221 | Getting Companies to Race Towards Positive Impact with Tanay Tatum-Edwards
Our guest this week on the pod is Tanay Tatum-Edwards. Tanay is a the Founder and CEO of FreeCap and has nearly a decade of experience building and growing social enterprises. FreeCap is the only ESG data provider with a criminal justice lens.
Resources mentioned in this episode:
Getting Companies to Race Towards Positive Impact: Interview Transcript with Tanay Tatum-Edwards
Transcription by Otter.ai
SPEAKERS
Paul Zelizer, Tanay Tatum-Edwards
Paul Zelizer 00:02
Hi, this is Paul Zelizer, and welcome to the Awarepreneurs podcast. This podcast is all about the intersection of three things: conscious business, social impact, and awareness practices. Each episode I do a deep dive in with a thought leader in this interview, someone who has market tested experience, and has already transformed. Before I introduce our guest and our topic today, I have one request. If you could go over to Apple podcasts or whatever app you're listening to the show on, hit the subscribe button, do review, it helps tremendously. Thanks so much for considering. Today, I am thrilled to introduce you to Tanay Tatum-Edwards. And our topic is Getting Companies to Race Towards Positive Impact. Tanay is the founder and CEO of FreeCap, and has nearly a decade of experience building and growing social enterprises. FreeCap is the only ESG data provider with a criminal justice lens. Tanay, welcome to the show.
Tanay Tatum-Edwards
Thank you so much for having me, I’m excited to be here.
Paul Zelizer
When I got a sense of what you all were doing, I was like, wow, this is fabulous, fabulous. And such important and unique work, and I can't wait to let our audience learn about it. Before we do that, today, get into the work and how you got into it. We're called the enterpreneurs. And one of the ways we like to get to know somebody is to ask you about a wellness or resiliency practice that you use to resource yourself for this really important, but not always very easy work.
Tanay Tatum-Edwards
So I always try to do at least one activity a day, that doesn't require technology. So whether that is cooking, and using actual cookbooks for the recipe so that I have like using my hands and feeling it. I also picked up painting throughout the pandemic as well. So trying to be really intentional about doing something that doesn't require me to look at my phone, or my email has been really great for resetting myself each day. What is a cookbook? Anyone know? And
Tanay Tatum-Edwards 02:11
and, you know, like, people don't realize this, but a lot of a lot of these amazing chefs, because they make money off their cookbooks. They don't publish their best recipes online. So do you want access to the good stuff? Sometimes you do have to pay for it. And what's one of your favorite things to cook? Is there like a particular kind of cuisine? Well, I'm I'm from Central Florida, so I love anything Southern.
Tanay Tatum-Edwards 02:35
So especially when I get get homesick, I tend to make anything from cornbread, I have three different cornbread recipes, depending on how I feel. So yes. So this whole work about data and building a platform that helps make transparent, like what company's relationship is to the prison industrial complex. And if you don't know what that is, listeners, we're going to get into that hang on that whole intersection of justice reform and race and inequality as it shows up, how did you get really passionate and say, I am going to focus? My waking hours, right there? How did that come to be? So it's not an there are interest on a single moment where I decided that I was going to do this work. I think in some ways, it's it's a culmination of a lot of moments. So I grew up in a community where I saw some incredibly smart people who were who ended up in prison as opposed to college. And I thought, Okay, this doesn't, this doesn't make sense. And so when I went off to school at Vassar, I had the opportunity to study under some of the leading minds who were focused on the prison industrial complex and structural racism, and how these individual actions by people create systemic problems that then lead to the outcomes that we see, particularly around the prison system. And so I, I had that academic training. When I graduated from college, I thought, Okay, I have this academic training, I understand this topic area, I want to do good in the world. Let me figure out how to do good in the world. And I thought at the time, the only way I could do that was through the non profit space. I also had an itch to travel and see the world. So I ended up finding myself in international development because it allowed me to do both of those both do social good and see the world and repeatedly over and over again, I would build do these awesome projects and South Africa and Ecuador and would
Tanay Tatum-Edwards 04:54
be able to create change in a small way, but didn't feel like
Tanay Tatum-Edwards 05:00
The solutions that I was working with were scalable.
Tanay Tatum-Edwards 05:04
So I decided to go back to graduate school in order to learn what are like scalable solutions to create social change. And around that time is when I got introduced to finance and impact investing. And I did not know that there was a way that you could leverage capital markets to create social change until that moment, and this light bulb went off in my head. And I thought, wow, that this is it like we can use these scalable tools depend do it on the impact areas that we care about.
