Join me in today’s conversation with Eleni Janis, she is the managing partner and CIO of Equivico which is a female owned investment firm in New York. In our discussion, Eleni shares her thoughts and experiences around inequality and how the power of our curiosity and questions can make a difference in how systems are implemented over time.
She has a personal passion for big change and believes that the best way to create equality is to increase access to capital, improve education and health care outcomes. Through the mission of Equivico Eleni and the organisation have helped to create a bridge between investors and small businesses who are in need of financial capital without bias.
Show Notes
Eleni shared that one of her favourite books is Sapiens by Yuval Noah Harari and she loves to read poems by Octavio Paz who is a philosopher and poet. One of her favourite poems is Ithaca by Constantine Cavafy as it has helped her to enjoy the journey and not only the destination. One of her favourite songs is Lean On Me by Bill Withers.
To get in touch with Eleni, you can connect with her on LinkedIn and read her article feature on Family Office Insights. You can also find Equivico on LinkedIn and their website.
Episode Transcript
Claire 00:00
Hello and welcome to a new episode of Narratives of Purpose. My name is Claire Murigande, I am a scientist by training, a TEDx speaker and your host on this show. This podcast is dedicated to amplifying social impact by bringing you inspiring individual stories of ordinary people making extraordinary impact within their communities and around the world. If you're looking for a programme that showcases unique stories of changemakers, stories of people who are contributing to make a difference in society, and at the same time you want to be inspired to take action, then look no further. You are in the right place. So get comfortable and listen to my conversations.
Claire 00:52
On this week's episode, I continue to discuss inclusion with my new guest, Eleni Janis. Eleni is managing partner and Chief Investment Officer at Equivico, a woman-owned impact investment firm based in New York. In this conversation, we speak about her research and her work at the intersection between investing and social justice, with a particular focus on developing access to capital for small businesses. Eleni's firm, Equivico, is in fact, driven by a strategy of inclusion, and they champion new models for a better and more inclusive economic system. Please take a moment to rate and review our show wherever you get your podcasts. And for now, listen to Eleni's journey and her passion to advance the economy in different ways.
Claire 01:54
A warm welcome to you on the podcast Eleni, it's really a great pleasure to have you on and you're joining me from New York. How are you doing today?
Eleni 02:01
Hello, Claire, I am doing great. It's a pleasure to be here virtually in Switzerland.
Claire 02:07
So before we start, tell me a bit about yourself. Can you introduce yourself for our listeners? What is your background and what led you to create Equivico?
Eleni 02:15
Yes, Equivoco by the National Community Reinvestment Coalition, it is indeed an impact investment firm. It provides services primarily focus on investment management, and deploying capital to underserved businesses and communities with the goal of untapping, both market opportunities, niche markets that haven't been tapped, and that also and foremost, to provide access to quality capital for businesses and people who have traditionally been a cut out of that capital, and giving them the opportunity to both fulfil their full potential, but also actually create more economic GDP ultimately grow our economy in ways where everyone is lifted up in more inclusive ways that the times call for. So how did I get here? I think the name of our company, Equivoco, tells a bit of our story. It stands for equality and victory for all and that is grounded in the experience that I have had, as well as my partners at the National Community Reinvestment Coalition, which is diverse career experience founded in inclusive economic policies and economic development. Just a quick overview of my personal history; I was born and raised in Greece, and they lived briefly elsewhere in Europe. But I've spent most of my adult life in the US in New York, and working in Washington, DC, of course, in New York City, but also states across the country. My work has been rooted, and especially the beginning in social science and research. Starting for years, as the opportunity agenda matters, public policy and systems, especially the financial system and public policy in the United States, on the federal level on the local level, and how the design of the systems and the implementation of the system have led and created discrepancies and inequalities, whether those inequalities happen across racial lines across socioeconomic lines, gender or geographic line. Absolutely it is the case in the US that the colour of your skin, your gender, and certainly where you're born - if it's a lower income community, we'll define and do define your prospects in life and what you may accomplish, at least for the majority of the population. And so my background is founded in a very deep understanding of systems and personally a passion for big change. Maybe it is reflected in my own story of migrating to a different country very far away from where I was home at the time. But the ability and belief to question what is around you takes nothing for granted. And pursuing change when it's needed is something that has fundamentally led both my life but also my career. I do believe that curiosity and questioning what happens is important, not because it necessarily needs to change, a lot of things are great as they are, but only when we understand our environment. Why what happens, why the train runs the way it does? And also why do you presumably act the way you do? Only when we gain that awareness of self and systems I think we can be more conscious citizens of the world, but also pursue change and even economic change and opportunity and create success and profits.
