Intuitively we all know innovation is deflationary. Today, you probably wouldn’t spend more than $100 on a terabyte of digital storage. Not that long ago, some companies were fitting entire floors of office buildings and spending a million dollars or more to get that same storage. Around the same time, the human genome project came in under budget at $2.7B1. Today, you can get DNA mapping plus a full health report from a company like 23andMe for under $200.2 These are just a few of so many common examples we can all readily cite.
Yet, if this is so intuitive, why aren’t more financial advisors considering a broader range of early-stage growth opportunities for their clients? Despite hot beds of entrepreneurialism and innovation in places like Indiana, Texas, Missouri and Colorado to name a few3, the majority of venture investments have been focused in only a handful of coastal states like New York, California and Massachusetts. You might be surprised to learn about the opportunities the fly-over states may have in-store.
As an example, consider our current food system. We have two. Born out of WW2, the first consists of foods providing caloric content and affordability yet often ultra-processed and high in sugar content. The second is healthier and more nutritious but more expensive and less attainable for many. Where does that leave us?
Americans spend 1.7T on food and at least the same on diet-related illnesses and lost productivity. Health experts like Dr. Robert Lustig are working to create greater awareness of this problem. You can watch a recent discussion we had with him here. Meanwhile, entrepreneurs like Matt Crisp are working to create healthier, better-tasting food from plant to plate, you can watch a discussion with Matt here.
Bottom line, food is health. To reverse the negative impacts of diet on health costs, we need innovators and entrepreneurs working to solve the problem – and, in doing so, potentially creating significant growth opportunities for early-stage investors. Given the costs of food and healthcare today, this is an area ripe for innovation and a potential opportunity to both do good and do well. This may be why $20B in venture capital was invested in Agtech and Foodtech in 20195. Others are seeing the potential and the need and may benefit accordingly.
iSelect focuses at the nexus of food and health. We’ve thoroughly evaluated more than 2500 companies and have invested in a portfolio we believe has the drive and potential to create both societal and economic value. Moreover, we’ve created a unique investment tool that enables you to offer these opportunities to your clients with greater access, lower investment thresholds, greater liquidity and lower fees than traditional venture models.
Join us for a discussion on these and other topics. We may or may not be just what you need to bring your clients new and promising opportunities. Regardless, we’d love to hear your opinion and share our perspective on why the flyover states are worth a look down.
- Human Genome Project FAQ; genome.gov
- Fortune.com 11.15.19
- Forbes.com 2.25.2020