Tanay Tatum-Edwards 05:41
So when I left, the Fletcher School, I got my first first job in Asset Management at microbus Capital Management and was able to
Tanay Tatum-Edwards 05:51
travel across the country and talk to people about their interest. And I'm using finance for good. And I repeatedly would hear these echoes of interest and racial justice investing. And then I remember one conference in particular, there was a panel and someone asked, okay, we know we care about racialist investing, what are some products that we have, we can invest in, and the panel was, I mean, there were crickets to be honest. And I looked around the room and I'm like, okay, there's a couple 100 folks here, I'm one of a handful of people of color. One of I think two or three maybe black women in the room.
Tanay Tatum-Edwards 06:35
If our industry is going to create solutions to this particular issue, we need people who have the right lived experience, to be able to, to create it. And so at that moment, I knew that even though I had done all this academic training and professional experience, your national development, my work was going to bring me back to working on, on issues of race here in the US, because of the experiences I've had in my community.
Tanay Tatum-Edwards 07:02
And so that's how I was able to, to lean on my academic experience in college, also reconnected with a loved one who does come home from prison about his experience with the different companies that were both profiting off of his labor while he was there, in addition to the exorbitant fees that we had to pay to remain in contact with each other. And just this light bulb went off that in my head that Okay, there is there, all these companies are profiting off of mass incarceration, we have capital market levers we can use to reshape their ai tivity. But no one has has explicitly made the link between this and a racial justice issue within the investing space. So once I saw that I couldn't unsee it. And
Tanay Tatum-Edwards 07:49
thankfully, it was able to, I found out that I was a finalist for an Echoing Green fellowship. And I said, Wow, okay, this is enough validation for me to quit my job and do research and see if it's see if this is a real
Tanay Tatum-Edwards 08:03
market opportunity. Thankfully, I won the fellowship. So quitting my job all worked out. But But yeah, I definitely took that, that leap of faith after having those experiences.
Paul Zelizer 08:15
I love these today about looking for scalable solutions to social change.
Paul Zelizer 08:23
And so many of our listeners, partially because we don't know each other that well, but my history is 15 years community mental health around many of the social impact areas, you know, racial inequalities, and all the way that shows up and trying to help families with restorative practices, substances and family violence, we're showing up in families and how to do that in a trauma and culturally informed way, etc, etc. And I burned out after 15 years. So anyway, I just say, I'm seeing some
Paul Zelizer 08:58
similarities between our stories. And so many of our listeners, when they reach out, that's one of the things they love about our podcasts is like, wow, I'm making a small difference. But like, I want to do more, and how do I do that? And I love listening to people who are thinking about that in very intelligent ways. So I just want to make that connection for our listeners. And also just say I saw related to what you were sharing today. Thank you for having the courage to step in to looking for more positive impact. I really appreciate you and thank you for doing that.
Tanay Tatum-Edwards 09:31
Yeah, absolutely. And, you know, one of my mentors told me, because I've also I mean, I think anyone who does social change work has probably experienced burnout at some point. And he told me that I'm running, this is my life's work, and I'm running a marathon, but I need to run it like a marathon and not a sprint. Which was a difficult lesson for me to learn when first starting to build the company cuz I wanted everything to happen immediately. But as I've, you know, have the have had these experiences and thinking about change at a at a scalable in a scalable way. I mean, it happens over decades. So being able to pace yourself as important.
Paul Zelizer 10:12
I'm literally an ultra marathoner. I'm getting ready for my first 50k on October 30. And I recently posted on social media, it's not a sprint, and I crossed out the word sprint, strike through and say, it's not a marathon. It's an ultra marathon. Right? Like, even my marathon paces. As somebody who's burned out pretty bad trying to do social change work like I've had, that's been one of my biggest lessons, like even my marathon pace is too fast. I've really had to learn. And it's part of the reason we're so passionate about well being, it's literally one of our core values, listeners. So yeah, so appreciate you saying that today. So to help set the tone, we're gonna get into the specifics of what you built, and how you built it and how it works and where it is and who you help and etc, etc. But let's just some of the vocabulary using, let's make sure people like onboard, what is what does two things I think, really stood out to help people understand what you're doing. If somebody didn't know what the prison industrial complex is, they might not get as much benefit. And also ESG, what is environmental, social governance just for somebody who may be less familiar with those terms, so they can feel more included as we go forward?
