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Cleantech Investments and Leadership with Jennifer Von Bismarck

on • 24 min. read

Episode 18: Cleantech Economy Investments and Leadership with Jennifer Von Bismarck

Most of our guests to date have led companies that develop renewable energy plants, sell cleantech equipment, or provide energy services. But today our guest is a pure play. She's a career-long investor who served in leadership positions at sequential investment funds, and she now serves as the co-founder and CEO of the DC-based Galway Sustainable Capital. Jennifer Von Bismarck's shop invests in companies, projects and assets that drive environmental and social resilience at the local level. I wanted to learn from Jennifer how a career in investment shaped her views on running a successful company.

Overview


Find out more about Tigercomm’s work at the center of the cleantech industry at www.tigercomm.us.

You can listen to our episodes on Anchor, Spotify, Apple Podcasts and iHeart Radio.

 

Introduction - Getting to Know Jennifer Von Bismark

Mike Casey:

Hey, cleantechers, and welcome back to another episode of Scaling Clean, where we tap the experience of clean economy CEOs for actionable insights on building teams and running companies. You know, most of our guests today have led companies that develop renewable energy farms, sell clean tech equipment, or provide energy services. But today our guest is a pure play. She's a career-long investor who served in leadership positions at sequential investment funds, and she now serves as the co-founder and CEO of the DC-based Galway Sustainable Capital, Jennifer Von Bismarck's shop invest in companies, projects, and assets that drive environmental and social resilience at the local level. And I'm looking forward to learning how a career in investment shaped reviews on running a successful company. Jennifer, welcome to the show.

Jennifer Von Bismarck:

Thank you, Mike. Thanks for having me.

Mike Casey:

All right. Tell me about your background. How would you summarize your career to date?

Jennifer Von Bismarck:

Well, as you said, my career to date has been very focused on finance in particular on structured finance and specialty finance. We have over the last 20 years really invested in various forms of cash-flowing assets. And it's really somewhere around the mid-2000s that investment discipline brought us towards looking at sustainability, in particular, looking at renewable energy, that was really being built off the backs of long-term power purchase agreements. That brought us into a number of transactions in the sustainability space. And as we started to see the need for capital in that space, especially in smaller companies, that were building great projects, but having trouble finding the right type of project financing, we really designed Galway Sustainable Capital to be an investment company that could fill that gap and help build out sustainable infrastructure at that scale.

Mentors and Early Career Influences

Mike Casey:

Who were your most important mentors and what did you learn from them?

Jennifer Von Bismarck:

It's a great question. I think I've probably benefited from a lot of different mentors over the years, but I think there are probably three who stick in my mind. Back in the very early days of my career, my first mentor was, when I worked for Bill Gates on his investment team and his chief investment officer actually hired me. I was the first person hired onto that team to really build out the investment function for Bill's family office, his personal investment office. And in that sense, I came with a philosophy degree and an undergraduate degree from Mount Holyoke College and was really new to finance. And in that space we set up the investment office and I really got to watch firsthand how to construct an institutional asset management portfolio. And to say that it was eye-opening is an understatement. But that was a really important experience for me and I think really brought me into this space. 

My second mentor is the founder of the original Galway Partners. He was a brilliant tax attorney and business person. And I think his three strongest attributes were that he was an incredibly kind person, an incredibly bright person, and he was really fun to work with. And I think when I think about building a corporate culture, I always think about the type of environment that he created. When we worked in the original Galway, we did a lot of interesting, sophisticated transactions, but we always had a lot of fun doing that. And that was a really important cultural lesson, I think, to take away. And I think my third mentor, that's really important, is my husband. I met him in 2005, and the significance of that was he runs an environmental non-profit organization in DC and he was the first person who really made clear to me that you can't get up in the morning and go to work and actually have an impact on the things that you care about. And when I started to think about that and then started to apply that to what I did, which was finance, I started to imagine what it might be like to do finance, but also do that and have an impact at the same time. And once I started to see that might be possible, that became sort of a lifelong objective for the rest of my career.

