Origin Story Interview W/ Dimitry Gershenson, Enduring Planet

Origin Story Interview W/ Dimitry Gershenson, Enduring Planet

Brighter Future

 / 

May 31, 2023

#BrighterFuture #entrepreneurship #Sustainability #ClimateChangeSolution #originstoryseries #seekthechange #SustainableFinance #ClimateInnovation #ClimateEntrepreneurs #SustainableFinance #ImpactInvesting

Brighter Future

We have the pleasure of sharing the story of Dimitry Gershenson, Co-Founder and CEO of Enduring Planet. Enduring Planet offers simple, fast, and founder-friendly financing for climate entrepreneurs.

Thank you so much for joining us, Dimitry. Could you tell us a bit about yourself and your businesses?

My name is Dimitry Gershenson, and I am the co-founder and CEO of Enduring Planet. Our company is a climate-focused FinTech lender that provides non-dilutive growth financing to climate entrepreneurs of all sizes. We have a fast, flexible, founder-friendly process and product offering. Although relatively new, having launched publicly in April 2022, we are actively deploying capital to invest in climate-focused small businesses and startups. Currently, we offer two instruments: a revenue-based financing product for early revenue, high-growth, and high-margin businesses, and a grant advance which provides working capital to companies that have won government grant funding for climate projects.

What is your bigger vision, and why should people care about what you do?

Climate change is here, and the world is on fire. We are in a pivotal decade where action needs to ramp up on a scale that’s never been seen before. The type of transformation society requires over the next decade is unheard of. All of this requires capital, and by many estimates, upwards of $10 trillion of investment per year is needed to keep us below two degrees Celsius.

In 2021, approximately only $650 billion was invested in climate; that leaves big gap, of which between $500B and $1T is in credit. There’s a huge opportunity for innovative capital providers to step in and fill the space that traditional lenders and banks have left open.

Today, earlier-stage companies either have no growth capital options or have to go to venture capital, which is expensive and exclusive— especially if you're not a white guy. It's always hard to raise venture capital, but even more so in today’s market.

We want to change that. We’re building a platform that offers climate entrepreneurs non-dilutive financing— that is, funding that does not compel founders to give up ownership in their companies— from inception to IPO. We aim to deploy $2.5 billion over the next few years, but the vision is a lot bigger than that.

Capital is just one piece of this puzzle. We want to build an entire ecosystem of partner services and additional products around navigating capital and fundraising because, frankly, we don't have time for these things to take time. People need money to solve this problem now, and if that doesn’t happen, we're all going to be in a pretty dark place.

Where does your journey on this start? Could you tell us a bit more about your background?

My family immigrated to the United States from Russia in the 90s because it was not a friendly place for us— especially given the fact that we’re Jewish. I ended up studying Applied Ecology as an undergraduate, following in my brother's footsteps, as he had taken the same major.

After college, I joined the Peace Corps because it resonated with me as a way to build an understanding of complex human and ecological systems while doing good work in the world.

One of the biggest lessons I learned during my two years in Honduras was that my passion for saving the planet was not really about natural systems— but instead about creating more resiliency, access, and sustainability for people and communities.

Even if we burn the planet down, on a planetary timescale the Earth doesn't care about climate change. Even if we have ecological collapse, over some time frame, life will return again. But people won’t.

After my experience in the Peace Corps, I shifted my focus to supporting marginalised communities through sustainable development. I pursued a degree in Energy and Resources at Berkeley, intending to do a PhD. I focused my master's degree on driving capital into energy access in emerging markets for because it was a powerful lever for change and a grossly under-invested space.

After completing my Master’s, I decided to shelve my PhD, as I had the opportunity to join Facebook and build its energy access program. This was a valuable moment, and it allowed me to direct meaningful capital into the space and have a real impact, so I gave up my National Science Foundation Fellowship and spent five years at Facebook. During my time there, I deployed approximately $15 million into the energy access market. This was mostly into financial intermediaries that could leverage our capital to raise additional financing. As a result, by our estimates, we unlocked close to half a billion dollars of additional capital and expanded electricity access for about 3 million people for the first time. I’m very proud of this accomplishment.

In addition to this work, I led some social impact-focused initiatives at Facebook, including running corporate accelerators in Puerto Rico and India and setting up a credit fund with Calvert Impact Capital to finance women e-commerce entrepreneurs in emerging markets with small micro-loans to support their growth.

