In Edible-Alpha® podcast #44, Tera interviews Joel Solomon, author of The Clean Money Revolution. He is also the founding partner of Renewal Funds, a $98 million mission venture capital fund investing in early growth stage companies in organic food and environmental technology in Canada and the United States. In 1980, Joel was diagnosed with a genetic kidney disease, prompting him to learn more about organic and natural food. He ended up making a small loan and later an investment in Stoneyfield farm’s first 5 cows. From then on he started attending gatherings like the Social Venture Network where he also became an early stage investor in Seventh Generation. He has been investing in organic and sustainable products ever since and is excited that those types of companies are now part of the mainstream.
Tera and Joel discussed the disconnect between early stage entrepreneurs’ perceptions of available money for their venture and the sheer volume of individuals and funds looking to invest in the space at various stages, if you know where to look. Most entrepreneurs start out with “friends and family” funding (essentially people they know who will take a risk with them), later moving on to “angel” funding, usually by people who have run successful food businesses themselves and understand the space in that specific way. After entrepreneurs have grown their business with that type of funding, typically to at least $1 million in sales, they have then demonstrated enough traction to appeal to venture capital firms. Joel commented on how natural food investors are starting to look at even earlier stage companies now that there is so much competition at the product, retail and investment levels of the food business ecosystem.
Joel compares the relationship between entrepreneurs and investors like his firm to a kind of a marriage, emphasizing that trust comes first. He recommends interviewing the funders, getting references and ensuring both parties have aligned values. Because Renewal Funds is a mission venture capital firm, they first care about and screen for the product/service meeting their mission and the values and intentions of the entrepreneur aligning with theirs.
After their mission screen, they evaluate potential companies just like other investors in that they evaluate the business model and the skills of the entrepreneur/management team. One investment they are very proud of includes Alter Eco, which they eventually helped sell to a family office. The transaction created a foundation that supports fair trade run by those founders. Joel is excited about the business opportunities to improve the quality of people’s lives and the planet, and views developments like organic foods being available and cheaper at big retailers, like Walmart, as increasing food justice.
Joel talked about the stories and relationships that inspired The Clean Money Revolution. With that book and his other work, he calls for more consciousness and attention on how money is made and its effects on people and the planet. Tera and Joel discussed their belief in the opportunities businesses have to be a part of game-changing solutions to societal problems. Given that an estimated $50 trillion will change hands in the next three decades, Joel is excited about the possibilities of more people joining the revolution.