July 4, 2024 • 39 mins
Welcome back to the Generosity Now podcast! As we continue our summer series, producer Jonathan Collier introduces international business leader John Halverson, a seasoned expert in investing, development, and strategy consulting. John shares his inspiring journey from working with Cargill and Land O'Lakes to leading impactful investments in East Africa through Talanton Impact Investing Fund.
John delves into the heart of impact investing, explaining how it differs from socially responsible investing and why Talanton focuses on small to medium enterprises. He highlights the transformational power of thriving businesses in challenging contexts, sharing compelling stories of companies like Masaka Creamery, Contegra, Burn Manufacturing, and a tilapia farming venture. These businesses not only generate financial returns but also create meaningful work and sustainable growth for local communities.
About Jon
Jon has 25 years of experience in international business leadership, investment, development and strategy consulting with two of world’s leading food and agriculture multinationals, Cargill and Land O’Lakes, where he served as a Vice President. He has lived and worked on three continents, most notably in Tanzania where he led a talented team in executing over 50 loans to SMEs across East and West Africa. Jon witnessed firsthand the transformational impact of a thriving business achieving scale in challenging contexts.
His areas of passionate interest outside of impact investing are mountain climbing, canoeing and skiing, both alpine and skinny skis! Jon has a BA from Wheaton College and an MBA – International Business from Regis University.
Connect with Jon
Talanton: https://talantonllc.com/
LinkedIn: https://www.linkedin.com/in/jon-halverson-5b0ba518/
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Please tell us your battle scars. Please tell us what the problems are.
We'd rather have you tell us now than find it later.
And we really begin ministry during due diligence, because that's where we start
to share about ethics, about our values, and we hear, we see their hearts,
and we find stuff, and we have honest conversations.
And then we structure an investment that we feel like is the best possible opportunity
(00:27):
for this business to scale.
It's not just about making great financial returns, not at all.
It's more about helping this business get a financing arrangement of some kind.
Music.
Well, hello there, and welcome back to the Generosity Now podcast,
(00:49):
where we bring you inspiring stories of generosity and whole life stewardship.
My name is Jonathan Collier, and I'm the podcast producer here on the Generosity Now podcast.
And I have the opportunity to fill in for Eric and Lori while they're taking
some time off this summer and preparing for an exciting fall launch of season three of the podcast.
So in the coming weeks, as you're spending time with your families this summer,
(01:09):
we wanted to bring some of our earlier episodes in season two back to the forefront.
We've got some great stories lined up, whether you've heard these before or
you're a brand new listener and you're just now discovering the Generosity Now podcast,
we hope that these conversations will inspire you to live a life of generosity
now and to dive deeper into the meanings of whole life stewardship.
(01:29):
As always, we hope you enjoy this episode and the ones to follow and be sure
to stick around to the end. Now, on to today's podcast.
Today, we're excited to introduce to you John Halverson, an international business
leader with 25 years of experience in investing, development,
and strategy consulting.
John's impressive career spans two of the world's leading food and agricultural
(01:50):
multinationals, Cargill and Land of Lakes, where he served as vice president.
His journey has taken him into three continents with a notable stint in Tanzania,
where he had led a talented team in executing over 50 loans to small market
enterprises and across East and West Africa.
John has witnessed the transformational power of thriving businesses achieving
(02:11):
scale in challenging contexts.
He holds a BA from Wheaton College, an MBA from International Business from
Regis University, and a DMIN from Bethel University in Faith,
Investing, and Theology.
Beyond his work at Impact Investing, John's passions extend to mountain climbing,
canoeing, skiing, and many other things outdoors.
John is a good friend, and he is a partner at Talaton Impact Investing Fund.
(02:34):
And we are so glad to have him. John and I have been walking down this road
of impact investing and having conversations going back from 2018,
and he is a wealth, wealth of information.
And so we're just so excited to have you. Thank you for coming today.
Well, it's wonderful to be here. Thanks for having me in. We're so glad.
Well, hey, John, give us a little bit of overview. So you got that little bio
about you, but tell us a little bit more about you, your family,
(02:57):
your faith journey, and then also your journey to Talaton.
Well, thanks. Thanks. I first and foremost am a follower of Jesus and was saved by His grace.
Part of my story is that my wife actually led me back to faith.
I grew up in a wonderful Christian family, but I made bad choices starting in middle school.
And honestly, my life, by the time I was a sophomore in high school,
(03:20):
I was headed in the wrong direction.
But my wife invited me to a youth conference. You might call it missionary dating in high school.
And I went with her because I had so much respect for her. She was respected across the high school.
And at that youth conference, I rededicated my life to Christ in high school
and decided on Wheaton College as a result.
(03:41):
I really had this huge hunger to understand the scriptures, theology,
and I thought Wheaton might be the place to do that.
I have four wonderful children, ages 17 to 27.
They really grew up in England and Africa. We've traveled and lived on three
pre-continence as a family in five or six states.
So we've been mobile, but God has been good. I'm thankful for his grace and favor with my family.
(04:06):
That's great. And tell us a little bit more about how did you,
you've had a lot of things as we read in the bio from Cargill to Land O'Lakes
to now Talton. What does that journey look like?
And also a stint in Africa. Yeah, I'll try to keep it short.
After graduating from Wheaton College with a degree in theology, I was hired by Dr.
Jerry White, the president of Navigators, to be his assistant.
(04:27):
And during those three years at Glen Eyrie here in Colorado Springs,
I was exposed to this idea that you could integrate business development and
be an investor really for the purpose of serving the kingdom, for the missions.
The navigators were at the front end of making this big pivot to embracing that
(04:50):
when I was there those three years.
So that was fundamental in creating a vision for me of doing what I'm doing
now. So I'm deeply thankful for those three years with the Navigators.
During that time, I got an MBA and then was hired into Cargill.
15 years at Cargill, most of my time in mergers and acquisitions and strategy
all over the world, very much international.
(05:11):
And during my 15th year at Cargill, my head and heart were really disconnected.
I couldn't figure out why. I was making decent money and everything seemed to
be going fine, but I really wanted to get much more directly involved with something impactful.
I wanted to integrate my faith more openly to what I was doing.
And God led me to an opportunity to move to Tanzania with a foundation that
(05:34):
was investing in mid-sized businesses.
So we left Cargill, moved to Tanzania. During that time, got deeply involved
with investing in mid-sized businesses in Liberia, Malawi, and most of the time in East Africa.
And I really grew to love the continent, the entrepreneurs.
There's many. We'll talk about that later, I think. And to see the upside when
(05:56):
things go right, you can have significant impact from a business going to scale.
John, I just need to clarify because I don't know your story as well.
When you say you were investing, were you investing on behalf of other people's
money in those small businesses and mid-sized businesses at that stage?
Yeah, great question. That particular foundation did loans up to $250,000 to
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mid-sized businesses that needed a lot of help.
These businesses often struggle with basic things like good accounting,
how to do a really good strategy. energy.
They all think they, they all want a truck. It's kind of, they sit down with
them and they say, Hey, a truck's going to solve all our issues.
We can pick stuff up. We can take it to market.
And the truck in Africa often becomes a community asset when,
(06:43):
and not necessarily a business asset.
So we would often say, I don't think necessarily depreciating asset that's $40,000
when you're a hundred thousand dollars is going to solve all your issues.
So you sit down and you talk through and maybe they do need a truck,
but you really want it to be in the context of a a business plan.
And we would do a lot of what I would call business development early stage at that time.
(07:03):
And it was investing foundation money. It wasn't what I'm doing now with Talentant, but it was similar.
So give us a little bit of an overview. I've heard you speak about this before,
and it's just super helpful.
Give our listeners an overview of what do we mean by impact investing and faith-driven investing?
Impact investing is really putting money to work with the intent of a return
with the stated goal of some kind of a transformation.
(07:27):
I like to differentiate it from another great form of investing,
which is what you might call socially responsible investing.
ESG. It gets a lot of buzz these days.
That's more about screening things out that are unsavory, which is still valuable.
Impact investing is we're going to invest knowing that if this business goes
to scale, it can transform many lives.
(07:49):
It's called positive screening. So we spend a lot of time really analyzing in
due diligence, what is the true impact this business is doing?
