S13E37: "Impact investing is broken", with Brett Simmons (CEO, Scale Link)

An episode of The Impact Multiplier CEO Podcast

S13E37: “Impact investing is broken”, with Brett Simmons (CEO, Scale Link)

Why is impact investing broken? And how can you be a more impactful entrepreneur?

We're continuing our season on "business as a force for good", Richard speaks with Brett Simmons, CEO of Scale Link. Scale Link is a social venture and a first of its kind secondary market for small business loans, working with more than 30 community development finance institutions (CDFIs) and having purchased over $52M in loans over the last 3 years to provide capital and additional revenue to important community organizations -  to the tune of $5.5M in unrestricted funds.

In this conversation, you’ll learn:

  • Why Brett believes impact investing is broken
  • The art of "execution versus calibration," as new information comes in
  • Why humility is a leadership superpower

Resources/sources mentioned:

Join Rivendell (https://xquadrant.com/rivendell/), our exponential programme for elite CEOs dedicated to transforming themselves, their businesses, and the world.

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Transcript

Brett Simmons
Scaling itself is a marketplace. So we’re trying to make a market of small business loans. If you look at happiness in different countries, having more stuff doesn’t do it. What really makes people happy is, like, testing themselves and finding their place. And I think, like, where they can contribute and feel that they’re part of society. And I think that often takes risk taking and it’s more than just sort of the myopic focus on, like, be happy, be happy, or happy.

Richard Medcalf
Yeah.

Brett Simmons
You know, take risk. There’s gonna be pain. There’s gonna be challenges. But at the end of the day, when you find your place and find how you can contribute or even fail at doing it, but you gave it the a best shot.

Richard Medcalf
Welcome to the Impact Multiplier CEO podcast. I’m Richard Medcalf, founder of Xquadrant, and my mission is to help the world’s top CEOs and entrepreneurs shift from incremental to exponential progress and create a huge positive impact on our world. Now that requires you to reinvent yourself and transform your business. So if you’re ready to play a bigger game than ever before, I invite you to join us and become an Impact Multiplier CEO. Brett, hello, and welcome to the show.

Brett Simmons
Thanks for having me, Richard.

Richard Medcalf
So looking forward to diving in. I think first of all, we’re gonna have to explain what is ScaleLink. Right? Because you’re the cofounder, you’re the CEO, and, it’s a really unique, business. And so why don’t you just start? Because before I miss explain it to everybody, let’s get it from the horse’s mouth. So kind of what’s the business? And and then once you’ve done that, tell me, like, why why did you wanna do this? Right? Because it say it’s a unique model.

Brett Simmons
Yeah. So I guess the easiest way to say it is scaling itself is a marketplace. So we’re trying to make a market of small business loans. The more unique and more explanatory side of it is why there needs to be a marketplace in the The place. So in the US, there are these organizations called Community Development Financial Institutions. They’re typically nonprofits, and they are trying to work with entrepreneurs, small business owners that might go to a bank and for whatever reason, maybe their credit score or, you know, they don’t have collateral to pledge. The business hasn’t been around long enough.

Can’t get a loan. So CDFIs fill this gap. They tend to work with entrepreneurs of color who might not have assets to pledge, you know, due to historic discrimination in the US. They might work with people in low income neighborhoods The are trying to start businesses that a bank looks at and they just, you know, how is this ever gonna revenue? So The organizations have this mission. They’re nonprofits. They’re trying to do this lending, but the reality is you put the loan out the door. If If you wanna do another loan, you need more capital so you can borrow more money or you could sell that asset. So Scalelink buys those loans from the CDFIs to give them capital to keep lending.

And then the marketplace side is we go and then pool those together, aggregate them together, and sell as much as we can to banks. The banks want the loans for the regulatory reasons in the US. We charge them a premium because they’re getting that value, and we actually donate 75% of that premium back to the CDFI. So they get capital on the front end. They get revenue to fund their business. So we’re helping these nonprofits do more of the type of lending that is so important in terms of helping entrepreneurs that wouldn’t have access otherwise to these loans to, you know, finally be able to get their business ideas moving and growing.

