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Impact investing and bio-businesses in Latin AmericaLATAM

Questions

Questions, answered

4 questions that founders, advisers and funders of bio-businesses in Latin America ask me. Each answer draws on the experience of operating, evaluating, building and financing.

  1. 01How do you prepare a bio-business for investment?First, decide which capital the company is preparing for, because each funder reviews different things. Then put in order the numbers and the operations that this funder will ask for, from unit cost to the use-of-funds plan.
  2. 02How does a bio-business reach break-even?A bio-business reaches break-even when it knows its real unit cost, with losses and freight included, and sells above it. It also has to survive the harvest cash cycle, which usually pays producers months before the customer pays.
  3. 03Which financial instruments work for a bio-business?It depends on the stage. Without stable sales, seed capital or grants fit. With purchase orders comes working capital, and with predictable cash flow, debt. Blended finance spreads risk across layers of capital, and equity arrives when scale justifies it.
  4. 04How do you scale a bio-business?Scaling a bio-business requires putting field operations in order, opening a market that pays for quality and financing each step with the right capital. In the field, logistics, supply and product consistency add complexity, and it pays to solve it before selling more.