John COLEMAN

GOOD CAPITAL

VIDEO TRANSCRIPT

Good Capital: Building Companies Where People Flourish

John Coleman at Main Street Summit 2025

John Coleman, co-founder and partner at Sovereigns Capital, delivers the opening session of Main Street Summit 2025 — a talk on what separates “good capital” from bad, and how business leaders and investors can deploy capital to help people flourish.

Good morning. It’s the first session of the morning — how do you think Main Street Summit is going so far? Can we give a round of applause to the team?

I was telling some of our other speakers backstage, legitimately, I think this is one of the most important conferences in America. The team here does such a phenomenal job of bringing together a community and running it well, and I’m so grateful to be a part of it again this year.

Last year, I had the opportunity to speak on the topic of good money — how to use money as a tool for human flourishing rather than something destructive in your life. That involved the right mindsets and behaviors: thinking about how you earn, spend, give, and invest well, and how you teach that to your kids.

As we were thinking about what to talk about this year, Brent and I landed on the idea of good capital.

Capital Surrounds Everything

How many of you are business leaders in this room? How many of you lead a business right now? How many are investors?The truth is that capital surrounds almost everything we do in the world. There’s about $140 trillion in invested capital across the world right now, and it touches almost every business, every real estate development, even every college campus. We all intersect with capital in some way.And yet the truth is that — just like money can be good or bad in your life depending on the habits, mindsets, and values you bring to it — capital can be good or bad, both in how it’s accepted and how it’s deployed.So I want to talk through two things this morning. First: when you’re a business leader thinking about partnering with a source of capital — a bank, a debt firm, a private equity firm, a venture firm — what identifies good versus bad capital for your business? And second, more importantly: how can you and that capital partner work together to use that capital to build something good?

Capital Can Be a Force for Good

Obviously, capital can be good. If you look back a couple hundred years, it was the simultaneous rise of modern financial markets and the industrial revolution that effectively set humanity free from centuries — millennia — of poverty. As stock markets arose and the industrial revolution took off, an explosion in human prosperity happened. And even today, you can see huge flows of capital going into health care, national defense, and rebuilding American manufacturing. All of this is good for society, and often good for the people who experience it.But we’ve also all seen cautionary tales about taking the wrong kind of money from the wrong kind of people. There are tons of books and movies about the way investment bankers and private equity can ruin businesses, and many of you have experienced that firsthand. There have been stories recently about private equity firms and the damage they’ve done to the American health care system. And there are individual stories where entrepreneurs led their companies astray by taking the wrong capital.So it’s important — when we as leaders receive capital — that we think carefully about our partnerships. And for those of us investing, that we think about what makes our capital good.

What Good Capital Looks Like

While nothing here is fully comprehensive, there are a few rules of thumb you can look to when evaluating whether someone can truly be a partner in the capital you accept.Good capital is focused on partnership rather than transaction. This kind of capital is patient. It wants to be in it alongside you, within the business, rather than treating it as a one-time deal.It’s long-term oriented. Brent runs an investment firm called Permanent Equity — the name itself signals an inherently long-term perspective, building businesses for the future in a sustainable way rather than being myopic about quarterly earnings.It brings more than capital. It seeks to open up its resources to you so that you can stand shoulder to shoulder in the work, and it aligns incentives so that each of you is rowing in the same direction — serving those who have invested, while also serving the interests of the companies you’re invested in.It values culture as essential, not just as a cost. Many of us believe culture is the greatest competitive advantage in business, yet many short-term capital partners get obsessed with cost-cutting and efficiency at the expense of the long-term health of companies — companies like Hobby Lobby or Chick-fil-A that have built organizations to last based on the cultures they’ve established.Good capital cares for people, including you. Entering a partnership is a bit like a marriage — you’re working together closely. You’d never want to be in a close friendship or a marriage with someone you couldn’t trust, who didn’t really care for you.It tells the truth, even hard truths. That can be hard as an investor when someone’s dissatisfied with what you’re doing, and it can be hard to deliver a message when there are problems in the business. But honesty is one of the most essential characteristics of a relationship — and good capital is committed to it. It creates an appropriate financial structure for incentives, then stands by its word.Integrity, truth-telling, honesty, and reliability are some of the most important characteristics of a relationship you can build together.

Deploying Capital to Help People Flourish

This definition of good capital isn’t just important for your individual relationship or the business you’re building. Because when you accept capital from others, you enter into a mission together — to use that capital to serve others and to build the culture of your company in a way that helps people flourish.That’s what I want to talk about next: how do we deploy the capital we jointly enter into, in order to address major social problems, encourage flourishing in human beings, and create cultures and communities we can be proud of?Let me preface this by saying I am a red-meat-eating capitalist, like most of you. This is not about philanthropy or impact investing. In fact, a proper conception of business — or even real estate development — says that if you can build good cultures, it’s not only the right thing to do, it can be the right thing financially as well.There are a number of statistics on this. The London Business School monitored, for 28 years, the performance of Fortune’s “100 Best Companies to Work For” versus the rest of the public companies in the index — and found that over 30 years they outperformed their competitors by 2.4 to 3.8% per year in public markets. That’s almost 25 to 50% better. McKinsey has done extensive studies of both public and private companies and found that top-quartile cultures return about 60% more capital to investors than median cultures, and 200% more than bottom-quartile cultures.So what I’m describing — though it is the right thing to do — is not something that will damage your business. It will enhance it, in a way that’s aligned for all the people who are partnered with you.