Richard Medcalf
Yeah. The that’s that’s amazing. Right? You are the oil in the system, right, in many ways and accelerating The. Right? Because suddenly these small CDFIs are not having to yeah. It’s a quick way for them to actually get off those loans off their books and and go and do the next thing, right, and serve the next entrepreneur, which is fantastic. So so, Brett, how did you get into this game? Right? Because probably most people don’t wake don’t children, they don’t kinda dream of of, selling loans from CDFIs. Right? So there must be some story that got you kinda got you into this.

Brett Simmons
Yeah. I mean, it’s all circuitous. I worked at a CDFI in Chicago doing this type of lending, and banks came to us and said, will you buy these loans? And we’re like, why would you wanna buy these loans? Like, they’re higher risk. They tend to have higher losses. The don’t make they don’t make any money in most cases. So why would you wanna buy them? And we’ve learned about this whole regulatory landscape and how it works and, you know, started selling more and more loans. And we were convinced that other CDFIs could benefit from the similar model and either tried to tell people, like, oh, you should go sell your loans. They’re like, you’re crazy.

Like, why would we, you know, the same reasons that we thought no one would ever buy our loans The the same reasons that all the CEO give us, like, this will never work. So, you know, about so 20, yeah, 2017, 2016, around there, we started, my colleague, Jonathan and I, consulting for CDFIs, trying to help them do this because we saw it was beneficial. And through that process, we just saw that the one off transactions, like, The CDFI to one bank were really difficult to make work. And we just came to this conclusion, like, we need someone to be the market maker that can be the intermediary that can speak the bank language and can speak the CDFI language and meet in the middle and make this whole model more efficient and effective. And that exists for so many secondary markets. Like, this is not a new thing. When we explain this to banks, they’re like, oh, yeah. We sell loans all the time.

We do participations in our loans all the time. We syndicate loans all the time. For CDFIs, it was totally new. So it really required, I think, someone that was gonna specialize and make it happen and be in the middle. So I think it sort of happenstance that we found this model, and then it was just, you know, The the willingness to believe that it was gonna be beneficial and could work and, you know, finding people that supported that vision and, know, sort of writing out that manifesto of what’s possible and then finding people that wanted to help you do it.

Richard Medcalf
Perfect. So you set it up as a nonprofit. Right? So you obviously see this as an impact opportunity rather than necessarily a pure business opportunity. I mean, you know, you could argue and say, well, it’s a financial marketplace. It’s, you know, it’s a business, right? So what’s your sense of kind of mission in all all of this?

Brett Simmons
Yeah. I think, you know, at the end of the day, we wanna cover our costs and make this a sustainable venture. Right? Like, we don’t wanna rely on philanthropy forever. And our hope is that when we reach the scale where we’re profitable as a nonprofit, that we just return more capital to the CDFIs. I think at the end of the day, this lending doesn’t make a lot of money. And in most cases, it doesn’t make any money. The more you do, the more Podcast you have because it’s just higher risk. You don’t wanna charge high interest rates to the borrowers.

You wanna help them be successful. So you end up with this model that just doesn’t financially pan out for The CDFI. So the idea of, like, creating something that was gonna be this new profitable venture on top of a model where people were requiring philanthropy every year just didn’t really make sense. So with this, you know, we can increase the revenue for the CDFIs and help them them be more sustainable. And the more successful we are means the more capital going back to them. So, you know, at the end of the day, we just wanna make the whole system function better. It’s really meant to be an industry wide solution, and that’s, hopefully what we’re building.

Richard Medcalf
So it’s a great story. Now I know that one of the things that you found is you’ve really had to pioneer this field. There’s no playbook, right, it’s not been done before. You saw the idea when you’re creating it. I know one of the things that you’ve said is that it really challenged the way that you saw your the way you created impact in in a business or in a in an organization. And you said that previously you had what might be described as a getting things done mindset and you’ve had to kind of rethink that. So can you say a bit more about how your own, you know, your own approach to leadership has changed?