We care a lot about jobs and meaningful work. It's deeply theological for us. So...
So impact investing is much smaller than socially responsible investing,
but it's growing fast as a place where people can say,
(08:13):
I can put my values against into something where I think the outcome will be
something that is in line with my faith or biblical worldview or whatever I'm
striving to do with my resources.
Perfect. And people can use kind of different streams of capital for impact
investing too. You can use your personal or private capital.
(08:34):
You can use your charitable capital as well for impact investing.
Yeah. Impact investing is generally private, not public.
So there's a whole different number of pockets of capital that can go towards it, certainly.
Yeah. So I would say a lot of private funds, either equity or debt funds,
(08:56):
are in that category that's generally for accredited or qualified investors.
The beauty of investing from a donor-advised foundation is that you can use
charitable capital and you can get a return back to that same account.
And there's a whole lot to unpack there, but I'll leave it at that for now.
So tell us, John, about your work with Talaton and how that—and we'd love to
(09:19):
hear some stories of businesses you've invested in and the impact that they've had.
And I've heard some of these that are just fabulous. Yeah.
First of all, talented is the Greek word found in Matthew 25 in the parable of the talents.
And we chose that very intentionally because we wanted to be outward about our
faith. We didn't want to surprise people down the road.
(09:40):
Everybody involved in the talented team, our board, and our investors are really
motivated by their faith.
So the Greek word in the parable of the talents is talented.
And we like to say we really want to help those two and five talent servants
put their resources to work for redemptive or kingdom impact.
(10:01):
And when Jesus was talking to his leadership team at that time,
he knew he was heading to the cross in about six, seven days.
So this was his succession speech, and this was laying out his expectations.
And he said, don't sit on these resources and do nothing. That was condemned.
He said, put them to work. In essence, take risks. And when you take those risks,
(10:22):
you can get exponential returns.
It's not necessarily only financial returns. He used a financial term,
one talent in a 16 years of pay.
So the five-talent servant got a lifetime's worth of pay.
He could have sat there and done nothing, lived a life of leisure, but he put it to work.
And Jesus said, well done, thou good and faithful servant.
(10:43):
In that very same speech to his disciples, he rolled straight into the sheeps
and the goats. And what's that say?
Serve the least of these. And that's the whole goal of talent and is to really
help people put their talents to work, not just financial, spiritual,
social, experiential, natural.
There's various forms of capital. Jesus was saying, all these resources are
(11:07):
mine, put them to work and don't forget to serve the least of these.
And Talent in our fund believes that serving the least of these,
is best done most of the time by giving them meaningful work,
letting them use their God-given gifts and abilities to reach a state of living
where they can give back, where they can think for the future,
(11:29):
invest in their kids, and really live a lifestyle that glorifies God, versus poverty.
Talatin has been in effect in investing now for the last five years?
Yeah, five years. Okay. And just to differentiate, we've had conversations around
impact investing before, and we'll continue to have conversations around impact
(11:49):
investing here on the Generosity Now podcast.
We're big fans of it, and so hopefully you are as well, listener.
But one thing I really appreciate about Talatin that's kind of a unique,
this is getting in the weeds, but I still think it's neat and it's good for people to know.
A lot of times there's different funds that are available. They're open for
only just a short period of time as they're raising up funding,
(12:10):
and then they're going to go into the deployment of that capital phase.
Something that's very unique about Talatin is it's an evergreen fund.
This fund is an evergreen fund, which means that people are able to invest in
it every single month or every single quarter, and you guys are then deploying
those funds as you receive them into new companies.
Is that right? Yeah, yeah. You get that very, very much right, Eric.
(12:31):
We're what's called an evergreen fund. I don't want to confuse anybody.
What that means is that we're open-ended. And for us, that was very missional.
We see the need to invest in midsize, values-driven, high-impact businesses
in places like Africa far into the future.
And a big advantage over a closed fund is we can keep doing that as we raise
more capital. Our pipeline is really broad.
(12:52):
Been full of great investment opportunities. We've looked at over 200 companies
and so far we've made 13 investments.
And we really are selective in choosing those values-driven,
purpose-driven, scalable business models that are really serving often thousands
of the least of these people that otherwise might not have meaningful work with good jobs.
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So what that means, Eric, is that we particularly love when we get investors
from donor advised foundations like NCF because they have the right hearts and
it fits our mission and what we're trying to do with impact.
We do a quarterly update for everybody on their returns, but also an impact report.
And we share stories of impact. We quantify impact.
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It's really critical for us to do that for our mission, for our charter,
but also because that's where our hearts are.
And God God has blessed us with wonderful faith-driven and some just values-driven
CEOs who share the idea that going to scale, getting bigger is not for the sake
of only financial returns,
but for the benefits of the community of, you know, of really good creating
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meaningful work for thousands.
So when you talk about that, because there's a timetable to this investment,
it's not that like a mutual fund where they can get it back quickly.
What's usually, looking at as the investors?
Yeah, I'll just explain some basic terms. I think that's helpful.
Yeah. So we have what's called a four-year lockup on capital.
And the minimum investment around is typically $50,000.
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But we have many that are in the range of $100,000, even up to $2 million.
And we look for businesses between $500,000 and $5 million in sales.
And our average investment size per investment is one to three million.
So we really get deeply involved. We view due diligence. Due diligence,
for those who don't know, is when you really start to dig in deep to an investment
(14:49):
to decide whether or not it's a fit. And you turn over stones.
And it's the unfolding of trust.
Every business has skeletons in the closet. And we always tell them when we
first meet them, please tell us your battle scars.
Please tell us what the problems are. We'd rather have you tell us now than find it later.
And we really begin ministry during due diligence because that's where we start
(15:13):
to share about ethics, about our values.
And we hear, you see their hearts and we find stuff and then we have honest conversations.
And then we structure an investment that we feel like is the best possible opportunity
for this business to scale. It's not just.
About making great financial returns. Not at all. It's more about helping this
(15:34):
business get a financing arrangement of some kind that really is a good fit
for them with their cash flow so they could scale.
And when they double or triple in size, or sometimes five or 10x,
some of them in our portfolio are doing that now, we already are seeing the
exponential impact on meaningful work.
We also spend a lot of time post-investment doing leadership mentoring and development.
(15:59):
We have some great Christian organizations that do mentoring at the highest
levels of quality, and they're mentoring some of our CEOs.
We do that within our talent and team. I serve on four or five boards of our investments.
It's a great opportunity over the long haul. That's the beauty of this kind
of investing is you're guaranteed to have a five, six-year relationship with
these companies. And during that time, things happen.
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So it's a wonderful platform for all of us, a mutual exchange of spiritual growth.
And that's the beauty of doing something where you're in it for a while,
and then we exit so they don't become dependent on us.
And it's a planned exit, and that's what's helpful also, that they understand
that, so that it's very helpful to them.
Absolutely. So that's really exciting. Now, I know you said you moved to the
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family over to Tanzania, so you have a heart for Africa, and most of the investments
have stayed in Africa so far, correct?
Yeah, we're only, great question, we're only in East Africa,
we do have an immediate or longer term to expand beyond that.
We'll always be in countries that millions of people need good jobs.
You know, so Africa is just a place where it's loaded with talent.
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And, you know, people look at that continent and say, why Africa?
So the reason is that as the world goes to 9 billion people by 2035,
the world's going to need everything that's in Africa.
They have the most untapped minerals in the world by far. They have the most
undeveloped arable agriculture land in the world by far.
(17:28):
And what I would say is they have, and most people don't have never really seen
this, they have incredible talent.
And most of it is either unemployed or underemployed. And when you're underemployed,
it means you don't have a job that fits your gifts and abilities.
So there's an opportunity there. What happens is that these folks often become entrepreneurs.
I've heard from some really good organizations that do statistics,
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over 70% of Africans you could call entrepreneurs.
And this is a continent of almost one and a half billion.
Imagine that. And that's everything from microfinance entrepreneurs to midsize
entrepreneurs to scale. Some of those really start to get it right.
And when they get that equation right, that's where talent can come alongside
them with responsible financing. financing, and much more than that,
(18:16):
support, prayer, you know, bringing in our investor community.