From Transactional to Transformational Leadership

Mike Casey:

If you and I sat in front of a wide-screen TV and we had split-screen footage of how Jennifer Von Bismarck was managing people when she first managed other people, and how you lead and manage now, what differences would we see?

Jennifer Von Bismarck:

I've been doing finance for 20 years and in some ways, the industry has changed over the last 20 years. And in some ways, our organization and our organization's structure have changed a lot. I think in the early days there was more of a distinction between the investment team and the operations team. And the investment team really worked as a group of partners making investment decisions, and the operations team was really executing transactions. And there was a bit of a difference there, but also Galway at that time was really executing one transaction at a time, less focused on building an enterprise. And today, I think what you'll see is Galway Sustainable Capital is designed to be a financial institution that's really programmatically addressing a gap in the capital markets. And we've built a team that can really address that problem at scale.

And so each member of the team is contributing something that's really important. And so there's a lot more collaboration, a lot more input from every part of the organization. And I think you'd see us really taking that into account as we make decisions going forward. But I think the second piece of that is as you get older, as you have had more experiences, more things go wrong, you start to be less afraid that something might go wrong, and you start to be more focused on building a great team who can manage things when they do go wrong. Cause inevitably they do. And so I think there's also a little bit more of comfort or style of being much more relaxed these days, and really welcoming inputs from all sides because we know that eventually things go wrong. The most important thing is to have great teammates who you're happy to be in the trenches with and get through both the good times and the bad times.

The CEO's Essential Toolkit and Roles

Mike Casey:

I really like that you're building a team so it can handle things when they go wrong, not if they go wrong. Ok, you quit your job tomorrow, you become a lecturer at the business school at Georgetown. How would you describe the components that comprise the role of the effective CEO to your students? In other words, what are the different parts of the job and how would you rank them in importance?

Jennifer Von Bismarck:

Sure. I think the most important part of the role of the CEO is to first have a clear vision of what is it you are trying to do and why are you trying to do that. And then the second piece that falls out of that is you need to be able to communicate to the people who are working with you and to the people who are investing with you, what it is you're doing and why you're doing that. And I think if you both have the vision and can communicate it effectively, that's really the first essential piece of being a good CEO. And then the thing that makes it all work is, again, bringing in the good people who can execute that plan and building a culture that really allows the people who are working with you to bring their best selves, and get things done.

Mike Casey:

In that hypothetical classroom, several of your students approach you to ask, what's the most important advice you're going to give us to track a career that you've had? How would you respond?

Jennifer Von Bismarck:

I think the first thing that is important is to understand, what is this career that I have. And I feel incredibly lucky. I feel like today I'm really sitting in my dream job and my dream job is that I get to get up every day and go to work and work on things that make a positive impact on the things that are important to me. I get to do it with the people I wanna work with and we are investing in companies that are led by really inspirational founders who are making an impact on the ground. And so that is the career that I have and I really feel grateful to have that. In terms of how you go about doing that?

I think the most important thing and I think it's really underappreciated, but it's very hard when you are first working and you have a job and you're trying to figure out how to get a paycheck, it's hard to also think about what's important to me. What feels right to me? Those two things don't naturally get bundled together. And I think it takes some time and some determination to really go out and understand what it is that's important to you and not just what's important to you, but in a work context, what do you wanna do that's gonna give you that sense of satisfaction? And I think the first thing you have to do is really be dedicated to that exploration. Then once you find that, the next thing I think is important is to get experience doing that.

And for me, I took the approach of just anything I could do that would get me closer to working on this was worth my while, all of it was gonna become important, eventually. It doesn't matter, what order you get the experience, as long as you're learning  - you are getting better and you're getting more equipped to have the job that you want. And then once you have the passion and you have the experience, you start to share that with other folks, whether it's people who will join you as your team members or people who might be investing with you. And if they see that you both have the passion and the experience to do something, I think that's when you start to build that followership and people who are there to help you get what you wanna get done - done. And I think that's what it takes to put those pieces together.