A Crisis of Purpose at Work

This matters for another reason. We as leaders are facing a massive crisis of purpose and human flourishing in our society — particularly at work.A Pew research study recently asked people all over the world, in hundreds of countries: do you find purpose and meaning in your work? No country in the entire world had a majority of people saying their work was a primary source of purpose and meaning in their life. Italy was number two at 42%. In South Korea, only 6% said work was a primary source of meaning. And in the United States, it was only 17%.One out of five of the people in your companies — in the companies you encounter in your community — considers their work a primary source of meaning in their life. And this is coupled with almost half of employees saying they’re not thriving, with statistics across society indicating that people are not flourishing.None of us got into leadership to make people’s lives worse. None of us likes to see the people we’re entrusted with failing to flourish. And I think you can deploy capital to address that.

Practices That Build Flourishing

At Sovereigns Capital, we’ve partnered with many firms — Permanent Equity, others in our ecosystem, even the Harvard project on human flourishing — to think about what it looks like to reliably create flourishing environments for the people in your companies and communities.There are a few categories that help people flourish: integrity and virtue; mental, spiritual, and physical health; deep relationships; service to others; a sense of meaning and purpose at work; and financial and material stability. The good news is that as we identify those areas, we can also identify specific practices that capital partners and business leaders can roll out.We just hosted a conference a couple of weeks ago with 130 general partners — people who run venture capital and private equity firms — trading notes on the practices they’ve seen work. Let me highlight a few.Everyone wants a friend at work. Human flourishing is predicated on the depth and breadth of our positive relationships. So in our companies we develop mentorship groups and employee resource groups, where even outside the function of their teams, people can form deep relationships at work. These cost almost nothing, yet they build a community within your company rather than just an isolated group of individuals.Everyone wants help in a crisis. People go through urgent crises, and it means a lot when their companies rally around them. One thing we’ve started rolling out — and see others adopting — are employee benevolence programs: a fund that employees in crisis can tap, whether it’s a medical emergency, the death of a child, or car problems they can’t afford to fix. People can come and get grants to help them through.Even more impactful, those funds are often opened up so employees can donate to help their colleagues. We have one partner whose benevolence program received so much more in donations than was being drawn that they actually had to cap contributions — they wanted to draw it down more, because the truth is, people within a company want to help each other. When you help someone in a moment of crisis, it not only shows them you care, it builds a much deeper sense of community around the work.Everyone needs someone to share struggles with. Some of our best companies have adopted care teams or chaplaincy programs. Our friend Frank Harrison at Coca-Cola Consolidated has care teams at all his distribution facilities and at the home office — people dedicated not to the day-to-day work of the organization, but simply to wandering the facilities and caring for people struggling with family issues, work tensions, substance abuse, or other problems. Someone there to counsel, to listen, and to care can make people’s lives better — and at the same time, help them feel more integrated into the organization.

Beyond the Four Walls

These practices can extend beyond employees. We’ve started thinking about physical, emotional, and spiritual health comprehensively — not just for the people within the four walls of your organization, but for everyone you touch. And again, these practices often cost almost nothing; they just require intentionality.Beyond that, we like to see servant leadership training — people who lead from behind in ways that support their teams — and family-friendly health policies like adoption benefits.You can think about how those practices then influence a much broader sphere of people. They reach families — benevolence programs, health care, and daycare programs make it possible for the people in your organization to pursue what matters most, with the people they love most.They reach customers. Part of what you feel shopping at Hobby Lobby or pulling up to a Chick-fil-A is that you’re treated specially — as a valued customer. Adopting practices that do that not only spreads your company’s positive culture, it enhances the love people have for the services you provide.They reach suppliers. I say this as a former management consultant who knows what it means to be a little undervalued by the companies you work with. Suppliers and vendors are often neglected. Many of you are vendors to others, and you know you aren’t always treated as well as you could be. Taking a moment to think about those folks can form partnerships that last.And they reach the community. We can do community service. We can volunteer, so that cities like Columbia, Missouri — and the other places in which we operate — know that our company cares about the place, not just the people within our four walls.

A Final Charge

So as you enter into this, I’d encourage the business leaders in this room to ask a series of questions before entering any capital partnership — about whether that partnership can truly enable the things you want to accomplish for others. And for those of us who provide capital, to ask ourselves hard questions about how we’re still pursuing excellence, so we can continue to enhance human flourishing for those we partner with and those they serve.Based on last year’s talk, I actually wrote a book coming out in March called Good Money. I’ve thrown up a URL code here if anyone wants to check it out.But I’ll leave you with this. All of you in the business and investment community are in important roles — in ministry, in leadership, and in reaching others. It’s incumbent upon all of us to think not just about our own financial success or the success of our businesses, but about the ways we are stewards of thousands of lives around us every day. The more conscientiously we approach that, the better leaders we can be, the more we can lean into this problem of meaning and purpose in the broader society, and the more we can build companies that are not only financially excellent but are achieving the mission and vision we would have for our lives and our organizations.Thank you so much for your time this morning. It’s been such a pleasure to be with you.

John Coleman spoke at Main Street Summit 2025. His book Good Money* releases in March. Transcript lightly edited from the original talk for readability.*