Unconventional Farm Funding

Jonathan Lundgren is a bit of a controversial figure in agriculture. In his previous job as senior research entomologist with the USDA-ARS, he spoke out against the negative effects of certain pesticides and the lack of farming diversity on honeybees and other pollinators.
His passion for the subject led the Brookings, South Dakota, researcher to appear in a 2016 video, appealing to farmers, researchers, beekeepers--and the internet audience at large--to help finance a working research farm that would raise crops while independently using science, education and demonstration to promote best farming practices … without the influences of agribusiness giants. That video drew a lot of interest and led to a crowdfunding project that has helped make Lundgren’s dream a reality.

Tapping Funds. Crowdfunding is a growing way of asking contacts--friends, family, outside investors and those in social media networks--to provide interest- and loan-free funding for a product, equipment or cause. The form of financing goes completely against traditional methods of raising business capital. Instead, it leverages online platforms, like Kickstarter, GoFundMe and Indiegogo, for greater exposure.

Crowdfunding comes at a time when farmers--particularly beginning farmers--are looking for nontraditional means of startup funding. According to one industry report, total funding from crowdfunding campaigns in 2015 totaled more than $34 billion globally. That’s a number projected to rise to $300 billion by 2025, owing perhaps to an increase in nontraditional funding coupled with more widespread use of technology. Data shows the average successful crowdfunding campaign raises $7,000. Lundgren was unaware of those statistics when he and wife, Jenna, set out to raise capital for their vision.

“Farmers and beekeepers want to see independent science they trust. We felt the opportunity was a good one to try and fill a niche not being addressed by the current research infrastructure,” Lundgren says.

The couple had a purchase agreement on 53 acres in Brookings, which they named Blue Dasher Farm. They still needed equipment and supplies for the lab.

They turned to the internet for help: $75,000 worth of help, in fact. Lundgren took the approach believing his opposition to USDA may have made more traditional funding harder to come by.

“We had absolutely no experience with crowdfunding and very little experience with social media,” Lundgren explains. Their campaign went live on Indiegogo in December 2015 and quickly gained notice from the media, stemming in part from Lundgren’s USDA controversy. As a result of the media attention, “millions of people saw our video,” he says. “From those millions, maybe 3,000 or 4,000 went to our website, and maybe 300 of those donated. Looking at those statistics, we were discouraged. It’s not a very good conversion rate.”

Call it lightning in a bottle, pure luck or maybe a widespread mistrust of government research. Conversion rate aside, donations poured in during the course of the 30-day campaign--$83,000 from across the globe. Backers, Lundgren says, included “farmers and ranchers--more those growing field crops with diverse rotations, along with beekeepers and consumers who believe we can solve planetary-scale problems.”

And that wasn’t all. “We actually ended up raising several hundred thousand total. Indiegogo is about a quarter of what we ended up raising. People also mailed us checks,” he says. Backers received token prizes such as T-shirts and decals for supporting the project, but their bigger return, Lundgren says, is “the idea that people believe we can solve planetary-scale problems and were willing to put their funds behind that.”

In March 2016, the Lundgrens operation began. Donations comprise one component of their revenue, and Blue Dasher Farm also receives competitive grants and foundation support. Lundgren and his team planted crops, too--annual sweet clover and borage--which they harvest and sell for seed. They produce honey and eggs, and recently established an orchard. That first year, the farm’s crops yielded about $500 gross revenue.

“We’re shooting to have the farm cover 30% of our total operating budget,” Lundgren says. “We’re tying our success to farming principles and practices to increase our credibility. We’re not just scientists blabbing about running a farm; we’re actively farming.”

Would he crowdfund for capital again? Lundgren laughs. “One outcome of the campaign is we received 1,000 names of investors/interested people,” he says. “Now that we have a network to tap into, that may actually be worth more than the $83,000 from the actual campaign. Our campaign was a lot different than most campaigns: We were selling a vision.”

Could an Online Campaign Work for You?

Bright Agrotech is a Laramie, Wyoming-based vertical-farming technology and education company. It offers financial services, software solutions and an online education platform, Upstart University. The goal is to help beginning farmers create business plans, manage systems and generate sales. Shortly after current CEO Chris Michael joined the organization in 2012, his team employed Kickstarter to help finance a new vertical-farming product. Today, Michael and his team coach modern farmers through the process of securing financing through a variety of means, including crowdfunding. Tips Michael says can boost success when trying to generate untraditional means of income include:

• Sell Your Story. Shoot a video to post on your page. Michael explains: “People want to experience something and be taken on a journey of how this campaign will affect their daily life, quality of food they have access to, etc.”

• Have An Outreach Strategy. A crowdfunding page doesn’t matter if no one goes there. You need a social and email strategy, as well.

• Set Strategic Goals. Simply announcing your goal is to save your farm is not a tangible target. Think in terms of a $10,000 farm expansion or $5,000 to help finance equipment used in rolling out a new product. Michael recommends determining how to finance a range of a quarter to half of the goal rather than relying on crowdfunding to supply the entire amount.

• Consider The Fit. “Sometimes you need to take an idea back to the drawing board for financing opportunities,” Michaels says. He explains it’s easy to get caught up in the allure of crowdfunding, but it’s not always a good fit and is a very crowded idea space.

• Research Your Sites. Blue Dasher Farms’ Jonathan Lundgren went with Indiegogo because the site allows users to collect money whether the campaign is fully funded or not. Some sites require you raise the full goal. Understand up-front costs. Most sites take a percentage, usually between 3 and 5%, with an additional cut to third-party payment processors.

For More Information:

Blue Dasher Farm

Bright Agrotech

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