By the way, our investor community is loaded with talent and many of them are
volunteering time on boards and helping us go to scale.
So we're in Kenya, Burundi with one great coffee investment, Rwanda and Uganda.
For now, we're just in those four East African countries. Yeah.
And I would say those are also four African countries that as countries,
(18:40):
they're the more more economic development side that's also helping these business
be able to scale because the country itself has scaled.
They're not all just third world backwards countries where they don't have governments
supporting some of this.
Well, that's a wonderful point you made and I would 100% agree.
There's 54 countries in Africa and they're all different. And within those countries,
(19:03):
there's often 10, 20, hundreds of tribes. They're all different.
So there's a huge amount of of diversity across the continent.
And you really have to look country by country for those established success stories.
And the countries we choose are those ones that are getting it right.
And when those countries get it right, things happen that are very exciting.
(19:23):
So yeah, during COVID, seven of the 10 most resilient economies in the world
that did not go negative GDP were in Africa, and all three of them are the ones we go to.
And Rwanda was at 10% GDP before COVID.
They dropped to plus 4% GDP during COVID, which is still great.
(19:45):
America would have loved that. And now they're back to 9% GDP.
So imagine a country growing 10% GDP a year. It creates a lot of opportunity.
Within that, there's still four or 500 million people who are either in poverty are still very poor.
And so there's this mix of entrepreneurism.
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Mid-sized businesses, a lot of opportunity, but they still need good jobs.
So why small to medium enterprises?
I think you just kind of teased out that answer, but why small to medium enterprises?
And then also, would you give us just an overview of some of the investments
you guys have made, some of the companies that Talton's invested in and some
stories about them? I can't wait to share those stories.
(20:27):
I'll start with your small, medium-sized enterprise, then I'll pivot to some wonderful stories.
Yeah. So a small, medium-sized enterprise in any economy, even our economy,
are the ones that create the most jobs.
Everyone thinks it's all the multinationals, and multinationals create a lot
of jobs, but most people end up working for a small or medium-sized company,
and it's the same in Africa.
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So it's really the engine of what generates significant innovation in an economy
and where people can generally latch onto and find meaningful work.
So we love those mid-sized businesses that are already on a trajectory of growth.
It takes a lot to get up to 100 or 200 or 300,000 in sales anywhere,
but especially in some of these countries in Africa.
So these entrepreneurs are already kind of heroic, but they still struggle to
(21:12):
get to three or four million in sales.
And that's where you can create meaningful work for thousands.
So that's the whole goal of talent. And we're finding hundreds of these mid-sized businesses.
That's been a huge kind of breakthrough in terms of when we set up talent.
And a lot of people say, you're not going to find deal flow.
You're not going to find pipeline, it's been the opposite.
(21:32):
And we have wonderful partners like The Navigators, like a lot of Christian
organizations that have boots on the ground that are now introducing us to business
people they're working with.
So that's been super helpful, along with a whole bunch of other people introducing us to companies.
So now, do you want a couple stories? Love some stories. Okay. Yeah.
So one of our most kind of great stories in our portfolio is,
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I'll start with Masaka Creamery.
Masaka Creamery is in Rwanda, and it was one of the most popular yogurt brands in Rwanda.
And Rwanda is a market of about 10 million, but right across the border in Congo,
there's 30 million people.
And then just north in Uganda, there's another 20 million. And then just south
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in Brittany, when you look at the market potential, it's 60,
70, 80 million. So this is not a tiny little country.
The market potential is significant. And they have free trade agreements with
a lot of their neighbors. But anyways, back to Vaisakha.
Vaisakha was a popular brand that the company went bankrupt.
They were shut down because of food safety violations.
And in about 2015, 2016, there was a young Christian guy, I think he's been
(22:38):
on this podcast, John Porter. That's right. Who stepped in.
And John actually really saw that, had a vision for this company and started
hiring, bought the company for pennies on the dollar, started hiring for the deaf community.
He thought it was going to be a sacrifice. It was one of the best decisions
he ever made. These are talented folks.
They are committed to what they're doing. They're highly engaged in their network.
(23:00):
They bring in other great deaf talent.
And now the company is 60% deaf, doubled in size this last year,
and they have 10 interns, all deaf.
And now what they're doing now across Rwanda is
a demonstration effect of you could hire and work
with peoples with disabilities and give them meaningful work
and in return you get incredibly talented engaged employees who bring a lot
(23:25):
of benefits to the business with a real low turnover yeah we were one of Masaka's
first big investors so we were in pretty early so and we I continue to serve
on the board so it's been a great fun journey do you want another story uh of course worse.
Yeah. I guess I'll share the story of Contegra.
So Contegra is a business that is involved in growing chrysanthemums.
(23:48):
The version of chrysanthemum is called pyrethrum. It's a beautiful white flower.
That little yellow center in the middle of this beautiful white flower is loaded
with an ingredient that's very hard to get at.
It's a bio-extract process.
And you can pull out of it, pyrethrum refined extract, which was the pesticide
for organic farming worldwide.
(24:11):
And uniquely in Kenya, because it's close to the equator, the elevation,
chrysanthemums like this can grass scale.
And the beauty of it is it's all done by smallholder farmers.
Now, there is some commercial farms.
Those are starting to grow. That's actually a good thing for the industry.
And Contegra is helping do that. But by far and away, it's thousands and thousands.
(24:32):
They're working with over 20,000 smallholder farmers now.
When Talenton first entered in, they had 300,000 in sales.
They were living month to month on cash flow. It was a risky investment for
us. But we love the faith of the management team.
We love the potential for impact. And we really finished off their first big round of investments.
And it was our biggest investment at the time and still is one of our biggest
(24:56):
investments. We've added two more tranches since then.
And I've had the joy of serving on the board and watching this in a front row
seat to the point now where there are going to be $8 million in sales this year.
And they have over 40 engineers, all Kenyans, giving it lab technicians.
These are really hard to come by jobs in Kenya. They have over 40 agronomists
working with the smallholder farmers.
(25:17):
So this is a business that not only is giving incredible programs to these farmers,
they're partnering with Crown Financial,
who has a program for smallholder farmers, which is a great story.
They're just entering some conversations with bringing some financing to these smallholder farmers.
So there's a lot of things they're doing to help them beyond just buying their
flowers, which, by the way, most of them that get into this flower farming,
(25:40):
they increase their incomes sometimes 7, 10x.
I had the joy of emceeing an event for Teleton, an investor event earlier this year,
and got to see some more stories even about that,
and even specifically a farmer that had transitioned from raising maize to these
flowers and how that has been massive because actually the drought that happened would have been,
(26:06):
had he still been in maize, correct me if I'm wrong here, it would have been
devastating to him and his family.
But instead, through the partnership with Contegra and the growing of these
flowers, he was actually even able to build himself a better home for his family
and things like that. Am I, got the story right?
Yeah, yeah, I can assure us. Yeah, you're very close to being exactly right, Eric.
There's a guy named Duncan, a farmer, that we've highlighted on some videos
(26:28):
because he just has such an inspiring story.
Duncan had a mud hut. It's the perception of what a lot of people have of how
a lot of people live in Africa.
Now, there's tons of Africans who are living in mud huts. So I want to be clear about that. Duncan was.
And Duncan was a sincere, dedicated farmer.
And many farmers in Africa and Kenya have kind of low self-esteems.
(26:50):
They view themselves as poor, and they also view their farms as kind of food
security and subsistence, nothing more than that.
And when you impart a vision to them that their farm is a noble calling,
that it can be a scalable business, that done right, you can diversify your
risk through different crops.
You can take those crops to scale and increase yields.
(27:12):
You can get training in agronomy. You can learn to access markets.
You can become savvy through your smartphone and apps and how to do market pricing.
Contegra helps with all of that. And they help these farmers go far beyond just providing flowers.
Duncan actually was a first mover into these chrysanthemums.
And what Well, the beauty of this type of flower is that you harvest it 10 months a year.
(27:38):
So you harvest it when it blooms at the right point in time.
It creates a smooth cash flow for these farmers compared to a traditional crop,
which is highly seasonal.
These farmers have something they refer to in Africa they call the hunger season.
And those farmers that are in between those crops, a lot of grain crops, they're hungry.
