186 Rose Marcario - From growing Patagonia to $1b in sales to making early stage regen tech investments

A conversation with Rose Marcario, former president and CEO of Patagonia and current founding partner of ReGen Ventures, about moving from an organic food company to joining an early-stage VC fund focused on regenerative technologies.
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During her time as CEO of Patagonia, which grew to over a billion dollars a year with a very strong activist focus. They launched their organic food company Patagonia Provisions and she also co-founded the Regenerative Organic Alliance. So why after she left that role, and that stage, she joined the early-stage VC fund focused on regenerative technologies?

More about this episode on https://investinginregenerativeagriculture.com/rose-marcario.

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Transcript

SPEAKER_00 0:00

During her time as CEO of Patagonia, it grew to over a billion dollars a year, global giant with a very strong activist focus. They launched their organic food company, Patagonia Provisions, plus the Regenerative Organic Alliance together with Dr. Bronner's and Rodeo. So why after she left that role and that stage, she joined the early stage VC fund focused on regenerative technologies? This is the Investing in Regenerative Agriculture and Food podcast, Investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume. And it's that we as investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet. To make it easy for fans to support our work, we launched our membership community. And so many of you have joined us as a member. Thank you. If our work created value for you, and if you have the means, and only if you have the means, consider joining us. Find out more on gumroad.com slash investing in regen ag. That is gumroad.com slash investing in regen ag. Or find the link below. Welcome to another episode today with the former president and CEO of Patagonia and the current founding partner of Regen Ventures. Welcome, Rose.

SPEAKER_01 1:43

Hi, Cohen. It's great to be here with you.

Why are you doing what you are doing? Why Soil?

SPEAKER_00 1:45

And to start with a personal question we always love to ask. I mean, I don't even actually I don't know how you got into apparel and that side of things, but which I would love to hear as well. But then also, how did you then I'm not saying make the switch, but went in to the world of soil and the world of food and the world of agriculture?

SPEAKER_01 2:05

Well, I was working, I've worked in traditional business my whole life in both technology and retailing. And I kind of hit this point in my life where I felt like my work was not aligned with my values. And at that point, I made the change to move over to Patagonia because, of course, you know, Yvonne Chouinard, a founder, is just a very famous, responsible businessman. And I felt like I would have a lot to learn from him. And so that's how I ended up at Patagonia. And it was an incredible 12 year ride there. The last decade, most of the last decade as CEO. But, you know, we really got into soil through working a lot on land conservation, ocean and waterway conservation and advocacy. And of course, you know, you come to the realization that the best stewards of the land are indigenous communities. who are local and have a stake in that community health, right? They're literally willing to stand in front of a bulldozer to protect their soil. And with soil and agriculture, it's the most important pillar of human health and well-being. And we had always been known, Patagonia had always been known as a pioneer in organic agriculture through their organic cotton program. People were adopting organic cotton, but at a pretty low rate because they were wanting to buy cheap clothes, right? And so it felt more important to maybe make the connection of organic and regenerative practices, which are so critical to the climate and biodiversity emergency that we face, that we focus on that. And Patagonia had always had a relationship with organic... farmers and um and also with um with carbon you know understanding how farming affected carbon sequestration so it was just sort of a natural thing for us to do and we started i founded the regenerative organic alliance um back in in 2018 with the rodale institute and dr bronner's and a few other organic brands we put that together to create a certification that It really outlined what regenerative practices were and would also give the consumer a high bar standard to say, hey, I know that this is being created at a regenerative farm or a regenerative operation, and it's also not using pesticides or synthetic fertilizers. So that's kind of how we got into soil. Do

SPEAKER_00 5:02

you remember like how that, I always like to ask if there was a moment or was a gradual process, because of course you've been focusing on apparel and of course on the sourcing of the fibers, but it's quite a step to food. It's quite another, it feels like a very different piece or thing. Do you remember when it was triggered? Was it a documentary? Was it a visit to a farmer that you thought, whoa, this is wild?

SPEAKER_01 5:28

Well, I think there's, you know, Yvonne was always very interested and I think inspired by some work that Doug Tompkins was doing in Chile and Argentina around your wild And I think that that was an inspiration to him. But how to operationalize that and actually make that happen, you know, there were a lot of conversations about how to do that. And like

SPEAKER_00 5:57

I said... But the farm, I mean, look for the picture. I'll put some links below. It's just like, I think that he called the tractor drivers artists or something like that. And you can see that like the photos are just spectacular. And I can imagine, yeah, that serves as inspiration.