Claire 06:06
You mentioned something there about research. And you also said that since you were in the US you have done a lot of research, tell me how that connects with the way you came up with creating, Equivico and how you use that research in what you do today?
Eleni 06:20
Our research was focused on understanding inequalities, as I said, in order to develop both communication and policy in the United States. I will draw just a few examples of key findings that are informing how we finance lending today, and how we are seeing and designing solutions that improve access to capital for underserved businesses. One of the most fascinating things is the work that we did on studying biases, both implicit and explicit bias, individual and systemic. And we did that work with top scientists in the United States from Berkeley to other universities and practitioners. One of the things is how when we look at systemic lending, so in lending, when a lender or a bank or an alternative lender considers the application from a small business, for a loan, will use a range of data more or less, depending on the lender to determine the credit worthiness, as much as is determined that if I give you $100,000, as the lender, will you pay back? And what's the possibility of you paying back on time, and overall paying it back? That information that goes into making that assessment could and sometimes absolutely does carry a bias that can disadvantage certain populations. So for example, in your application, in that analysis of creditworthiness, you use a reference to geography where you are based in the US or your status as a homeowner. It is likely, as we know, from the data analysis that people who are black, or people who live in certain regions of the United States will be deemed negatively in their application, they may lose certain points. And in this case, I'm referring to an automated analysis of risk assessment that is mostly used in tech driven lenders. So we know that if you are actually born in a low income area, or are of certain ways that the likelihood of being a homeowner is less likely, the factor that you may not be a homeowner doesn't determine the value of your business, or your ability to actually pay it back. For that matter there are studies that show that if you're not a homeowner, you may be more likely to be more likely to pay it back or you may be more invested in your business and have more flexibility of cash flow to accommodate the needs of your business. And we should remember that at least the businesses that we work with are very small businesses that have 50 or less employees. And in some cases, you know, they may have 20 employees. So really, the success of the business is intrinsic to the livelihood of the founder. And there is more data, so not to get lost in that. But certainly my understanding and my research and our research at the time of how systemic bias may impact real life outcomes and may impact whether a business can actually access capital or not, has absolutely informed what we do today in a way that's very practical. So we have our own standards of underwriting and we know what is fair lending and what isn't. And when we work with lenders, we examine their process to understand what they do and ask for changes when necessary to align with our standards. So that is some systemic bias. Now another topic that fascinates me and certainly informs what we do today. And I think it's a matter that impacts most people in most professions is implicit individual bias. And fortunately, or unfortunately, if we as human beings, and I think you started biology, Claire, you may know that we use shortcuts in order to make very, very fast decisions in our daily lives. So for example, when we cross the street, or consider crossing the street, we see a red or a green light. And depending on that light, we decide to cross the street. However, you don't see that the light blinking for about one minute whether you should close or not, it is an automated shortcut that happens in our brain, a very split second decision that happens based on the sign that you get. So similarly, those shortcuts are very common across our everyday life. And that is actually how bias I created. I know I'm oversimplifying. this actually some scientists will say, "Oh, well, we can add some detail." But like at the basis of it, that's what bias is. They're misinformed, in this case, the shortcuts that impact our decisions, so one of the shortcut in lending may be that if you are African American, if you're black, and you're a business owner, and walk into a bank and