Brett Simmons
I think we’ve almost this might be too broad of a statement, but I feel like there’s a little bit of, like, required cognitive dissonance when it comes to building something. Right? Like, we had this 30 page business plan that we spent all this time ideating and creating and, you know, here’s the paradigm that we think makes sense, and here’s all of our financial models. And you have to have The, like, that road map needs to be there. But as soon as you get into the work, 3 months in, you’re you’re like, alright. We just have to get it all done. It’s all execution mindset. And then as soon as you’re 3 months in, you’re like, oh, well, we just talked to a bank. They wanna buy loans, but they need this one thing that we didn’t realize was a requirement.

So all of a sudden, we’re like, alright. We gotta redo our whole process. So I feel like every 6 months, we’re, like, changing and trying to make things more efficient. The more we learn, the more you have to change. So it’s just this constant, like, maybe I need to get things done, but you have to be ready to get out of The execution mindset and be like, okay. Now that didn’t work anymore. We just reached this level of scale that requires a different approach or different mindset, or we need to hire someone else. So I think that constant kind of feedback loop and being able to get down and just do the work, but realizing you gotta pull yourself out of The.

Richard Medcalf
Yeah. I mean, what I’m hearing is The kind of execution, getting things done, kind of only works in some sense when the rules of the game are understood. At least to some degree right when they’re actually fixed. And actually, it’s as important to kind of come up for air, right, and reevaluate, take stock, and recalibrate.

Brett Simmons
Yeah. I mean, we thought when we started, Richard, they’re like we would mostly work with community banks. They’d have, like, 1 or 2 branches, major metro areas that that would be the fit. Within 12 months, we realized that the big regional banks that are in multiple states cover half the country, like that, we’re a better model for them because they can buy from us across all these different geographies at one time, and it’s super efficient for them. But it’s a totally different selling process for a bank that size. Like, you’ve gotta talk to 40 different people and get them all to say yes before a bank of that size is gonna purchase from you. With Community Bank, we had, like, a president of a bank looking at loan files themselves because they wanted to be sure it was going. So it’s just a totally different sales process and, yeah, you gotta The, like, execute, execute, find that next customer.

And then when you realize that you need a different sales different people in the room, you know, be able to step back and make those changes.

Richard Medcalf
Yeah. And that can be frustrating, right, because you could spend a lot of time building out the sales process for what you think is gonna be the the way. Yeah. And then it’s like, oh, all that stuff, we have to redo it because it’s different.

Brett Simmons
Yeah. I mean, I I did graduate school and then worked in the corporate sector for a while. And for a big manufacturing company, it’s very big on 6 Sigma. And I know, you know, 6 Sigma, you know, it’s maybe not as cool as it once was a decade and a half ago, but the whole idea that you’re continuously improving your process was really ingrained in me. They’re like, if you have the right metrics and the right approach as you’re moving, it’ll be clear to you when you need to change and that you have to change. Now I think our team might get a little frustrated sometimes, and I’m like, alright. We built The. It was great.

It’s not what we need anymore. But, you know, you have to, you know, build a culture that that’s part of what you do.

Richard Medcalf
Yeah. So just getting things done mindset, how do you use that still? So do you find that you are able to kind of focus and and deliver, or do you feel that it’s still very much that iterative process?

Brett Simmons
I found that as we’ve grown, I needed to be more focused on trying to build space for it to step out of the, like, execution mindset more frequently. And as CEO, we’ve been to more of a business development role. And actually, we just made some changes recently to try to free up space for me to be able to just be building the next 12 months of what we need and, you know, the do the fundraising that we’re working on, you know, all that side of it. That when you’re a small team, like, you just do everything. Well, all of our job descriptions have The bullet at the bottom that, you know, it’s The task as required. Like, it’s just and it, you know, it might be 30% of your role as other task as required. Like, that’s just the reality of building a company in. But now I feel like I can get up for air more frequently.

