Innovation with Purpose: Tim Hoerr Of Serra Ventures On The World’s Most Successful Purpose-Driven Business Models

An Interview With Russ McLeod

The company must also highlight and recognize the achievement of purpose in non-monetary, but noteworthy ways. Several of our portfolio companies have recognition programs that profile team members “caught doing something right.” The reward is having your contributions as an individual highlighted to the rest of the company while also receiving a nominal gift such as free movie tickets.

In today’s business landscape, companies that integrate purpose into their core strategy are gaining significant traction. These businesses go beyond profit to create positive social and environmental impact, proving that doing good and doing well can go hand in hand. What are the key elements of these successful purpose-driven business models, and what can other companies learn from them? I had the pleasure of interviewing Tim Hoerr.

Tim Hoerr is the founder and CEO of Serra Ventures, LLC, a venture firm managing $180 million in early stage technology investments. He is a former international accounting firm partner, having spent 15 years with RSM, and is also a former tech entrepreneur with experience in a number of industries. With 13 years experience in the ag and food tech space and having navigated some of the most challenging economic conditions in a generation, they’ve delivered multiple exit events, strong returns, and are one of the most prolific investors in this sector, having been ranked third most active in 2023 by Pitchbook.

Thank you so much for doing this with us! Our readers would love to get to know you a bit better. Can you share a bit about your background and what has led you to this moment in your career?

I grew up in a family business in Peoria, Illinois (Hoerr Nursery). It was my experience in the family business, from fifth grade through college, that formed my work ethic, my commitment to serving others, and my pursuit of a higher mission in life. In 1983, I graduated from Illinois State University with a degree in Accounting and Business Information Systems, and then joined the accounting and consulting firm now known as RSM where I spent the next 15 years in a variety of roles — all within the management consulting discipline.

After departing RSM in 1998, I launched LifeVision, a consultancy offering executive coaching, professional speaking, and strategic services. In 2000, I served as President of SourceGear, a software firm, and then in 2001, as Co-Founder and Chief Executive Officer of iCyt, a bioscience instrument firm which won numerous technology and business awards including Best Places to Work in Illinois. iCyt was acquired by Sony Corporation in 2009. I then served as the part-time CEO of ImmuVen and part-time CEO of Cbana Labs for two years, while launching Serra Ventures, LLC with the help of business partner Dennis Beard and my daughter, Alyssa Kolb.

In side-bar endeavors along the way, I enjoyed:

• Owning (along with two partners) the Official Fan Store of the Fighting Illini (University of Illinois), Gameday Spirit, from 1999 to 2014.
• Owning (along with eight co-investors) and directing a multi-unit Jimmy John’s Gourmet Sandwiches franchisee located in central Texas from 2010 to 2020.
• Owning (along with a co-founder), Collegiate Marketing Inc. from 2004 to 2011.
• Executive producing the film Beyond the Mask in 2012 and 2013.

Over the years, Serra has grown into a successful venture capital firm managing $180 million in early-stage technology funds and serving over 100 tech companies. Today, we have a presence in Chicago, San Diego, Park City, Dallas-Fort Worth, and our home base of Champaign, Illinois. We have three Managing Partners, six Venture Partners, six Venture Advisors, three full time associates and a couple of interns.

Can you share a pivotal moment in your career that inspired you to integrate a sense of purpose into your professional journey?

From a very young age, I have felt a strong sense of purpose. Working in my family’s business was deeply meaningful and satisfying for me, even as a youngster. I knew that serving customers with excellence was something special and could result in a great sense of fulfillment. Later in my professional career, I had an epiphany of sorts at my church’s small group leader retreat. Two nights before traveling to the retreat (Indiana), I experienced a powerful and strange dream…in which I sensed that “something was up” and I’d receive a revelation of sorts regarding my future work at this retreat. Sure enough, I had a very spiritual experience there that aligned with the dream and confirmed that I was called to serve my clients in a very profound way. It was very energizing — and seemed to unleash a new level of passion, purpose, and productivity for me. Within two years, I was promoted to partner at the accounting firm and went on to lead a team of consultants bringing very novel tools to address our clients’ unique problem situations.

Can you describe your company’s mission? What societal problems are you solving? What customer problems are you solving?

