of big transition.

Wade Myers: Yes, great question. So I’ve got this one diagram I show where emotionally most sellers say no and walk away from the table about three times during the course of a process because of the just the emotional nature of this one is the letter of intent in terms sheet stage, where it’s kind of the first time they’re seeing someone else’s opinion of the value of their business. It’s like, wait a minute. Are you kidding me? And it is kind of like they feel like you called their baby ugly, because most business owners always joke that most of them think their business is worth exactly two times the market value. I mean, this is like handing off your daughter in marriage, right? You gave birth to her. You took care of her. You protected her. And now years later, someone tells you it’s not that special. This is all it’s worth. Right. So that’s usually one inflection point that says I’m just out of here. I’m so disappointed. Another one is the length of the due diligence and the effort, which means so usually it’s a complete distraction. The business starts to head south in terms of they’re not there to do the rainmaking or to keep an eye. Things are so busy in the due diligence process, you know, and kind of along the way, you’ll usually see some really emotional bumps. And then a third one, frankly, is seller’s remorse in many cases, once they sell and if they do right. And it’s over is kind of like now. Now what? I kind of lost my purpose. Right? Like, what do they do now? And so one of the things that we try to do is to tell them there are way more options than just the binary options of, you know. Keep your business or selling. There’s many more options to pursue. And so, first of all, that reduces a lot of the pressure in a lot of the stress and a lot of the emotion if they realize that, oh, I could take on a minority growth investments, still run the company, kind of leverage someone else’s cap or reduce my risk, diversify. There’s all kinds of ways of doing this. But what’s really important for us is on the entrepeneur side. We help walk them through how the process works, kind of education. And, you know, if you’ve heard the Dunning Kruger effect, it’s these two professors within all this analysis on kind of like this, a two by two grid. Right.

Wade Myers: So all of us, when we enter into a new process or a new situation and we’ve never done before. We’re unconsciously incompetent. We don’t know what we don’t know. And over time, you know, we become more aware of what we’re not good at or what we don’t know. And that’s conscious incompetence. And and hopefully we move over into, you know, conscious competence. We’re really good and we’re aware what we’re doing. And then finally, the ultimate is unconscious competence, where you just it just comes second nature. It’s just, you know, you don’t even have to think about it. But for an entrepreneur, every time you grow your company, when you grow from one million to five million or five to 10, you know, huge milestones, you kind of fall back into the unconscious incompetence. It’s like this is way different. This is, you know, once you have multiple branches, like one of my companies I grew, we’ve got now 40 or so branches across the US. I remember trying to deal with like three or four or five branches going, wow, this is way different than a single location. Right.

And so when an entrepreneur is thinking about selling, they’re in that quadrant of unconscious incompetence. You’d expect that they’ve never done this before. Typically, they’ve never been involved in M&A. They don’t know the terminology, the lexicon. Investors tend to speak the language of finance. Entrepreneurs speak the language of operations. Meanwhile, accountants and CPA speak the language of accounting. It’s like they’re all speaking. It’s like the Tower of Babel. And so we try our best to sort of translate and say, OK, if you’re looking for capital to help grow and you want to take some chips off the table and sort of diversify your risk and not just risk your own capital. That’s called of minority growth investment or that’s called growth equity. And this is how the style works. We’re looking for a non control investor, so our platform actually translates. So the company can put in what they’re looking to do. In typical operations language, I want capital to acquire a competitor. I need capital to buy more equipment, whatever that is. And then our platform translates that the capital provider side, because they speak the language of finance and they want to know, well, is this a minority growth investment or is this a control investment or non control? Is it a buyout? Is a distressed right. And so to get the entrepreneur ready for an exit is more than just an exit, sort of. First of all, saying lots of options out there. What are you trying to do? I always want to have our team focus on their goals. And in many cases, what they’ll say is I just want to redeem my time. So one quick story. I a guy that on the roofing company with his brother and he called through a referral and said, hey, I’d like to know how the sale process works. I’m thinking about selling my business and starting a ministry. I said, oh, tell me more about that. Like, what are your overall goals? They said, well, you know, I don’t really know. But I just really I want to be more faithful to God. I just want to figure out how to better serve, you know, the kingdom. And I’m thinking like maybe marriage and family and raising kids kind of ministry. Now, he was only about 40, so he had, you know, a lot of time and energy left to keep running the business or what have you. But he just was kind of thinking that to really serve God well, he had to go do something in ministry. And often, as all of us on the call knows, that’s often kind of a misnomer that people think, well, to do God’s work, I really have to be kind of a person of the cloth and not run the businesses in itself, a ministry. So the first thing I said was, well, OK, so tell me a little bit about your company. And he tells me about the company and the value the company was, I think was like a couple of million dollars, you know, two or three million in terms of equity value. I was very familiar with roofing contractors and what the multiples were in the valuation. So he’s telling me as earnings kind of go on. OK, well, here’s part of the problem. He and his brother were there 50/50 owners. So if you guys take, you know, that call it three million dollars. And after the 30 percent friction costs Sipan, 20 percent capital gains and, you know, lawyers and CPA and investment bankers and so forth, you know, you’re going to end up with like 70 percent. And then if you take that in never touch capital and you took that away safely, maybe three percent, five percent annualized, that’s the last check you’re ever going to see. And now your income is going to be way, way lower than what you’re pulling out of your business right now. Right. So I think I think it was so forgiver was I think with six. Thousand of earnings, right? So times five is three million. So he and his brother split up about three thousand per year. So now imagine if you only took, you know, two and a half million. Put that away at, you know, five percent. A hundred and twenty thousand gross before taxes. Maybe it’s one hundred thousand after tax that you and your brother split. You’re going from three hundred each gross to only, you know, of fifty each gross or sixty thousand each girl. So it’s at the very time that you want to start a ministry, you have way less earnings because now you’re a fixed income are at best. Maybe the market goes down in a recession. You have no returns for that particular year. And so I said, let’s think of it this way. How many employees you have? One hundred employees. OK, they each have four or five family members. You’ve got customers. You’ve got vendors. I said your ministry is, you know, hundreds, if not thousands of people. And I kind of just walked in through that now. I was in the position to help him sell business and make a commission. But I talk them out of it completely. I said, no, no, why don’t you just grow your business? And if you just want more time, bring in just more professional manja team members, you know, just, you know, hire someone to be our CFO, hire someone to do this kind of step back, gain some your time. But now at least you’re not giving up all of your earnings. You’re maintaining the assets. And so capital works. We call that legacy value to say if you think about your business as just your first family office investment or just it’s one of your income producing assets, you don’t need to sell the golden goose. You just want to nurture it. Bring in people who can help you run it and gain whatever you want to gain out of what you thought an exit would get you. He thought an exit would give him a pile of cash that would make life easier the rest of his year of his life and that he would free up enough time to start a ministry when he kind of heard the sobering facts and kind of realized, well, yeah, I’d never want to touch the core amount of principle that I got. That was my last check. And now you’re right. If I just give out to a wealth manager and only live on the returns, there’s no way I can live on fifty or sixty thousand dollars a year. My wife used to me bringing home three hundred grand and growing. Right. Yeah. Yeah. The growth is the key issue. So. So that’s an example of there’s way more options. Let’s talk through them all. But first, tell me what you’re trying to achieve and then we kind of can fill in some blanks and open up those options and then match that with investors who say, yeah, that’s exactly what we’re looking to do.

Henry Kaestner: So Wade, I think that’s really important. And you’re getting something there that obviously points to the fact that not all transactions are black and white as just a straight sell and understanding and with any negotiation what each side really wants. There’s a dynamic, of course, you know about with the mass exit of baby boomers from their business, generational transfer businesses that are being sold. And I think that they’ve played a role in some of the illustrations you have, but talk to us a little bit more about the mistakes you see sellers make in looking at that. But then also that buyers make as buyers are interested in a business and are wading into a family business, what are some mistakes both sides make?