Certain times of year, you gotta do it differently, but, we built the team slowly to get that to that point.

Richard Medcalf
Well, I totally get it. That’s why I wrote my book. Right? Making time for strategy because well, it’s really the strategic. Right? Like, what is what is the thing that you actually need to put your focus on to move out of the Rivendell, the the day to day? And it’s it’s the big challenge for any entrepreneur I find.

Brett Simmons
Yeah. And I think it takes some focus not just like thinking, oh, I need to make time for strategy, but, like, how do I build my role in my team

Richard Medcalf
Yeah.

Brett Simmons
So that I can Yeah.

Richard Medcalf
Absolutely. That’s the SDE in the in my acronym time. It’s the environment. Right? How do you actually structure the environment that allows you to do that? Yeah. 100%. Yeah. So tell me a bit about your kind of motivations because I know that one thing you’ve said you really care about is is not so much kind of helping people be happy, but helping people discover who they are and to take risks and to build something they’ve dreamt about and bring, you know, deeper kind of self actualization. So kind of where does that come from? Where does that desire come from? And then how does that intersect with, you know, running this particular organization? Right? Do you get a chance to do that in your role? Is that the ultimate mission? Is it what you do with your team? Is it like how does it intersect?

Brett Simmons
Yeah, I think like, when you think of people that go into The work, you immediately think, you know, these people are mission oriented. And when you have conversations with them, it’s often like, you know, I wanna help people. I want them to be able to provide their basic needs and to be happy. And I think maybe it’s just my own upbringing or I I don’t know where it comes from, but I’ve always just had this fascination, you know, kinda in this, like, capitalist society. You go out and buy stuff. You should feel better. You should be happy. If we give people more resources, they can buy more stuff.

They’ll be happy. And, like, at the end of the day, like, if you look at happiness in different countries, having more stuff doesn’t do it. What really makes people happy is, like, testing themselves and finding their place. And I think, like, where they can contribute and feel that they’re part of society. And I think that often takes risk taking and it’s more than just sort of the myopic focus on, like, be happy, be happy or happy.

Richard Medcalf
Yeah.

Brett Simmons
You know, take risk. There’s gonna be pain. There’s gonna be challenges. But at the end of the day, when you find your place and find how you can contribute or even fail at doing it, but know that you gave it a you gave it the best shot. Like, to me, that is an opportunity that that more people should have and The we should build space for it. I think it helps people feel happier and contribute to society, you know. And that’s to The, what what this motivates me. And I think The idea that we could help other people get a small business loan to take that risk, to jump off, you know, pursue something and try to find their highest best use and contribution to society.

You know, maybe that’s running a bakery and you’re great at baking and you want to see that smile on people’s face when they come in your door and buy the best croissant in the world, like, that’s great. But you gotta take a risk to do The. You need capital to do it. So, you know, that’s what we’re trying to build is something that can help make that happen. And, I think we try to build that with our own team too. Like, that’s motivating for me. Like, I wanted to be part of starting something that Mhmm. Was new and contributed.

Finding space for our team members to take their own risk also is important.

Richard Medcalf
Yeah. I love I love it. It reminds me of what shades of my own mission. Right? I believe the world’s top leaders have a duty really to make the world a better place, you know, and but also The get to they get to do it. They get to kinda go for ambitious, crazy goals The even though they’re so successful, there’s still a whole new level available to them. Can change the world in different ways. And why, like, why not have a go? And what I find is that there’s this kind of play to win mentality or even play not to lose. But I think to really break through, it’s around play to play, which really means the joy is in the journey because got a a goal that’s so inspiring.

Like, let me have a go, see where I can get The. And whatever I do, it would have been worth it. Right? And I think if we’re doing something which is only worth it if we succeed, then it’s probably not the right Yeah. Goal

Brett Simmons
for us. Yeah. Yeah. And I think what’s the it’s like the the arrival fallacy. Yeah. You heard The cycle. Right? Like, if I if I get there that one day and I achieve this one thing, then I’m gonna be happy. And the reality is it never works It never works out.