In early 2020, I left Facebook to pursue other opportunities. I joined Enduring Ventures, as an operating partner involved in both the M&A and venture studio sides of the business. I led some mergers and acquisitions for the company and was responsible for a portfolio of rural internet businesses, which I ran as COO for about a year. Additionally, I helped incubate one of our first venture studio companies, which successfully raised money and achieved its goals, and I still sit on the board of directors.

In April 2021, I stepped down from my operating role in the company I was running, as we had brought in a seasoned Telco executive to take over the business and move it forward. At that time, the Enduring Ventures team encouraged me to build a new company out of the venture studio.

I wanted to go back to my roots at the intersection of climate and capital, and I was frustrated by the market's lack of options available to founders. I brought in a co-founder, Erin Davis, a well-experienced credit person who built a fund for clean tech lending in emerging markets. She is an incredible partner, and I am beyond humbled to work with her every day.

Since then, we’ve raised significant capital and completed over 20 transactions, with plans to finance over $25M in investments in 2023. We invest in mitigation, adaptation, and removal, and we’re open to providing capital to both small businesses and startups.

What exactly made you take the step to found your own business? And how did you meet your co-founder?

I wanted to start my own company due to several factors. First, I have a hard time working for others— a characteristic of many founders. You spend your life building a career and find yourself wanting to have more control. Secondly, the opportunity was there: the Enduring Ventures team offered me the safety of a venture studio to build a company from scratch.

When finding a co-founder, I spent a long time thinking about what I was missing as the “perfect entrepreneur” to build this business. One of the primary things was that I had invested in lending businesses before but had never been a lender. If you're going to build a FinTech credit company, you need that expertise in-house, and it needs to be a core part of the team.

So I started thinking about who in my network could make the deal work and also help raise money, both commercial and concessionary. I was looking for someone who brought depth and breadth across investing, fundraising, and investor relations in our operating space.

One of the first people I reached out to was Erin Davis. I met her while at Facebook, when she was fundraising for SIMA. We didn't end up working together then, but we stayed in touch. I'd always been impressed with her. We spent almost two months working to align values and expectations, and then she came on board full-time. She has exceeded every expectation I ever had, and I admire her ability to execute, think strategically, and drive this business. Without her, we wouldn't have raised the debt we raised. We put together a ~$5 million facility in six months at a 10% cost of capital and over 90% advance rate, which is unheard of in this industry.

Perhaps more importantly, Erin shares the value to prioritise supporting underrepresented founders: this actually has become an investment mandate of ours. We prioritise lending to underrepresented entrepreneurs, diverse teams, and companies serving marginalised communities.

That’s great. It’s definitely a struggle for many entrepreneurs to find suitable co-founders.

I come from a position of privilege because I have a deep network in the industry, which made it easier for me to find a co-founder. However, I acknowledge that only some have this advantage. I was lucky to find someone who shared my values and culture, making it easy for us to agree on how to run the business.

While ideological diversity can be valuable, co-founders must be aligned on core company values. Misalignment can cause friction and lead to failure. We were fortunate to find a Head of Product (now Chief Product Officer), Josh, who joined us about six months after we started the company. He initially worked as a part-time product consultant but later expressed his desire to be considered for a full-time position. We were super impressed by him and brought him on full time in March of 2022.

What part of your work would you say is most fulfilling to you?

The most fulfilling part of my work is the impact we have. We provide capital to those who are tackling some of the most significant challenges of our time. I also enjoy finding ways to support founders beyond just investing, including connecting them with other capital sources and services and providing operational expertise when needed. Our partnership with them is what makes the work truly wonderful.

I enjoy my role in the company. I like talking to people and sharing our story, and even though it may sound strange, I get a kick out of fundraising. While raising capital from VCs can be difficult, there's a certain thrill to it that I appreciate. I enjoy the constant hustle of the work, even when there are setbacks. Prioritising and managing interactions between different tasks can be challenging, but it's also rewarding.

What would you say were the biggest challenges faced by Enduring Planet?