(27:58):
They might eat one meal a day and their kids are trying to go to school or working in the fields.
Chrysanthemums can help smooth that income. And it's a non-food crop,
which is valuable. It brings in cash.
So they're going to always grow some maize for food security.
It's very cultural, but they don't need to grow as much maize as they do.
So to take some of that maize, like you said, Eric, and transition it to a high
(28:21):
value crop that brings in cash, they can begin to save for the the future.
They can buy things like Duncan now has a brick house with a metal roof and
he has got electricity hookups.
Entering into this business has really transformed him and his family's lives.
All right, let's hear it. Let's talk about burn. I love burn.
You love burn? I love burn. Yeah.
(28:42):
Burn manufacturing is another one of our investments. The image of a cookstove
is that it's for aid agencies and that sort of thing.
The truth is that 80% of Africans still use cookstoves. A cookstove is simply
about an 18-inch diameter.
They throw in various forms of charcoal or wood, and it's a stove.
(29:03):
It's pretty rudimentary.
Byrne has figured out how to make one of these that's very, very environmentally friendly.
And they work with partners that supply environmentally friendly briquettes.
And the beauty of Byrne is that it leaves very little toxins.
A lot of times these folks that are using these have very bad health impacts.
So this is a much cleaner, 80% better clean energy.
(29:27):
But the beauty of the stove is that it uses far less wood.
And timber, far less. So it generates significant carbon credits.
So for Talenton, we funded 80,000 of these stoves. It was really a form of project financing.
And we took them to a whole other group of people that didn't have this kind of wonderful new stove.
(29:48):
And we got a base rate on a loan that's favorable for our investors,
but significant upside by generating carbon credits.
And there's There's a whole lot to unpack there. We don't have time today,
but it's a neat investment that's really protective of the environment in a
way we call creation care. This is God's creation.
(30:09):
But doing it in a way that it provides a very affordable stove to thousands
of people for better health impact and better for the environment.
All right. I also think about, I want to hear a little bit more of an update.
Dave, when we were at the conference, you were just announcing an investment
into a tilapia farm and a large-scale tilapia. What's going on there?
(30:33):
Yeah, it's one of our newer investments, and we're really excited about it.
Tilapia is a wonderful form of protein in countries that are used to just having chickens and beef.
Those are far less efficient and more costly to get to scale than a typical fish.
So it's wonderful to have affordable forms of protein. Protein is often deficient.
(30:53):
In the first five years of life, protein deficiency leads to huge negative outcomes.
Kids' brains don't develop the same, and they have a lifelong impact,
and they're often stunted in their growth.
So affordable protein, the product itself is impactful.
But the beauty of this is that it's creating hundreds of good jobs and not just
within the tilapia business itself.
(31:15):
It's in southern Lake Kivu in Rwanda, by the way.
And it's right on the border of Burundi and the Congo.
And these often women, market women, they're quite hardworking,
will come right to the place where they bring the fish in every day on a boat
from the fish farms out in Lake Kivu.
And they'll buy right there on the spot. They're very discerning,
(31:36):
these women. They measure each fish. They study each fish. They pay them by
size and weight and quality.
And they throw back stuff they don't want. I mean, they're very...
And then they take it to market and they make good money every day.
It's their way of making a living.
And so it provides not only direct employment at the fish business itself.
And it provides also an opportunity for all of these market women and to go
(31:59):
out and take this to wherever they go.
And it reaches a lot across Rwanda, across the Congo, to sell this fish to people
who are hungry for a protein diet.
Here in the U.S., we often stock all of our streams and all of our lakes for fish.
Is that part of this process also for the tilapia? Yeah, yeah. It's a good question.
(32:22):
Tilapia is grown in these fish pens.
And the very interesting thing about the fishing industry and lots of these
big lakes in Central Africa is it's actually tied a lot to the sex trafficking
and human trafficking trend.
These are poor communities. And they often, you've heard the old saying,
(32:42):
you know, teach a man to fish and, you know, he's got a livelihood.
I actually don't love that. It's not a bad thing. You know, I would call that
very, very micro. They might be slightly less poor, but they're still poor.
It's much better to get a fish pen for those folks that can grow thousands of
fish and teaching them how to run a fishing business.
(33:03):
And that's what these businesses do is they actually have their own fish pens,
but then And they partner sometimes with aid agencies, the ones that are good to work with.
And they'll get these villages a fish pen of their own.
And they'll teach them how to work it together.
And so they go from a single fisherman catching a handful of fish every day
to creating a business that's scalable.
(33:26):
So, you know, there's no stocking that, yes, some escape out into the lake.
But typically they stay in the pen.
And the one we invested in has a whole fingerling development.
There's a whole process of going from a hatchery to fingerlings.
It takes about nine months in the pen. There's a lot of technology around fish feed.
So this is not a low-tech business.
(33:48):
It takes a lot of know-how at the right light temperature, the right depth,
even the right disease maintenance and that sort of thing. This business knows how to do all that.
So we're excited to see what they're going to do. We think they could grow 510X
and generate significant impact in that region of the world.
It's so neat. I can honestly say I just learned I had no idea that there were
(34:08):
things called fish pens. So that's fun to hear and fun to learn.
You bring up a good point. And I think it's good for us to talk about here.
And so I'd love to hear your thoughts.
You definitely have a bent towards investing. But yet at the same time,
you also believe that there is, and as do we on the General C&L podcast,
believe there's a place for donation dollars.
And you talked about micro microfinancing and larger scale financing.
(34:32):
Would you give us kind of, we're going to pull on your theological strings and
give us some thoughts on donations versus micro versus larger scale financing.
Yeah, yeah. I'll try and wrap all that around a theological perspective.
First of all, I really believe that grants and donations are critical in many circumstances.
(34:53):
And we work with some fantastic partners that are nonprofits and they're doing
training for entrepreneurs.
They have these things they call accelerator models. It's really not ready to
be an investment model yet, but they really lay the groundwork for what we're
doing. So we're thankful for those partners and they're essential.
And there's even some aid programs that are doing some good things.
I would say many of them are doing things that I might question,
(35:15):
but the ones that are doing some wonderful things are doing things like helping
businesses understand how to develop a business plan for a pitch event.
And they might host a pitch event and they bring in investors like Talentin, we give them feedback.
And occasionally one of those comes into our investment pipeline.
So there's this great puzzle piece that needs to be put together of.
(35:37):
Charitable organizations, donation-based organizations that are doing things
that a for-profit just couldn't do.
But I believe it's critical for a business that's going to scale,
to have a true investor come alongside them earlier than later in their development.
Because the nice thing about that is you've both incentivized to focus on what
(36:01):
really matters, and that's generally positive cash flow.
If you can have a healthy balance sheet and get to where you're generating positive
cash flow, and you understand markets and revenue and the basics of running
a good business, you get into strategy.
A true investment fund has those capabilities, and Talenton has those capabilities,
(36:21):
and we can come alongside them in a unique way that a nonprofit might struggle to do.
For Talenton, we believe that God wired everyone to work and has given people
gifts and abilities that can be really celebrated through meaningful work,
Not just a mediocre bad job,
(36:42):
but a job that might fit them and their gifts and their passions.
And the goal of what we do in due diligence and post-investment support,
really, we want to serve our investors by giving them incredible participation
in stories of giving people opportunities to work for God's glory.
So they can use those gifts to bless their families, bless their communities.
(37:04):
So it's really about that, if you wanted to boil it down theologically.
So, John, we just would love for you to share with all of our listeners how
people can get involved with Talton. Yeah, great question.
There's a number of ways to get involved with Talton. Most of our investors
have deployed capital where they've already taken a tax benefit through a donor
advised foundation or something like that.
(37:26):
But we have investors, too, that looked at us and said, we love what you're
doing and we want to diversify our portfolio. and we have private alternative
investors that look at us as a straight up investment just to diversify their portfolio.
And we have family foundations and family offices and different types of folks involved in talent.
(37:48):
But the heavyweight investor for us at this point of our development has been
donor advised foundations that have really stepped forward and said,
we love what you're doing.
It's good stewardship and we love the impact. It's in line with our faith and
our values, and that's where people really resonate.
