The Entrepreneurs for Impact Podcast: Transcripts
#118
Impact Investing with $8 Billion Under Advisement – Nick Flores, Managing Director at Caprock
PODCAST INTRODUCTION
Chris Wedding:
My guest today is Nick Flores, Managing Director at Caprock, a multi-family office and founding B Corporation with $8 billion of assets under management and a rigorous approach to impact investing. In addition, Nick is the former Director of Investment and Entrepreneurial Services for Investors’ Circle, an impact-focused group, Manager of the Capital Access Program at Green for All.
01:53
In this episode, we talked about their work helping 260 plus families invest $8 billion across six asset classes. How they select fund managers to invest in. The process by which they integrate impact considerations, think environmental or social in tandem with their core investment underwriting, not as a separate add on later. His origins outside of the world of wealth and how that affects his investment outlook. What impact intentionality means.
The misconception that impact investing means below market returns; hashtag not true. Yeah, what a theory of change is all about. The biggest gaps in impact investment to fund managers across various asset classes. Advice he would give his younger self. His love and practice of stoicism. Tools he uses to speed up his typing. Yes, you productivity lovers will appreciate his recommendation. Recommended books and a whole lot more. Hope you enjoy it and please give Nick and Caprock a shout-out on LinkedIn, Slack, or Twitter by sharing this podcast with your people. Thanks.
PODCAST INTERVIEW
Chris Wedding:
Nick Flores, Managing Director at Caprock and member of our mastermind program at Entrepreneurs for Impact, welcome to the podcast, man.
Nick Flores:
A privilege and an honor. Excited to chat with you.
Chris Wedding:
Hear, hear. Finally pressing record after many good conversations. So, I just want to admit to thousands of people right now that you were the source of the book, The Daily Stoic, which you passed along my way after I think our first conversation where you’re like, “I know exactly the book that you would like.” And I thought to myself, “That rarely happens,” but I got the book, had never heard of it. I'd heard of Ryan Holiday before. I consume it, maybe not every morning, but most mornings.
And as I've told you before, we also gave it to our 17-year-old son, who that was a bit of an experiment, but he's taken the bait. He reads it almost every day. Now he admonishes other family members when they're not behaving in a very stoic way, which is hilarious. And it's a book which I've given out to lots of other members of our Climate Mastermind through our retreats. So then, boom, shake the room, you're the source. Thanks for that.
04:24
Nick Flores:
You're welcome. I know in the interview we’ll talk about this, I listen to all sorts of podcasts and one of the philosophies that so many folks seem to go back to is stoicism. I am not a philosophy major. I don't think I could have ever made it through a philosophy course in college, but for whatever reason, as I think I shared with you, this book makes that philosophy a little bit more digestible and there’s so many nuggets of wisdom. Every now and then you'll get a bad day or a dud, but man, I've been through it now several times over the years and I try to help my kids with it as well. I just feel like there's so many useful, like I said, tidbits of information and philosophy and perspectives.
Chris Wedding:
Well, I like that you said that you're not a philosopher or wouldn't have made it through a course because sometimes whenever I say, “Oh, there's this great book on stoic philosophy,” I can kind of see the eyes and it's like, “Oh, come on,” flip your nose in the air, hoity-toity. I was like, “Hold on, hold on. I don't know the second thing about philosophy, but this book is very practical and bite-sized, if you will.
Nick Flores:
Yeah.
Chris Wedding:
All right, so advertisement for Ryan Holiday, love him, now complete. All right, so another thing we talked about earlier was this statement, that in your words, “I don't come from I guess the world of wealth,” dot, dot, dot, but I'll say, look, that's where you work, right?
Nick Flores:
Right.
Chris Wedding:
So, let's connect those dots, maybe describe what you do at Caprock and then connect it back to that statement. Is that cool?
Nick Flores:
Absolutely. So, what I do at Caprock is advise families and a small number of foundations, and help them to invest in a manner that is consistent with their objectives. Most families and foundations, all of the families and foundations who come our way anyway, have hired us because we have a finance-first focus. What that means is, we invest across every asset class and have, I think, a unique ability to help clients align their wealth with their values, whatever those values may be.
