Entrepreneurs for Impact (EFI) Podcast: Transcripts
#96:
Fast, Non-dilutive Capital for Climate Founders — Dimitry Gershenson, CEO of Enduring Planet
Chris Wedding:
Dimitry Gershenson, Co-founder and CEO of Enduring Planet and perhaps a brother from another mother, how you doing?
Dimitry Gershenson:
What's up, man? Good to see you. Good to talk to you. Thanks so much for having me on the show.
Chris Wedding:
Yeah, for sure. Well, before we pressed record, I joked as I do on some of these shows about needing slash wanting to hook the listeners to make sure they listened to everything, coming out of the gate hot. And here's our coming out of the gate hot, the setup, Dimitry. So, this feels quite contrived. Just kidding. How much capital, Dimitry, are you all looking to place in climate tech in the next five years? Boom, fill in the blank, go.
04:39
Dimitry Gershenson:
Two and a half billion.
Chris Wedding:
Boom. Not million, billion, two and a half billion placed.
Dimitry Gershenson:
Yeah.
Chris Wedding:
And Dimitry, what kind of capital will that be?
Dimitry Gershenson:
Non-dilutive. No equity, no warrants, no nonsense.
Chris Wedding:
Gassed.
Dimitry Gershenson:
Just founder friendly credits. Fast, simple, covering the entire spectrum of the market, SMBs, startups, later stage companies, instruments that are really tailored to serve the climate community.
Chris Wedding:
All right. So, if we were texting or writing, there would be this giant either emoji with the head blowing up or the three big dark circles of like oh my gosh. Yeah, two and a half billion bucks over the next five years of non-valued of capital, not taking equity in these companies, credit debt facilities, creative debt facilities. Sweet, we did it. Okay, I know every listener is so--
Dimitry Gershenson:
Absolutely. Show’s over.
Chris Wedding:
…paying freaking attention. All right, cool. Now that they're like, “Well, I'm intrigued, what in the world does Enduring Planet do?” what do you all do, Dimitry?
Dimitry Gershenson:
We provide growth financing to climate entrepreneurs. We do that by deploying debt. So, this is capital that requires repayment in the near term. It's not driven by liquidity event like equity. Today, we invest via a single instrument. It's a revenue-based financing product, so we offer teams cash and they commit to giving us a portion of their revenue for a fixed term. There's no collateral, there's no personal guarantees, there's no liens, there's no complex covenants. It's super simple, 10-minute application, a week to get a term sheet, 30 days to get funded.
We'll compress that timeline dramatically over the coming months because we're going to be integrating a lot of automation into the process. Our goal is to do term sheets in 48 hours and funding in, well, sure as hell less than 30 days. We will also be launching additional products, so when our new instrument is coming out, let's say October, where we'll be supporting much earlier stage companies with credit products. I'm not going to get too deep into it, but I'm really excited for this to come out. It's close to a $50 billion a year opportunity that we'll be lending into.
07:07
But I think the bigger picture here is that climate needs five trillion a year of investment for us to all survive. That's the North Star. Of that, we think about 700 billion a year needs to be in the form of effective credit solutions, spanning the gamut of corporate finance. This isn't project finance we're talking about. That's like a whole other bucket. This is just balance-sheet lending. We think that's like a 700 billion a year problem and so even if we do two and a half billion in the next five years, it’s a drop in the bucket of what we actually need to accomplish to all stay alive.
It's still a big number. I'm very proud of that number. We're going to hit that number. Hopefully we can exceed it, but in the grand scheme of things, there needs to be a hundred of us to really turn the tide.
Chris Wedding:
I think what folks who are listening are probably doing right now is stopping their jog or stopping their drive and saying, “Pause, rewind this. What did he just say?” Those are some fun numbers, which I want to come back to those numbers in a second. I'm also thinking about a bit of an analogy here.
So, you referenced the target of $2.5 billion placed in the next five years, but a $700 billion per year need for corporate debt to not burn up. What it reminds me of is the B Corp certification process and I'll tell you why. I'm currently teaching this course at UNC's Business School on Sustainability Reporting and Certifications and an awesome guest speaker, Jessica Thomas from NC State and head of B academics, I think, was presenting about B Corp.