Well, it's so great. We will go ahead and link to Talaton's website in our show
(38:10):
notes and let you go take a look there.
Well, thank you, John, for being on the show. On the Generosity Now podcast,
we do seek to inspire, equip, and connect our listeners for generous kingdom
impact and whole life stewardship.
Wow, what a great episode. I want to thank you for tuning in and listening.
If you're a returning listener, thank you for being along for the journey.
And if you're a new listener, we're glad you're here.
(38:31):
Be sure to subscribe wherever you consume podcasts.
You can even find us on YouTube. All of the information in today's show notes
and links and resources mentioned will be listed below.
And until next time, thank you. God bless. And we'll see you right back here
on The Generosity Network.
Music.
Please tell us your battle scars. Please tell us what the problems are.
We'd rather have you tell us now than find it later.
And we really begin ministry during due diligence, because that's where we start
to share about ethics, about our values, and we hear, we see their hearts,
and we find stuff, and we have honest conversations.
And then we structure an investment that we feel like is the best possible opportunity
(00:27):
for this business to scale.
It's not just about making great financial returns, not at all.
It's more about helping this business get a financing arrangement of some kind.
Music.
Well, hello there, and welcome back to the Generosity Now podcast,
(00:49):
where we bring you inspiring stories of generosity and whole life stewardship.
My name is Jonathan Collier, and I'm the podcast producer here on the Generosity Now podcast.
And I have the opportunity to fill in for Eric and Lori while they're taking
some time off this summer and preparing for an exciting fall launch of season three of the podcast.
So in the coming weeks, as you're spending time with your families this summer,
(01:09):
we wanted to bring some of our earlier episodes in season two back to the forefront.
We've got some great stories lined up, whether you've heard these before or
you're a brand new listener and you're just now discovering the Generosity Now podcast,
we hope that these conversations will inspire you to live a life of generosity
now and to dive deeper into the meanings of whole life stewardship.
(01:29):
As always, we hope you enjoy this episode and the ones to follow and be sure
to stick around to the end. Now, on to today's podcast.
Today, we're excited to introduce to you John Halverson, an international business
leader with 25 years of experience in investing, development,
and strategy consulting.
John's impressive career spans two of the world's leading food and agricultural
(01:50):
multinationals, Cargill and Land of Lakes, where he served as vice president.
His journey has taken him into three continents with a notable stint in Tanzania,
where he had led a talented team in executing over 50 loans to small market
enterprises and across East and West Africa.
John has witnessed the transformational power of thriving businesses achieving
(02:11):
scale in challenging contexts.
He holds a BA from Wheaton College, an MBA from International Business from
Regis University, and a DMIN from Bethel University in Faith,
Investing, and Theology.
Beyond his work at Impact Investing, John's passions extend to mountain climbing,
canoeing, skiing, and many other things outdoors.
John is a good friend, and he is a partner at Talaton Impact Investing Fund.
(02:34):
And we are so glad to have him. John and I have been walking down this road
of impact investing and having conversations going back from 2018,
and he is a wealth, wealth of information.
And so we're just so excited to have you. Thank you for coming today.
Well, it's wonderful to be here. Thanks for having me in. We're so glad.
Well, hey, John, give us a little bit of overview. So you got that little bio
about you, but tell us a little bit more about you, your family,
(02:57):
your faith journey, and then also your journey to Talaton.
Well, thanks. Thanks. I first and foremost am a follower of Jesus and was saved by His grace.
Part of my story is that my wife actually led me back to faith.
I grew up in a wonderful Christian family, but I made bad choices starting in middle school.
And honestly, my life, by the time I was a sophomore in high school,
(03:20):
I was headed in the wrong direction.
But my wife invited me to a youth conference. You might call it missionary dating in high school.
And I went with her because I had so much respect for her. She was respected across the high school.
And at that youth conference, I rededicated my life to Christ in high school
and decided on Wheaton College as a result.
(03:41):
I really had this huge hunger to understand the scriptures, theology,
and I thought Wheaton might be the place to do that.
I have four wonderful children, ages 17 to 27.
They really grew up in England and Africa. We've traveled and lived on three
pre-continence as a family in five or six states.
So we've been mobile, but God has been good. I'm thankful for his grace and favor with my family.
(04:06):
That's great. And tell us a little bit more about how did you,
you've had a lot of things as we read in the bio from Cargill to Land O'Lakes
to now Talton. What does that journey look like?
And also a stint in Africa. Yeah, I'll try to keep it short.
After graduating from Wheaton College with a degree in theology, I was hired by Dr.
Jerry White, the president of Navigators, to be his assistant.
(04:27):
And during those three years at Glen Eyrie here in Colorado Springs,
I was exposed to this idea that you could integrate business development and
be an investor really for the purpose of serving the kingdom, for the missions.
The navigators were at the front end of making this big pivot to embracing that
(04:50):
when I was there those three years.
So that was fundamental in creating a vision for me of doing what I'm doing
now. So I'm deeply thankful for those three years with the Navigators.
During that time, I got an MBA and then was hired into Cargill.
15 years at Cargill, most of my time in mergers and acquisitions and strategy
all over the world, very much international.
(05:11):
And during my 15th year at Cargill, my head and heart were really disconnected.
I couldn't figure out why. I was making decent money and everything seemed to
be going fine, but I really wanted to get much more directly involved with something impactful.
I wanted to integrate my faith more openly to what I was doing.
And God led me to an opportunity to move to Tanzania with a foundation that
(05:34):
was investing in mid-sized businesses.
So we left Cargill, moved to Tanzania. During that time, got deeply involved
with investing in mid-sized businesses in Liberia, Malawi, and most of the time in East Africa.
And I really grew to love the continent, the entrepreneurs.
There's many. We'll talk about that later, I think. And to see the upside when
(05:56):
things go right, you can have significant impact from a business going to scale.
John, I just need to clarify because I don't know your story as well.
When you say you were investing, were you investing on behalf of other people's
money in those small businesses and mid-sized businesses at that stage?
Yeah, great question. That particular foundation did loans up to $250,000 to
(06:18):
mid-sized businesses that needed a lot of help.
These businesses often struggle with basic things like good accounting,
how to do a really good strategy. energy.
They all think they, they all want a truck. It's kind of, they sit down with
them and they say, Hey, a truck's going to solve all our issues.
We can pick stuff up. We can take it to market.
And the truck in Africa often becomes a community asset when,
(06:43):
and not necessarily a business asset.
So we would often say, I don't think necessarily depreciating asset that's $40,000
when you're a hundred thousand dollars is going to solve all your issues.
So you sit down and you talk through and maybe they do need a truck,
but you really want it to be in the context of a a business plan.
And we would do a lot of what I would call business development early stage at that time.
(07:03):
And it was investing foundation money. It wasn't what I'm doing now with Talentant, but it was similar.
So give us a little bit of an overview. I've heard you speak about this before,
and it's just super helpful.
Give our listeners an overview of what do we mean by impact investing and faith-driven investing?
Impact investing is really putting money to work with the intent of a return
with the stated goal of some kind of a transformation.
(07:27):
I like to differentiate it from another great form of investing,
which is what you might call socially responsible investing.
ESG. It gets a lot of buzz these days.
That's more about screening things out that are unsavory, which is still valuable.
Impact investing is we're going to invest knowing that if this business goes
to scale, it can transform many lives.
(07:49):
It's called positive screening. So we spend a lot of time really analyzing in
due diligence, what is the true impact this business is doing?
We care a lot about jobs and meaningful work. It's deeply theological for us. So...
So impact investing is much smaller than socially responsible investing,
but it's growing fast as a place where people can say,
(08:13):
I can put my values against into something where I think the outcome will be
something that is in line with my faith or biblical worldview or whatever I'm
striving to do with my resources.
Perfect. And people can use kind of different streams of capital for impact
investing too. You can use your personal or private capital.
(08:34):
You can use your charitable capital as well for impact investing.
Yeah. Impact investing is generally private, not public.
So there's a whole different number of pockets of capital that can go towards it, certainly.
Yeah. So I would say a lot of private funds, either equity or debt funds,
(08:56):
are in that category that's generally for accredited or qualified investors.
The beauty of investing from a donor-advised foundation is that you can use
charitable capital and you can get a return back to that same account.