Wade Myers: Yeah. Good question. So you have this huge baby boomer thing, right? Two thirds of all business owners, I think it’s about 63 percent are baby boomers, which are probably on average around 65 years old. And so with this massive golf ball working its way through the garden hose and they all should be thinking about an exit or some kind of transition, not necessarily again selling, but just transitioning in some way. So that that’s huge. I estimate that to be about 10 trillion dollars of business wealth that’s going to be sold or transferred or potentially lost. So think of it this way. 50 percent of all transitions by a business owner are unplanned. They’re completely involuntary. And I’m quoting exit planning institute data because of the five D death, disability, disagreement, distress, or divorce. And so it’s an unplanned event. So if an entrepreneur, let’s say, just, you know, is called home and dies at their desk, 50 percent of all entrepreneurs are going to leave their family with a mess because they weren’t ready for an involuntary business transition. They didn’t have their ducks in a row. And I’ve seen some of those where I’ve been called in to try to help you just go. This is just a mess. The family doesn’t know anything. They’ll have the passwords for the operating account, for the business. It was, you know, maybe it was the dad that ran the business. The wife can make it to the office. It’s like, where’s the key to the front door? You know, there’s all kinds of stuff that it’s a real problem. So we do have this huge issue and it’s looming right before us because everyone is at that age to where they need to be really planning this. So the first thing is to get a plan in place, get everything organized, at least for the benefit of your family and your estate. Not have a mess to mop up. And so there is a big issue of just trying to get organized and small business owners are very, very busy. So but they have to. They have to stop kind of do the planning. Get all that lined up and really think through the goals and have family meetings and family discussion and figure this out. Right. On the other side, for investors, there’s oftentimes, you know, in a fund environment, there’s just a pressure to deploy capital. LPs are constantly, you know, trying to understand why aren’t you putting capital to work, you know, or how many deals you’ve done this year? What’s really funny in our analysis is of these 48 hundred odd private equity funds in the US. And that includes from seed capital all the way to buyout, forty eight hundred funds, give or take. They only average point eight deals per year per fund. So, you know, one deal a year now in the early days of a fund, that’s not very interesting. So you got to hurry up and deploy capital. You gonna start charging management fees. And oftentimes manager fees are only charged on what capital’s been deployed. And so what I see the mistake on the investor side, you know, not so much that pressure on a family office, but more on the fund side is there’s so much pressure to deploy capital that you can tend to overpay. Right. So frothy environment. You’re competing for deals and you get deals that don’t fit your thesis where you’ve kind of caved to close, you know, a term that’s common, which says, well, you really were looking for X, Y and Z, you kind of caved and just took X, right. And you kind of gave up on Y and Z didn’t really live out your strategy, your thesis, and you kind of, you know, caved on it. Right. And so they want to hurry up and put capital to work.

Wade Myers: And so mistakes are made on not having a proper pipeline in place, not following, you know, the investment thesis. And because of those pressures on both sides, it means a lot of deals are fairly messy and don’t really live up to their potential and in many cases, disappointment on both sides of not, you know, seeing the outcome that they would hope for.

William Norvell: Wade, as we come to a close, one question I did want to ask was, how do you think about the faith driven aspect of a company during a transition? So obviously, people sell companies to other folks that aren’t as faith driven and just recognize that they’ve built a great company with the great culture. How should an owner think about, you know, look at the thoughts running through my head from common grace to, you know, even still the culture. And it’s going to continue, whether you’re leading it or not, to how there could really be a lot of destruction of value there. And what do we do? Our job while we were running the company, just lots of thoughts could be gone through my head. I feel like our listeners could as well maybe walk us through how you walk through that with owners.

Wade Myers: Sure. So one is the cultural aspect where that honor has built a culture on top of a biblical framework and their style of how they operate is very much imbued with those values. What comes to mind is ServiceMaster, which had a really simple, you know, three point cultural and value statement. Number one, we honor God and all we do. And then they talked about employees and customers. Right. And so the honoring God and all we do thing was the critical point of their culture, which that kind of like set the tone for everything when they sold to a private equity firm. They had a massive Chicago area headquarters. That and this huge lobby with this big statue of Jesus washing the disciples feet. The first thing the private equity buyers did was had a crane come remove the statue and crush it up and throw it away. And you just kind of go that right there, just sort of killed the soul of the company and then they scrub the honor God in all we do from the value statement, and that’s kind of a nightmare of a lot of faith based entrepreneurs, is say none. No. I built this company. I committed it to God. I care for employees and customers and the community in a way that’s different. That’s a huge part of the soul of the company. Now, there’s also a lot of analysis that faith based companies and companies that are trying to do social good and kind of say we care about all constituents, not just shareholder value, that those companies almost always outperform regular companies that are just focused on the bottom line. And again, it makes sense. It’s the biblical economics that who should do the right thing and treat everyone’s respect and golden rule that generally, you know, things will turn out better. So there is an aspect of I had one owner tell me the worst thing I could imagine is I sell the company. I take a whole bunch of money away. I walk away, leave my employees. They’re at the mercy of the buyers. And then I bump into the employees at the grocery store or the park or something. They say, great, you sold us out. So happy for you that you made a pile of cash. Look what we’re stuck with at work, right? And so there is this sense of a lot of faith based entrepreneurs that says, I want to do this right. And I would prefer to sell to a buyer. If I sell to a buyer, that is going to continue. The culture continues of values, continue the ethos of the company, because that’s really critical to what we do and it’s critical to the value that we’ve created and to our outperformance. Because, again, the analysts would say that faith based companies and companies that are focused on kind of social good and are looking at all constituents almost always outperform. So it it does tie together. Right, with the culture and the performance, et cetera. So that’s usually a pretty big deal. Well, there’s other entrepeneurs that would just say, well, I want to maximize the proceeds.

Wade Myers: And then with those proceeds, I have a plan for how I use that for faith based purposes. Right. And in that case, as someone came along and offered a much higher price, that was a not a faith based investor, you know. Now, there’s a decision of am I trying to be a good steward of the potential value in proceeds and how I can use that and how much of the culture and so forth would survive under this acquiring entity. In some cases, that acquiring entity might be so convinced by what’s going on that they’re open to continuing that. And it serves as a testimony to people that otherwise wouldn’t have been testified to. Right. In terms of, wow, there’s really something here. But in general, a faith based entrepreneur is very concerned about what happens to their employees or customers, their values, their culture. And it’s a big deal. And I think to your question, there’s tons of opportunities to do this right to match, you know, the buyers and the sellers together in this ecosystem that says if that’s what’s important to here’s all these opportunities. I think all of us have been involved in some of these, you know, events. And you guys are putting on events. There’s all kinds of events. People are just really kind of waking up to, wow, there’s this all movement of faith based investors and faith based entrepreneurs and trying to bring them together. This is great because it’s more opportunities than most business owners realized to find a great buyer and potentially just matches up the whole thing. And I’d like to keep a stake in a company. But I don’t want to keep a stake in a company with a buyer that’s going to completely change the company. Right. And so there’s all kinds of opportunities now to really be fully aligned on the values dimension, as well as just the financial dimension.

William Norvell: Wade, that’s good. And, you know, we talk to a lot of folks as well. And I think it’s one of the phrases we say a lot. is one size really does fit one. And you just really never know what God’s doing for every kind of tragedy story as the ones you mentioned there. And, you know, some great experiences with private equity firms and other buyers and all kinds of things. I’m sure you do as well. You know, just it really is so good to hear how you think about it and how we can encourage others to think about it as they come up on that, you know, pretty big decision in their life, as you’ve said so well. And as we come to a wrap here on the Faith Driven Investor podcast, I would love to invite you to share with our audience where God has you today in his word and what he may be telling you. It could be today, could be the season, could be something he’s just had on your heart and that you’ve been working through. Would you mind just let us in a little bit into where God has Wade, in his word?

Wade Myers: Yeah, absolutely. So, you know, given the whole Covid impact and the recession, there are so many entrepreneurs that are in trouble, that are anxious, that are being forced to lay off employees, being forced to shut down. And what I’m really grateful for is we have all of our analytics in our platform that we can turn on for free and just say, well, let us help. Let us just help you get through this. And, you know, raising capital for companies that need it, saving jobs. And so one of the things I’m really grateful for right now is just being faithful and being a good steward of what, you know, is right at my disposal and just offering to be a wonderful help to those that need it and to really try to make a difference with that at the same time. I have one of my five children is fairly ill right now and we’re wrestling with that. And so other thing God is telling me is just execute well on all fronts. On the family front, you know, as well as the business front, there’s all these balls that we’re constantly juggling and just trying to do it all well and trying to lead faithfully through good times and bad times and through, you know, good health and bad health and just coming out the other side and knowing that it’s just a growth opportunity. And so as I meet with entrepreneurs right now, they’re struggling and are worried. The nice thing is God has taken me through a lot of experiences where I’ve learned a lot of hard knocks and made a lot of mistakes. So there is a degree of empathy that God is able to use to help them just, you know, understand that you’re not alone. Because most entrepreneurs feel very isolated and lonely and like I’m a failure. Right. It’s like, no, this is a different environment. Let’s help you through it. So I’m really grateful to be in that position. But clearly, God is saying take what you have and offer it. A lot of what you have free right now just to help businesses get through this next, you know, three months, six months, whatever it is, until kind of people can get back on their feet.

Henry Kaestner: Wade, thank you very much for your time. Thank you for your faithfulness and for sharing. And for encouraging our faith driven investor audience. May God bless you and your family and your child that’s going through these difficult times.

Wade Myersr: Thank you very much. I appreciate it.

Henry Kaestner: Welcome back to The Faith Driven Investor podcast. We’ve got a really special edition today. We talk a lot about how to get investors focused on how to honor God in the marketplace and be a part of his kingdom coming on earth as it is in heaven. And if I’m truthful, much of our focus has been on people who are already investors, who’ve been out there for a while and thinking about a new way to invest and maybe to reconfigure the way they think about their assets. Maybe they’ve been investing in fidelity for 20 years or some of the more traditional asset vehicles. But what’s a great way to think about getting investors to think about faith driven investing from the outset? The beginning of their career, their beginning of their investment life. Well, the two folks that are with us today have been thoughtful about that.

