 Welcome, everyone. Thanks for joining us so late in the day. I was hoping that the bar was going to be open behind us, and maybe we would get a few more people in here. But apparently they moved it outside this year. But I'm hoping that we're going to have a really good conversation. We've got some really energetic, interesting folks on stage. The topic itself is fascinating, from my perspective. And I think that it's a really timely conversation with where we are in the current state of supply chains. So we're going to get started. My name's Kate Danahar. I work for RSF Social Finance. We are based here in the Bay Area. I'm a lending manager. I oversee a lot of our sustainable food and agriculture work. And we work with a whole lot of companies that are working to bring high integrity supply chains to the markets and make them sustainable and support companies that are growing and making a great impact in this world. So thanks again for joining us. I wanted to start by setting the context of the conversation and then pass it on to these guys to introduce themselves and their organizations and give you a little bit of flavor around what their supply chains actually look like. And then we'll dive into the real meat of the conversation and hopefully end with about 20 minutes maybe for Q&A. So this conversation has become extremely relevant for us at RSF because over the past 30 years we've been working with a lot of organizations that care deeply about their supply chains and they work very hard in their supply chains to build integrity and values and bring up a better way of life for a lot of the communities that are otherwise oftentimes exploited by the folks that are sourcing from their regions. And at RSF we make senior secured asset-based loans to companies based in the US. It looks a lot like a bank loan you would get anywhere. But over the years, as we develop relationships with a lot of our borrowers, we hear about the needs beyond their own financing and a lot of what we've been hearing over the years is we're growing, we need to grow our supply chains. There's a lot of work that needs to be done in this particular region, but there's a gap in the financing. There's a gap in the capital available to get this work done and to keep the good work going. And so we've started waking up to this a lot over the past few years and we're actually trying to raise a fund ourselves to help address this capital gap with a lot of our partners. And so that's why it's become such an interesting topic for us. But the topic in general is really that there are some amazing companies that have been around now for 20 or 30 years working in the fair trade space and they've built these beautiful, beautiful high-integrity supply chains. But as they grow, their supply chains need to grow or they need to go build supply chains in other parts of the world and doing that work is incredibly challenging. And while there's a lot of financial products available to address things like working capital or trade financing, build very, very large projects in parts of Africa, there's a lot that remains unfulfilled. And so we wanted to have an opportunity to explore what those gaps are for each of these organizations, how some of our organizations like Root Capital are helping to fill those gaps. And then talk about besides just the fact that it might be 50 to $500,000 or cat-backs versus trade financing, like what are the things, what are the other things that we need to be taking into consideration, like trust and relationship, simplicity, a lot of things that I think will come up that you don't usually hear in the typical finance jargon. So with that, I'm going to hand it over to Les to introduce himself and maybe we'll just go down the row and then we'll kick it off with a conversation. So hi everyone, my name is Lassen. I work with Dr. Bronner's Magic Soaps. I work primarily in the business development area, but I do quite a bit of work supporting our supply chain projects. And we have, well, in terms of just raw materials, we're sourcing roughly about 3,500 metric tons of agricultural commodities to make our soaps. That's primarily coconut oil, palm oil, olive oil and mint oil. That's sort of core raw materials. And then we also source essential oils like eucalyptus and tea tree and lavender and a few others. And we kind of run the gamut in terms of the types of structures that we use, everything from kind of very high involvement projects that we own and operate ourselves to projects where it's just kind of a buy and sell relationship with a third party. And so, and everything in between like joint ventures, for example. And so it's something that we started back in 2003 when we decided to go organic. And the primary motivation there was just to protect farmers and farm workers from just toxic pesticides. And once we did organic, we soon realized that we have to go beyond that because organic is really not enough. You can have organic raw materials and it's still produced by trial labor, for example. And so there was a lack of transparency in terms of who those suppliers were, who those farmers were. And so we decided to go fair trade certified as well. And it's been a process, a transition process. And now we're 90% plus of our raw materials are both organic and fair trade certified. And fair trade is important for us in terms of kind of how we define it. It's very much based on keeping small holders on their land and not working with plantations but having a direct sort of commercial relationship with those farmers versus going through middlemen. So now we have sort of four main projects that we own and operate. We have palm oil from Ghana. We have coconut oil in Kenya and Sri Lanka. And we have mint oil in India and we're soon gonna have another coconut oil project in Samoa. So I'm Scott Leonard, I'm the CEO of Indigenous. We are a fair trade and organic fashion company. We've been doing that for about 20 years. Our mission is to create jobs and scale skills in the BOP, which is a pretty arduous task when it comes to scaling the skill, getting it ready for market truly, to the likes of say Neiman Marcus and Bloomingdale's and Saks Fifth Avenue, where actually these artisan products show up. So sourcing it all, making sure that the quality control is there and financing it. So we're gonna talk a little bit about the different types of financing mechanisms we've used. It's nice to be on stage with two of our actually funding partners, RSF, has been behind us for many years. We've been in business for about 20. Root Capital has been instrumental in actually scaling fair trade. So maybe we can talk