Episode 16: Revolutionizing Agrifood Systems

Join host Todd Hovermale for a special conversation with Thad Simons to 
hear how The Yield Lab is investing in and accelerating high-impact early-stage companies in agrifood systems, around the world.

Thad is the Managing Director and founder of The Yield Lab. Founded in 
2014, The Yield Lab brings together new innovative technologies focused on 
improving productivity, enhancing knowledge, eroding boundaries, and 
merging historically independent ecosystems into a more cohesive 
agricultural system.

View Guest Thad Simons LinkedIn

Transcript

EPISODE 16 – Revolutionizing Agrifood Systems w/Thad Simons 

Transcript 

Voiceover 

SLU International Business Now Conversations That Matter is a podcast developed by the Boeing Institute of International Business in Saint Louis University's Chaffetz School of Business. Special thanks to founder Doctor Seung Kim for his grant to support the launch of this podcast. 

Todd Hovermale (Ad Read)  

This episode is brought to you by Enterprise Holdings. Enterprise Holdings is a leading provider of mobility solutions including car rental, fleet management, carsharing, vanpooling, truck rental, luxury rental, retail car sales and vehicle subscription, as well as travel management and other transportation technology services and solutions, to make travel easier and more convenient for customers. Enterprise Holdings’ subsidiaries and franchisees, together with its affiliate Enterprise Fleet Management, manage a diverse fleet of 2.1 million vehicles through an integrated network of more than 10,000 fully staffed neighborhood and airport rental locations in more than 90 countries and territories. Privately held by the Taylor family of St. Louis, Enterprise Holdings manages the Enterprise Rent-A-Car, National Car Rental and Alamo brands. 

Todd Hovermale (Intro) 

Welcome to Saint Louis University international business now, conversations that. My name is Todd Hovermale and I am the host for this conversation with Thad Simons. Founder of The Yield Lab. Thad launched The Yield Lab in 2014 after retiring from Novus International, after 13 years as its President and CEO. Novus International is a global animal nutrition company headquartered in Saint Louis.  

The Yield Lab’s mission is to enable entrepreneurs to sustainably revolutionize agrifood systems by investing in and accelerating high impact early-stage companies around the world, through its nonprofit branch, The Yield Lab Institute. It will, in parallel, provide educational resources and support ecosystem development.  

I sat down with Thad over the summer to learn more about The Yield Lab’s story, his vision and how he goes about executing its mission. I hope you enjoyed this conversation as much as I did.  

START OF INTERVIEW  

Todd Hovermale 

So, take me back. So, you recognize the difficulty in supporting early stage investing. You retired in 2014. Why did you establish Yield Lab? Why was it you and not somebody else? Why you? 

Thad Simons 

I have no idea. I guess it was because I was looking for someone who already done it, at least in the Saint Louis area and there really wasn't a lot. We did have bio generator, but most of their investments were in human health. You know, the bio phase of Saint Louis with everything bio. That was a part of that and this and that was good. It was a good start, but we wanted something that was more focused. Specifically, towards the cultural and food industries, and we're still missing things we don't really have a  food investment fund in Saint Louis. We don't have anyone that's really focused on the whole pet sector in Saint Louis. We're still those opportunities for this whole section sector to grow, but talking to the folks of Cultivation Capital, they started out as software investments and they moved into life sciences and it was through the Life Sciences fund, one that we were able to get started and then we could grow our own fund and raise our own money and own portfolio and all those things are necessary for getting a fund going. But it was that I think that realization that is a tremendous amount of technology development in the Saint Louis area initially is where we started from to be able to justify putting together a fund for these kinds of investments and then overtime the true demand was there. We found partners in other parts of the world, and it grew in an organic way. 

Todd Hovermale 

So, tell me, what was your original vision and then describe for me how it did grow organically? 

Thad Simons 

So, the original vision was to create a network of ag tech accelerator programs, focused on those early-stage companies. They're very much truly startups. Sometimes the first institutional capital, the first Capital after their friends and family, friends and fools, right. So, and then after that, quite often we are the first institutional capital that came into these companies. We were the first ones to try and get the companies to become much more corporate, building corporate governance structures so they understand what's important for being able to get later stage investment, but overtime we came to realize that that was, well important. It wasn't sufficient.  