Richard Medcalf
I hope you’re enjoying this conversation. This is just a quick interlude to introduce you to 2 transformative programs that we run. The first is Rivendell, my exclusive group of top CEOs who are committed to transforming themselves, their businesses, and the world. It’s an incredible peer group and a deep coaching experience that will push you to new heights no matter how successful you’ve already been. The second is Impact Accelerator, a coaching program for executives who are ready to make a big leap forward in their own leadership. It’s regularly described as life changing and no other program provides such personal strategic clarity, a measurable shift in stakeholder perceptions and a world class leadership development environment. Find out about both of these programs at Xquadrant /services. Now back to the conversation.

I I did a presentation, in fact, to a bunch of CEOs and and I was we’re walking to the next place, and one of the CEOs was walking with me, explained that he had in his previous life, he’d been a been a lawyer. And, he and his wife or girlfriend, who was also a lawyer, were both a bit fed up with that particular career path. They wanted to change, do something more entrepreneurial. And, and they decided to have a look and say, you know what? Like, if we were to, like, win the lottery or whatever, like, make it big, strike gold, you know, what would we actually want? And they wrote a list of all the things that they would want, and they priced it out. And they looked at it and went, oh, we could already afford it. So they then said, okay. Well, we could either go and buy all the things we said we wanted to. But if we did that, we’re just gonna make a new list that’s even bigger and even more expensive, and, like, someone will need to start chasing that.

So instead, why don’t we, like, not buy the things on our list, but know that we can if we need to or if we want to? And it was such a shit because suddenly they were like, oh, like, I’ve kind of we’ve kind of made it, and we don’t need it. The are stuff we say we think we might want. So now let’s do what we really want to do and have fun in life. And it’s a really great shift and allow them to take a lot more personal risk and and pay to and play to play.

Brett Simmons
Yeah. I think I don’t wanna like downplay that there’s ton of people who work in non profits. They’re doing things that are trying to just, like, help people get food on the table and and make ends meet, and that’s super important. But I feel like, you know, I’ve worked in homeless shelters before. I’ve been in all sorts of different environments. And those interactions, when it was with people, like, here’s here’s something that you need, and that was the extent of it, and not giving that person the opportunity to even tell you, like, oh, here’s my hopes and dreams and what I wanna do. Like, even if you’re homeless, you have hopes and dreams beyond just getting the next meal on the table. And if you can try to accomplish addressing that hope and dream and just getting the next food on the table at the same time, like, to me, that’s that’s a mission that I get excited for.

And I hope that we’re, you know, contributing in our own small way towards achieving that.

Richard Medcalf
So, Brett, I’m gonna change gears slightly, and we’re gonna move into a part of the show that I’ve just invented, and it’s called Brett Gets to Rant. So Brett Gets to Rant is a is a special unique component, which is The I know you’ve said that, you know, one of the things one of your kind of counterintuitive perspectives, or countercultural perspectives is that philanthropic giving is broken, and a lot of impact investing fail falls woefully short of being impactful. Now I have heard this from other people who are very involved in this CEO, so I think you’re onto something. But, like, rant at me. Tell me, like, what’s what are you seeing?

Brett Simmons
Yeah. I think well, there’s there’s a bunch of different directions we could go. But I think at a high level, like, if I step back and think of any problem, I try to go back to, like, why is this a problem in the The place? Right? Like, The needs in our society, they’re not being met by the market. Right? And that means there’s not a business that can make a profit doing it because we would expect that someone would do it. There were. So when an Impact investor comes in and says, I wanna, you know, get 8, 12% returns and have an Impact. Miami thought is, well, is that really impact investing? Like, the market would serve that need if it could be served and make an 8 to 12% Richard, so something else has to give in order for that return to be The. And in many cases, it’s like a policy intervention or something else has to be built first before a business could even thrive.

