How a London city private banker took a permaculture course and now applies his finance knowledge to build the biggest regenerative farm of the UK. Definitely stay until the end to hear from Mark Drewell, executive chair how investors are responding to the new equity offer compared to debt of New Foundation Farms.
LISTEN TO THE CONVERSATION ON:
THIS EPISODE IS PART OF THE NEW FOUNDATION FARMS SERIES. FIND OUT MORE ABOUT IT HERE!
How Can Finance Stop Climate Change?
The 2008 global financial crisis prompted him to question what is the purpose of finance and how it can become a medium to stop climate change. As someone who loves the outdoors, it didn’t come as a surprise that he’d take up a permaculture course the same year. What he didn’t expect was that it would completely change his perspective on agriculture and that it would influence his understanding of how industrial agriculture got in the state of where it is today.
“The big thing that blew my mind with these concepts is that, if you do permaculture or horticulture the right way, the yield is infinite. It was just a real concept that stuck in my mind, which seems to completely blow conventional logic out of the water.” – Paul Pizzala
Working To Make A Positive Impact
After graduating in Schumacher College, Paul ended up becoming an impact fund manager in public equity markets, who had their own theory of change and way of dividing up the market into positive impact, working with a small market of investable companies that do something positive in the world.
“It struck me, that’s brilliant, there’s not a 95% capital that needs to make this shift. What sparks my interest was to find the entrepreneurs that were the disruptive entrepreneurs that were putting these solutions into practice on the grounds.” – Paul Pizzala
Working With Mark and New Foundation Farms
Paul knew Mark for years. They planned on launching a fund on a meaningful economy. The idea didn’t really speak to him until Mark pitched the idea of New Foundation Farms.
“It was just so obvious to me that the soil is the core asset of humanity. Not just agriculture.” – Paul Pizzala
Paul explained the original structure of the company and how they are looking to create a business model where investors’ money is capitalised by the assets of the company.
“Look, the mission, the impact, the business model, all of that stays exactly the same. There’s no change there. What we’re doing is recognizing that investors, they want more upside, that comes of the risk. So let’s make this a really good deal for you. We’re making sure that providers of capital are first in line in the capital structure.” – Paul PIzzala
Investment Longevity
The fundamental idea behind the business model is using the investment to acquire farming lands and fund enterprise developments, effectively turning shareholders into equity owners. From there, profitability would start demonstrating after 4 years into the venture, thus at least a 10 year commitment is necessary. This will allow an investor to receive the full returns of his investment, a passive income which he could use to fund other endeavors or an asset that he and his next of kin can hold on to.
“I would love investors to stay for the whole journey. That could be 10 years, 20 years, 30 years, 50 years. I’m hoping that regenerative agriculture in the UK is going to be around for the next few 100 years. Imagine a scenario where, as an investor, you hold on to this and you pass it on to the next generation.” – Paul Pizzala
Other Important Points Discussed:
Paul, Mark, and Koen discussed these points in this episode:
- Why carbon credits are a distraction
- Plans on how to prevent future repurposing of the acquired assets
- Acquiring investors who are unified with the company’s vision
- How the company will assist in the selling of shares upon maturity
- How Regenerative Agriculture is superior to Conventional Agriculture
To know more about Paul Pizzala, Mark Drewell, and investing in New Foundation Farms, download and listen to this episode.
Bio
Paul has a career in investment and fund management, at Heartwood Wealth Management and WHEB Group. He dove dive into ecological complexity and systems thinking gained through his MSc in Holistic Science at Schumacher College. Paul has taken an entrepreneurial route since 2013, raising finance for local renewable energy projects at TRESOC, starting an NGO, The Climate Map, in the US and developing the market for leading edge carbon drawdown technologies with Rainbow Bee Eater in Australia.
Links:
- Rod’s Permaculture
- Schumacher College
- Jeremy Grantham Foundation
- Breakthrough Energy Ventures
- Climate Map
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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