We needed to have larger funds to be able to support more of the later stage needs of these companies, and that's because they need money. But as it turns out, they need to be able to demonstrate to their early investors and follow-on investors as well. It's just so kind of the way in which the investing community looks at it. If you're not following on with your investment, perhaps there's something wrong with the company and it not necessarily true. Quite often it's because the initial investor fund was so small, especially in our case, that there wasn't the opportunity for us to make a follow-on investment. So that's one of the one of the main learnings we had overtime is we need to have funds that were a little larger funds that can actually do subsequent investments in successful companies and then get the companies to a scale where they would be able to attract further investment from others. 

Todd Hovermale 

So, you realized that you didn't have enough funds to keep the business going so that it could realize its potential. And then is that when you decided to start raising your own funds? How did that come about? 

Thad Simons 

Well, it changed the kind of funds we were raising. So, we were all raising funds. But initially we raised funds that were of a scale of a million to two a year and we went to raising funds that were, let's say, 15 to $50 million and maybe eventually one of our funds, we'll get to more than that. But we started realizing that the funds needed to be at a scale, call it 30 to 50 million so that we can actually carry them through that seed stage into their Series A. Move into the Series A, then start attracting a lot more outside capital. But if it couldn't help them bridge that Series A because their fund, was only $1,000,000 and was already deployed. That's why the accelerating model for us wasn't working. I mean it worked in the first few years but after that it wasn't sufficient. But it didn't have sufficient scale to be able to support the company's growth. So, what we've done is we have migrated away from formal accelerator program, towards using our nonprofit side, The Yield Lab Institute, so as a series of innovation challenges for which there is a prize instead of an investment, and from which the--you do have a mentoring program. So, we can still have the same impact at that early stage, but now we need more targeted because it's going to be against a certain question. So, we can do something like we've done several with United Soybean Board, so something around soy, soy processing, soy--use of soy. So that way we can be very focused. We did something on manure, but even in sustainable agriculture and livestock, we did something on aquaculture across the world. So, by doing these innovation challenges, that is a deal flow source, yes, for the funds. Not just our fund for other funds as well, but primarily it's beginning that early stage where capital going into the company still very high risk, and we want to make sure that the companies are getting that initial support but doing it through a prize or a grant structure. And that seems to work better for us now. But as each region now has sufficient capital to be able to invest at an early stage like 100,000 or $200,000 and they can make investments over $1,000,000. So now they're helping to bridge into that Series A. 

Todd Hovermale 

Thank you for explaining that. So, can you tell us a story of how you went global? You started off in Saint Louis. You attracted 115 applications from 15 countries initially, and now you're at a place where you focus on North America, Europe, Asia, and Latin America. How did you get to where you are?

Thad Simons 

Well, we could see the application, the number of applications year by year, which is as we built a reputation that we can recognize as a leading ad tech accelerator program, early stage investor that just drove more and more demand. And so, we, partnering with the World Trade Council here we have mentioned first went to Ireland and we were able to introduce a number of people there who would-- Ireland is basically an agriculturally based country, but they didn't really have venture funds that were focused on agriculture. They were focused on pharma and you know, software and other things, but they didn't have any funds that were focused on agriculture. So that was something we wanted to really do something about. Enterprise Ireland is the local government. You can just like MTC here in Missouri Technology Council, so they're actually able to invest early stage. Through a government financing opportunity, but there wasn't really the venture capital follow on investment there. So by coming in with the fund, being able to partner locally with people like that, (Enterprise Ireland) after a couple of years of experience in Ireland, we moved on to other places in Europe, got a larger investment from the European Investment Fund. It's still government in that sense. And so, it means it must follow certain rules that are established by the government. The seller gives us a lot of opportunity to learn about many technologies across Europe that have relevance to global growth and relevance to our later stage investing we would do in other parts of the world. LATAM came because one of our early investments, our first-year investor, was a company out of Argentina. They opened an office in Saint Louis and from that founder of the Saint Louis office went back to Argentina at the end of his visa time. And he became the founder of the Latin America Yield Lab. And they're the ones that have grown really allotted with the past couple of years. But they've been growing steadily, but they I think they were founded in 2017, memories, right? And so, over this time period, even with COVID, they've been impacted by a number of different kinds of investors, investors like Nestle and limbo, which is the largest flower miller in the world and several companies like that, the  American Development Bank. So different kinds of investors who are looking into the Latin American market. Which is one of the fastest growing in terms of production of food.  Then in 2019, with a couple of friends from here. One I've been knowing ever since my Monsato days and the other, we knew in Singapore, but she was originally from Saint Louis. So, we got together and started The Yield Lab Asia Pacific, of course 2019 was really crazy time because next year COVID struck and fundraising was put on pause. It was striking that even within their first year they made four seed stage investments in India. They made the Series A investment in Singapore and they made another investment in Myanmar. So even though they were still at the very early stage in their fundraising, they were able to leverage that and identify some really interesting opportunities across the region. We had a little bit of support for Singapore government to cover some of our costs while we were getting established, and we have a joint investment agreement with the Singapore government. That Series A investments that we make, will be matched by this series Singapore government fund for those companies that are based in Singapore. So, like I said early on, you really have to go in and understand who are the local investors, what are they trying to support, which of the governments or what it's going to be industry, and what are things they're looking for. It's not going to be one rule. It's not like we'll say, well, Nestle, you should just come to invest in our overall fund and all the funds. We'd love that of course. But that's not what Nestle is looking for, they're looking specifically for what's happening in Latin America, and I think now it's going on to our 4th fund in North America. So, we're now in this kind of phase of what that fund structure will be, who the investors will be. But the stage of investing, I think will be, as I said, it's going to be that kind of 1 or $200,000 for some things. They're really early. Stage through the Series A it's going to be a 10-year kind of fund, which they all we've. All migrated to the very traditional structure but staying very much focused on the early-stage investment. 

