Shownotes
Ever sought the thrill of leaving the mundane behind to explore the world, only to land in the fascinating field of agriculture? Join us as we sit down with Chris Rawley, the founder and CEO of Harvest Returns, who did exactly that. Combining his experiences as a Navy veteran, a globe-trotter, and a commercial real estate investor, Chris shares his journey to bridging the gap between investors and farmers through his platform. Listen in as he delves into the transformation of farming practices due to climate change and technology.
Venture with Chris as he transports us through his travels across 60 countries, sharing meals and connecting with locals. His travel tales are not only intriguing but also shed light on the stark dichotomy between food systems in developed and less fortunate countries. His stories from the open seas are captivating and humbling, reminding us of the raw beauty and power of nature. Moreover, his observations have shaped his current work in sustainable agriculture and vertical farming.
In the realm of agriculture, every turn comes with its own set of challenges. Chris candidly discusses the hurdles faced in financing agriculture and the necessity of building trust in the industry. From developing different financing structures for farms to fostering relationships with different cultures, he's done it all. He also shares his insights into the struggles and triumphs of vertical farming. As we wrap up our conversation, Chris emphasizes the importance of sustainability, risk management, and investor education in farming. This intriguing conversation with Chris promises to illuminate you on the complexities and rewards of farming and sustainable agriculture. Don't miss out!
Thanks to Our Sponsors
AgTech Marketing Team
Key Takeaways
0:00:00 - Chris’ Introduction to Vertical Farming
0:08:28 - Connecting Cultures Through Food and Travel
0:15:33 - Challenges of Financing and Building Trust in Farming
0:20:48 - Challenges and Traits of Vertical Farming
0:28:19 - Considerations for Funding Indoor Farms
0:38:40 - Investor Perspective on Sustainable Agriculture
0:45:25 - Cash Flow and Trust in Business
Tweetable Quotes
"If you want to broaden your experience, best thing to do is go travel, just see the world."
"I learned a lot about risk because we did some dangerous things, looking at what the worst case scenario is and probabilities of a failure and have tried to translate that into my business, especially on the investing side, as we look at farms that we're going to invest in."
"There's a fine line between having an expensive hobby and having a business that can grow and make money for people involved. There's even more challenges because you've got investors that you have to provide a return to, and that's another thing that people don't think about when they have this sort of dream of I'm going to start a vertical farm."
Resources Mentioned
Chris' LinkedIn - https://www.linkedin.com/in/chrisrawley/
Harvest Returns LinkedIn - https://www.linkedin.com/company/10945364
We Are the New Farmers - https://www.wearethenewfarmers.com/
Chris' Facebook - https://www.facebook.com/harvestreturns
Chris' Instagram - https://www.instagram.com/harvestreturns/
Chris' Twitter - https://twitter.com/HarvestReturns
Chris' Email - [email protected]
Connect With Us
VFP LinkedIn - https://www.linkedin.com/company/verticalfarmingpodcast
VFP Twitter - https://twitter.com/VerticalFarmPod
VFP Instagram - https://www.instagram.com/direct/inbox/
VFP Facebook - https://www.facebook.com/VerticalFarmPod
Subscribe to our newsletters!
AgTech Digest - https://agtechdigest.com
The Indoor Farmer - https://www.indoorverticalfarm.com/
Horti-Gen Insights - https://www.hortigeninsights.com/
Sponsor Links
Cultivatd’s Website – https://cultivatd.com/
Cultivatd’s Instagram – https://www.instagram.com/cultivatdco/
Cultivatd’s Twitter – https://twitter.com/cultivatd
Cultivatd’s Facebook – https://www.facebook.com/cultivatd/
🎙️🎙️🎙️
Podcast Production and Marketing by FullCast
Discover the best podcast services in the world at The Podosphere: https://www.thepodosphere.com/
Mentioned in this episode:
2025 Precision Ag Report by iGrowNews
2025 Precision Ag Report by iGrowNews
Transcripts
$680 million poured into precision ag last year.
