Are you ready to crowdfund that new cattle barn you have been thinking about or the new
Rebecca Bloomfield raised over $12,000. Photo: Craig Cardiff
equipment needed for your organic vegetable operation? In tight fiscal times, entrepreneurs are using creative methods to finance their new enterprises. Research firm Massolution reported that crowdfunding platforms raised $2.7 Billion last year, up 81% from 2011. In the last year or so, new and expanding farm entrepreneurs are jumping on the bandwagon. In this region with a high median income and strong desire for locally sourced food, crowdfunding might be a realistic solution for some adventurous, savvy farmers.
What is crowdfunding? It is the use of small amounts of capital from a large number of individuals (often reached through social media) to finance a new project or business venture. Crowdfunding can be used for philanthropy and for investment purposes. Some investors who have no financial stake in a project will donate out of concern for the social, environmental, or economic interests of a community. Crowdfunding has been used to build public buildings, fund research, and establish new public programs. Crowdfunding has also been used to finance business ventures that don’t fit the typical business model that a traditional lender would support.
One example is Rebecca Bloomfield. In an article in USA Today, Oliver St. John reported that Bloomfield taught herself how to crowdfund just like she taught herself how to farm. She prepared a 5 minute video using available web tools and posted it on a crowdfunding platform to raise money. At the time the article was written, she had already raised $12,000. Another example is Vital Farms, an organic farm enterprise that raises free range chickens. Using the When You Wish crowdfunding site, the organic eggs producer is raising funds for adding a new farm to the network.
Tilian Farm Development Center serves as an incubator farm in Michigan. On its website, the center advocates the use of crowdfunding to help get new farmers started. Using the Kickstarter platform, Tilian farmers raised $13,323 to pay for a toolshed, deer fencing, and a walk-behind tractor.
As you see, most philanthropic farm requests tend to be modest and the pitch has to be simple and appealing. The donor needs to believe that the community benefits from this new venture. Quoting Wendell Berry, “It all turns on affection.”