Todd Hovermale 

So the vision was always to go global and then it sounds like as you had opportunities to go into different countries and regions of the world, you followed those opportunities and then you worked  to understand who the local investors were and whether that was governments or corporations or individuals, and how they would all work together and, you created a fund for each region of the world that would take care of the needs of the investor base. 

Thad Simons 

Yes, right. So instead of trying to go for one big $100 million global fund that's going to invest all across the world, it was important to us that we are close to our investments, and we can't be as close as Silicon Valley. We're just down the road, but having regional knowledge is really important, we think, at this stage of investing. So, to understand the companies, understand the environment in which they're working in. I mean, if you're working in some countries that are going through different kinds of internal strife, or financial collapse, or what all different kinds of things we face in the different regions, or currency issues, these are very different than the issues we have when we're investing in North America. So, it's really important to have people locally who understand those challenges because those challenges that are being faced by our investees. The companies we're investing in, they're they are facing that every day. 

Todd Hovermale 

So, tell me how many investments do you have today, roughly? And what areas of ag-tech are you invested in? 

Thad Simons 

So, we have roughly 75 active investments. That we're that active does mean there may be two or three that actually overtime fail. There's not 100% success rate but not too many failures, but 75 active investments. I think, top of my head the US represents 30-35 of them. Half by any means. So, it's interesting to see that growth all around the world and a little bit tied to the age. As I said, North America has been here since 2015, was the first investment year and Europe was just behind that and LATAM behind that, and Asia is just kind of coming along now. So, I think that's been a pretty good success. We have seen a few times where we've been invested, then at a later stage, attracted companies like Awa out of Argentina who has opened their North America office in Saint Louis. So, we've made investments first in Latin America out of that fund. And then we made investments out of the North America fund to support them as they can and to grow in this market. And there are other examples like that as well.  Actimmune is a company based here in Saint Louis that works in swine vaccines, and they have investments out of the Singapore fund because the primary application for their vaccine, for African swine fever is mostly present in Asia, and so the market for the product is going to be in Asia. So, the Asia Fund has invested. So, those are a couple of examples. That they're really supporting both local companies here as they go to Asia and supporting non-American companies, they're coming to North America, and we have more examples and that's what we're striving for to find those that makes sense to be able to support that growth and to introduce them to new investors in these new markets.

Todd Hovermale 

So, what are the attributes that you look for, characteristics that you look for in these early-stage companies? Where do you decide or how do you decide where to invest? 