about that a little bit later. My name is, is this thing on? My name is, I feel like a cyborg. And it's hot and sweaty in here with these lights. It's good to see y'all. My name is Ben Schmurler, I work at Root Capital. Root Capital is a nonprofit social investment fund based out of Cambridge, Massachusetts. We've been doing this work for about 15 years. Really Root Capital came into existence to solve issues in the supply chains of these gentlemen here on stage. We came into it because as fair trade was emerging, it all of a sudden realized that if we're gonna source from small farmers, we've gotta actually figure out how those small farmer organizations are gonna go out and buy the product from individual farmers so they can deliver to Scott and others here on the panel. And so over the last 15 years, Root Capital has done quite a bit of work, around a billion dollars of investment into 25 countries spanning about 30 different products. At present, we have three real distinct business lines. One is our direct lending, where we do different types of capital structures, working capital, capital expenditure, and then moving into some more complicated and risky financing models like for renovation of crops. We do another business line is called Advise, which is similar for you all to like a rural MBA program where we take our clients and prospective clients through a suite of financial advisory services to get them from anywhere being at very basic financial management up until manning to their own types of internal credit systems similar to like a micro finance institution. And then the third business line is called Catalyze, which is our favorite and our most amorphous and also the most exciting because at the scale that Root Capital works, we'll never really be able to see the change in the world that we wanna see ourselves, but we can catalyze others, other actors, other financial institutions, larger value chains to take up this effort. And so through Catalyze, we focus on impact assessment, field building and thought leadership and really trying to blueprint an industry that will allow us to really see some of the financial products in the financial market that can serve the millions and millions of small scale farmers who are around the globe. Awesome. I'm Chris Mann, I'm the chairman of the Gord for Goyaki Sustainable Rainforest Products and our main product is called Yerba Mate and Yerba Mate is an evergreen holly leaf that is a national drink in Argentina, Paraguay, Uruguay, basically the southern cone of South America. And it traditionally grows in the rainforest, but commercially, virtually everyone grows it in the sun in monocrop fashion. And so we build our business around the concept of bringing mate back to the forest and then partnering with forest communities who have the most to gain, most to lose from the survival of these vital rainforests and then utilize Yerba Mate, which basically just grows on a tree, we can prune it each year, dry the leaf and then produce beverages. It naturally is caffeinated and so we like to say that it's got the strength of coffee, the health benefits of tea and the euphoria of chocolate. But because it's just an ongoing tree that we can just harvest and basically prune it, it grows back, it can then become an economic driver for stewarding and restoring rainforest. So we work in the three countries, Argentina, Paraguay and Brazil. We work predominantly with small family farms and indigenous communities. We've got about, I believe, 10 different projects and again, all direct source. We've got a whole team that's on the ground that's, so we're very active in the projects and on the ground managing them. So kind of to your points around organic and fair trade. Those are good places to start, but we know that we have to go beyond fair trade, beyond organic, if we're gonna address a lot of the systemic challenges that we face as a world. Thank you. So I think that a really, we've had two conversations as a group, one on the phone about a week ago and then a quick kind of huddle up in the back and the question, like the really simple question that I feel like just gets you guys going, I don't have to do any moderating for, is what is the gap? But before, because everybody, these are different size companies, different ages, different geographical locations and the gaps are different based on where they're sitting, but I think that before we talk about where you guys perceive some of the gaps to be, I think it's also important to understand what is already pretty well established in the financing world for supply chains and what is gaining a lot of momentum. So I don't know, Ben, can I throw that one at you? Sure. And then people can jump in. Sure, sure. Firstly though, I am super excited to be sitting up here with these companies because I really grew up in my own career in the fair trade movement and to like sit with pioneering companies, it feels like I get to be a little bit of the kid in the candy shop hanging out with people that were visionary leaders for many years and so I'm excited to be a part of this whole thing. And how we think about the financing gap and what you're gonna hear about today is from a root capital perspective, there's really three ways that you have to solve for if you're going to finance rural agricultural businesses that are at the end of the back road very, very far away from government support and services who are usually early stage businesses that don't require a large amount of capital to begin with but over time can grow and ultimately can be engines for economic growth for entire communities and as well as environmental stewardship and all of these other knock on benefits. The thing that's happening right now and it's really exciting is that we're all at SOCAP and that means that there is a capital supply that is starting to emerge to support supply chains like these ones. There is working capital that is going into rural agricultural businesses, it's going into health, it's going into infrastructure, it's oftentimes short term, it's differently, it's non-traditionally collateralized in the sense that it's not taking traditional assets, it's using purchase contracts, that is starting to emerge and that is a really exciting thing and so all of these guys and in their supply chains, their suppliers are starting to have access to this type of credit. The place that really needs a lot of work right now, in addition to some of the capital supply is the capital demand and how do you find very strong financeable businesses that you can start to put additional types of capital into so that they can