Speaker:Autonomous weeding robots dominated, and John Deere made 2 acquisitions in 3
Speaker:months. A food company, not an equipment maker, bought a
Speaker:robotics startup to protect its own supply chain. The deals are
Speaker:accelerating, the money is moving, and the winners are already separating from the
Speaker:pack. If you're investing, building, or buying in this space,
Speaker:you need the full picture before your competitors get it. The 2025
Speaker:Precision Agriculture Intelligence Report From iGrow News is
Speaker:now available. Get your copy today at igrownews.com/precision.
Speaker:Definitely change perspectives. You know, as I mentioned, all that travel, if you want to
Speaker:broaden your perspective, if you're kind of a young person, maybe you grew up in
Speaker:a city, maybe you grew up in a country or wherever you grew up or
Speaker:suburbs, and you've had kind of a vanilla life. If you want
Speaker:to broaden your experience, best thing to do is go travel. Just see the
Speaker:world. You will meet some very interesting people from different cultures and learn
Speaker:that the way you grew up is not necessarily the way. In fact, it's not
Speaker:the way that Most people are gonna live, most people have very
Speaker:different experiences, and it's good to learn from them.
Speaker:Welcome to the Vertical Farming Podcast, weekly conversations
Speaker:with fascinating CEOs, founders, and agtech
Speaker:visionaries. Join us every week as we dive deep into the
Speaker:world of vertical farming with your host, Harry Duran.
Speaker:Vertical Farming Podcast. Season 9. Regular listeners to the show, welcome
Speaker:back. I appreciate you coming back each and every week, sharing these episodes with
Speaker:your friends, sharing these episodes with the folks in the vertical farming community,
Speaker:whether it's in person, whether it's online, whether it's on socials. I see
Speaker:you, I appreciate you, and you get a big virtual hug from me.
Speaker:If this is your first time listening, I'm sure you're in the right place because
Speaker:this is the show where we interview fascinating CEOs and founders of the leading vertical
Speaker:farming companies from around the world. I'm your host, Harry Duran, podcasting since
Speaker:2014 with my first show, Podcast Junkies and founder of
Speaker:Fullcast, our full-service done-for-you podcast agency. In case you missed
Speaker:last week's episode, we had a great conversation with Tinea Pina of Renewable.
Speaker:Tinea and I connected at Indoor AgCon way back— it
Speaker:feels like way back— months ago, months ago in Las Vegas.
Speaker:And she was in one of the booths in the corner, and then I
Speaker:noticed that she was doing something interesting in the space, and I reached out to
Speaker:her, and we were able to make the conversation happen. It took a little bit
Speaker:of back and forth, but we had a great conversation. So check that out.
Speaker:We talk a little bit about our shared experiences in New York, the evolution of
Speaker:renewable, the challenges and growth in sustainable
Speaker:agriculture, and the innovative approach they're taking with creating renewable
Speaker:materials from the outputs of vertical farming. This week I
Speaker:speak to Chris Rawley. He is the founder and CEO of
Speaker:Harvest Returns. In this engaging conversation, we sit down with Chris
Speaker:and we talk about his experiences as a Navy veteran, a globetrotter, and a commercial
Speaker:real estate investor. He shared his journey about bridging the gap between investors
Speaker:and farmers through his platform Harvest Returns. And he shares how his
Speaker:experience in the Navy traveling across 60 countries and
Speaker:sharing meals and connecting with locals really colored his
Speaker:experience and his exposure to different
Speaker:perspectives. His travel tales are not only intriguing,
Speaker:but they shed light on the dichotomy between food systems in developed and less
Speaker:fortunate countries. He talks candidly about the hurdles faced in financing
Speaker:agtech and the necessity of building trust in the industry. With the team at
Speaker:Harvest Returns, Chris has developed different financing structures and
Speaker:also stresses the importance of building relationships, which is something that
Speaker:he learned from his travels. Chris also emphasizes the importance of sustainability,
Speaker:risk management, and investigation in farming. Lots of takeaways from this.