Tanay Tatum-Edwards 11:27
I'll start with the prison industrial complex. So there's a whole network of companies that profit off of the mass incarceration system as it exists today. So whether that is through vending contracts with corrections department, from the food contracts, to the providing telephone services, to building prisons themselves, there are certain business models that are more involved than others. So for example, when you think of the, the the largest private prison companies in this country, they only make money, we continue to build more prisons, therefore, they have an incentive to lobby for more prisons to exist. You also see some companies who use the subsidized labor in prison. I mean, I don't subsidize is not the right word for it, they think it's exploit folks who are incarcerated, essentially. So people are getting paid less than $1 an hour to do work, that would be minimum wage work outside of outside of prison. So companies, some companies have direct incentive to keep that in place to help their bottom line. And so they lobby for those policies. So they're the network is quite extensive. And there are, as I mentioned earlier, some folks who are egregious in their actions, I think that the folks who fall more on the the lobbying side and where their business model in order to grow requires increasing incarceration rates fall into that vast spectrum. And then we have folks who aren't necessarily are complete not, I don't know if complacent is the right word. Some are not aware, some are complacent, and like not actively pushing it forward, but still benefiting from it. And I think those companies are the ones that we have an opportunity to, to help educate to be better.
Paul Zelizer 13:24
So one very simple example that somebody who I follow on LinkedIn was sharing very recently was just think about, like you said, Today like staying in touch. So like, if you're incarcerated or your family, your you know, families in the incarcerated individual are trying to talk to each other because they love each other. And there's all kinds of good research of you stay connected, somebody is incarcerated, it's better than if you don't stay connected, right? Just the outcomes and the feeling of mental health and well being. correlations are really hard experience. If you stay in touch those communicate dollar per minute to call somebody or do a video call is like 5x 10x 20x 30x more than somebody today and I on zoom right now are me calling my family last night, right? So is that kind of what you're talking about those companies that are making 10x? What they would make, or 20x would they make from a family just calling each other when they're not incarcerated? That 20x there's a huge profit. It's not just like, what what's the big deal, they put phones in prisons and they make some money off it retagging exorbitant rates for basic like survival needs when you're in prison and make 20x what it would cost anywhere else. Those kinds of things are happening in almost every touchpoint there are certain company food and clothing and like you said, not paying a reasonable wage, and yet you have to work to prove that you're, you know, doing your good time so you can have a better chance getting out. Those are some of the kinds of granular examples that somebody might be wearing. referring to when they're talking about how problematic this system is, is that fair to say?
Tanay Tatum-Edwards 15:04
That's absolutely fair. And again, like, as you said, are kind of suggested, there are some companies that have engaged in very monopolistic practices in this space. And so in, you have an have a group of people who don't have other options or alternatives, which is why they're able to charge exorbitant fees because their people or people are stuck there. So, so yeah, there's some, a lot of predatory behavior happening.
Paul Zelizer 15:34
So let's, let's help people. So that's the practices that you're trying to disrupt. And we're gonna get to exactly how you do that just a second, one more just like, let's help make sure everybody's on the same page in this conversation, this whole idea of ESG, and what it means to be an ESG data provider, that's like core to what you're doing. But that might not be familiar language to everybody who's listening. So let's, let's help. What does that mean? And why is that helpful for somebody who wants to make a positive impact in the world? Yeah. So
Tanay Tatum-Edwards 16:01
I mean, if you it's the term ESG, I would say it's still hotly contested within the industry, like what's ESG versus an impact investor? And I certain people have their own definitions, but the way I think about it is how is you know, traditionally, people only thought of traditional financial metrics and making an investment and so how profitable it will this company be given x, y, z factors that are feeding into it? Now, people are saying, okay, it's not just enough to think about the profitability, you need to think about what's the what are the environmental impacts? What are the social issue areas, as well as governance? So how company manages, is corporate board? their policies in place? And, and how, what are how do those things also impact the viability of the business in the future? I think most people in the ESG space would and there's some research that suggests this as well would argue that companies who are really good on ESG policies tend to outperform in the long term, because they're better actors in our community who we want to keep around. And it also means that they're better, better at managing risk as well. And so there are some a lot of folks in the space who also use ESG as a risk framework, when they're thinking about investments and trying to reduce the amount of risk they have, and their portfolios.