grow? I mean this can be anything from the initial working capital to capital that they were required for updating processing facilities or investing in eco solar dryers or any types of things to improve the business capacity as well as the livelihood of the people that are selling into it and so we think capital supply is moving in the right direction, capital demand still is a long ways to go and then around all of this, there needs to be the right type of and you probably have all heard it in the last day and a half, the right type of ecosystem, the enabling environment that builds around all of this. One of the things that happened in fair trade many years ago was that fair trade, we put it on a bottle and then we were like, okay, this is good, everybody's fair trade, now it's gonna move the needle and what we've found and don't have to tell anybody in the audience is that we need to build more holistic supply chains, ones that are not just based on a price premium, ones that are based on worker standards but things that are saying, what are we doing today and where's the outcome we wanna see in 20 years? And so the enabling environment creating wholly inclusive supply chains is one of the places that we all as an industry both whether it's financial or supply chain need to work together to actually solve for some of that. So what I'm hearing is that there's, it's not necessarily a gap of capital, it's the readiness of businesses and like you said, that ecosystem to wrap around them and lift them up. So there's a, so I'd say that the capital is maturing, there is more capital in the marketplace than there used to be. There's more capital for organizations like Roo Capital to actually do this type of lending but the right financial products at the right term and tenor, those are still being evolved because this is a relatively nascent industry. And so that coupled with the right type of capital demand with the businesses that have the skills, the acumen to actually take that on, that's where there's still quite a bit of a gap in the marketplace. Do you guys have thoughts on that? Yeah, I mean, even before we go into the gap, I mean, maybe even taking a step back and looking 20 years ago when we started in Digenus, we didn't have a Roo Capital and when Roo Capital came along, we all of a sudden weren't necessarily having to lend our own money or find money for our cooperatives because that's almost like a fair trade penalty in a lot of ways. We were having to put down these deposits and keep all that on our balance sheet. So when Roo Capital came along, at a fair interest rate, they were actually helping our partners with financial literacy, financial acumen to understand what it meant to take a loan and to build that into the product that we were then purchasing from them. So that was pretty huge. Also, RSF was a supporter of our business early on as far as gaps that still exist. I'm a proponent of bringing people into the room. So I think even though there are more opportunities for Roo Capitals, I think there is the access that were not only access to the loan, but access to the room in which we're literally, what rate of interest are we talking about? And I think that becomes pretty, like for instance with RSF, you guys have lenders, borrowers, and investors all in the same room talking about that interest rate. That's I think an important component to us really understanding what is needed in for us to really look at every project that we're gonna do within that community what is the best interest rate. So something that I think is a gap is, I'm just gonna throw this out, there is a 0% interest. Which, yeah, I know. We've been actually talking with RSF about it and nobody's agreed to anything yet, but we're really excited about the opportunity to have some breathing space, to bake back in, like if you look at what GBF has done, often they're putting technical grants in with the loans and the equity that they're doing. This is an opportunity if we've got maybe even 2%, 3% that we can put into the loan that actually gets it done in that community. And kind of back to what you were saying, Ben, is Ben knows better than anyone, it literally takes a village. So just lending money, it's a very blunt tool just to throw money at somebody that might not be prepared or are we going to actually work systemically in that community. That's a huge component. So if we can find a way to bake that into a 0% that sort of maybe gives back and actually gets done what we want to within that community, I think that would be huge. And it's a gap that we'd like to fill with you. That's a very specific gap. Yeah. Yeah. Pressure's on. Well, I think I would tap into 0% is one thing, but I think one of the keys is relatively low interest and that can be below 5%. And kind of, I think one of the concepts we wanted to talk about a little bit was simplifying. In Guaya Kiwi, one of our mantras is simplify and amplify. And I think there's this natural tendency to get more and more complexity into our models. And we kind of love complexity because it makes us feel smart and it requires a lot of maintenance. And so, you know, you have to hire a bunch of people to manage it and then you feel powerful. But the reality is that what we all really long for is simplicity. And when we are working in communities in South America, in our case, they're naturally coming from that place of simplicity and why do we have to make things so complicated? And so when we start to get into the finance conversation, it becomes really, really scary. And so if we can simplify that process and really rely on the relationships that we have, we feel like we can make a much larger impact. And a quick example is, for instance, if we're working with an indigenous community and they have, you know, 40,000 acres of wild mate that they can harvest, they can sell the green leaf and generate a small amount per kilo for the green leaf. But if they can have a drying facility and actually do the drying and provide a finished product, they can generate, you know, three, four times as much revenue. And so they really get the value add. And so that's one of the areas where we see a gap is how do we get the financing in place to be able to build drying facilities in a community so that they can get the value add. And this is a community that, you know, it's an indigenous community, so it's not like they're looking to sell equity. It's, you know, you're basically talking about debt. And if it's a high interest debt or if it has a lot of strings attached to it, then it just becomes scary and it's a non-starter. So for us, one of the things that