Speaker:If you have been considering financing for a project or in the middle of
Speaker:financing or have gone through the process yourself, I know there's going to be a
Speaker:lot of interesting takeaways and you're going to learn a lot about Chris's
Speaker:experience going through it himself. I'd be remiss if I didn't give a
Speaker:special shout out to the team at Vertifarm, who is a great host for
Speaker:me this past week in Dortmund, Germany. Had a long day,
Speaker:long trip both ways traveling out there, but it was well worth it. I got
Speaker:to connect with the team there, past guests, made
Speaker:some amazing new connections, and you'll be hearing more of those. At least 5 or
Speaker:6 more queued up, brand new CEOs that I met there. And just seeing
Speaker:all the innovation that's happening in this space, it's really insightful for
Speaker:me. Even better than that, I got to spend some quality time with
Speaker:some folks there. We went out to dinner, we went out for a couple of
Speaker:events, got to see a local football game. And yes, I mean European
Speaker:football, not American football. And it was fun to
Speaker:really go deep as opposed to wide and
Speaker:shallow sometimes with these conferences and these events. Narrow and
Speaker:deep has been a bit more of my focus and something I'm appreciative of. So
Speaker:shout out to all the new folks I met at the conference, new
Speaker:relationships built. new partnerships formed and deepening
Speaker:relationships that were already strong but are getting stronger. So I
Speaker:highly encourage you check out a future indoor farming event. I think that may be
Speaker:it for me this year, but I'll definitely be queuing up my calendar
Speaker:for Indoor AgCon next year, which looks like it will be February in Las
Speaker:Vegas. But if anything comes up before then, then of course you'll be the first
Speaker:to know. If you're enjoying this episode or past episodes, please leave us a rating
Speaker:and a review at ratethispodcast.com/vfp. Nothing makes me
Speaker:more happy. I'm telling you this, then to read these out on a future episode.
Speaker:So if you've been listening and you've been holding off, I'm talking to you,
Speaker:listener, then
Speaker:ratethispodcast.com/vfp is where you should
Speaker:be next. You can actually pause this and go do that now. I'd love
Speaker:that. Remember, you don't need a notepad as you're listening to this, 'cause these episodes
Speaker:are full of great takeaways. I want you to focus all your energy on this
Speaker:conversation. Rest assured, you can always visit verticalfarmingpodcast.com to read the
Speaker:full show notes for each episode, which includes all guest links as well.
Speaker:Okay, let's jump into this uninterrupted conversation with Chris. But before we do, a
Speaker:few words from the amazing partners that support this show. This episode is brought to
Speaker:you by HortiAgriNEXT, November 20th to the 22nd.
Speaker:In this first edition of the conference, you can expect a vibrant show that'll bring
Speaker:together a portfolio of high-level horticulture technology to the Emirates,
Speaker:with the goal of aiding the Emirates to take the next step in becoming more
Speaker:self-sufficient in their food production, aligning with their 2051
Speaker:goals. The show is expecting 8,000 to 10,000 visitors over the 3 days
Speaker:and will include investors, buyers, curious farmers, government officials,
Speaker:university professors, and association members. Booths are still available and
Speaker:exhibitors are welcome. Partners for the conference include the Abu Dhabi Agriculture
Speaker:and Food Safety Authority, Dutch Greenhouse Delta, and Wageningen
Speaker:University, which will provide a wealth of knowledge and insights. Sessions will
Speaker:include a mix of Emirati and Dutch speakers and will highlight how these different
Speaker:worlds will come together in partnership. Based in Abu Dhabi, the agricultural
Speaker:hub of the UAE, the government's involvement will ensure that companies
Speaker:interested in partnering with the Emirates receive their full support. Co-located with
Speaker:VIV MEA 2023, the premier show in livestock production and
Speaker:animal husbandry, this week will provide a comprehensive look at the entire ag
Speaker:industry supply chain, both vertically and horizontally. If you're considering
Speaker:container farming, then look no further than Farm Anywhere.
