Igniting the Power of Influence: Investing For Tomorrow | Iconoclast Summit 2024
Igniting The Power of Influence: Investing For Tomorrow with moderator: Moira Forbes, President and Publisher, ForbesWomen and EVP, Forbes and panelists: Igor Tulchinsky, Founder, Chairman & CEO, WorldQuant, Erin Harkless Moore, Managing Director of Investments, Pivotal Ventures, Bing Chen, Cofounder & CEO, Gold House and Michael Anders, Founder, ICONIQ Capital.
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00:00For the next conversation, Igniting the Power of Influence, Investing for Tomorrow,
00:05please welcome moderator Moira Forbes,
00:08President and Publisher, Forbes Women and EVP, Forbes,
00:12and panelists Igor Tulchinsky,
00:14Founder, Chairman, and CEO, WorldQuant,
00:18Aaron Harkless-Moore, Managing Director of Investments, Pivotal Ventures,
00:23Bing Chen, Co-Founder and CEO, GoldHouse,
00:28and Michael Anders, Founder, Iconic Capital.
00:32Hi, good afternoon, everyone.
00:34It's so great to be up here again this afternoon.
00:38I'm really excited for this panel because we have leaders who are at the forefront
00:43of thinking about new frameworks, mindsets, and innovation tools
00:49to really have a catalytic effect around impact and progress,
00:53whether that be more directly in the business arena or the philanthropic arena.
00:57And how do we really accelerate new models and create this idea exchange
01:01that I think many of us would appreciate some of the lessons to be learned
01:06from the extraordinary work that you all are doing.
01:08So thank you to you all.
01:11Mike, I'm going to start with you.
01:13You at Iconic have really pioneered this really interesting approach
01:17in terms of bringing together your network
01:20and bringing together your investors for iconic impact.
01:24You're deploying significant amounts of capital,
01:27I think over $500 million of grants have been announced.
01:30You're creating co-labs.
01:32You are actually putting capital in the hands of really transformative leaders
01:37very, very quickly, and you've done so in a handful of years.
01:41Can you talk about this model and how it goes against the grain
01:46in terms of some of the more traditional ways that we've been approaching the sector?
01:50Sure. Thanks, Maura, for having us.
01:53I think the big challenge in philanthropy right now is not lack of solutions.
02:00It's lack of understanding how to get capital to those solutions.
02:04And what we found was most of our clients were founders and still running businesses.
02:11And while the world's problems were not going away,
02:14in fact, they were becoming more and more challenging,
02:19we lacked time to get that money to those organizations.
02:22We wanted to create a platform that would foster collaboration,
02:26that would lean on subject matter experts and give the confidence of our client base
02:32that they could get the money to organizations quickly, efficiently,
02:36and know that those organizations were highly vetted
02:38and being sourced by folks that really understood the space.
02:42And so we created Iconic Impact with this notion of this co-lab model.
02:47And so, for example, the first effort that we pursued was around refugee resettlement.
02:54It was an issue that was near and dear to one client in particular,
02:57and he was willing and his wife were willing to commit a significant amount of money
03:04to sort of partner, in this case it was with MacArthur and Lever for Change,
03:09to sort of cast a wide net of the universe
03:12and source the best of sort of philanthropic deal flow in the area of refugee resettlement.
03:20And the hope would be that as we got down to a few finalists,
03:25others in the Iconic ecosystem who cared about that issue would raise their hand and say,
03:30sure, we want to give money away to this cause,
03:32we don't really have time to build our own charitable arm and expertise in this issue,
03:37we know the issue is really critical, we don't have time to wait until we've retired
03:41or we've ultimately found our own foundation staff.
03:44And so, in this instance, the hundreds of organizations whittled down to 20,
03:50our clients got it down to five finalists,
03:54and this was actually in the middle of COVID, the program's less than four years old.
03:58In one 90-minute Zoom, we invited other Iconic families who shared the interest in refugee resettlement.