And there's a whole lot to unpack there, but I'll leave it at that for now.
So tell us, John, about your work with Talaton and how that—and we'd love to
(09:19):
hear some stories of businesses you've invested in and the impact that they've had.
And I've heard some of these that are just fabulous. Yeah.
First of all, talented is the Greek word found in Matthew 25 in the parable of the talents.
And we chose that very intentionally because we wanted to be outward about our
faith. We didn't want to surprise people down the road.
(09:40):
Everybody involved in the talented team, our board, and our investors are really
motivated by their faith.
So the Greek word in the parable of the talents is talented.
And we like to say we really want to help those two and five talent servants
put their resources to work for redemptive or kingdom impact.
(10:01):
And when Jesus was talking to his leadership team at that time,
he knew he was heading to the cross in about six, seven days.
So this was his succession speech, and this was laying out his expectations.
And he said, don't sit on these resources and do nothing. That was condemned.
He said, put them to work. In essence, take risks. And when you take those risks,
(10:22):
you can get exponential returns.
It's not necessarily only financial returns. He used a financial term,
one talent in a 16 years of pay.
So the five-talent servant got a lifetime's worth of pay.
He could have sat there and done nothing, lived a life of leisure, but he put it to work.
And Jesus said, well done, thou good and faithful servant.
(10:43):
In that very same speech to his disciples, he rolled straight into the sheeps
and the goats. And what's that say?
Serve the least of these. And that's the whole goal of talent and is to really
help people put their talents to work, not just financial, spiritual,
social, experiential, natural.
There's various forms of capital. Jesus was saying, all these resources are
(11:07):
mine, put them to work and don't forget to serve the least of these.
And Talent in our fund believes that serving the least of these,
is best done most of the time by giving them meaningful work,
letting them use their God-given gifts and abilities to reach a state of living
where they can give back, where they can think for the future,
(11:29):
invest in their kids, and really live a lifestyle that glorifies God, versus poverty.
Talatin has been in effect in investing now for the last five years?
Yeah, five years. Okay. And just to differentiate, we've had conversations around
impact investing before, and we'll continue to have conversations around impact
(11:49):
investing here on the Generosity Now podcast.
We're big fans of it, and so hopefully you are as well, listener.
But one thing I really appreciate about Talatin that's kind of a unique,
this is getting in the weeds, but I still think it's neat and it's good for people to know.
A lot of times there's different funds that are available. They're open for
only just a short period of time as they're raising up funding,
(12:10):
and then they're going to go into the deployment of that capital phase.
Something that's very unique about Talatin is it's an evergreen fund.
This fund is an evergreen fund, which means that people are able to invest in
it every single month or every single quarter, and you guys are then deploying
those funds as you receive them into new companies.
Is that right? Yeah, yeah. You get that very, very much right, Eric.
(12:31):
We're what's called an evergreen fund. I don't want to confuse anybody.
What that means is that we're open-ended. And for us, that was very missional.
We see the need to invest in midsize, values-driven, high-impact businesses
in places like Africa far into the future.
And a big advantage over a closed fund is we can keep doing that as we raise
more capital. Our pipeline is really broad.
(12:52):
Been full of great investment opportunities. We've looked at over 200 companies
and so far we've made 13 investments.
And we really are selective in choosing those values-driven,
purpose-driven, scalable business models that are really serving often thousands
of the least of these people that otherwise might not have meaningful work with good jobs.
(13:15):
So what that means, Eric, is that we particularly love when we get investors
from donor advised foundations like NCF because they have the right hearts and
it fits our mission and what we're trying to do with impact.
We do a quarterly update for everybody on their returns, but also an impact report.
And we share stories of impact. We quantify impact.
(13:37):
It's really critical for us to do that for our mission, for our charter,
but also because that's where our hearts are.
And God God has blessed us with wonderful faith-driven and some just values-driven
CEOs who share the idea that going to scale, getting bigger is not for the sake
of only financial returns,
but for the benefits of the community of, you know, of really good creating
(14:02):
meaningful work for thousands.
So when you talk about that, because there's a timetable to this investment,
it's not that like a mutual fund where they can get it back quickly.
What's usually, looking at as the investors?
Yeah, I'll just explain some basic terms. I think that's helpful.
Yeah. So we have what's called a four-year lockup on capital.
And the minimum investment around is typically $50,000.
(14:27):
But we have many that are in the range of $100,000, even up to $2 million.
And we look for businesses between $500,000 and $5 million in sales.
And our average investment size per investment is one to three million.
So we really get deeply involved. We view due diligence. Due diligence,
for those who don't know, is when you really start to dig in deep to an investment
(14:49):
to decide whether or not it's a fit. And you turn over stones.
And it's the unfolding of trust.
Every business has skeletons in the closet. And we always tell them when we
first meet them, please tell us your battle scars.
Please tell us what the problems are. We'd rather have you tell us now than find it later.
And we really begin ministry during due diligence because that's where we start
(15:13):
to share about ethics, about our values.
And we hear, you see their hearts and we find stuff and then we have honest conversations.
And then we structure an investment that we feel like is the best possible opportunity
for this business to scale. It's not just.
About making great financial returns. Not at all. It's more about helping this
(15:34):
business get a financing arrangement of some kind that really is a good fit
for them with their cash flow so they could scale.
And when they double or triple in size, or sometimes five or 10x,
some of them in our portfolio are doing that now, we already are seeing the
exponential impact on meaningful work.
We also spend a lot of time post-investment doing leadership mentoring and development.
(15:59):
We have some great Christian organizations that do mentoring at the highest
levels of quality, and they're mentoring some of our CEOs.
We do that within our talent and team. I serve on four or five boards of our investments.
It's a great opportunity over the long haul. That's the beauty of this kind
of investing is you're guaranteed to have a five, six-year relationship with
these companies. And during that time, things happen.
(16:21):
So it's a wonderful platform for all of us, a mutual exchange of spiritual growth.
And that's the beauty of doing something where you're in it for a while,
and then we exit so they don't become dependent on us.
And it's a planned exit, and that's what's helpful also, that they understand
that, so that it's very helpful to them.
Absolutely. So that's really exciting. Now, I know you said you moved to the
(16:43):
family over to Tanzania, so you have a heart for Africa, and most of the investments
have stayed in Africa so far, correct?
Yeah, we're only, great question, we're only in East Africa,
we do have an immediate or longer term to expand beyond that.
We'll always be in countries that millions of people need good jobs.
You know, so Africa is just a place where it's loaded with talent.
(17:06):
And, you know, people look at that continent and say, why Africa?
So the reason is that as the world goes to 9 billion people by 2035,
the world's going to need everything that's in Africa.
They have the most untapped minerals in the world by far. They have the most
undeveloped arable agriculture land in the world by far.
(17:28):
And what I would say is they have, and most people don't have never really seen
this, they have incredible talent.
And most of it is either unemployed or underemployed. And when you're underemployed,
it means you don't have a job that fits your gifts and abilities.
So there's an opportunity there. What happens is that these folks often become entrepreneurs.
I've heard from some really good organizations that do statistics,
(17:52):
over 70% of Africans you could call entrepreneurs.
And this is a continent of almost one and a half billion.
Imagine that. And that's everything from microfinance entrepreneurs to midsize
entrepreneurs to scale. Some of those really start to get it right.
And when they get that equation right, that's where talent can come alongside
them with responsible financing. financing, and much more than that,
(18:16):
support, prayer, you know, bringing in our investor community.
By the way, our investor community is loaded with talent and many of them are
volunteering time on boards and helping us go to scale.
So we're in Kenya, Burundi with one great coffee investment, Rwanda and Uganda.
For now, we're just in those four East African countries. Yeah.
And I would say those are also four African countries that as countries,
(18:40):
they're the more more economic development side that's also helping these business
be able to scale because the country itself has scaled.
They're not all just third world backwards countries where they don't have governments
supporting some of this.
Well, that's a wonderful point you made and I would 100% agree.
There's 54 countries in Africa and they're all different. And within those countries,
(19:03):
there's often 10, 20, hundreds of tribes. They're all different.
So there's a huge amount of of diversity across the continent.
And you really have to look country by country for those established success stories.