So, I advise one family foundation that has asked us to invest 100% of their corpus to help combat climate change. I also work with a family who is very faith driven and is hoping to support low-income populations, ideally in emerging markets through the provision of water, financial inclusion and a number of other services, housing, that sort of thing.
The important thing about Caprock is that we have always believed that allocating capital with impact intentionality, as we would call it, need not necessarily entail a financial return sacrifice. One can certainly accept concessionary returns or do so philanthropically, but our belief has always been that as long as we are rigorous in our diligence, that we integrate impact analysis into our analytical processes, and that we follow up and ensure that managers are adhering to whatever their stated impact goals were from the time when we initially allocated capital. That if you do those three things, you can invest for impact. You can do it well. You can help clients align their portfolios with their values, and most importantly, that you can drive market rate returns in whatever the asset class may be.
08:01
Now, the way that ties in to me and my background is because I almost did financial advisory work right out of business school, so way back in 2005, 2006. I spent a summer at a very large bank that most people would recognize the name of and something was missing. It just didn't feel right.
The refrain when I went back to business school, is again I spent a summer in between first and second year. The refrain and joke kind of was, well, you don't want to make rich people richer. Well, one could argue I'm doing that now. I feel like I'm helping people, it sounds so hokey, but helping people make the world a better place in whatever manner they think that can be achieved.
Now, there's necessarily some self-selection that goes into that process, like some folks I think have hired Caprock and/or myself personally, because I share their worldview. I believe that people ought to have access to affordable housing. And so, I think there's necessarily some alignment that I share with most, if not all of the clients that I'm fortunate to advise, but the reason I do this work is because of that impact component that was missing years ago when I spent a summer on Wall Street. It was ultimately what compelled me to pursue this profession.
When I say I don't come from the world of wealth, it's because I've been on stage several times where critics or cynics may look at me like I was born with a silver spoon in my mouth. And quite to the contrary, my mother had me out of wedlock at the age of 20. I'm an only child. I was raised in affordable housing, I’ve written about this, been quite public about it in the past. And the reason I don't mind wearing my heart on my sleeve and being upfront about that is because it informs how I help clients allocate capital.
It means I am necessarily going to look at any asset manager who comes our way with a bit of skepticism. If they're claiming impact intentionality in support for low-income populations, I'm going to want to know that they're not being extractive. I'm going to want to know that they actually care about the communities they claim to serve because I come from those communities. So, a long-winded answer to a pretty simple question, but hopefully better informs your listeners about who I am as a person.
Chris Wedding:
Oh, it's all my thought. I asked you two hard questions in one question. It was like a golden rule to not do in podcasting, but I knew you could handle it, Nick.
Nick Flores:
Thanks, I appreciate it.
Chris Wedding:
All right, so you mentioned impact intentionality a couple of times. Define that a little more.
10:36
Nick Flores:
Well, it means a lot being in this growing impact investment industry. So, I'll back up a second and just say that the definition, at least to us, of an impact investment is any allocation of capital that has not only a financial return expectation, but also has with it the intention to create quantifiable social and/or environmental benefits. So, the intentionality is the critical piece for us.
In other words, if a manager comes to us and says, “Hey, I've invested in all of these low-income housing properties and assets over the last decade, I'm now an impact manager.” Well, were you trying to create social benefits? And if so, how? In other words, we want to know if the manager as part of their investment strategy and thesis holds at the core support for some population geographic area. Or on the climate side, are they trying to decarbonize a particular asset or reduce greenhouse gas emissions?
Just because it happens, and it's coincidental, or I should say incidental, it doesn't mean to us that you're an impact investor. We want to make sure that anyone to whom we're allocating capital, again, intends to create these benefits and then we go one step farther.
I'm getting a little bit into the weeds, but we go one step farther and then require via a [inaudible – 00:12:09] what's known as a side letter, managers to commit to reporting on whatever that stated an impact intention may be. So, we require them to commit to reporting to us on no less than an annual basis, some form of impact metric. In other words, how are we going to know that you're fulfilling the intention that you came to us with in that I in turn then told our clients that you were going to do?
