Hello, everyone. Thank you for joining today's webinar, A Chat with Kevin O'Leary, ESG Investing for a Better Future. I'm your host, Mandy McReynolds, Senior Director of Environmental, Social, and Governance at Workiva. I'm so glad you're here, and before we begin, I have a few housekeeping items to help our webinar go smoothly today and for you to engage with us. First, we want you a part of the action. So at the bottom of your screen, there are different engagement tools we want you to use. Move it around to suit your preferences. Second, please be sure to check out the additional resources that Workiva has provided for you. We've got a great e-book on ESG, as well as additional webinars coming up that might be of interest. Next, let's take a moment, and if you have time, please fill out the survey questions for us. Your voice is critically important to help in guiding the rest of our content. 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I have the distinct honor of introducing today's speaker, Kevin O'Leary. As a Shark Tank fan, I spent time watching the show with my family. What I'm most excited about today is we're going to dive into Environmental, Social, and Governance, otherwise known as ESG Investing. We're going to move quickly through this session as Kevin shares his thoughts and then have a rapid-fire Q&A together, and I promise you, we will cover each of those topics, E, S, and G. So before we hand the mic over to Kevin, let's have some fun and test out your skills with our polling. Are you a Shark Tank fan as much as I am? Yes or no? We'll give you a moment to answer that polling question. All right, it's time to head into the main event. Kevin O'Leary, top entrepreneur, author, speaker, venture capitalist, focusing on his investments that make money and are environmentally friendly. He calls himself an eco-entrepreneur. We provided our audience with insights around business, finance, as well as financial literacy. O'Leary is an active photographer, watch collector, guitarist, and of course, one of my favorites is his books. They are wonderful financial advice for everyone, from women, money, and finance to your families. Let's turn it over and hear the short intro video from Kevin and his team and what he has to share with us today. You can't come in here not knowing your numbers. This is the Shark Tank. We're going to kill you. People ask me all the time, why are you so mean on Shark Tank? I'm not mean. I'm just telling the truth through the experiences I've lived. I was born into a working-class family. I struggled like everybody else did. My mother was Lebanese descent. My father was Irish. He was a salesman. He sold winter clothing for children. I was about seven years old when my father died. Those were very tough years for me. My dad died when he was 37 years old, leaving my mother alone with two children and a very uncertain future ahead. Life being what it is, changes all the time. My mother met a fellow named George. The two of them married, and life changed dramatically. My stepdad joined the ILO, a division of the United Nations. We lived everywhere. We moved to Cambodia, Cyprus, Tunisia, Japan, France, Switzerland. Every two years, a different country. Looking back at all the unique cultures I've been steeped in, you understand everybody's challenges in the world, not just your own. My stepdad's a very pragmatic individual. He tells it like it is. I think I learned that trait from him. When I got out of college, I wanted to be a photographer and a rock star, and I tried being a hippie for a few years. My stepfather said to me, you're going to starve to death. You should go back to school right now. When I graduated, I started my first company, Special Event Television. It made sports programming for the networks. Then SoftKey started in my basement, which eventually became The Learning Company. A few years later, I sold it for $4.2 billion. If you guys loved it so much, how come not a dime from any of you? A lot of people see me as the harsh guy on Shark Tank. It's so not true. Would you rather have me lie to you because I'm worried about your feelings? I don't care about your feelings. I care about your money. A shark that is disingenuous, that tries to keep you feeling good when they know your idea has no merit, is doing you a huge disservice. Today, I'm really proud to be an entrepreneur and to help entrepreneurs so they can create jobs. You don't start a business out of greed or the pursuit of money. You do it for the pursuit of freedom. But I realized in the early years I didn't have a lot of time for my young kids. I was so busy with my business. So now I try and spend as much time as I can with them. Everything you see around you here, I made myself. I worked like hell for it. And I'm not embarrassed about it. I'm proud to be a capitalist. In my spare time, I love to cook. And I'm crazy about O'Leary Fine Wines. I'm still taking photographs. And I love to collect guitars. And oh, yeah, I love to play them too. Like everybody else, I want to be a rock star when I grow up. Today, I spend a lot of time teaching. I tell students, you don't start a business out of greed. It's not about money. Why do you want to be an entrepreneur? To set yourself free. The pursuit of entrepreneurship is about freedom and helping others achieve their goals at the same time. People always ask me why do you keep going, and here's my answer. If you want to help someone, anyone, anywhere in the world, the best thing you can do is to create a job for them. Who does that? Entrepreneurs. I'll spend the rest of my days encouraging people to do exactly what I have done. Become an entrepreneur. Start a business, and create jobs, and above all, support others who want to do the same. For me, entrepreneurship and the freedom it gives is the essence of life. Thank you, everybody. I'm going to take us on a bit of a journey today because it's a unique time in the economy and a unique time in society as well. We are just emerging from an extraordinary event everybody knows about, the pandemic. Going into it, I had private positions in over 50 companies, 54 of them. And what I want to talk about at the beginning of my presentation is what's happened through these last two years, a little bit more than two years. But many of them survived. Many of them are thriving. And unfortunately, some disappeared. They went to zero. What is the difference? What happened between these two groups, these entrepreneurs? And these businesses are across a wide range of sectors. Almost every sector of the S&P 500. There's 11 sectors. We had investments in all of them, in almost every geography, in almost every state, including international investments as well in places like Norway, Canada, Mexico. And so the first thing, and let's advance the slide here, is that everybody on Earth was forced to operate remotely, obviously. No