The Agri Tech Venture Forum in Toronto is a fascinating event, and much different from the more farmer-focused events I attend.
In the room are venture capitalists of all types next to agriculture technology inventors and businesses looking for that capital.
People are investing their own money and gathered with others who have a similar desire to put funds into agriculture. The individual money morphs into larger funds when they bring in other business or institutional investors.
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An example is Ag Capital Canada, funded by former leaders of Canadian agriculture companies and FCC.
There are also funds put together by co-operatives and government agencies like Emmertech, led by Connexus, a large western Canadian credit union and also funded by credit unions across the country, including a big investment from Libro in Ontario and FCC’s venture fund.
Then there are corporate funds, run by individual entities like the Andersons and Telus Agriculture or a combination of many companies such as Emerald.
A growing number of funds want to invest in companies that are starting new businesses or expanding in agriculture and I can see that change from the first Agri Tech Venture Forum I attended a few years ago. That’s great news, as the agriculture startup world was bereft of alternative finance options until about five years ago.
The numerous venture capitalists on panels at the conference were quick to point out that venture capital might not be the best route for a company to find financing, and it can come with both complications and value beyond the money.
A lot of the funds invest time and expertise in growing companies to help them solve problems.
I have a lot of respect for innovators and entrepreneurs who put their capital and careers at risk to develop the products they’ve invented or to which they’ve purchased the rights. Farming is entrepreneurial and risky, but you can almost always sell your corn or your beef if all else fails.
Ag tech entrepreneurs are developing products from the idea stage and they have to build the market from nothing to profit. An example is root architecture company Cquesta, which gene-edits plants to create specialized root systems.
Canada just approved a process by which gene-edited crops can be approved, so a company like Cquesta now has a market. Even so, there’s enough interest around the company that it recently raised $6 million to fuel its research and growth.
A fund whose work I really like is Fulcrum Global Capital, a Kansas City-based venture capital fund that is almost entirely financed by investments from farmers.
Canadian funds close to the farm are doing some great work in agriculture, like Ag Capital Canada, RHA Ventures and Verdex Capital’s Carrot Ventures.
However, I would love to see a farmer investment fund here, like Fulcrum Global Capital, that is made up of farmers putting together a pot of cash to invest in ideas that will move the industryforward, and from which they should also get a return.