SPEAKER_01 6:27

Yeah. And I think like everything else in, you know, the US right now, you know, there's terms like organic and regenerative, you know, they come under fire from directly from the chemical companies and lobbyists. Alan Lewis uses this great term, the Fiberati, he calls them. And there's always a status quo that seeks to debunk the benefits of organic and regenerative practices. But it's what we need now to fight the climate crisis. And there's been such good research on organic and regenerative yields being competitive with conventional yields over the five-year transition period and organic systems producing yields 40% higher in a drought and things like that. So there's a lot of good data out there that says we should basically be going back to these ancient practices, right? And that chemical agriculture and monoculture and CAFOs are not good for people or the planet.

SPEAKER_00 7:36

And then your tenure ended at Patagonia and you could probably choose any job in the world. There will be opportunities popping up if you like it or not. And you decided to join a venture fund as a managing partner or founding partner and very specifically focus. And you mentioned something now, like we should go back to these ancient practices. But Region Ventures, we've interviewed, obviously the founder, Dan, I'll put the link below of the interview as well, is very much focused on the technology side of things. So sort of feeling, I don't know if that's the feeling, but moving forward and making big steps into that. Like what was the rationale Chanel behind after all the choices you could make or also not do anything for a long time is to join this group nothing against Dan because I think he's amazing but why this choice

SPEAKER_01 8:24

well Dan and I had worked together and invested together through the venture fund that I founded at Patagonia which was working primarily on innovations and supply chain and I just felt Dan and I were the We're really value aligned about a few things. One was the speed and scale with which change has got to happen over the next few decades in order for us to have a livable planet. The idea that the kinds of businesses that we should be supporting are founders that are focusing on restoring the planet and not destroying it. And that... The important thing about, and this is a startup fund, right? So we're focusing on really early stage companies. And the technology has to enable that transition and can be a tool to really enable that transition. And so that's why I decided to work with Dan. I'm also on the board of environmental impact companies that I feel like will have You know, we'll be the brands that will help with this just transition that we need to make towards, you know, electrification, towards changes in means of production, towards, you know, this new food system that we need to create. I mean, all of these are innovations and economic opportunities. And so it's very exciting from that perspective.

SPEAKER_00 10:06

And how is the, I mean, of course, we're in a time where COVID has returned. restricted travel quite a bit the last few years. We're recording this at the end of summer 2022. Let's hope autumn will be less chaotic compared to the last few years. But how's the journey been? Because this was started right in the middle or even just before. How's the journey been as a founding partner of an early stage startup fund focused on specifically technology in regeneration?

SPEAKER_01 10:36

Right. Well, I think what's exciting is that Most of the young entrepreneurs that we meet and founders that we meet are, you know, they grew up with this crisis front and center in their life, right? They grew up digitally native and with, you know, tremendous amount of information and access at their fingertips to make their own judgments about, you know, what's happening to people in the planet in the old model and the status quo model. And then what they can do to change it and make a difference in the next couple of decades. And I think they're really driven by, you know, in the past, Yvonne Chouinard was kind of a lone guy in the wilderness, you know, talking about the importance of environmental, you know, environmental responsibility. And we've come a long way from there. And I, you know, for me personally, I felt like I want to spend the next, you know, couple of decades of my life where I can be useful, focused on regenerating and restoring the damage that we've done to the planet by creating these new economies, right? And they are new economies, you know, just, and I think that that's the exciting part of it from a business perspective. And I think of that based on products and services and technology that can enable that.

SPEAKER_00 12:09

And so, What are some companies or one or two that you are that obviously is public? Otherwise, we wouldn't be discussing it. You're extremely excited about it. What do you get to work with now daily or weekly that really resembles for you that new economy piece?

SPEAKER_01 12:29

Uh, well, I mean, I'll, I'll go kind of from, from big, big to small, you know, so, so from big, you know, it's, it's, uh, you know, I'm on the board of a company called Rivian, which is focused, you know, on electrification, right. And they were clean sheet of paper company focused on, on electrification and they're doing, um, you know, a kind of an adventure truck. Um, but, but, you know, they did really interesting things, you know, when they, they did their IPO, they gave That's true.

SPEAKER_00 13:29

outside the US because I think you could also take a mountain bike, but like it's, it's a huge market for outdoor Z and a lot of transport. Obviously, I think you have a huge deal with, with Amazon as well to get to trucks.

SPEAKER_01 13:42

Yeah, but I think it's representative of this transition that we need to make to electrification. Of course, yeah. I'm also on the board of, and we've invested in a company called, Regen is invested in a company called Meaty, which is a plant-based, mycelium root-based, um, plant-based food company. And also really interesting because it's using a very ancient fermentation process essentially and creating a really, really nice high protein source, which we will need more of in the coming years, good protein sources at reasonable costs with a low environmental footprint. So I find that whole space very interesting. And then on the technology side, some of this early technology that we've invested in, I mean, it runs the gamut, you know, between solar powered robots that are used for weeding and farm support to mapping technology that's looking at how forest carbon is sequestered and giving us a way to look at that. So, you know, and climate solutions around democratizing carbon financing and how that will work. And I mean, these are sort of startups that Regen's investing in, which are enabling the transition that we need to make.