Chris Wedding:
Okay, let's go a little higher level for a second. I think I probably should ask more of a business model question so that listeners know what I know. So, Caprock, you're a multifamily office, asset manager, you're not managing like tens of thousands. It's a touch more than that, ha-ha-ha. Give us the Caprock summary, your assets under management that helps listeners understand, it's probably easier to find impact investments at a small scale, but at a larger scale, maybe it's harder. You used the word managers just now and I think in your definition of Caprock, just to explain what a manager means in that context.
Nick Flores:
Sure. So, if you go to caprock.com, and there's a reason why I would say this, you'll see that we now advise a little over $8 billion in assets, and that's spread across 266 clients. So, quick math, you can hopefully get a sense for the size of balance sheet with which we're typically working. Many, if not all, of the clients that we advise tend to want and need diversification across every asset class. And in order to do that, we're going to need to allocate capital to what are known as asset managers.
Caprock itself is not an asset manager insofar as we do not create products to generate revenue for Caprock. We have what's known as an open architecture platform. What that means is we go out and find the best asset managers, think of them as deployers of capital and in whatever the asset class may be. So, if it's public equities, fixed income, stocks or bonds, real assets, venture capital, private equity.
So, those are the folks who are managing the capital. Some folks almost pejoratively refer to us as an allocator or a manager of managers. The reason is because we're ultimately responsible for taking a client's balance sheet, having many conversations with them to figure out what they want to accomplish. From there, building out a portfolio in such a way where we're solving for their liquidity needs, their cashflow objectives, their risk tolerance, and their return expectations. Building out a portfolio across those four things, if you will, and then going out and finding asset managers who can steward that capital in such a way and invest in it in such a way that in totality, in the aggregate, across the portfolio, we're helping those clients achieve their objectives.
15:20
The impact piece of that, it makes one might argue our job that much harder. Because if we have, say a client who really only wants to support low-income populations, well now we need to go out and figure out how we're going to do that in categories like venture capital, private equity. Real assets might arguably be easier because we have deployed a fair amount of capital in affordable housing, but in other asset classes it might be harder. That's kind of why I joke for majoritively referred to as an allocator of capital.
Well, there's a lot more that goes into constructing a portfolio generally speaking, especially if it's across six asset classes, and especially, especially if you're then trying to help the client effectuate a theory of change, or again, further their mission. Does that answer your question?
Chris Wedding:
It does, just taking notes here. Maybe let's build off that last thing you just said, theory of change. I think everyone understands those words individually, but together, they mean something different.
Nick Flores:
Yeah. So, we work with a rather large family foundation in Colorado. Their theory of change is that one of the best means of economic development is support for low-income populations. Well, how? One way may be through financial inclusion, in other words, access to financial services. Another way may be education, and specifically early childhood education, which it just so happens is a woefully underfunded component of the education technology space. But that has demonstrable results in ample empirical evidence to show that that is arguably one of the best areas in which education, technology, capital ought to be deployed.
Oh, and by the way, that's their theory of change and they want to pursue that theory of change within the confines of the state of Colorado. That's their focus geographically. That's about as niche as it gets, I would say, certainly across Caprock, but maybe even within the capital markets. I say that kind of jokingly, but the point here is we've been able to deliver on that client's expectations, partly because of our open architecture, partly because our freedom and flexibility to go out and find the best solutions where they are.
Not necessarily because we believe we're the purveyors or managers of how that capital ought to be invested. Because I think unlike some of maybe our bank and broker dealer competitors, we're able to go out and offer objective advice. So, again, we try to strip from our service offering any conflicts of interest, which just means I'm not sitting here pitching product like I would have had I stayed at the bank where I worked 15, 16, 17 years ago. We can just go out and find, like I said, the best solutions wherever they may be in the marketplace.
Chris Wedding:
Got it. You've alluded to this a little bit, but at a high level, what is the process for picking an impact-focused, but finance-first manager, asset manager?
18:36
Nick Flores:
Oh, boy.