And we’ve got Stephen Diedrich from the Baylor Angel Network and then also Dick Blanc from Cedarville to talk to us about how they’re working with young entrepreneurs, young investors, how to help them to understand from an early day about how they can participate in faith driven investing. So Baylor Angel Network has been going on for a while. The idea of investing and putting money to work and training up student investors with real dollars is pretty unique. You guys have been doing it for 13 years and I want to camp out on that a little bit. Just tell us more about how you do what you do. What are the deals you see? How did the students get involved? How do you structure deals and maybe tell us even some success stories that have come out of your time in investing?

Steven Diedrich: Yeah, I’m happy to. So, you know, the basic way we operate is, as you know, I’d say almost any other angel network. We’ve got a pool of members that come in and we invest in promising companies. And although we’re university affiliated, we don’t have any hard restrictions on you’d have to be a Baylor grad to join. Right. Or you don’t have to give to the university to join. And the same with the companies. You know, we look at all sorts of companies, even if they’re founded by non Baylor alumni, the tie into the university is really through the student educational program. And it’s really flavored with even the way we got started. You know, the perspective has always been one of service and giving back. And one way I’ve heard it put it is, listen, I joined the Baylor Angel Network so I can invest. Right. And make some money in my investments as a steward of my you know, what I have. But then I can turn and give to the University of the profits, give up my time and mentoring these students and pouring it into that interaction is it’s really neat relationship where we’ve got students that are learning about investing and analyzing these opportunities. And we’re connecting them not only with investors who do it, but we’re having them do the work where they actually lead our screening, cycling and all the diligence materials that we hand to our investors when a company comes in to pitch was put together by these student analysts who’d been mentored and guided both by our faculty and by our members. And, you know, if we look at some success stories, we had an exit in January that I think is a great one to look at because it touches on all these points of why Baylor supports this. Right. Why do you support a bunch of investors, right. Who invest in these start companies? Well, we had members of the Baylor Angel Network who invested in and oftentimes they’ll take advisory seats, too. But they invested in this company that was actually started by a Baylor grad with this one, you know, in five or six years later, had thirty five times their money returned to them. So hugely profitable investment. That’s kind of what we’re going for in the angel world anyway, right? It’s not the most frequent outcome, but it is a great one. And out of that. Right. The members actually approached Baylor said, by the way, we know this was a great investment for us. We have clearly profited in our investments. We want to give to the university. And so out of that the university received, I think about 10 percent of profits were just given charitably from these members. And so you have this deal in particular touching a Baylor entrepreneur screened by Baylor students, invested in by Baylor alumni who’ve now turned around given money so Baylor can continue to do this program in training up and guiding these students.

Henry Kaestner: So tell us about the other part of that, which is the company that you invested in and are there different types of companies that you look at in terms of stage or industry or geography or whether the leaders are driven by their faith?

Steven Diedrich: Yeah, so our perspective is we want to be good stewards of our investors finances and we look at all sorts of opportunities. It almost has guided more by our investors perspectives on what they want to invest in. And that’s kind of what guides what we look at generally where early stage series. So after first revenue, but not too late. Across all industries. And so, you know, there’s a lot of diversity there. We don’t have any formal requirements that, you know, it be founded by a Christian. We don’t have any formal requirements on a mission there. But our perspective is we want to invest in companies that contribute to kind of the flourishing of mankind. Right. Things that are beneficial to society now. We can also paint a negative light. This is hey, there are things we just we don’t want our money in. But we don’t take a hard perspective on investing in Christians, because I think a lot of our members, they look at this and say, listen, I’m a Christian, you know, and not all of them are. But, you know, oftentimes our members have these projects that you know, I’m a Christian. I want to put my money to work in companies that are doing good. And then I can have an influence. It builds my relationship with this company, with guiding them, with their consumers and as well as with the students. And so I’d say more of our perspective is leaning on, you know, if you are a faith driven investor and you join the Baylor Angel Network, live that out. Right. You may be investing in an entrepreneur that is not a Christian, but what a great opportunity that is for Christians to be living and engaged in with people who don’t know the Lord Christ because it gives opportunity to point to him, to his glory. And why are we doing this? Why is the Baylor Angel Network different in our giving some of our profits in our pouring into students? And so it tends to more flavor who we are in leaning out rather than being a filter that we apply.

Henry Kaestner: Yeah, I think you bring up a super good point there and that it’s not just how unique Baylor Angel Network is, but I think that a lot of the folks that are listening to this podcast are angel investors and help manage a fund that invest in Faith driven entrepreneurs in Southeast Asia, United States. And somebody might infer from that that I think that really true faith driven investing is only investing in Christ followers. And yet you mentioned something dynamic that’s incredibly important. As an entrepreneur is out there regardless of their faith background or their faith intentionality. And they are living it up. They’re feeling the stress. They are going through the crucible, if you will, an angel that’s really involved in an entrepreneur’s life has this incredible opportunity to witness and be with them and be friends with them, whereas share the reason for the hope we have with gentleness and respect. And that comes through a relationship. And an angel has this great opportunity to be in relationship with the founder and then with time and through love, being able to share the reason for the hope they have. And I think that that’s such a key part, lest we otherwise be constrained with faith driven investing only into a holy huddle. Now, to be clear, I’m a member of that, and I think that investing in Faith driven entrepreneurs is a beautiful way to advance God’s kingdom. And yet that’s not the only way. And so you’re speaking to that. Can you maybe even give us an example or have you seen that happen where somebody from the Baylor world has gotten involved in a company and the discipleship or the faith foundation of the founder, the entrepreneur has been influenced in a way that’s been full of life for the founder?

Steven Diedrich: Yeah, no. And without getting too much into into maybe specific scenarios there. I mean, we we see a number of times where a BAN member will get involved as an advisor and help provide some coaching or help your entrepeneur. And, you know, I think one area, maybe one example that specifically shows how being a Christian in this can be a huge benefit is, you know, not all these investments go well and return 35x, like I mentioned earlier. And we have one that there was infighting, a shareholder and not a new thing, not a unique thing. But there was actually one of the BAN members who, you know, is investor in this company. And, you know, I look at and say, you know, because Christians were called to live in a way. Right. That puts us above reproach. I mean, that’s the calling of the Christian. One of our BAN members was asked to come and join into a special committee that was trying to help bring the peace. Right. And you think about what a Christian is called to do. And be peaceful. Right. Be a peacekeeper. And in these relationships. And so that BAN member was able to step into this role, help broker these tense relationships. And, you know, I can only imagine you look at this one on ones and say, what’s your thought on this member here? It’s like, well, you know, what a great option they were to step into a tough situation and show the patience, show the love, show the kind of uprightness of Christ in those relationships, even when things get bad.

Henry Kaestner: Thank you very much for that. I want to switch over to you, Dick. You’ve got a new program that’s starting at Cedarville under your leadership, has been launching a platform and a program for a little bit more than a year. Talk to us about how you are forming your curriculum and your investment strategy, how you’re looking at deals, maybe some of the same type of questions that I just asked Stephen.

Dick Blanc: Happy to. Well, we first looked at launching this program. We got 25 business leaders. Most of them alums from the university together. And we were focused on picking one thing where we could put our expertize and capital behind to advance the cause of Christ aligned with the university’s mission. And in doing that, they ultimately decided that the best and most equitable way and focus. Our collective marketplace energies, our capital, our expertize, our relationship base, our opportunity to mentor students and alumni and others close to both an accelerator on campus, we call the whole program Beyond, the Accelerator and also an angel network, not unlike what Stephen just described at Baylor. Then we also, of course, have an entrepreneurship academic track that cuts across all 16 of the schools at the university. But, you know, one of the things that really informed how we structured this and why we did it and why top down board of trustees, president, cabinet, across the university, everybody is very aligned with the strategic importance of the program. Our belief is that I know everybody on the call here the same belief that under God, the marketplace has tremendous influence on our culture. If there’s any doubt about that, you can see what happened when we shut it down for 20 days. These recent events that still continues has huge impact. The market points to us. It has gone on a culture. We also do it. The great advances for the cause of Christ seem to always begin with an athlete or a leader both Biblicallyin contemporary history. And if you look at how the marketplace looks like, particularly in the US, there’s like a continuous transformation or renewal of the marketplace that goes on every 20, 25 years. There’s cycles for the startup economy feom 20, 25 years ago also becomes a leaders of a marketplace of the future. Those leaders who were part of that whole venture economy 20, 25 years ago then become leaders in heavy influence in the marketplace. The worldview that those leaders ultimately have has enormous influence in the culture, communities, and the way we live. And so we’re playing a long game with a certain Time over Target. I personally think that by launching hundreds of state driven companies with a biblical worldview, for profit model, you know, ultimately rising and scaling to have positions and platforms of influence in the marketplace. We feel that that is a great, positive way to allow our communities to flourish, to advance the cause of Christ. That’s a biblical worldview, helped to shape the culture and really the ambitions and influence with those pillars and also those of us that helped shape and fund and coach and mentor and capitalize and to have that kind of impact. So we want to be a Midwest hub, in effect to what’s going on with faith driven entrepreneurs and faith driven investors. We also want to be part of a global ecosystem where our impact and deal flow and our capital can be multiplied. And you guys have a great impact and making all that happen. And it’s created just a phenomenal ecosystem for which we are now joining. And our angels, our alums and students going through the accelerator, the interactions we’re having with other accelerators for deal flow, the sharing of deal flow across other angel networks around the country. They just have this multiplying impact for God that has really added more impact for the university for God’s kingdom. So that’s what excites us and why we’re happy to have made this strategic move in the past year or so and it continues to scale.