SPEAKER_00 15:19

And how do you use this model of VCE early stage seed or pre-seed and series A invest with like how do you how does it work within regeneration i mean we've had many conversations here on the podcast where people say yes simply the time horizons maybe don't fit well or even the return expectations of let's say primarily software focused or people that are used to crazy returns like how do you feel about that um is there enough deal flow that fits that and do we even want to to fit that model of the crazy scale we need the crazy scale like in impact absolutely but do We also need these exits. Are they going to be there and sort of justify this VC model in regeneration?

SPEAKER_01 16:07

Well, I mean, the way I look at it is... if you're looking at investments in regeneration and specifically food systems, you know, you don't have to go too far. You can, you can follow the money. I mean, just look at the huge, and in some cases, unprecedented valuations that the large food companies have paid for natural and organic products. Right. Because, you know, and, and there's a list that, you know, that I, you know, I, couldn't even name how many but you know General Mills bought a ton of those companies Cascadian Farms they've bought you know Danone bought Earthbound Farms and you know you can just go down

SPEAKER_00 16:51

mostly on the brand side like the CPG side right

SPEAKER_01 16:54

totally on the brand side and I really think of this as a product from a product perspective because everything does end up on the plate in some form you know and investing in products grown with regenerative practices right without pesticides and synthetic fertilizers and stuff with short and ingredient lists and high nutritional density. That is the future. If you don't think you're going to get a high return from that, I just think you're not paying attention. And citizens, this is interesting to me too, is that citizens are becoming much more enlightened, right? Because partly because of technology advances and the poor quality of healthcare, right? People are taking control of their metabolic health and they're eating food that are more nutrient dense, that are lower in sugar and fat and kind of all the things that the old food companies have like, you know, lived off of. And they'll pay the appropriate price for those products. And they'll also become extremely brand loyal, which is why a lot of the food companies buy those brands, keep those names, you know, and continue this sort of Trojan horse approach to changing their portfolio.

SPEAKER_00 18:09

Which is a many examples. I mean, you've been very involved in the B Corp movement as well, where the companies were bought and Ben and Jerry's was probably one of the first and many others followed. And they didn't turn out to be the children horse necessarily. They were, the name is still there. In many cases, they're better ingredients than others, but also in many unfortunate cases, sort of the real soul of the company and the real ethics and the impact disappeared when they were swallowed up literally by gigantic food companies. Like how do we prevent that with this new wave of regenerative CPG companies to not simply quote unquote sell out, which is great for the investors and great for the space because it creates a lot of momentum, but then maybe the large company doesn't change its sourcing. Like it doesn't become the Trojan horse, it simply becomes a horse and nothing really happens, which is still okay, but it's not the revolution we need.

SPEAKER_01 19:06

No, I totally agree. to have a greater impact. And you can't always look to the past to say what the future will be. I think regenerative ecosystems that grow delicious, nutritious food, and they also unlock maybe the distribution around local distribution, that's a winning investment combination. And I think some of these founders too, you know, they're There's so much going on in the digital space now. They might be less likely to be dependent on that big company distribution and might think of going public themselves and creating other ways to create a liquidity event that are more meaningful. And so I think that's also an element too. Yeah.

SPEAKER_00 21:01

And do you see like any potential in the steward ownership discussion? I know Organic Grown in the US basically sold to itself and became a sort of forever company like Bosch in Germany and many others. And to safeguard, I mean, still perfectly fine to raise money, perfectly fine to make money of your investments, but the mission stays locked in and can never be changed. Even if the most quote unquote evil company shows up with$10 billion, we're not going to sell for that because we know the mission cannot be changed. Do you see a role for that or is that just too far out of the current system?

SPEAKER_01 21:38

I think the current system is challenging, right? Because the buyer has a lot of flexibility and there are things that, I think that's one of the ways that the benefit corporation movement has been important because it enshrines the B Corp charter into the legal framework of the company and says, these are the things that this company stands for and will either contribute to with philanthropy or whatever the model is. In Patagonia's case, it was giving 1% of sales to grassroots environmental groups. But I think that there needs to be a better corporate structure around that. And I think B Corp is the closest thing that we have right now, but it's difficult, right? It's a difficult thing right now to make change in. I think that the thing that's exciting to me about the entrepreneurs that we get to, you know, be in touch with, with regen ventures is that, you know, they're, they're pretty savvy about this stuff. They're thinking about it right now, you know, when they're getting their first round capital, they're thinking about who their investors are and are they value aligned. And I don't think that was so much the case before.

