• August 24th, 2023

Agtools

Case study

How She Started: How would you describe the story of Agtools?

Martha Montoya: It was a journey of watching how international markets impact farmers.

HSS: Many people struggle with raising money and how much equity to give away during those raises. Why did you raise money?

MM: I realized if I wanted to attract and retain the best team I needed to raise money. The second reason was that I saw how many guys were getting to market fast. I at first didn’t understand how so many of them got to market so quickly. In my business we were doing A-B-C-D and they're going from A-Z. They could get to market in as little as 2 to 5 years.

I studied that and I realized to get to market quickly, you need to fundraise. When I went to the Stanford program on the scalability for Latinos (this is a 9-week program hosted by Stanford faculty for Latinx business owners. Businesses must hit with monetary thresholds starting at $500k in funding or $1M in revenue). I recognized the need to alter our strategy.

I also needed to educate myself on valuations. It’s a journey because there's no school that tells you “this is how much your business is worth.” Reading has been my #1 tool to understand fundraising.

There are some professions where the job comes with an instruction manual, there is no instruction manual for how to raise. It's an art. To me, raising is selling your idea to somebody who's going to give you money. It’s a similar process to selling a product in exchange for money.

HSS: Can you go into the little bit more detail about how you learned to fundraise?

MM: At the beginning I was very process oriented and I was demonstrating sales and gathering evidence. Then I saw a guy in Silicon Valley who raised $10 million for a company that produced 0 in sales. Then he raised $100M on 1 customer proof. I realized he sold a concept.

That’s when I found that fundraising is the art of selling. There are some elements that are formulaic. For example you need a deck. However, I should have learned the importance of storytelling. The investment is in you. It's about what you're doing, why you're changing the world, and why you are a disruptor.

HSS: How did you acquire your first customers?

MM: I was committed to bolstering my credibility on various levels. While my expertise remained unchallenged, I fortified my stance by enrolling in an entrepreneurship program at UC Davis. This demonstrated that my initiative wasn't just a random idea.

The program I participated in was focused on proving our concept. We interviewed potential customers, and my first customers came from those interviews. Unless you do the research on potential customers you can’t adequately address their pain points. In these interviews you can get an unbiased view of the frictions they experience. Then you can come to them with your solution and they say “ you solved it, so now I can buy it.” Additionally, my industry network yielded valuable customer connections.

HSS: How do you retain your customers?

MM: That is something we’ve pivoted on. We used to sell data, but we don't sell data anymore, we sell change of behavior. The reality is that we have an amazing product. If customers don't use it regularly they're not going to improve their P&L's. As long as customers understand the functionality, they are happy with the value we provide

HSS: What is your growth strategy?

MM: Our initial phase entailed proving our solution's viability through individual sales. Because we have a proven track record we now co-sell with scalable partners. We just launched with the largest telecommunications company in in Latin America and the Americas. They have access to 70% of all phone users in the Americas. By leveraging their expansive reach to millions of phone users, we transitioned from singular customer identification to holistic partnerships.

HSS: Do you feel like there was an inflection point where you saw a lot of growth?

MM: Yes. When I read about women not being invested in. Before launching Agtools I came from the agricultural economic development space. I would sit down with my spreadsheets, my plan of attack, and I could say I'm going to create a mango program in Vietnam and I would secure $20 million for this program. I worked on a program based in Afghanistan and Pakistan to make a mango processing plant and I secured $85 million. In that space, fundraising was not an issue for me.

Then when I'm launching Agtools I had a hard time even raising $1M million. I thought “Whoa. this is strange.” I rolled with the punches for 1.5 years. I thought maybe it’s my business plan or my deck. Then finally in late 2021 when more data started coming out about trends in VC funding for women it was a lightbulb moment.

Because I wasn’t seeing the investments I wanted, I then focused on customer growth and customer acquisition. I concentrated on big customers with large contracts. I knew that if I couldn’t raise money, at least I could go to the bank with the contracts to get a loan.

A large barrier to raising was the whole debacle of digital coins. Finally, everybody woke up and said we want companies that actually sell products. And guess what? VCs stopped investing in coins and Agtools was there for investment. All that to say, luck isn’t just luck. Luck is preparing yourself for the time when history is going to change and you're going to be part of that history.

HSS: Where do you see AGTools growing?

MM: Governments are increasingly acknowledging the role of data in managing their agricultural sectors. Policies and financing programs are being crafted based on data-driven insights. Additionally, the financial sector presents immense potential. When you have $172B financed to farmers, but only $1B is by banks, which are regulated, there’s $171B presents an opportunity for institutions. Our farmers are exposed to this risk, so the financial institutions and insurance companies need our data to get into the game and grow their market share.

HSS: What are your lessons learned?

MM: We women understand business because of our upbringing. But we are afraid of bringing that knowledge in front. Regardless of what it looks like whether it’s a PhD, an MBA, or if it’s managing your family at home. You use the same tools. I learned to never be ashamed of bringing my knowledge to my business.

HSS: Do you have any additional advice for female entrepreneurs? When was being a female in advantage for you?

Empowering more women is an essential mission. We bear the responsibility to shift the norm. The perception that men excel often emerges due to their prevalent presence in the startup arena. We must counter this unconscious bias by actively integrating women into leadership roles. When launching a business, ensure this inclusive agenda is integral, enabling women's empowerment to thrive. When launching a business, make sure to incorporate this agenda, empowering your business to uplift women.

Insights

How We Met: Cold LinkedIn Message

I messaged Martha and we set up a call over email.

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