Speaker:Astute listeners will recognize the name from my conversation on
Speaker:episode 99 with Gabriel Zarafanitis. Farm Anywhere is
Speaker:renowned for their state-of-the-art container farms and complementary agricultural
Speaker:equipment, which guarantees a robust start to your indoor farming venture.
Speaker:Even better, Farm Anywhere is providing a discount exclusively to
Speaker:listeners of this show, a $5,000 reduction in delivery fees,
Speaker:no monthly subscription charges, and many other benefits. To take
Speaker:advantage of this special offer, visit
Speaker:farmanywhere.ag/vfp.
Speaker:I've been excited about the work the team is doing at Farm Anywhere since my
Speaker:conversation with Gabriel, and this is a fantastic offer you should take advantage of.
Speaker:of if it's a fit for you. The link again,
Speaker:farmanywhere.ag/vfp. So
Speaker:Chris Rawley, founder and CEO of Harvest Returns, thank you so much for joining
Speaker:me on the Vertical Farming Podcast. Really happy to be here today,
Speaker:Harry. Thanks. So where are you dialing in from? So
Speaker:we are in Fort Worth, Texas, cow town, but
Speaker:it's also vertical farming town because we like to invest in vertical farms.
Speaker:Is that, you born and raised there or where'd you grow up? I was born
Speaker:and raised in Dallas, which is just adjacent to Fort Worth. For folks
Speaker:that are not familiar with the area, what's the selling point or what's the highlight?
Speaker:What keeps you there? It's big and flat and hot this
Speaker:time of year. That's what most people are thinking about, but it's a great town,
Speaker:terrific food scene. It is in the middle of agriculture
Speaker:country. So if you go just not too far outside of Dallas
Speaker:or Fort Worth, you're going to find ranches and farms and things like that. And
Speaker:in the inner city, we do have some urban farms and it's a great
Speaker:sports team for sure, but it's, and it's a great place to have a business.
Speaker:Yeah, I think it's always interesting, especially with the changes in what's happening
Speaker:in climate across a bunch of different areas. People are always open to new
Speaker:opportunities to try out, you know, the way what
Speaker:climate was in a specific area maybe 10, 20 years ago seems to have changed
Speaker:drastically nowadays. So I think people are open to trying out new places
Speaker:to live and the fact that everyone's remote as well. I'm wondering if
Speaker:that's had an impact with you in terms of how you think about
Speaker:business in terms of people looking for that flexibility of being able to work from
Speaker:home. Yeah. I mean, for our company specifically, we're kind of a hybrid
Speaker:company. We've got people that are fully remote, people that are partially remote, people that
Speaker:are mostly in the office. So it's just flexibility is
Speaker:something employees are definitely looking for these days. And then of course we work with
Speaker:companies all over the country. But, you know, farms,
Speaker:that's one of those things that you can't really do remotely, even indoor farms, vertical
Speaker:farms. So we definitely understand that.
Speaker:So I wanted to just rewind the clock a bit. You've had a really
Speaker:diverse and interesting history in terms of your resume,
Speaker:in terms of the jobs you've had. I've seen you've spent some time in the
Speaker:Navy, so thank you for your service as well. I appreciate that. Can you
Speaker:talk a little bit about your background for folks that may not know you,
Speaker:or just to kind of introduce you to the listener? I know you've got experience
Speaker:in data systems and communications, and obviously a lot of the work that you were
Speaker:doing with some of the defense companies you were working with.
Speaker:So whatever feels your call to talk about and share in terms of
Speaker:like those experiences and how they eventually will make our way to present day. But
Speaker:I thought some of that would be valuable. Yeah, I definitely did not
Speaker:grow up in a farming family like many of the people that we
Speaker:work with. You know, every day I talk to farmers that are second, third,
Speaker:fourth, even more generations than that in the farming business.