company would ever shut down its offices and headquarters ever if they weren't forced to. And yet, that's exactly what happened. Now, had this pandemic hit just 15 years ago, it would have been abysmal chaos because we didn't have the tools, the technology to communicate the way we have today. And remarkably, while there was so much angst at the beginning of 2020, in February, March, and April of that year, all of a sudden, companies that were providing remote access services, all kinds of different technologies in those days, nobody knew what a Zoom was. No one was really doing video conferencing at any frequency. And today, it's ubiquitous across personal and corporate lives. But the point is that technology was our crutch. It let us diversify away from one single location. And many people started to operate remotely. And it was very much questioned and very concerning, but it worked. So obviously, this was a huge acceleration of adopted technology. If you didn't know how to use video conferencing two years ago, you certainly know how to do it now. And that's in almost every age group. So that was really important. Let's advance the slide, please. Now, you know, corporately, and this is a trend that occurred globally, because obviously, retail distribution, if you looked at a group of companies, like my 50-plus companies prior to the pandemic, this is what the pie chart of distribution of sales would have looked like. 50% of sales, and these are primarily consumer goods and services companies, including technological companies, but the majority of their sales went through retail. 50% went through retail. Walmart, Bed Bath & Beyond, Target, and hundreds of thousands of other retail stores all around the world, frankly. Now, the point about retail distribution, it's about $0.50 on the dollar margin, even for a company like Nike. In the S&P 500, it's about $0.50 on the dollar because you have to pay for distribution centers. You have to pay the retailer's margin. You have to transport the product. You make $0.50 on the dollar. And you have for 100 years. 40% of sales prior to the pandemic, now this is only a phenomenon that occurred 17 years ago, it started, comes through Amazon today. The majority of companies that sell, sell through Amazon. Amazon should be considered a giant retailer. That's what it is. And it's slightly better on margins. You make about $0.60 on the dollar, so 10% more than you do through traditional brick-and-mortar retail. However, you do not get any data on who you're selling to. Everybody is aware that Amazon maintains their own customer database. They guard it jealously. And And often, they'll ship a competitor's product in the same box yours is in as they consolidate orders. And the logo is the Amazon logo that arrives at everybody's business and home. Everybody understands that. The last 10% was, prior to the pandemic, direct-to-consumer from individual companies' websites. Now, the reason it wasn't more than 10% prior to the pandemic is it was very expensive for these companies, any company, to acquire a customer. And very often, that activity, that 10% direct-to-consumer, was a money-losing proposition because the customer acquisition costs were significantly higher than the lifetime value of the customer acquired on that site. That's why it was remained at 10%. There was not a lot of CapEx spent on it. It was just a way to build your brand and consider it a form of advertising, more or less. OK, pandemic hits. Let's advance the slide, please. The first thing that happens is people are pushed out of their office space, and they start working remotely, not just domestically, all around the world. Now, think about that from just management of companies' point of view. Think about that in reporting. Think about that in compliance, logistics. It was very important to start to communicate with each other on an hourly, daily, or sometimes multiple times a day to try and work with teams remotely, and in the beginning, it was a little chaotic, but for the customer, let's think about this for a moment. The customer, the hundreds of millions of people that were in panic, as they should have been as this ferocious pandemic started to advance across all countries, they stayed at home. They went online. They watched television. They listened to radio, but they remained stationary and sequestered. This changed a lot in terms of their purchase behavior and how they communicated with products, goods, and services with all companies globally, so what we started to see was that retail shut down primarily because customers weren't going into retail. Even Amazon itself went to essential goods and services, particularly in the months of February, March, April, and May of 2020, and all of a sudden, the companies that had nascent websites where they basically were advertising goods and services started to explode in sales because they simply went online, told their existing customers. They weren't even trying to acquire new ones. They were just telling their existing customers, look, we're alive, and we can ship direct to you. We've set up on Shopify or whatever platform they use. We're using Facebook to communicate and other platforms. They got much more savvy in the use of social media to communicate their message. And this was just to their existing customers. They weren't even trying to acquire new customers. They're trying to stay in business. Now, normally, when you would do that kind of digital marketing, that kind of digital messaging, you would be lucky to get 2.5% response. But that's not what happened. And this is where the story starts to get really interesting. Now we're talking about March, April, May, June of 2020, when all of these companies, not just my portfolio, even behemoths like Nike, started to communicate direct to their customers and started shipping directly to them. Nike, for example, I keep using that as a case study, was able to, in a matter of six months, do something they thought would take six years. They got to 50% direct-to-consumer globally. Now, why you would care about that is the margins on a direct-to-consumer sale of a pair of sneakers can be as high as 80%. You're no longer paying the retailer their margin. You're keeping all of the sales dollars. So your only costs are customer acquisition, logistics, and manufacturing costs, generally 20% of a product, 22%, 23% of a product. So that business became wildly profitable. Same for my companies. We started getting response rates of 5%, 10%, 15%, 20%, 22% response out of databases of customers that were happy to hear we were alive and still wanted to buy our goods and services, and so that 10% exploded during the pandemic. In many cases, and we're going to look at a case study in a moment, remarkable changes. Companies that should have gone bankrupt are now thriving in a brand new economic model, and I'm