Internship Description
Charlton Hook ’21 interned with Produce Pay, a social enterprise startup that sits at the intersection of fintech and agriculture by providing liquidity to farmers across Latin America. Charlton helped produce materials for potential Series C investors by aggregating product and financial information and interfacing with investment bankers — materials to garner debt and equity investments from impact investing firms alongside traditional VC investment firms. Additionally, Charlton automated internal finance reporting using tableau and SQL to reduce human error in delivering payments to farmers and distributors.
I applied what I had learned from my venture capital experience both in and out of class. I already had some knowledge of the agricultural market in the United States from doing due diligence in the Investing in Social Ventures class on FarmFare, an American agtech company. I took the foundation of knowledge around challenges within the American small farm supply chain and built upon that while I was at ProducePay. I learned more about the convoluted legal and government structure that make the American farming sector. I was able to experience the scrum framework that I had learned about in class and has become ubiquitous in the startup world. From Sprint plannings to standups to backlogs I was able to experience firsthand how effective it can be when trying to accomplish very concrete objectives over a short period of time. I will be using this skillset and work style going forward as I proceed into the startup and venture capital space
For fundraising, the investment bankers were suggesting that we hire consultant to do a ground up market sizing. This would have cost $100K to $250K. Given the cost, Ben, one of the co-founders, decided that we should dedicate an internal team to do the market sizing ourselves. I was part of the internal team assigned to do this. For the task, we luckily knew which data sources we wanted to check, which were USDA and Panjiva. Both had transaction and shipment level data that allowed us to size the market down to the last kilo of orange and pound of watermelon. We immediately encountered an issue with the sheer amount of data we were working with. We were looking at over 2M lines of data, which wouldn’t even fit into Excel, let alone run in one. We were eventually able to upload the data in pieces to the cloud and then combine the tables there. However, even then there were significant issues with data quality where we would have to normalize weights to the same metrics and remove the weight of pallets that would inconsistently be added to the data source. Additionally, neither data set was complete on their own. USDA had prices but not every shipment but Panjiva had every shipment but an often-null price field. By combining the data sets and applying dozens of other normalizations to the data, we eventually were able to calculate the total addressable market (TAM) of ProducePay as $300B and had the data to back up the enormity of the addressable market.
My main takeaway was an appreciation for how difficult it is to clean data and how data quality is fundamental for all analysis and analytics. Not only did I face challenges with data in market sizing, but I also faced challenges with internal data when automating reports in tableau for the finance team. Between both projects’ challenges coming down to data quality, it really made me appreciate how I took good data quality at Capital One for granted. I also took away how personal the farming experience was to every person working at ProducePay. Hearing about Pablo, one of the co-founders, talk about how farming was in his blood and how he has lived the challenge of inability to access capital as a farmer was quite moving. They helped me realize the importance of having founders that come from the countries that you are investing in, as they have a much more fundamental understanding of what the problems and challenges that people on the ground face. This is something that I will take with me as I move into impact investing, especially as I invest in other countries.
While I was at ProducePay, I helped prepare fundraising documents for their Series C. ProducePay does supply chain lending to Latin American famers that import to the United States. They do this by securitizing the produce while it’s being grown and after it’s been grown and selling the securities to investors. As ProducePay looks to grow the asset class and access that farmers have to capital, a key factor will be low cost of funds that the farmers can afford. This will be accomplishable through more investors and more in depth credit underwriting of the farms. By helping raise the series C, I helped keep ProducePay in business and helped achieve the goals that they have around the next year, which involve building out their analytics platform. With this proprietary data they will have greater insights into the Latin American fresh produce space, which will in turn reduce the farmers cost of funds through lower levels of uncertainty and better underwriting.
I applied what I had learned from my venture capital experience both in and out of class. I already had some knowledge of the agricultural market in the United States from doing due diligence in the Investing in Social Ventures class on FarmFare, an American agtech company. I took the foundation of knowledge around challenges within the American small farm supply chain and built upon that while I was at ProducePay. I learned more about the convoluted legal and government structure that make the American farming sector. I was able to experience the scrum framework that I had learned about in class and has become ubiquitous in the startup world. From Sprint plannings to standups to backlogs I was able to experience firsthand how effective it can be when trying to accomplish very concrete objectives over a short period of time. I will be using this skillset and work style going forward as I proceed into the startup and venture capital space.
For fundraising, the investment bankers were suggesting that we hire consultant to do a ground up market sizing. This would have cost $100K to $250K. Given the cost, Ben, one of the co-founders, decided that we should dedicate an internal team to do the market sizing ourselves. I was part of the internal team assigned to do this. For the task, we luckily knew which data sources we wanted to check, which were USDA and Panjiva. Both had transaction and shipment level data that allowed us to size the market down to the last kilo of orange and pound of watermelon. We immediately encountered an issue with the sheer amount of data we were working with. We were looking at over 2M lines of data, which wouldn’t even fit into Excel, let alone run in one. We were eventually able to upload the data in pieces to the cloud and then combine the tables there. However, even then there were significant issues with data quality where we would have to normalize weights to the same metrics and remove the weight of pallets that would inconsistently be added to the data source. Additionally, neither data set was complete on their own. USDA had prices but not every shipment but Panjiva had every shipment but an often-null price field. By combining the data sets and applying dozens of other normalizations to the data, we eventually were able to calculate the total addressable market (TAM) of ProducePay as $300B and had the data to back up the enormity of the addressable market.
My main takeaway was an appreciation for how difficult it is to clean data and how data quality is fundamental for all analysis and analytics. Not only did I face challenges with data in market sizing, but I also faced challenges with internal data when automating reports in tableau for the finance team. Between both projects’ challenges coming down to data quality, it really made me appreciate how I took good data quality at Capital One for granted. I also took away how personal the farming experience was to every person working at ProducePay. Hearing about Pablo, one of the co-founders, talk about how farming was in his blood and how he has lived the challenge of inability to access capital as a farmer was quite moving. They helped me realize the importance of having founders that come from the countries that you are investing in, as they have a much more fundamental understanding of what the problems and challenges that people on the ground face. This is something that I will take with me as I move into impact investing, especially as I invest in other countries.