Like, Scale Link would not exist without bank regulations. Carbon trading markets don’t exist without

Richard Medcalf
Yeah.

Brett Simmons
Government intervention. A lot of markets don’t exist without government intervention, but it the reality is, like, if you want that intervention to happen, you have to probably lose money first. Or you have to fund a nonprofit that does public policy advocacy, and that’s a grant that loses money. Right. Now Rivendell, maybe a market is set up, but, like, I don’t see that full range of strategy and a lot of impact investing portfolios. It’s like, I just wanna do this thing and get my money back and I wanna make a return. Like, there’s gotta be capital in the strategy that just says The market doesn’t exist yet. It doesn’t function properly.

What do we need to make that happen? Let’s spend $10,000,000 doing that, and we’re not gonna get any of it back. But in the long run, we’ve set up a new a whole new marketplace that can make something function. So I just feel like that whole strategy of, like, how do we actually think about the tools that we’re using? And The often is not a tool that’s, like, let’s just lose the money. Like, it’s great. We’re gonna we’re gonna spend the 10,000,000. It’s gonna be gone, but we’ll have built this new marketplace and some other investor might make money on it. That’s fine. Like, most impact investors I talk to are not, like, mom and pop, like, putting their retirement away.

It’s like, I already made a lot of money, and now I wanna give back. So don’t ignore all the tools at your disposal when it comes to building

Richard Medcalf
Right.

Brett Simmons
These markets and these new impacts. Yeah.

Richard Medcalf
It’s a paradigm. Right? It’s a lens of, like, how am I looking at

Brett Simmons
Yeah. Like, there’s VC, but there’s also, like, I could just lend The below market rates, or maybe I could here’s a $1,000,000 if you gave me 80% of it back, but you had huge Impact, that’s great. Like but there’s there’s almost not even a language in some cases for many impact investors of, like, what does it mean for these other avenues and what do they look like and how do I approach The? And, you know, one of my board members, Andrea Levere, is doing a ton in this space. She’s termed this enterprise capital, which is just trying to create terminology and language for people to think about, like, I’m gonna get money to a social venture. Is it VC? Is it private equity? Or is it this enterprise capital idea? Like, I’m giving it to a nonprofit. They’re gonna have huge impact. They’ve got this great business plan. I’m approaching it just like I would a VC investment, but it’s a grant.

Richard Medcalf
Right.

Brett Simmons
Right? So what is this what does that look like, and how do you talk about it? So I think there’s just gotta be new language and approaches to really build out the toolkit for Impact investors to make the biggest impact. And right now, the toolkit sometimes feels like it’s just a hammer and there’s nothing else in there.

Richard Medcalf
Yeah. The way of putting it. Yeah. And I guess it just limits the possibilities. Right? Because it’s it’s it feels like it’s just a really marginal shift from the default market oriented model. It could be what you’re planning.

Brett Simmons
Yeah. Like, if you’re gonna make 12% returns and, like, that’s we’ve had people come to us, like, yeah. We’re happy to invest, but we need, like, 9, 12%. I’m like, the business model just doesn’t function. Does that mean we shouldn’t exist? If or does it mean that we just need different kinds of capital that don’t require that level of return? And that’s fine because it’s a good impact. Yeah. Yeah. Fascinating. So that’s my The rant.

Richard Medcalf
Yeah. So how we solve that problem, that might be a in a slightly longer episode. So thank you for kinda playing on that. So the other one I wanna kind of, talk about my tongue slightly in my cheek is that, you know, I know that, you’ve said that you’re a world record holder in the art of humility. I know you didn’t actually say that. So I’m putting words in your mouth, putting words in your mouth, But, yeah, you let’s talk about humility because, I think, you know, you have said that something which you feel is actually a strength and I get it. Of course, it’s a bit funny to kind of talk about it in that way. So, yes. So tell me like about, yeah, how you see humility in leadership and how they Impact.