going to show you one in a minute, but I want to talk a little bit about what happened in our assumptions. For example, in my own companies, let's advance the slide. I had made the assumption that towards the end of the pandemic, that 15% of our staff were not going to return to the office, that they were going to work remotely. They didn't want to commute anymore. They were in the areas I assumed, particularly in accounting, compliance, and logistics. Those are the people that often work in the cubicles, and they have to commute a half an hour, an hour to the office, and maybe they're raising children. Maybe they're taking care of elderly parents. But the point is, my assumption was, and we indeed, we polled the CEOs of these companies to ask them, what do you think your real estate usage is going to be in headquarters where their nexus, primarily in the states of New York, Florida, Texas, and California? Because we wanted to readjust our costs of real estate. This is just for headquarters, not even talking about retail locations yet. Just headquarters square footage were primarily leased from REITs. And each year, we negotiated 15%-20% of the leases. Even the CEOs, at the end of the day, thought it would be 15% of the staff that wouldn't return. One, five, 15. Well, we have the data now. It's 55%. More than half are refusing to come back to work in an office anymore. They're using their cloud, given the tight labor market currently, to find jobs that accommodate this demand. In our case, even our own operating company that manages our portfolio recently hired a new director of finance. She said, look, I've got five job offers. They're all remote. The only one that isn't is yours. So if you actually want me to consider your offer, you're going to have to bend on this. I said, well, is there any chance you would come in once a week? She said, no. I said, would you ever come in? She said, maybe, but I'm not putting that in the contract. Today, she works for us remotely, doing a fantastic job. My point about this is it's not 9:00 A.M. to 5:00 P.M. It's project-based management. You set tasks. You don't care when the employee gets it done, particularly around compliance and audit and accounting and everything else. It's just get it done by next Friday at noon, and they do it when they wish. This is a new way the economy is running, but we actually have had major savings as a result of this, so let me give it to you by the numbers. The portfolio prior to the pandemic that existed was making 15% free cash flow prior to tax. That's pretty good for private companies. That's hitting on all cylinders. That's a great portfolio, and in private companies, you care about free cash flow. There's no stock price to worry about. You actually want return of capital, and you get distributions on a monthly basis. That's how it works. Here we are, coming towards the end of whatever this version of the pandemic is. Hopefully, there won't be another one for a while, Omicron. Things are slowly changing state by state. The portfolio last year that just finished, and here we are in February in the first quarter of 2022, we're generating 17.5% free cash flow. That may not get you excited, but it gets me really excited. We've never been able to do that before. That's because of the cost savings around two areas. Number one, real estate. We have much less of it, leased. We've closed many, many retail locations that were marginal stores that we don't need anymore because it's been replaced by direct-to-consumer business. Our business travel is down 58%. You don't have to fly to meet everybody to sell them products and services anymore. We've proven that for the last two years, both not so well for the airlines, but great for the S&P 500 and certainly my portfolio of companies. OK, let's advance the slide. There is an issue that still exists, and this is around supply chain. One of the reasons we see inflation in the economy right now, and I'll give you a case study and example. I have a company called PRx in Fargo. Now, it's very cold in Fargo, and I've been there in February, but it's an amazing company. It makes gym equipment for condominiums in America, 900 sq ft, 600 sq ft condominiums, because many people don't want to work out in their gyms in the pandemic. And today, they enjoy working out even post-pandemic. They just want to exercise at home, maybe watch TV or whatever they do. So this company sells it from geometrically. Primarily, most of its parts came from Asia prior to the pandemic, the screws, the barbells, the benches, all that stuff, whatever they needed. Now, during the pandemic, those supply chains collapsed. They still haven't returned yet for a wide range of reasons. But they source their products, goods, and services now domestically at a 33% increase in cost. That's what it costs to get a screw made in America and then apply it and use it in America. Now, that's just a fact. So they've raised their prices in aggregate 17% and had no effect on sales. Lots of inelastic products, goods, and services that people want to buy regardless of price. And that obviously is inflationary. When will that return to normal? Well, it's not just the port of Los Angeles and the fact that 20% of the truckers in America are not yet returned to work. We also have supply chain managers in the countries of origin where they are not so lucky in terms of managing the pandemic. And it's still sweeping through there. And a lot of their ports are closed. And their truckers aren't back to work. So this is going to take a little longer than people thought. I just wanted you to understand that there are still challenges in the system. But overall, in aggregate, how did it work so well? So I'm going to take you on a little journey of a case study. Let's advance the slide, please. All right, we're going to go back to Shark Tank. I want you to see specifically a company called Blueland. This is a company that was in the detergent and cleaning fluid business that had a very, very strong ESG mandate, as you'll see in a moment. I'm going to show you a little bit of the pitch they made and how interesting it was for the sharks to see this solution to plastic waste. But unfortunately, these products prior to the pandemic were only purchased in retail. When was she going to launch her business? February 15, 2020. You couldn't have picked a worse time. I mean, it was the week that retail shut down. So let's see this pitch. Let's advance the slide, please. Let's have a look at a video about Blueland taking you inside the Shark Tank. If you would, please play that video. First into the tank is an eco-friendly version of a household staple. Hi, I'm Sarah. And I am Syed. And we're here seeking $270,000 for 2% of our company, Blueland. Wow. Sharks, this is what an average household uses in one year in cleaning products. Many of these products, they're over 