With bank loans hard to come by, many farmers are looking for alternatives, and one of the new models is online crowdfunding, a form of Internet-based donations, loans and investments. Many of the online platforms, such as Kickstarter and Indiegogo, attract large numbers of entrepreneurs looking for funding.
According to Eileen Gordon, founder of Barnraiser, hers is the only crowdfunding platform devoted specifically to funding the sustainable food movement “one farm or healthy food business at a time.”
Speaking at a recent EcoFarm conference, Gordon told attendees, “We’re trying to connect with the 40 or more million Americans who care about sustainability, health and wellness, yet they don’t often know how to affect change. There are still many parts of the country where consumers don’t have the opportunity to vote with their forks at the grocery stores by choosing sustainable foods.”
Gordon asserts that crowdfunding is rapidly changing the way we drive innovation, personal aspirations, new products and social change.
“No group is more deserving than those on the front lines of the food movement, leading us toward health and sustainability,” she said. “Barnraiser is a place to meet and back the thousands of food and farming innovators and put better food on our collective table. When one farmer gets a new barn, the whole community gets better food.”
Gordon is also co-owner with her husband, Michael Chiarello, of Chiarello Family Vineyards in Napa Valley. About 12 years ago, she and Chiarello acquired a 100-year-old vineyard in the Napa Valley and converted the land into a sustainable farm. It was an old historic farm that had been planted before prohibition and hadn’t been farmed in over a decade.
“In the process of taking this old farm and rejuvenating the land and converting it to sustainable farming, we met some fantastic people in the realms of organic and biodynamic farming. As we saw our property come back to life as a healthy ecosystem started to thrive, this was incredibly exciting to us.”
Gordon believes crowdfunding is a way to eliminate some of the traditional gatekeepers.
Crowdfunding can be faster than traditional fundraising, so you get the benefits of celebration and public awareness which can have a snowball effect.
“What you’re doing with crowdfunding is asking people to enter into relationships with you,” she said. “And for people who care about this movement, that’s an exciting thing to do. It’s a fair exchange — it’s a relationship. When you structure rewards for certain levels of pledge, your fans are getting something exciting from you in addition to being part of your success or growth.”
Barnraiser, like Kickstarter, is an example of the all-or-nothing model, in which you set a goal and you keep the money only if you meet or exceed the goal you’ve set. There is no cost if a campaign is not successfully funded. If the campaign reaches its fundraising goal, Barnraiser’s fee is 5 percent of the total funded amount, in addition to third party payment processor fees of 3-5 percent.
“Statistics show that people raise more money by being invested in a goal with the all-or-nothing model, and that’s what Barnraiser uses — so it gives more motivation and success rates.”
Other platforms offer an alternative, “keep-what-you-raise” model in which you keep the funds you’ve raised, but are charged a higher fee for the service. Kiva offers a way to ask friends for an interest-free loan rather than a donation. Some other crowdfunding platforms that cater to sustainable food entrepreneurs include StartSomeGood and WeTheTrees.
Crowdfunding Success Stories
Gordon claims that Barnraiser has on average, a 60 percent success rate of participants meeting their fundraising goals, or nearly double that of other platforms which have about a 30-40 percent success rate.
“One of the benefits of having one focus for our website/platform is that our platform has become one of the faces of the movement — consumers come here, and find sustainable farming success stories.”
The average payoff for a successful Barnraiser project has been around $12,000. A lot of people can get to a good place in a project with $5,000, while others can get up to $40,000 or more, depending on where they are and what they need.
“We’re very careful to make sure that people don’t fall into the common mistakes like not setting goals right and not setting a reasonable timeline or not staying within the timeline — we help them with all that,” said Gordon.
She says that Barnraiser’s campaign tools make it fast and easy to launch and run a campaign. The platform helps users decide what they should be doing and how to spend their time at every stage of the campaign from a marketing standpoint.
“We give lots of examples like what successful emails look like and what you could be doing on social media and or special events; we help you do these things one thing at a time so that it’s not overwhelming. We also help you expand your network by finding useful contacts on social media and how to understand and use the network that you already have in your daily work.”
One of Barnraiser’s showcase success stories is that of Amigo Bob Cantisano. Under the nonprofit Felix Gillet Institute, an organization that Cantisano founded and runs, the project used Barnraiser to raise more than $33,000 to start an heirloom “mother” orchard of fruit and nut trees that are drought-and pest-resistant, most of which were introduced to the northern California foothills by Felix Gillet, a French horticulturist, in the late 1800s.
Certainly one of the factors in Cantisano’s success with the fundraising project is his own credibility in the sustainable food movement: he is a 40-year veteran organic farmer, agriculture consultant and co-founder of the Ecological Farming Conference. Cantisano was getting some funding for the Mother Earth project from grants, Gordon explains, but when he went public with a Barnraiser campaign, more people jumped on. Other organizations saw Cantisano’s project because of the media attention and came forth to help. One public donation often begets more donations. Even if you don’t meet your funding goals, there are lots of downstream benefits of public fundraising. These involve refining the way you market and your potential audience.
