What it takes to become a conscious investor

In this episode, Legislate meets Liall, co-founder of Etcho, an app designed to help everyone understand the impact of their investments, current and future. Liall shares the story behind Etcho and why it's really important to centralise all your agreements. Listen to the episode below:

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Learn more about Etcho

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Learn more about Legislate

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Charles Brecque: Welcome to the Legislate Podcast, the place to learn to learn about the latest incites in trading property, technology, business building and contract drafting. Today I am excited to welcome Liall, co-founder of Etcho on the show. Etcho is an app designed to help everyone understand the impact of their investments, current and future. Liall, thank you for taking the time. Would you like to please share a bit of background about yourself and Etcho?

Liall Medina: Yes, sure, thank you for having me on. Yes, absolutely. So, Etcho really started and as you said, in 2020, and over the last twelve months, eighteen months, it's really gained some traction and fruition in terms of the build and raising some cash, but really where Etcho came from and what it's all about is doing work within the ESG data space. So working with a lot of big players in the market to try and assess their investments and securities in terms of sustainability and the other co-founder, Charlie, worked within the UN and work within partnerships, and we really had a shared passion for positive change and what I found from my line of work was that there was nothing really for the retail client. Your average person, they might want to know which companies are really leading positive change and which ones are really going to spearhead us and take on some of the challenges that we face at the moment, whether that's climate change for example of poverty, what have you, and a lot of the data that we have on companies was really centred towards financial institutions, key players, those with money, those with the cash, the teams. So, what we wanted to do was we wanted to create a product, a conscious companion we like to say, which is an app, something that you can have on your phone that would help pinpoint the best companies. So, allowing people like you and I that are creating the most change, and also being able to assess your current investments and see where you stand, and we put our heads together and we came up with Etcho. So, the name Etcho has a Ghanian tie and it means 'tomorrow', giving hope to tomorrow and creating a positive future, really. So, Charlie, the other co-founder has done a lot of work in Ghana, so that's where that came from and, yes, the process obviously wasn't as simple as that, it wasn't an overnight process but yes, we put our heads together and we think we've got something really special and we're currently just building it now.

Charles Brecque: Perfect, and when you talk about ESG scores, do you find that it's the companies with the most money that have the best ESG scores because they can invest in that or what metrics are you using to track ESG in companies?

Liall Medina: Yes, so you've hit the nail on the head, actually. So, it's a really good point. So, what you tend to find with, kind of, ESG scoring is that for a lot of companies, it's a tick box exercise, it's a tongue-twister, that, and if they tick the right boxes they will get a good ESG score. So, to really understand what companies are up to and discover, perhaps, smaller companies, you've really got to dive in deep into the analysis and not just look at, are they saying they're doing? But what are they actually making money from? What are their business activities? And taking that holistic view on a company's performance saying, 'Okay, talking the talk but are they walking the walk?' Basically, then you're really able to analyse a company, because you're right, if the company's got a good PR team then they could potentially have a good ESG strategy and that's not something that we really want to promote, green washing essentially, and having access to that data as we were saying, for the retail client is very difficult. There's a lot of barriers to entry, so yes, that is something that we wanted to provide access to the everyday investor who perhaps just wants to put £50 here and there, or just wants to check their portfolio.

Charles Brecque: That's really interesting, and in terms of coverage, how many companies are you tracking?

Liall Medina: Yes, sure. Good question. At the moment, we have the capabilities to do several thousand companies, but I think what we're going to do is we're going to launch with quite a small, select universe, we test the waters, see what companies the market wants, see what our users want. Something that's really important to us is speaking to our community. We raised some money on CrowdCube, we've got a wait list, we've got subscribers, we've got people that we do user testing with, all of our investors, we like to engage with them. So, we're going to see what companies do they want to see? Either asking through questionnaires or what have you, but yes, we're going to start with a small universe, perhaps say 1,000 stocks, see how that does and then we can always tweak it as we go but we have the capabilities to do much more than that.

Charles Brecque: That's great, and through this journey of building Etcho and you're still building but you're engaging with customers, what's been your favourite moment so far?

Liall Medina: Yes, sure, the one thing that I've really learned when doing this is that you need to prepare, you need to be prepared to be flexible and agile, and pivot whenever you need to, basically. I think Charlie and I both have a really strong vision for Etcho and what we're trying to do, and enable people to create positive change and assess their investments, but the way in which you get to that vision might change. Your business, Etcho, is just a vessel to get to your vision and what I've really liked is being flexible and really engaging with our users and saying, 'Okay, here's an idea,' based of that and based of user feedback, how do we change that to really prioritise what they want and I think that's something that, as a start up, you really need to push is having that agility, but yes, engaging in user testing has been a real learning point for me, it's something I've never really done before Etcho, having come from a big corporation, so I've really enjoyed that.

Charles Brecque: Yes, I find user testing really insightful as well because you often end up with behaviours or results that you didn't necessarily anticipate but it makes it quite fun.

Liall Medina: Exactly, yes.

Charles Brecque: Through building Etcho, what do you wish you'd known before getting started?

