The Mississippi River is Drying up, and That Should Concern Us All

I love rivers. I grew up in Louisiana on the Mississippi River. Our cotton fields bordered the levee. When I was working in those fields I would always eat my lunch on the levee so I could watch the massive river rolling by peacefully.

This week I have friends posting pictures on Facebook of themselves walking across the riverbed right there off that same levee where I ate my lunch. It is shocking to see. Persistent drought has reduced the Mississippi, Ohio and Missouri Rivers to historically low levels.

The drought is not just impacting rivers, farmers in the Midwest were hit hard this year. “Total U.S. feed grain production in 2022 is forecast down 1 million tons in the October World Agricultural Supply and Demand (WASDE) report, on lower corn and sorghum yields, due to difficult summer drought conditions across the central United States.”

This growing season most of the world has experienced excessive heat and drought. Europe experienced its worst drought in 500 years. China is losing some of its hydro power because the Yangtze River is at such low levels. Plants need water to grow and produce grains, fruits and vegetables.

At iSelect, water conservation is an area of focus for us. We have a variety of technologies in our portfolio designed to reduce reliance on water in farming, reduce the use of water in agricultural processing and improve farmers’ ability to use less water to grow their crops.

When we started looking at this issue, we were largely driven by sustainability concerns. Lots of consumers love rivers like I do. Restoring them so wetlands are rejuvenated, algal blooms are a thing of the past and rivers like the Colorado run all the way to their deltas were issues that led consumer packaged goods companies (CPGs) and other industry players to start to make commitments about water conservation and chemical pollution to their customers. We saw investing in the technologies that helped the CPGs meet their goals as a good opportunity.

No one on our team expected that global droughts would impact farm productivity as quickly as has actually happened. It was a luxury when our view of sustainability was focused on restoring water habitats and preserving rivers. This year has made us painfully aware that sustainability also means being able to grow enough food to feed everyone a healthy diet at affordable prices.

Thank goodness those CPGs started making commitments to consumers a few years ago. We at least have a start on developing technologies to help farmers grow more food while using less water. But we have a long way to go still and a lot more investments to make to solve this problem.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.