we've really looked upon is, and we've talked with ourselves about this, is the concept of trust underwriting. Because with that complexity comes the cost. And the cost to the lender is all the due diligence and, you know, how are we gonna do due diligence on a relatively small loan amount? Say it's 50,000, 100,000, 150,000. How are we gonna do due diligence on these four different projects that are in remote parts of the world without charging, you know, 20% interest or something like that? And then from our standpoint, we obviously would prefer not to have to decide between are we investing capital in building the supply chain or are we investing the capital in trying to grow the brand so that we can drive more supply and build more capacity? And from the community standpoint, they're looking at, you know, how do we make sure we're not gonna lose our land or that we're not gonna get screwed in a deal? And so, again, by creating the simplicity and relying on the trust and relationships that we've built over time, we feel like we can create a model that simplifies and amplifies and fills a vital gap. Yeah, I guess in terms of a gap, I mean, I agree with Ben that the idea of working cap or PO financing is pretty established. And there's root, there's triados, there's really kind of core players that are doing that and have been doing it for a few years. And we've worked with root as well as triados as well as Altrafin. What we're moving into now, which is kind of another sort of layer of financing that's a little more complicated is CapEx financing. And we have a project in Ghana that we're working with root on. It's about $450,000 expansion of our facility there. And that requires a little more due diligence on their part. It requires sort of registering assets as collateral. So the process of just in terms of structuring that loan is a little more complicated. In terms of a gap, I would say that it's really kind of at the front end, which is the startup phase. And I mean, it's hard to get a loan when you're a business, brand new business out of the gate. And in Sri Lanka, we were refused by a number of the social lenders. And in the end, it was really Dr. Bronner's who had to put up that money at sort of seat stage to get the process going. And only after there was a bit of an operating history were we able to access debt from the social lenders. And in Sri Lanka, actually we've taken the next step, which is really nice. We've gone from, you know, the social, or from seed to social lenders. And now they're borrowing from a local commercial bank at, I mean, they were borrowing from Triados at I think 8%. And now they're under 5% with a local commercial bank. So it's an established business with an established track record. And I mean, Triados was very happy actually. They said, this is exactly what we want to see happen is a sort of success story. So, and I also heard quite a bit about sort of stacked and layered and blended and all sorts of financing things, but there's nothing like that going on in supply chain stuff. And so it's pretty much very kind of simple products that are out there right now. Can I speak to another gap? I think that's out there. When I think about investment, I think about investors, are we as brands and investors willing to actually work within that community and build something in that community for not just that brand that we're investing in. How far are we willing to go to benefit a community? Is that really what we're going to, are we going to go all the way? Is the really the way I would, that's the gap. I think that we often stop short. I was having this conversation with Chris too. I mean, what Gwaiakee's doing is they're really looking at building the urban mate market, not just for Gwaiakee, but for lifting all boats, the tide lifts all boats. A project that we're working on, we primarily work in South America, really hard to reach areas in the Andes. So we're working in Peru to actually help alpaca farmers to do their own spinning. So that product is going to be able to be on the market, maybe only 25, we're a very small brand, 25% of that fiber, maybe 5% of that fiber. We'll hit the market through indigenous and we also produce for Eileen Fisher. But in reality, we've really created a very unique opportunity for the community. And so I think we just have to, we're here at Socap, where else would we talk about really wanting to go all the way with impact? Yeah. So there's a couple of threads that I'm hearing that I guess I just wanna name them, see if we wanna unpack them. So the first is community, hearing a lot about the right way to build these supply chains is to dig in from the community level and think about it as a holistic system. In order to do that, it takes a lot of partners. It doesn't take just one financial transaction. There's a level of trust that if you can incorporate that into the process, both from the multiple stakeholders it takes on the ground, but also from the financing level, you could actually lower the transaction costs maybe because transaction costs are a very real thing. I mean, you hear it from banks in the US doing, US-based lending is our $50,000 loan costs us as much to underwrite as our million or $2 million loan. It's the same. True, yeah. True. True. So 12 to 20%, some people would call that, could see that as predatory lending depending on the organization, but at the end of the day, it's like Root Capital and Trito, so those are real costs for you all. And so I kinda wanna unpack the idea of trust and building community around these transactions in these communities and if that could actually lower transaction costs and change structuring because people understand the needs of the community and what's it look like in 20 years, not what does it look like at the end of this term loan in five years. And then the last part is the early stage. I think that that is actually really interesting. Then we had this conversation on Monday is where is the gap for philanthropic-like capital? And it really is at that early stage when a loan is never gonna happen. It's certainly not gonna happen for less than 20%. So yeah, I guess I wanna unpack the transaction costs as it relates to trust and community because my next question I'm just gonna tell you right now is I think that that can work and that's what we're working on at RSF, we're working on it, you OSE too a group of in the Bay Area of like-minded sustainable brands are working on ways to figure this out too with through relationship but can it scale? Could we take that to a platform where it could scale or is trust really gonna be based on that particular