Paul Zelizer 17:32
Sue, you decided, if I understand, right, today, I'm going to go right into there and the way I'm going to help people who want to invest in a more ethical way, and particularly like you said, You looked around this room, and you were one of the few people of color and one of only, like less than 1% of black women in the room. He said, the way I can do this is to help get really good data about what's going on in the criminal justice system. is a particular company one of those egregious companies, or is it one that's really trying to act in good faith and make a positive difference in this way? Is that basically at a top level, somewhere in the ballpark of what you're doing with free cash?
Tanay Tatum-Edwards 18:15
So let me go into a brief story. That's okay.
Paul Zelizer 18:22
What you're trying to do, yeah.
Tanay Tatum-Edwards 18:25
So when I wasn't when I was, I remember going through one of my my 401k. And realizing that one of the real estate investment trusts that we were invested in had private presence in it. And being incredibly frustrated that that was I didn't have an opportunity to screen that out of my portfolio. And so my first goal was actually to create a fund like a like an exchange traded fund, something that was easily available for folks that would divest from the prison industrial complex. What I learned creating that first product, or the the prototype for it was one the data on what people were doing was spotty. And to when you divest, you have to have something that you're putting the money into. And so what were the things I was running away from something, but what was I running towards? So in that process realized, okay, there's clearly like a part of the reason why we don't have the products that we need is because there's not enough data on the market for people for fund managers to design products that consumers like myself wanted. But also what, what are the things that we actually want companies to be doing and how to articulate that and then go and invest in those companies as opposed to spending so much energy looking at and focusing on people who are not meeting our needs. So that's how I came. That's how recap has has evolved. to where we are now where we're focused on a set of leadership criteria for what are best practices for companies when they're engaging with people who are currently or formerly incarcerated. And so we have a set of 10 metrics that we look at for companies, half of those are focused on fair chance, which is commonly referred to a second chance hiring. So making it easier for people who are coming home from prison to get employment. And the second half is focused on prison risk mitigation. So how do companies handle like exposure to predict prison labor and funding contracts and their, and how they manage their suppliers. And so the way we've set it up is okay, these are, these are the best practices for if you want to be an ally and a leader in this space. And then we we rate companies based on that. And so then we have a leadership list, which then makes it easier for fund managers to decide, okay, these are the ones that we want to invest in, and not just divest away from.
Paul Zelizer 21:04
That's such a wonderful service. Notice, listeners, if you've been here around for a while, you know that I have what I call my spiritual highlight, right? So I want to mention this big fluorescent orange highlighter, right? So what I love about what you just shared today, and I think that a lot of folks in the impact space could learn from is it's not enough to just say, here's what's wrong, here's what's causing harm, or here's the impact in a direction that we don't want to go. We got to give people viable options of where we do want to go and I'm hearing you being very thoughtful of baking that into what you're doing. If recap is is that fair to say?
Tanay Tatum-Edwards 21:45
Absolutely, I think I you know, I'm very much into let's find who's doing good work and lift them up so that other people will want to be like them. And, you know, especially when one of the things that when we were designing the model, we realized that it was really important to benchmark companies against their peers so that companies could see Oh, wow, okay, this person in my sector is doing better than me. How can I? How can I get there because we've seen I mean everything from from last summer with George Floyd when you had the first company make a public commitment to donating to Black Lives Matter and in different in causes related to those issues. And the waterfall effect of all the other companies following is really important. And so in order to do that, you have to start somewhere by by benchmarking them against each other.
Paul Zelizer 22:42
That's our episode title today getting companies to race towards so thank you so much for helping us get up to speed and listeners, Thanks for your patience if these are terms and frames you were already familiar with, I really wanted to work to make sure as an inclusive episode as possible. So now help us today understand, okay, like, what does that look like? Like Where's free cap at in terms of being able to provide this data, these companies are really egregious, these ones are rocking it go put your money there, if this is something that's really important to you in terms of racial justice, and disrupting the prison industrial complex, like yeah, like what's on the ground? What's, where is the company as an enterprise right here right now in terms of products, clients, etc.
Tanay Tatum-Edwards 23:28
So, I mean, this is really a really exciting time to be chatting with us, because we've spent, as I mentioned before, iterating, two years iterating on different product models, building a product waitlist of a couple 100, folks, and we launched our first data set yesterday,
Paul Zelizer 23:45
Oh, my God.