SPEAKER_00 23:10

Which is hopeful. I mean, that's very, you need to think about it because if you go on a certain path or with certain investors, nothing against them, but it sets you up for an X amount of years or X amount of rounds and X amount of evaluations. And that might be not fitting, let's say for the overall strategy or impact you're looking for. So we need, yeah, we need awareness around that. And in terms of, I mean, deal flow in this deep regeneration tech space, Very simple question. Do you see enough? Do you see enough exciting and also good founders, potential markets, and then all of that? How has it been? Because it's quite almost like a niche within a niche.

What deal flow are you missing?

SPEAKER_01 23:52

You know, I don't see it that way because I think I come from, you know, a background of making products and running businesses. And what I see is everyone is trying to figure out how do I get to my net zero goals? How can I make my supply chain more resilient and stable and good for the environment and good for the people that work in it? And everyone is dealing with those issues and they've made public Right. really this sort of megatrend to be able to track and manage projects, to be able to ensure that the carbon markets are accurate and verified. All of these transitions that need to happen that we talked about earlier. So I don't know. I feel very optimistic about that. I don't feel like it's niche-y in any way. And I think it'll deliver exponential outcomes, both returns and impacts and with less risk than a traditional VC, I think.

SPEAKER_00 25:36

And what would you, I mean, you mentioned a few now, but what would you, like if you had to pick one sub theme or something you would love to see more of, like what are you quote unquote missing in your deal flow database? I would love to see more companies tackling X, Y, Z. What's really something you would you would love to get to see more of?

SPEAKER_01 25:55

Well, I think there's so much that we don't know about soil and kind of where we started the conversation, right? It's like soil is a mystery to us, I think, in terms of being able to really be able to measure carbon sequestration in a meaningful way. And when we crack some of that code, I think it will be really interesting. I mean, I'll give you an example. I'm on the founding board of a nonprofit that's called the Society to Protect Underground Networks, and it's all focused on fungi. Brilliant.

SPEAKER_00 26:35

Spun. Yeah, we should have Toby on soon.

SPEAKER_01 26:37

You have got to have Toby on because she's brilliant. I mean, there are trillions of miles of mycorrhizal fungi sequestering carbon around the world, and they're actually going through a process of mapping that. And it's not just on farms, but in grasslands and deserts.

SPEAKER_00 26:57

Forests and very extreme places, yeah. Amazing video. I'll put a link below. It's hilarious and very, very cool at the same

What do you believe to be true about regenerative agriculture that others don’t? Inspired by John Kempf

SPEAKER_01 27:06

time. So this fungus makes up, you know, in different places in the world, can make up up to 50% of the world's biomass. And... 75% of the world's terrestrial carbon, right, is stored underground. We know very little about that. You know, this, Toby is working to unlock that. I think she's the Jane Goodall of, you know, this generation. And, you know, working on, you know, how do we unlock this network in such a way and learn from this network in such a way to make sure that we have, you know, a healthy functioning, you know, carbon storage network. That to me, that kind of thing to me is really interesting. And there are so many different companies that could spin out of that idea and be helpful to this transition that we're trying to make. And, and so, yeah, I mean, I'm just, I'm excited about that kind of, that kind of thing. And I think that we haven't even really scratched the surface, you know, but we've got all these great young entrepreneurs working on it.

SPEAKER_00 28:12

And what do you believe? I mean, I'd like to ask this question inspired by John Kemp. He asked it slightly different, but what do you believe to be true about regenerative agriculture is that others don't? So if you go to a conference, where are you contrarian within, let's say, our bubble?

SPEAKER_01 28:27

Well, I think I'm contrarian in a couple of ways. I mean, one, I do think regenerative organic agriculture, and I feel like I have to say the word organic because it negates then using synthetic fertilizers and pesticides. It can feed the world. We know that. There's been enough research that proves it, but there's a lot of junk science out there funded by chemical companies that's invested in the status quo and it's got these captive ag schools that say you'll never get the yields, but it's just not true.

SPEAKER_00 29:05

What can we do about it? We have seen the research. We have the papers. We have the profitability papers of Dr. Jonathan Lundgren proving that it's way more It's better for the pests. It's better for your insects. It's better for your yield. It's better for your, especially for your profitability and all of that. And somehow every time this question keeps coming up, like, okay, but it sounds real nice and cute, but how are we going to feed the world? Like, really? Like, are we still there? Like, how do we... Should we learn from the tobacco grassroot movement against it, how they silence it and say it's going strong, unfortunately, in certain places? But how do we unplug that blockage that we apparently have around yield and profitability that just isn't true, but seems to be continuing to be true, at least in the general audience's view?

What gives you hope, are you optimistic?

