We recently got an email from a local food company with this simple question: "Would you happen to know the best way to go about getting a small business loan? I have some equipment I'd like to purchase and was told getting a business loan might be the best way to go about it. Any advice would be great!"
We thought others might like to see our answer... Here it is:
AFI Partners Curt Nelson, Eric de Valpine, and Jarred Maxwell tell their AFI "origin" stories... how they came to get involved in investing in local sustainable food companies and the founding of Austin Foodshed Investors.
What kind of companies should apply to AFI? Jarred & Curt discuss the breadth of the agriculture and food system, and their interests in investing in companies throughout the value chain. They also talk about the size of potential fundraising rounds (spoiler alert: small is OK) and the idea of "impact arbitrage".
More info: see AFI Target Companies.
AFI Partners Curt Nelson and Eric de Valpine discuss the "Fundraising Readiness Assessment", AFI's online tool for understanding gaps in an entrepreneur's ability to effectively raise money.
Free New Online Tool helps Local Sustainable Food Companies Assess their Readiness to Raise Outside Capital
AFI released a short video today describing their new tool "Fundraising Readiness Assessment", which helps entrepreneurs thinking about raising capital understand the process, players, and requirements of fundraising.
The tool, which is free and open to the public, can be accessed in the Raise Resources section of AFI's website, at http://www.austinfoodshedinvestors.org/raise-resources.html or directly at Fundraising Readiness Assessment.
AFI's Fundraising Readiness Assessment asks:
"After seeing hundreds of deals, in various states of "investor-readiness", we decided to create a free online self-service tool so that any company, anywhere, could analyze their fundraising gaps," said AFI Partner Curt Nelson. "And, for entrepreneurs that decide to work with us, the tool, along with our other tools, really helps create an actionable workplan that the founders can use to confidently progress toward raising money."
AFI Partners Curt Nelson and Eric de Valpine discuss "Px8," AFI's online tool for impact assessment and planning.
Free New Online Tool helps Social Enterprises Think About & Plan Their "Impact"
AFI released a short video today discussing their new tool "Px8" (pronounced "pixate"), which help local sustainable food companies - or any social enterprise really - think about and plan for "impact".
What is "Impact"?
We think of "Impact" as building "positive externalities" into your core business model. And, reducing or eliminating "negative externalities".
How Does Px8 Work?
Px8 is a free online tool that presents a variety of impact vectors - eight of them to be exact - that all happen to start with the letter "P" - for companies to think about. It asks questions about current and planned activities, and allows users to self-score on each of those vectors.
Learn More, & Use Px8
To learn more, including the Px8 Scoring Rubric and online tool, please visit the "Impact" page in the "Raise Resources" section of AFI's website.
AFI Co-Founder Jarred Maxwell muses on his journey through Slow Money, investment clubs, and the founding of Austin Foodshed Investors. This article originally appeared in the Winter 2016/17 issue of the Slow Money Journal.
One of the most difficult things I’ve experienced about working within the Slow Money community is the uncertainty that comes with trying to move in a fundamentally new direction. We are moving away from decades of centralizing, governmental, regulatory, and social institutionalization toward local investing in local food systems and a more hands-on and direct form of financing such ventures. It’s a bit unnerving, because there are no road maps for what we are doing—we have to create them as we go.
... click below to read the whole article, or see it at the Slow Money website here...
Austin Foodshed Investors partners Jarred Maxwell and Eric de Valpine discuss why they started investing in food, how the food sector is appropriate for "impact investing", and AFI's overall approach to local sustainable food companies.
"Every community, every family, every person is touched by food." says AFI Partner Eric de Valpine. "It's all about getting good clean fair healthy food grown in the community on to the tables of the community. There are other areas of impact we could think about, you could find a passion for energy, for water, but you don't find small businesses necessarily in those spaces in every community [but] every community has a need, a desire, for good clean healthy food... and they almost all have some food production facilities."
"I saw small scale agriculture and food as being the economic driver in rural parts of America," says Jarred, "not every small town is going to get a Home Depot data center or a Tesla giga-factory [but] these small farms seem to be a good spot to drive the revitalization of these local economies."
#GoodFood #LocalFood #SlowFood #SlowMoney #InvestLocal #ImpInv #SocEnt #AustinTX
What a pleasure to stumble on this half hour documentary, "Small Business in America". Produced by local Austin multimedia company Flow Nonfiction, it tells the story of why we do what we do. Even though we had nothing to do with making it! The film touches on concepts of sustainability, and localism, and triple-bottom-line business, but mostly it reminds us that "business", small business at least, is about real live living breathing human beings, and how we interact and treat each other. It is about opportunity, and respect. Beautifully shot, nicely paced, and as an added benefit produced by folks right here in Central Texas. Wow!