Thad Simons 

Well, certainly there needs to be a commercial need for the technology. So one of the first things we're going to be looking for is how the founders can express that need, describe that need, how practical they are and understanding how it's going to be commercialized. Quite often we end up with people who have never have never sold products into some of these markets and are not really having an understanding of what’s required for being able to demonstrate value to a dairy farmer or a poultry farmer, or to a soy farmer. And if you can't do that, and if you don't understand practical operational aspects, we'll still work with you so long as we feel that you can be mentored. We're looking for those teams and sometimes it's just an individual, but generally, a team. Willing for those teams that really demonstrate that they are open and able to incorporate mentoring and change and understanding of--of the markets. If we don't have that. If we don't have a really good team, it doesn't make too much difference how great the technology is because it will never get commercial. And not with that team anyway. And then we have a really good team and we discovered that the technology is not exactly matching up against the market needs. They'll find a way of finding that angle to be able to adjust their offering to what that market needed. So, it's a little bit usually easier to do that than this to totally change out the team. So, it always as far as it comes back to first, it's in the team that we can and I suppose it works both ways. Because it's not just that. Do we think that team is coachable? But I think. We are the right coaches. 

Todd Hovermale 

So, do you have a process around uncovering opportunities and developing those opportunities to where you eventually would consider investing in them? How? How does that work? 

Thad Simons 

So that was one of the reasons for starting the other institute to be able to target in on particular sectors because it was very broad before we're getting -- and it's good to be able to invest across many parts of the industry, that's a good thing--being diversified is a good thing, but if you had the very earliest stage of that, can be a very difficult thing too. And so we try and use the open innovation challenge model to be able to open up opportunities even for sometimes we're not even a company, they may just be a research group at a university and that way we can identify them. They go through a process. We maybe have 100 applications. They maybe only have six or eight of them that are finalists and those finalists and go through mentoring process and they're eventually one or two or three of them will get a prize.  So that's been working very for us to do it in that in that way to identify really early-stage things and I think we have also an example, but only so far where we actually created the company in partnership with another company. So, there was a seed company that developed the technology that wasn't really going to fit in their sales model. So, by partnering with them and they are a European based company they needed to work around GMO's to be able to really make this technology work, so we brought the company we founded the company in Saint Louis. We have to identify the leadership of the company and now it's been very successful. Technology is going well. We've--it's still a technology-based company, it's not a commercial company yet, but the signs are really good because that was a kind of company where Saint Louis really has a lot of strength to be able to identify this and develop it into a commercially valuable product most likely to be acquired by one of the big companies before it ever ends up being commercialized. 

Todd Hovermale 

So, it sounds like The Yield Lab Institute is one of the primary drivers of new investment opportunities, and at the same time, you're open to other innovative ways to identify investment opportunities as well. 

Thad Simons 

Yes. So we can use the Institute as a way of being very specific in a certain area for future investment for us. And we can also directly from the fund side, partner with other technology companies that are looking for outside funding because as I mentioned earlier, one of the struggles many of the companies have is where is it going to fit into the R&D budget. And they're looking to be able to share the risk with regard to these, this R&D project. Especially if it's not core to their existing business. It's still a very interesting technology. So, in this case, we're able to work with them to bring that technology forward, invest in it, share the risk of that investment and now it looks like it's going to be a very valuable technology. 

Todd Hovermale 

So, can you give us an example of or talk us through what you look for when you have a successful early-stage company, you've made an initial investment, how do you decide to do a follow-on investment? What milestones or benchmarks are you looking for? 

Thad Simons 

Well, I think one of the most important things is going to be the relevance to the market they're going after. So, we're looking for, there'll be technical milestones that will be set at the time of the first investment and these technical milestones are met or not met, and why they're met or not met, will tell us a lot about whether this is going to be at a good follow-on investment or not. And so, we will be part of that's going to be the team part is going to be how well they've been able to meet development plans. And so, we always find that to be a really important part of it.  And we just don’t leave them out there and come back every three months to check on them. No, we are very active investors, so we want to make sure that as things are going along. We're very close to what they're doing, make introductions, whether it's into farming communities or whether it's going to be into other investors, we're there to make sure that they are getting all the self-support as well as the financial support that we can. And I think that it's not. It's never a surprise. We always know what's coming along and which ones are being successful and which ones are not. We pretty much understand the why because we're working. Very close to them. 

Todd Hovermale 

So, since you're hands on and you're working very closely and monitoring them all the time, you know when it's the time and it's the right time to make a follow-on investment. 