region, community, or ecosystem of partners? Yeah, well I think you mentioned OSE too, which is a group that I'm involved in. We call it one step closer to one sustainable community. It's a group of Bay Area sustainable food companies. And so we share a lot of ideas, we share a lot of our challenges and this is one of them that keeps coming up. So scale of course is a relative term and what does it mean to scale? But I see a lot of demand around the world for these kinds of loans and one of the things that we were talking about earlier was even if it's not this particular product that scales to a billion dollar product, if it can lay the seeds for people to become more bankable to be able to go like from Triotos to the local bank, go from RSF to Triotos to a local bank, then that's the kind of thing that's building a lot of scale. And so I think that trust is really kind of a vital part of our relationship, whatever we want to call it. It's all very, very much connected and I think it has a lot of value. And I think it's something that in our society we can tend to undervalue the quality of relationship and we become very transactional. And so I think that's where we have this real gap and especially as you get into longer term loans, if it's a shorter term loan and you have a little higher interest rate, you can bear that. But if it's two or three years and it's 12 or 20%, it becomes a real factor. And so if we can use the trust and the relationship to be able to get into that agreement at a lower interest rate, be able to make a viable project that can then scale onto the next level of financing. And in that sense, you're kind of building a whole ecosystem around it. Right, right. I mean, almost like a financing supply chain. So maybe the gap and saying the capital supply, capital demand, everything is matched up. In the very early stage of businesses, the 10 to $50,000 range of loans, there's nobody operating in that space. I mean, it's the right call. Everything that is $50,000 to $1 million is the same cost of underwriting and due diligence for someone like Root Capital. Nothing is financially sustainable if it's under $300,000. And so you have to, when you think about capital stacks for being a non-banking financial institution, non-bank, we basically have to structure our entire balance sheet around how we're going to cover the losses in our portfolio so we can seed these businesses so they can be a part of your supply chain. So over time, they can graduate to more commercial scale capital and can be then served more efficiently and affordably. And the local bank can come in and give them a 5% loan and they've graduated there and we're happy. And then we look down the pipeline for more early stage businesses deeper in their supply chain to be that pipeline builder. That sounds like a terrible business model. It's an interesting business model. It's an interesting one. And one other quick point on that too is I think one of the things that's just valuable in riffing on these kinds of things too is just by creating some kind of model that's working, then it starts to, as soon as something's working and there's kind of this energy around, oh, we need to figure this out, someone puts a stake in the ground and says, here's a model. Then other people go, oh, okay, well, I like angles of that, but this part won't work. How about this? And then pretty soon you start to get a number of different really creative products that are coming around it. Right, and when you think about it, and I agree in it, I think that what's critical here is there is, we get scared when we're at a place like SoCAP to talk about things like targeted subsidy or philanthropy or concessionary capital, but it's required. You need to have some capital to get this stuff started and then you can find a blend of impact capital. You can wrap it with very interesting types of guarantees and currency reserves and there's a whole host of things you need to do, but we have to be okay with, there are things like 0% loans that look and really smell like philanthropy, but they play a vital role in helping seed early businesses, early stage businesses, to gather a credit history so that someone like Root Capital could take them on as a client and then over time grow them. And while they grow them, they grow their impact and their ability to conserve vital lands, et cetera. Well, I mean a great example of that is this project that we're doing, a pure project in Peru that we're working with RSF on. Actually, it's Root Capital on the ground right now that you guys aren't even involved, but they are involved. They're helping us with the due diligence. We're using their office space. I mean, and so you're actually literally helping us seed something that will grow that actually then we can come back and do a deal maybe where we're doing more of a finance trade, which is one of the reasons that Root Capital exists. But again, it's that sort of community and that trust that Chris was talking about. Les, I'm wondering, because Dr. Bronner's, what are you guys in revenue every year? Around 100 million. 100 million, yeah. You're a different, you operate on a different platform, I think, than Guaiki or Indigenous. Yeah, we're still under a billion. What? Way under. And so I'm wondering, does this translate to what you guys are doing at the size you're operating at and the size of the supply chains you're working in? Or is there a disconnect between size of company and the size of supply chain in terms of this talking about trust and relationship and interest, anyway? Yeah. Well, I mean the trust and I mean the relationships are key and I mentioned when we started that it's all about connecting directly with those farmers and so we have, and we like our model a lot because we actually enjoy that process and we think that the impact is much more significant when you have that direct relationship. I mean, in terms of the Fair Trade Certification there's roughly, well close to 400,000, if we take all our projects together there's roughly $400,000 a year that's set aside through what we call a Fair Trade Premium. So every time Bronners or any other customer from these projects purchases, there's 10% of that that's set aside and put into a fund. And then that fund supports and invests in local community development projects. And it's not our priorities, there's a committee, a Fair Trade Committee, it's made up of workers, farmers, community leaders and they decide what's most important in terms of sort of spending priorities. And that's a huge amount of money for these communities and I mean it's everything for us, it's been