Henry Kaestner: I want to talk to a little bit more about how each of you think about equipping the investors of the future with how they look at investment opportunity. But before I do that Dick, you have this entrepreneurial program that goes across all the different colleges that are part of your university. What are some common tenets what are some common principles that you want to impart on these young faith driven entrepreneurs, that are going to go out there and innovate and create a business?

Dick Blanc: Yeah. Great question. You know, we put some thought into that. Obviously, a biblical worldview is certainly a common principle. Everybody at Cedarville University, regardless of the school that their majors anchored in, whether it’s business or engineering or science, cybersecurity. You’re seeing all those degrees, everyone gets a Bible minor before graduation. So biblical principles are instilled throughout the curriculum in all of the practice areas of the 16 schools of the university. Interestingly, now the entrepreneurship program besides now the Bible minor is one other minor that’s across all 16 in all schools. So I tell you what, we see our partnership in all the tenets of the grit and tenacity in going all in that we know an entrepreneur does to attack then uncaptured opportunity or a problem that God cares about in a for profit model. We want to encourage more of our students, more of our alums, and of course, many of our investors who have an affinity with the university to help scale the addressing and solving of problems. So we see entrepreneurship in principle as a great way to influence the world, but also to solve the unsolved problems that I talked about two minutes ago in isaiah 58.

Henry Kaestner: So riff on that a little bit more, because you’ve got an opportunity, of course, to teach great entrepreneurial curriculum, you can do lean startup, you can do traction a whole bunch of different things. You can do Yoaz. And then, of course, you’ve been well versed in how to train kids on the Bible. Are there aspects of being an entrepreneur that you think a Christ follower really needs to lean into? Or are there different things that you think of Christ following entreprenuer that wants to have a career in entrepreneurship needs to be aware of or wary of?

Dick Blanc: Yeah, yeah, good question. I mean, one of the things that probably would be unique, I think, to an entrepreneur who’s a Christian, certainly one would be how they think about their role as a founder, as a CEO, as a leader of their enterprise. More from a stewardship standpoint than from an owner standpoint. That’s really one key principle that certainly drives home pretty hard.

I think another key principle is just the whole idea of, certainly the companies need to be wildly successful economically, financially, to scale, to attract investors, to attract customers, to operate, just like some of the great companies that are out there today, the Chick-fil-a’s the Home Depots and others. They need to be financially strong and sound at scale. Great profits, great revenue growth, but we also encourage our entrepreneurs to be principled in the impact that they make. So, you know, having more than one bottom line is something that we feel strongly about. And we see out there in the marketplace as something that’s honoring God. We have just some great mentors are role models that are participating in our program who do that with their businesses. And boy, it really resonates when a student sees that type of principled mindset in the leaders of today as they see leaders of tomorrow.

One thing I’m encouraged about, about the students today and I know, Steven, I’ve talked about this a little bit as well at Baylor, is the things that took me a while. And I’m an alum of the University, but the things it took me a while to learn in the marketplace. It seems students already have learned just the things that are important. They’re More principled. They’re more focused on having a purpose. They’ve got a mission. And I don’t know that when we were all grads was quite as prominent. You know, certainly we talked about it, but I see that passion that heart. Most of the students that I interact with have a strong heart for mission and purpose of God, but also a strong ambition to be excellent and successful in the marketplace. And they seem to have a great balance to that. And I hope that continues as they enter the marketplace.

Henry Kaestner: Steven, I want to switch back to your Baylor Angel Network. You’ve been thinking about investing for at least 13 years. And undoubtedly you’ve got a curriculum and a framework to teach investors, young investors about faith driven investments. What’s that curriculum look like if you’re going to encourage another university that wants to be serious about developing a curriculum on faith driven investing? What are those core pieces?

Steven Diedrich: So we kind of look at this from two perspectives. You know, first and foremost, as a university, you know, our focus is really making sure how are we doing a good job educating these students. And so not just training them. We’re not a trade school. Right. We’re not teaching them to just do this kind of classroom involved, but really encouraging the students to think through and be innovators and be leaders in this space and within the business. I think this is especially important then to take that extra step and put them and to get these hand experiences and let them lead right. With these companies, because with the CEOs engaging with the investors. And that’s one thing that’s kind of helped shape what our curriculum looks like. And the basic framework from the students perspective is, you know, they come in and they are not only being trained in, you know, understanding the basic tenets of how do you negotiate, how you evaluate an opportunity, what’s important, what terms or get you how do you model some of these financials? You know, that’s kind of the one part. Right. And that’s building on the broader curriculum that Baylor has in both finance and entrepreneurship and in a number of other backgrounds that our students come from. But beyond that, what I’d say sets the Baylor Angel Network apart is, you know, we have just an awesome opportunity to take, you know, these top students in this area and connect them with alumni and connect them directly with these entrepreneurs. Not only can they do it, but then they can see, you know, what’s a moderate who someone I can emulate. You know, one of the feedbacks we get at the end of the year, I often ask these students, like, what have you appreciated most about your time in the Baylor Angel Network? And I’ll tell you all, it’s good for these students. Like when you look at job placement, for example. Right. It’s good that they know how to do some pretty heavy financial modeling. They they’re creative in the way they think about opportunities and threats and. None of it mentioned just that piece, right? They don’t say, hey, it set me up for a great job. Oftentimes the feedback we get is, man, the members, the mentors I have. Right. The way I can now look at a Christian businessmen. Right. And learn to emulate that. The way that they walk in humble service. Right. Honoring God and what they do and now being a model for my life as I’m leaving college. Because, you know, oftentimes these students that I’ve had them ask me this several times already, as they say, you know, I’m Christian and I’m a finance major or I’m an entrepreneurship or I’m an engineering major. Right. And I do that. And, you know, should I take this job in investment banking or should I go into ministry? And I feel like there’s this kind of tension and just the opportunity, you know, beyond me. Right. But, you know, for each of our members. Right. To be able to give their input and really guide these students to understand that, you know, your faith. That should influence what you say. Yeah. You know, the answer is yes, Minister, through your life as an investment banker, minister through your life if you go into consulting or venture capital or, you know, a number of careers that our students go into. And so it’s that extra little piece that I see us having the opportunity and a platform to deliver through the Baylor Angel Network that I say sets this apart from other opportunities where they’re either just getting educated or just getting experience.

Henry Kaestner: So there’s a lot of conversation happening right now about the fall. And by the fall, I’m not talking about what happened in the garden. I’m talking about the season. Autumn, there’s uncertainty in what the fall schedule is going to look like for many schools. And as a result, I think that a lot of people are looking at the higher price tags of higher education. How important are programs like this, these real world experiences to the value of the college experience? And do you think that this crisis is going to slow, that our accelerate that, how are you processing all that?

Steven Diedrich: That’s a great question. I’ve actually had the same conversation with some of our analysts. Right. They’re looking at what if we go online in the fall? Should I take an internship, take a gap year gap semester? I mean, how does this impact just me personally? And, you know, one of the perspectives I have on this is higher education serves a great purpose. Right? A university model. It has a great purpose. And I maybe won’t get into the price of that because I think that’s a whole nother can of worms. But when you talk about the value that someone’s putting into coming off to university, it’s not just for the experience of being off at college or just for that diploma. Right. It’s kind of a signaling tool to get a job. Right. You jump down that labor economics degree. But really, you know, what the university should be striving to do is encouraging these students. Right. To be thoughtful leaders. Right. It’s contributing to that academic curiosity. And so a program like Ban, I think fits in perfectly and just enhances that experience because it’s not just I go to a classroom and I’m learning and they’re encouraging me to be creative and curious. But, you know, it kind of stops here. It’s this kind of flavor that we call the BAN practicum. So as the students come in, there’s the curriculum that they go through to. And in that it’s not just a class like you would normally have where you show up, you do your readings, you have some assignments. So it’s we’re digging deep. Right. And we’re encouraging the students to be curious and to ask questions. And then we’ve also got this awesome, you know, almost an internship through the Baylor Angel Network. And we hold these things side by side. And I can sit down and look at one of our analysts and say, you know, so tell me about this. You’ve got one company that you’ve been on a call with the CEO. You’ve talked about terms. Right. Why is it important? How are you applying what you’re learning today and tomorrow? And just that interplay between, you know, really pouring into and building up these students from an academic side, from an experienced side, from connecting them with alumni and engaging them that way side. I think just creates a student who’s so well equipped to not just go into the workforce, but to thrive and to succeed and be a leader in the workforce. And as we look at our years of graduates who’ve come through the Baylor Angel Network. As an analyst and looking at where they are now, it’s amazing and it’s humbling because they often leave with this perspective of how do I turn around and help the next person? How do I approach this with a humble stewardship? And that’s just such a blessing to see the way that just a short time we have I mean, it’s only 18 months of their college career, but through the Baylor Angel Network that we can help instill that and tie them in. And, you know, they can turn around and and help the class after them the next generation.