04:05We heard the pitch from the five finalists,
04:09so everyone got a sort of chance to understand what these organizations did and the impact they could have.
04:14And within those 90 minutes, the $10 million that initially was funded by the initial client
04:22turned into $12, turned into $14, turned into $18, turned into $24.5 million in 90 minutes.
04:29And then Mackenzie Bezos and the IKEA Foundation got behind it and turned it into north of $40 million.
04:34And so the idea was the humility of a client initially to say,
04:38I care about this issue, but I don't have the time or the expertise to solve it on my own.
04:43We don't have the time to waste for me to figure this all out on my own,
04:46even though they're smart enough to do it.
04:49And then the humility of other Iconic families to get behind this particular client who shared an interest and said,
04:55it's really important that we tackle this issue.
04:57And then for Mackenzie Bezos and IKEA Foundation to come in behind that.
05:02So the whole idea is to just get capital flowing to proven scalable organizations that are doing incredible work
05:10and not reinvent the wheel and not let ego sort of drive this sense that, you know,
05:15once I solve this company and take it public and retire, I'll go tackle education or I'll go tackle this, I'll go tackle that.
05:22It really is this humility to say, let's go find the best subject matter expert in this particular issue area.
05:29Let's trust their philanthropic deal flow and their ability to vet those deals.
05:34And then let's collaborate and both leverage not just the capital,
05:38but the time and talent of the Iconic clients who know how to scale a company and know how to scale an organization
05:44and really sort of leverage the network to drive real social change.
05:48I love that model in the sense that there's no shortage of intent from a lot of high net worth individuals or philanthropic organizations.
05:58But the timeline, right, to be able to, as you said, to vet it, to think you get it right,
06:03the amount of time it takes to deploy that capital and the opportunity cost that's lost when it is in a silo and not necessarily across a collective,
06:13which, again, is a great way to think differently about how we how we put capital into really important issues at speed.
06:21Erin, you do so at Pivotal Ventures as well, which was founded by Melinda Gates,
06:26accelerating progress by removing social barriers that hold people back, investing in women led funds and companies.
06:34But the work that you're doing is is you are not a nonprofit.
06:37You are backing really interesting, viable businesses,
06:42but you're also taking a number of different approaches in the ways in which you invest different structures.
06:49Can you talk through how you've had to take a more expansive approach to the models for doing this?
06:55And what are some of the takeaways, again, to be able to think outside of the more traditional frameworks?
07:00Sure. Thanks, Moira, for having us here today.
07:03And it's so exciting to be discussing this topic because when I think about Pivotal Ventures,
07:07we were designed by our design to expand the impact toolkit and recognizing that to advance social progress and specifically advance women's power and influence,
07:16we need to pull multiple levers to do that.
07:19You need traditional philanthropy.
07:21You need policy and advocacy work, strategic partnerships along the line of what Michael was talking about with other philanthropists and donors.
07:27You need investment capital. Philanthropy can address market failures.
07:33Policy can do that as well.
07:34But you need investments to really drive innovation and unlock sustainable solutions that are market based.
07:41And that's the work that we're trying to lead specifically with our investment strategy at Pivotal.
07:47We take an approach to diligence in the private market specifically that recognizes that there are sort of structural biases in place that limit who has access to capital.
07:58And we're not trying to lower the bar in our work at all.
08:01We're trying to reframe it and adjust some of these truisms around what is due diligence to get at the underlying risks that we're trying to assess as investors,
08:11to then back some founders that are going to be building companies and segments of the economy that are really going to drive tremendous growth.
08:19And we realize we can't do it alone.
08:21So similar to what Michael was saying, it's really important to collaborate with other philanthropists, with other investors to bring more capital to bear at scale.
08:31And we've done that using our voice, using our convening power.
08:35We try to be early as investors into our funds, so being in a first close where we can to catalyze others, sharing our diligence, not being too proprietary with our underwriting.
