Open letter.

Dear Venture Capital Influencers,

Your words (and funding) have a disproportionate impact on our future. In today's climate, they matter more than ever before. That trend will continue in one direction only. I'm writing this letter to ask for your support in correcting how we talk about the future of food, agriculture, and well-being. I wrote a version of this letter after getting a bit worked up about Episode 86 of "The All-In Podcast" after hearing, "...and now they're trying to get us to eat bugs."

I want to share a little bit about the insect agriculture industry. We’ve been working on de-stigmatizing the space and, while occasional sensationalism falls under the category of “all press is good press,” it’s critical that we pair that with education.

"Men argue. Nature acts." - Voltaire

Common-sense solutions.

Insect agriculture is not a part of some “woke green movement.” It is not part of mis-paced policy made by out of touch never-been-on-a-farm interest groups that “don’t even interact with farmers.” It’s the opposite. As a keystone species, insects are critical for healthy ecosystems. They have been a part of food production (and for many cultures, food themselves) for thousands of years. As better articles than this email explain, regenerative agriculture “technologies” are as ancient as it gets.

My name is Aly Moore and I've been growing the insect ag community for 12 + years. My goal has always been to support the space that has become more like an extended family to me through the years.

Recently, I traded my "Switzerland" position (as an advocate for the space as a whole without ties to any single company) to assemble what I call "Team Avengers" - my idols from the bug space collaborating under one company to launch the re-integration of insects back into agriculture.

The company I’m writing about (along with a brief overview of the insect agriculture industry) is Chapul Farms; we’re about to launch a Series A fundraise to scale our project development services that “solve waste” by feeding it to bugs, also creating premium animal feed and fertilizer co-products. The investors from our seed round are coming back, including Mark Cuban, Daniel Lubetsky, and Nexus PMG. We’ve been working on this for a while, and this is our best plan. I think it’s a good one.

My hope is that you’ll be compelled to support this massive leap forward into incorporating ecosystem services into waste management and agriculture. At the very least, I wanted to provide some information about our industry to add context for future pod conversations (as influencers in the capital space, how you talk about the future of food massively impacts the outcomes we realize.)

Thank you for taking the time to consider, and for your work on articulating the need to act in this critical realm of capital.

With Tremendous Enthusiasm,

Aly Moore

“If you find a great business, and you believe in that business over the very long run, you don’t need to worry about timing the markets. You put money in that business as long as you get a fair valuation today… if you find a great business that you think is going to compound value for you over the long run, market cycles don’t matter.”

- The All In Podcast Ep. 87

Critical Context for Podcast - Insect Agriculture 101

Correcting the Narrative

It is critical that we dispel harmful misrepresentations about where we are and how we got here. If “class warfare” took place, it started with the Green Revolution (for this example’s sake we’re focusing on the Green Revolution, but even this is “reductionist”/misses the important conversation about colonizing land that once belong to natives who used regenerative agriculture practices.)

Yes, the fertilizers and technologies of the 1970s allowed us to feed a booming population.
But it also killed the soils - the ecosystems (like our gut microbiomes) still beyond our understanding, and essential for the survival of our species.
The “class warfare” happened in the 1970s when farmers were told to “get big or get out” by Big Food.
The ensuing years created insidious patterns of biodiversity loss, growing decreased resiliency, and growing dependency on inputs.
Eg) reduced the diversity of land ownership, reduced the diversity of crop/livestock production, reduced the nutritional value of food being grown on the soil (leading to a crippling disparity in health outcomes between those who could afford food-food and those who could only afford empty-calories or anti-nutritional sugar snacks; massive downstream inequality…), and destroyed the diversity of the soil food web.
When beneficial microbes are alive in soils, they’re capable of adapting and healing themselves. During the Green Revolution, we traded short-term yield gains for long-term soil health.
We’re only now feeling the effects of the “artificial sugar high” produced by the green revolution. We’re learning that chemical “solutions” were temporary fixes that decoupled value/price and led to negative externalities.
On top of that, we made farmers dependent on expensive chemical inputs. Today, farmers are operating on depleted soils and forced to pay whatever price for chemical inputs to treat their dead land.
Enter also: pesticides, antibiotics, tilling…
While I won’t go into detail, I did want to call out how impactful restoring insects as a keystone species can be with a few concrete examples: by mimicking nature and feeding would-be-waste to bugs, we naturally create (1) insect animal feed and (2) insect manure (frass). (1) It’s not surprising that we see better health outcomes in animals fed insects - birds & fish evolved to eat them! Beyond nutritional outcomes, we’re also beginning to understand that nature’s tech (bugs) play important roles in antimicrobial resistance and decreasing bioaccumulation of microplastics and other toxins. (2) Soils are quite literally built on frass. Insect exoskeletons and poop restore not just the diversity of beneficial microbes to soils, but they also improve soil structure (better water retention) and trigger plant’s natural defense mechanisms, decreasing the need for pesticide use.