Tanay Tatum-Edwards 23:48
Thank you, thank you, um, it was very exciting, we were able to do rate, the entire s&p 100. And we have about little over 1000 data points. And it was really awesome to see this. Like, one of one of the in terms of, you know, how companies are changing their behavior, I can think of the financial sector, financial services sector as an example of where we saw companies who, previously like, JP Morgan was the first company to decide, okay, we're gonna we're gonna start of the big things, we're gonna stop lending to private prisons. And then we saw this waterfall effect of all these other banks, who also decided that okay, because they're going to stop doing it because they had, there's an amazing group of shareholder advocates, who led that advocacy committee campaigning as JP Morgan. We saw a lot of banks follow. And so they ended up scoring higher on our metric than when we started doing the research a year ago, because That, that half that that happened so quickly. And where they ended those financing contracts. So again, it's like being able to benchmark people against their peers and showing who's leading and why really gets others to act. on the business side, it was really cool, because, you know, we launched them like, and I'm thinking yesterday, oh, my goodness, I hope it's just not my mom and my husband who's downloading this report. And it's the the folks who have who have been spending the most time on and and reaching out to us or are all folks in the asset management community, which is promising. The way our business model is set up is, you know, we have this information that's free for the public so that consumers and even people who are justice justice involved or who have formerly incarcerated who want to be able to know, okay, who's a company that's going to not discriminate against me, when I go into the hiring process, we made an intentional decision to make a lot of the high level insights free for people to access it. But in order to use the underlying data and to design products based on it, that requires a licensing agreement with us. And so yeah, I am, I'm really excited and incredibly optimistic about the way the community is going to, to utilize it, because we've gotten such amazing feedback in just a short time period, since we launched yesterday, with the full data set.
Paul Zelizer 26:31
When you put years of work into something, and it goes live, and then people actually are using it and getting value and asking questions, what a magical, magical moment. So how wonderful, we get to celebrate that with you.
Tanay Tatum-Edwards 26:47
Thank you, thank you. Yes, there was a lot of I will say one of the things that I did, well, leading up to this was communicating the vision, and why this was important to communities before the product existed. And so I had been in on the conference speaking circuit at all the big industry events, talking about the research, and what was coming and being able to, you know, communicate small parts of it over time. And so when it arrived, people have been waiting for it. And so having that anticipation ahead of time, I think has has really benefited us,
Paul Zelizer 27:25
again, pull out the highlighter folks, big orange fluorescent circle. I know so many caring, impact oriented entrepreneurs, who build a thing, in your case spent two years and times five years, sometimes more years of our life. And it's like after it's built and working on it. For years after Paul, I got this thing and nobody knows I exist. And now like how do I get it out there in the world. And when I heard you to say today, and I just want to like mirror to our listeners, please hear what happened exactly in this free kept journey. And I couldn't agree more tonight. My metaphor is, I'm a gardener, you prepared the soil, you were in the conversation with thought leaders in your space where you wanted to have impact for years, where they were already gathering, talking about the issues and talking about you what you were doing before was done before it was perfect while you were iterating making mistakes and learning along the way. But the soil is planted. So when it goes live, there's already people who are excited about him, I'll help you get the story out there. Is that a fair summary of what I think I heard you say?
Tanay Tatum-Edwards 28:40
Absolutely. And to add to that being so close to those that our you know, our customers allowed us to iterate in a way and get feedback on what we were building. And so you know, when I first started, I had this rubric of 40 metrics. And like we have to it has to be this perfect thing where in in very, like detailed focus has to be 4040 metrics. And talking to people in my industry was really what they were like today, like the bar is actually much lower than you think. And so we need something, and we need something that we can be communicated clearly. And so 40 is actually too convoluted. And we ended up you know, adjusting our framework accordingly. And I was only able to get that kind of feedback because I was in the space with the folks who want to use this product and talking to them about how they're, how they would use it and what their needs are. So it's both the you know, the getting your brand out there as well as getting market feedback in real time.