She's like, “Look, it's something like six or maybe another 8,000 either B Corps or public benefit corporations.” So, on one hand, small. On the other hand, that's a lot, but their tool, the B Impact Assessment has been used by like 130 or 120,000 companies. That's where the analogy goes. Like you're two and a half billion, but think of all the other capital structures you're influencing to say, “Oh no, hey guys, wait up. This is possible. It's profitable and you're doing good stuff for the world too.”
Dimitry Gershenson:
Yeah. I think the thing that people should focus on is that this massive gap is really an incredible opportunity and the economic system that we engage in today, the entire structure of our society is going to change whether people like it or not. This isn't one of those things where there's a bunch of like hippies chanting about solar panels and saying, “You can make money and do good at the same time.” That's great, but that's not really what's happening anymore. I think the people who don't understand it are going to be left behind.
The world is on fire. It is on fire. A third of Pakistan is underwater right now. One third, that is not an understatement. That's the truth. There are significant parts of the world, parts of the world that have never faced this challenge that are facing food shortages and food security issues because of droughts that have lasted a decade. You have parts of California that have to think about shutting off power to the richest people in the world because they literally can't support extreme heat events.
And so, will we hit these investment numbers on the timeline that we probably need to hit a trajectory that makes sense for everyone? Probably not, but it's going to happen whether people like it or not. And so, the question is for those folks who are sitting on the sidelines, who are managing capital, who are thinking about impact in terms of their portfolio, get on the train because it's going to leave without you.
11:00
Chris Wedding:
Yeah, right. So, connecting the dots again here, the course I teach in an hour at Duke University is on ESG investing and it's cool because many of the students are masters of environmental management students, they totally get the environmental climate change piece, but they're newer to finance. Then the other half or so are Duke undergrad econ majors that are going to go work on Wall Street. Both are learning the others trade, and both are just I think metaphorically mind blown about the need and potential opportunities here. Okay, that was depressing and motivating. Thank you for that. Those numbers.
Dimitry Gershenson:
I mean, that's what climate is.
Chris Wedding:
I know.
Dimitry Gershenson:
This is one of the things a lot of people talk to me about. They're like, “How do you stay hopeful in the context of what's going on as a person who's steeped in a day to day?” And the answer I give is often not what people expect, which is, I don't have a choice to not be hopeful because given all the information that's presented to me, I have two directions I can go.
I can either crawl into a hole and I'm paraphrasing actually something that a graduate school professor of mine told me on the first week of our grad program. I did a master's at Berkeley at the energy and resources group. It's basically like, look, once you learn about what's really going on and where we're at, how far we've come and all the steps we didn't take when we should have taken them, you have two options.
One is you fight like hell because everything depends on it and you have to be optimistic because otherwise you give up, and I'm not about giving up. I have a lot to give and I believe a lot of people have a lot to give and I believe a lot of folks are really motivated to make inroads on this problem. The amount of effort and investment and care and excitement that I've seen in the last year alone, it shows me that I'm not the only person thinking about it this way. It's time. It's been time, but now it's like really time.
Chris Wedding:
Yeah. No, I think it's all super well said. Obviously, we agree with each other on this topic. Some listeners of the podcast may remember that the first name for the podcast was the Climate Torch, which both means we're burning and also like, not me, but let's let the guests be a light of hope. Like here's the way, right here, follow me with the torch.
By the way, for those listeners, little marketing advice, I was told by a dear friend when I asked her for branding advice, she said, “Well, right now you have Entrepreneurs for Impact, this climate CEO group, you got a newsletter, it's called Zero, you got a podcast called Climate Torch.” She's like, “If you were like Ford Motor Company, yeah, have different products, different names. You're not, pick one.” I was like, “Oh, I feel both fleeced and enlightened.”
14:00
Okay, back to our focus here. Let's go back to your numbers, Dimitry. The time it takes to apply for your revenue-based financing product, 10 minutes, but I heard, look, automation, baby, that's going to get shorter. I think I heard 10 days. A week to get a term sheet, yeah?
Dimitry Gershenson:
Usually, yeah. Look, it depends. We give people the option to apply for financing without connecting their financials to our API. If they don't connect their banking, payment processing and accounting, then our underwriting takes longer. We have to manually review documentation. So, we can do it in a week, we've done it faster, but we give people optionality because we know we're still building trust in the market and that's okay. We'll earn it. I'm not worried about that.
Chris Wedding:
Yeah, I'm not worried about it either. Then 30 days to get funded.