08:46Because, again, if we're not open about what we're doing, it's going to make it a lot harder for others to follow and others to join us and, again, take longer for these solutions to drive impact at scale.
08:58So it comes back to looking at the models that exist and asking the questions of, you know, how do we underwrite this to open up the pie, right, to create more seats at the table so that women, more women, more people of color,
09:10more underrepresented founders and fund managers are able to bring their ideas forward and have an opportunity to pitch us and others.
09:19So so much of this is about expanding these toolkits.
09:22It's about acting communities and activating communities intent, Mike, as you mentioned earlier, in terms of your community.
09:29Bing, Gold House is an extraordinary example of this.
09:32This was launched to bring together the Asian Pacific community for, you know, coming out of crisis, COVID-19 and the like, all these factors that took a huge toll on this community.
09:44But you've galvanized in a way for nonprofit, for profit, and really have tapped into this extraordinary power of coalition and identity and deployed capital, both culturally and financially, in terms of extraordinary opportunities at a very fast pace.
10:02Can you share your model and what can be learned from what has been so galvanizing in bringing this forward?
10:10I appreciate that.
10:11Thank you again to the Forrest family, of course, and Maura for coming.
10:14To be somewhat loaded in the least millennial millennial, my model for everything is the church.
10:19All of the most powerful cultural institutions follow this illustrative model.
10:24One is we started with the core manifesto or practical North Star because our diaspora in particular, despite being millennia old, has actually not had concentricity.
10:33It's not necessarily a single race, a single language.
10:35We're cornered to every edge of the earth.
10:38We don't have a universal historic struggle like slavery, which I'm grateful we do not have slavery.
10:42I hope you all celebrated Juneteenth yesterday, by the way, so forth and so on.
10:46And so in lieu of a shared history or reason to convene, we focus instead on shared destiny.
10:52And so our analogs, to be a bit pedantic, were actually Singapore and the UAE, two nation states, countries that are ironically roughly six decades old, too young to have a codified identity, similar to the notion of Asian-American, which is also six decades old.
11:05And despite that, have successfully become the multinational hubs for the entire Asia-Pacific and West Asia regions.
11:11It's entirely because of their North Star, which is economics.
11:14So our North Star was how do we actually create net new economic opportunity that then can trickle down and immediately dismantle pernicious cultural stereotypes?
11:23The second and third piece are my other model for life, which I would argue is also the church, which is the Walt Disney Company.
11:29And the Walt Disney Company, despite its five to six divisions, is effectively a bifurcated model.
11:34Half of their IP and studios are about truth telling, about sort of reshaping public opinions through narrative.
11:40And then the other half, Disney Plus, CPG, site-based entertainment, are effectively just distribution and monetization engines.
11:45So that was really instructive to us.
11:47We need two halves to our holistic ecosystem.
11:50One is this incredible media apparatus so we can get our portcodes out to the mainstream, so we can get people out to the mainstream, not just for attention, UAE, and brand building, but also just because it's exciting.
12:00And then second is how do we actually have the services, the products, the capital, the funds, and so forth to ensure that their opportunities are sustained?
12:08And again, it's been remarkable to see the work that you've done.
12:11Igor, you're approaching this from a slightly different perspective in the sense that the other panelists are talking often about different impact opportunities.
12:21But you have spoken about, at the end of the day, building a successful business is first and foremost, and that's what enables you to drive change at scale.
12:31One of the things I really admire about WorldQuant is the ways in which you've gone into countries where hedge funds have not spent time, where you've really created these extraordinary talent pools and developed these ecosystems in a way where business really is this enabler of opportunity, but you're investing in human capital potential where others have overlooked.
12:53Can you share that strategy in your approach?
12:56Yes, thank you.
12:58Sure, we have 26 offices in 13 countries, some of these countries like Vietnam, where we have virtually no competition in the hedge fund space.
13:13And we entered these countries because we believe talent is distributed uniformly around the world, opportunity is not.