SPEAKER_01 30:15

Well, there's a lot of, there's a lot, it's analogous to me, like the fossil fuel industry and climate, right? It's very analogous to that. There's a lot of big chemical interests, like, you know, Bonsai. These, you know, CEOs of companies that are focused on regenerative and organic need to be more vocal, you know, they need to be able to have that public debate and have a policy and advocacy, you know, part of their business, you know, that lobbies just as hard. The problem is, right, the chemical companies have a lot of money. I mean, but look at Monsanto, you know, they fund a lot of their Right. policy and advocacy. And that will help move things much faster. And I don't know if you're seeing this, but to me, it feels like everything is moving exponentially faster, right? Because we've been fighting these climate battles for so long. And then all of a sudden, bam, you know, things are moving, you know, partly because we're in such a crisis, right?

UNKNOWN 32:06

Yeah.

SPEAKER_00 32:06

Absolutely. I mean, if we look at this summer, I don't think you can pick any place where it was a traditional summer, a normal summer. I mean, if you look at the heat waves in India and Pakistan, if you look at the heat waves in the US and Europe and many other places, if you look at the drought, the flash floods, everything seems to be happening faster than the worst scenario. So hopefully, of course, it triggers

SPEAKER_01 32:30

something. And Cohen, this is probably the coldest summer you'll ever experience.

SPEAKER_00 32:34

Yeah, that's the scary part

SPEAKER_01 32:37

right i mean that's that's what's terrifying you know um and

SPEAKER_00 32:42

what gives you hope then like are you with all that you've seen and the fights you've fought in the apparel industry and in the chemical food against the chemical food industry but still within it because you were fighting in like what are you optimistic and if so why

What should smart investors, who want to invest in Reg ag and food look out for?

SPEAKER_01 33:01

Well, I feel like I'm believe in nature's ability to restore and regenerate itself if we uh stop doing the harmful things that we're doing and and it can do it quite quickly i mean we we saw that in you know in la after a week of uh you know covid lockdown i walked outside my house and i was like i've never seen skies this blue in los

SPEAKER_00 33:54

angeles the speed is is is yeah very hopeful and so what would you you let's say we do this in a in a theater somewhere and there's a live audience full of investors people working in a finance space or people working also in this space where would you of course without giving investment advice but where would you tell them to to look deeper or to dig a bit deeper is it mostly mycelium like what are places where we definitely need let's say more energy more people more resources more funding more investments of course but what would you tell them to in this region i can food space or regeneration space where would would you tell them to, okay, go and explore there a bit deeper and a bit further?

SPEAKER_01 34:36

For sure, it is... in the soil. And it is in that network underneath the soil, which includes mycorrhizal fungi, it includes all kinds of issues around soil health and, you know, from forestation to grasslands management to, I mean, simple things that sound simple, but they're difficult to implement, but need more energy and financing and innovation and thinking is just, you know, like pasture raised animals, right? I mean, if we eliminated all of CAFO today, I mean, you'd see water systems restored. You'd see waterways and rivers restored. You'd see, you know, you'd be able to fish in your local stream again. You know, there are so many benefits to like rethinking a lot of these sort of status quo ways of implementing our food system. And so I think that to me is really a place you know agriculture food systems you know I think I would generally stay away from like the GMO CRISPR science you know gene editing stuff because you know we've had that for years and it really you know it hasn't it hasn't been perceived as anything good for people or the planet and you know I know that there I don't know how many European nations it is now Cohen that have that have banned GMOs but you know It's more than seven, I think, or six or seven. So, you know, soil is the wealth of our nation and there needs to be a lot more attention put on soil and the impacts that soil have on our life and our health.

SPEAKER_00 36:28

And what do you tell me when you bring up the animal protein side? And of course, as Region Ventures, you're investing in a number of plant-based companies. What do you tell like a hardcore, like we're still in the same theaters and a hardcore person following a vegan diet stands up and says, yeah, but what about the animals? What is your normal, because I struggle with that, honestly, the normal answer, what is your usual response to when people really respond quite badly to the potential of grazing animals and the potential that it has in an ecosystem? What is your usual, I'm asking for a friend, AQA me, what do you respond to somebody that really focuses on getting all animals out of the food system.

SPEAKER_01 37:16

Yeah, I understand that. I don't think it's going to happen anytime soon. I think that people need to be making huge reductions in the amount of meat that they're eating. And if they buy meat, it needs to be made in the correct way. And I'm not saying the burden of cost should be put on people, but I think that's more on regulation and product creation. But when I look at the example of how it's done well, I think about Dan O'Brien at Wild Idea in South Dakota, who restored that South Dakota plain that was destroyed by cow farming that didn't belong on the South Dakota plain, restored the native grasses and restored the keystone species on the plain. And it's beautiful. You go there and you can hear the the burrowing owls and you can hear all the birds and see the whole ecosystem restored. Now, he didn't do that as an NGO. He's like, I need to make money. It needs to pay for itself. So, he's selling buffalo meat, but he's doing grass harvesting. He's doing the most humane harvesting I've ever seen. Patagonia, we helped to fund that. So, you know, I get it, but I also get that like we need grazing animals on the bino, you know. And so, grazing animals animals done right is good for the planet.

