Venture capital's "largesse is finally trickling down to sustainable agriculture," says James McWilliams, a history professor at Texas State University.
"The key word is 'trickling,' " says McWilliams, writing for the Atlantic's food blog. While venture capitalists are hot to finance "clean tech" companies in areas like alternative energy and carbon reduction, small firms working in sustainable ag are, so far, also-rans.
That might be changing, as more people become aware of agriculture's outsize impact on the environment. When people think of, for example, global warming, they most often think of car-clogged freeways and giant coal-powered power plants. But agriculture is responsible for about a third of the greenhouse gases we spew into the atmosphere, among a host of other environmental problems.
But when it comes to financing, firms in the sustainable-agriculture sector "will likely never have the same investment pull as a multinational wind energy conglomerate," McWilliams says. And most often, "the profiles of these operations are too low to find room in the privileged portfolios of venture capitalists." (Though there are notable exceptions.) "It's not easy, say, for a vermiculturist with a backyard operation to convince the monied elite that his worms are worthy. It requires some translation."
Enter the translators, like Janine Yorio, a consultant who McWilliams says provides a necessary bridge between the ag nerds and the money people. VCs "generally do not want to waste time parsing the intricacies of an obscure agricultural operation. Their concern is how it'll pay off," McWilliams writes. Firms like NewSeed Advisors help them understand.>>>MORE
Wednesday, July 15, 2009
Can Sustainable Ag Attract Venture Capital?
From The Big Money's Daily Bread blog: