From Wallstreet to the Amazon Jungle
35-year-old Philip Kauders is a remarkable man. He was born and raised in New Jersey but has been living in Brazil for the past decade. He became interested in Impact investing during high school and pursued further studies at Ivy League Cornell University to learn more about microfinance and emerging markets. His career path started as an intern at the world-famous Goldman Sachs investment bank but gradually led him to South America’s emerging markets, where he headed a Latin American Unicorn company before moving on to found Courageous Land. We sat down with Philip to learn more about Courageous Land and the person behind the company that aims to fight climate change through Agroforestry.
Good morning Phil, I’ll jump in: you got into impact investing at a very young age, right?
Yes, let’s get going! When I was 15 years old, my mom gave me a book called ‘Banker to the Poor’, written by Nobel Peace Prize Winner Muhammad Yunus. It tells the story of how Yunus set up a profitable and successful bank that was using small loans to help Bangladeshi micro-entrepreneurs out of poverty.
Why did that book make such an impact?
It taught me that you don’t have to choose between doing something good for the world and doing something profitable. They can absolutely go hand-in-hand! I mean, that’s very obvious now, but back in the day, it seemed like you had to sort of choose one or the other. I don’t know what it was, but it sparked something in me. It made me realize that the more good you can do for the world, the more profitable a business can be.
Did it influence your career?
At university, I started to learn Spanish and spent time in both Spain and Chile and decided then that I wanted to spend more time abroad as an adult to try to make an impact in an emerging market. I did, however, start my career more traditionally. I worked at Goldman Sack in New York in the investment management division. I tried to convince them to open up an impact investing fund at the time but was actually doing more traditional investment management. (Goldman didn’t pick up the idea at the time but later bought an impact investment asset manager to incorporate into their business to be able to offer that product to their clients).
But then, how did you end up in Brazil?
At that time, I started learning Portuguese in my free time to move to Brazil and do something important down here. I didn’t really know what yet, but three years later, I came down to work for a private equity fund in Brazil based in Sao Paulo, where I worked at both the management company and inside of two portfolio companies that we had bought controlling stakes of to help, you know, run those businesses. A little while later, I was recruited by a technology firm to open and run Latin America for them. I went on to do that, and seven years later, that company became a unicorn.
Was that a game-changer?
It allowed me to really start focusing my efforts on what I’ve wanted to do for a long time, which is to have as much of a positive impact as possible and started to look at the different crises affecting the world today and identify which ones were the most important and the most interesting in my opinion.
And your research led you to Agroforestry?
I saw climate change, biodiversity loss, human health issues, lack of opportunity in rural areas in Brazil (which of course, leads to people winding up in the cities’ favelas), and lack of preparation for climate change as this big intertwined mix of problems. Upon identifying those problems and starting to think about solutions, I studied a whole bunch of different possible opportunities to revert to those issues, and when I came across Agroforestry, it became clear that it was the most complete solution to a myriad of problems, and it could solve all those problems simultaneously.
So the rest is history?
You could say so. I have since dedicated my life to helping scale biodiverse Agroforestry. I went on to look for the right co-founders and launched Courageous Land two years ago.
Yes, let’s dive into that! Can you tell us a bit more about Courageous Land?
The mission of the company is to create health and prosperity for all of life on earth, and that includes wildlife, rural communities, and consumers that are eating products that come from our farms. On the social side, there is a real opportunity to help people escape the traps of poverty and to actually build wealth. We do so by restoring ecosystems, planting trees, revitalizing soil life and creating habitat for biodiversity. In the process, we’re also creating healthy organic food that consumers can enjoy worldwide.
How does this work in practice? How do you make this happen?
Courageous Land wants to be the vehicle for these rural communities to realize their full potential. With our agroforestry farm operations, we help create opportunities where they can be a part of it and earn salaries that are above average for the region. Moreover, they can participate in the future profits of the operations, and also, if they have land, they can create agroforestry systems on their own land and connect to the market through Courageous Land. This way, they can move from degenerative activities like logging, land clearing, cattle ranching and illegal mining into regenerative activities like agroforestry.
This sounds awesome! Courageous Land is a young company but clearly on the path to success. What do you consider your greatest success so far?
Hands down, our greatest success so far is our remarkable team. With Gilbert and Luiza, seasoned agroforestry operators of 15 years, as co-founders, we’ve brought together a diverse group of experts. We have technology specialists with master’s degrees and PHDs in mathematical modelling and expertise in carbon and software development for agroforestry. Additionally, we have top forest engineers, agronomists, a world-class marketing professional, and Frederico, who excels in partnerships and financial structuring. I really believe the key to making this all happen is getting the right people, and we’ve been very lucky with that.
What do you think your team members would say if I asked them what it’s like to work with Phillip Kauders?
I think they would say that the mission is clear, and every day we’re driving towards that mission, I bring leadership and clarity to the team. They would probably say I am a mix of high-level strategy plus being in on the details, which helps the team do their best work.
How do you – as an investor – look at a concept like shareholder value?
I think that, given our mission is so clear, to help create health and abundance for all life on earth, the more that we can accomplish that mission, then by definition, it means we’re creating shareholder value. In our case, they go hand in hand: the better we are for humanity and for life on earth, the more we’ll be rewarded. Ours is a positive feedback loop: the more impact we can create, the more we are rewarded, which leads to more organic products we can grow in bigger restoration projects, and more people we can create opportunities for.