Henry Kaestner: Dick, want to throw in on that, too?

Dick Blanc: Yeah, yeah, happy too. You know, we had a record enrollment of 10 percent above the prior year in 2019, which was just phenomenal. And unheard of in the university settings. And even in the covid environment here our deposits are pretty well aligned with a similar performance. And so that’s been great. We’re going to open up on campus a couple weeks early. We want to send the students home for Thanksgiving break. And that’ll be the end of the semester. That’s how we’re going to manage that. But it will be on campus instruction. Even before the crisis came along, there was already a strong trend towards students wanting meaningful and real experiences that were real world and immersive. And programs like what Stephen is describing a Baylor, what we’re doing at Cedarville. Very much that way. They’re very real-world, very immersive. The interaction with top business leaders, Angels, venture capital, private equity, strong operators, and strong entrepreneurs. The students are getting immersed experience, paid on campus internships in venture finance, fund management, entrepreneurship. And it’s really created a draw for more of that kind of experience at the university. So we feel like programs like this could be a trend. So across Christian universities at least, that could make great impact, both outcomes as well as the on campus experience.

Henry Kaestner: I’ll ask you guys one last question before our final question that we always ask each of our guests, and that is if I’m listening to this as an investor or as a established entrepreneur. Are there opportunities for me to get involved as an investor or as a volunteer in either of your organizations? And if so, how do I go about it?

Steven Diedrich: Absolutely. You know, I shoot me an email now. So, you know, we’re always looking to bring in more members, more investors. And, you know, we always distill down to the four main reasons that people join the Baylor Angel Network. You know, one is to make investments or make profitable investments. The other is portion of the students piece, you know, kind of the service. And this comes in times in waves as members are able. But there’s great opportunity to contribute not just to the students as a mentor, but even more informally or with some of the other acts of service that we have. The other reasons we look at are just the opportunity to network with other investors. Right. Who share these values or, you know, kind of the final one is to learn about investing in these entrepreneurial ventures. And that’s the kind of the investing piece, right? Yeah. The deal flow that comes. You know one of the unique things as we talk about just the investing. I mean, these things get to be highly vetted by the time our members see them. You know, I will take 30 companies that apply in a cycle. Our analysts will do deep dives and 15 of them raise to get to the top four. And this is a five week process that results in, you know, 10 pages of research that our analysts do.

And so, I mean, there’s a high vetting of the deal flow, too. And so, you know, I’d say if someone of to join we’ve got ways to engage. If you’re close enough to drive into Waco, we’ve got ways to engage if you’re not right. We have out of state members that join us virtually. And so much of you know, when we hit this covid crisis, it didn’t really throw too big of a wrench in what we’re doing because most of our members live, you know, hour and half to three hours away. You know, most are about that far. And so a lot of our cycle is virtual, is enabled by Zoom or conference calls in other things. And so, you know, the presentation meetings online, too. Not ideal, but easily doable. And so, you know, I think you’ve got my contact information and, you know, let’s have a conversation.

Henry Kaestner: We’ll put it up in the show notes. Dick, how about your?

Dick Blanc: I would say the same thing. You can put my contact in the show notes. You also have the cedarville.edu/beyon. And if you go to those landing pages, there’s opportunities as entrepreneur in residence. There’s opportunities as an angel member to participate and mentor the students, as well as to invest in a curated set of deal flow and our next virtual investor event where we’re looking at deals is June 12th. So you can go to the Web site I just described and register. So that you can be a guest speaker, you can sponsor internships. So all that’ll be really clear if you go to cedarville.edu/beyond I’d love to have more listening in here, participate in the growth and become angel members. That’s the best way to plug in.

Henry Kaestner: Okay. Thank you. Thank you. With each of our properties Faith Driven Entrepreneur Faith Driven Investor and the new faith driven athlete, we ask our guests one final question. It’s always the same. What are you hearing from God’s word? Maybe this morning, maybe this week, maybe last week, that you really feel that he’s speaking to you about. Steven, we’ll start with you.

Steven Diedrich: That sounds great. So I’ve been reading through with my two boys first and second Samuel and we’re into Kings now. And, you know, as we’ve been doing that kind of just Bible study with, you know, a four and a five year old, one of the things that I’ve been just really taken from and resting in is God’s sovereignty. And I think even just in the face of COVID, that’s something that I’ve been able to communicate to as the spirit’s been teaching me. It’s this reminder that our security is not in our health, or our security is not in our finances or in our, you know, the income we have. You know, that’s not it. And so even if all that’s taken away. Right, God is sovereign. And that’s just an amazing thing to be able to read. Right. To talk to my little kids about. But also then to turn to our analysts and kind of point them to in this time of uncertainty. God is sovereign.

Henry Kaestner: Amen, Dick.

Dick Blanc: I’m thankful for Bobby Gruenewald, who I think you guys have interviewed on this podcast before, talking about the Bible app. And my discipline is to essentially go through that every year.

I love just how easy it is and the availability of it. And so I’m at this point in the year where I get to read about king after king in Israel in a quick summary of their life and their impact as leaders of God’s people, the Israelites. The contrast is so stark when you go through and read each of those chapters. It just basically starts out. And so and so was either a good king following in the steps of David or was not.

So where God challenges me every year in that particular area is just who will I be as a leader and who will I mentor others to be as a leader? And what, if there was a chapter in God’s word that summarized the impact of my life, what would it say? Would it say I was courageous and bold enough to address the things that God dislikes in the ways he wants? Would it say that I trusted him in his sovereignty and in his wisdom versus aligning and partnering with perhaps another acquaintance or company or partner who has some strength to help me in a difficult situation? Would I look to God and say God, like David, do I go to battle or do something else? And that certainly was a test for all the kings. Could it be said that in the scope of the things that I have the opportunity to lead and steward that I left him better than when I was given the role in terms of, you know, being aligned in God’s mission, in the impact that God wants to make in the marketplace. And that’s what resonates with me. And reminds me every day it wakes me up every day to think how we’re making an impact today.

Henry Kaestner: I love the fact that you brought up Second Chronicles there. I think I’m on a different reading plan, doing it actually as a three year plan with a bunch of buddies going through a chapter a day and in this time going through the Bible. The thing that really impacted me was Second Chronicles and maybe because of where it follows, maybe because you just went through eight or nine chapters that just had genealogy after genealogy, which are kind of tough to get through. But then I listen, you run into the bad kings of Judah and the good kings of Judah. And the thing that left such a lasting impression was that the good kings were good thereafter to their father’s heart. They’re after David’s heart. And yet every one of them made a critical mistake along the way and didn’t seek God before making a major decision. And it didn’t go well for him. For one, it was a trade deal. For one, it was going to battle. There six good kings, all six of them made a big mistake. And that’s such an admonition for me. And really interesting to hear that they made an impact on you as well. We’ve come to the end of our time. I’m grateful for both of you. Super excited about the way that you’ve been thoughtful and having teenagers through early 20s, being very thoughtful by Faith Driven Entrepreneurship and Faith Driven investment. It makes me incredibly hopeful for the world. And thank you for the fact that there are things that both of you guys could have been doing. One of the things that we share in common is that we’re both formed a little bit in St. Charles, Illinois, through our time with Arthur Andersen, Accenture Family Group but God has us each in different places. And you could have been in different places on Wall Street. And for you to be so serious about your faith and investing in this next generation, to have taken leadership in both these schools. It’s a big deal, makes me hopeful. Thank you for your faithful obedience in that direction. Thank you for us listeners. And until next time, God bless you.

Henry Kaestner: So welcome back to the Faith Driven Investor podcast. We’ve got a special guest with us today. We have Malcolm with us online, Malcolm Johnston from Northern Ireland. I was going to ask you why you talk with that funny accent. But now we all know and Malcolm, I’ve gotten to know you over the course of the last year or so and just been so impressed by the way that you process what God has put in front of you. You’ve got a great story and some really interesting places. So I’m really grateful for you to be able to be on our podcast with us to share some of those. Welcome.

Malcolm Johnston: Thank think it’s great to be here. And I hope that you can get my accent. I didn’t realize I had an accent until somebody told me. I hope you can get what I say.

Henry Kaestner: Yes. No, I think it’s phenomenal. It’s an awesome accent. I think it may be one of the best ones, maybe probably the best one we’ve ever had on the FDI podcast. And yet there’s a great story behind it, too. It’s more than an accent. It represents a culture and a great country and a society that had really been in the news when you and I were growing up. You were living it.

I was in the United States growing up in the 70s and always hearing about Northern Ireland and the troubles. And you’re in the midst of that. You now, as part of what you do, you go to places where there are troubles and you bring in light and you bring in investment and you bring in training for entrepreneurs. But you grew up at a time in a place where there were some troubles. Tell us about that. What was it like growing up in Northern Ireland in the 70s and 80s?