Paul Zelizer 29:51
Couldn't agree more. Thank you so much for sharing that wisdom. So let's do this. When we come back. I want to hear more about where you see it's going and how how that process worked of designing something with the people that were going to use it. I'm not done there, I think there's a lot more for our listeners to learn about that. And also, yeah, where you think you're going, before we do that, I just want to take a quick pause and hear a word from our sponsor. So if you have a business, that's about making a difference, you know that it can be challenging to find resources for our kind of businesses. This morning, I got an inquiry, Paul, I need a VA who kind of understands what this language is, as opposed to looking at me blankly when I talk about social and somebody who can read my sales page and just give me some feedback without having to sign up for like a six month coaching package with all these legally. If this sounds like your kind of business, you might want to check out the aware printers community, super affordable membership started $25 a month, we have over 280 members. And that's what we do with each other. We share resources and ideas. And can you talk to me about pricing for this kind of sector, Facebook ads, designers, and other resources for the kinds of realities that our audience faces. It's called the enterpreneurs community. And you can find out more by going to a where printers.com forward slash community. And I want to say a huge thank you to everybody in the ware printers community who sponsors this podcast. So today, in the second part of the show, we were already starting to get there. But we'd like to put on our granular social entrepreneur classes. And so help us understand a little more. So we got the idea. And again, I love that you design the product with the people who are going to be using it. And they actually said you're working too hard, make it a little more simple the bar is when we talk about this are leading conferences in our space, nobody knows what to say, and there's crickets. So make it really simple to help us kind of start to move in a positive direction here. And we'll learn together from there as is kind of something that I hear being said, there's this free version where people can get the top level data. Talk to us about a license where you mentioned that before. So I'm in a financial institution and I want some more granular information here like what is the license even look like? And give us a sense are we talking about I buy it as an I am personally upping my investing game? Or JP Morgan buys it, right? Yeah, just give us a little more granularity about how it works in that license model.
Tanay Tatum-Edwards 32:36
Yeah, so we want as I mentioned before, the it to be a we want as as much as many dollars as possible, flowing through our research, because that means that we are, essentially defunding the prison industrial complex and funding companies who are leaders in criminal justice reform. And so when we look at think about licensing, it's based on the number we're looking at asset managers and people who advise people on their money, as well as folks who manage money themselves and who create funds. And so the pricing model is varies depending on how many assets under management you have, for like, in terms of the product itself. So if we're licensing for a specific if someone wants to use our data, to build or incorporate into their ETF or mutual fund, their ESG product, we would get a small percentage points based on the amount of assets that flow through there. For folks who are advising that process is that licensing agreement is slightly different. But the goal is to, you know, to be working directly with, with business to business leaders, the free version of the report has the high level scores for, for what companies received, and how they compare to people in their industry. And also like mostly talks about a lot of the trends that we saw, so some of our big takeaways, but the data set has, what every individual company scored on the on all 10 of our metrics. And so compet people who are designing products who are advising clients on that, how they manage their money, need access to that granular information, because if you're an investment advisor, you may have someone who are like, Okay, this is I know she's into this fair chance hiring stuff. What we really need is just we want to make sure that we don't have any prison labor in our, in our portfolio, and there's a single metric that looks at that specific area. And so if someone can advise As our client on that, and so they need access to that granular information.
Paul Zelizer 35:04
Great. Thanks for that. So here's a question for you tonight. Again, our episode titles, getting companies to race towards positive impact. And it sounds like you're thus far, literally only a day, 24 hours of recordings, it's so exciting. But so far, the feedback and the, you know, you've been working with your ideal client, asset managers and asset management companies for quite some time and the reception, as best I'm hearing it sounds like it's been pretty warm, and people want this and they're working with you. When we're working on hard issues, like inequalities, and how that shows up in the prison industrial complex, it'd be easily for somebody to get offended or to get turned off in Whoa, I don't want to hear this data that my company isn't doing so good, or my sector isn't doing so good. How can What did you learn about being skillful as the data is coming in and presented in a way that engages people instead of alley?
Tanay Tatum-Edwards 36:09
That's a really great question. When we were doing the research, we wanted to make sure that companies had a chance to, to disclose in case there's anything that we had missed. And so we actually sent a survey out to all that, like after we collected the data, send a survey out to all the companies who are in our, in our data set with questions and asking them, they have supplement supplemental material. In that process, it was really interesting, because the companies who tended to score better anyways, were the ones who got back to us. Um, because they are they are the leaders in this space. And so I guess so to get to, to get to your question about what we, how we've been intentional about focusing on like, not alienating folks, for like we won, we gave them an opportunity to speak up. And so we can always use that as a defense for us as an organization. But to the way the report is written, the way that in the reason why the our public facing piece of it is, these overall company scores and rankings is so that you see who is doing the best. And that you see the models on what we want to replicate, as opposed to who is doing the worst because, because because that's not necessarily moving the ball forward in the direction we want to go.
Paul Zelizer 37:50
Just genius, how you're doing that. So again, listeners, I hope you're hearing how much care has been baked into what pri cap is doing in today. That's your leadership. I'm sure there were smart people around you, but you listen to them and had your own wisdom.
