When the Internet boom busted a few years back, venture capital in the United States went hunting for the next big thing. "Clean tech" quickly replaced high tech as all the rage. VC firms began to bank on healthy returns from cutting-edge companies dealing in alternative energies and other grand environmental solutions. While the verdict is still out on the wisdom of this shift, one thing is certain: the largesse is finally trickling down to sustainable agriculture.
The key word is "trickling." Small sustainable producers will likely never have the same investment pull as a multinational wind energy conglomerate. But there's ample room in the emerging eco-friendly economy for niche-oriented operations wedded to socially responsible principles. More often than not, though, the profiles of these operations are too low to find room in the privileged portfolios of venture capitalists. It's not easy, say, for a vermiculturist with a backyard operation to convince the monied elite that his worms are worthy. It requires some translation.
This is where Janine Yorio comes in. Yorio graduated from Yale in 1997 with a degree in history. She went directly into finance, specializing in structured loans and boutique hotels. She did well. However, as real estate waned, she got out, deciding instead to pursue an industry with "real underlying growth prospects." After studying what was happening in the underworld of sustainable agriculture, Yorio reached a novel conclusion: there's gold to be found off the grid of conventional agriculture.
Venture capital firms generally do not want to waste time parsing the intricacies of an obscure agricultural operation. Their concern is how it'll pay off.
Yorio started NewSeed Advisors in early 2009. The company works with niche producers to transform innovative ideas into organized industries capable of attracting venture capital. VC firms demand clarity. They generally do not want to waste time parsing the intricacies of an obscure agricultural operation. Their concern is how it'll pay off.
A critical part of Yorio's job is to demystify what are often highly technical sustainable processes, reduce them to their profit-oriented essence, and market them to Wall Street in a familiar language. In a sense, NewSeed Advisors acts as an agent serving as a talent scout for relatively unknown agricultural innovations.
Yorio's relationship with the company TimberFish Technologies reveals what she's up to. TimberFish pioneered a complex process that transforms forest material into fish feed within a recirculating ecosystem. "It's so niche," explains Yorio, "so technical." But that's both its beauty and weakness.
Too much jabbering about feed conversion rations or "terrestrial-based flow-through configurations" will make eyes glaze over and wallets close, and you'll be back to depending on the generosity of friends and family to run your start-up. Reframe TimberFish as THE solution to THE largest pollution problem for an active industry with global dimensions, however, and ears suddenly prick up. Every company has a story to tell. But, as Yorio says of TimberFish, "the story needs to be told in a better way."
Yorio's work with a vermiculture company called CSR Plus Vermicast presents the related challenge of expanding a company's scale. The company converts organic waste into soil additives using earthworms. As it now stands, CSR is able to provide, according to its website, "a consistent supply of top quality worm castings" for people practicing urban agriculture, rooftop gardening, or greenhouse production.
Yorio's goal is to commercialize this model through a blueprint that aims to attract big municipal contracts. "It takes 20 million worms to recycle the organic waste of a small town," she explains, adding that there's no reason why CSR could not scale up to "process organic waste at the municipal level." With many large cities contemplating, or even enacting, composting laws, one can see how a savvy investor might find a re-conceptualized CSR to be an appealing investment.
Is this the future of sustainable agriculture? As the vermiculture and aquaculture examples suggest, we're not talking about grandpa's idea of food production. Indeed, if there's a catch to Yorio's quest to merge big capital with small sustainability, it's that the ventures most likely to succeed are ventures that have a technological element, are not afraid to enter the heady world of sophisticated finance, and are eager to grow.
It's not that there isn't room in NewSeed Advisors' vision for the small organic farmer wanting to enlarge his business. It's just that, at this stage of the game, a signature innovation--as opposed to the timeless logic of sustainable farming--is more likely to attract the kind of money that will allow a venture to become big, profitable, and sustainable.
Whether or not Yorio's rare vision will pan out remains to be seen. But what's worth noting is that New Seed Advisors is all alone in this endeavor. For that reason, if no other, it's worth watching.