13:23And so we go there, we get the best and the brightest, and we teach them our trading processes, and then they become part of the global WorldQuant ecosystem.
13:41And they do well generally, and the multiplier effects kick in, and it helps other businesses in the local economy, and it's just a good thing for everybody.
14:02And we have kind of, you know, we have like a pyramid, right?
14:08First, we have to make the money.
14:10Once you make the money, you can decide where to give the money, who to give the money to, how much to give the money, and how to do it.
14:23And I understand that in the USA, about 2.9% of GDP goes to philanthropic ventures.
14:35I also understand that the target from different sources, some of them biblical, might be 10%, so we could be giving more than we're giving.
14:50But first you make the money, then you decide how to distribute it.
14:59And how to distribute it, we also have our ideas, we invest in education, our own education, we've created the WorldQuant University, which gives a completely free financial engineering degree in quantitative finance,
15:18graduates about 1,000 to 2,000 people per year, which makes it the biggest such program in the world, and education is a program that spans multiple generations, it's a gift that keeps giving, and so that's what we do in a nutshell.
15:44Well, it is easier said than done to be able to develop these talent pipelines in some of these markets, and so to do so at scale, and then to take those learnings and really create this multiplier effect has been really exciting to watch, and many lessons learned, I'm sure, for all of us.
16:04Michael, I'll go back to you, you talked earlier about these new models and ways in which capital is being deployed, it's being deployed differently from a number of different perspectives, just how quickly, the diligence, the trust, these co-labs, but at the end of the day, when the money goes, you know, is put forth, what is the different dynamic now in terms of how you measure impact, when many of the things that you do, for example, I know you did a recent documentary,
16:32the sort of cultural narrative, similar to you, Bing, those are these intangible areas of impact, but how do you think differently about measurement and communicating that in a way where you're also really setting new benchmarks as for what success looks like?
16:49I think measuring has always been tricky in the philanthropic world, and what we're trying to promote, which is not our idea or something super novel, but I think it's really important, is this notion of trust-based philanthropy.
17:05Because you've created enormous wealth over here doesn't necessarily mean you have the expertise to give it away super intelligently tomorrow in another aspect of the economy like philanthropy,
17:18so the idea of trust-based philanthropy is once you've done the work, which starts with, if the issue is ocean health, as an avid lover of oceans and someone who cares passionately about that, I'm the first to admit, I don't really know, or at least didn't before we did the ocean health co-lab, what the levers are for ocean health.
17:40How do you ultimately build a portfolio of world-class, not-for-profits that are going to have as much impact as possible in solving ocean health and ultimately climate change?
17:51So finding the partner that really understands ocean health has spent decades looking at ocean health from all aspects, finding partners that operate within ocean health, and ultimately creating that sourcing mechanism of philanthropic organizations within ocean health, and then an expert that can vet and diligence those like we would on the investing side.
18:15That to me is the critical piece of ultimately having the confidence that the capital you're unlocking is having the best chance possible of going to organizations that are proven and that are scalable and have been vetted by an expert.
18:30Once you've done that work, there needs to be an element of letting go.
18:34There needs to be an element saying to the organization, this is a multiyear commitment.
18:39We're not going to impose our KPIs on you, but rather what are the KPIs we should look through, and how are we going to hold one another accountable over the course of the next few years?
18:49And so what you're doing is you're letting the organizations articulate what's really important to them in terms of measuring their results, but you're also giving them the freedom to go do the work and not perpetually fundraise and not perpetually try to put a square peg through a round hole by fitting, you know, our, you know, investment KPIs.
19:09So I would say it's really about this process of getting to the place where you can have trust-based philanthropy.
19:18And I would imagine it's an opportunity for your funders, right, in a very different way to let go and create a different framework for how they traditionally invest in any areas.
19:31Erin, I'll turn to you because it requires, again, these new models and these new frameworks in terms of how we look at impact.