90% water, which means that you're paying for plastic packaging and a ton of water. This is such a waste, which is why we created our revolutionary eco-friendly brand, Blueland, where we've turned this into this. So now your pantry can look like this. How does it work? Simply fill your bottle with water, drop in a tablet. Minutes later, you're ready to get cleaning. And our tablets come with a beautiful, reusable forever bottle, so you never have to throw away another plastic cleaning bottle ever again. Together, we can eliminate approximately 5 billion plastic cleaning bottles each year. So, sharks, let's save money and space without the plastic waste. Bam. We have samples to pass out. And I can bring around more. Is it one product cleans all windows and surfaces, or are there multiple products, multiple tablets? Yes, so we have four products. We have a foaming hand soap. And we have three cleaning sprays that include a multi-surface cleaner, a bathroom cleaner, and a glass and mirror cleaner. Listening to Lori, I realized that there's a piece of this she understands far better than I. So I would propose, without consulting with Lori, that we invest $1 million for 25% of the company. Are you in the deal or not? I think I'm going to change the deal. Well, on your deal, I'm going to make you an offer that's probably more close to what you actually wanted to do. Because I don't think you're going to sell 25% of your company here today. All right, what I'd like to do is do $270,000 for 5%. And I want 1% advisory shares. Because frankly, I bring a lot to the table. There's only one Mr. Wonderful. Change our offer. We're going to do $270,000 for 8%. Ouch. 4 and 4, that's the offer. My offer is $270,000 for 6%. And the other is $270,000 for 8%. What do you want to do? We can't give away that much. You guys know as much as we do that it is perfect for us. Do you have a counter for any of us? You have a counter for any of us? $270,000 at 3%. Ooh, you guys really did get it. I would love the opportunity just to say one more thing. So in the theme of compromise, I'll go to 5% for the $270,000. We're not going down. It's like already too little. So, Kevin, we know you like a good royalty. Oh, I do. We kept you at 3% for $270,000. But then we give you a royalty of $0.50 per kit until you make your money back. Done. Whoo! Congratulations. Thank you so much. Oh, really? Oh, my God. Great job, Sarah. Congratulations. Thank you. you. Oh, my goodness. Love it. Oh, my God. The way we just started, I thought there was no way we walked away. Oh, my goodness. There's a woman who understands me. OK, so you get the product. It's very obvious that this has huge merit as an idea. Because let's just take where I live right now in South Beach in Florida. We abhor plastic. Everybody here does not want to see plastic in our beaches or on the sand anywhere. And so we do everything we can to eliminate plastic straws and plastic bottles and plastic everything. And here's a solution that says it all. Now, unfortunately, prior to the pandemic, all cleaning fluids, 99.9% of them were sold through retail for a whole host of reasons. And so Sarah had taken all of her capital and built out a massive amount of inventory to roll out in Target and Walmart and Bed Bath & Beyond and everywhere else where every retailer knows they have to get on board ESG mandates. So she had an easy path to the end cap in almost every store in America. And it cost her millions of dollars to build that inventory and position it all over the country in different DCs, different distribution centers. So she called me right at the beginning of February 2020 and said, look, I thought she was telling me she was going out of business because I made the assumption that it was over. I mean, this just happens. It's unfortunate. But that's the nature of venture investing. And some great entrepreneurs can pivot. Others can't. And she's a very, very talented manager. But that's not what she was calling about. She said, "Look, can you get on a plane and can you fly to Brooklyn, outside of New York? And we need you there by noon tomorrow. The SAG-AFTRA, the Union for Commercials and Television and Moviemaking, is going to shut down production tomorrow night at midnight. We would like to shoot a commercial with you about Blueland, tying it to Shark Tank, tying it to you. It's going to be whimsical. No time for the script. You just got to get on a plane right now and get there." And I said, "What for, Sarah? What's the point? You're going out of business." She said, "This is not for retail. We're going to pivot. We're going to try and sell all of our inventory direct to consumer right across America, Mexico, and Canada. But we need a commercial so we can buy remnant cable television. We can chop it up for social media, that we can push out social and much stronger messaging to try and acquire the customers we never even had. Remember, she hadn't sold anything yet, didn't even have a customer, didn't even have a store yet in retail. I mean, that takes guts. It also takes brains. And it's what I call the Great American Digital Pivot 2.0. So I did make it. We did shoot it. I'm going to show you the commercial. This thing has aired 100 million times now. And we chopped up into many versions. And I'm going to tell you what happened to the company. So let's roll that second commercial. This is the Blueland commercial shot in Brooklyn, the last day of production prior to the pandemic. I'm Mr. Wonderful from Shark Tank. When Blueland asked me to clean a toilet on TV, I said, are you joking? But here I am because Blueland is serious about saving you money. Stop paying for wasteful plastic bottles. With Blueland, you only need to buy one. Easily clean anything around your house. Your vault, portraits of your ancestors. And at $2 a tablet, you're set for life. And so am I because I get a royalty. Get your kit now at blueland.com. Smells like a deal. OK, so what happens? What she's doing here, remember, she has no customers. She has no sales. She just has millions of dollars of inventory sitting in warehouses. So she starts taking cities like Miami, like Dallas, like Chicago, and smaller towns like Champaign-Urbana in Illinois, and starts testing different price points with that commercial. And the way you do that is you buy remnant cable at 2:00 A.M. in the morning and 3:00 A.M. in the morning. Many of you know, during the pandemic, people were sleepless. They were watching TV all day and night. And we were expecting, remember, we had no customers. So we're not trying to tell our existing customers we're still in business. We're trying to acquire new customers. So we'd be lucky to get 2.5% response. But that's not what happened. This product caught fire. And it tells you so many things about the American consumer today and how many people care about ESG mandates and sustainability and plastic