First, since we are a venture-backed company, it’s challenging to raise venture capital for a business that operates at the nexus of the industries we are involved in. Climate investors often need help understanding FinTech, while FinTech investors need help to comprehend climate. So finding individuals who fully understand both and are willing to invest in the space takes a lot of work. We successfully navigated this issue with our initial funding round, and I’m optimistic about where we’re headed.

Secondly, there is a customer education problem. Many founders lack a comprehensive understanding of the capital landscape available to them. Venture-backed founders have been given the false narrative that VC money is the best tool to finance all their needs, but this is just not true. The incentives for VCs are not always aligned with what is optimal for entrepreneurs or their businesses regarding capital efficiency. VCs seek allocation and are focused on multiples, meaning they want to acquire more of your business every chance they can, which means they’ll sometimes push against better financing options when the time comes. This is not ideal for entrepreneurs and is worse from an IRR (Internal Rate of Return) perspective.

We need to teach founders how to think about capital holistically.

What mistakes have you had in your business and what were the learnings you took from those experiences?

We make mistakes every day, and that's part of the game. You need to push yourself harder if you're not making daily mistakes.

One mistake that I often think about happened during our first round of fundraising: I just pushed myself to do too much. When you're raising capital, people tell you it's a numbers game with high meeting density and volume. So, I had weeks where I did four to five pitches daily, which resulted in 20 pitches a week. I pitched to about 250 investors over five months. However, I didn't do it in a sustainable way for myself. While we raised a little over a million in a month and a half, raising the remaining million took another four months. I showed up to every pitch feeling drained and with less conviction, without taking the time to recharge. I probably blew about 90% of those pitches. I was tired and would say things like, “Yeah, I think we're building the right thing. I don't know, whatever.”

People only want to talk to you when you're energised, excited, committed, and candid. Fundraising is a numbers game, but you still have to show up and be your best every time. If that means taking fewer meetings and focusing on recharging, that's what you need to do. That was a significant lesson for me.

Another mistake came early for us. There's a common misconception among founders building businesses that revolve around automation and scalable models. They believe they can skip the personal, “squishy” work and opt for a more streamlined approach. However, small business owners and startup founders ultimately want to have a relationship with their investors. Therefore, as a FinTech lender, it's crucial to consider how you work towards automation while building and maintaining trust with clients.

There were times when we tried to go through an entire deal without ever having a call. We thought we could just cut a term sheet and skip the meeting. But of course we learned that this approach doesn't work. There needs to be a person-to-person conversation to build trust, even if you automate most other processes. But it's still okay to have human interaction, and it works even at a billion dollars worth of volume.

We learned that we should only automate the pieces that make sense to automate and then build a small team responsible for having those conversations. This lesson applies to many enterprise products and SaaS companies; you still need human interaction, where people feel comfortable and safe throughout the process. You can't just send them a link and say you're done. You must be aware of the customer and figure out where you can be hands-off and when to touch base.

What were the biggest “Aha!” moments that shaped your entrepreneurial and personal path?

One of my biggest realisations was that you don't need to overwork yourself to succeed. This is especially true for founders, as there's a prevalent culture of hustle that suggests you need to work 80 hours a week to succeed. I've found that this isn't necessarily true, and that being thoughtful about how you invest your time is more important. At Enduring Planet, we've prioritised creating a work culture that emphasises balance and thoughtfulness over quantity of hours.

Another big lesson I learned was that it's much easier to be authentic to yourself than to try and fit into a mould that doesn't suit you. I've lived with anxiety for much of my life, and I’m on the autism spectrum, which can make me look prickly or overly direct, but I've learned that it's better to be true to myself than to try to be someone I'm not. In past roles, there were often times when management would push folks to “disagree and commit” to strategy or projects even though people didn't personally feel okay with what was being proposed. I didn't want that type of culture in my team. I've prioritised creating a work culture where people can be themselves and express their opinions without fear of being shut down or ignored.

Lastly, it's important to align your work with your values. Working on projects and with organisations that align with your values can lead to greater happiness and a sense of purpose. This is especially important in today's world, where many pressing issues require attention and action. While not everyone has the privilege to work on their passions, if you can, you should try to align your work with your values.

Who or what would you say has been the biggest inspiration in your life and career?

While I can’t pinpoint a single inspiration, I draw inspiration from many people. I believe that this is healthy, as it provides me with diverse perspectives. I worked in the environmental space because of my brother's passion for natural systems and climate. This was 20 years ago, and his enthusiasm gave me the confidence to pursue the same field.

