Venture Investment in Ag
When the Silicon Valley startup accelerator 500 Startups spawned farm production software company Farmeron late last year, sustainable agriculture officially joined the accelerator boom. Accelerators typically take an equity stake in your startup in return for which you get a little bit of funding and, more importantly, to participate in an intensive three to six month mentoring program at the end of which you should ideally have a fundable business. They’re often confused with the now-less-hip incubators, which generally offer physical office space in addition to mentoring over a prolonged period.
Below New York City’s skyscrapers, 8-foot tall okra plants tower over an impressive array of vegetables, herbs and flowers growing on a rooftop farm situated just 100-feet from the kitchen of Riverpark Restaurant. Lunch and dinner menus state that meals are made with “produce grown right here at the Riverpark Farm.” In fact, the 15,000-square-foot urban farm on East 29th Street supplies 100 percent of the restaurant’s organic herbs, lettuce, and flowers.
There is only ONE DAY LEFT to lock in your ticket at the Rooster Special Ticket Price for the Seedstock Sustainable Agriculture Innovation Conference (details below) at UCLA. The conference has recently added a number of new sponsors including Whole Foods Market, Palumbo Family Vineyards and Wine, the UCLA Anderson School of Management’s Entrepreneur Association and Net Impact Branch.
News Release–SUNNYVALE, Calif.–Blue River Technology, a pioneer in the use of computer vision and robotics for agriculture, today announced it has raised $3.1 million in Series A funding led by Khosla Ventures. Steve Blank, author of “The Startup Owner’s Manual,” Ulu Ventures, and Stanford Angels and Entrepreneurs also joined the round. In addition, Ryan Kottenstette of Khosla Ventures has joined the company’s board of directors.
Founded in 2011 by two Stanford University Alumni, Blue River Technology is developing an alternative to chemical-intensive agriculture, which is both expensive and hazardous to the environment.
Running a dairy or cattle operation efficiently requires the management, tracking and assessment of complex sets of data ranging from animal feeding cycles and health to overall production performance. Farmers and their teams often spend an inordinate amount of time and money shuffling through spreadsheets, manually cobbling together data to insure that their operations run smoothly.
To solve this problem and increase the efficiency of data management, a company called Farmeron has developed an online software product that enables livestock farmers to easily track the ins and outs of their animals. The company’s software program allows farmers to manage such data sets as the number of animals on the farm, feeding cycles, milk production, medical treatments, location transfers and much more. Through Farmeron’s cloud-based web application, farmers can update their data as they go and later create reports and analytics that keep their farms running more efficiently.
For many sustainable agriculture entrepreneurs the point at which their ideas become ‘real’ is the one at which they must confront the decision as to whether to patent their technology or process. This decision point frequently comes even before pilot projects are established or target customers identified. Unless you’re fortunate enough to work at a university or research facility that is willing to cover the cost of patenting, it will typically involve spending anywhere between $5,000 and $20,000 in legal fees in addition to using team time, at a stage where time and funds are scarce; so the decision is rarely taken lightly.
Biomass-based biofuels – fuels produced from renewable biological resources – are arguably the most successful of sustainable agriculture sectors when it comes to attracting investors. While other sectors were fortunate to break $100 million in investments, 33 biomass deals raked in just under $1.4 billion last year, according to industry journal Biofuels Digest.
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.