Dimitry Gershenson:
That's usually the time between the start of the application. As long as people respond to diligence questions on time, as long as they get all of their signatures and approvals on time, yeah, it takes us about 30 days to fund.
Chris Wedding:
Okay. So, let's just compare contrast, shall we? Given the other options that the kinds of companies your backing have, what does your timeline to fund look like versus other timelines?
Dimitry Gershenson:
We compete with all sorts of different capital, given that we serve such a broad array of the market. In the SMB community, our competitors are banks. Banks suck at deploying capital.
Chris Wedding:
How do you really feel though, Dimitry?
Dimitry Gershenson:
I mean, look, it does depend on the bank, but there's a lot of reasons for why banks operate the way they do. Often it takes I would say three to six months to get a meaningful loan from a bank and often those come with collateral, personal guarantee requirements, all sorts of heavy, complex stuff, big legal costs, 80-page long documents.
Chris Wedding:
One kidney perhaps, yeah.
Dimitry Gershenson:
Yeah. They also don't often lend to companies that are pre-profitability or early profitability, no collateral, no personal guarantees. You can't even access their money and so it's actually pretty easy to compete with banks. We also provide an alternative to venture capital for startups who are either raising around and want to minimize dilution or reduce their overall cost of capital because our money is way cheaper than VC. We also invest in startups in between rounds to help them change their trajectory, go bigger before they go out for VC again and so get a better valuation. There are VCs that move very fast and I commend them. We have angel investors on our, call it cap table that invested in 30 minutes, but that's a very different situation and those folks are taking equity. In our case, we don't.
17:06
So, if you look at other lenders, I'd say we move about as fast as any of the other alternative finance players in the market. Some of them might move faster because we're just getting started and that's okay. We think our terms and our value add is greater.
Part of what we do, which makes us unique is that we're not just lenders. We have a massive network in the climate ecosystem of pipeline partners. So, we share deal flow with over 200 equity investors and other lenders who might provide types of financing that we don't offer in the space today. We also have over 30 other kinds of value add partners, everything from designers to PR firms, to tax firms, to accounting firms, to growth consultants who offer pretty hefty discounts to our community. And over time, we're going to build out additional resources for the founders in our network.
The thing that probably makes us even more unique is that we offer all of those benefits to companies, whether they raise money from us or not. As long as they're in touch, we like what they're doing, we will help them raise capital, even if they're not a fit for our credit products. Because in the end, if folks in this space are doing good work, and they're not getting funding because they're, I don't know, not good at fundraising, or they're not a white guy, it's imperative for us to show up as partners, regardless of whether or not we fund, because again, the world's on fire.
Chris Wedding:
I mean, what do I say? Yeah, I love all that. The giving, not just getting. I mean, look, it's full circle for sure, but also building the ecosystem. Okay. I wonder whether I've been assuming too much here. Maybe we should allow you to break down what in the world we actually mean by revenue-based financing.
Dimitry Gershenson:
Yeah, so the way that our instrument works is we provide cash, either like in one payment or there might be tranches and then a company commits to giving us a portion of their gross cash receipts for a fixed term. So, typically we're lending upwards of half a million in a first check and they're giving us some percentage, between one and six or 7% of top line revenue for one to two years.
So, what we get back is the principal, the amount that we're committing, plus our gain. We actually have multiple structures that we're testing where you can prepay the gain and then you cap our upside, but you also reduce our risk. Or you can pay it over time and so we get a little bit more upside, but you then get to amortize that payment over the period. It's still always tied to revenue and so if you have a bad month, you don't pay us as much. You have a good month, you pay us more.
That's one of the unique differences between a financing like this and bank loans or term loans, is that in those cases, you're typically making a principal on interest payment or an interest payment that's fixed every month. If you have zero revenue that month, you're still paying it and if you don't, you enter breach and default, and then there's all sorts of pain that comes down the line.
In our case, we're taking that risk and that influences how we underrate it, it influences how we structure. But in many ways, it's a way more founder-friendly model, especially for folks who can't perfectly predict their revenue. And frankly, if you can perfectly predict your revenue, I still think it's a really effective instrument, but you can often do a lot with that kind of financing as well.