everything from a maternity ward to deep water wells to school supplies for kids. I mean it's just farmer loans, buying farmer tools like harvesting knives and things like that. So the impact is pretty significant and for us based on the size that we are as we grow that just means greater and greater impact at that community level. Gotcha. So I want to be mindful that maybe in about four minutes we can open this up for questions, but so what RSF is doing and there's a couple other folks trying to get into this is that idea behind the trust based transaction, we are not international lenders, we don't know a tremendous amount about all of the different intricacies of supply chains like Root Capital does, but what we're trying to do is hear a need from our community, raise a philanthropic fund and the reason philanthropic is because of transaction costs because of the risk associated with the type of work we're thinking about engaging in. It's too much work frankly to worry about how we're going to get every penny backed and perfect ourselves on collateral when really what we're trying to catalyze is growing supply chains for our partners that we know and trust and so we are going to start putting money into Guaya Key, Indigenous and a couple other companies supply chains so that they can put money into their supply chains and grow and build a processing facility or get looms for individual producers and we're kind of going to throw this at the wall and see if it sticks, but our hope really is for replication. We're never going to be a Root Capital in size but in size or in what we do. We're very much here in place-based lending in the United States, but the idea is for replication and to be honest with ourselves if something fails, also at being a philanthropic fund it gives us the opportunity to try something and fail when a lot of organizations based on the type of capital they have don't have that opportunity so I guess my last question is around and it's a little bit back to I think when I use the word scale that was the wrong word I think it's more replication. Do you think that by reducing transaction costs and accelerating the flow of capital to these supply chains based on a theory of trust in community or whatever those ingredients are for your supply chain is it something that's replicable at different sizes in different regions for new supply chains? What are the opportunities there or are we limiting ourselves to just being able to work on a processing facility with Guaiki and a pure project with Indigenous? I like to believe that there's a lot of different projects and opportunities that we can work with in communities and fund with a lot of different brands so the invitation to SoCAP is not just for investors but it's also other brands that are doing cool projects that can be funded and the idea around fair trade is that you're able to throw off some extra cash put back into the community. The same idea would be for just to augment that is if we're able to reduce some of the percentage points on a given loan that we're able to put that back into some kind of technical assistance to get the actual what we wanted to achieve out of the loan. I'm hoping that there'll be a larger, longer conversation and we'll succeed. Yeah, I definitely see the replicability. I referenced OSC Squared earlier and we've done a lot of work on this as well and worked with RSF on it and companies like Numi, Tea, Big Tree Organics that's doing coconut sugar and cacao, Alter Eco doing cacao and quinoa. We all have these needs and looked at we all have needs but they're all different and they're different structures and so I think one of the cool things about what RSF's doing, seeing how root steps in is that there's a collaborative element to it and even amongst us to where you said to kind of throw it on the wall and see what sticks is it is a bit open source and it's like we know there's these needs, everyone's going to have their own personality, lenders are going to have different personality, they have different strengths and weaknesses at work, some people are going to be able to scale it much better because someone like Impact Assets that's working with financial planners so they've got this huge national network that they can tap into but the structure is obviously going to have to be different and so I think it can be very personalized to not only the lender but then also totally agree and part of what the relationship and trust implies is that there's also a really strong working knowledge between kind of companies in our case companies like us that in a way are kind of intermediaries on the finance side because we're saying we want to channel this money into the supply chain it's not necessarily into our businesses it's into a third party supply chain but we know it intimately and we know it's going to work with it and we can guarantee that we're going to be doing purchasing from it at the same time we also are wanting them to also build part of what a sustainable supply chain means is that we're not the only buyer that we're not locking them into like you know we're the only buyer and you're kind of stuck with us but actually how do you develop also a domestic supply chain for you know if you're importing mate or exporting mate to the United States are you also selling 30% or 50% or some number within your own country and maybe exporting to others as well so that you're also not reliant just on one supplier and I think that also really changes the typical dynamics between you know between manufacturer supplier between lender borrower just kind of rethink all of that and get creative with it let's get creative with it and keep the money flowing yeah I mean I think that what you're say emerging there and from the financial lender perspective is that you then also merely you just create what say a parallel supply chain of finance where you have early stage seed capital that's really critical that maybe looks like some type of philanthropic concessionary dollars maybe equity it may be debt and then you also have the next layers of capital that just follow on that can accompany that business over time as they grow and change and evolve and right now I think there's probably less on the very early stage stuff there's a little bit in the in the like I would say the first one is the seed stage the early stage there's very little and then as you get to like bigger tickets there starts to be finance coming into the system I just thought of something have you guys done Kiva so we're to partnering Kiva supply chain lenders which is which is a way to start out with maybe five thousand I think