We highly recommend 30 minutes of your day enjoying this! Watch it here.
A new study from the Austin Texas-based Capital Area Council of Governments, "Selling Food is Good Business in the Capital Area - But What About Local Food Production?" asks “... how much of the dollars being spent on food are staying in the local economy, as opposed to going to food producers elsewhere?”
The answer is shockingly low. In 2015, around $5.4B (yes, the big "B" as in "billion") in retail food sales occurred. But our area produced $1.3B, meaning around $4.1B of food sales left the local economy. Went somewhere else. Benefited some other economy, or some corporation somewhere, some place other than here.
We think we can do something about that - by investing in good, clean, local sustainable food entrepreneurs.
Starting March 1 in Austin, then again on April 13 in Fredericksburg, then throughout 2017 in Lockhart, Georgetown, La Grange, Burnet, and Rockdale, Austin Foodshed Investors will present 1/2 day seminars for local food entrepreneurs and entrepreneurial Technical Assistance Providers on understanding and accessing various kinds of capital to help businesses grow and succeed.
With support from partners Texas Center for Local Food, USDA-FSA, Capital Farm Credit, National Center for Appropriate Technology, Texas A&M AgriLife Extension, and the Capital Area Council of Governments, local food company owners and managers can learn about the range of funding alternatives available, how to prepare to talk to a bank or any other investor, how to finance a business you don't intend to ever sell, and who's available to help.
Visit the Rolling Roadshow, Funding our Foodshed page for more information and registration.
2/22/17, 4:30-6:30, Hopfields on Guadalupe
Several AFI Investor Network members have requested more "in-person" events. It is fun to hang out with each other! And what better way than to hear from three local sustainable food entrepreneurs about their upcoming investment opportunities.
Please join us Wednesday, 2/22/17 at Hopfields, from 4:30 to 6:30pm to hear from three cool local food companies in the process of raising money.
This is a low-key, AFI-style event. No pitches, no projectors, just 20 minute Q&A with each entrepreneur, followed by 20 minutes of roundtable for all the entrepreneurs and all the investors, followed by dinner and drinks if you'd like to stay.
This event is only open to members of the AFI Investor Network. For information on joining AFI, please visit our Invest page.
Please RSVP via Eventbrite by clicking the image below.
Thanks, and hope to see you there!
"...During the farm crisis of the 1980s, an Iowa farmer asked if I knew the difference between a family farmer and a pigeon. When I said no, he delighted in explaining: “A pigeon can still make a deposit on a new John Deere.”
...This prime-time disregard for farmers and food policy is not only irresponsible, but also politically inexplicable when you consider that food is far more than economics to people. Purchasing food has become a political act that takes into account cultural, ethical, environmental, and community values. This was confirmed last March in a national survey published by Consumer Reports showing that huge percentages of shoppers consider production issues important:
This week, just days before he says goodbye to his job, Secretary of Agriculture Tom Vilsack landed one last punch in a brawl that's gone on at his department since he got there eight long years ago.
He announced new regulations that are intended to protect small farmers from mistreatment at the hands of meat packers, swine dealers, and poultry companies. Advocates for small farmers, including the Rural Advancement Foundation International-USA, praised it as an important step toward ending abuses of power by the handful of companies that dominate the meat industry. The National Pork Producers Council, on the other hand, was furious, calling Vilsack's move "an apparent attack on rural America for its role in helping elect Donald Trump as president."
The sharply partisan reaction to the new regulations suggests that the new rules face an uncertain future. Some of them aren't set to become final until after Trump takes office.
The regulation has its roots in complaints by farmers about growing concentration of power in the poultry, pork and beef industries. A few big companies dominate each of those businesses
In the case of poultry, the major companies typically rely on "contract farmers" who build and own the chicken housing, but depend on poultry companies to supply everything else, including the birds and the feed. Some of these contract farmers say that under these arrangements, they carry much of the risk, but have almost no power.
Contract farming has been on the rise in the pork industry as well. And in the beef industry, some farmers say they can't be guaranteed a fair price for their animals, because just four companies control three-quarters of the market.
In 2008, Congress asked Vilsack's agency to write rules to protect farmers against unfair practices in the meat industry. Later, though, after meat industry protests, Congress changed its mind and blocked any further work on the rules. Last year, that legislative dam broke, and Vilsack charged through the opening.