Gender Perspectives in Professional Growth as a Woman CEO

Mike Casey:

Would you have a subset of that guidance that you would modify or newly offer for aspiring women CEOs in the early part of their careers?

Jennifer Von Bismarck:

Sure. When I think about packaging up my experience, my experience obviously comes from the point of view of a woman. So I think my experience, my advice are specifically crafted, crafted by and for people of my gender. I think an interesting question might be, would I have different advice for a man at an early point in his career? And I obviously don't know if I'm really well equipped to answer that. I think it's an interesting question. When I was starting out, and I think way back to the nineties when I was really just getting into finance, I was really excited for any opportunity to learn. And I remember one of my early jobs, I had a job at the Frank Russell Company, which is the home of the Russell 2000 Index and things like that.

I was offered a job typing the notes that consultants wrote during their interviews with investment managers. And so essentially I am a typist at that point, but I was so thrilled for the job and I was getting handwritten notes and typing them into a database. And what I would do is I would actually read the notes and I was learning the whole time about what all these different international pension consultants thought of institutional asset managers. So it was fascinating for me and I really enjoyed it. But I remember a woman who I worked for at that time said to me one day that she was really frustrated for me and I thought, ‘Why? I'm really enjoying myself’. And she said, ‘It's hard for me to imagine this company would take a man with the same degree that you have and ask him to type our notes.’

And I thought that was really interesting. I hadn't thought about it that way before. She thought maybe they'd be in a training program and being an analyst and promoted up the investment ladder. And so I thought that was interesting. And so I think about it really from a double-edged sword, which is, for me, I have been grateful for the opportunities that I have had, and I've really tried to learn from them and use that experience to take the next step. I am aware that maybe there are easier pathways, maybe there's a more direct line, but I'm also mindful that not everybody gets the opportunities that I've had. So I think to ask whether that advice might change based on where your point of entry is, it might. I think I still come at it with a sense of gratitude for the opportunities I've been given and this belief that if you make the most of those opportunities and treat them all as a learning experience, that at the end of the day is what you're accumulating. And that's what you'll be using later on.

 

Intentional, Professional Growth and Journey to Cleantech

Mike Casey:

You know, I heard you say in different terms something we talk about here, which is the importance of bringing intention and attention to your own professional growth, that you actually have that as something you owe yourself to do on a fairly routine basis, two, three times a week. I'm asking myself when I’m bringing my intention and attention to my professional growth, and  I really find it validating to hear you say that sitting in your corner office is something we talk about here a lot. It's really cool. I read in your background, if I did so correctly, that you got into cleantech after your first position as the CEO of Galway Partners, what drew you to cleantech? Was it the influence of your husband?

Jennifer Von Bismarck:

It coincides with the same year that I met my husband, and it's hard to say. We were looking at transactions in the agriculture space and working with landowners providing financing to various agriculture-related assets. I met my husband and at the same time, we started looking at other types of payment streams that farmers were getting. One of the other payment streams farmers were getting was royalties from wind farms and solar farms. And somehow I think that the confluence of those two things happening at the same time, both we saw the opportunity to finance long-term payment streams that had attractive attributes, but that were also filling a gap of capital need on the ground. Also, I started to imagine what if I started to use finance as a tool to also have a positive impact. And I think that was really the turning point for me.

Challenges and Unique Aspects of Clean Economy Investments

Mike Casey:

I imagine you've had the opportunity to compare notes with leaders working in different sectors. And if and when you've done that, is your takeaway that running a clean economy company different than running companies in mature sectors? And if so, what are some of those differences?