Chris Wedding:
You're like, “That's our entire business.”
Nick Flores:
Yeah. On one hand, the first step in that is sourcing. How do we go out and find these managers? I will say the good news is because we've deployed more impact capital than most, certainly within the private markets and across, not only more asset managers, but even then, across strategies. So, I think by last count, we had allocated to over 50 and close to 60 different impact managers and then within that, sometimes we've invested with a manager multiple times, so we've allocated more than a hundred funds.
The good news is that with that activity comes a reputation to be really crass, writing checks. Really, we're active and have deployed a fair amount of client capital. I think, not only do perspective clients recognize that, but so too do asset managers, they pay attention. The point of your question is, well, what does the diligence process look like? I don't know if I have time to go through it in great detail or in length. I don't know if people would even be interested, but the point here is that it's quite rigorous.
We're not just looking at track record. We're looking again at that investment strategy in the underlying impact thesis. In other words, how does the success of your strategy you get more environmental and or social benefits? And how does that flywheel effect really start to take shape in the companies or assets that you're looking for?
We have a dedicated investment committee and I'm not a part of that, but a multi-person investment committee on which all of our founders sit. The good news having deployed as much capital as we have is, I think we have very specific areas and theses that we're constantly updating and trying to pursue in service to our client objectives. But the impact piece is, I just want to be clear, fully integrated throughout, so in other words, we don't have two separate due diligence processes. One for traditional, i.e., non-impact funds, and then one for impact funds. Everything is evaluated holistically by the same investment committee.
What I've heard, some competitors are a little bit different, but we believe that's the best, if not only way, that one can go out and find impact opportunities that are every bit competitive with their traditional counterparts.
Chris Wedding:
Of the, I think, six asset classes that you just mentioned, where is it hardest to find asset managers that get impact along with finance first?
Nick Flores:
I'm going to go with a surprising answer here and say cash.
Chris Wedding:
It's surprising.
Nick Flores:
It's the most overlooked asset class, but oddly enough, we have had a growing number of institutional clients who are coming to us and saying, “Look, we have all this cash sitting on our balance sheet. We want you to play almost a treasurer type role and protect it, but we'd like to know that it's doing something for the community if it's just going to sit there.” In other words, Schwab and Fidelity and those custodians are fine, but if we can get this cash into local credit unions, community development, financial institutions, or CDFIs, minority depository institutions, believe it or not, there are all sorts of small banks and financial institutions out there that will be more than happy to take your cash. And oh, by the way, still enjoy up to $250,000 of federal insurance.
22:15
Where folks became acutely aware of this need was during COVID, because these CDFIs and other local banks were really active and constantly putting cash and capital to work in their surroundings, oftentimes underserved or overlooked communities. Well, most people would probably say, “Real assets or private equity or venture capital,” I think now, we see plenty of asset managers. Five years ago, at nine years ago, when I joined Caprock, holy cow, it was so hard to go out and find managers that could further some of our clients' objectives and again, not sacrifice financial returns.
Now there's no shortage of managers in really any of those asset classes, even in private credit. There's plenty of opportunities out there and I was going to say everybody knows, but maybe not.
Stocks and bonds are pretty easy to value as the line. Nowadays, we consider it table stakes and so that leaves cash and it's hard to find someone who can say deposit $20 million with minimal risk and do so in a values line manner. But thankfully there are some increasing options.
Chris Wedding:
Well, you mentioned stocks, so public equities, and I think we would be remiss if we didn't mention our mutual friend and company, Jay Lipman and Ethic and the work they're doing to help wealth managers put, I think, of two or three billion bucks towards values align public equities, investments.
Nick Flores:
Yeah, they do a phenomenal job. Did I say that? That is not a solicitation to invest with Ethic, but we're so appreciative of the work that they do because not only can they help a client align with pinpoint precision, an indexed passively managed public equity portfolio, align those securities with the client or foundation's values, but they can go one step further and provide a really concrete estimate of what the tracking error may be. So, in other words, what the variance might be associated with the application of all of these different screens.