Sounds awesome! However, setting up a company not only doesn’t only bring success but ensures fuck ups too. What are your biggest lessons in that regard?
I would say we haven’t had any big fuck up so far. I think that the biggest lesson has been how long it takes for things to happen. When you’re dealing with large scale, there’s complexity. There are always several actors that need to come to the table for things to happen. It requires a team, it requires financing, and it requires everything that goes into building the technology as well. What I’ve realized as a founder is that in whatever timeline I think something will happen, I should probably double it. Even though we’re working hard and driving forward every day, good things simply take longer than you expect them to.
Taking all this into account, what’s your biggest fear?
My biggest fear is the unknown, the unforeseen risks that we haven’t accounted for. However, we have taken a conservative approach, factoring in various potential challenges such as disease, low prices, and crop loss. Despite these considerations, our business remains attractive. We have diversified our crops and spread them across multiple locations, minimizing the likelihood of everything going wrong simultaneously. This diversification provides multiple revenue streams and safeguards against extreme misfortune.
Our investor’s biggest fear, one that withholds them from investing, is wildfires. What’s your take on that?
I think that this risk is relatively low because we’re in a tropical rainforest, and we are getting insurance against fire for our crops, so replanting would be covered by that. Also, we’re creating firebreaks and training the team on fire combating.
What’s a firebreak?
A firebreak is a cleared perimeter of land surrounding a farm that acts as a barrier between the vegetation on the farm and neighbouring areas. It functions like a road, preventing fire spread by eliminating combustible materials such as plants and trees. The purpose of a firebreak is to create a protective zone to contain and control fires that could otherwise cross into your property.
As the CEO of an Impact Company, you want to keep up-to-date with all the developments within the industry. Are there any things that specifically excite you within this sphere
To me, In terms of land use and food, agroforestry is the most comprehensive solution. In terms of other opportunities, aquaculture, particularly seaweed and shellfish, presents immense potential too. Additionally, I think climate change adaptation is a vital sphere for business growth. With most climate funding directed towards prevention, there is a need to allocate resources for preparing and assisting communities in the aftermath of extreme events. Private sector models can ensure access to essentials like electricity, clean water, evacuation support, and medical assistance. The state alone cannot meet the needs of affected areas.
So basically, what you’re saying is that these problems create opportunities too, and very meaningful opportunities?
Yes, there are opportunities in helping people, helping people survive climate change.
With that in mind, what advice would you give to aspiring impact entrepreneurs or impact investors?
In addition to looking into those areas that I have mentioned, I think general business models that have holistic approaches to solving complex problems are good and also have, ideally, multiple revenue streams, like combining carbon with crops. That way, you have diversification in your model and are not a prisoner to the whims of certain markets.
There’s a lot of greenwashing going on in the nature-based solutions and carbon industries. How do you stay clear of that?
To stay clear of it, we focus on rigorous measurement. We set clear goals and then measure and report our progress accordingly. How much carbon have we sequestered? How many jobs have we created? How much organic food have we produced to replace chemical-intensive and deforestation-linked agriculture over time? These are measurable metrics that help us maintain transparency and avoid greenwashing.
Is Agroforestry just as profitable as industrial monoculture agriculture?
Absolutely, and it can be far more profitable than all kinds of agriculture. You can grow crops by looking at the farmland as if it was a 3D space. So you have things growing in the high strata, in the middle strata, in the lower strata, like, for example, coffee, which is shade tolerant. In addition to that, you have the potential to generate and sell carbon creditsYou have all of these things combined, plus you can have premium pricing for regenerative agricultural products, low-carbon products, organic products, etc.
Some may argue that you’re driven by financial gain, especially since you moved from the New York investing scene into an emerging market. What would you say to those people?
I’ve been searching for the right business that can make a maximum impact my whole life. When I discovered Agroforestry, I knew it was the path I wanted to pursue, even if it meant lower profitability. However, Agroforestry not only has an immense positive impact but also significant upside potential. So, fortunately, I don’t have to choose between creating societal value and financial success.
You had us at impact! Now, if you had to describe yourself in three words, what would they be?
Let me think… I’d say positive, mission-driven, and caring.
Recently, our team visited Brazil to check out your activities firsthand. How was this experience for you?
Well, to be honest: It felt like love at first sight! Corekees and Courageous Land share a similar mission-driven approach. We’re both young companies with experienced teams operating in emerging markets. We’re beginning an exciting growth period that aligns with our respective missions and creates value for our investors. Beyond the business aspect, there’s a genuine camaraderie and friendship that has developed. We’re rooting for each other to build businesses that can make a positive impact on the world.
Is there a message you’d like to convey to potential investors who are considering investing in Courageous Land and our project?
This opportunity allows you to contribute to solving important issues such as social impact, environmental conservation, biodiversity, human health, and climate change preparedness. Additionally, investing in our project helps preserve and restore the world’s largest tropical rainforest, the Amazon. It’s a timely opportunity with significant impact and financial potential, and we’re excited to welcome mission-aligned investors as official partners!
Do you want to learn more about Courageous Land and the tangible impact they make? Check out the Project Amazon page to find out how you can help them make a difference while you get rewarded for your efforts.