Jennifer Von Bismarck:

You pointed out that moment when I got into Cleantech once I realized that I could do finance and have an impact, for me there was really no looking back. When I see people who are doing basic fintech or other financial services or other investment activities without impact, I do see a distinction and they're numerous. On the one hand, I think clean energy, cleantech, the transition economy are still viewed as somewhat new and nichey. And I think you have to deal with that in the capital markets. The capital markets love certainty and they love a long history, and they love something that has proven liquidity on the backside. And I think there are a lot of things you'll see in the clean economy that haven't really proven out, their liquidity hasn't really proven out the sort of broad acceptance and don't have long track records of performance history.

So I know that we are working in a segment of the economy that's more difficult, which means you're talking to a smaller audience and you're really trying to help build the market while at the same time working with the market and talking to the market. And so that is definitely a different activity that a lot of other folks in the investment space do not necessarily have to engage in. But I really believe that with what we are doing, there is a big transition that is happening. And in this transition, there are tailwinds that are pushing us forward in that direction. And when you're in the capital markets and there are cycles and you have an economy like what we have today, you have uncertainty around interest rates.

It's very difficult to have your long-term forecasts or in some cases even your short-term forecasts about what to expect next period. For us investing in this space, we know that the transition is happening and it has to happen. We don't know how fast, but we are certain of the direction. And that's a huge benefit and a huge asset when you're working as an investor, if you know which direction the market is headed, that can give you a lot more comfort. It can make it much easier to take certain types of risks that are really more timing risks. So again, in many ways, I feel incredibly grateful to be working in this space. I think this is the most interesting, exciting segment of the economy of my lifetime and probably a lot of people's lifetime. And I feel that folks who are not yet investing in this space eventually are going to come around and start integrating some of the things that we do every day into their own investment disciplines.

Influence of Passion and Culture on Talent Acquisition

Mike Casey:

Is running a clean economy company different than running a company in a more mature sector? And you were talking, by my listening, your response was, we have winded our backs and it makes it like the interest level is higher. I'm wondering how that higher excitement, and interest level, how does that translate into day-to-day realities for you as a leader and as a manager of other humans.

Jennifer Von Bismarck:

Hiring great people is one of the two things that we believe we really need to do. Well, at Galway, we always say, we need to hire great people and we need to do great deals. And if we do those two things well, we're gonna have a successful business. It's very helpful from a hiring standpoint that this is an exciting time to be investing in clean energy. There are fantastic people who are smart, interesting, and motivated, and passionate who would like to do something in this space. And what's great at Galway is we are making investments, the day we make them, you see people go to work, you see things on the ground changing, you really see a very tangible, tactile impact, and it's immediate. And we measure, we have metrics when we make an investment, we'd like to see these things happen.

And then quarterly we measure those things and see that they are happening. It's a really satisfying space to work in. And because we can show that, I think we can really appeal to some of what I like to think are the best and brightest talents out there, it makes it easier to bring great people on board. And then I think the people who work at Galway are all really passionate about what we're doing. And that makes it a fun work environment. I think we work hard to bring in diverse voices so that we can hear people from different points of view who come with different backgrounds, different experience. Different things inform our own investment decisions about what's the right thing to be investing in today. That can be a very lively conversation. People feel very strongly about these points of view, and we really try to welcome that because I think the more people come with those different points of view and you hear them all around the table, you start to get closer and closer to what feels like the right point to start from. And I think those voices, you know, make us a smarter investor and a better organization.

 

The Importance of a Metrics-Driven Approach in Leadership and Management

Mike Casey:

Has a career spent in investment shaped how you lead and manage? In other words, are you, for example, a more metric-driven boss because you're a numbers person by background?