Malcolm Johnston: I think probably it was more influential than probably we thought at the time. It’s your normal that you kind of learn to live with it. But yeah, I was born in 1962 and the Troubles kicked off in 69. So it was very much part of my life. And the restrictions that we had and school and going into the city, a constant news flow that was pretty depressing, but effectively just tribal conflict and then a very small country. And yeah, it definitely shaped. And I find ways, I guess. Bit by bit to find out how to be salt and light in the middle of that trouble. And so apart from, you know, going into business fairly early on in life, the business I went down to was a family business. I joined my father and it was a wealth management and financial planning business. So we were advising wealthy people about their money, building their investment portfolios, helping turn a wealthy and successful people to try to think through some kind of purpose and objectives for themselves. But the thing was, probably more shipping was getting involved in inner city Belfast and very socially deprived communities politically of young people, and in many ways were the castoff ghettos that grew in the city because of the troubles.

Henry Kaestner: And let’s take just a quick step back, because I realize that you and I were born in the 60s. And I understand you say, by the way, that the troubles began in 1969 and I happen to be born in 1969. I like to think that you’re talking about two different things. But many people, listeners may not understand what were the troubles. I want you to tell us what was it all about, the IRA, etc..

Malcolm Johnston: Well, it’s complicated. I guess, that you’d find this when you go around the world that the conflicts in most places are not straightforward and very often they’re the consequence of depending whether you look back 10 years or 50 years or 200 years, and Ireland’s very much like that.

It’s been a place of amazing richness, but also a place where a lot of conflict and ultimately the conflict, I would say, was racial and tribal. It just happened to be called Protestant and Catholic, but it was basically two tribes of people whose background was a bit different, whose allegiance was a bit different to sense of national identity, was a bit different. And it happened to be called Protestant, Catholic, but it really wasn’t a religious difference. It was more about allegiance and flags. And it very much created a black and white divide in Northern Ireland, which erupted. It went way back that the conflict between Palestinian Catholic communities went way back. And then it erupted at the end of the 60s due to a series of events that just brought to a head and exploded and the IRA became weaponized to fight a war or a battle. And then the communities just polarized. It was pretty much a civil war that was called Protestant and Catholic, and it shaped everything. Everybody knew where they stood in that conflict and that defined community set defined borders and boundaries and parts of the city. And it was very much a coming to the head of years and years of history that went way back. And where you stood, everybody stood somewhere or not, depending on how far you look back in history.

Henry Kaestner: OK, good. So I want to come back to that in a little bit, but less than talking about the history, but talking about that as a platform that makes you uniquely equipped to do the amazing work that you’re doing right now. But I interrupted you during your biographical sketch. You’re talking about work in the family business, working with your dad, working and wealth management. So bring us through to the point in time where you really felt that God had really called you out of that. But what’s that process?.

Malcolm Johnston: Yes, I got involved in business, got married. Married now for Thirty three years this year. Two girls. Who are I? I can’t believe I’m saying this, but they’re twenty seven and twenty five. So I think God wired me to go to difficult places that started in Belfast going and to inner city ghettos with very high unemployment and starting to work with kids and young people. And the business gave me a great platform to grow the business, to be as successful as it could, to be as profitable as we could grow it completely and absolutely with the purpose of seeking the kingdom in the business. So we were never scared of trying to make it as successful as possible. And we saw our business very much as a platform to be salt and light to the people we were dealing with on our staff and all of that to very much Kingdom in the business building profitability so that we could do really cool stuff with the overflow of the profits, but then also using the business as a platform to build freedom of time to go and be involved in other things. Being on the business that allowed me to work in inner city Belfast for many years doing community development work in an inner city ghetto. And it also allowed me some time after that to go pioneering mission, pioneering and Eastern Europe, just after the fall of communism so early 90s, starting to go into Eastern Europe building mission.

Henry Kaestner: So what is that like? So Wall comes down. Lots of us remember just what it looked like on TV and in pictures. And you’re one of the first guys in with some others going in. Walk us through that experience that this time in history.

Malcolm Johnston: It was. Actually, over time, a number of business guys. People who were connected, strategic thinkers, entrepreneurial, not scared to jump into a challenge, but jumping into these places where they had been completely controlled through communism. The church had been underground. There was new enterprise system at all. Everything was centrally controlled. And then almost in a flash, it disintegrated and there was absolute mayhem. It was just chaotic. And me and some other business guys went down as practically mission and entrepreneurs, as volunteers with Youth for Christ and Youth for Christ basically said we’ve never been able to do anything in Eastern Europe. Now it’s open. Do you want to go and have a go at it, see what you can do and see if you need to build a team, build a team, if you need to raise money or, you know, find it. But it was kind of like a blank sheet. Go and see what you can do. It was harrowing in many ways. What we find as the churches started to come up from being underground, the poverty was absolutely terrible. We just had to respond to what we saw, especially starting to support pastors and learning to be beside people. And I kind of lived in this strange double life where at home I ran a business that worked with the wealthy and help them build their portfolios and think through what their purpose wasn’t and all that stuff. And then this other part of my life, I was working in abject poverty, trying to be beside people that were trying to get on their feet. And I made an agreement with my wife that I would travel short and often rather than go for long periods of time. The kids were young. I couldn’t be away for weeks at a time. So we kind of came to an agreement. I would go for maybe five or six days, just flat out doing stuff and then come back into this other world. And I had so many experiences of coming back absolutely broken hearted from what I’d seen on just trying to decompress and just sitting in the office I cried my eyes out with the suffering that we had been thrown into the middle of and trying to figure out how do we be beside these Christian communities and help them to get on their feet. And how do we reach young people and kids in that situation? So it was harrowing and it absolutely broke my heart and I never recovered from it. I start to tell you that talking about things that happened, it will still make me cry. So it was God threw us into a big challenge, first in Ukraine and then in the years that followed that we established a Youth for Christ program. There was great local leaders finding the right people. God brought us to the right people who had a passion for their own country. And we just learned to mentor them. And so we went from Ukraine to Moldova. Right, Russia, Belarus, Armenia, Georgia, setting up stuff.

Henry Kaestner: So tell us about the business and the economic environment at the time. And just to put some framing around our time together, you’re just really uniquely equipped to talk to us about faith driven investments, investing in Europe. You do investments in other places you and I met in Africa. But you are uniquely equipped to talk about. What does it look like to come into different economies and invest, whether it’s an economy like Northern Ireland, which at one point in time, I think had something like 65, did you say 65 percent unemployment?

Malcolm Johnston: Yeah. And that and the inner city ghetto where you work with young people. That was their reality. 65 percent unemployment.

Henry Kaestner: And then fast forward to, you know, behind the Iron Curtain as people are emerging in the state controls so many of the jobs. What does it look like when you’re ministering to people that don’t have hope? They don’t see commerce as a way out. They don’t see investments as a real thing. They see a class divide between rich and those they exploit. Just walk us through. What does that look like in your business? Because you’ve come from wealth management and you understand investments and how it drives economic gain. What’s it look like? So maybe we’ll go back to Northern Ireland later. But let’s focus right now in Eastern Europe. Walls come down you’re in with Youth for Christ. You’re going around to these different economies, you know, business. You know, Jesus. What did it looked like when you start putting your business and investment skills to work?

Malcolm Johnston: That’s a great question. And initially, we were very much we were a charity. You know, we were raising money in the rich world to bring it out into the poor world. We worked a lot with the churches. Even when they were small, they were beginning to get on their feet. And we reckoned that the best thing we can do is work with the churches to help them to do what they want to do in their communities. And we started to do a lot of work with street kids, helping churches to set up projects for the children that were living on the streets in their communities. I absolutely loved that. And I could live lots of lives. I would just keep doing that, getting to know those kids, letting them know that they were loved. And so we set up kind of typical rescue programs for kids that were charity based. The kids were generally coming from absolute squalor. Remember, they lived on the streets literally, or they just find somewhere to sleep in a friends house.

But they just lived in squalor around this kind of typical charity project of, you know, day centers feeding, somewhere warm to stay, hearing about Jesus. You know, it was a safe place for three hours a day and we helped the kids then go to school. And as I watched this program, I realized that when we closed the doors at night and I remember one particular situation, I went to visit one of these day centers in a little village. I had a destitute rural Moldova. And I watched the kids coming in, smiling, laughing. But you could see the pain in their eyes at the end of the program, five o’clock at night. It was getting cold. It was dark. And this little girl that I’d watched in the program, beautiful little eight year old and. When we were leaving, driving away back to the city, this little girl was sitting on the footpath outside the program where we had met in the little church building, and I asked one of the folks explains why she not going home. She said she’s no home to go to. And that absolutely broke me. And it was part of God’s call, which was these kids do just need projects. They need parents with a job. You know, this is huge sticking plaster. It’s typical charity stuff, but it’s sticking plasters. Little girls like that need parents with a job.

Malcolm Johnston: It’s in the United States equivalent. There is going on a mission trip and painting the church. So you’re using sticking plaster is the term that you use in Europe.

Malcolm Johnston: Yeah, yeah. And that was God’s challenge to me because, you know, to build the charity programs, the street kids was very, very difficult, you know, to find the right leaders and build the funding. That was all tough. But to start to think through, what did it mean for parents to have jobs? Well, it was about business and what needed to happen to establish business and see businesses growing and these kind of very difficult circumstances. And that was God’s challenge to me. I remember clearly it was God’s challenge to me was Malcolm, if not you, who? You know, you understand business, you understand investment, and you love these kids dearly. If not you, who?