ask for loan, the officer that seats them, the loan officer may have somehow unintentionally or intentionally may have formed an opinion that you are more likely to default on your loan because of the colour of your skin. And what that does is that it impacts implicitly, I think, largely how that loan officer will treat your application, the National Community Reinvestment Coalition, which is again my partner and in this and where the Political Studies from has run for several years, mystery shopper studies, where they have sent business owners, they pretend to be business owners of different colour, gender, race, to banks to ask for a loan. And we have seen this behaviour that I'm describing. So for example, if you are African American, you are less likely to be offered a business card from the loan officer, it's less likely significantly, less likely that you will be encouraged to apply. And your meeting tends to be, if I remember correctly, the meeting tends to be short, it tends to be a short conversation. So people are discouraged from applying, largely because of the colour of their skin. And we couldn't say that's why it happens. But we know when we look at the data that it does happen more often that people of colour are discouraged when they seek a loan. So when we think about how that race is going, again, back that I've done, but there is that it is available, how it informs our work today is absolutely informs in extremely practical ways, from our assessment of data analytics in the underwriting process, to knowing what is the experience of someone who has a very small business, who may be black, maybe a woman, when they have traditionally gone to a bank branch, if even one is available in the neighbourhood to actually ask for a loan. We know what the experience has been at least, we think that we know based on research and based on experience of the people around that. And then in the way that we choose to work with lenders, for example, online lenders, we take that into consideration, which is why in addition to some very good responsible lenders on the ground with physical branches, we actually believe in the power of online lending, a little bit more impersonal approach and access and reach to these businesses, because surveys show that a small business that has been discouraged from applying for a loan in the past may be more likely to apply for a loan online, in part perhaps because of that lack of even potentially some shame. Because, if you've ever walked into a bank, or been in a position maybe as we all have to ask for money, maybe you asked for your as a child, your dad, your mom and and as an adult, people don't you know. Money is not an easy conversation to have. And when you feel constantly discouraged from pursuing it, there are a lot of elements in it, including maybe even a self embodiment of the idea that you are not worthy of it.
Claire 14:23
Let me take an example, let's say so I am black woman, I am now moving to the US because I'm a now in Switzerland, and I want to open my business and I have let's say 10/15 employees. I've had this first experience, perhaps at a branch in my neighbourhood, but it didn't work well. How could you support me in getting the loan that I need? And if I'm tempted to also go online? So my question is a bit twofold: how do you support small businesses? Is it more online? Or is it in more also in different ways?
Eleni 14:50
So if you were in the US and you're looking for a small business loan, how would they be able to help you? You can absolutely go to the Equivico website, equivoco.com and say that you're interested in a loan, so you would fill out the form. So at that point, what we do is that we connect you, we would direct your interest to the lender that works with us and uses our capital to finance a loan. So you can go to equivico.com and express your interest without you knowing, of course, everything is transparent, but it's a very smooth process. So you click it, you click here, you click there, you find yourself in the place where you make where you submit your application for a loan. In the past, and also in the future, we'll have additional services for small businesses, which can also be found on our website.
Claire 15:47
So you're basically an intermediary, and you work with different lenders and your range of partners is growing. How fast is it growing? And why I'm asking is that do you see this, that the interest is really growing and people are ready to invest in small businesses? Or do you think it's still you know doing some convincing work to do and we're not there yet?