Speaker:Vertical Farm is a little bit different because you do see some legacy
Speaker:farming family people there, but also people that's their first time in the farming
Speaker:business. So I grew up in a city, not a lot of touch
Speaker:with agriculture. And then as you mentioned, I was in the Navy and
Speaker:fortunately in that role, I had many great opportunities to
Speaker:travel. I've traveled to roughly 60
Speaker:countries or so, and many of them in developing world. Place like
Speaker:Africa where there's just not all of the opportunities
Speaker:that we have in the food system is radically different than what we here experience
Speaker:in the US. In the US, food system is very centralized, at
Speaker:least with things like growing leafy greens. It's
Speaker:reliant on a global supply chain. So you have 365
Speaker:days a year fruit and vegetables that shouldn't be
Speaker:ripe coming in and being imported from South America and places like that, ripe.
Speaker:So straight to our grocery stores or our markets and
Speaker:farmers markets and very vast distribution system.
Speaker:And of course, terrific restaurant scene in a lot of cities. And
Speaker:in the developing world, most of that is just not a thing.
Speaker:People tend to buy their food at a local farmers market
Speaker:or grow it themselves. And so that was very interesting with me as
Speaker:I was traveling to learn about, you know, how that is and
Speaker:Of course, food insecurity in many places, especially these days, is a big problem.
Speaker:So back in 2016, I did work in these other industries. I
Speaker:worked in commercial real estate and I worked in technology and did a lot of
Speaker:investing in various things. And back in
Speaker:2015, '16, became very interested in farming,
Speaker:decided that rather than trying to buy a farm or start a farm, which I
Speaker:really didn't have the know-how to do, that we were going to
Speaker:invest in farming, and there were not a lot of great ways
Speaker:to do that. So my partner Austin Manders and I, we put together this company
Speaker:that enables people to come in. Farmers come to us that need capital,
Speaker:and we have an investor side as well. So
Speaker:investors that want to diversify their portfolio by investing in
Speaker:farming, and we basically put the two together and give
Speaker:the investors the opportunity to help People start new farms,
Speaker:to expand existing businesses or get into new areas. And
Speaker:we've been doing it for quite some time now. We've raised over
Speaker:$30 million for a number of farmers, including vertical farms.
Speaker:On the vertical farm side, we've done everything, you know,
Speaker:another term that everybody's probably heard is controlled environment agriculture.
Speaker:So just indoor growing. We've done everything from large-scale
Speaker:greenhouses to the kind of more Urban, smaller vertical
Speaker:farms that people might be familiar with. To, we
Speaker:consider indoor aquaculture as part of the whole indoor
Speaker:agriculture scene. So we've done a couple of those as well. And then we've done
Speaker:some unique things like a couple up in New York. One was
Speaker:an alternative or 2 sort of alternative protein companies.
Speaker:One, growing spirulina microalgae. So it's a really cool
Speaker:thing. A lot of people are putting it as a supplement in their smoothies. It's
Speaker:a company called We Are the New Farmers up there. And then another one called
Speaker:Pete, which is in Brooklyn, and they do sort of a
Speaker:circular farming where they're taking food waste from restaurants and they're growing these
Speaker:really great mushrooms and then they're selling them back to the restaurants. It's really cool.
Speaker:So, and across, you know, all these deals, and then we also do
Speaker:livestock and we do some vineyards and specialty types of farms, and then we do
Speaker:some technology companies that support the vertical farming industry and other
Speaker:aspects of farming. So we've kind of seen a bunch, but we basically help
Speaker:raise money for anything except for sort of a wheat farm, row crop farm, soybean
Speaker:farm, corn, that sort of thing. Conventional crop growing, just
Speaker:because there's other sources of capital for those folks. Yeah, it definitely
Speaker:seems like you've got your hand on a lot of different aspects of farming
Speaker:in general, and then specifically of all the different niches that are happening and within,
Speaker:you know, a lot of things that are hot now in vertical farming, like mushroom
Speaker:farming. I'm curious because, you know, a large portion of your time, you know,
Speaker:you're talking about a little bit of your experience prior and given
Speaker:how much time you spent with the Navy, how did that color, like, who were
Speaker:you when you went in and who were you, you know, it looks like 30
Speaker:years, like how did that change like your view of life, your
Speaker:experience, you know, the people you met there? I imagine it must've been a,
Speaker:just a real life-changing and perspective-changing experience. Yeah, it definitely changed
Speaker:perspectives. You know, as I mentioned, all that travel. If you want to broaden your
Speaker:perspective, if you're kind of a young person and, you know,
Speaker:maybe you grew up in a city, maybe you grew up in the country, wherever
Speaker:you grew up or suburbs, and you've had kind of a vanilla life.