Tanay Tatum-Edwards 38:08
Thank you. I appreciate that.
Paul Zelizer 38:11
One of the things we talked about before we hit the record button, you and I today, we talked about what it's been like you had this idea, you're like, Oh, this is a really great idea. And as we discussed, there's years of research to build and to do the research and to even identify 40 indicators that we're going to Trumps No, we only need 10. Well, that took years. And we talked about how you ran into some challenges like company like this, especially when you're building something at this kind of scale, it oftentimes times takes capital to get up and running. You need money to live on while you're building something unless you happen to have, you know, a source of money that is already in your disposal. Yeah, you've worked and made a ton of money because you invented something your family's able to give you the most of our listeners, that's not our situation. Most of humanity. That's not, and you ran into some real significant barriers, trying to access that capital that you needed to start free cap. Can you tell us about running into those barriers? And then can you tell us you got really creative about how you navigate it? Can you tell us about that?
Tanay Tatum-Edwards 39:20
Yeah, so when i when i was looking around at other data providers, I'm like, wow, all these folks were independently wealthy when they started their businesses, and so they're able to hire some amazing teams, or they raise a lot of capital pretty quickly. And, and I went out thinking, Okay, that's what I have to do to be a data provider. I'm there. I had unique challenges accessing the VC space as as a solo founder as a black woman. And everyone just kept telling me that they didn't think that there was enough interest in, like having impact in the ESG space for something like this to grow. And so it was incredibly It was incredibly frustrating. And I and I ended up having like reaching burnout with with fundraising to be honest from VCs. But I was able to use leverage fellowships in order to get funding and to get access to networks and mentors and supporters and community and realize that, you know, a lot of those folks who didn't don't understand what we're doing, shouldn't be on our cap table anyways. And I need to start talking to the people like I'm hearing something different from the people who want to buy it, then the people who are like in the VC space, and even though VC is finance there, they're not, they're not having the same conversations as folks in the asset management community we're having. And so I say, Yes, I was, I was grateful to be able to, to, to join both Echoing Green and Roddenberry fellowship community and then go through the Halcyon incubator, which was a simple, which is essentially like my mini MBA and how to start a startup business and structure. It. I also relied incredibly heavily on graduate students and undergrads to conduct the research as well. And, you know, like, went back to my graduate school, talk to Professor she's like, Yeah, well, we'll give academic credit to students who are willing to write their master's thesis for free cap. That was huge that was touching he that was still like, you know, having these people who already had like four or five years of work experience in the sustainability space in the ESG space, be able to essentially get academic credit to do work for us was was really big and helping us get that first set of research off the ground. And we were also like, yeah, I'm able to leverage in kind support on the legal side to to get things structured, so levered, like leaning in on that community, relying on on, on those fellowships for, for the early seed funding was was really important to getting us to the point we are now.
Paul Zelizer 42:33
I'm so sorry that it was such a struggle trying to get started. And I believe you, and I certainly have heard it for many founders, many founders of color, and especially many women founders of color, we know, less than the 2% or 1%, I can't remember off the top of my head, a tiny fraction historically, of VC funding goes to female founders of color. So I believe you and I'm so sorry. Yeah, I
Tanay Tatum-Edwards 43:01
mean, it's it's less than it's less than it's like a point something percent for not even 1%. Okay, yeah. When you when you're looking at Black and Latina founders specifically, it is small, and I saw the number went up recently. But I think that was that was fueled by like one or two companies that did that.
Paul Zelizer 43:26
Big Big shout out to a former guest on the podcast, I'll put a link to her episode Yasmin Cruz hurryin, visible hands and everything they're doing and visible hands to specifically addressed this issue. So and it's still a very significant struggle that many in our networks are dealing with. So just good on you for getting creative. And being just an innovator and working against all the inequality that's baked into the system, sorry, how to do it. And thank you for doing it.
Tanay Tatum-Edwards 44:02
Yeah, I appreciate that. I mean, there's no way around it fundraising is is was a miserable experience. And even now that I am on the other side of it, I am just so grateful that there we go, this is a very much a reframing of what happened, but I'm really grateful those people aren't on my team. Because I am very much trying to find there are people who support women of color. And there are people who are allies in this work. And those are the people that I want to build with and create a table with. And so if I have to convince you of my work of my worth, of why my community matters, and then talk to you about the business, it's just it's too much work for me. So yeah, so very much have been like learning from that experience, too. to focus on folks who who are allies, meaning a new question, whenever I get an email from a VC or a funder, I asked them explicitly how many founders of color and how many women do they have in their portfolio? And they can't answer that question. And it's not point there's no point as having a follow up conversation.