Contextualizing & Connecting Today's Challenges

The ongoing global challenges we’re facing only strengthen our business case and increase the urgency with which we need to scale.
This is why “Circular” continues to raise capital and grow valuations while most investment categories are stalled out and fearing inflation, high interest, recession, etc.
Trend-lines and headlines point to population growth, geopolitical tension and rapid deglobalization, logistics dysfunction, skilled and unskilled labor shortage, urbanization, food scarcity, increasing energy costs, increased urgency on emission reductions, retiring baby boomers and how that impacts capital markets, focus on health through nutrition - ALL of these point to Circular Economy Solutions as the most obvious investment category existing.
In episodes 86 and 87, you’ve discussed the food and energy problems as if they were separate. They’re deeply connected. It comes down to hydrocarbon/petrochemical input dependency. To fix this, we must foster resilient, independent, distributed (ownership) food systems.
Market trends are showing an increased demand for biological inputs over chemical “solutions.” We’re learning that chemical solutions were temporary fixes that decoupled value/price and incurred negative externalities.
Sure, we could bet on developing technologies and the slow roll out of policy to re-price the markets. But what if we scaled nature’s solution for “waste management” by integrating insects into existing agricultural production businesses?

The Solution? Natural Nutrient Recovery.

Create value for farmers by designing custom, co-located “waste management” solutions in the form of insect farms. Instead of paying to send waste to landfills, we feed organic waste to insects, also generating premium animal feed (the insects) and biofertilizer products (frass - insect exoskeletons and excrement).

What if we worked with, rather than against, nature?

Nature doesn’t waste - it’s the expert at creating systems that adapt.
If we get agriculture wrong, nothing else can go right. As a keystone species, insects are critical for healthy ecosystem functions.

Chapul Farms and other regenerative/circular agriculture companies design symbiotic systems.
We’re using nature’s technology to recapture valuable nutrients (diverting waste from landfills) to create animal feed and potent fertilizer products instead.
The positive “externalities” of closing the loop on agricultural production are too numerous to get into here, but I’ll tease a few: restoring biodiversity means restoring independence/adaptability/food security
Frass - a co-product of insect farms - is something we’re really excited about. You discuss the ammonia/fertilizer challenges. Frass is the key to soil health, energy independence, and GHG reduction.
We should just be feeding animals bugs - not corn/soy

Talking about risk:

Risk assessment. It’s a big part of capital allocation. The risk in capital is losing your money. Looking at that, compared to the risk of NOT getting organics out of the landfills, of not restoring our soils… that’s the real risk. The risk of inaction, or better, the consequences (as we understand them) of inaction is too great. (This is excluding the opportunity cost “aligned capital” could see of not putting it toward another plausible solution.)
The insect industry is poised to boom for many reasons; one of the more compelling is how insidious it is that we currently feed fish/birds (animals that evolved over millions of years to eat bugs) corn/soy. This is a result of latent “Mad Cow Disease Era” legislation (you can’t feed livestock other livestock”) that producers of corn/soy have legislated to keep in place, despite the deleterious effects on animal welfare. Only recently did we get the ball rolling on updating regulation to permit the various farmed species in our industry to permit sales for animal feed. (not shocking that we’re seeing massive positive effects on animal mortality, immune, gut microbiome, mood, decrease in bioaccumulation of toxins etc.)
Insect companies > to AD + composting + lab meat + cell-based
- Biotech vs. bio-based: another important distinction. Insects are part of what we refer to as “ecological technologies” - integrations with natural systems that have been perfected/de-risked by millions of years of evolution; unleashing/working with (rather than against) nature.
- Insects vs. plant-based/cell-based: some estimations suggest lab meat will need $450M in capital invested to produce the next 10,000 metric tons of product.That’s two of our facilities… so even just in terms of cost of unit production, we’re way ahead of cell-based. + the 100s of millions of years we have from nature to test this technology compared to other “newer” technologies.
- In your recent podcast you mentioned microbes that can pull ammonia out of the air… These are great innovations, but why not reduce the synthetic fertilizer use and repair soils with frass while reducing food waste and improving animal welfare? Nature has “de-risked” this technology through millions of years of evolution
And Chapul Farms is leading the space (there’s a reason I chose to work with this company; business model is de-risked from other big players like InnovaFeed because their biggest input cost (bug feed) is what our clients pay us to solve + expertise + Nexus Partnership + our CEO is leading the National Science Foundation-funded Insect Research Coalition

Commentary on two episodes:

Episode 87

Episode 86

“You’re saying there’s a pollution externality…being created. We need to internalize the externality. Capture the cost of it. So what you want to do is create some sort of permit system. Where it incentivizes… do it gradually to not destroy the livelihood of the farmers…”
- I have a lot of thoughts on this one. It was really frustrating to listen to. Destroying livelihoods of farmers is something that has happened throughout history - colonization, Green Revolution synthetic fertilizers…
- I agree that policy is still figuring out what to do here. Because the thing is, we don’t have time for “gradually” - we need solutions NOW to foster resiliency. We’ve passed several cascade effect points (if you’ve watched The Expanse and tuned into the systems on Jupiter’s moons it’s quite similar).