Speaker:If you want to broaden your experience, best thing to do is go travel.
Speaker:Just see the world. You'll meet some very interesting people from different cultures
Speaker:and learn that the way you grew up is not necessarily the way.
Speaker:In fact, it's not the way that most people are going to live. Most people
Speaker:have very different experiences and It's good to learn from them. In the
Speaker:Navy specifically, I learned a lot about risk because we did some dangerous
Speaker:things. And, you know, looking at what the worst case scenario
Speaker:is and most likely scenario and probabilities of failure and
Speaker:have tried to translate that into my business, as especially on
Speaker:the investing side, as we look at farms that we're going to invest
Speaker:in and helping them, helping us and our investors and the
Speaker:farmers themselves understand what that
Speaker:risk sort of looks like for their business. For
Speaker:folks who never had or never will have that sort of
Speaker:experience, is there any, I'm sure you've got dozens, if not
Speaker:hundreds of stories related to your time there, but is there one that maybe
Speaker:stands out and obviously one that you can share related to that experience?
Speaker:Oh, well, yeah, I don't know. Some of my best times
Speaker:were just, you know, the people you work with, both for me, I was in
Speaker:the Navy, worked with some just really great people from all walks of life.
Speaker:And then on the other side, you get to meet. And a lot of the
Speaker:work that I did in the latter part of my Navy career was in Africa
Speaker:where we're working with small navies that, you know, they,
Speaker:we wouldn't even call them a Navy. We wouldn't even call them a Coast Guard,
Speaker:but they're just hardworking people. And those are
Speaker:probably the best memories I have of just, you know, seeing these foreign cultures and
Speaker:then interacting with them in the context of the
Speaker:job and sharing meals together. I can remember some great
Speaker:meals where we were sitting around in Africa, in the
Speaker:middle of nowhere, essentially sitting around eating a goat and they, you
Speaker:know, with the head of it, those sorts of meals you see on some of
Speaker:these eating shows and you kind of have to do it because that's what's
Speaker:culturally expected and, you know, it'd be disrespectful if you didn't. So you
Speaker:just kind of get through it and, you know, they crack the sheep's
Speaker:head or the goat's head and they bring out the brain. Yeah. And then if
Speaker:you actually do it and eat it, you kind of win their respect and they're
Speaker:impressed with you. So you gotta get over any sort of food fears
Speaker:you might have when you're in that setting. Yeah, I
Speaker:imagine it builds up that ability for you to take chances.
Speaker:And also the, the thing that you touched upon, it's really important, is like honoring
Speaker:their cultures and seeing the world from a different perspective.
Speaker:And that, you know, a lot of times people who haven't traveled, they think that
Speaker:the way they grew up or the way that we see things from in the
Speaker:US is the way everyone else should, you know, without taking into
Speaker:consideration, you know, what people's cultures that are probably
Speaker:older than the United States as well in terms of like, you know, traditions and
Speaker:how they carry things down. And I think seeing that and being
Speaker:able to honor and respect that, and then that's almost the way that you connect
Speaker:with people there, which is different. That's how, you know, business is done.
Speaker:That's how transactions are made. You know, they want to know that they can trust
Speaker:you and they feel that comfort level with you first. I think that's very important.
Speaker:Yeah. And you know, that is something that's kind of universal that does tie into
Speaker:this business is sharing things over food and drink, right?