19:41When you look at the work that you're doing at Pivotal Ventures, there's many traditional frameworks and biases that are inherently built into who has a seat at the table, how capital is deployed.
19:52You've done some really creative things in terms of new measurements or ways to assess opportunity that actually opens the doors and really creates access points that didn't exist before.
20:05Can you talk us through a few examples of that and how you think others can take those insights and be able to think differently about how they look at these opportunities?
20:15Sure.
20:17It's, again, it's not about lowering the bar, it's just reframing it.
20:21And that's something that I think is incredibly important to remember when you're approaching and coming at this set of issues.
20:29You know, there are sort of three parts of our process that I want to quickly walk through.
20:33One is being willing to invest early.
20:36And I can point to an example.
20:38We incubated and ultimately anchored a fund called Magnify Ventures out of our office at Pivotal that's investing in technology to support modern families.
20:47Now, this was five, six years ago that we started doing some of this research.
20:50And we actually sized the care economy as a $648 billion market.
20:55That's bigger than the pharmaceutical industry.
20:58But no one was talking about it.
21:00And we're all caregivers at some point in our lives, right?
21:02Whether you're a parent, you're caring for your own parents, people in your community, neighbors, friends, et cetera.
21:08But no one was willing to kind of step out and take that risk.
21:10So once we saw that opportunity, we were able to come in and find a team and to support them early with that capital for them to start and start to prove out that thesis.
21:21We're housing a few investments, giving them that runway to then raise the fund.
21:26And they're out in market now for their second fund to continue to prove and build on that thesis.
21:32So it was a willingness to go early and bring others along with us.
21:35Two, it's looking at some of these markers, like a track record, for example, and trying to assess, you know, what is the risk that we're really wanting to underwrite when someone says, well, I need to see, you know, decades plus of investment experience or Y number of deals.
21:54You know, that's structurally going to limit who might have access to the capital and a seat at the table as they're raising their fund.
22:02So particularly at the early stages in adventure, what are the other bits of your life story that are unique and relevant to your investment thesis that we can look back to over time to build this mosaic of what is your track record?
22:15So as an example, maybe you were an operator.
22:18Your thesis is, you know, I'm going to support these companies in a certain way at this stage, leveraging the networks and the experience I've had directly as a founder myself.
22:27So let's go back and do dozens of reference calls to understand and underwrite, okay, how you did that and, again, how it's going to directly apply to your investment thesis.
22:36You know, that might not be demonstrable in a set number of deals or a set number of companies that you've already invested in or Y number of exits.
22:44But if I can draw the through line back to your lived experience and the work you've done in the past and how that's going to tie to the thesis that you have today, you know, that creates the space for us to, again, come in and take those risks.
22:57And the third piece is, again, being very transparent and open and sharing with others, you know, what we're doing and creating the space for them to come along with us.
23:05I mean, I look at all of us on the stage, and Bing and I have had many conversations about, you know, deal flow and opportunities to collaborate.
23:11And it's not just about, you know, pivotal in our platform alone.
23:14It's what can we do to bring others along with us to prove out that case and test those models and bring more capital to bear for these founders and fund managers.
23:24And then these new models, Bing, in your world include really this pioneering way of bringing together this interplay of culture, capital, social change, and activating it.
23:37When you think about the opportunities in front of you, as we talked earlier, many of these things are intangible, you know, types of things.
23:45But how do you advise others in terms of leaning into this interplay of maybe nontraditional things that really can complement and accelerate impact and opportunity in ways that previously were overlooked?
23:59I think there are sort of two approaches.
24:01One is we often say that money can't just be green.
24:03It needs to be gold, which means it needs to be good and great.
24:06So the first is actually a mental shift.
24:09For instance, most nonprofits or many nonprofits are just not well run.
24:13And 90% of their annual income comes from a gala with a bunch of celebrities that don't care about them.
24:17That is alarming to me.