Some of our clients are comfortable with a bit of variance knowing that they don't have say, for example, guns in their portfolio or fossil fuels. Other more institutional clients want to know, okay, we're going to hug that benchmark pretty closely and I just think Ethic does a great job of meeting both types of clients where they are.
Chris Wedding:
Okay. Backing up one comment, you set me up because you said something like, five years ago, harder to find asset managers across all of the asset classes. Now, lots of them. But there's also this phenomenon, which is, first time fund managers and being financed first, but clearly you care about impact, how do you balance that? The funds didn't exist, now they exist, but they don't have a three-year or a fund one, fund two proof that the funds worked out.
25:19
Nick Flores:
Right. So, there’s a couple of different perspectives on that question. The first is again, nine years ago, 10 years ago, before I joined Caprock, we didn't really have a choice, but to get comfortable quickly in some cases with first time funds and first-time fund managers. When I say quickly, I don't mean that we would somehow truncate our diligence process, but if a client came to us and said, “Hey, we want to allocate more capital in pursuit of land conservation,” let's just say, now we need to go out and find, okay, well what Timberland Investment Management Organizations, or what Timberland funds or land conservation funds are out there? Well, back then there were very, very few.
I can tell you or name them if you're interested, but the point is, if a family came to us and said, “This is what we want to accomplish from an investment and impact investment perspective,” there were times when we just needed to go out and find it. And there were even times when we had to work with asset managers who we knew to help them then structure a fund to, again, further some of those client objectives.
I would say one thing that has become much more obvious in the last four or five years is how track records in the bias against first time clients oftentimes disproportionately and negatively affects people of color. Because oftentimes they don't have the networks on which many firms like Caprock tend to rely. And so, I think we have done our best to not become overly reliant upon track record, it's certainly important. We're no different than any other multifamily office or investor in that way, but in the absence of that, we'll look at how the manager is affected by the issue that he or she may be trying to change. We'll want to look at the team.
This gets back a little bit to your question on diligence. How long have they worked together? How well did they work together? How have they worked with other people? How have they supported other portfolio companies? Even though there are plenty of first-time funds, which rare, never say never, but I don't know of any time that we've invested in someone who doesn't have some investment track record like either as individuals.
And so, this whole notion of first-time funds, I think as we've grown and scaled, we have had to rely on first time funds a little bit less, but that doesn't mean we avoid them. And in fact, again, we've had to invest in a couple of first-time funds even in the last year or two because we have an increasing number of clients who are asking for certain things that just aren’t out there in the marketplace right now.
Chris Wedding:
Yeah, and I think sometimes the research actually shows that first-time fund managers cannot perform [crosstalk – 00:28:22] much bigger funds, yeah.
Nick Flores:
A colleague of mine introduced this term to me. I want to double-click on that.
Chris Wedding:
Yeah. So, hip. Yeah.
Nick Flores:
So, not only does the data prove that, but it's consistent with the thesis that we've had for quite some time, which is first time funds might be a little too small, but we've definitely allocated to funds as low as 30 million, I want to say in our past. The numbers went up as the scale of our operations have grown, but we're always trying to find managers who are disciplined and have a cogent coherent thesis, but that are also a little bit nimble. You’ve certainly seen it, I'm sure, in the climate space and all of a sudden you have the TPGs and KKRs and all these like multi, multi-billion-dollar funds, and that's great. I think our industry will need it, but we're almost going to have a bias more towards smaller funds that can take board seats that may have a 250-million-dollar pool of capital.
29:31
While that sounds like a lot of money, we believe that some of those managers who can scratch an itch or go into pockets or corners of the capital markets that are a little bit more niche. And again, as long as it's further inclined objective, and it passes all of our due diligence screens and rarer, I think we can get comfortable quite quickly with some of those smaller funds because they're just a little bit more targeted and flexible.