Liall: Oh, good question. What do I wish I'd known? I think you've just got to make sure that you have a good team around you, which I actually, I already knew and I think that's why Charlie and I align so well. We work great together but I think your team is everything. So, we've still got a small team, but it's growing, so it's really worth putting in the time of finding individuals that are going to help you and that you can lean on and you put trust in, but I think you need to be prepared to do all aspects of the job, basically, and just step in when needs be and lead that team. Other than that, I think going back to our last question of you just need to be able to switch and be as flexible as possible because you're going to have to change, you're going to have to maybe go outside of your comfort zone a lot but yes, if you can be flexible and you can be agile, I think then, as a start up, you're in a good place.

Charles Brecque: Yes, I can definitely agree on flexibility. So, you touched on vision slightly, you know, what's the goal for thee next five years?

Liall Medina: Sure, yes, for us, sorry, at Etcho, our vision is to really empower as many people as we can to become conscious investors, so have the information that they need to make conscious investment decisions and discover some of these companies that are really making positive change, and that's the overall and overarching vision. Over the next five years, we want to really expand our data side of the business, really bring it as in-house as we possibly can, and scale it up and make it as accessible as we can to people and put it in as many peoples' hands as we can, and then possibly tap into other channels, so rather than just looking down the B2C route, perhaps B2B, looking at businesses as well, that's certainly something that we'll be looking to do and one thing for us that's really important is education, and community as we touched upon just before the podcast. So, yes, really exploring the community and the educational side of the app. So, yes, you can look at how companies are performing, their areas of sustainability, impact, investing or range of topics that you want to learn more, you could jump on the Etcho app or thee Etcho website and engage with that material and content. So, that is something that we really want to expand on over the next couple of years and I think that is something that we're going to start really, post MVP, really start focussing on is that extra content and those extra educational pieces.

Charles Brecque: Well then, that's a broad vision, so good luck, and I think education, especially in a domain like finance is really important. Best of luck. So, I imagine as a co-founder with a growing team, you've interacted with contracts quite a bit. What are the key agreements that you look at the most?

Liall Medina: Key contracts, at the moment we've got a lot of people in terms of whether that's contracting or you have a lot of help from freelances, web designers, app developers, so those kinds of employment, VA agreements, they're always changing hands so that's something that we interact with a lot. There were a lot of contractual frictions, if you like, when we were closing our precede round and I think this really goes to what your business would be really useful is because we're trying to centralise them all and create somewhere that you can easily just create, basically, just easily throw out some contracts, basically, is what I'm trying to say because yes, when you're raising cash and you're closing, you've got term sheets and contracts going between investors and that can be quite painful if you don't know where to start, basically, so having a repository would be really useful but yes, at the moment, it's a lot of employment contracts and things with freelancers, app developers, stuff like that.

Charles Brecque: Great, and with those contracts, are there any common areas of friction that you've encountered?

Liall Medina: There's not really any common ones but I think it's not so much that there's common areas, it's just having a standard template and then easily being able to integrate some of the terms, if you like, whether that's milestones employees have to hit, or if you're getting work done, for example app development, something like that, it's quite hard to know when someone's starting out which areas that you should be tweaking and which areas you shouldn't touch, basically, and a lot of traditional law firms, it's got a high price to even take a look at it, there's some friction there for sure.

Charles Brecque: Yes, I think tweaking standard templates is always a challenge, even if it is something simple like adding a probationary clause or adding some form of performance clause, and that's really where Legislate try to fit in is making people to make those amendments without necessarily having to get lawyers involved. Yes, that's a common area of friction that we're trying to solve as well. Liall, I'm conscious that I've taken already a lot of your time, so I'm going to ask you the closing question we ask all our guests, if you're being sent a contract to sign today, what would impress you?

Liall Medina: Yes, sure. Okay, so what would impress me about the contract, it would definitely be transparency, easy to digest. Sometimes you get these contracts, you know, pages and pages, and it's the bottom 10% that's actually relevant. So, easy to navigate, transparent, and yes, get straight to the point, basically. Highlights the key points so you can get through the noise because I spend a lot of time reading through contracts and it's as I say, it's only the last couple of sentences that are actually relevant. So, that would be really important for me, I think.

Charles Brecque: Great. Sounds like you've just described Legislate.

Liall Medina: Yes, free advertising.

Charles Brecque: In the sense that, yes, we try. We do our best, but no, I think the key thing with our contracts is we definitely try to present the key terms as a set of questions and answers so that when you do look at the contract and the actual text, you know what you're looking for, if that makes sense, and in terms of the actual text itself, we do try to simplify and avoid us using legalese where possible, but when we have to use legalese then we do annotate the contract so that there are explanations to help you understand what it is you're signing up to.

Liall Medina: Yes, yes.

Charles Brecque: So, yes. Thank you very much, Liall, for taking time to be on the show, best of luck comparing the stock markets and bringing transparency around ESG.

Liall Medina: Yes, no, thank you. Thanks for having me on and yes, who knows, maybe we'll be partnering at some point further down the line.

Charles Brecque: Yes.

Liall Medina: Thanks very much. Bye.

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