Mistakes & Misconceptions
“If I just build it they will come” is a common misconception with entrepreneurs starting their first crowdfunding campaign. As Gordon said at the EcoFarm workshop, “Many entrepreneurs think that if they put up a crowdfunding campaign they’ll come up with $60,000 overnight. In fact, at least 80 percent of the funding for successful campaigns comes principally from your customer base and the people you’ve lined up to fund in advance. You can’t just wait for the campaign to go viral before you ask supporters to put in their money. The initial support provides the inertia to start the snowball effect.”
Another common mistake is not giving yourself time to plan. For most crowdfunding platforms, you’ll need 30-60 days to prepare.
“You need to get going right out of the chute,” said Gordon. “It helps to do a pre-launch so that your website is ready, and you should let your friends and family know that your launch is coming so they can help fund it right from the beginning. Every form of fundraising takes time, so give yourself time to plan.”
Tell Your Story
Some tips that Gordon shares for start-up campaigners are to pay careful attention to crafting a story, work your network properly, set achievable goals and utilize rewards creatively.
Find and craft your story. Sometimes it’s tough to introduce yourself, your dreams and big plans all on one page. Start with the basics: the who, what, where and why of your campaign, and flesh it out. Then find the hook. What sets your campaign apart from others? How are you enriching your community? Are you finally making a lifelong dream a reality? Are you the only one doing something like this? Can you help others learn from your idea and start something on their own?
“Just be playful and tell people who you are,” said Gordon. “You might ask your network of friends if they can contribute unique rewards — if they can contribute something that they’ve produced that is handmade, for instance. We just had one funny example of a small farm that wanted to go from hand-pushed tractor to something more automatic and mechanized, and they made the funniest, cutest video and kept everyone entertained.”
Tap into your network. Crowdfunding at its core is all about using your network to tell your story and encouraging them to share your story with others. Younger people are more used to using social networks and are not afraid to ask for funding.
If your network is physically in front of you, such as at a farmers’ market, you can tell customers about your project and help them sign up for news about your crowdfunding campaign. Other farmers may have to network within the business relationships they have, like distributors, wholesalers, retailers or other local business relationships.
Every project is different, but generally the momentum starts and builds within your own network. For some farmers, their network might be Facebook or Twitter, or the customers at the farmers’ markets they go to, but Cantisano didn’t use either of these social media tools, nor did he go to farmers’ markets. His network was primarily in his email list.
Set appropriate goals. A common mistake is setting your goals too high for the size of your audience. Set realistic goals. Consider what you need the money for and how big your community or network is, as well as what other outlets you have for telling your story and the people who might spread your story.
Set a minimum funding goal that you feel confident you can meet and then set additional goals that you can add to once you’ve met the minimum. Let’s say your ideal vision is for a $24,000 project. The first phase might be $12,000 and makes the minimal tipping point so that your project has met its initial goal, and then have a second phase of another $12,000.
Establish rewards. Offering rewards to customers is an invaluable way to make contributors feel more connected to your project, as well as a way to market your products or services by getting them into the hands of as many people as possible.
Some ideas for rewards include sending acknowledgement, such as a thank you card, email or social media shout-out; swag, such as a T-shirt, your product, a video, trinket, or subscription; recognition, such as naming rights or a sponsorship; experience, such as a restaurant meal, garden/farm tour, or a class or workshop or consultation.
Create rewards with a variety of levels so that goals are more readily achievable. You also might include some rewards that have a higher dollar amount, such as a workshop or a seminar that you can present for a smaller number of people. It’s also important to have rewards that are not limited to your local area — this helps broaden the potential for your potential audience.
“Find rewards that are fun and play to people’s interests and be aware of bigger trends. Tap into bigger stories out of the world if you can — this will help you come up with rewards that may be broader than your inner, core circle. Stay in touch with your fans/ funders after the campaign is over. They want to hear how you’re doing and feel they are part of your success.”
Make a video. Barnraiser encourages projects to post a short 1-2 minute video, especially if trying to raise over $5,000. This doesn’t mean it has to be a blockbuster hit, instead go for short and compelling, with good shots and clear audio. Consider creating short edits from your main video, keeping them to 15 seconds or less, to make it easy to share video clips on social media, such as Vine, Twitter and Facebook.
Make contact. Don’t be afraid to pick up the phone! Taking the time to call people shows your dedication to the project and provides an opportunity for you to answer questions and share more details. After the call, be sure to follow up with an email including a link to your campaign.
Make if fun! “Add some monkey to your business. Have fun, and whatever you do, never underestimate a cat photo.”
By Eric Gibson. This article appeared in the March 2016 issue of Acres U.S.A. magazine.
Eric Gibson is the author of Sell What You Sow: The Grower’s Guide to Successful Produce Marketing and the co-author of The New Farmers’ Market: Farm-Fresh Ideas for Producers, Managers and Communities.
Barnraiser (Crowdfunding platform, seminars, blog tips, etc.)
Grow It! The Crowdfunding Guide For Food Startups (free ebook)
Raising Dough: The Complete Book on Financing Socially Responsible Food Businesses, by Elizabeth U.
CrowdsUnite (List of crowdfunding sites)