Thad Simons 

Yes. And as I mentioned, one of the one of the factors that goes into having the larger funds is it quite often to attract new investors at that Series A stage. The new investors like to see the first investors to make some continuation investment in those companies. Now we don't do only for that reason. They have to be meeting their milestones. They have to be on track. We have to see, there's going to be potential for good return to our fund, but if all those things are there and that's one of the things that is a factor and that's a way that we can use our actions with other funds to be able to do this kind of co-investment. And you start seeing that different funds start partnering on a regular basis. They have compatible kind of approaches and so I think that's one of the things been developing. It's really a good, a good thing to see. Instead of being--like if you think about software in Silicon Valley. Venture capital is very competitive, so they're all looking for the best deal from the best tech. In Ag Tech it's not that way. It's very much more. We need more investors. We need co-investment. We need co-investment partners that we can trust. We can rely on if we can't be there, we have to know somebody else is going to be there. Just making sure these companies are actually on. So I think that's really the thing that's one of the important parts of it. 

Todd Hovermale 

Yes, it sounds it sounds like it and I'm going to put a pin in that a little bit come back to that. You mentioned earlier that you've had a few investments that haven't worked out. Tell us about, when do you, you know, is it very quickly that you would understand, “Hey, this just hasn't worked out,” or I mean how do you decide not to do-- or I guess they need the follow-on investment, but you've decided not to do that? I mean, can you walk us through an example?

Thad Simons 

Sure. So sometimes it's simply because their fund is fully deployed. So, if we go back to the days when we were only running $1,000,000 fund, it's pretty quick that you're through, your $1,000,000. But $100,000 into six companies and you have 200,000 left and you pay to operate the fund, you're all done. And now these funds are getting larger. This comes up more often because now you do have some reserve capital able to put in. You plan for some reserve capital, a certain amount of your fund to be put in later and then you really are faced with this question.  And then we who are the general partners are the ones who are then interfacing with the investments. We're on the board or observer have regular calls with the management. So, we're the ones then coming back to our other partners in the fund and saying, “well, this is the stage at which this company has achieved, this is where they are on track, where they're not on track. This is what the other investors are thinking of them right now.” And that's going to be a positive or a negative view from the other investors. “This is how likely they are to get follow-on investment from those other investors or from new investors.” So, there are a lot of things that go into account, but the most important thing is going to be, are there—First, are they on track with the things they promised? If they are not, have they been transparent with us in the process so that we understand why they're not? And the second thing is going to be for them to understand the difference between a bridge and a pier. And so, what this means is they're asking us for a follow-on investment. It has to be a follow-on investment to a destination and the destination is not to fall on the peer because the thing is, put more money in, and within six months, they're going to be out of money again. And even less likely to be able to raise money in six months than they can today. Then that is not a good use of our funds. It is not a good use of their time. So, we have to realize that we have to understand both sides. It's just really a bridge or is it a pier? 

Todd Hovermale 

It's a good analogy. When you're making that decision do you find that, well, it's all about the people, right? You talked about how important people are and what you do and having teams that are coachable and can accept mentoring and grow and development or grow and develop. Do you see in the situation we're talking about whether it's a bridge or a pier, how often do the people limit that ability to attract that follow-on investment or have you found situations where if you just had different leadership or different people on the team that you'd be that you would go forward and make that follow-on investment? Can you talk more about how do you evaluate the people in that equation? 

Thad Simons 

Yeah, there, there are three different ways of talking about it. So one, there is the, you don't find any person who's more dedicated to the success of the startup, then the founder, or the founders, so there's this founder's passion that comes across both from a customer point of view as well as from an investor point of view. But then again, not all founders are going to be able to build the company as a company becomes more operational and requires more structure. These are not the strengths of some entrepreneurs. This is the strength of others, and we have some people who came out of Montana, for example, and they founded a company and from day one, they had regular board meetings and they were, and everything was--their governance was excellent, and they were always reporting their results and kept the board well informed. That's not how a lot of them work. A lot of them were just the founder, two or three, his or her friends and how they got together and it’s very much looser and I find the ones that can make that transition from being kind of a loose entrepreneurs--where everyone is doing everything, to a stage where they can operationally split the functions within the company. It's an ability of the company's founders to be able to scale the company because they learned how to delegate and that seems so simple, but it's not simple at all. If you've been doing all of it yourself, you're making all the decisions yourself. And all of a sudden, now you have to build into your process your internal process. If you build into it, this ability to delegate, it's tremendously stressful for a lot of these early-stage companies. That's where you start finding that the real hard thing has to happen, is we have to then change the CEO and we've had it a few times. So, we have to do that, to change the CEO, he was not the founder anymore, so doesn't have that same passion. But maybe has something else. Maybe has a different--Maybe he's done it before,. Quite often a CEO who actually done this before, been able to take a company through that Series A change in structure and organizational development of the company. It’s a really critical stage. 