Eleni 16:09
We are relatively new. We've been working on this for at least a couple of years. But we launched the fund just a few months ago. So we are growing and the movement for small business financing is also growing on the side of investors. The pandemic COVID-19 and the severe consequences on small businesses, has shed the light. And we kindled the conversation about small businesses being the backbone of the American economy, which is something we say a lot. And but I'm not sure that we always actually realise how important they are. The pandemic really helped shed light on this because there was a lot of news about small businesses closing with small businesses not being served by certain institutions, during the pandemic, when the government used private institutions to deploy government backed funding. And in addition to that, we actually saw how important small businesses are in our everyday life. Because if you walked down the street, and you saw certain stores closed, or maybe you had a conversation with a small business owner, and you realise how hard they tried, and how successful they are, in perhaps building their business and staying alive, it really brought at ground level awareness of the importance of small business. Traditionally, there's been a class of investors that have financed that, which is mostly really banks, that has changed, that's been changing. That is actually part of our mission, as a company is to educate investors in new asset classes or new opportunities for investing where you generate returns. And small businesses are the focus right now. There is increased interest, both from philanthropic foundations and the endowment side, whether asking more questions and really wanting to make a difference there. We work with the Established Markets Foundation, a large international private philanthropy, we work with them to support small businesses in this way providing financing, and then their institutional investors who have become very interested. I will say that with institutional investors, they're becoming very interested in ESG, environmental, social governance investing overall. And we propose this and definitely can certainly advocate and bat for the case that small business lending is certainly a socio economic positive impact impact type of investing. We do get very good responses and I do hope that we will help grow the market and that we will ultimately connect new capital to new capital and bring capital to this asset class, as I like to call it, capital that in the past didn't have access even to invest in small business lending. Yeah, so I'm positive, it's going well, and I hope that in addition to Equivico others will pursue the same
Claire 19:07
And just out of curiosity, do you also have individual investors or you're only working with institutions and philanthropic organisations?
Eleni 19:15
We mostly work with institutional investors, but we will also work with high net worth individuals, individual investors. We have individuals as we've now started fundraising, who are very interested, and honestly, some large family offices may really enjoy working with us even outside of the context of this specific strategy. Because they tend to be individuals who are very focused on the impact they want to make. They're trying to define the impact we want to make and Equivico because they find a partner that is absolutely genuine, there is no greenwashing and we were the opposite of greenwashing. But we know the system very well, we know exactly what to do and what to change, and of course we remain open to innovating and becoming better. So high net worth individuals usually find a great partner in their own journey of investing their money in a different way.
Claire 20:10
And speaking about impact, how do you measure the impact of what you're doing for the businesses?
Eleni 20:14
Our impact framework is largely based on economic impact analysis, which is a traditional method of measuring the impact of a project or capital on the local economy. So that is fundamental in our measurement. In addition, we use Gene, which is the leading field capacity, same time industry measure in the US for impact measurements. So we have combined our know-how with the Gene framework, which incorporates the SDGs.
Claire 20:49
So SDGs, for those who don't know, are the Sustainable Development Goals. Right?
Eleni 20:54
Yeah, absolutely. The Sustainable Development Goals. Among them is the goal to fight poverty. And those are very broad, high level goals. But I found that they have the most robust guide online for investment managers, but even other settings and institutional investors as well.
Claire 21:13
And to get your perspective on, you know, looking forward, and in the future, you were speaking about systemic bias, and you want to influence policy as well and also communicate with investors. So from your perspective, and the environment where you're active right now, how do you see this moving further?
Eleni 21:30
I absolutely do. Think it is a movement of interests and people, I most certainly think that the future is an interdisciplinary approach to business, it has become imperative that we as individuals and corporations are very intentional and very conscious of the impact that we have on people, including our employees, and our customers, and our shareholders, as well as the environment. Today, we are faced globally with increasing poverty and economic inequality has been documented by everything that hangs out, there is a thing at this point, the only thing that we can do to solve that is increase access to capital, improve education and health care outcomes. And, unless we do that, I mean, we can create products, and we're gonna keep building products and selling products, eventually, less and less people will be there to buy them. So I think at the end of the day, it comes down to that. I certainly have views about how the world should be and how we can all try to be, I don't think I'm honestly better than anyone, I have my own experiences and points of view. And the one thing that I am passionate about is that we must bring our heads together and really act in a more interdisciplinary way, whether maybe a social scientist informs, and the other way around where the nonprofit world becomes more accountable in a way which I will appreciate that more accountable to business standards, and actually supported in their pursuit to bring more business standards in their organisation, which is has not traditionally been honestly supported by philanthropy.