20:49
It's pretty straightforward. There's no gotchas. We actually put our term sheet on our website. We give people the power to estimate how much revenue-based financing they can raise with a handy calculator. We're very transparent about how our funding works and people seem to like it. So, we have a few case studies of investments we've done today. You can start to take a look around why people chose our capital. We've invested both in small businesses and venture back companies and we're going to do a hell of a lot more in the coming months.
Chris Wedding:
Can you say a little more about the kind of company? You mentioned levels of profitability or are they VC backed, are they not, cash flow or lifestyle. What are some examples I suppose of types of companies, maybe stage or size or whatnot?
Dimitry Gershenson:
Sure, so with the revenue-based financing product, what we're looking for is consistent growing revenue with strong gross margins and that’s not net margins. We're not looking for profitability. What we're looking for is consistent growing performance over time and with a venture-backed company, there's also runway requirements. We're not going to give you a loan if you're about to run out of money, but generally we will fund companies that are doing at least 25K and monthly revenue gross margins of over 35% gross, again, not net. We typically want to see about 30% year over year growth.
And so, with startups, we're looking at software businesses. We're looking at small hardware businesses. We're looking at hybrid hardware, post software models. We're looking at recurring services. On the SMB side, it's a lot of like recurring service businesses, solar sales, solar installs, composting. Basically, if you're into climate economy and you're consistently generating growing revenue, you're probably a fit for us.
We don't care if you've got a massive TAM, we don't care if you went to an Ivy League school, we don't care who referred you. We empirically assess every company based on their fundamental economics, and then we make an investment decision. And so, as long as you meet our credit criteria, then we'll give you capital. I think a lot of investors in this space have pretty discrete requirements around climate impact. They're like, “Oh, I want to see a gigaton of emissions reductions over 50 years,” and I'm like, “That's great. Okay.” I have lots of thoughts about investing like that, but we don't invest that way.
So, for us, as long as you're involved in climate, as long as the direct mission of your company is to build a new climate economy, you're in scope for us. You can be doing indirect impact, direct impact, you can be doing adaptation resilience, all of that is of interest to us. And we particularly want to fund underrepresented entrepreneurs, diverse teams, and companies serving marginalized communities.
You talked about B Corps and PVCs, we're a public benefit corporation and we have a dual mission. So, it's to provide founder-friendly financing to climate entrepreneurs, and to support underrepresented founders, diverse teams, and companies serving marginalized communities. Actually, I would say, I think all, but one company in our portfolio today meet one of those criteria. Maybe they all do now that I think about it and over 80% of our pipeline meets one of those two criteria. So, a lot of folks talk about DEI in their work, we're doing it.
24:21
Chris Wedding:
What is also interesting is, as you describe the kind of company that's in scope, what I know you're also saying is, “Hey, founder or CEO, we know you've had trouble raising perhaps from other sources because you don't know somebody, because you didn't go Ivy League, because your total addressable market is too small or your gigaton estimations are not high enough. Guess what? We're here for you, baby.” Right?
Dimitry Gershenson:
Yeah. I think this is what distinguishes us from BCs. BCs want to make bets that have big exits that are concentrated, that have a very unique structure and model and I want to fund it all. As long as the credit risk is aligned with what we want, I'll give you money. And so, we can even fund competitors. We don't really care. This market is so big. I mean, look, there are certain spaces where we probably won't have too many investments because if you're doing carbon offsetting for the top five big tech companies, there's probably only so many of you that could be.
So, we have a company that does compost subscription, basically pick up, they have like a circular economy thing. They produce really incredible products that then they sell to consumers in the area. They're in Denver. Like, will we fund another compost business in Denver? Probably not, but will I fund a compost business in Austin? Totally and every major city that doesn't have municipal compost should have one of these.
I think for us, that gives us a unique advantage and as we launch additional products, we'll open ourselves up to other parts of the market. Today, that's the profile we're looking for. In a month, that profile will dramatically change and there'll be two instruments available and in 12 months, there'll be three and so on and so forth. Eventually we want to serve every startup and small business, small medium sized business, large business in climate from inception to IPO. Like we want to cover every credit need and leverage automation where we possibly can to make the process fast, efficient, equitable, inclusive. Those are all key priorities for us.
Chris Wedding:
Going back to revenue-based financing, so obviously, you all are applying that for a certain kind of company or a kind of sector. Maybe talk to us about how common revenue-based financing is broadly, like are there other sectors or how long it's been around, where it's going right, where it's going wrong, is that too much out of scope or is that the scope?