Our business creates value for existing ag operators with a nature-based solution that improves efficiency while reducing emissions and increasing climate resiliency.
- “To invest in agtech is to invest in something that is going to happen because it has to. Pick what you're passionate about: data, AI, robotics, genetics, energy, water - and you will see both ROI and impact at scale.”
- Agtech today will be about the pressing problems and issues that are facing us. Environmental issues (carbon reduction, nutrient/environmental loss), fertilizer affordability, food security related to achieving production goals with a stressed supply chain and high cost of inputs… Technologies that can make fertilizers more efficient, while reducing environmental loss and improving soil health will tick off most of the high level problematic areas. The most important is being commercial ready, cash flowering with the ability to scale up and grow revenues with disruptive technologies. We are there and can help solve these pressing issues.

Opportunity:

Chapul Farms is a project development company ready to scale a natural solution to some of the world's biggest challenges including waste, soil health, biodiversity loss, and alt protein production (in partnership with 100+ experienced project engineers from Nexus PMG).

Chapul Farms

Soon initiating Series A fundraising round to accelerate the development of its >$1B project pipeline, invest in new research and development opportunities, and drive sales and marketing reach within the multi-$B opportunity of insect agriculture.
4 Min Summary: https://www.bnnbloomberg.ca/video/~2435612
The latter fundraise will be supported by a Reg 506(c) offering to the “public” (qualified investors) in partnership with Dealmaker.
Series A Summary Deck
1-page Executive Summary
White Paper - BSFL in Circular Agriculture

What:

Instead of relying on new tech that will take years of R&D, Chapul Farms uses natural "tech" (insects) to create value for farmers and other existing ag companies.
We improve efficiency while reducing emissions by feeding waste to bugs instead of sending it to landfills.
As a project developer, we sell custom insect farms as solutions to waste.
These farms also generate premium animal feed and fertilizer products to sell into rapidly growing markets.

Why Us:

In partnership with Nexus PMG, who has established a record for project execution through long-term project success, we distinguish ourselves from other insect industry companies that have little experience.
There’s always risk, but that’s where the partnership with Nexus is so influential. They have an established track record and a deliberate approach that’s led to their success of addressing risk upfront and head-on to plan for it.
Chapul Farms is the US leader in insect agriculture operations.
Pat was elected the Chair of the Industry Advisory Board for the National Science Foundation's new Insect Research Center - (Center for the Environmental Sustainability through Insect Farming).
We have partnered with internationally renowned and experienced climate project developers Nexus PMG, to lend experience, a track record for excellence in execution, and the capacity to scale quickly.
We've made significant progress since our seed round and need to scale quickly to meet demand.
We have developed the technology for a fully-integrated insect farm system - a brief rendering of our facility design can be seen here: Chapul Farms Design.
Our business model now is to design, build, and operate insect farm systems (BSFL species) that are co-located with organics waste streams (insect food) and in a zero-waste process, produce insect protein for aquaculture feed and pet food, and insect frass (manure) as soil fertilizer.

Why Now:

Recent acceleration in our industry - fundraising efforts from similar companies in the EU (Innovafeed) and Asia (Nutrition Technologies).
Now more than ever we need to reduce our reliance on inputs and build domestic food resiliency.
This is why “Circular” continues to raise capital and grow valuations while most investment categories are stalled out and fearing inflation, high interest, recession, etc.
Trend-lines and headlines point to population growth, geopolitical tension and rapid deglobalization, logistics dysfunction, skilled and unskilled labor shortage, urbanization, food scarcity, increasing energy costs, increased urgency on emission reductions, retiring baby boomers and how that impacts capital markets, focus on health through nutrition - ALL of these point to Circular Economy Solutions as the most obvious investment category existing.

Timeline:

2012 - Chapul launched with a Kickstarter campaign
2014 - First Shark Tank investment (Mark Cuban) to sell cricket protein bars
2018 - Radical leap in direction of impact - scaling insect supply chain
2020 - Chapul united team of global insect experts, raised $2.5M in seed funding, and partnered with Nexus PMG to launch Chapul Farms (Seed Round: Cuban comes back with 3x original investment + Daniel Lubetsky + Nexus PMG)
2021 - Chapul Farms develops pipeline of project opportunities (>$1B), builds market for project off take (biofertilizer + insects as animal feed,) and begins construction on Oregon-based Innovation center
2022 - Chapul Farms currently has 7 industrial projects in the latter stages of development + launching Series A

Education

2015-2017

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2011-2014

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2007-2010

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123-456-7890

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