SPEAKER_00 38:44

And what role can technology play there? Because I don't think you're going to invest anytime soon as RegenVentures or at least the first fund in a buffalo herd. But are there things exciting for you in that animal protein space that could be interesting at some point for a VC fund looking at the technology, like the implementation of technology with regenerative practices?

What would you do if you were in charge of a 1B investment portfolio?

SPEAKER_01 39:08

Well, I think some of the interesting technology is the technology that sort of proves the model out. That if you look at the cow ranch next door to the ranch that's letting buffalo do their natural thing and roam around and help till the soil with their hooves and things. If you look at that from a rigorous soil testing method, the Buffalo ranch is going to sequester more carbon. It's going to create a healthier ecosystem and it's going to be, um, better, uh, for, you know, weather and climate resistance and resilience. And I think those are the kinds of things that like technology can help define and, um, create markets for whether they're carbon markets or, um, you know, other ways of exchanging carbon, carbon credit. And I think it it's an, it's, there's there's a lot there there's more that i'm sure we haven't even seen yet but those are the kinds of projects that i think are interesting

SPEAKER_00 40:17

and if you would be in charge of a like let's say you've raised a billion dollars or let's say a large large amount doesn't have to be only early stage vc like it could be the full suite because i know then at some point i mean there's definitely ideas to um to make this a whole suite of funds and suite of approaches etc like what would you you do if you'll be in charge of a billion dollars there i I mean, there should be a return at some point, but it can be very, very long term if that's needed. But I'm asking this question to understand priorities. Like where would you focus this amount of resources and this amount of energy at the end? Because money is energy. If you would be in control of that, let's say tomorrow morning.

SPEAKER_01 41:00

Well, that's something that deserves more thought than a couple of minutes on the podcast. But I would say that there are certain areas that are really critical, right? And one of those areas is the fact that a lot of farmers don't own the land that they're farming. It's leased and there are all kinds of difficulties for farmers to actually finance the transitions that they need to make. from chemical agriculture or monocrop agriculture to regenerative agriculture and start to begin to move that meter to building topsoil rather than destroying it. So I think working on that, the financing mechanisms for that transition is very important because it's a multi-year transition. I also think this cleanly produced, this plant-based protein is very important. It's very important for the future because, you know, if we were feeding everyone the American diet, we'd blow out all of our planetary boundaries, right? So that's not the way to go, you know, besides the large amount of diabetes and other, you know, medical issues that we have in the U.S. So, you know, I think that's important. I think this pastured animals done correctly, I think that's an interesting space and, you know, innovation needed there. And, you know, and I think there's a lot that could be done there in an interesting way. And I also think, you know, financing the transition through these, you know, carbon markets and measurement tools and the science that we really need to know that's not, you know, what we've had in the past, which is these big chemical companies or big food companies that just, you know, own these agricultural schools and basically tell them what to, you know, report. What to say. Yeah, instead of the truth of what's actually going on. So we need, you know, more sort of interesting citizen science and collaborative science. And, you know, I think we're at a really critical juncture as a species. You know, we're either going to choose life and innovation and health and learn to live with nature instead of destroying her, or we're going to go the way of the dinosaur. And I'm not willing to give up yet. You know, I have hope we can tip the scale towards a more righteous future.

SPEAKER_00 43:30

and On the plant-based one and the clean labeled one, what needs to happen there? Because it feels like the solutions that are currently on the market and getting a lot of attention, also getting a lot of criticism from the ingredient side, from the labeling side, because there are just too many things on the label, and maybe also from the taste side to a certain extent, but simply the nutrition, the health, and also you can make an argument that they're potentially worse or at least equally bad in terms of sourcing and where they're in ingredients come i'm obviously talking about the gmo soy etc like what what do you see there is was it sort of a first generation i mean there were generations before and now we're thinking okay we actually i mean it's not just plant-based is not not good enough we need to go a level beyond that because otherwise we just replace one crab with the other crab which is not really helpful

SPEAKER_01 44:22

yeah i totally agree i mean that's why i'm really excited about meaty because it's a very short ingredient list it's using fermentation and it's using something that is um basically mushroom root, mycelium based. And it's, it's, it's very good on the gut. It's not trying to create, you know, something that looks like meat that that's going to, you know, wreak havoc on your gut because it's got this long ingredient list. It's trying to create, you know, fat textures and stuff like that. You know, it's, it's, it's, it's more simple. And I think those are the kinds of solutions