Dimitry Gershenson:
No, not at all. Totally not out of scope. Revenue-based financing is one of the oldest forms of investment. It's been called lots of different things. So, there's models of it called factoring. There's models of it called minority cashflow, private equity type engagements. It's all the same thing. I'm giving you money and you're giving me a portion of your revenue for some pre-agreed term.
There's been a lot of talk of it being this like innovative fintech alternative credit thing that has been promoted by the clear banks and pipes and whatever of the world and that's cool. It's fine, whatever gets your message across, but in the end, it's not innovative. This isn't rocket science.
27:49
Today, this product is generally employed in a few different spaces. So, e-commerce has quite a bit of revenue-based financing because it's really hard to raise venture. There's pretty predictable marketing investment to revenue ratios that you can track in the space so you can make investments. I think from what I've seen in the last few months that that model is straining given the macro-economic conditions, so we'll see how that plays out in the next year or two.
The other space where we've seen a lot of revenue is financing and factoring a software, especially SaaS, because there's MRR that you can blend against and basically convert it to ARR. I also think there's some issues with lending to just SaaS businesses that are very dependent on venture cycles. Right now, we're going through a downturn, so we'll see how those companies perform. We apply revenue-based financing a little bit more broadly.
We believe that a unique moment right now where as a whole, climate is going only in one direction and that means revenue is really only going in one direction. So, at a portfolio level, there's this macro wave supporting these businesses where, again, world's on fire and so there's a lot of demand. Both from capital and from customers and from an emerging class of consumers, both people and businesses and corporations and governments who are like, “Holy crap, we’ve got to fix this problem now.” And so, we think that as long as companies demonstrate consistent growing revenue over time with strong gross margins and a business model that is somewhat predictable, we can lend by revenue-based financing.
As I was saying, we apply it to software like a lot of other folks in e-commerce, sure, but we also apply it to hardware. We apply it to hybrid revenue models where people are selling hardware and software. We apply it to recurring services. We think that all of those spaces can benefit from a product like this.
Chris Wedding:
Cool. Thinking about you as a co-founder, CEO yourself, not just a financier, but also growing a company, what's been the hardest part of growing Enduring Planet?
Dimitry Gershenson:
Man, I think maybe at the highest level, being a founder is always hard. It doesn't really matter who you are. I think some people probably have it easier than others. I'm a privileged white guy. Yeah, so I'm already starting from an easy place. For us, it’s been a really incredible journey. We've only been around a year and we were able to raise a bunch of money and build product pretty fast and deploy capital pretty fast. Now we've signed eight investments and we're pretty excited about how they're performing.
I think this industry is still very early and it's understanding of what a real capital ecosystem should look like. Also, in many ways, investors historically have done a disservice by removing all the nuance from conversations around capital. And so, we will often interact with founders who are like, “We're a venture backed company and so we raise venture.” And I'm like, “But why? There's all this other money out there, why would you just raise venture? It's like literally the most expensive product you can access and it comes with all these strings attached.” They're like, “But we're a venture backed company, that's what we raise.”
And so, that's why we invest a lot in founder education, both around raising venture capital more intelligently and efficiently, but also around thinking about, how do you access alternative other forms of capital so that you can be capital efficient, so that you can be thoughtful about how you allocate ownership, so that you can optimize for cost of capital? There are all these things that founders don't, I think, often do and then I think on the other side of it is educating the rest of the community to participate in the ecosystem in a way that works for everyone.
31:55
Part of what's been really fascinating is learning about the different incentives that drive behavior in this market and getting a sense of like, okay, well, this type of investor, their customer is not their investee. It's like their LPs. And so, they're not incentivized to behave in a certain way that's actually best for founders. Understanding that and navigating that ecosystem has been really fascinating.
I mean, look, in the end, the things that are hard are the same things that are hard for any other founder. It's like getting enough rest and having enough time to do all the things, making sure that you remain focused and only pursue the opportunities that really matter in a given moment, because there's always too much. Navigating the ups and downs of running a startup, I think even the best of us have this roller coaster experience and staying sane through it is hard. But in the end, we're so lucky and we're so fortunate that we had early support.