Speaker:Yeah. You know, no matter where you go in the world, that's a shared
Speaker:experience. It might look different, you know, eating in a sushi restaurant in
Speaker:Manhattan versus eating in a desert, sitting around a
Speaker:goat's head, but you're still doing, you know, you're still
Speaker:sharing culture and transacting business and getting to know people and
Speaker:understand people better. So it's, It's something that, that is
Speaker:universal. Did you find it hard when you got back, you know, to explain to
Speaker:people what that's like for people that will never do that at
Speaker:that level? It is. And that's why I do tell
Speaker:people, you know, that military travel is one piece of it.
Speaker:Doing dangerous things is another piece of it. And being in
Speaker:environments where there's ongoing wars and things like that's another piece of it.
Speaker:But the travel is When you talk to people that haven't really traveled much,
Speaker:it is challenging to kind of relate that. Although, you know, more and more people
Speaker:can, people have access to so much content these days
Speaker:of YouTube and, you know, just movies. And it's a much
Speaker:more, the networks bring in content that
Speaker:to people and open people's eyes that they may not have seen previously. So that's
Speaker:a little bit easier, but there is sometimes hard relating to
Speaker:people that haven't had that same background. I think what's happening, what I'm seeing
Speaker:a trend towards, is because there's such a movement towards virtual and
Speaker:AI and remote, you know, people think they're having the experience, but they're
Speaker:having a perception of what that's like. And now I feel
Speaker:like— I grew up DJing, so I'd really appreciate the fact that I can— I
Speaker:have vinyl and I bought a nice turntable and I can physically touch something and
Speaker:play it and put the needle on. Yeah. And these, these physical
Speaker:experiences, I think I read that Some Amazon was doing like
Speaker:in-person, like book readings or something like that. Because, which is funny because they're
Speaker:switching back. And I think, you know, we're going to, it's like a pendulum, right?
Speaker:As with all things, we need like the physical, we need to touch and experience
Speaker:and be in front of someone and eat a meal, not just watch a
Speaker:blogger talk about it. Yeah. And now more than ever, you know,
Speaker:post-COVID, people want to connect with other people in person
Speaker:and share those experiences and experience new
Speaker:things. And I really think that's what we have to encourage young
Speaker:folks growing up to get away from their screens and their devices and their
Speaker:content and all that and interact with one another. Would you say you
Speaker:have a love for the open sea? Yeah. Oh, for sure. Yeah. That's
Speaker:why I did it for so long. I like the ocean. What's that like? Because
Speaker:most people will not get past the shore when they're on the beach and they
Speaker:don't understand. And I've done it a couple of times where you travel far enough
Speaker:where you lose sight of the shore and it's a bit Jarring the first time
Speaker:it happens. And then just having that, that huge expanse of just ocean.
Speaker:I imagine, you know, the first time it happens, it's, you know, jaw-dropping, I
Speaker:imagine. And it must, it's something that needs to be experienced. Yeah. I mean,
Speaker:it puts you, your life into perspective in
Speaker:that we're all pretty insignificant alone.
Speaker:That the vastness of the ocean, especially in the Pacific Ocean where you can
Speaker:travel for days and days and days and not see another ship. person,
Speaker:whatever, you know, anything outside the lifelines of your ship,
Speaker:it kind of brings it all into perspective that this is a really big world,
Speaker:but it's also small. You know, it, it's increasingly small by the way
Speaker:we're able to travel and connect with one another.
Speaker:So you mentioned, you know, those experiences and you started thinking about
Speaker:the opportunity to work with farms and food.
Speaker:How did that get on your radar? Like what was happening in your world at
Speaker:that time where you started to look at, you know, food production? You mentioned like
Speaker:your experiences in other countries, but like, can you talk a little bit more about,
Speaker:you know, personally what was happening for you where this was
Speaker:really something where you felt like you had to do something in this space?