And the countries we choose are those ones that are getting it right.
And when those countries get it right, things happen that are very exciting.
(19:23):
So yeah, during COVID, seven of the 10 most resilient economies in the world
that did not go negative GDP were in Africa, and all three of them are the ones we go to.
And Rwanda was at 10% GDP before COVID.
They dropped to plus 4% GDP during COVID, which is still great.
(19:45):
America would have loved that. And now they're back to 9% GDP.
So imagine a country growing 10% GDP a year. It creates a lot of opportunity.
Within that, there's still four or 500 million people who are either in poverty are still very poor.
And so there's this mix of entrepreneurism.
(20:06):
Mid-sized businesses, a lot of opportunity, but they still need good jobs.
So why small to medium enterprises?
I think you just kind of teased out that answer, but why small to medium enterprises?
And then also, would you give us just an overview of some of the investments
you guys have made, some of the companies that Talton's invested in and some
stories about them? I can't wait to share those stories.
(20:27):
I'll start with your small, medium-sized enterprise, then I'll pivot to some wonderful stories.
Yeah. So a small, medium-sized enterprise in any economy, even our economy,
are the ones that create the most jobs.
Everyone thinks it's all the multinationals, and multinationals create a lot
of jobs, but most people end up working for a small or medium-sized company,
and it's the same in Africa.
(20:48):
So it's really the engine of what generates significant innovation in an economy
and where people can generally latch onto and find meaningful work.
So we love those mid-sized businesses that are already on a trajectory of growth.
It takes a lot to get up to 100 or 200 or 300,000 in sales anywhere,
but especially in some of these countries in Africa.
So these entrepreneurs are already kind of heroic, but they still struggle to
(21:12):
get to three or four million in sales.
And that's where you can create meaningful work for thousands.
So that's the whole goal of talent. And we're finding hundreds of these mid-sized businesses.
That's been a huge kind of breakthrough in terms of when we set up talent.
And a lot of people say, you're not going to find deal flow.
You're not going to find pipeline, it's been the opposite.
(21:32):
And we have wonderful partners like The Navigators, like a lot of Christian
organizations that have boots on the ground that are now introducing us to business
people they're working with.
So that's been super helpful, along with a whole bunch of other people introducing us to companies.
So now, do you want a couple stories? Love some stories. Okay. Yeah.
So one of our most kind of great stories in our portfolio is,
(21:54):
I'll start with Masaka Creamery.
Masaka Creamery is in Rwanda, and it was one of the most popular yogurt brands in Rwanda.
And Rwanda is a market of about 10 million, but right across the border in Congo,
there's 30 million people.
And then just north in Uganda, there's another 20 million. And then just south
(22:14):
in Brittany, when you look at the market potential, it's 60,
70, 80 million. So this is not a tiny little country.
The market potential is significant. And they have free trade agreements with
a lot of their neighbors. But anyways, back to Vaisakha.
Vaisakha was a popular brand that the company went bankrupt.
They were shut down because of food safety violations.
And in about 2015, 2016, there was a young Christian guy, I think he's been
(22:38):
on this podcast, John Porter. That's right. Who stepped in.
And John actually really saw that, had a vision for this company and started
hiring, bought the company for pennies on the dollar, started hiring for the deaf community.
He thought it was going to be a sacrifice. It was one of the best decisions
he ever made. These are talented folks.
They are committed to what they're doing. They're highly engaged in their network.
(23:00):
They bring in other great deaf talent.
And now the company is 60% deaf, doubled in size this last year,
and they have 10 interns, all deaf.
And now what they're doing now across Rwanda is
a demonstration effect of you could hire and work
with peoples with disabilities and give them meaningful work
and in return you get incredibly talented engaged employees who bring a lot
(23:25):
of benefits to the business with a real low turnover yeah we were one of Masaka's
first big investors so we were in pretty early so and we I continue to serve
on the board so it's been a great fun journey do you want another story uh of course worse.
Yeah. I guess I'll share the story of Contegra.
So Contegra is a business that is involved in growing chrysanthemums.
(23:48):
The version of chrysanthemum is called pyrethrum. It's a beautiful white flower.
That little yellow center in the middle of this beautiful white flower is loaded
with an ingredient that's very hard to get at.
It's a bio-extract process.
And you can pull out of it, pyrethrum refined extract, which was the pesticide
for organic farming worldwide.
(24:11):
And uniquely in Kenya, because it's close to the equator, the elevation,
chrysanthemums like this can grass scale.
And the beauty of it is it's all done by smallholder farmers.
Now, there is some commercial farms.
Those are starting to grow. That's actually a good thing for the industry.
And Contegra is helping do that. But by far and away, it's thousands and thousands.
(24:32):
They're working with over 20,000 smallholder farmers now.
When Talenton first entered in, they had 300,000 in sales.
They were living month to month on cash flow. It was a risky investment for
us. But we love the faith of the management team.
We love the potential for impact. And we really finished off their first big round of investments.
And it was our biggest investment at the time and still is one of our biggest
(24:56):
investments. We've added two more tranches since then.
And I've had the joy of serving on the board and watching this in a front row
seat to the point now where there are going to be $8 million in sales this year.
And they have over 40 engineers, all Kenyans, giving it lab technicians.
These are really hard to come by jobs in Kenya. They have over 40 agronomists
working with the smallholder farmers.
(25:17):
So this is a business that not only is giving incredible programs to these farmers,
they're partnering with Crown Financial,
who has a program for smallholder farmers, which is a great story.
They're just entering some conversations with bringing some financing to these smallholder farmers.
So there's a lot of things they're doing to help them beyond just buying their
flowers, which, by the way, most of them that get into this flower farming,
(25:40):
they increase their incomes sometimes 7, 10x.
I had the joy of emceeing an event for Teleton, an investor event earlier this year,
and got to see some more stories even about that,
and even specifically a farmer that had transitioned from raising maize to these
flowers and how that has been massive because actually the drought that happened would have been,
(26:06):
had he still been in maize, correct me if I'm wrong here, it would have been
devastating to him and his family.
But instead, through the partnership with Contegra and the growing of these
flowers, he was actually even able to build himself a better home for his family
and things like that. Am I, got the story right?
Yeah, yeah, I can assure us. Yeah, you're very close to being exactly right, Eric.
There's a guy named Duncan, a farmer, that we've highlighted on some videos
(26:28):
because he just has such an inspiring story.
Duncan had a mud hut. It's the perception of what a lot of people have of how
a lot of people live in Africa.
Now, there's tons of Africans who are living in mud huts. So I want to be clear about that. Duncan was.
And Duncan was a sincere, dedicated farmer.
And many farmers in Africa and Kenya have kind of low self-esteems.
(26:50):
They view themselves as poor, and they also view their farms as kind of food
security and subsistence, nothing more than that.
And when you impart a vision to them that their farm is a noble calling,
that it can be a scalable business, that done right, you can diversify your
risk through different crops.
You can take those crops to scale and increase yields.
(27:12):
You can get training in agronomy. You can learn to access markets.
You can become savvy through your smartphone and apps and how to do market pricing.
Contegra helps with all of that. And they help these farmers go far beyond just providing flowers.
Duncan actually was a first mover into these chrysanthemums.
And what Well, the beauty of this type of flower is that you harvest it 10 months a year.
(27:38):
So you harvest it when it blooms at the right point in time.
It creates a smooth cash flow for these farmers compared to a traditional crop,
which is highly seasonal.
These farmers have something they refer to in Africa they call the hunger season.
And those farmers that are in between those crops, a lot of grain crops, they're hungry.
(27:58):
They might eat one meal a day and their kids are trying to go to school or working in the fields.
Chrysanthemums can help smooth that income. And it's a non-food crop,
which is valuable. It brings in cash.
So they're going to always grow some maize for food security.
It's very cultural, but they don't need to grow as much maize as they do.
So to take some of that maize, like you said, Eric, and transition it to a high
(28:21):
value crop that brings in cash, they can begin to save for the the future.
They can buy things like Duncan now has a brick house with a metal roof and
he has got electricity hookups.
Entering into this business has really transformed him and his family's lives.
All right, let's hear it. Let's talk about burn. I love burn.
You love burn? I love burn. Yeah.