waste. It was powerful. This thing exploded to the upside. We were selling product. All of our inventory we were able to sell. The company did a giant digital pivot and became primarily direct to consumer. She hasn't even done retail yet. She's so busy doing direct to consumer. Because when you buy the kit, you get the bottles. And then she ships you the tablets. She knows exactly when you bought it. So she knows how most people use up the tablets, what the pace is, and ships you new ones. And people that are used to using the product love it. And the business has continued to grow, currently at a run rate of $50 million for 2022. This is a wildly successful story. Now, you know she's not the only one that did it. The remaining companies that are in my portfolio that were successful did the same thing. And so did all the companies in the S&P 500. The entire world has changed. And now they're selling direct to consumer. And they've learned a lot more about their consumer because they have the style, the size, the flavors, all of the information, the birthdays, the time they buy the goods and services. And it used to be, before the pandemic, the way to mine that data was very, very expensive. But thankfully, the cloud services today and what's going on in managing data, when you have direct customer data, you can be very powerful in your use of capital. You know where in the country your product sells, at what price point it sells, to whom it sells, when they buy it, and all of their preferences around flavor, size, and color. And so you're able to make those offers very targetedly. And they become very high returns on investment. So that's a massive change that occurred in the economy. I want to move to a different topic now because you may find this interesting before we open it up for QA. But Shark Tank has been on the air for 14 years. That's a really long time for any television show. In fact, when I started, I had hair. Not really. But it was a long time ago. The point is that we've learned a lot. Now, I want to share with you something. If it's the only thing you remember about my presentation today, I want it to be this. It turns out, when you've gone through thousands and thousands of pitches, you know there's professors that did this a few years ago and said, is there any common strings between the companies that get funded and versus the ones that don't? Is there anything they did during their presentation that defines success versus failure? And it turns out there is. You will find four mandates today inside a successful presentation. Does not include the outcome of the company. Remember, you're just funding them for the first time. But it picks the winners versus the losers in terms of presenting their idea and their business. And I consider these four points the definition of leadership today. I don't care if you're a parent, a general, a preacher, a politician, or an entrepreneur. These apply to you. So they'll definitely become useful to anybody listening to this. So let's now go to point one. Number one. Let's get that slide up. Great. Are you able to articulate the opportunity in 90 seconds or less? You saw on the Blueland tape how quickly you understood what they were doing. They took old strategies that included a plastic bottle and a ton of liquid cleaning fluids, and they crystallized it, and they rejuvenated that fluid by dropping it into a bottle. I get it. I 100% get it. That only took 30 seconds. I mean, that was a brilliant presentation in terms of presenting the opportunity, so check the box on that. If you're still talking about your opportunity five minutes into your presentation, you're dead. People will not follow someone who doesn't know where they're going, and if you can't articulate where you're going, you will not be followed. You will not be a leader. You will not be successful. OK, next slide. What is it about you that takes that great idea and can execute on it? Now, great ideas are a dime a dozen. Executional skills are very, very rare. You have to combine them both together to aggregate and reduce risk to the investor. If you have a great idea with a great execution team, then you start to warm up to the idea of investing, which is what exactly happened. You saw it happen on that Shark Tank clip. All of a sudden, Lori's nipping at the bud. She's bidding against me. She's teaming up with another shark. She wants in on that ESG mandate. She wants in on that deal. But she was greedy, and it cost her the deal at the end of the day because Sarah was clearly saying, I'm not selling more than 3%. You have to read the room on these things, but the point is, she had the room sizzling hot because she was able to give a great idea. What you didn't see, because I didn't want to spend 10 minutes on that video, but she had a long track record of success in other ventures. In fact, 75% of my returns on Shark Tank over 14 years have come from companies run by women. They're extremely good at mitigating risk and returning capital. I'm very, very biased today. The majority of my investments on startups and small and mid-cap companies are women-led management teams just because they do a great job. All right, advance the slide. Here's number three. This is the killer. You can have the first two right. You can be very, very successful. If you don't know your numbers, how fast is the market growing? What's your gross margin at different volume levels? How many competitors do you have? When are you going to break even? Rapid-fire questions about your business model you have to be able to answer. Now, if you get the first two right and you fail on point three, you deserve to burn in hell, and I will personally put you there. So wherever you are in life, make sure you know your numbers. Even a politician has to know their numbers. Everybody has to know their numbers, and if you don't, bring someone with you. Now, in recent years, and you're going to find this really interesting, these three alone do not determine success because the consumer has changed. What matters now is mission and sustainability in the business model. Advance the slide, please. This is core to any successful business today. Consumers care. The government cares. People care. Mandates, policy all around the world are toward sustainability. ESG is not a marketing scam anymore. It is a mandate at government policy level and corporately. If you don't show people that you care about sustainability, you care about ESG, you care about the environment, you care about sustainability, if you don't care, they don't care about you, and every business needs to know that. You can see massive movements towards companies that have missions and show how they specifically solve for sustainability. Now, in some industries, like airlines, where they have no choice but to burn hydrocarbons, they have to offset it with carbon credits, and