For JD Vance, it seemed like the perfect investment.
In February 2018, he was working as a venture capitalist when he learned about AppHarvest. Its founder, Jonathan Webb, was a Kentucky native who wanted to build giant greenhouses in Appalachia that would put locals to work. For Mr. Vance, an Ohioan and chronicler of Appalachia with political aspirations, the idea sounded enticing.
“We really try to identify where a given economic trend matches up with a new technology” and then “put as much money into that company as you can,” he said in a podcast interview a couple of years later. He called AppHarvest “a pretty perfect elucidation of that thesis.”
Within three years, the company would file for bankruptcy.
Mr. Vance, 40, spent less than a half-decade as a Silicon Valley investor, but those years were a pivotal period when he laid the groundwork for his political career — as a Republican senator from Ohio and now the running mate of former President Donald J. Trump.
When he co-founded his own firm in 2019, Narya Capital, some of its investments would mirror his evolving beliefs. One was Rumble, an unfiltered video-sharing service that bills itself as “immune to cancel culture” and is awash in the kind of false claims that Mr. Vance has embraced during the presidential campaign. Both Narya and Mr. Vance also invested in Hallow, a Catholic prayer app; he converted to Catholicism in 2019.
None, however, attracted his attention the way AppHarvest did. His memoir, “Hillbilly Elegy,” had described Appalachia as “hemorrhaging jobs and hope”; AppHarvest was pitched as a solution to the declining coal industry there, ready to provide hundreds of workers health insurance and living wages.
The buzzy company became emblematic of Silicon Valley overreach. While Mr. Vance was on the board, it outlined overambitious expansion plans and rushed to go public before it had any revenue. The company faced soaring interest rates and spiraling labor costs, churning through workers in sweltering greenhouses that drew complaints. Eventually, despite its promises to Appalachians, it turned to migrant labor and even acquired a robotics startup in hopes of automating production. Last year, AppHarvest collapsed, just as a number of other indoor farming ventures did.
“Senator Vance believed in AppHarvest’s mission and wishes the company would have succeeded,” Luke Schroeder, a spokesman for Mr. Vance, said in a statement.
“Decisions to hire outside labor were made months after Senator Vance departed the company,” he added. “Senator Vance believed in AppHarvest’s mission to create jobs for local workers and disagreed with the decision to depart from that mission.”
The New York Times reviewed AppHarvest’s securities and bankruptcy filings and talked to former employees and executives, financial analysts and Kentuckians who worked with the company.
Mr. Vance never had any operational role and left the board in April 2021, before the company’s finances unraveled. But for a time it was one of his largest personal investments, at least on paper, according to Senate disclosures. He was lead partner on AppHarvest at two different investment firms, including Rise of the Rest, a fund started by the AOL co-founder Steve Case that became one of AppHarvest’s largest investors. After Mr. Vance co-founded Narya with the right-wing venture capitalist Peter Thiel, he briefly sat on AppHarvest’s board and its audit committee before departing to run for Senate.
While many average investors suffered losses, a few insiders cashed in handsomely — though Mr. Schroeder said Mr. Vance’s shares had never vested and he never profited. He was not named in shareholder lawsuits that accompanied AppHarvest’s demise.
But one lingering question is why Mr. Vance and the other professional investors who poured millions into the company and its idealistic vision didn’t place tighter controls around Mr. Webb. He was a founder with little relevant experience, surrounded by top executives who often lacked a background in farming, let alone the demanding field of controlled-environment agriculture.
“I was always puzzled why AppHarvest screwed up so badly, because they should’ve been an easier bet,” said Eric Stein, a business professor with a focus on indoor agriculture at Penn State Great Valley.
He noted that the company drew on technology long used in the Netherlands, the world leader in indoor farming. And it had ready-made customers through contracts with large distributors like Mastronardi Produce, which today operates one of the four greenhouses built by AppHarvest. While the company was adept at attracting attention, however, it lacked operational expertise.
“I don’t think you run a greenhouse with star power,” Mr. Stein said, referring to celebrity board members like Martha Stewart. “You need good horticulturalists.”
