By Jimmy Dula, NFU Intern
Are you a farmer with a well-considered and lucrative plan for value-added production, but without the business history to secure a loan for the necessary equipment? Do you think your customers would pitch in to help you buy a smaller tractor if they could secure preferred access to the produce you grow with it? Crowdfunding might be an alternative to loans for you to access the capital you need.
Crowdfunding sites have revolutionized how people raise money for their dream projects. This financing model is not only a unique method to fund your operation, but it is also a great way to engage an audience and allow them to actively participate in the success of your farming endeavor. For those unfamiliar with the concept, a person or group creates a page on a crowdfunding site describing a proposed project and appealing for funding. For a predetermined amount of time, individuals can choose to contribute any value of money to the project, often receiving a reward in return, like early access to the finished product. The hosting site then generally takes a small percent of the revenue, before passing the rest along to the original creator. Projects can raise hundreds to millions of dollars through these platforms.
Launched September 9, 2014, Barnraiser is a crowdfunding platform for food-system related projects. Unlike other crowdfunding platforms, Barnrasier connects creators with a homogeneous community interested in bolstering food systems and improving food access. 82% of Barnraiser projects reach their funding goals, dwarfing Kickstarter’s 35% success rate. Like all crowdfunding sites, Barnraiser charges its users a fee, taking a 5% cut of donations. That is a fairly typical rate across the industry. When pitching a project, it is important to consider these additional fees and costs. Visit Barnraiser to read more about crowdfunding specifically for agricultural projects.