we have like a fifty thousand dollar credit that we actually we actually can lend out on behalf we kind of guarantee that that's going to happen but we can put it up there and it's a zero percent fill for smaller start up it just kind of made me think about and one thing to tie in with your question that you that you had for less around size of business and what kind of the impact is you know even if you're a very large business if you're getting into a new supply chain you may be starting with the start up or someone that's small but you have the credibility of your brand to be able to you know give some kind of collateral and it may not be structured that it's actually purchase order collateral or like the traditional way but again it could be it could be the trust element that like well I trust Dr. Bronner's and they say they're going to work with this company even though it's a start up we feel strongly about it and that can also be a way to kind of bridge the early early gap I mean we have a client and I should probably stop in one thirty seconds but we have a client that we're financing with Dr. Bronner's right now and they are at the I mean they're they're in the upper Volta region of Ghana one of the three poorest regions in the country where the majority of people are living on less than a dollar twenty five a day and we figured out through Dr. Bronner's because they've been doing this work there how to place a four hundred fifty thousand dollar CapEx loan there to expand processing where you have six hundred and seventy jobs created basically out of the Sahel and two hundred and three six hundred and seventy farmers selling to a mill that is processing that is processing palm sustainably with two hundred and thirty jobs that didn't exist before and so we can figure out how to do it up there I think there's opportunities regardless of scale we can figure out how you can finance these opportunities that have deep impact and they might not always get their risk return that everybody wants but like it just depends on the level of market failure trying to solve for and if you're trying to solve for market failure in the upper Volta region of Ghana like you're going to probably get a small coupon for it. No kudos to to to root capital because you guys always have stretched it a bit you know I mean for instance root capital is lending to indigenous producers with indigenous designs right and that's not I mean that's a huge stretch I mean we don't do that. No you guys don't usually you don't do it but in fact we've done millions and millions and millions of dollars of loans with artisans over the course of ten years with zero default so we've had a huge success with root capital breaking them into apparel and handicraft informal work setting empowering people creating jobs and sustaining them so it just takes a little bit of effort but we can figure it out less than a final thought yeah innovation I mean and tenacity I mean we built these projects because we committed to organic and fair trade and there was no organic fair trade coconut oil out there it didn't exist and same with palm oil so once you commit you know then you figure out how to do it and so in retrospect we didn't have any grand design to be vertically integrated it was just something that we figured that we had to do and I think we're kind of in a similar position here this is something we have to do thanks we could do this for a lot longer but we only have I promise twenty minutes and we have nine so I'd like to open this up for questions hi there I'm Ethan from Terra Genesis we redesigned supply chains based on mimicking the structure and function of ecosystems that the supply chains are in and actually I want to just put forward an idea that supply chains don't actually exist because there aren't actually chains anywhere in living systems so that's a thought for you but the question is really you've talked a bit about this ecosystem we need ecosystem of support and I wonder you know what might be if you could sort of distill what are some of the key species in that ecosystem and are there going to be different species in Ghana versus in you know the South America that are somehow based on the ecosystems of those places Ben that's something you took that one well no so I think one of the things is that we use so I'm not ecosystem we use it very broadly like actually the wrap around support that helps you know some of these non supply chains supply chains function I don't have the language yet so you're going to have to like follow that on with a different there you go and so I think it probably often takes foundations people that are actually sourcing the product it takes some type of aggregation point for farmers to sell into it takes creativity on finance whether it be local finance social lenders development finance it will require people that have technical skills to like on to provide support to these communities etc so that there's not really like a there's not a there's not a solution in a vacuum and as Scott mentioned earlier finance in and of itself is a very blunt tool to solve poverty but finance deployed smartly sustainably with all of this other support around it can be quite a powerful tool to provide impact hi I'm Terry Andrews Bumbler foods and I've done work with supply chains or supply systems in southern Africa and one of the biggest ways we found to reduce financing risk is linking financing with extension or training services and just wondering if you guys have specific examples and if in your in your regions in your areas if that's also been the case and what you think about that I would say in our case we have people that basically live in the communities that we're involved in and so it's very integral because we've seen indigenous community that we work with they have had hundreds of thousands of dollars channel through the community but without kind of that relationship and they all kind of look at each other and they're like were you going to do anything and nothing really happens and we went in with very small amount of money but with the relationship with the team and really building trust which takes a long time because you know communities that have been through genocide and different elements there's just a real difference to deal with outside folks and it just takes time to build those relationships and so I think it's imperative because and especially if you're if you're working with a community that doesn't have experience with finance if they do then it's still beneficial but a little bit different because you can really get creative and make finance go a long way