Brett Simmons
Yeah. I mean, I think one side of it is just being being able to be honest with your team about what how we got where we are, when we failed, what the gaps still are. And I think humility is a huge piece of being able to do that and be empathetic with everyone at the table. I think there’s also, to me at least, in the entrepreneurial space, like, there’s a lot of, like, sort of the cult of leadership sometimes, like, the great person who made this all possible. But I think for me at least, it’s been very helpful to be able to step back and see that it took a village to get where we are. And I think that takes some humility and being able to to take the eye out of it. You know? Like, I built The. I did that.

I did that. Like, if we hadn’t had the board that we have, we would never be here. If we hadn’t made the right hiring choices and gotten lucky to find the right people, we wouldn’t be here. So I think to me, humility is a huge piece of being able to see the challenges in front of you and and address The. And, you know, even when we start this conversation, it was like, The get things done mentality. I think the ability to stop getting things done and to step into strategy in many cases requires humility. Right? Because you wanna just keep your head down and keep chugging away and doing the same thing because you don’t wanna admit that the thing that you’re doing isn’t working, and it’s more comfortable to just keep doing that and not realize that you have to change things. Yeah.

So to me, that’s like The all goes back to a humility and a and a willingness to admit that, like, the thing you thought was gonna work for the long term just wasn’t it was maybe right 6 months ago, but it’s totally not right now. And you gotta step back and think of it differently. You know, you know, I think you get good at humility because you have people that keep you honest. Right? Not because you’re actually good at it. Right? I’ve friends and family and colleagues.

Richard Medcalf
Yeah.

Brett Simmons
You cultivate a network that helps you stay humble.

Richard Medcalf
Yeah.

Brett Simmons
You don’t just have that ability necessarily.

Richard Medcalf
Yeah. Yeah. I know that you said that that, you know, one part of this is to actually look at yourself and and your flaws and your plan and all the holes in that plan and then still be able to go to your investors and board members and say, you know, go with me on this. Right? So there’s a kind of conflict. Like, there’s this kind of balance, right, of, like, having the ability to see the see the floors and also a kind of a deeper sense of confidence that it’ll be okay anyway.

Brett Simmons
Yeah. That I mean, maybe that’s it’s probably a little different from humility when, you know, just thinking it out loud now. But, like, I characterize as jumping, like, jumping in a cold lake. Like, you see the challenge, you see all the flaws, and yet you have to know that you’re competent enough to execute on it still. And I think that takes, it takes having people around you to encourage that Yeah. For 1. You can’t just hope that you are strong enough to do that because you won’t be. But then it also just takes, you know, repetition and feeling that confidence, like, I grew up a perfectionist.

I hated doing things wrong. I probably spent more time doing homework than any child because I, like, didn’t wanna turn anything in. It was ever wrong. And I think it just took getting knocked down and having people around to say, like, it’s not about whether you got it wrong or right. It’s about your competence level to fix it. And I think we try to build a culture in our organization like, don’t take it personally when things go go wrong. Fix it. Right? You’re hired because you’re smart enough to fix it, not because you’re gonna get it right every time.

So, you know, I think that’s part of the humility and the confidence side of things.

Richard Medcalf
So, Fred, it’s been a fun conversation. Tell me The what multiplying your Impact gonna look like. So what would be an amazing future for ScaleLink? You know? What what or or you, you know, through The? What what would be a huge, impact for you?

Brett Simmons
To me, it’s getting to that next level. You know, I think that there’s a period from, like, 3 to 5 years, 3 to 7 years for a business that’s maturing and growing where it’s a really difficult transition to get to that scale where there’s profitability and ongoing sustainability. And we’re, like, right on the cusp of doing that. You know, as I mentioned, doing fundraising right now to try to get there and, have the right net assets and equity to build the company that we think is possible. And when we get there, it means we’re gonna work with like, we’re only hitting 32 of the 50 states right now. We’re gonna hit all 50. We’re gonna work with twice as many CDFIs and really just, you know, multiply the total impact that we can provide to this this industry that I think has been bereft at the right financial tools to grow, and this is the tool that can help them get there. So to me, if we can really not just achieve the sustainability, but achieve the reach and the depth in each market that that we can serve, then that that would be success.

