sustainable agriculture investment
For a startup, the odds of obtaining venture capital funding are lower than one in 100, likely less for a sustainable agriculture startup as I’ve covered elsewhere. The odds of securing a federal grant on the other hand are more like one in six , and they rise if you’re a student or university researcher. Yet, most agriculture startups spend a disproportionate amount of time chasing venture capital, and comparatively little considering grants as an option.
In the not too distant past, startups developed using government grants as opposed to equity investments were considered less hip than their venture capital backed brethren; the rationale being in part that those receiving grants would be less apt to move their idea speedily towards commercialization.
The following is a guest post from Ro Kumar, the founder of LocalBlu, a blog covering urban farming and sustainability. Based in the Bay Area at UC Berkeley and Stanford, he is a passionate advocate for a cleaner planet with healthier people. Subscribe to Ro’s updates.
Stock brokers make big bucks by making smart bets on big opportunities. There is no smarter or bigger bet than sustainable agriculture. This is because there are very few industries which are assured to always be around—mobile phone apps, solar, and even banking are not among them. Agriculture, however, is and always has been the biggest and most important industry of human civilization. For this reason, shifts in agriculture represent tremendous opportunities for entrepreneurs.
We are currently undergoing such a shift as the dominant farming practices used since the Green Revolution demonstrate themselves to be inherently unsustainable. Industrial agriculture’s inevitable demise will also mean the inevitable growth of alternatives.
News Release – (LONDON – 28 March 2012) – Nearly one billion people in the world are undernourished, while millions suffer from chronic disease due to excess food consumption. Global demand is growing for agricultural products and food prices are rising, yet roughly one-third of food produced for human consumption is lost or wasted. Climate change threatens more frequent drought, flooding and pest outbreaks, and the world loses 12 million hectares of agricultural land each year to land degradation. Land clearing and inefficient practices make agriculture the largest source of greenhouse gas pollution on the planet.
Ejnar Knudsen is one of the better known hedge fund managers in the sustainable agriculture space; he was investing in the sector as far back as the late 1990s, when he led Rabobank’s investments into the early wave of food and agriculture internet sites such as farms.com, a collection of agriculture information sites, and eHarvest.com, a news provider.
Knudsen is a long way from the stereotype of a money-hungry MBA-grad hedge fund manager; he describes himself as a “flexitarian” and is absorbed with finding better ways of utilizing fish oil and nuts to provide health benefits after weaning himself off cholesterol drugs thanks to a nut-rich diet. Until recently, he was one of the portfolio managers at 12-year old San Francisco-based hedge fund Passport Capital. A few weeks back he spoke about his interest in alternative proteins at a recent agriculture investing conference.
The world’s population is growing rapidly, and that calls for new ways of thinking about how to produce enough food while also conserving the earth’s natural resources. As a result, agricultural entrepreneurs today are striving to combine the best of traditional farming methods with new technologies in order to create food that is healthy, flavorful and locally grown.
And if that doesn’t sound like enough of a feat, there’s also the challenge of doing it all using a business model that won’t leave the farmer broke.
Southern California has become a region of growing activity for these types of ventures, and Seedstock has attempted to provide a glimpse of what that experience looks like. A panel of agricultural entrepreneurs from the region—including those using soil, hydroponic and aquaponic growing methods—gathered at UCLA on Wednesday to share their experiences.