Jennifer Von Bismarck:

Yeah, I think as an investor we really are metrics-driven. The thing that we do at Galway that we try to apply across the board and we think sets us out from other investors is that our metrics are quantitative around financial performance, and they are quantitative around impact metrics. And so,  as I mentioned at the outset of an investment, we set up our expectations. Here's what we think this project is gonna deliver, and then on a regular basis, we measure those. Sometimes it's in CO2 tons, and sometimes it's in kilowatt/hours and sometimes it's in pounds or tons. But all of them are fairly quantitative metrics. But some people start their Monday morning with a deal call about what are going to do next. We start our Monday morning with an asset management call that says, how's the stuff we did doing? And we really focus on that. If we are going to be a multi-decadal financial institution, which is what we are planning to be, we need to make sure that the stuff we do performs well, so that we and our portfolio companies will be here next quarter and the quarter after that, continue to do those things.

Hiring and Creating a Diverse Work Environment

Mike Casey:

Broadly speaking, hiring is almost always cited as one of the most challenging parts of leading companies. What have you learned about making new hires?

Jennifer Von Bismarck:

Yes, at Galway, one of the things we really try to maintain is a corporate culture that is inclusive, collaborative, and diverse. One of the things that I fear most is working inside an echo chamber. And again, when you have very passionate people, if we all share the same point of view, you can get the very wrong answer if everybody's saying the same thing at the same time. So we really try to bring people who have a different experience, who have a different background, and we look for that when we go to hire people and we try to bring in a diversity of experiences. Our investment mandate is extremely broad, so we feel like we have to have this diversity so that we can address a large market, but we benefit from that diversity and hearing those voices.

And then I would say we also need to have people who have a little bit of perspective, and maybe I would even say a sense of humor because again, this is project finance that we do primarily. And anybody who's done that before knows that things do go wrong. Things break, and things don't happen on time. And so a lot of what we do is spend underwriting, what a sponsor tells us, what we think will happen, and then monitoring what actually does happen. And we look for people who are really good at analyzing projects, but also really good at understanding when things do happen. How do we make the most of this? How do we move forward? How do we get these assets to perform?

Motivations and Success in the Business World

Mike Casey:

Do you have a go-to interview question when you are talking to candidates? And if so, what are they and what do they tell you?

Jennifer Von Bismarck:

One of the most important things for me when I think about bringing people on board is to understand what motivates a person. Why are they coming to Galway? We have an opportunity here to make an impact, and it would be a shame to bring people on board who are not passionate about that. And again, because we seek diversity, passions can take lots of different forms, but my favorite interview question is, it takes different forms, but it's really trying to get at what motivates a person. What is that person really excited to do? Like if there's something you just can't help but do, what is that thing? What do you like to read? What do you do? To understand what makes them tick and what's gonna get them excited?

We are investing in projects that are dealing with income inequality, expanding economic opportunity and inclusion, with dealing with waste streams. We've looked at sustainable fashion, we've looked at all kinds of food and waste and fertilizer deals. For people who care about stuff, there's a lot here for you. And so we really try to get at what's in their heart? What can they get really excited about? To see if what they are gonna bring to our team is going to really be additive to this environment.

Personal Reflections and Gaining Wisdom

Mike Casey:

One of the most interesting questions we've been asking guests recently is about the habits or practices they identified and used to help them stay on top of their game as professional performers. We've heard answers ranging from attending the opera, weekend hiking, and getting up at five o'clock in the morning. What's Jennifer Von Bismarck’s secret sauce?

Jennifer Von Bismarck:

I think I would say something similar, or at least tangential to that, which is I like to think that by having experiences you're gaining wisdom. And I think that's true, that you can't always access that wisdom immediately. Sometimes you have to kind of turn off your brain, try to get away from being responsible for something for a minute, and do something like go for a hike or a walk, or a long shower even. You need a moment. And I think when you do that your brain can sort of reflect a little bit on, on what you've heard,  what you've seen, some problem you're working with, for me, that's when the wisdom starts to come out, is when you shut down everything else. And so I think all of those activities, frankly. We do a lot of hiking. We have a cabin in Pennsylvania that we retreat to, and there's a lot of outdoor time there. And you'll find that if, once you've been doing something like that for an hour or so suddenly problems start to work themselves out in a whole new way. And I find that to be incredibly useful, valuable time.