people get that, but most businesses today have found ways to get around buying carbon credits because everybody knows it's a poor and blunt tool and, in many cases, will not survive ESG audits. So they look for alternative sources of energy: wind, solar, hydro, nuclear, whatever it is that they can do that does not require them to be audited around carbon. This is a fantastic movement that's occurred. And it's picking up steam every single quarter. You get these four right, and basically, your probability of getting funded and growing a business go up geometrically. This is the essence of leadership today. So I think it's very important to understand where it fits. And I'll give you a case study that I'm involved in now. Bitcoin, digital currencies, blockchain, the digital economy that's emerging is a very interesting and controversial space in terms of investing. I have a very broad portfolio of interest in that area, including Bitcoin mining. Bitcoin mining is being shut down in countries like China. There's a threat in Russia as well. Upstate New York shut it down. Provinces in Canada, like Québec, have limited it. Why? Because the first generation of miners didn't care about sustainability. They would buy electricity made by burning coal. That's what they did in China at the beginning. That is not sustainable. That's sheer stupidity. The new generation of miners have figured out how to do it sustainably. For example, I'm a big investor in upstate or northern Norway, where we have an abundance of hydroelectricity. We are in partnership with the mayor of a town with 3,000 people. The heat from our computers heats rookeries where we can help spawn fish and heats hydroponic facilities for growing vegetables in a Nordic climate, and many of the people in that village work at the facility, and we spent $15 million to upgrade their power because that power was just not being stored at all. You can't store power you don't use. It falls off a waterfall, but now we're storing it in value by mining Bitcoin and leaving the Bitcoin on that company's balance sheet, of which many of those townsfolks are shareholders, so that's sustainability. That's a mandate that the government of Norway supports, and that's my showing you how investors, because they've already invested about $45 million in that facility, are very conscious of ESG mandates, very, very conscious of it. And they don't want to, as institutional investors, ever breach those mandates as dictated lately as the world's largest money manager, BlackRock. The annual letter from Larry Fink, the CEO there, dictates these sustainability mandates, and everybody wants to comply, so that's kind of a journey of the last 24 months. I hope you've looked at it for what it was. It was really a chronicle of support of entrepreneurship and the innovation of American entrepreneurs, particularly the innovation of the great digital pivot 2.0. At this point, I'd like to open it up and let's get into QA. Kevin, thank you so much for sharing your insight, especially how business value is driven with social value together, and they both are equal. I love the examples that you gave and the insight of where we're going as a society as we listen to all of our stakeholders, not just our investors, but you talked a lot about the digital pivot revolving around our vendors and supply chain and our customers. So fabulous, so as an audience, we're going to give him a minute to get a drink, and we're going to pivot to a poll question number two. All right, hand to heart. Are you wearing your pajamas right now? Let us know. No, 100%. Yes, business on top, PJ's on the bottom, other, which I don't know if I really want to know other. So we'll give you a moment to answer that question. Well, I'm going to tell the truth. I am wearing short pants and flip flops. There you go. Because I'm on the beach. In my elevator, there's beach sand. But you don't see it, and that's just the new business attire. I haven't worn business pants for two years, and I'm very proud of that. All right. Well, I'm full-on business, and if you know me, that's kind of how it rolls. Kevin, as our audience is answering that polling question, let's get a little personal. I really loved in your bio how you discussed being an environmental studies major, your experience with your father and your mother engaged in the UN. How did that shape you in your investment practices? I was in the first cohort in the late 1970s, early 1980s of environmental studies. Greg Michalenko and Sally Lerner were the two professors that came out of architecture and engineering to build this new mandate around learning how the interaction of the environment would affect government and private and institutional investors. At that time, it was just blasphemy to even think about it. It made no sense whatsoever that somehow there'd be an environmental cost. The world wasn't even thinking that way. But they really gave a very compelling case to us, young minds learning and thinking. And what Greg said and Sally said as professors is, look, there'll be a time, there'll be a day when a company that doesn't support sustainability will go out of business. They were right. I was just very early in that educational process. It was always in the back of my mind. So I graduated before I did my MBA in Environmental Studies. And people thought, what is that? What even is that major? What is that discipline? And I was the first cohort. And it really, really changed my mind about what I invest in today because they were 100%. They were so They were so far ahead of their time. And even today, if you go online and look them up, you'll see all the accolades. Because what they taught back then, the rulebook that they built back then is exactly the same they're teaching at Harvard today. So it just became the standard in how you think. ESG really matters. And it matters because it's not just corporately driven. It's consumers making that decision, buying one product over another, understanding where the company's policy is, what their mission is, how they're giving back, and how they're being sustainable makes the companies more profitable, so ESG compliance is a big deal, and so I will not invest in companies that are not willing to go through a carbon audit, and many companies approach me all the time, and they know that's how I think, and I'm not the only one. There's millions of us as investors that want to see this fixed. There is no greed like the greed of pollution if you're trying to run a business. That's outrageous, and everybody knows that because sustainability is what consumers want. Long answer to that question, but it really changed my mind wherever I went. I love that. You know I get asked all the time, as the field is growing from younger people, about what to do. And And I say, go get both. Get both a social degree and a business degree together because