Todd Hovermale 

Let's go back to your investors. I know that's a really important part of what you do. You couldn't do what you do without the investors, and you talked about how in different regions of the world, the investors are different or they maybe they have different goals and objectives. What does an ideal investor look like for The Yield Lab and how do you find them? 

Thad Simons 

The investors in the US are primarily individuals and family offices. Which I guess you could say are the same thing. It's just that amount of money in their bank account makes a difference. So, it's going to be basically individuals of different financial ability if they're family office, they will have staff, they will be managing these investments and interfacing with us. They will be looking for subsequent or follow-on investment opportunities. A lot of the individual investors early on, we're looking for return like angel investors do, but they're also driven by community support. It's good for Saint Louis. It helps early-stage companies in Saint Louis, so I think you get a mixture of both of those. As you get to the strategics, you start looking more at, “I'm not investing in this to be able to make a lot of money from this investment. I don't want to lose money from the investment, but I don't need to achieve a certain financial result because this is not driving my business and what is necessary for my business is growth,  new technologies, new kinds of products or services.”  So, what we have seen is that have a lot of--when I say a lot, I should mention a number. I think more than a dozen of our 75 there have had different kind of partnerships with some of our strategic investors and so you're able to start and then and even if the investor was strategic in one market, we were talking to them about our companies in other markets, and they started looking at the technologies and trialing the technologies. So, it gives a lot of opportunity then, for those investors to see early-stage probably earlier than they would have done themselves just because of the amount of effort it takes at the early stage. Governments are about attracting--about employment and about attracting business to their region. So, from employment and, one second, I have the number here. So, The Yield Lab companies together have over 2000 employees and then we can break that down by region. We can break it down by country. So, that's one of the things that we can start talking to governments about workforce development, how these technologies are going to be really beneficial to your, to your region, it's sort of obvious to most people.  The importance of agtech and agriculture in the Saint Louis region, but it's not obvious everywhere. It’s not obvious in Singapore. So, you have to be able to come back and say how these are really having a relevance to vision and then you start looking for ultimately they're looking for financial results and that's where it's a long stage kind of investment. Agtech does take a long time to get results. So, the kind of financial results we can point to and know is that from our from our 75 investments we have like 3/4 of a billion dollars to follow-on investment that are coming in. So that's probably leveraging something on the order of $30 million, that would guess maybe a bit more, $30 million and invested capital across these different 75 companies. So, it's really they can start driving a lot of follow-on investment if you can make sure that they are really successful as they're getting through that crucial point in that Series A. They're putting into place the governance. Things they need to have, and they can attract them larger and later stage investors. 

Todd Hovermale 

Could you talk more about the importance of ESG to strategic investors? 

Thad Simons 

First, I will say that for our European Government investors is extremely important. So, we have very point that not only do we have to report on ESG part of our return back to our partners is based upon the ESG results of the fund. So that's what-- so Europe is by and far the leader in acquiring and measuring what they are looking for. In the US today, it's very, very strongly focused on climate more than anything else. I think they enforced--I think the investors are really looking for meeting their climate goals and I think that's also becoming increasingly true for the strategic investors. Most of them have announced and probably all of them have announced some kind of environmental impact goals for their company. And so they're looking for technologies that are--will make it possible for them to meet these calls. That becomes one of the strategic reasons for an investment. And when it gets to the family offices that’s a mixed bag, so some are only financially driven, and some are driven by these other factors too. 

Todd Hovermale 

Thank you. So, in 2024, Yield Lab will celebrate its 10th anniversary. Where do you see the yield lab in 2034? 