Henry Kaestner: So, where do you get started? That’s quite a challenge.

Malcolm Johnston: It was it actually turned out to be mission impossible before too long. I changed the dial tone in my phone to the Mission Impossible theme tune.

Henry Kaestner: Oh, that’s so cool,.

Malcolm Johnston: Because it literally was mission impossible. I mean, it was just excruciatingly difficult to find how to make that work. And this was like twelve, thirteen years ago when the whole idea of impact, investing, social enterprise, enterprise and development, faith driven investors. None of that existed. You know, twelve, thirteen years ago, it was literally a blank sheet of paper. How would we possibly go about this? It was God’s call, Henry and Bob and the feel. There are things that showed me that God was absolutely calling us to start to think about this. What the job creation, three billion business to the glory of God look like, and really tough places where the church was tiny business hardly existed, but it needed to happen and it was God’s call. But I think it showed me actually in hindsight that God has an amazing sense of humor. You know, it was brutally difficult. I look back and I couldn’t look back and paint an amazing picture of success. I think that we were pioneering and I think rather than building success, I think we find every possible way of getting things wrong and things not working.

Henry Kaestner: Tell us about some of those early stories. I love the Mission Impossible phone ring. By the way, I may or may not adopt that or may or may not give you credit once I do. But tell us about some of the early stories. Tell us about some of the mistakes and maybe even some of the victories. Definitely some many victories.

Malcolm Johnston: We formed Angello to gather together people who were thinking the same way, new faith driven people who were thinking the same way, who were looking beyond charity and business people who could see that these places needed business to grow. So we formed Angello without actually really any clue about what was going to be the right approach. And we decided and then at the beginning that we would try to build a small investment fund to invest in small businesses in Moldova. And at that time, we had to build everything from front to back. We had to try to find entrepreneurs, bearing in mind that the country wasn’t long gone of communism. So the entrepreneurial culture was very, very early stages and certainly faith driven entrepreneurs hardly existed, you know, in a country where the Christian population is less than one percent. So to find entrepreneurs who are decent business ideas was challenging. And then to find investors who would be willing to invest in small businesses in a place that they’d never heard of. Generally, you know, just a bit everything about it and building a structure. You know, the legal and tax structure that could accept people’s money and then deploy up and the small businesses in a place that had never, ever had any inward investment of any kind.

Other than a few, you know, big infrastructure projects through European Bank for Reconstruction Development or something. But this has never been done before. So every piece of it was difficult. And actually people agreed to invest because they knew that I wasn’t crazy. You know, they knew that I probably was well intentioned and it was like I probably was well intentioned. We have no clue what you’re talking about, but it sounds like this is the kind of thing that should happen. So we’ll make a small investment in your fund to getting people convinced to be investors rather than just philanthropists. They understood philanthropy, but the idea of building Kingdom through building business was not something that people really understood much about at the time.

Henry Kaestner: I’d imagine some of that dynamics is because and we see this in United States, so presumably you see some amount of it in Northern Ireland. The concept of building the kingdom through business is a novel concept even here, let alone Moldova. Right. Yeah. And so you’ve got some vision casting to be done that actually God cares about the marketplace. He actually cares better. Investment dollars. I want to do it in Moldova, but that was had some ripple effect back in as you’re building this consensus and building this fund. It must had some ripple effect back in Northern Ireland to right?

Malcolm Johnston: Honestly, Henry, most of the outcome from that was there were very, very few people who understood it. Very few people who, you know, would say we should go to crazy places like that. But I think that generally people did not really get what we were talking about. A few people were willing to invest. They were willing to come with us. But I think that we were probably way ahead of our time. Now, there are more people that have heard of impact investing and, you know, there’s few more stories about it. But actually, back then, we were probably ahead of our time. It was desperately lonely, actually, to persevere in what we knew. God had called us, too. And so it was tough.

You know, I didn’t bring a huge groundswell of change in people’s attitudes to invest in philanthropy. And it didn’t. It was lonely. And we had to go to London and into Europe to find people who got it, actually. And most people didn’t. They were still in a different paradigm.

Henry Kaestner: Yeah. I can empathize with that when we’re starting Sovereign’s capital. We went and talked to maybe 700, 750 different people and a very, very distinct minority, said, oh, that makes sense. You know, you can actually put investment capital and work with entrepreneurs driven by their faith for some sort of financial return and social impact. And I found myself at times feeling frustrated by that. You must really felt that.

Malcolm Johnston: Yeah. Very much so. It was absolutely mission impossible. And it was really tough, really tough.

Henry Kaestner: Because at least with us, we had some investment ideas lined up. You’ve got to build a market and demand on the investment side. And you also had to build a market in demand on the entrepreneur side. Right. So how do you do that? How do you take people who’ve been living under communism for so long? Bring the gospel to bear and help them understand there’s a God who love them, but then also that they were created in this image of a God who worked and who was entrepreneurial, who is creative. Tell us generally how you do it. But then give us an example of a company or two in Eastern Europe where you came alongside an entrepreneur and helped them to live that out.

Malcolm Johnston: Lots of things we tried. Didn’t work. One of the guys that was involved with us on the team back in the early days, even before Angello got going, he was a tech entrepreneur and he had gone to Moldova with a student ministry to volunteer the student ministry for a short time. And he could see that part of the legacy of communism was a pretty rigorous education system. So students were coming through university.

They were a lot of kids were coming through and learning IT, but there was no work for anybody. They came out of university with qualifications and ended up in the streets. And, you know, there was no work for anybody. And this guy decided that he’d set up a tech company with his own investment and start to hire these I.T. graduates and teach them modern day programing. So they basically built software in Moldova and sell it into first world markets. And so he started this company in the early we had been about 98, 99 at the same time as I went first to Moldova. When they started to recruit graduates from the universities and build a software development company, which was the first of its kind in the city, and began to employ people, pay them decent wages and pay tax. They became the biggest taxpayer in the country and the company grew like wildfire. Actually, they began to recruit more people. They were winning contracts outside the country. Fast forward a few years, a lot of difficulty, a lot of efforts to close the company through corruption and so forth. And actually, I give these guys credit for it. They have just floated that company in the New York Stock Exchange. hat is completely out in the left field compared to anything else that they have seen. But they went the right sector. They spawned an I.T. sector in the country. That’s nine, 10 to 15 percent GDP. And it was a raging success. But the challenge with any of those countries is to find entrepreneurs who have got the skill and the experience to grow and scale their companies.

And we made the mistake about 10 years ago of going investment first, make sure we just a small fund and then we needed to find companies to invest into. And on hindsight, we took the wrong approach. We shouldn’t have been trying to invest. We should have been doing what we talk a lot more now about had me is building the enterprise ecosystem. And hoping that after a period of time quality companies would come through that process, that were ready for investment. And in hindsight, that’s what we should have done.

Henry Kaestner: Yeah. And so the work that you and I are now doing in Africa, you know, brought to the Fairview Hotel, we got together in February with an eye towards doing faith driven investments. Where are the great entrepreneurs? Let’s invest in them. And I really came away from that trip. Really just encouraged by the opportunity. But then also understand that if we wanted this to really be a thriving marketplace in five or 10 years, we had spent a lot of time thinking about building capacity.

Malcolm Johnston: That’s exactly right. That’s exactly right. And I think that’s a big lot of our experience is where to start building that capacity and knowing that it’s just going to take time. Hard yards building relationships is one of the things that I learned and I’m deeply convinced and convicted about is that in these developing markets, guys with ideas and vision and all of that, how we behave when we turn up is incredibly important. We can really get that badly wrong with our enthusiasm to be agents of change. And I realize that so much of what we’ve got to do is to empower locally and not Short-Circuit, that by bringing in smart people from outside who can get from A to B faster.

Henry Kaestner: That’s pretty tempting, though, isn’t it? When you see how it will work in Northern Ireland or the West and then saying, we’ll do this, do that, and you can get pretty prescriptive pretty quickly, at least I feel like I can.

Malcolm Johnston: Yeah. We made all those mistakes, and I’m honestly we a lot of it for good reasons. You know, we cared about the poor. We wanted to see community change. And there’s times where we just drove too fast. And a lot of what we built that wasn’t based on local empowerment fell apart and we had to go back and start again.

Henry Kaestner: So tell us about, again, what brought us together is this group that got together in Kenya focusing on faith driven investments in East Africa. And then as a result of that, taking a step back and saying, gosh, what does it look like to you? Yes. Do some of that, but tread slowly, but also build out the Faith Driven Entrepreneur ecosystem. What are some of the things that they are starting to happen and have happened in Eastern Europe, as you’ve looked at some of the mistakes that you made and said, gosh, we need to focus on capacity building where some of the initiatives that you have been involved in.

