Kickstarter Offers Enterprising Farmers Something They’ve Never Had: A Straightforward Way to Raise Money for New Projects
Now that Vermont farmer Walter Jeffries has raised $25,000 on Kickstarter to complete a new butcher shop at his Sugar Mountain Farm, he’s working on the next $5,000—to “pour the concrete for… the abattoir where we'll be able to do on-farm slaughter. “
He’s clearly taken with his success, and well he should be. Raising capital has traditionally been a very challenging task for most small businesses, and even more so for small farms. They just haven’t had the pizzazz of video game companies or businesses making some new iPhone gizmo.
But all that is changing. Not that the techie businesses are less attractive, but the farms, well, they’ve got a new aura about them with the growing interest in wholesome and healthy food.
I was looking around on Kickstarter, and found any number of farm-related enterprises raising money. There’s a compost program in Buffalo, NY. A North Carolina vegetable farm is trying to raise $4,500 for a market van.
Kickstarter has even spawned its own ecosystem. As one example, there is something called Kicktraq, which projects how much a particular project can be expected to raise. For Jeffries, he’s trending toward $38,000, says Kicktraq.
Grist reported recently that food ventures raised $2.8 million via Kickstarter last year.
As someone who spent a lot of time in a previous life advising small companies on writing business plans to raise money, I find Kickstarter very intriguing, one of those special outgrowths of the Internet age. The notion that businesses can raise financing without having to give up something substantial, like a significant percentage of ownership, or a lien on a home, is pretty radical.
Indeed, I don't see it truly as a financing tool, or even, as the New York Times suggests, “a way to float ideas and see if there’s a market for them before they trade ownership of their company for money from venture capitalists.”
For farmers, at least, I’d say Kickstarter is a very neat promotion, expansion, and sales tool. What Walter Jeffries is doing is offering pork sausages, bacon, and other meat products as an incentive to people to fund a couple of important farm projects. So people like me, who back him, can get something we value—good food—and feel altruistic at the same time.
It's not been a slam dunk for Jeffries. He's had to do aggressive promotion among his customers and friends, and get lots of Twitter and Facebook mentions. There have also been some nice media mentions, like on Vermont Public Radio.
All that is essential, because you only get your money if you achieve your entire goal. You get nothing if you only partially achieve your goal. Kickstarter says close to half of its 20,000 projects have achieved their goals.
When he’s done, not only does he have the money for his project (minus 5 per cent for Kickstarter and 3-5% for Amazon, which handles the transactions), but he has a list of future customers. And he still owns as much of his business and his land as he did before he went on Kickstarter.
A key to success appears to be “the reward” offered as part of a project. And here, farmers have a big advantage. Everyone loves good food. Put together the right combination of interesting project and food package, and it could work. I’m just not sure Kickstarter is quite ready for raw milk rewards.