(28:42):
Burn manufacturing is another one of our investments. The image of a cookstove
is that it's for aid agencies and that sort of thing.
The truth is that 80% of Africans still use cookstoves. A cookstove is simply
about an 18-inch diameter.
They throw in various forms of charcoal or wood, and it's a stove.
(29:03):
It's pretty rudimentary.
Byrne has figured out how to make one of these that's very, very environmentally friendly.
And they work with partners that supply environmentally friendly briquettes.
And the beauty of Byrne is that it leaves very little toxins.
A lot of times these folks that are using these have very bad health impacts.
So this is a much cleaner, 80% better clean energy.
(29:27):
But the beauty of the stove is that it uses far less wood.
And timber, far less. So it generates significant carbon credits.
So for Talenton, we funded 80,000 of these stoves. It was really a form of project financing.
And we took them to a whole other group of people that didn't have this kind of wonderful new stove.
(29:48):
And we got a base rate on a loan that's favorable for our investors,
but significant upside by generating carbon credits.
And there's There's a whole lot to unpack there. We don't have time today,
but it's a neat investment that's really protective of the environment in a
way we call creation care. This is God's creation.
(30:09):
But doing it in a way that it provides a very affordable stove to thousands
of people for better health impact and better for the environment.
All right. I also think about, I want to hear a little bit more of an update.
Dave, when we were at the conference, you were just announcing an investment
into a tilapia farm and a large-scale tilapia. What's going on there?
(30:33):
Yeah, it's one of our newer investments, and we're really excited about it.
Tilapia is a wonderful form of protein in countries that are used to just having chickens and beef.
Those are far less efficient and more costly to get to scale than a typical fish.
So it's wonderful to have affordable forms of protein. Protein is often deficient.
(30:53):
In the first five years of life, protein deficiency leads to huge negative outcomes.
Kids' brains don't develop the same, and they have a lifelong impact,
and they're often stunted in their growth.
So affordable protein, the product itself is impactful.
But the beauty of this is that it's creating hundreds of good jobs and not just
within the tilapia business itself.
(31:15):
It's in southern Lake Kivu in Rwanda, by the way.
And it's right on the border of Burundi and the Congo.
And these often women, market women, they're quite hardworking,
will come right to the place where they bring the fish in every day on a boat
from the fish farms out in Lake Kivu.
And they'll buy right there on the spot. They're very discerning,
(31:36):
these women. They measure each fish. They study each fish. They pay them by
size and weight and quality.
And they throw back stuff they don't want. I mean, they're very...
And then they take it to market and they make good money every day.
It's their way of making a living.
And so it provides not only direct employment at the fish business itself.
And it provides also an opportunity for all of these market women and to go
(31:59):
out and take this to wherever they go.
And it reaches a lot across Rwanda, across the Congo, to sell this fish to people
who are hungry for a protein diet.
Here in the U.S., we often stock all of our streams and all of our lakes for fish.
Is that part of this process also for the tilapia? Yeah, yeah. It's a good question.
(32:22):
Tilapia is grown in these fish pens.
And the very interesting thing about the fishing industry and lots of these
big lakes in Central Africa is it's actually tied a lot to the sex trafficking
and human trafficking trend.
These are poor communities. And they often, you've heard the old saying,
(32:42):
you know, teach a man to fish and, you know, he's got a livelihood.
I actually don't love that. It's not a bad thing. You know, I would call that
very, very micro. They might be slightly less poor, but they're still poor.
It's much better to get a fish pen for those folks that can grow thousands of
fish and teaching them how to run a fishing business.
(33:03):
And that's what these businesses do is they actually have their own fish pens,
but then And they partner sometimes with aid agencies, the ones that are good to work with.
And they'll get these villages a fish pen of their own.
And they'll teach them how to work it together.
And so they go from a single fisherman catching a handful of fish every day
to creating a business that's scalable.
(33:26):
So, you know, there's no stocking that, yes, some escape out into the lake.
But typically they stay in the pen.
And the one we invested in has a whole fingerling development.
There's a whole process of going from a hatchery to fingerlings.
It takes about nine months in the pen. There's a lot of technology around fish feed.
So this is not a low-tech business.
(33:48):
It takes a lot of know-how at the right light temperature, the right depth,
even the right disease maintenance and that sort of thing. This business knows how to do all that.
So we're excited to see what they're going to do. We think they could grow 510X
and generate significant impact in that region of the world.
It's so neat. I can honestly say I just learned I had no idea that there were
(34:08):
things called fish pens. So that's fun to hear and fun to learn.
You bring up a good point. And I think it's good for us to talk about here.
And so I'd love to hear your thoughts.
You definitely have a bent towards investing. But yet at the same time,
you also believe that there is, and as do we on the General C&L podcast,
believe there's a place for donation dollars.
And you talked about micro microfinancing and larger scale financing.
(34:32):
Would you give us kind of, we're going to pull on your theological strings and
give us some thoughts on donations versus micro versus larger scale financing.
Yeah, yeah. I'll try and wrap all that around a theological perspective.
First of all, I really believe that grants and donations are critical in many circumstances.
(34:53):
And we work with some fantastic partners that are nonprofits and they're doing
training for entrepreneurs.
They have these things they call accelerator models. It's really not ready to
be an investment model yet, but they really lay the groundwork for what we're
doing. So we're thankful for those partners and they're essential.
And there's even some aid programs that are doing some good things.
I would say many of them are doing things that I might question,
(35:15):
but the ones that are doing some wonderful things are doing things like helping
businesses understand how to develop a business plan for a pitch event.
And they might host a pitch event and they bring in investors like Talentin, we give them feedback.
And occasionally one of those comes into our investment pipeline.
So there's this great puzzle piece that needs to be put together of.
(35:37):
Charitable organizations, donation-based organizations that are doing things
that a for-profit just couldn't do.
But I believe it's critical for a business that's going to scale,
to have a true investor come alongside them earlier than later in their development.
Because the nice thing about that is you've both incentivized to focus on what
(36:01):
really matters, and that's generally positive cash flow.
If you can have a healthy balance sheet and get to where you're generating positive
cash flow, and you understand markets and revenue and the basics of running
a good business, you get into strategy.
A true investment fund has those capabilities, and Talenton has those capabilities,
(36:21):
and we can come alongside them in a unique way that a nonprofit might struggle to do.
For Talenton, we believe that God wired everyone to work and has given people
gifts and abilities that can be really celebrated through meaningful work,
Not just a mediocre bad job,
(36:42):
but a job that might fit them and their gifts and their passions.
And the goal of what we do in due diligence and post-investment support,
really, we want to serve our investors by giving them incredible participation
in stories of giving people opportunities to work for God's glory.
So they can use those gifts to bless their families, bless their communities.
(37:04):
So it's really about that, if you wanted to boil it down theologically.
So, John, we just would love for you to share with all of our listeners how
people can get involved with Talton. Yeah, great question.
There's a number of ways to get involved with Talton. Most of our investors
have deployed capital where they've already taken a tax benefit through a donor
advised foundation or something like that.
(37:26):
But we have investors, too, that looked at us and said, we love what you're
doing and we want to diversify our portfolio. and we have private alternative
investors that look at us as a straight up investment just to diversify their portfolio.
And we have family foundations and family offices and different types of folks involved in talent.
(37:48):
But the heavyweight investor for us at this point of our development has been
donor advised foundations that have really stepped forward and said,
we love what you're doing.
It's good stewardship and we love the impact. It's in line with our faith and
our values, and that's where people really resonate.
Well, it's so great. We will go ahead and link to Talaton's website in our show
(38:10):
notes and let you go take a look there.
Well, thank you, John, for being on the show. On the Generosity Now podcast,
we do seek to inspire, equip, and connect our listeners for generous kingdom
impact and whole life stewardship.
Wow, what a great episode. I want to thank you for tuning in and listening.
If you're a returning listener, thank you for being along for the journey.
And if you're a new listener, we're glad you're here.
(38:31):
Be sure to subscribe wherever you consume podcasts.
You can even find us on YouTube. All of the information in today's show notes
and links and resources mentioned will be listed below.
And until next time, thank you. God bless. And we'll see you right back here
on The Generosity Network.
Music.
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