And I think we’re, like, you know, I see all the flaws in the plan and all the challenges, but I also am confident that I think we’re, like, right The. And hopefully, you know, our next round of investors feel the same way.

Richard Medcalf
So Brett, how are you gonna need to shift yourself, how you lead, how you operate for you to multiply the impact? So what what’s the stretch, the shift, the edge for you? Because what got us here doesn’t get us there.

Brett Simmons
Yeah. I I still think it’s a little bit of transitioning out of the the execution mindset some. And as much as we change directions on The path over the last 3 years, the overall direction didn’t change at all. Right? Like, we’re still just we’re executing. And now I need to be in this mindset of, really thinking about the next thing and the next product that we can build to make this an organization that’s not just at the whims of a secondary market. Right? If you’re gonna be a market maker, that can’t be your only business because it’s a volatile place to be. So, you know, part of this next strategy move for us is taking the systems that we’ve built and the efficiencies that we’ve built doing really small loans, which takes a ton of operational savvy, I think, and figuring out what we can do with that and other markets that benefit the same nonprofits that at the end of the day, we wanna create tools for them to be successful. And so I need to, you know, be able to focus on that and make that pitch and build out The.

And, you know, sometimes you can be really good at execution, but it’s a different skill set as you move towards, you know, that that next level.

Richard Medcalf
Yeah. That next state. Yeah. Well, thank you.

Brett Simmons
So and I’m looking forward to figuring it out with the right people around me. So

Richard Medcalf
Yeah. Well, thank you. Thanks, Brett. It’s been an interesting conversation and a fun one. Love getting into understanding, the role that you play here as a market maker, really facilitating these loans to entrepreneurs that otherwise aren’t gonna get them. And, you know, I think your vision in in doing that is is is great. Right? And then the way you’ve really put everything in there to to make this happen over the last few years. I think it’s been really helpful to kinda remind ourselves on this this balance between execution and strategy.

Right? For there is a time to execute and there is a time to stop, pause, and recalibrate. And often, we get into that buzz of, like, let’s just keep going, keep going. Not always in the right direction actually. And it can be hard because stopping and thinking is sometimes harder than charging forward, actually. So it’s a great it’s a great catch. And then I think, you know, I think it’s your points around philanthropic giving, Impact investing are are really valid, right, as from somebody who’s who sees that close-up, right, at multiple levels, right, in the in the financial system in which you operate and also The as a nonprofit yourself looking for for investment. So I think that’s Impact input that you’ve given us. Yeah.

And then I think just this reminder of of humility, which has been beautiful. So thank you for for sharing everything.

Brett Simmons
Yeah. Thank you for having me. It was a fun conversation, and hopefully, our story helps other people who are on the cusp of taking that risk. They wanna find the next stage of of how they can be impactful and maybe are ready to make the jump.

Richard Medcalf
So if people wanna find out more about you or about Scalelink, where should they do that?

Brett Simmons
Yeah. So scalelink.org is our website, or you can email me directly. I think it’s on The website, but if not, it’s just my first name at scalinc.org and and they’re always happy to talk with people, you know, whether they’re interested in scaling itself or how they can increase their own impact and and take some risk and hopefully contribute to the bettering world.

Richard Medcalf
Beautiful. Thanks, Brett. It’s been a pleasure.

Brett Simmons
Thank you.

Richard Medcalf
Well, that’s a wrap. If you received value from this conversation, please do leave us a review on your favorite podcast platform. We deeply appreciate it. And if you’d like to check out the show notes from this episode, head to expudrent.com/podcast, where you’ll find all the details. Now, finally, when you’re in top leadership, who supports and challenges you at a deep level to help you multiply your impact? Cover more about the different ways we can support you at xquadrant.com.

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