Mr. Webb, now 39, was not a horticulturalist. But he appealed to Mr. Vance, who would come to call him a “dear friend.”
After graduating from the University of Kentucky with a marketing degree in 2008, Mr. Webb tried his hand as a singer-songwriter before pausing that dream to apply for almost 150 jobs in renewable energy, by his count. He didn’t get a single interview, so he started scouting properties for solar and wind developers.
He sought out influential people. “I would go into people’s offices and say I had an appointment, and I didn’t have an appointment,” Mr. Webb said in a 2021 interview. (He declined to comment for this article.)
By 2014, he was hired by a government contractor for renewable energy projects. Describing the work, an AppHarvest securities filing said Mr. Webb had once “led a public-private partnership on behalf of the Department of Defense, developing what was then the largest solar project in the southeastern United States.”
But his role was more modest. Charlie Snyder, Mr. Webb’s former boss at the contractor, said Mr. Webb was a project analyst who coordinated efforts to install solar panels on military bases in Georgia, working as a middle man between the government and a large utility.
“He had big dreams that we were going to go do these massive projects, and we turned out to be facilitators,” Mr. Snyder said. “We never pushed dirt. We didn’t build anything,” though he said they had played a key supporting role in such projects.
Still, Mr. Webb was determined. In January 2017, he posted a picture on Facebook of a bedroom wall he had turned into a chalkboard to jot down business ideas. He began looking for greenhouse sites in Eastern Kentucky and launched AppHarvest the next year.
He had just “about spent everything I had,” he recalled in a Fox interview, when he reached out to Mr. Vance, whom he had met through a mutual acquaintance and who was then working for Mr. Case.
“Like I’m not leaving the room, you will have to call security,” he said of their discussions. “I don’t care what the dollar amount is. I need some money. It’s got to come from Steve. I’ll get the credibility. I’ll be able to go raise more money. So that went on for about a week to 10 days. And I got him to write a $150,000 check.”
Mr. Webb would cultivate an image as something of a countercultural entrepreneur.
“I’m anti-Wall Street — this is the first stock I’ve ever owned,” he said in 2021 of AppHarvest, while noting that he had also invested in Bitcoin and Dogecoin, a lesser known cryptocurrency that was a favorite of the Kiss bassist Gene Simmons.
Mr. Vance has a more storied career trajectory. While he was at Yale Law School, he was deeply influenced by a 2011 speech by Mr. Thiel about the purposelessness of most high-powered jobs. Within a few years he would be working at Mr. Thiel’s venture capital firm, Mithril Capital.
But he may have seen some of himself in Mr. Webb. The two aspiring businessmen were both in their early 30s, both intent on carving careers out of Appalachian transition and both from working-class, churchgoing families.
While Mr. Webb may have had limited experience, he was a skilled fund-raiser, taking in nearly $800 million from investors like the former NBA star Blake Griffin and Rupert Murdoch’s son James.
“This is psychotic to me, the amount of money we’ve raised,” Mr. Webb said in the 2021 interview. By contrast, he described running the business as far more challenging. “The reality is, none of us had a clue what we were doing.”
Mr. Webb talked about building a dozen massive greenhouses before perfecting operations at the original Morehead facility, which he said could fit “50 football fields under glass.”
Promoting the company, Mr. Vance told Axios that “we looked at lots of ag startups,” but felt that the others lacked “a really good business model.”
While Mr. Vance was on the board, the company planned to go public before it even had revenue, by merging with a special-purpose acquisition company. The strategy was then a prevailing though controversial trend on Wall Street.
AppHarvest quickly ran into problems. At Morehead, where it grew tomatoes, the company battled disease and pests and struggled to meet the grade-A standard required by Mastronardi.
Shares surged after its Nasdaq debut in February 2021 but quickly fizzled. Mr. Vance, who was mulling a Senate run, would not stay much longer. Once an outspoken Trump opponent, his rhetoric abruptly shifted.