Serra Ventures’ mission is to identify the most promising technology startups solving today’s most challenging problems in food and agriculture, invest in them, and then coach them to success. From a global timing perspective, the convergence of key trends is creating a unique opportunity to invest in Ag and Food Tech. Three mega-trends in particular are indicative that the time for innovation and investment in innovation is NOW:

• The Changing Consumer: 70 million Millennials are demanding transparency and sustainability in all aspects of the Ag and Food supply chain. The Millennial consumer wants more healthy as well as more diverse food choices; climate-conscious farming and production practices; mindful treatment of animals; increased food safety, to name just a few impactful changes that have become large “pain points” for these industries, but which represent significant opportunities for emerging technology solutions.
• The Changing Farmer: 70% of U.S. farms are experiencing generational leadership changes with tech savvy Millennials taking charge in many cases. There is increasing adoption of tech on the farm due to significant advances in the functionality and stability of “building block” technologies (e.g. field level imagery, microclimate weather monitoring, carbon measurement, and quantification techniques).
• The Changing Climate: Governments and corporations are placing high emphasis on sustainability as we wrestle with the reality of climate change. Massive amounts of venture funding have been flowing into the Ag Tech category — $12.3 billion in 2021 and $10.6 billion in 2022.

Serra is investing in the companies that are solving the unique set of problems brought on by the convergence of the above mega-trends. We are empowering these brilliant and dedicated teams with capital, industry knowledge, coaching, and encouragement.

Do you have a big hairy audacious goal for your organization and its impact on the planet?

Serra seeks to be the best-in-class venture firm working in the ag and food tech space. We want to empower and encourage the best entrepreneurs who are solving today’s most pressing problems in ag and food while delivering the best returns for our investors. We really are saving the planet…one breakthrough innovation at a time!

Can you please describe some of your successes to date?

Our success is reflected by the mission and success of our portfolio companies. A few examples of these are:

Mast Reforestation utilizes technology to make post-wildfire reforestation scalable to combat climate change. Their industrial drone swarms are able to plant seedlings in difficult-to-reach environments that have been ravaged by wildfires.

Smart Apply developed technology to help farmers of high value crops use fewer chemicals, resulting in communities being healthier and safer. Reduction in chemical use of up to 60% has been achieved by multiple customers of theirs.

Barn2Door is facilitating the connection of local farmers to end consumers in their respective local communities, lowering carbon footprints, providing healthier foods, and creating positive communities around their local farmers. Additionally, creating localized food systems increases efficiency and minimizes waste within those communities.

Earth Optics has created technology to enable sustainable soil management. Through use of a digital twin software platform, Earth Optics is enabling farmers to use less fertilizer by optimizing how it is applied to their fields.

Provision focuses on digital tracking of food safety information, which results in increasing consumer confidence and trust in the safety of our food system.

How would you describe your business model? How is impact engrained in the business model?

Our business model is to aggregate capital from investors into a fund vehicle that then seeks out the very best technology companies solving problems in food and ag. We source over 1000 deals per year to invest in 10 of them — so our model is highly selective. Once invested, we come alongside our portfolio company teams to coach them as well as connect them to others in the ag ecosystem. This hands-on mentoring further enhances their odds of success, leading to exceptional growth.

Everything we do is about IMPACT. We want our portfolio companies to become “category leaders” in solving the problems they’re tackling. We want to empower and equip them to CHANGE THE WORLD.

Can you share an example of an innovative solution your company developed that aligns with your core purpose?

Serra was the instigator and now major sponsor of the Illinois Ag Tech Accelerator. Its Executive Director, Jack Marck, works in concert with the Serra team with his office co-located in our headquarters. Founded in 2021 between the efforts of Serra and gener8tor, and having recently completed its sixth cohort of five companies (30 companies total), this accelerator has become a preeminent program and has attracted over 1,300 applications from ag tech companies to date. Serra is actively involved in reviewing the applicant companies and in mentoring/coaching those selected to participate. This gives the Serra team front-line exposure to the best emerging Ag Tech and Food Tech companies. Equity positions are taken in the companies participating in the main program cohorts (there is also a Beta version that does not feature equity investment). Overall, Serra has obtained equity positions in 18 cohort companies in the last three years. Two of those companies have gone on to receive additional equity investments from Serra’s Ag Tech Fund and also AgTools and Intelliculture.

Many purpose-driven businesses have struggled to achieve growth. What are some of the biggest mistakes purpose-driven businesses make in their business model and approach to selling to customers?

• Not understanding that being purpose-driven needs to be woven into the cultural fabric of the company in every possible way. It cannot just be “tacked on” as a result of a single retreat or workshop.
• Failure of leadership to embrace the purpose on a personal, not just corporate level. Being purpose-driven is caught, not taught.
• Not creating and implementing the systems to enable profitable growth, while achieving the organization’s purpose.
• Not executing on the core purpose of the company properly.

With the design of your business model, what has allowed your organization to achieve growth and deliver on impact?