Malcolm Johnston: Yeah. One of the best examples of that is a group of people we’re working with right now in Uzbekistan. And that’s a little part of the world, Central Asia. That was always fascinating to me, even when we were very much involved in Eastern Europe. We helped to start mission stuff in Kyrgyzstan because they were blessed a lot by having common language and Russian. So it’s a fascinating little cluster of countries East Pakistan, Kyrgyzstan, Kazakhstan, Tajikistan, Turkmenistan, very, very close. Islam is rampant, growing, and we find a cluster of Faith driven entrepreneurs who desperately wanted to have partners from outside. And we very readily agreed to this journey, this together, because I could see that they had good local leadership. They were smart. They had a vision for this themselves, not the vision that we had to try to sell to them. And so we came alongside this little group of faith driven entrepreneurs in Uzbekistan. And right now, we’re taking these steps with them to build that ecosystem. And they want to have programs in there, like the ones, for example, we saw in East Africa. They want the programing. But right now, what we’re doing is standing beside those guys to provide some very small level of loans and to faith driven entrepreneurs almost as a sign of partnership. We’re with you. We’re gonna do what we can to help you..

And I think that the conditions really exist there in Uzbekistan to build out this ecosystem. And they want to be an example out. ofUzbekistan for the Central Asian region. And that excites me. So that’s an example. And a little place like Uzbekistan that just desperately wants faith driven people whose faith puts me to shame. You know, it’s just such a privilege to be with, not to try to teach or push, just to be beside. It’s such a privilege and honor to be with these guys with friendship, actually, and just a commitment to journey. These are the kind of guys that can really make a difference in their country. And they’re so excited that there’s a movement happening. So as I tell them about the movement that’s happening with, for example, faith driven investors and Faith driven entrepreneurs and that kind of stuff that’s growing in East Africa. They are thrilled to bits that there’s a movement that they could be part of. That’s a great example of it.

Henry Kaestner: Tell me about this dynamic of going in and starting off with some low interest loans with these entrepreneurs. Just really, really impressive by their faithfulness in a really challenging spot. How do you balance coming alongside them and the discovery and the diligence that you would do as an investor if you’re looking in opportunity in Belfast or New York? Presumably they don’t have data rooms. They don’t have audited financials sometimes. How do you come alongside them in a way that’s not judgmental or prescriptive, but at the same time leads them towards a world in which they will be ready for more of a buttoned up presentation, maybe more accountability? How do you navigate through that whole dynamic with patience and wisdom?

Malcolm Johnston: Actually, it takes a lot of wisdom to let them come at their speed with appropriate support and. I think one of the things that I’ve seen most, Henry, is that if we build from where our investors willing to go with what they have with their current perceived wisdom. All right. What is impact investing look like if we go from that point of view of. Existing impact investment capital and an existing impact investment structures investment will never go to Uzbekistan. It’s just the demands of the money. The kind of due diligence that’s required currently. These frontier markets, the difficult places for the church is small, but for business, that’s definitely necessary to see that kingdom built then existing money and how it thinks would never go to these places. Now there’s a massive missing segment that is going to continue to be missed.

Malcolm Johnston: I guess I find that a bit depressing as I’ve watched the sector evolve, as I stay close to people in these difficult places determined that they should find the support that they need. It’s a bit depressing to watch the capital with its intentions. Being far away from where these guys are going to be for a long time. And so what I desperately want for these kind of guys who we need to support them with, with rigorous programing incubators and accelerators and mentoring and all that stuff, the good stuff, that there are no great programs available. We’ve got to push them to really develop their standards and so forth. But there needs to emerge, in my opinion, type of capital that see, that’s role as kingdom building, not as a new cool place to find an impact investment, because if the money wants a new cool place to invest, it’s never going to go to Uzbekistan or Moldova. Those countries will stay, still, on the frontier because they don’t have thriving enterprise ecosystems of faith driven people, because the church is tiny and it’s persecuted and they need commitment from people like us to go the journey with them over a number of years, and willing to see capital brought to it that’s appropriate to where they are and they can get to us their next step, not holding out capital that says we’re with you if you can make it to the fifth base.

But capital that is willing to come to the second base to serve what’s happening, what God’s doing in that country. So that’s one of the things that I see emerging. I think it’s exciting what we see emerging with the journey towards building ecosystems. The stuff that we’ve been talking about is super exciting and it can be done. I’ve been around it long enough to know that what we’re talking about can work on the kind of faith driven people that are building these ecosystems is exciting. The missing piece is the kind of capital that’s willing to come. So the faith driven investors, in my view, are going to need to apply their capital to serve in some of these difficult places. Just the way, you know, people like the guys that have followed with me and the difficult places where we’ve kind of gone with our time and our lives to serve, to see future in these places, capital is going to need to do the same to come to these difficult places and still with rigor and still with proper thought, not just throwing money at stuff that doesn’t make sense, but that’s what I desire for these kind of guys that will find ways of plugging the gaps with capital that will come to serve them because they are truly kingdom builders.

Henry Kaestner: I want to bring it back to Northern Ireland before we close out. Fast forward to present day in the ghettos. The slums now. Are things better? Over the last 20 years.

Malcolm Johnston: Yeah, they’re definitely better, and that gives me hope, you know, as I go into other frontier markets and see difficulty. I see a change comes, mindsets change. Innovation starts to happen. People start to have confidence to build something that isn’t going to be wiped out by the next terrorist attack or economic slump. So, yeah, there’s been massive change. People have hope now. And people stay to a greater degree when there’s a sense of hope. This is a place I can build a future than people choose to stay. And, you know, when I was growing up in Ireland. Ireland was a place that students come out of University and then left to go and build a future somewhere else. Now to a greater degree. People will stay and start businesses and that’s exciting to me as I see. Eastern Europe, Central Asia, one of their biggest problems is immigration. Bright people leave and the experience of Northern Ireland is that. when the steps are taken and she and starts to happen, then people even start coming back and bring their skills back with them that they learned elsewhere. I’m going to build a future here. And so, yeah, we see a huge change here in Northern Ireland. There’s a much greater understanding between people who are in the past diametrically opposed, that there’s a much greater sense of space has got potential.

Henry Kaestner: So, as you said, it’s a message of hope for some of the other places that you’re investing and that maybe 20, 25 years behind. And I’m very, very grateful for this conversation. I think that a big lesson that I’m taking away from it is making sure that we have a mind of service, that we’re not prescriptive or judgmental that would come alongside the entrepreneurs. We work with the right pace to bring them to a place that may take decades to where they are equipped to have the pro forma financials and cap tables and ability to talk about proff stacks and convert’s and those types of things. But we need to come along at a pace that is driven by a heart of service and driven by the Holy Spirit. And so I’m grateful for your perspective and your long obedience in same direction and in difficult places in emerging markets. Malcolm, one of the things that we’d like to ask people that are on any of our podcasts is something that they’re hearing from God through his word recently that they see really working in their life. And it could be through your Bible time this morning. Maybe it’s last week, maybe last month. But what’s one thing that you feel that God is speaking to you about now?

Malcolm Johnston: Yeah, I think it’s a great question. What God called us into and through in some difficult places. It took me a long time. I’m probably like you. I want to change the world where there’s brokenness. And Isaiah 61 is the call of God in my life when there’s brokenness and lack of hope and opportunity. I want to change the world. God brought me through a lot of tough stuff of realizing that, Malcolm, all I’m calling you to do is be faithful to what I called you to. You don’t need to have a big success story to shout about. Your success is that you were faithful to what I called you. And what God has taught me a lot about in the last while is from man Psalm 27 where David who was a go getter and he was a fighter. He was a king and all that stuff. And he got to the point of saying, in Psalm 27. He said one thing I ask of the Lord this is that I seek and I may dwell in the house of the Lord all the days in my life to gaze upon the beauty of the Lord and to seek him in this temple. And that was a go getter who got to that point of saying, this is the one thing I do. And I’m glad to say that God had to break me down from wanting to constantly be getting things done, to be able to say this is the one thing I value above everything else, to learn to gaze upon the beauty of the Lord and to learn what that means. To actually just gaze on the beauty of the Lord to spend time in his presence in silence, learning to appreciate his beauty, that these nations that I care about, wanting to see them being restored and transformed. God says these are my nations. I’m working. Even before you turned up, I’m working because I’m the God of all the earth. You learn to gaze on all my beauty and realize how big a God that I am. And you just be faithful to what I’ve called you to today. And don’t worry, if you don’t see it happen in your lifetime, you just be faithful and learn to gaze on all my beauty and enjoy walking with me. And so Psalm 27, I would say, is the big thing that has meant so much when seeking to learn to walk faithfully, whether there seem to be results or not.

Always is beautiful. I needed to hear that. I have a feeling that a lot of our audience needed to hear that. I’m grateful for your time. I’m grateful for your friendship and your encouragement. And I’m so much looking forward to doing work with you under God’s power, not ours, for his glory. And then my sense is that together we’ll have an opportunity to gaze upon the beauty of the Lord through the work he’s doing in Central Asia and Eastern Europe, in Africa and other places. I’m grateful for the message you had about the mindset that we have in investing in emerging markets. The history, the context. And again, grateful for your friendship. Malcolm, thank you very much.

Malcolm Johnston: My pleasure. Thank you. God bless.