24:19And so we need to teach our philanthropic leaders to think more profitably of what are the recurring sources of revenue and also multitudinous sources of revenue beyond and or in addition to the great foundations of the world.
24:30The second is looking at all of us, particularly marginalized folks or marginalized causes, as coming not from a place of punishment or victimization or charity, which immediately is pejorative and will often be treated with less, how do you say, less diligence, but instead coming from a place of power.
24:46So I'll give you an example of the Asian diaspora.
24:48Harvard Business Review says we're the least likely demographic to be promoted to management, but actually we're the most successful founders, one could argue, which means we're actually the most successful managers.
24:5743% of the companies that have IPO'd in this country in the last two years have at least one Asian Pacific founder.
25:03That is startlingly high.
25:05And so and then consistently for over 40% this year, the force minus list is also of the Asian descent, and many of them are our deal partners and my LPs, my bosses, thank you.
25:12But that's the second sort of mental shift, I think, in the broader world.
25:16The second set as a good Taoist is both inductive and deductive.
25:20I think a lot of times in philanthropy we focus on the cultural imperative or the character-based imperative, when that ultimately is fine and well in God's work, but not sustainable.
25:28Instead, we focus on what is the commercial and critical imperative.
25:32In venture, this is really obvious.
25:34What are the markups, what are the exits?
25:36Pretty straightforward.
25:38Within our content fund, the sister fund, our venture fund, it's the exact same thing.
25:40What are the multiples on production and or distribution acquisition?
25:44And then on the critical side, what awards are we winning and what percentage does that represent?
25:48Secondly, and it is in that order, as offensive as it may seem, what are the numeric cultural dismantlements that we're actively changing?
25:57Whether it's making sure that women are 51% of those who are receiving capital, whether it is in the press, the mindshare that we're changing, what does that delta look like over time?
26:07And then the final of the hilariously alliterative Cs is character.
26:12My generation is now millennials in Gen Z expect that purpose is profit and profit is purpose.
26:17And so what that means at a functional level is you can no longer just amass an immense amount of wealth and capital if you are a candidly bad person.
26:25If you are harassing other individuals in any form, you are not acceptable anymore.
26:29Those days are over.
26:31And so expecting great character to complement that cultural dismantlement is the other sort of secondary consideration that we've used that has really resonated, I think, certainly with our generation and I think a lot of our partners as well.
26:42So we're talking about underutilized tools or ways to be able to think differently about these problems.
26:48Igor, you talked about before about the belief that empowering global talent is imperative in terms of the ways in which you approach your business, but also utilizing predictive technologies and as ways and the work that you're doing at WorldQuant to be able to really address some of these societal issues at scale,
27:09the compounding effect of the work that you're doing and the insights to be able to better tackle these problems.
27:15Can you talk about the work that you're doing in the context of WorldQuant, but different ways to think about that, applying it to other issues more broadly on a global scale?
27:25Well, if you say what AI is, AI is basically prediction.
27:40So prediction is changing the way businesses operate throughout anything.
27:50And now that we have large language models, really the amount of disruption that has to happen is tremendous.
28:04You can literally pick a business and it's obvious what to disrupt about it and what not to disrupt about it, how to put it together.
28:18There are legacy businesses which maybe cannot be disrupted too much and there are new businesses which are created as a result of the AI technologies.
28:34So at WorldQuant Predictive, for example, we have just created a process for creating a new company every three months.
28:48There are so many opportunities and there are so many things to improve that this is just what should be done and everybody should be doing it.
29:04It's not unique to us by any chance.
29:08Well, you're still doing it in remarkable ways around the world.
29:12And again, it's one of the things that stands out is the scale at which you all are working.
29:18The pace to be able to bring that pace of innovation and opportunity and the business sector to scale the way that you're doing in other arenas is really incredible.
29:29So thank you to all of my panelists.
29:31I sleep better at night knowing that leaders such as this exist in the world and doing the work that they do.
29:37So thank you to you all.