As a small business raising capital, it isn’t all venture capital firms, pitches and high-tech companies. Local organic produce grower Rock Dove Farms is taking a more creative approach to raise the funds needed to take their business to the next level.
Since its start in 2010, Rock Dove has worked to refine its offerings into the successful venture it is becoming today.
“We slimmed our crop set down to 17 things,” says Owner Todd Schriver. “We’ve focused more on salad greens and cooking greens, baby root vegetables, a handful of herbs and cherry tomatoes.”
Schriver says they are feeling confident enough with those crops that they are ready to grow in the Columbus market, especially with wholesale distribution. The farm currently distributes with Sanfillipo Produce, one of the biggest restaurant produce distributors in Central Ohio, and are active at farmers’ markets, but “We’re trying to capitalize our operation so we can expand and do sales like Whole Foods or Raisin Rack, and maybe even Kroger and Giant Eagle,” Schriver explains.
As the farm expands, they are learning the balance between operating money and capital money.
Programs like their merchandise credit at farm stands (customers buy a pre-loaded credit card of sorts at a discounted rate that gets them the produce they want at the farm stand) give them a steady stream of customers – and potential investors – but, “That money, we can’t’ spend that money on anything that’s not an operating expenditure.” Schriver says. “We have expansion needs, too, and we can’t raise money for our expansion through that avenue and survive.”
Coming up with an innovative solution, Rock Dove has initiated a farm bonds program.
“I just think it’s a really good opportunity to invest in the local food system,” Schriver says. The farm is hoping to raise money directly from the people who will be consuming their produce later.
Rock Dove’s farm bonds program works a lot like a traditional bond or CD. Individuals make a minimum investment of $500 to $1,000 that will accrue interest and and be paid in full when mature. A five-year investment requires a minimum of $500 at four percent APY. A three-year investment with a minimum of $1,000 yields a 3.5 percent APY.
“[We needed to] figure out a way to raise money in such a way that doesn’t damage us until we start making money with it,” Schriver says. The farm had tried traditional loans in the past, but often found they had to start making payments before they were actually able to generate revenue on whatever they have financed.
“Of that really the first $45,000 is really critical to us,” Schriver says, with the excess helping make things even more efficient. While it’s a large amount, they are comfortable with multiple, smaller investments, hence the lower required amounts. So far they have acquired verbal commitments from investors totaling $11,000 to $14,000 with expressed interest from many other customers.
When investing, people often want to know exactly where their money is going and Rock Dove is ready to supply that for their investors. Schriver shares that the critical $45,000 will go towards irrigation, transplanting machines, a better soil prep tool, a raised bed shaper and cooler space at the farm. It’s tools to help solve the biggest problems they are facing now.
One of the biggest challenges the farm faces is planting on schedule. For many of their crops, “If you can’t irrigate it immediately, you really can’t plant it,” Schriver says. Better irrigation will help the farm produce at potential. Other tools like the transplanting machine will greatly speed up the number of man-hours required to get seeds from greenhouse to field.
More cooler space will give the farm more flexibility. Instead of losing produce that over matures in the field because customers aren’t ready for it, the farm can properly store the produce at peak maturity.
Overall, funding will help the farm run more efficiently, while also allowing them to expand their reach.
“The main thing is that we are trying to make local produce available for everyone and not just the handful of people that shop at the farmers’ market,” Schriver says.
For more information, visit rockdovevegetables.com.