Chris Wedding:
Hey, it's Chris. Just a brief message from our sponsors and we'll get back to the show. Just kidding, we don't take sponsors. On the other hand, I do have the privilege of leading the only executive peer group community for growth stage, CEOs, founders, and investors fighting climate change. With monthly group meetings, annual retreats, and one-on-one executive coaching calls, our members help each other boost revenue, impact, capital raise, clarity, confidence, work-life balance, and team effectiveness. Today's 30 plus members represent over $8 billion in market cap for assets under management for climate solutions. If you're interested, go to entrepreneursforimpact.com and join the waiting list today. All right, back to the show.
Okay, we're going to switch now, as listeners know, from the business to the person.
Nick Flores:
Yeah.
Chris Wedding:
So, Nick, if you could give your younger self advice on how to be faster, more effective, happier, pick your wonderful adjective, what are a couple of nuggets you’d pass on?
Nick Flores:
Well, I certainly wish I would have found stoicism earlier. I also wish I would have been more diligent in my meditation practice. I had some heart issues. What would that have been, 12 years ago in 2011? So, I was kind of lost and I was a rather intense type A type person. I thought, “Well, I've heard a lot about this transcendental meditation, maybe that'll help.” So, I paid the money, took the course, did all the work and then I didn't do the work. I didn't do it as rigorously as I do now and I think for someone who's dealt with anxiety since feels like birth, just slowing down, taking breaths, meditating, maybe exercising a little bit more, embodying some of the philosophies of stoicism, I think those things would have made life far much more easier for me in my younger days.
Chris Wedding:
I hear that. Similar theme, tell us about some habits or routines that keep you healthy, sane, and focused in the work you do.
Nick Flores:
I mean, I go back to meditation, exercise, especially this time of year, everybody's supposedly doing, because that's what their resolutions were. So, prior to Caprock, I had a job that allowed me to work from home and I remember thinking it was an absolute disaster. COVID forced me to do it again and I think, one of the best habits that I have is I try to have boundaries. So, generally speaking, especially now, I try not to work between the hours of 6:00 and 8:00. Anybody who's listening to this, who's emailed with me is going to be like, “He's definitely emailed me at 7:30.” I don't always live up to that, but I just feel like the more I can respect those boundaries, the more appreciative I'll be of, not only the time that I have with my family, but then the time that I need to work.
33:07
Chris Wedding:
Well, I think one tool that it took me a long time to discover in order to respect boundaries of time is to schedule, schedule emails, schedule Slack posts, so that even if I happen to be working at odd hours, which is not often that I can schedule it to show up, not what I'm doing at work and then it clogs someone else's downtime, but it shows up, whatever, 9 o'clock the next morning.
Nick Flores:
Yeah. On that note, I don't know what you would call it, I think of an app called Boomerang, which enables you to send an email later is what I use in that way. I was first introduced to keyboard shortcuts. I mean, I figure that's not what they're called on an iPhone, but you know how you can write like TTYL and Apple will automatically elongate that to talk to you later, see, those sorts of things.
So, I found an app called PhraseExpress, which enables you to do that for, I mean, full on paragraphs if you wanted to. So, I don't know that that keeps me sane to the spirit of the question, but those little tools, I guess you could call them hacks, I love them. Because I do feel like most people have canned responses in these little things like PhraseExpress or even on the iPhone, the keyboard shortcuts. I'm saving a fair amount of time. I wanted to at least make sure I mentioned them.
Chris Wedding:
PhraseExpress, first time appearing on the podcast. Yes, that's a total type A, nerdy, hyper efficient thing that I would love. Yes. Good recommendation. How about books, podcasts, quotes, et cetera, that you think the listeners may enjoy, Nick?
Nick Flores:
We already talked about one book, which I have gifted a fair amount. Another one that I've gifted a few times is Essentialism by Greg McKeown.
Chris Wedding:
That’s a great one.
Nick Flores:
Yeah. [inaudible – 00:35:10] and I'm guessing a lot of your listeners do too. When I read way back in business school that I am constantly surprised at how often it comes up is Robert Cialdini, it's a book called Influence. When folks read it, they're going to be like, “Well, yeah, of course.” Things like social proofs, urgency, all the really simple tools that marketers use and you'd be surprised how prevalent they are in just your day-to-day life. So, those are three books. I'm not going to again, surprise anybody with some of the podcasts I listen to, Andrew Huberman, Tim Ferriss. I have tried to listen to a few more podcasts by like Tom Segura and Dax Shepard just to not be so intense and such a nerd and always trying to self-improve, like to actually be entertained [crosstalk – 00:35:55].
