by Clare Ellis
Craig and Tara Smith bought a farm in Petalumashortly after they read Michael Pollan’s book, The Omnivore’s Dilemma, and were blown away. “That’s a dangerous book,” says Craig. Once the two insurance executives had decided to change their lives and switch to farming, they hunted down Polyface Farms‘ Joel Salatin, renowned as much for his pithy sound bites as for his sustainable practices, to see how it’s done. Ever since they’ve been applying their sales and marketing experience toward making Tara Firma Farms a going venture. As with many sustainable farmers, they’ve got big dreams and not a whole lot of cash to finance them.
Craig Smith shared a few of his plans for the farm during a recent tour of his 300-acre farm with its free-range chickens, grass fed cattle, organic vegetables, and herds of athletic pigs. (“Hey look! The pigs are running!” ) The Smiths want to build out their CSA membership and their Farm Institute, which provides hands-on education and financial support to young farmers. But here’s what it really boils down to: Craig, who is hanging onto his job in the insurance industry, and Tara would like to figure out how to create a business model for sustainable farming that’s replicable – and that means without holding down a second job.
Converting passion into cash
The truth is that for all the passion, energy, and drive in this world of good food there’s an astonishing shortage of cash. The food business has slim margins to begin with that become even thinner when you add in the challenges of coping with a less-than-efficient distribution system and the costs associated with high-quality production. Since small food entrepreneurs and farmers are typically not considered strong bets by Big Banks, they were on their own – until recently. Into the void have leapt a number of organizations offering innovative ways to raise cash.
I was at Tara Firma Farms this past Saturday – along with 250 others (including the photographer above) – to see one of those enterprises in action. After the farm tour when we had decamped to a big white tent we watched as a group of food entrepreneurs pitched their projects. They were there at the invitation of Slow Money, established to bring together investors and food entrepreneurs. Since its inception in 2010, a dozen chapters have sprung up around the country and it has “catalyzed the investment of $14M in over 85 small food enterprises around the country,” says associate director David Corson-Knowles.
Among the featured speakers was Tara Smith who made an appeal for partners, members, and plain old cash. “The point of what we’re doing is to make a point that we need to grow more local food,” she said, and that farmers can afford to grow it. She got a hearty round of applause – as did every presenter. Hopefully they got some cash, too.
These money-raising services have got your back
Here are a few of the money-raising groups that have sprung up in recent years for people in socially responsible businesses. While we’re featuring networking models, more traditional investment models exist as well. Slow Money has listed several here.
Slow Money: Brings together food entrepreneurs and investors with the goal of “building healthy enterprises, communities, and ecosystems, not just extracting financial wealth.”
How it works: “In general, the folks who join our network and are ready to put their money to work seek out the enterprises and farmers to invest in, through a variety of means, ” says Corson-Knowles. “One of those ways is an entrepreneur showcase like the one that was incorporated into the Farm Fest on Saturday.”
How to apply for help: Visit the local chapter closest to you and fill out an application. Finalists have been selected based on their “commitment to the Slow Money principles, relevance to the local food shed, economic viability, and scalability.”
GroAction: Facilitates the sharing of resources that can “accelerate the positive change being made in the world” by creating a network of investors and social entrepreneurs.
How it works: GroAction matches “change-makers” with other members who have money or skills they’re willing to give.
How to apply for help: Investors and social entrepreneurs are invited to apply to become part of the network. Once you’re accepted you have access to other people with capital and useful skills.
Kickstarter: This massively successful crowd-funding site was originally set up to fund small artsy projects. Since then it has become a driver for business start-ups – and farmers, too.
How it works: Kickstarter lets you launch a fundraising campaign by pitching your story (producing a kickass videois critical), establishing a reward system, and working the social media network 24/7 to raise capital. Only 43% of all projects are fully funded because if you haven’t met your funding goal by the deadline you lose everything.
How to apply for help: Anyone can qualify but not everyone succeeds. Many people are now consulting professionals to put together their video trailers and help package their campaigns.
Other crowd-funding sites
ChipIn: A widget that can be posted on blogs, websites, and many social media profiles and that allows individuals, private groups, non-profits, and others to raise money online. (At the animal shelter where I volunteer this is a very effective way to raise money for hard-luck cases.)
Credibles: A brand new (in beta) crowd-funding site partnering with Slow Money to help fund food businesses.
Start Some Good: A platform that allows social entrepreneurs to launch fundraising campaigns and brings them together with investors.
Profounder: This well-respected site shut down in mid-February because its model of sharing future revenue runs counter to current laws regulating crowd-funding (we need to change those laws). It says it will continue to support socially responsible ventures by working with GOOD.
-Clare Ellis, Media Chief, Good Food Media Group
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