First and foremost, experience. Being in the venture business for 15 years and in business generally for 40 years has enabled the team to be very effective at selecting tech companies who will be successful. Second, we use a very lean approach to executing our business model. Expenses are kept to a minimum. Everyone is focused on the corporate purpose. Third, our investments are the result of significant front-end work and are ultimately highly selective.

What are your “5 Things You Need To Create a Successful Purpose Driven Business Model”?

1 . It starts with the leadership. Each C level leader needs to be committed to being purpose-driven as an individual and as a company. When I was CEO of iCyt, I made it a point to be purpose-driven individually first, and then as a company. We talked about purpose at each company meeting — how we were doing on achieving, where we were falling short, etc. It was routinely emphasized.

2 . Purpose needs to be integrated with the company’s objectives, goals and strategies. It cannot be an add-on. Serra Ventures regularly communicates our corporate purpose to each team member. This year, we hired an outside facilitator to take us through a year-long process of creating the long-term strategy for our company….and most importantly, aligning each member with that strategy.

3 . The organization must hold each team member accountable to achieving their role in the fulfillment of purpose. I serve on the board of one of our companies where each of the vice presidents are required to prepare a quarterly report on goals achieved and challenges encountered. Then, at the quarterly board meeting, each VP must present their report and field questions from board members. This has created a great environment for accountability…it has become part of the fabric of the company and how it executes.

4 . The organization must implement a rewards system that pays for the achievement of purpose. The company I referenced in point 3 has a rewards system that pays out company profits if the company’s purpose-driven goals are achieved on a quarterly basis. This has strongly reinforced the notion that the company is serious about its purpose — and that each team member (including factory workers) can be rewarded for contributing to it.

5 . The company must also highlight and recognize the achievement of purpose in non-monetary, but noteworthy ways. Several of our portfolio companies have recognition programs that profile team members “caught doing something right.” The reward is having your contributions as an individual highlighted to the rest of the company while also receiving a nominal gift such as free movie tickets.

What advice would you give to other entrepreneurs looking to create a successful purpose-driven business model?

(See the answers to the previous questions.) I’m big on walking the talk and being an example. In my opinion, it’s the only way to build a company. Being purpose-driven should be at the CENTER of what you’re doing — as an individual and as a company. It isn’t an add-on or an afterthought to appease investors or outsiders. It can be done in such a way to produce phenomenal financial as well as emotional, spiritual, and psychic rewards for all.

Can you share a story of a mentor or a leader who inspired you in your journey?

My father was the ultimate servant-leader and purpose-driven human. Everything he did was about serving his employees and his customers, putting purpose at the center. Very unselfish. Very generous. Very committed to others and the community in which he lived.

He was also 100% committed to his family’s well-being. He made numerous sacrifices to ensure that his family and everyone around him was consistently thriving and succeeding.

What do you envision for the future of purpose-driven businesses, and how do you see your company contributing to this vision?

Those businesses who will succeed and thrive in the long run will all be purpose-driven. The movement is in full swing…so if you haven’t jumped onboard, now’s the time.

At Serra, we’ll continue doing what we have been doing organically from the beginning….loving people, serving them, doing our jobs with excellence, and working diligently to “set things right” wherever we can.

How can our readers further follow your work or your company online?

Visit www.serraventures.com We also publish a monthly update of our activities — to subscribe, email Alyssa at alyssa@serraventures.com

This was great. Thanks for taking time for us to learn more about you and your business. We wish you continued success!

About the Interviewer: Russell McLeod is an experienced business leader, social entrepreneur, and mentor. A champion of profit with purpose, the circular economy and of collaboration for positive progress. Russell is the founder of Mightyhum a Toronto-based impact enterprise dedicated to supporting growing organizations. And, while it’s not a requirement, the Mightyhum team has a passion for collaborating with purpose-driven businesses. Mightyhum specializes in providing consulting services and turning hairy audacious concepts into achievable ventures & projects. The Mightyhum team work with C-suite executives and leaders, developing new product offerings, effective go-to-market strategies, building for profitability, and streamlining operations. Before Mightyhum, Russell was involved in the world of social enterprise as the Executive Director of ME to WE, one of Canada’s best known and most awarded social enterprises. While at ME to WE, the team demonstrated that being profitable and impactful was indeed possible. During his tenure, ME to WE delivered $20M in cash and in-kind to WE Charity, helping transform the lives of over 1 million people through access to clean water; the lives of 200,000 children with access to education; and 30,000 women-led businesses launched globally. Russell’ personal mission is to inspire others that there is ‘a better way to do business,’ ‘that through business we can solve some of the world’s problems at the same time.’ You can follow Russell’s work at https://www.linkedin.com/in/russell-mcleod1/ or www.mightyhum.com.