Claire 23:13
Absolutely. I couldn't agree more. I think the word interdisciplinary is key here. And if I would give my own personal interpretation of that is another way of speaking about diversity, because you're bringing people from different lived experiences and different backgrounds to solve the issues that we're all facing in the end, right?
Eleni 23:31
That's absolutely an excellent point. When you think about diversity. But yes, you're right, interdisciplinary in every way from the discipline, theoretical discipline to the people. And the work you do is interdisciplinary, and your interest from these two I know working in healthcare, supporting women in advocating for women in the workplace, it all comes together.
Claire 23:59
What I like to do towards the end of these episodes is that I asked my guests the same three short questions just to have insight into what type of music you listen to and what type of books. What is at this point on your playlist on the top of your playlist or on your nightstand? What are you reading at this point?
Eleni 24:15
I'm reading two things. I'm reading Octavio Paz, a philosopher, poet, and Sapiens by Yuval Noah Harari, which I'm sure you know as it's quite well known. So I'm reading these two books, and I've read Sapiens in the past. It's a good overview of human history and brings in different disciplines from different sciences. The one thing that stuck with me there in conversation also with a friend from neuroscience is ultimately that maybe our ability as humans to evolve our behaviour may be the ultimate differentiation point between us and the rest of the animal kind. Again, simplifying it, so I'm focusing on that love And I love philosophy. I love poetry.
Claire 25:02
My second question is, do you have a piece of music or even a book that was really special for you at a specific time in your life and why?
Eleni 25:10
It was certainly, I guess maybe I can, quote A Greek poem called Ithaca, which is by Constantine Cavafy. And ultimately it talks about Ithaca, this is the pursuit to return to Ithaca. And that is how it is the journey that matters, not the destination, the destination is the drive for waking up in the morning. But looking forward to what the journey brings, is what the poet talks about. And I am someone who's very goal driven. So it's taken a lot of time, a lot of life to learn to settle in the journey and enjoy it. But I'll say that the more I do that, the more I find I know, of course, they enjoy the journey more, but I appreciate all the surprises and the learnings that it brings with it.
Claire 26:07
And very last question, do you have anything you want to recommend to our listeners, a specific song perhaps that you have on repeat? Or even a book or something else?
Eleni 26:17
Yes. I mean, I think Sapiens is great as it's just a big overview. And, one song that came to mind is Lean On Me. I think it's a great song, and perhaps on a larger societal level, the ability that we can lean on each other and think more about unity rather than competition, then it helps not to feel alone.
Claire 26:42
Before I let you go, would you like to share any last words with our listeners? What would them take out from our conversation today?
Eleni 26:50
Yeah, absolutely. I would say the take out would be to be humble and confident. And I'm sure you know, your listeners are very curious human beings. Reach out to each other. And, again, question what you see and reimagine the future, whether that's your personal future or others. And I always question why we do what we do as individuals or as groups or as businesses, and from their innovation and greater happiness will probably result. And if you want to find us, as I said before, we are at Equivico - equivico.com. And we'd love to talk to you, Claire, this wonderful, good luck on your show. I've enjoyed listening and getting to know people around the world. Keep up the great work.
Claire 27:43
Thank you. And thank you for being part of these people around the world who are making change.
Claire 27:57
According to the CFA Institute, environmental, social and governance, otherwise known under the acronym ESG, or non-financial factors are increasingly applied by investors to identify risks and growth opportunities. The way I see it, is that we are at the beginning of a new era of socially conscious and sustainable investing. I definitely like Eleni's approach with her firm Equivico, which is to make the world a fairer place in a profitable way, equality and victory for all. You will find more information about Equivico on their equivico.com You'll also find the link in the show notes. Thank you so much for tuning in today. I appreciate you taking the time. That was episode number 33. A Conversation with Eleni Janis, be sure to leave us a review wherever you get your podcasts. If you like our show, remember to tell your friends about it and share within your network. You can also connect with us through our social handles or our website. Until the next episode, take care yourselves and stay well and stay inspired.