Paul Zelizer 45:21
Really wise. So give us a sense, like, look ahead to yours? Or do you want free cap to be how much scale Can you imagine how's the product different are the people who are buying it are your customers the same are there changes that give us a sense of what's coming down the road.
Tanay Tatum-Edwards 45:44
So the goal is to be able to replicate, you know, this, this 100 set 100 companies is it's meaningful information, because so, so much of an investable assets are in the s&p 100. But we to really get to the scale and to reshape the way where we're aligning capital and thinking about risks, we need to have 3000 companies going through this rating rubric. And so that requires building the technology to, to get us to that kind of scale. So that's a big thing that will happen is we'll be able to have more companies covered for our clients. And also, I hinted at this at the beginning of the podcast, but within the ESG community, there's this back and forth debate, there are some folks who are very much like this is a risk mitigation tool. And we use it to help manage risk, because we think that's because we think, you know, climate change is bad, therefore we manage risk. And that's a that's a good reason to use it I'm I don't have any doubt about that. I think there's another pool of people who are very much interested in making sure their money aligns with their values and using ESG as a tool for change. And the way our methodology works is that we go directly to folks who are directly impacted, we look at, okay, if we want to create, what metrics can be measured, that will will create will create tangible, positive change in the world. And so we start with that frame, as opposed to starting with the risk mitigation frame. And it often ends up complementing each other anyways, but I think that impact first frame is novel in our industry. And my goal long term is be able to, to replicate that to other social justice issues, so that we can, you know, scale out that s component of ESG. And be able to Yeah, have have more more metrics and more frames and more lenses that, that reflect with the rest what we value as a society.
Paul Zelizer 48:03
Well, what a beautiful vision I'm thinking of, don't remember the episode number, but I'm thinking of Kat Houghton, who created a platform to mental health. She described it as like Facebook, for families with autism. And it's a mental health platform that allows people to share and kind of like a social network kind of way, but it's all HIPAA compliant, and families can crowdsource resources and all sorts of thing. And the people who created the software can get resources into the hands of families who are struggling thing just by posting, wow, this is what's going on in our family, dealing with our young person who has autism, and learning about how to use that with autism, they're going to go into all kinds of other spaces, like the next one they're working on is actually psychedelic assisted therapy around depression and anxiety and trauma, etc, etc. Like once they got one thing working in a HIPAA compliant way around a mental health issue, they could go to many different kinds of mental health issues, using the same template but nuancing it so anyway, such a great idea. And I'm really, really excited I can imagine the kind of scale you can work towards, as you polish it in this arena, how you can go to other adjacent social impact issues. That's just a gorgeous, thank you. Today, I could hang out with you all day, you're obviously super smart and are doing awesome. And you're busy woman and our listeners are really busy. So I don't want to do that. If there was something you were hoping we were gonna get to today, and we haven't talked about it, or there's some wisdom you want to leave our listeners who are working really hard to create successful impact businesses. You just want to leave them with something as they, you know, go back to their lives after listening to this interview. What would that be?
Tanay Tatum-Edwards 49:56
As I mentioned earlier in the podcast, when when I I reached burnout, especially as a solo founder, I leaned heavily on other entrepreneurs to help me heal from what I had experienced fundraising in the in the VC space, and to motivate me to keep going. And so if you are building something from scratch, that's different, especially in the social, social entrepreneurship space, it's going to often usually takes time for people to not everyone gets it immediately, because what we're doing is so different and innovative, and you really need to be around other people who do and, and who understand the unique journey as an entrepreneur to support you. So my piece of advice is making sure that you, you find those people as early as possible.
Paul Zelizer 50:58
Wonderful advice, an absolutely fabulous to have you on the show today. tonight. Thank you for everything you share. Yeah, thank you so much. It was great talking to you. So that's all the time we have for today. interview. Thank you so much for listening. Before you go. Just one quick reminder, we love listener suggested topics and guests. So if you have an idea of something you think that'd be great to do an episode on, please go to the website, where printers calm and go to our contact page. And you'll see there the three criteria that we use, we try to be really transparent, here's what we're looking for. So if you take a look at that and say yes, this would be awesome. Please, please, please send in your ideas. For now I just want to say thank you so much for listening. Please take really good care and these intense time and thank you for all the positive impact that you're working in our world.