SPEAKER_00 44:56

that you need. I'm fascinated by them. Like what's the, you've tasted it for sure. It tastes

SPEAKER_01 45:01

amazing. I mean, I wouldn't have gotten involved with the company if it didn't eat well. I mean, it's, it's, and it doesn't have, I mean, I've always had issues with the other plant-based meat companies and that it just didn't feel good in the gut afterward. And I learned that a lot of that has to do with both the fact that they're using a lot of GMO inputs, but that they're also trying to, you know, recreate, you know, meat textures and things like that. You know, mycelium root mushroom root kind of already has a meaty texture to it. So it's, it, It tastes very good, and it's a beautiful center-of-the-plate product, and it's doing very well, and I'm just really excited to see that brand

SPEAKER_00 45:44

grow over the years. What does it use as sort of ingredients? Sorry, what does it use as ingredients? What does it use to, I don't know, grow the mycelium on? I don't think on is the right word, like in, or what do you need to feed it,

SPEAKER_01 45:56

quote-unquote? It's a fermentation process, and you feed sugar to it, essentially, right, in fermentation. And

SPEAKER_00 46:02

does it matter what kind of sugar? It

SPEAKER_01 46:04

does. And I think sugar sources is an issue, right? Because you want to get the best source, most responsibly sourced sugar. So that's an issue that we focus on as well in the supply chain there.

SPEAKER_00 46:18

Yeah, because otherwise, I mean, the sugar industry has some issues as well, not just because of the sugar, but also because of the growing practices there. For sure. And so that's very interesting. I mean, the fermentation part, obviously, is very interesting. And do you see a lot of other innovations there in a sense like that used is um not trying to fake meat but actually trying to grow a product that is as center plate as you mentioned as tasty or even more like is that has that been happening because of all the backlash that obviously some some of the larger companies we've seen with a lot of marketing budget um like do you see a lot of innovation in there or would you love to see more

SPEAKER_01 46:57

I think we're going to have to see more innovation on, and we're seeing it already with protein being added into products, right? Because people want to have a higher protein diet or get the amount of protein that they need in a day, and they don't want to do that by just eating animal meat. And so we're seeing that, but I think that's a wide open field. I mean, one thing I had learned about the food industry you know, starting Patagonia's food business is that, you know, innovation should not be about, you know, adding new flavors and that kind of thing, right? Innovation should really be about the future of food, you know, and I think very few big companies think that way, which is why they end up, you know, buying these innovative smaller companies because they just don't have that capability in-house.

SPEAKER_00 47:52

And, like, but it's interesting because we've talked about the CPG side and how it can really unlock interesting returns, but also unlock, I think, a lot of potential for farmers to find supply or to find ways to sell their regeneratively grown almonds, et cetera, et cetera. And yet on the$1 billion question, you said you didn't mention, okay, well, let's invest in a lot of these startup food companies to do it. Is that deliberate or do you see less opportunity there? Or maybe it's more crowded because we know organic... exits were good, this space will attract new bars and new food companies? Or has that been something you haven't focused on too much?

If you could wave a magic wand and change one thing in the agriculture and food industry?

SPEAKER_01 48:37

No, I think that a lot of the change will happen. I mentioned plant-based because I think protein is so important and sources of protein are so important as we look to the future. Like I said, this issue of using animal-based proteins would kind of blow out the planetary boundaries to the Really quickly, yeah. And I really I really do think that there is a huge change happening where people are people are unhappy with their health care. You know, they're starting to take it into their own hands and they're starting to be technology that's helping them to do that. So I'm excited about that. I think there's a whole huge opportunity there in both, you know, transforming food systems and health care. And there's there's just a lot there.

SPEAKER_00 49:49

Have you made investments like in that, like in the health care food space, let's say, or are you looking at things on Obviously, only if you can share, but have you done any deals there? Not

SPEAKER_01 50:05

in that particular space, but, you know, we are looking at, we are definitely, you know, talking to companies that are looking at that space. I think a lot of folks are. I mean, it's going to be huge as people begin to be able to take more control over their metabolic health.

SPEAKER_00 50:27

And then as a final question, it never is the final question, but if you could change one thing overnight, so you don't have your$1 billion fund anymore, I'm sorry, but you do have a magic wand and you have the unlimited power to change one thing and one thing only, what would that be?

SPEAKER_01 50:45

I think it would be to abolish all forms of chemical agriculture.

SPEAKER_00 50:51

simply make it illegal or simply like what would that process? Regulate it out of existence, you know, regulate very quickly out of existence. How quick, how quick would you do it? If I

SPEAKER_01 51:02

could wave a magic wand, I would do it right now. Yeah. Yeah. I mean, it's a tough one because it's like, would I, would you do that or would you get rid of all the CAFOs in the, in the, in the

SPEAKER_00 51:13

world? All the subsidies could be.

