Sonia Lo is CEO of Crop One Holdings, the company behind Massachusetts-based indoor farming operation Freshbox Farms. Before she was a farmer, she was a chef, and before she was a chef, she was an investment advisor and angel investor.
Lo is vocal about Freshbox Farms’ somewhat different approach to the business of indoor farming from its high-raising peers — her company is “equipment agnostic,” and not looking to operate like a tech company. It’s an approach that Lo believes has led Freshbox to be profitable just two years after its first harvest.
We caught up with Lo to find out how her experience as an investor informs her role as an entrepreneur, and what she wants from the men in her field.
Within venture-funded startups, there is a well-known truth that capital follows capital. How can entrepreneurs in chronically underfunded populations like women and people of color work within that paradigm?
That is such a complicated question to unpack. I think there are endless think-tank discussions about why women and women of color, and men of color don’t get the same access to capital.
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I think it comes down to what the Europeans call ‘clubbability.’ It means how likely a person might be to be admitted to a private members’ club. And women are never clubbable because these clubs only admit men. With the vast majority of VCs being men, and white men at that, I think it’s easier to admit someone into the club or invest in someone that looks like you, has the same educational and/or social background – ‘he looks like me, therefore, he’s going to act like me and that means I can trust him to caretake my funding.’
Women continue to be a minority at business schools and in finance. Tech as well. These are the usual sources of venture capitalists and so a dearth of numbers at the inception of a woman’s career, then turns out to be a further narrowing of numbers when she goes out as an entrepreneur to look for capital.
And then, women’s lives don’t neatly intersect with the social lives of venture capitalists in Silicon Valley. One fund’s “go-to” CEO (they use him whenever they need a transition CEO in one of their portfolio companies), meets the VCs because his kids play little league with various VCs kids. He openly admits that’s how he gets his gigs — that’s Clubbability again.
Until you start seeing women make up 50% of the investment committee of tier-one VCs, I don’t think that you are going to start to see gender balance in very large well-funded ventures. Whether it’s in agtech or any tech for that matter.
Your bio is a bit intimidating. You speak seven languages, you’re an investor in your own right, you were a professional chef and you have a third-degree blackbelt in Tae-Kwon Do. You’re also a woman of color. When you walk into a board room of any kind, what do you feel is the most prominent aspect of your person that is perceived by others?
Funny you should say that. I was recently advised to emphasize certain aspects of my personal background that I would normally not have thought to include. I am all of the things that you point out, but I’m also a mom and a farmer and an entrepreneur. The market for produce, is 85% women (mostly moms) who are feeding their families. And yet, here I was, not really seeing that I am the only CEO of a major vertical farming company that is our target demographic. Despite all the languages, I fell into a specific vocabulary and mindset, and I’m glad we had this wise advice about speaking to my other strengths. So now I’m pitching as “Mommy Farmer” – which resonates with investors and customers alike.
In your various capacities as investor and CEO do you make an active effort to elevate people who have a hard time getting elevated? And how does that work?
Yes. Do I apply a gender lens to what I do as an individual investor? Absolutely, and I think the statistics bear me out. Do I apply a gender lens at work? No, because I don’t do much of the direct hiring. My direct reports are my senior management teams and they’re all men. They just happen to be the best people for the job at the time that we were hiring them. We have great women at the director level and on the director track at the farm, but we also have a lot of very good men. And the one thing that has been a little surprising for us is that we do very well with people who have Asperger’s or are on the autism spectrum.
And it’s not surprising right? Because it’s highly detailed repetitive work. So you know we’re not applying a gender lens obviously, but we are hiring a particular personality type that I think might otherwise struggle to get jobs. We are a great fit for people who think in a different way.
What do you tell other women getting into agrifood tech?
Try to run companies for profitability. Don’t go into things where you’re beholden to capital forever.
This is an industry where the disruption can be enormous, but it can also be very slow and there are very good, entirely satisfactory substitutes in field-grown produce — particularly organic. My colleagues in the industry don’t necessarily want to hear that — they’d rather live the dream of how we’re building the coolest thing since the iPhone X. But the reality is that we still have to build profitable farms if we want this industry to last. Our margins are better (and hopefully will stay better) but costs and revenues still matter, and we still have to make that work, one leaf at a time.
Is that advice you give across the board?
I give this advice across the board, but particularly to women.
Because there just simply isn’t the same access to capital. I wish I didn’t have to say that but it’s true.
If you could have anything from men in your field, or if you could recommend like one thing and they actually do it, what would that be?
For the men in my field, I think my one piece of advice is execute flawlessly. I say it to women as well. If you don’t execute, then all of us are going down with you. This industry is too young for anybody to have a big failure so please don’t fail.
photo: Freshbox Farms