At the time, Eastern Kentucky suffered severe flooding. Mr. Webb donated $500,000 during a telethon to aid victims. Organizers discussed including Mr. Vance as well, but dropped the idea after texting one another about controversial statements Mr. Vance had made, including a broadside assailing diversity training, according to interviews and text traffic reviewed by The Times. (Mr. Vance has given to charity amid regional flooding, including a $10,000 check in 2022.)
When he left AppHarvest in mid-April of 2021, there were reports that his departure was related to his social media postings. He derided the idea at the time, posting that he had been talking to other board members and decided that “I’m going to keep speaking my mind, and I’d rather do that unconstrained by the demands of a public board.”
Mr. Vance remained an advocate. That July, on a podcast interview, he said one of the investments he was “most proud” of was AppHarvest. In mid-August 2021, he attended Mr. Webb’s wedding in Lexington.
But the company’s finances looked precarious after reporting a $32 million net loss that same month. Still, AppHarvest remained a darling of local politicians, including Gov. Andy Beshear, a Democrat. The company originally hired hundreds of locals, but a growing reliance on migrant, or “contract,” workers was played down. They began arriving between July and September 2021, according to public filings, although some employees recalled them coming even earlier that year.
When Senator Mitch McConnell, Republican of Kentucky, visited the Morehead plant in November 2021, Spanish-speaking workers were sent home, according to five greenhouse workers interviewed as part of an investigation published by Grist and the Kentucky Center for Investigative Reporting in 2023. The report found a chaotic corporate work environment and unsafe greenhouse conditions.
“I think we were pushed harder than what was humanly possible with it being that hot,” said Chelsie Ratliff, who worked in the Morehead greenhouse from June 2022 to May 2023.
An internal “heat mitigation” report reviewed by The Times showed that work was only fully halted if temperatures climbed past 140 degrees. Ms. Ratliff said thermometers displaying the time and temperature were often covered by gray plastic bags. She got sick from mold covering the tomato plants. She was told to work faster and take fewer bathroom breaks, and she waited three weeks for a requested N95 mask.
While Mr. Vance was involved with the company, he “was not aware of employee accounts of unsafe working conditions,” his spokesman said.
“Had he been aware, he would have taken action,” he continued.
By late 2022, the company brought in Tony Martin, an executive with experience in the indoor agriculture industry, as chief operating officer.
“Great companies have ideals, and their ideal is to employ local labor,” Mr. Martin said on a March 2023 earnings call. “But when you’re faced with a thin labor pool and a high attrition rate, oftentimes it’s difficult to attract, retain and recruit the appropriate labor force. In the United States, we can rely on contract agricultural labor.”
Alison Davis, an agricultural economics professor at the University of Kentucky, was skeptical from the start, noting that it would be hard to get a high enough price for tomatoes to justify construction and labor costs.
“It was just another attempt to save the region without really understanding what the regional needs were,” Dr. Davis said. “They just assumed coal miners would switch and suddenly pick tomatoes. That didn’t happen.”
By the time it filed for bankruptcy, AppHarvest’s 500 contract workers outnumbered its other 416 employees, only 30 percent of whom were salaried. One shareholder lawsuit accused the company of making inflated projections; Mr. Webb and other executives settled for more than $5 million. But some insiders had profited. Robert Laikin, the chairman of the acquisition company that had merged with AppHarvest, bought and sold 162,500 shares between late January and mid-March of 2021 for a profit exceeding $2.1 million.
Colin Greenspon, Narya’s chief executive and co-founder, said in a statement that “as with any transformative company, it wasn’t without risk. We, and I’m sure the many other institutions that invested in AppHarvest, are disappointed that it fell short.”
Both Mr. Vance and Mr. Webb have moved on. Mr. Vance talks a lot about his Appalachian roots while campaigning, but not about AppHarvest. Mr. Webb was among the executives awarded a $540,000 payout a week before bankruptcy was declared. He appears to be leaving tomatoes behind. The Nuclear Company, his latest venture, aims to develop new power plants. Fund-raising has already begun.
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