35:56
Chris Wedding:
Wait, because I don't understand what you just said, what are those last two podcasts about?
Nick Flores:
Oh, Tom Segura is a standup comic. Might be a little too raunchy for some, but my wife and I love standup and then Dax Shepard is, I think he is an actor technically, but he has a pretty good podcast. I mean, he's had like Obama, Hillary Clinton. I mean, he had some big-name guests. Those are fun too.
Chris Wedding:
Okay. So, back on the book Influence, I bought the expanded 10-year anniversary, who knows what it is, I bought the big old book. I mistakenly took it on one of my three-day solo retreats in the mountains. Wrong book for a mountain retreat. But yeah, it's been a little overwhelming and this is a good reminder either to read it or to get the audio and take notes while I read it.
I would say, from what I read, the words are obvious, social proof urgency, but the science behind it is shocking. We are a crazy species. See, I have a strong plus one on that one. Okay. So, Nick, getting to the end here, what's a final call to action, a message that you want to leave a large room full of climate innovators, entrepreneurs, investors with?
Nick Flores:
So, two things. One, anybody who has committed their career to this industry, whether that be climate technology, impact investing, just trying to make the world a more hospitable, habitable place, keep it up. I feel like when I switched careers, I was motivated highly by idealism and constantly frustrated by how infrequently people walked their talk. I am emboldened today by the momentum that this industry, I’m referring to it very broadly, that the momentum that this industry continues to enjoy.
I mean, anybody who reads your newsletters and can see just the amount of dollars going toward climate technology just continues to skyrocket. The same is true of impact investing and so I think there's going to be no shortage of capital available to those who can prove that they have a better mousetrap, whatever that may be, obviously speaking figuratively.
The second thing I would say though is a little bit more parochial, but it's a message that we have been delivering since I joined Caprock and even before that. I'm pleased that I think it's finally resonating amongst a lot of investors, but it's simple. It's what I said earlier, which is impact investing need not entail a financial return sacrifice. It's never ceased to amaze me how often folks knee jerk reaction to that statement is, “Well, it's just skepticism.” I would hope that people would want to believe that I'm speaking the truth.
The good news is, we at Caprock now have the empirical data to prove it, but for so long it was stigmatizing and especially in a place like Silicon Valley. I mean, that's one of the reasons why I left is because it just so frequently was characterized as less than. Now, we have this other boogeyman worried out, it's the ESG demon and it's sadly become politicized. I think we're able to stay above that fray because I don't think anybody would ever, if they looked at some of our impact investments, they would never doubt that we're actually generating tangible social and environmental benefits, but there’s no question, there's still a lot of people out there who skeptically believe that impact investing is somehow less than. I would love to change their mind if possible.
39:52
Chris Wedding:
That's a great response and Nick, it's awesome that there are so many families with the kind of resources that they have that also agree with you and are putting their money to work where their values are.
Nick Flores:
It does help, Chris, when there's people like you out there, who are not only teaching that next generation, if I can give you a little bit of a plug, teaching that next generation, but also just continuing to spread the gospel, so to speak. Or information that, again, enables hopefully that next entrepreneur to know where they can go to find whether that be capital, whether that be human resources, whether that be a network like the mastermind group. There are resources out there and 10 years ago, I don't know that it was anywhere near as easy, but again, positive note on which to end, I am happy that the momentum continues to build.
Chris Wedding:
Well, I appreciate that. It is fun work to spend the next few decades on. Yeah. Hear, here. All right, man. Talk soon.
Nick Flores:
Thanks, Chris.
Chris Wedding:
Thanks for listening and if you want more intel on climate tech, better habits and deep work, then join the thousands of others who have subscribed to our Substack newsletter at entrepreneursforimpact.com or drop me a note on LinkedIn. All right. That's all y'all. Take care.
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