Alexa brought up 996. Nine to nine, six days a week. Roy asked her what it meant, she explained it, and he said that was light work as far as he was concerned. I jumped in and said we were doing that on Wall Street, that's nothing. Two guys with banking in their past, agreeing on instinct.
Then Roy turned it himself. He said wealth gets measured in different ways. If you want to be wealthy in Elon Musk's image, that is typically what it takes. If you want to coach your daughter's soccer team, that is also wealth. He left an investment banking career when his oldest daughter reached a certain age. He said he has zero regrets.
I have heard plenty of people make the case for better jobs. Few of them admit they picked the grind themselves for years and knew exactly why. That is the register of the whole conversation. Roy is not asking our industry to feel differently. He is asking it to check its work.
I walked in already believing impact and returns are not opposed. What I lacked was a clean account of why that is still an argument. Roy's answer is that the obstacle was never the math.
Start with the number. Ford runs a $1 billion notional impact endowment, plus roughly $450 million of catalytic capital where impact is the primary purpose and financial return is secondary. Roy put their cost of capital at about nine and a half percent: a five percent legal spend rate they exceed, plus inflation. Miss it and they erode the corpus. He pointed out that hurdle is higher than many public pension funds and some sovereign wealth funds. So the portfolio most people file under concessionary is underwriting to a harder number than the portfolios people file under serious. That is worth sitting with before the next time someone says impact capital is patient.
Then the reading. Roy has a line about "a category of reading assignments that are in fact assigned but not read on the syllabus." He put Milton Friedman's famous essay in that category. He went back and read it, close to ten times, because he could not believe what was on the page. His read is that it is a stakeholder capitalism essay: businesses should follow the rules and invest in workers and communities for the purpose of increasing enterprise value. He added that Friedman also wanted a basic income for everyone. I am not going to referee that interpretation in a podcast recap. What I took was the method. He went and read it.
The part I actually wanted was the mechanic. I asked him what asset managers and venture capitalists specifically can do with any of this. He said the fastest thing you can do at any moment is also the hardest, which is to question conventional wisdom, then he made it concrete. He pulled the term "non-financial factors" out of fiduciary legal vocabulary. Empathy and culture sit in that bucket. Attrition is the easiest thing in the world to measure, and some sectors run two hundred percent annual attrition. Empathy and good culture reduce it, and the savings go straight to the bottom line. So "non-financial" turns out to be a labeling decision rather than an economic finding. His framing of the cost, in his own words: accepting things without questioning them means "you can lose out on alpha."
The psychology sits underneath all of it. Roy pointed at loss aversion, that when people are comfortable they will pay to stay comfortable and give up upside to do it. Narrow, affinity-based allocation, he said, may not be economically rational, but it is psychologically rational. Anyone raising a first fund from people who only write checks into what they already recognize should read that sentence twice.
Where I am still unsettled: I asked for what allocators do and I got a method, not a checklist. Attrition math is clean in a sector running two hundred percent turnover. It is not clean at a fourteen-person seed company where the founder is the culture and everyone is mid-vest. I do not know yet how to price that at pre-seed, and Roy was not claiming to. He also offered Anthropic as the example, saying Ford was offered the chance to invest in March 2024, that there were real questions then about whether the company would make it, and that the public interest focus which initially slowed its growth became a big asset. I believe the mechanism. I would still want to hear that argument made without the outcome already attached to it.
Earlier this year I wrote about the wrong kind of urgency, the kind you borrow from someone else's scoreboard. Roy opened this episode with urgency too, running the other direction. Ford has not taken outside money since 1947. The grants are the largest bill they pay. Purpose can create urgency, he said. That is the version I was reaching for and did not have a name for.
Listen to the full episode here: https://www.google.com/url?q=https://swimmingwithallocators.com/podcast/doing-good-is-not-the-trade-off/&source=gmail&ust=1790324065329000&sa=E
See you later allocator,
Earnest
Assigned But Not Read
On the reading nobody did, why "non-financial factors" is a labeling decision, and episode 109 of Swimming with Allocators with Roy Swan of the Ford Foundation
