Friday, January 20, 2017

A Fish Story

When I was growing up, Friday was fish day: pan fried haddock, creamed tuna, fish sticks, swordfish, halibut, corned chowder. (What I wouldn’t do for some of that corned chowder or creamed tuna just about now…)

Anyway, because Friday’s a fish day, I thought a fish story would be a good one for Pink Slip to tell.

So here goes.

Yesterday, Bloomberg featured an article that focused on Ross Baird, a Sand Hill Road VC who doesn’t follow the VC herd by investing in the tech and bio-tech centers of California, Massachusetts, and New York. He’s not looking what’s called the “ten-baggers” that earn a return of 10x, let alone for the unicorns that get valued at $1B, often on (hot) air alone.

No, Baird, looks for three-baggers. And he’s looking for them in fly-over states.

“If Donald Trump wants to deliver on his promise to create rural jobs, he doesn’t need to create anything out of thin air,” he says. The talent is there, but the capital isn’t. It occurred to him that the problem was similar to one he encountered in India, where he studied microfinance for his master’s degree from Oxford. Grameen Bank and others demonstrated how small loans to poor entrepreneurs could jump-start poverty-stricken places. Baird, an Atlanta native, came home convinced the approach would work in parts of the U.S. that were starting to resemble a Third World economy because of persistent joblessness, poor health, and shrinking life spans. (Source: Bloomberg)

Well, bravo, Ross Baird. Sounds a lot more promising than wishful thinking nonsense about bringing back coal mining.

One of Baird’s bets is something called Fin Gourmet Foods of Paducah, Kentucky. Fin Gourmet:

…buys invasive Asian carp from local fishermen and turns it into boneless filets for gourmet restaurants and fish paste for Asian supermarkets. Asian carp is best known as the biggest threat to the ecosystem of the Great Lakes; the federal government just earmarked $42 million to combat the species. The youngest fish eat their body weight daily, outcompeting bass for plankton, leaving sport fishermen in fear of economic ruin. Asian carp grow into 70-pounders known to jump as high as 10 feet…And because the fish are full of bones that make them hard to eat without meticulous processing, they fetch a third the wholesale price of catfish.

They’re still pretty tiny. The forecast for this year is $1.5M. But that’s a five-bagger over their 2016 revenues, which were roughly $300K. and you gotta love a company, that hires:

…“people who need second chances from incarceration, drug courts, domestic violence”

And whose “family” runs the gamut from Duck Dynasty lookalikes to the PhD founders (Lua Luu, a nutritionist- and refugee from Vietnam, and John Crilly, a “former psychiatry professor at Tulane in New Orleans, [who] has researched mental health and suicide in rural populations.” Take a look. That’s some mighty find workplace diversity.

Baird discovered Fin in 2014 when Village Capital (as in “takes a village?) “organized a three-month training program for agriculture startups in Louisville.” Fin Gourmet participated and made their pitch. Baird put in $50K. Very Grameen Bank, that’s for sure. Very non-unicorn…(But to put that investment in perspective, Luu and Crilly have sunk $1.5M of their own money in.)

The story is not all hope and joy. There are a few fish-bone-in-the-throat twists and turns. But mostly it’s a good story about do-gooders doing good where it’s most needed.

Here’s hoping that there are more fish stories out there. We sure could use them…

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