you can really be smart about things we see you know from this one community a lot of broken down about a car or motorcycle things that were going to require unveiling money that they just didn't understand and didn't plan for so I think it's super vital yeah I mean I think it's the thing that you know for us we're putting investor money out into the Upper Volta and like we need to get that money back and so one of the ways that we can mitigate that risk is to make sure that the clients where we're placing those credits have the right skills and tools to do the types that both you know the farmers can deliver on the product and then they can repay the loan to someone like Root Capital we've been looking at it very early stage but looking at building diagnostics for our clients to say how good is your extension service you as a last mile extension provider to individual farmers and like their ability to provide really solid extension might be the difference between you know small productivity this year and big productivity next year and kind of a huge windfall of impact I have to say from the financing perspective RSF we are working on this fund and we also do a lot in US based food systems and the more work I do in the space I actually find it almost negligent to not pair some kind of technical assistance with a loan if you're working with a certain size or organization as you said Ben you know a loan is a pretty blunt instrument or a finance is a pretty blunt instrument and you really do have if you want to create impact and you want to derisk your loan you've got to wrap it with especially when you're doing financial due diligence on a company and you understand that they do not understand their margins and how those margins get into profitability people are very good business people they're very savvy they've got great ideas but they don't necessarily understand all of the levers on their balance I think it's a really powerful tool necessary thank you guys for being here my name is Colin I'm one of the founders of a fair trade organization that works with artists in Nicaragua and a question that I have and I'm trying to get answered over the course of the conference is it appears that like all of your organizations they were built with this idea of social good and fair trade and it was designed around that and something that personally is whether you guys see a future where companies that are slower to adopt fair trade principles could eventually come around to dedicating a significant amount of their profits to community development or poverty alleviation and or if it's really hard if you guys think it's too hard for those companies to retroactively refit their systems to focus on social good thanks personally I think that eventually we're all going to come to the realization that we need to invest in communities wherever they are supply chains supply circles and that all these communities are connected I think it's inevitable maybe not in our lifetime but I really can't see the type of financial model that we have right now including the way that we lend money and maybe that's why we're talking about it to to continue forward so I mean my hope is with yours that corporations will begin to look at people and how we can elevate them and I think we've used the word graduate in that people in supply chains may not if it's a person in the field they may or may not want to stay in the field if it's a person that's doing a worker in a supply chain that might not be their dream to do that and so if we can start looking at people's dreams and how we can blow on those coals of of existence maybe that's a big dream but you're talking big dreams I have one example I was at the Fair Trade Federation conference in April and Ben and Jerry's did a presentation and so Ben and Jerry's has obviously had a strong social mission for a long time particularly environmental not organic, not fair trade and they made the move to go 100% some percentage of fair trade a high percentage of the ingredients that they could and one of the things that really impressed me in it was like with companies like Wykey or Indigenous we're still relatively small and so we can just implement things but we don't necessarily have the best systems designed around it, we just do it because it's in our DNA and when you start to get someone to the scale of Ben and Jerry's who's a subdivision of Unilever, they're developing really fundamental systems on, okay how are we going to measure this, how are we going to demonstrate that this is really working and I was really impressed with the level of thought that went into it and the kind of systems that they were building that ultimately will trickle down and help all of us in our businesses as well so I'm very optimistic about it Did you want to say something last? Okay. Can we do one more? No. Okay, one more quick question please close this to the microphone. Sorry, I beat you. Chris Johnson from Choice Humanitarian we're Grassroots Sustainable Development we're just curious about thoughts or challenges you may or may not have had with partnerships with NGOs in terms of trust building, community development you guys have put a lot of energy and investment obviously directly into the communities but not all companies in the US are willing or even want to get into that space of boots on the ground so we have to do it quickly because our clock is going up now Don't go. I'll just address that very quickly and it ties back to the previous question as well where we've worked with partnered with NGOs in terms of sort of the startup on a couple of our projects and there's a in some cases NGOs you have people with the right sort of mindset in terms of wanting to do good but they don't have a lot of business experience and I think in all of our cases in the end these have to be commercially viable they have to be run well they have to sort of make a profit and so you're kind of balancing that issue of does that person have the right intentions in terms of fair trade and community development as well as do they have sort of basic business skills that are going to allow this operation to flourish and from my perspective it's almost easier to find somebody from with the right kind of business training and kind of convert them to think about the importance of fair trade and community development versus going the other way so we've had both experiences and starting with somebody that or a team that has the right skill set commercial skill set is in our experience a little easier yeah thanks you guys so much we'll be here for a few minutes if you have questions for us alright thank you