the field is growing. And we need people who understand both the societal impact as well as the business impact that can enter into companies and engage in the process. We had an interesting survey at Workiva where we looked at Gen Z investors, individual investors, and their perspective on ESG. And no matter where they were in the world, whether they were in the U.S. or in Europe, they wanted to align their personal investments with their ESG values. However, they found it complex and confusing and didn't quite know where to start. So I know you're going to give us nothing but the cold, hard truth. We're just going to simplify this for people. You and I are very practical people. Let's just make it simple. If you're a young investor or you're thinking about your investments, where should they start? Is it ESG index funds, mutual funds, green bonds, social bonds, REITs? What's your tip for them as they want to align their investments with their values? It's a great question. I'll answer it because I actually work in that industry. One of my largest businesses is an indexing service for sovereign wealth. I recently became an Emirati citizen for the UAE. As many people know, the Middle East and sovereign funds are some of the largest in the world. I'm also an Irish citizen and a Canadian citizen. For many of the institutions in these countries, I do indexing for them. I create indices that are based on the mandates that they tell me to build. So very often, for sovereign funds, that would be a subset of the S&P 500. And one of the biggest mandates going globally today is to figure out ESG indexing. So in other words, ETFs that are effectively ESG driven. And so that the selection of the underlying companies inside of it have ESG mandates or abide by them or at least are willing to go through a carbon credit audit. And you will find many of them in the market, the same with bonds. So the trouble is we haven't standardized on what ESG means. For some companies in an ESG index, you can own an oil and gas company as long as they've offset their emissions with credits. And others, you can't. But the point is the capital, including these young investors, it's moving in these directions. And it's not a small amount. It's a huge amount. And so this is rolling. It's momentum. When you invest that way, you are pushing the institutions in that direction. I think it's fantastic that young people are starting there. You should be saving between 10% and 20% of your salary and putting it into ESG mandates that are broad-based. So ETFs are very good. Green bond funds are good. This is all good. Or you have to pick stocks individually if you're inclined to do that because that's very inexpensive to do. There's no cost to maintain a portfolio anymore. Most of the services that are online let you do it. But you've got to do your own research on which companies are supporting ESG. And every day, that list grows larger. That's right. Doing your own research and thinking about if you're interested in impact, where are the funds that are aligned to the UN Sustainable Development Goals? I love your message about diversification. I think that's fabulous financial advice for our young investors to think about. As we look to your example of Blueland, which is such a wonderful example of an entrepreneur and looking at that collision of E and S coming together, Fink in his letter that you referenced talked about the next 1,000 unicorns, so the next IPOs that really break through are going to be businesses who are socially responsible. I want to get your take on that. Do you think the next 1,000 unicorns are really going to be these businesses that are solving complex societal problems with simple day-to-day solutions? You know, it's a great question because people assume that if you have a social mandate, a social mission, a sustainability mission, an ESG mandate that you're abiding by, that somehow that does not equate to profits. Nothing is farther from the truth. Companies that take on these very complex societal issues and particularly make it clear to the customers that are buying their goods and services that this is part of their DNA, part of their business model are richly rewarded with very, very strong profits because people get on board, become very loyal to the brands, the goods, the services that are part of these mandates. So the next generation of companies that are going to be successful will be partly successful because of executional skills. But they'll also be successful because capital, my capital and billions of other dollars are only interested in supporting these mandates. We're not interested in supporting mandates that don't have these missions. And so when your cost of capital goes down, your probability of success goes up. And everywhere I go today and all the work I do in the Middle East with the sovereign funds and everything else, it's all based on advancing these causes and these social issues being resolved. So when I co-invest with a Middle Eastern government in a project somewhere, an infrastructure project, particularly the UAE, I don't know if you're aware, their government is now over 50% led by women. They are very, very advanced in their social mission. And so my companies that I invest in with them have to have the same mandate. They are very ESG. And that kind of leadership with billions of dollars behind it, and that's just one sovereign, they're very advanced, are leading the way. And so they are the ones that, because the majority of the large companies, it's not retail investors. It's sovereign wealth that owns them. Giant, giant countries, Nordic countries, Middle Eastern countries, the Swiss government, the Canadian government, the U.S. government, many of these, even universities stateside, they have mandates that they invest this way. And they're supporting these new unicorns. Fabulous. And we've covered a little bit around your personal, too, if you're an individual investor, some around institutional. Let's talk about a person's wallet. Your books are so wonderful at giving personal financial advice. And so for anybody out there in the audience, one of the things that Kevin's book does so nicely is you talk to young people about, hey, why don't you go get an e-bike versus a car because that is actually a better financial decision. And it's great for the world. And I would love for you to give our audience maybe two to three examples of something they personally could do that would have a benefit to society and also have a great bottom line for their personal wallet. You know, it's happening every day. But when you make product services and choices, when you buy products and services, for example, I will not allow anybody to serve me with a plastic straw. I don't care where I am. It's a decision I made a long time ago. Why would anybody need a plastic straw? Why can't we completely