We came out of a venture studio, so we didn't have that period of time where we were eating ramen and not sleeping. I can't even do that. I've got a four-year-old and a mortgage, so that wasn't even an option for me. Then we were lucky because I came into this role already having had a network in this space. And so, in many ways it was easier to raise capital to fund that first stage. My co-founder had raised an insane amount of money for her last debt vehicle and so it was in some ways easier for us to raise debt. It's pretty rare that a first-time fintech can raise as much capital as we did for our first facility at the cost that we did, because it was a lot less than our peers had to pay. Partially that's because we're in climate and partially that's because we have some help.
And so, we are stupid lucky and we are very aware of that. We’re not taking it for granted. We've been given a lot of resources and we have the privilege to take those resources and put them into the hands of really talented entrepreneurs solving this problem. We're going to do that fast and we're going to do it again and again and again. Coming back to the original point, we're going to put a lot of money in the hands of climate entrepreneurs in the next few years and hopefully other people do the same.
Chris Wedding:
Yep. Well, I mean, part of what you're saying is along the lines of that quote, those to whom much has been given, much is expected in return. Let's switch, Dimitry. So, we talked about the business. Let's move over to the person, Dimitry. Yeah, there we go. If only those folks on listening could see the video just now. What is some advice, Dimitry, you might give your younger self to be more effective, happier, et cetera, on this journey?
Dimitry Gershenson:
I don't know if you can see it. I know it's not on video. I'm going to repeat it, but there's a little plaque up there on the wall.
Chris Wedding:
I see the plaque.
35:08
Dimitry Gershenson:
It's part of a quote and the entire quote is the hills of Everest are lined with the bodies of very determined individuals, so maybe calm down. I think like maybe calming down is the best advice that I can give my younger self. Anxiety has always been something that I've had to navigate. I have general anxiety disorder. I'm not shy about that. I'm also on the autism spectrum, so my brain just works differently than a lot of people.
I spent a long, long time trying to figure out how I could not be those things and instead I've now learned how to use what I can to my advantage and when I can't, to be okay with the things that are hard because in the end, you can only do so much. And so, I think figuring out ways to exist in your world that work within the confines and constraints of your world is actually the real challenge.
So, one of the things, for example, that we did when we started Enduring Planet is we all committed that we were not going to build a startup that would require us to work 80 hours a week to be successful. That has actually played out in really interesting ways because we all work pretty reasonable hours. I mean, we work hard, but we prioritize in a way that I think is pretty unique for companies of our age, because the three leaders are all parents.
We all have complicated lives at home and that means that when we're working, we hustle like crazy and every minute counts, every second is accounted for and that's okay. It means that when we go home, I can spend time with my four-year-old and I don't have to be on Zoom calls till midnight. That's one.
The other thing too is that I have always wondered whether or not the choices that I was making about my career, the things where I spent time were right in the sense of what other people perceive or believe is right. I found that most of the time when people tell me that I'm wrong or that I'm envisioning an idea that won't work, that I'm actually on the right track. Maybe just reminding myself that lots of people will have lots of opinions and everybody's got an opinion.
Chris Wedding:
There's an expression around that. It involves a body part.
Dimitry Gershenson:
Yeah, and odors. I'm usually very vulgar in my vernacular and I'm trying to be less so. I'll keep it to myself.
Chris Wedding:
Yeah. I debate about how much vulgarity to just drop in a public forum like this. Occasionally it comes out, but anyway.
Dimitry Gershenson:
I'm very proud of myself. I haven't said the F word once, so I'm doing well.
Chris Wedding:
Not while recording, no.
Dimitry Gershenson:
Yeah.
Chris Wedding:
Well, on the first part of that, committing to not build a company that required 80 hours of work per week, if you think about the name of your company and your parent company, enduring, this is not a short sprint. If I recall one of Enduring Ventures founders, Xavier, I forget which founder it is, talking about building or buying, I suppose, beautiful businesses that you own forever. If you want to endure forever, thrive forever, you can't burn out, right?
38:54
Dimitry Gershenson:
I mean, I think there's this ethos in, I don't know if it's Silicon Valley or if it's all venture-backed startup ecosystem, where if you're not working, you're failing, you're losing. That if you don't work 16 hours a day, your competitors will beat you or whatever. Maybe that's true in certain very crowded ecosystems, but I think in the end, you need to build a business that you can navigate efficiently and effectively. If you're in charge, you have to be okay because if you're not okay while you're doing it, you're going to screw it up.