My parents also inspire me because they took a significant risk and moved our family across the world to escape a terrible situation and start something new.

And, of course, my daughter inspires me daily with her endless kindness and curiosity. She reminds me to be a better person. Both she and my wife are major influences on my perspective— my wife has really changed my worldview and taught me so much about justice and resilience.

One unique aspect of my career development is that I intentionally built relationships with people who could act as mentors and teach me about my work. I consciously started this process by spending time with professors during my undergraduate studies and during my time in the Peace Corps, grad school, and Facebook. I continue to seek out mentors to this day, and they continue to inspire me.

What were the most significant compromises or sacrifices you made to get where you are today?

Perhaps physical and mental health. As I was saying earlier, for a long time, I pushed myself in ways that were not sustainable, and I didn't realise it at the time. If I could go back, I would do things differently, but I also learned much through that process. It built certain muscles that are useful for being a founder and for being thoughtful about how we approach our work. I've been very fortunate to have the resources, network connections, and opportunities I've had. It may not be fair to say that I've deeply sacrificed, as there are people I meet daily who have gone through hell to get to where they are. I made choices about how I work, how I exist, and what opportunities I chase. For example, I joined the Peace Corps out of college, earning only $9 a day for two years, which affected my employability afterwards.

What kind of world do you envision, or what future are you actively working to create?

It could be summed up as a new climate economy, a system where we can survive. The alternative is bleak, and many people who aren't immersed in this space don't realise the gravity of the situation. We are on a dark path, but every step we take towards the right direction is powerful and impactful. It will take a collective effort to prevent a difficult future. I hope my children won't have to live in a bunker, unable to go outside and socialise with friends or get food. We're in a wild moment, and I'm working toward creating a liveable world.

I have hope, partly because I need it. If I didn't have hope, there wouldn’t be a point in doing anything anymore given the trajectory we’re on as a species. But there's also a reason for hope. We've progressed with policies, regulations, government commitments, corporate actions, and consumer activism. Of course, we'll not dismantle capitalism to save ourselves, nor is it the only path forward, but progress is being made. At the very least, we're trying.

If we look ahead a few generations, what would you like your children to take from your journey and your business?

I was able to create something that benefited the world. I don't know if my legacy is solely based on my career. It's more about who I am as a person and my ability to empower others to succeed. I prefer my legacy to be that I helped many individuals achieve success rather than just having built a business.

What advice do you have for upcoming entrepreneurs or those who want to start out?

For 90% of them, the advice is: don't start a company, especially a venture-backed one. However, if you’re set on being an entrepreneur, the other advice I would give is to be sure that what you are trying to build makes sense commercially and from an investment perspective. Many people want to raise venture capital to build their businesses, but they cannot fund or capitalise in the way they think.

Another piece of advice is, to be honest with yourself about your limitations and what you lack. Many people believe they have everything it takes to be a solo founder, but they don’t have all of the relevant experience for their work. It could be an excellent idea, but it doesn't mean you can build it yourself. You should bring other people in who are talented, who can support you, and who complement your skills. Sharing ownership with others who add value is okay. Our business is built around reducing dilution— again, funding that can force a founder to lose control of their business— but having 30% or 20% of a successful billion-dollar business is way better than having 95% of a failing business.

Finally, work on something that matters. Don't build the next NFT marketplace just because it's trendy. There are many things wrong with how our society exists today, and if you are going to build a business, it should be focused on changing it for the better. Building something that makes real change is more effective and impactful and will endure and generate. Focus on something that matters to society and work on it, regardless of your background. You will not only make money— but also feel fulfilled.

If you had one message that could reach everyone on this planet, what would it be?

There has never been a better time to work on climate change. If you can contribute, please do so. So many of us depend on climate stability in our way of life, and our future depends on people acting. The world is on fire. We need to take the appropriate steps to put it out.

Thank you so much for taking the time to share your story with us. Capital is a profoundly important part of the climate fight, and it’s incredible that there are people like you trying to secure it for planet-friendly companies. We sincerely hope you make the progress you consider necessary toward funding the global economic paradigm shift we so badly need.

If you would like to learn more about Enduring Planet, visit www.enduringplanet.com.

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