eliminate that yet? I'm not talking about a government mandate. My whole family will not drink from a plastic straw because it's going to be thrown out. It's going to end up in the ocean. It's going to take 1,000 years to dissolve. It's going to probably kill a bunch of animals along the way. So when you make personal decisions that way, incremental mandates form very, very quickly. In teaching, when you're raising kids today, you have to talk about saving money, preparing for a future, building a financial pillar, one day having a family. But in addition to that, why aren't you teaching them about sustainability mandates? It's their planet. I'm not trying to sound like some zealot about this. I'm not standing in front of a truck that's using harder carbons and letting them run me over. I'm just saying these are individual decisions. So every day, if you just do one thing, instead of using a plastic bag, use a paper one or a Tupperware that's reusable, whatever it is, it really matters. It doesn't have to be some crazy mandate. It's just incremental. Try to start with straws. There's lots of paper alternatives or sip from the edge of the cup for a change. That's what they used to do 1,000 years ago. So it's not that hard. And really, if you lead by example, other people will follow you because it just makes good sense. That's right. I know in your book you talk about ghost money. And I have a young 12-year-old daughter. And we've been talking about it. And she'll pull out her calculator and start calculating ghost money now. So it's a great example of what are the things that can go away. And sometimes we can make some of those better decisions for ourselves, for our families, and ultimately the financial future and the future of the world for our kids. As we bring this to a close, we've got two more questions. Kevin, you talked a little bit about your investment in women and the research that your firm did, and I love the quote from your book where you talk about women, they preserve capital and they also make capital, so tell us a little bit more about that research and how that's shaping maybe for you the next two years. Yeah, so after seven years of investing in private companies, obviously you start to see the tally of success versus failure, and so with our auditors, they said, I wonder because these are such risky businesses, you've had some wildly successful outcomes and others that not so much. I wonder if there's anything that is common amongst the winners that you could use to find out the direction of further capital because you really put a lot of energy and money into a company and it fails for three years, four years later. Why? The first thing that stuck out because we had our own portfolio. This isn't some academic study. We had real companies, and we had real data, and we had the monthly data. We had monthly tear sheets, as we call it, of profit, of sales, and free cash flow. We had all of it. We had years and years of data, and we'd never mined that data before. The first thing that shot out was that 75% of returns came from companies run by women. We never thought of it that way. We never did the tally, and we went, wow. I mean, what are they doing that is so different? And you know that old adage, if you want something done, give it to a busy mother. What we found out was at the core of their success was their ability to pivot quickly. But here was the one thing. When we looked at the sales forecasts of all the companies in aggregate, the ones run by men would often make sales assumptions and achieve their goals about 65% of the time. We called that the testosterone target, really being aggressive about sales. And then when we looked at the ones run by women, they were achieving their targets about 95% of the time, quarter over quarter, but had taken down their growth rate assumptions by 25%. So they were admitting a slower growth target but hitting the targets way more, 95% versus 65%. So why would that manifest itself in higher returns? And if you dig one layer deeper, you find out that teams that are successful in hitting targets get a different kind of sticky culture. There's virtually no staff turnover. So you're not losing the head of sales, the head of logistics, the head of accounting, whatever it is. It's like being on Tom Brady's football team. Nobody wants to be traded while he was playing because he won the Super Bowl so many times. So the culture gets stickier. And the staff turnover is less. And the return of capital is higher. It's a brilliant outcome. It's very, very smart. And these are women CEOs that didn't even know each other in different sectors. One was running an insecticide company. Another, a honeymoon business. I mean, it doesn't matter. They were using the same tactic that I think women are intrinsically mitigating risk in terms of supporting their own families that way. I think it's brilliant. It's really biased to me in terms of how I deploy private capital. I'd much rather, and this is horribly sexist, I guess, give it to a team run by a woman because my success has been so high there than a man. I mean, I'm sorry. I'm not trying to start a gender war. I'd give money to a goat if I could get a return. At least it tells you where my heart is and my money. Thank you so much for sharing that story because I think it's really important as we consider S factors and we look at diversity, equity, and inclusion. We're talking about what is the bottom line success. And thank your firm for doing some of that research and for people to think through then why those investment funds and index funds have continued to accelerate. As we come to the close of our Q&A, we've got two quick polling questions for you. The first is we want to know if you're ready for your investment of your future. Say yes, you've already started your journey. Yes, I need a little more help and guidance, which we hope Mr. Wonderful gave you today. Or no, I'm just focusing on today and trying to get through today. Wherever you may be, go ahead and answer that poll for us. And finally, our last poll for today, we want to know, is this your first Workiva event? If it is, answer yes. If it's not, answer no. If it's your first one, welcome. We hope you explore more and are with us again. If you came back to join us, we appreciate you coming back, and we also have some resources for you. Mr. Wonderful, thank you so much for being wonderful. You truly are because I know you're going to give us nothing but the truth. I know from the bottom of my heart it's going to be about business value meeting social value, which is the key to any environmental, social, and governance success. As we come to a close, check out those Workiva resources that we have for you. If you have CPE credits, you'll get an email that will include information about downloading your certificate today. Thanks, and we'll talk soon.