I've seen startups where people from the start, I know many companies where people from the start said, “I'm not going to build it that way. We're going to build it far away,” and it works beautifully. Yeah, there's lots of companies where people work 80, 90 hours a week and everybody sleeps in the office. You just crush it and it works great. For every one of those, there's 99 where people burnt out and couldn't cut it and made bad decisions all the time because they were exhausted and they were broken and they didn't have good balance.
I don't think it has to be that way and you know what, maybe in three, five years, you'll have me back on the show and I'll be this failed founder of a fintech startup that never went anywhere because we didn't work more than 40 hours a week or 50 hours a week. Maybe we'll have that conversation then, but I have a lot of conviction around building balance into how you lead a business, because I've seen what happens when you don't.
Chris Wedding:
A question that I like to pose to myself or the CEOs in our mastermind, or even students is like, what are you solving for? Sometimes what you're solving for should include other things like health and wellness on this very short journey we have on the planet. Yeah.
Dimitry Gershenson:
I mean, it has to, whether you're building an enduring company that is forever or not, if you're building a startup, it's a marathon. I'm going to shoot myself in the foot saying this.
Chris Wedding:
Don’t say it.
Dimitry Gershenson:
Yeah. It's a while.
Chris Wedding:
Yeah. There you go.
Dimitry Gershenson:
It's a long time. It's not a year. It's not three years. It's a long time and you have to be at the top of your game every day. That's the thing that I think a lot of folks don't realize and I'll give a concrete example as we wrap up. When we did our pre-seed raise, I pitched, I think, 240 investors and there were parts of that process where I was doing five plus pitches a day every day.
At the time, my thought was, “I need meeting density and volume matters, and I can totally do it.” What I wasn't realizing is that every time I was showing up in a call, I was not energized and I was not really clearly communicating the conviction that I had about our business. I was not clearly communicating the vision that we had because I was burnt out. And so, there was probably a month and a half period where I did, 80, 90 of these meetings that went nowhere because I showed up like a sad bag of soup. I could have done half of it and we probably would have closed faster and you know what? It was a really incredible lesson for me.
42:30
I've approached our seed round, which we're doing now, very differently. We still have density. We still have a very short, tight timeline. We're doing all the right things, but instead, I'm not showing up in meetings like a sad bag of soup. I'm like--
Chris Wedding:
Fired up.
Dimitry Gershenson:
…an excited cup of coffee, I don't know. I don't know what the metaphor is.
Chris Wedding:
There we go. Exactly.
Dimitry Gershenson:
Yeah.
Chris Wedding:
Quick side note, and then we'll move to wrap. There are studies that talk about the further a judge is away from their last meal throughout the day, the more harsh or the worse their decisions are, their mandates are, their rulings are. Anyway, we are biological creatures for sure.
Dimitry Gershenson:
Yeah.
Chris Wedding:
Well, hey, listen, I know we just got a minute here, Dimitry. Is there a final message, call to action, folks you want to hear from as we wrap up here?
Dimitry Gershenson:
Look, if you're an entrepreneur in climate and you've got revenue, come hit us up. We'd love to give you money. If you're an investor in climate, put your money to work and be founder-friendly. These people are saving the planet and you're not the one generating value, they are. You're just there allowing for the ride to support them and so show up and be a good human.
For the folks who aren't in the space yet, who aren't actively working in climate and have the opportunity to do so, have the privilege to do so, the world's on fire, come join us because it's a crazy time. It is just a crazy time. I've never been as excited about any moment in history in entrepreneurship and industry development, in anything as I am today. It is bonkers.
Chris Wedding:
Yes, yes, yes. Back to the we as climate founders and investors are lucky right now, imagine if we were trying to do this 20 years from now, the ability to have an influence I think would be far less. Well, anyway I think we'll just leave it there, that's an extra version of—
Dimitry Gershenson:
Yeah. No, the times now. I mean, the time is really 30 years ago, but the time is really now. It's never going to be better than now, and tomorrow it's never going to be better than tomorrow. Every day that goes on, it's less, so come join us.
44:55
Chris Wedding:
Right on. Hey, great stuff, Dimitry. We are rooting for the success of Enduring Planet and all the companies you're supporting. Talk soon.
Dimitry Gershenson:
Excellent, thanks Chris.
Chris Wedding:
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