Thad Simons 

I hope that all the funds we have right now will have exited and had successful exits, because then that will mean the next fund will be easier to raise. They always say that the hardest fund to raise after the first one is the second one, and the reason the second one is harder than the first one is because in the first fund you're selling your vision. Second fund, you don't yet have any results. So, you don't have any results and you're still selling the vision which you saw the first time. So, the second fund is even the hardest harder than the first fund to raise, and that's the foot of the stage that we're at right now. The European fund is fully invested. That's fine, but Latin America, Asia Pacific are still raising--they're into their first fund. And we're sort of going into our fourth fund here, but really it's our second fund on this new model of a larger size fund, so we're kind of in that stage of being really a second fund. So let's see the challenge over the next 10 years is to see successful results. Good exits and success. Financial returns to our investors and then being able to keep doing it. We'd love to refresh our GPs, of course as I found there, but I won't live forever and so it'--we have to start looking and adding new partners and we have been doing that very actively across the world. And when we launch our next fund in North America, we'll be bringing on new partners as internal partners there. Both will be really highly qualified for being able to come in and manage the new fund. So, I think it's those kinds of things you're looking at because we have to, like I said at the beginning is our team, the value of our team to the investment team is really critical to be able to see that that's going to be bringing value to them that that mentoring, that being able to be there introductions that we can make and the great thing about Saint Louis is we have this degree of separation here. So, it's really much easier to introduce a new company in Ag Tech to the relevant customers or thought leaders in the field here, than they would be if they went to Silicon Valley and they were doing something in software. 

Todd Hovermale 

So, Thad, we're reaching the end of our time together. Is there anything else that you would like to talk about or put a message out to our audience that they should know that we haven't talked about? 

Thad Simons 

I would go back to saying-- And you're even-- A little bit from your ESG question. You know, we really need to think about the digital importance of technology development in the agrifood space. We have to be able to feed greatly expanding and growing population in the world. We need technology for being able to do that. We need to find what to support that, that can be beneficial to the environment. We know how to do it already for the most part it’s not requiring a lot of technological change where it requires some, but where it requires awareness and the right kind of investment, and I think this is going to happen. This has to happen, but we have to start looking at it from a point of view of how we invest in these companies that are going to be making that happen. If it becomes only something driven by philanthropy and which is all good, but it's only driven from there, then it doesn't actually-- It's not sustained. It doesn't have a market support mechanism to be sustained. And so parts of the world today, which are still very poor and underdeveloped, would be that kind of next thing. I keep thinking about Yield Lab Africa. How do we build The Yield Lab of Africa because Africa is the fastest growing part of the world. There'll be some projections, say 4 billion people in Africa, by the end of the century, and they import 68% of their food. But the only arable land left in the world is actually in Africa, so there's tremendous opportunity if we can find the right ways of making investments that will support local agricultural production at scale and efficiency and in a way that we know how to do, but we haven't had the support and willingness-- and the startups are there. We had Africa applicants from the very first year, so it's there. It's just a question that is finding a way and I think we're learning a lot in Asia, that will help us as we start looking more deeply into Africa. So, to me that's kind of the next part is to continue to do what we're doing, do it more efficiently, doing with more capital so that we can follow-on capital, get more of these technology into the market and then look for where we can come in. And we're also using The Yield Lab Institute for that. We've already done two studies in Africa with FAO to look at where the markets are supporting agtech early-stage investments in East Africa and West Africa, to be able to see how that's going to work. We've done the program in Latin America with the UN environmental program to look in terms of what's happening there. For agtech investments that are supporting sustainable agriculture in that region. So, I think there are a lot of things that can be done, and we can learn from what has worked here and what's worked in Latin America in particular, to be able to see how we can translate that over into the conditions in other places? So, that’s how I see the opportunity. I think this is really where the need is. It's going to be important that we're able to bring total production in these regions up in terms of technologies that we'll be able to scale with those local markets and be able to start satisfying those local demands.

Todd Hovermale 

Thank you for sharing that and thank you for sharing your time with us today and sharing this extraordinary story of founding The Yield Labin 2014 and where you are today and your vision for the future. There's so much to do, and it sounds to me like we might have to have a Part 2 on Yield Lab Africa at some point down the road. 

Thad Simons 

Well, thanks, Todd. I would love to. Do that and. Certainly something I would like to. I think we really need to find a way of making that happen. It's important for all of us. 

Todd Hovermale 

Agreed 100%. Thank you, Thad. 

Todd Hovermale (Outro) 

To our listeners, we hope you've enjoyed our conversation with Thad Simons and this look into The Yield Lab and their endeavors in supporting Agri food systems around the world. If you learned something from this podcast, please be sure to leave a review with your podcast provider and join us next time as we continue to explore international business. I'm your host, Todd Hovermale bringing you conversations that matter. 

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