The new rules come in several parts. The first, which could takes effect almost immediately, makes clear that unfair, discriminatory, or deceptive behavior toward any individual farmer violates the law. Until now, some courts had decided that the law only prohibits behavior that reduces competition in the entire industry. Vilsack called that "an extraordinarily high burden" of proof for farmers to meet.
Other rules define what those unfair, discriminatory and deceptive practices are. They include a requirement that companies share information about how they set prices and ban retaliation against farmers who complain.
The National Pork Producers Council, in its statement, said the new rules would have a devastating effect because they will increase the risk of lawsuits by farmers. That increased "legal uncertainty," according to the NPPC, will actually hurt small farmers, because more companies will decide instead to produce their own hogs, on their own farms, cutting small farmers out of the action.
It's unclear whether all of the rules will take effect. Some of them, including the definitions of what practices are unfair, discriminatory, or deceptive, won't be final when the Obama administration leaves office. The incoming Trump administration could move to block them or simply refuse to enforce them.
Seasonal, local food that is grown and produced by people you know is the tastiest, most nutritious and freshest food available. Here in Central Texas, we have access to an abundant variety of fresh food from local farmers, ranchers and other producers. In fact, farmers' markets, farm stands and opportunities to subscribe to community supported agriculture (CSA) programs are available in nearly every community. Buy Fresh Buy Local Central Texas makes it easier than ever to find local producers and products, while supporting local economies, our environment and the cultures represented by food produced in our area.
"The city where cowboys and hippies have long come together over breakfast tacos is breeding a new kind of food pioneer," writes Beth Goulart Monson in a long-form, beautifully photo'd essay hitting all the high points of the Austin sustainable food movement: urban farming, farm-to-table, farm-to-school, food system design, hunger, climate change, and food sovereignty. And she even name checks AFI! Wow!
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AFI is proud to have joined the new Texas Center for Local Food (TCLF) today, as a Founding Member.
The Texas Center for Local Food is a new non-profit headquartered in Elgin. TCLF provides technical assistance for rural & agricultural economic vitality by creating and retaining quality jobs in processing, production, distribution and marketing of Texas sustainably grown crops.
TCLF is now accepting new memberships - starting as low as $20 - from individuals, organizations, and companies dedicated to strengthening our regional food system. We really encourage you to check out this new organization, support their goals (which align very nicely with ours), and visit their website, at Texas Center for Local Food.
One of the many joys of doing AFI is meeting cool people along the way. Alejandra Rodriguez, founder of La Flaca Urban Gardens, might be one of the coolest.
Alejandra custom grows unique ingredients for chefs, caterers, and food artisans. She does that on land reclaimed from being boring old regular lawn!
Recently she emailed an update including a link to this video, and we asked if we could repost some of it here. She writes:
"In July we shared the news of starting a new farm in southwest Austin. It's been a challenging summer with highlights such as getting a Bobcat stuck in a ditch on a rainy day and shoveling 120 cubic yards of soil amendments under a relentless sun to shape our beds. The idea of farming is quite romantic, the reality never is. Seeing our goal of a big harvest this fall come into fruition makes the blood, sweat, and tears 100% worth it. To the family and friends that have our backs, the chefs that have stood by us, and supporters from all walks of life: Thank. You. Starting a farm requires a strong community, we're deeply grateful for your support throughout this crazy adventure."
Alejandra - you rock! All the best from your friends at AFI!
Jarred & Curt of AFI were honored to attend (and even get to speak) at FARFA's 10th Annual Farm & Food Leadership Conference in Bastrop this past September 25-27. We met many great folks, and heard many great presentations, but the best by far was this rousing keynote from Dr. John Ikerd, Professor Emeritus, University of Missouri, Columbia, MO.
Farm Policy at a Crossroads; A Time to Choose
"We are in the midst of an epic battle that ultimately will determine the future of farming and food production in America. Ultimately, it is a battle for the hearts and minds of the American people. Public trust in American agriculture has been seriously eroded by growing numbers of controversies. The agricultural establishment has responded with a barrage of public relations and political strategies designed to defend the corporate, industrial agriculture status quo. It remains to be seen whether public trust will be restored or public concerns will grow into a demand for fundamental change in the American food system. The ultimate outcome of this battle is up to us – the American people."
[Click the Read More link below for the full text of the speech. We promise it is worth it.]
News from AFI; Links to stories on business-for-good, private-company investing, fundraising, & sustainable food.