Mike Casey:

Is success in running a business more reliant on what you choose not to do or what you choose to do?

Jennifer Von Bismarck:

I really believe in having the vision and the intentionality. At Galway, we have a very clear idea of what we are trying to do from an investment standpoint. We have a pretty good understanding of our desired portfolio allocation, the type of exposures we want. We really study the transition and try to understand what markets are seeing this inflection point and a commercial scale-up. And we will sometimes reach out to companies we haven't met yet, but we've heard about and said, ‘Hey, you're doing something that's really interesting. We provide capital to folks like you. How can we work together?’ Our business is very intentional about what we wanna see happen. And I would say it's very much about trying to execute on that vision and the execution is the hardest part. I think we wanna make sure we have the vision and then again bring the people who can execute that very much about what we do do. And we don't spend a whole lot of time thinking about what we're not going to do as long as we have our vision, right? Do our homework and build the portfolio, build the strategy and the company that we've kind of designed in our vision.

Optimism and Action for a Sustainable Future

Mike Casey:

Closing question - is Jennifer Von Bismarck a climate optimist or a climate pessimist, and why?

Jennifer Von Bismarck:

In our business, I think you have to be an optimist. We're obviously betting on ourselves, we're betting on our peers, we're betting on our sponsor companies. We are definitely climate optimists. I think a lot of folks throw on the statistic that 60% of the solutions that we need are available today. And our capital is very much focused on let's deploy solutions now. So I would say that's a very optimistic point of view. That being said, 60% is not enough. One of the things I think you get the luxury of doing as an optimist is trying to take action and then influence other people to also take action. And we certainly need a lot of other action and a lot of other actors to come along. And there are a lot of things people can do that are helpful and supportive to the transition.

I'd say one of the most supportive things we see are companies and customers that have said, we wanna do this. We wanna be net zero, we want sustainable packaging. We care about forests and we wanna see forest projects that throw off carbon credits. We wanna see those get built. We understand it's hard. We understand that regulating things and monitoring things is hard, but we still wanna see that happen. There's gotta be demand for net zero, and there's gotta be demand for sustainability. And we need more of that. We need more companies to take those pledges. We need more investors to say, ‘I'd like to have exposure to this. I understand transition is happening, and we'd like to have our capital invested in that sector’. So I think we're optimistic, but we're very solicitors of other people to join our optimistic view because we really need more support.

Mike Casey:

Jennifer, it has been wonderful having you on this show. And I can't prove this, but I said during the Trump years that period would tell us whether or not we had hit the inflection point when markets and private sector decisions mattered more than policy environment decisions. And I think the verdict's clear that despite four years of attempts to monkey wrench to clean economy transition, perhaps by the gang that couldn't shoot straight, the sectors emerged growing a lot of velocity, et cetera. And my uninformed, non-expert opinion is that the financial sector was enormously effective during that period of time. So as an American and as a person with kids on this planet, I wanna thank you for the work you've been doing because I think it's the nitty-gritty of making smart capital allocations that are along with direct corporate purchasing. I think it's been the mainstay of continued momentum here. So appreciate the work you're doing. Thank you for being on the show and for the work you do.

Jennifer Von Bismarck:

Thank you very much. I've really enjoyed it. And I will put a plugin for the corporations, customers have been helpful, but we're also grateful I'm sitting here in Washington DC. There are a lot of folks in this town who've done a lot of work as well to make things like the Inflation Reduction Act, and other policies available to us. Every bit helps, and some bits are quite significant. But I couldn't agree with you more. I think we're a company of 2020. We were formed during that period of time because institutional investors wanted to see things happen. And I think we're grateful to be here and we're gonna keep up the work.

Mike Casey:

Jennifer Von Bismarck is with us here on Scaling Clean. Thank you so much for coming, Jennifer, for your time. Keep up the great work.

Jennifer Von Bismarck:

Thank you, Mike.