This Entrepreneur Has Raised $100 Million To Enable Investors To Align Their Values With Their Investments

In a recent interview, Doug Scott shared insights into his unique journey, blending diverse perspectives from his international upbringing and experiences, including in oil and gas investment banking, to building a sustainable investment platform. Today, we delve into the story of Doug Scott, tracing his path from unexpected beginnings to the founding of Ethic, a company pioneering sustainable investing.

Listen to the full podcast episode and review the transcript here.

A Global Perspective from Home

Growing up in a household resembling a quasi-United Nations, Doug Scott attributes his global perspective to the diverse and international influences within his family. Hailing from Australia, he absorbed different viewpoints from his parents, who advocated for social and environmental causes.

This early exposure became a cornerstone in shaping his worldview and later influenced the foundation of Ethic. Doug remembers growing up in a lovely leafy suburb in Melbourne and being involved in anti-gun rallies in the early 1990s with his parents in response to a terrible shooting.

Unexpected Paths: Oil and Gas to Investment Banking

Despite familial roots in social and environmental advocacy, Doug found himself navigating the intricate landscape of the oil and gas industry as an investment banker.

He loved the experience of working with terrific people and solving really interesting problems – but ultimately felt his career was facing the wrong direction. Reflecting on his experiences, he emphasizes the value of curiosity inherited from his father, whose stories of growing up in conflict-ridden Belfast in Northern Ireland inspired Doug’s pursuit of solving real-world problems.

A Pivot Toward Sustainable Investing

The turning point came when Doug realized that his career, though rewarding, lacked alignment with his values. Fueled by a desire to make a meaningful impact, he departed from investment banking and embarked on a journey to the United States around 2015.

During his time in the Bay area, Doug connected with his present-day co-founders, who were in New York at the time. Armed with a commitment to building something to make a difference and solving real problems, Doug co-founded Ethic, laying the foundation for a company rooted in sustainable investing.

Navigating Challenges and Building Ethic

The journey to building Ethic wasn’t without its challenges. Doug emphasizes the importance of transparency and personalized solutions, challenging the norms of index passive investing. The objective was to help people make informed decisions about how they’re investing. And to understand the second and third-order consequences of their investments.

By introducing tools that provide clarity on where investments align with individual values, Ethic aims to reshape the narrative around financial decision-making.

Ethic’s Mission: A Paradigm Shift in Investing

With Ethic managing capital on behalf of advisors and institutional investors, the company is on a mission to personalize investment portfolios centered on investors’ values and global causes. That’s how they can build investment solutions based on the issues and causes that are important to them and important to the world.

By building personalized, separately managed accounts, Ethic also creates an entire client experience that helps advisors and investment consultants better connect with their clients.

The business model centers on assets under management. Ethic acts as a fiduciary on behalf of its clients, building portfolios for them and then managing those portfolios.

Ethic Business Model

Ethic serves the advisory and institutional community. Ethic works on behalf of clients, who are, in turn, working on behalf of clients in a B2B2C model. Doug talks about how they’ve built an infrastructure that allows them to be custodial agnostic and build individual portfolios consisting of individual equities.

Ethic operates on highly advanced technology that has the capability to compete with highly sophisticated investors and advisors across the ecosystem. The Ethic team built a tech stack that stood up to institutional scrutiny from the very beginning, helping to navigate rigorous due diligence processes with its clients successfully.

Building and Developing Teams

Reflecting on the challenges of building and developing teams, Doug shares valuable lessons. He emphasizes the significance of finding people who are curious, humble, mission-driven, and coachable.

The imprecise science of team-building necessitates a focus on developing individuals, fostering ownership, and promoting a diverse and inclusive culture. Doug strongly believes in hiring people who will take ownership of their jobs.

Lessons from Fundraising and the Ethic Vision

In the realm of fundraising, Doug underlines the need to empathize with investors’ motivations at different stages of the company’s development. Understanding what each investor cares about enables effective communication and alignment of goals.

For Doug, long-term partnerships with investors who share Ethic’s vision for a sustainable investing norm are crucial. Ethic has successfully raised venture funding of $100.

Storytelling is everything, which is something that Doug Scott was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend Peter Thiel (see it here), where the most critical slides are highlighted.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

Doug concludes by reiterating Ethic’s vision—a world where sustainable investing is the norm. The company aims to bridge the gap between traditional and sustainable investing, advocating for a more informed approach to investment that considers environmental, social, and governance factors.

Words of Wisdom

In closing, Doug imparts valuable advice to fellow entrepreneurs—stay humble and stay focused. In the whirlwind of building companies, humility and focus are the compasses that guide the journey. As Doug Scott continues to lead Ethic toward a future of sustainable investing, his story stands as an inspiration for those navigating the intersection of values, finance, and impact.

Listen in to the full podcast episode to know more, including:

• A diverse upbringing provided a global perspective that became the foundation for Ethic’s mission in sustainable investing.
• The journey from oil and gas investment banking to building a sustainable investment platform was fueled by curiosity, a trait inherited from his father, pushing him to solve real-world problems.
• Ethic challenges the norms of index passive investing, introducing transparency tools and personalized solutions for investors aligned with their values.
• Building successful teams involves focusing on individuals, promoting curiosity, humility, and coachability, and fostering an inclusive culture.
• Understanding investors’ motivations at different stages is key to successful fundraising, creating long-term partnerships aligned with Ethic’s vision.
• Ethic envisions a world where sustainable investing is the norm, emphasizing the importance of considering environmental, social, and governance factors in financial decisions.

Ethic Inc. is an SEC-registered investment adviser located in New York, NY.

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