UNKNOWN 51:16

Yeah.

SPEAKER_00 51:16

But maybe if you get rid of chemical agriculture, there won't be this immense surplus, subsidized obviously, of feed that could easily go to CAFOs and thus take away their business model, which in a true cost accounting world obviously wouldn't exist. And in an unsubsidized world, I'm betting that it wouldn't exist either. So maybe if you take away the feed, also that model doesn't have any legs anymore.

UNKNOWN 51:46

Yeah.

SPEAKER_00 51:46

So that would be the big change. And anything you're particularly excited, I mean, where it seems to be that we're going into a hot, literally, but like autumn and obviously winter, like things you look forward to over the next, let's say six months or so from the venture side, from region ventures, like what's, I wouldn't say keep you up at night, but what's exciting you over the next months that we should definitely check into, let's say if we talk in a year or two years to see, okay, what's brewing there?

SPEAKER_01 52:16

Well, I think what's exciting What's exciting is we've deployed a portion of our fund, but we still have a lot of capital left to deploy. And there's so much exciting stuff happening in both, you know, in food and technology and in soil health and in all of these different areas that I just feel like we're really positioned to pick those regenerative technology companies that really have the capability to scale. And we're seeing, you know, we're seeing the beginnings of that in these early stage companies that we're investing in. And I just see the impact that the fund can have as being, you know, having great returns, but just having really significant environmental impact, which is what we're shooting for. And I don't see those things as mutually exclusive, you know, and I ran a business where, you know, We were very profitable and very successful, but we also were very mindful and supportive of planetary health and advocacy. And those are the companies that I think will win in the next generation. And those are the companies that will be on our lips. It won't be Pepsi and Chevron and, you know, the companies we grew up with or I grew up with probably.

UNKNOWN 53:46

Yeah.

SPEAKER_00 53:46

I think it's an interesting point. I mean, and that's also a very fundamental piece, I think, of the Patagonia journey that it never got sold, or at least, I think it never even got investment capital, outside capital, to a certain extent, and maybe it didn't need that in that timeframe. Like now we are living in different times, of course, but it had this sort of long organic growth, and of course, hyperscale at some point, but it really only had to serve the goals it set and not necessarily Wall Street or something, because I don't know if that journey would have been the same over 40, 50 or whatever the number is years. There would have been some crises potentially. So there's something to learn there potentially as well, but also raise the question, what happens with the next generation? I mean, nobody has eternal life and even neither. Like what will happen? I mean, for sure plans are in place, but how can that live on and have the enormous impact it had also many decades from now?

SPEAKER_01 54:44

Yeah. Well, I'm not the CEO anymore. I can't really answer that question, but I, I do, I do think that the benefit corporation structure is helpful in that, in that secession conversation, because like I said, it does enshrine the values of the company into the company's charter. And so you, you know, you know what those values are and they're very explicit. So, you know, but yeah, I don't have a crystal ball, but will happen in the future there.

SPEAKER_00 55:13

And do you see like, how's it, change in terms of the amount of entrepreneurs you've seen with this deep tech and deep regeneration focus over the last couple of years? Like you say, we see sort of this growth now. I'm very excited. We have quite a bit of dry powder left, which is great because we see deals. Has that shifted? Has that changed since your time with Regen Ventures or has it been always quite a good amount?

SPEAKER_01 55:36

No, I think it's like sort of a renaissance, you know, and I think part of that is that a lot of these founders are digitally native, right? I mean, they, they, they grew up in a digital world that we did not, or I did not with, with a lot of information at their fingertips and a lot of technical knowledge and, and with idealism of wanting to apply that to the world. And, and they are, they are vocal, they are active, they are, you know, coming

SPEAKER_00 56:13

up. And some of them become like, Patagonia of our time, but in the regeneration space?

SPEAKER_01 56:18

Oh, without question, I think. I think what we want is not just one more Patagonia-like company. No, many. We want many, right? That's

SPEAKER_00 56:26

what we're shooting for. Many of these unicorns,

SPEAKER_01 56:28

yeah. Yeah, yeah. Well, we don't want them to be unicorns. We want to have a full herd of them.

SPEAKER_00 56:37

Absolutely. I want to thank you so much for your time, Rose, and for sharing, of course, for the work you do, and The fact that you didn't go and retire but actually get your hands dirty and do a lot of work after, I think, an immense 12 years that also took its toll was definitely a rollercoaster ride. So I want to thank you for the work you do in this space and, of course, showing up here and share about it.

SPEAKER_01 57:02

Thank you, Colin. Thank you for having me today.

SPEAKER_00 57:11

Thanks again and see you next time.