Speaker:Yeah, a lot of it had to do with where I moved. So, you know,
Speaker:I'd lived in sort of urban areas and I'd done all this travel. And then
Speaker:several years ago when I moved back to Texas from Florida, I
Speaker:moved out to a fairly rural area where I drove
Speaker:to work every day and passed these large ranches. And
Speaker:fortunately, most of those ranches are still there, although there is some development in the
Speaker:past 10 years. But yeah, I saw cows and traveled not too far and
Speaker:saw farms of various types and started to
Speaker:get that combined with my overseas travels, that
Speaker:appreciation for farming and a different sort of
Speaker:lifestyle than I'd ever lived. And like I said, other than
Speaker:starting a farm, which I really didn't feel like I had the wherewithal to do.
Speaker:Investing in the farm seemed like the next best thing for me.
Speaker:And as we've kind of gone along with this company, we've seen that there are
Speaker:people out there that feel the same, where they grew up in
Speaker:urban areas or they live in urban areas, but they want to connect to
Speaker:the grounds in some way. And, you know, getting out there, obviously getting
Speaker:out and spending time in nature is amazing and people should do it,
Speaker:but Connecting with the food system by investing is the way we've decided
Speaker:to do that. So we put people in touch with different types of
Speaker:farmers. And so parts, I think that's part of the mission that
Speaker:we really have a passion for. How was it going in those early
Speaker:days when you, you know, obviously a lot of it has to do with
Speaker:connections, your experience in financing other projects, maybe non-farm
Speaker:related, your introduction to an industry that you're new to. So
Speaker:Having been an entrepreneur myself, I know that there's a lot of
Speaker:challenges when you're first getting started in a new space. And so
Speaker:what was the mindset or how did you approach that in terms of like figuring
Speaker:out where to make your first deal or how to have those early conversations? Or
Speaker:I imagine referrals and connections were a big part of that as well. The thing
Speaker:with entrepreneurship is you just, especially if you're starting in a field
Speaker:that's not mature, and for us,
Speaker:Crowdfunding farms was entirely new in 2016. Nobody else was
Speaker:doing it. Now there's some other people that are out there doing other companies, but
Speaker:it was brand new. And we were brand new to farming, although my co-founder
Speaker:Austin, he spent his summers working on farms, family farms and
Speaker:things like that. So he had more of a touch on that side. I had
Speaker:more of a touch on the investment side. And, you know, we brought those 2
Speaker:together and the thing with, especially when you're brand new starting a company, it's
Speaker:always like, what do I do now? What's the next step? I mean, you can
Speaker:think of some logical steps, but a lot of it is completely
Speaker:illogical. And so building your network is the best way to do that. So
Speaker:we started learning because we knew there was a lot to learn, especially
Speaker:on the ag side and going to conferences and
Speaker:obviously a lot of reading and talking to people and meeting people.
Speaker:And the first deal is always the hardest deal
Speaker:and we had some stumbles and some mistakes and You know, we still make
Speaker:mistakes, but fewer and fewer as we've done more iterations of
Speaker:raising capital for these farms. And it's just a
Speaker:matter of you've got to get out there and do it and you can't, you've
Speaker:got to be sort of fearless because you can go in knowing you're going to
Speaker:fail and you're going to make mistakes. And that's just part of the process.
Speaker:So for those early transactions or those early
Speaker:deals, what had been their go-to for
Speaker:financing prior to connecting with a company like Harvest Returns?
Speaker:Yeah, it really depends. I mean, it took us a while to figure out our
Speaker:niches that I sort of described with the indoor farming or specialized
Speaker:livestock production, regenerative agriculture, those sorts of things.
Speaker:So we were kind of, we were chasing the wrong things at first. We were
Speaker:looking at, oh, we're just going to do any kind of agriculture. Well, there's a
Speaker:very well-established agriculture funding
Speaker:system, banking system, agriculture credit unions, things like
Speaker:that. But at the same time, that system hasn't changed in about
Speaker:50 years and it's only focused on supporting
Speaker:people doing similar types of things, large-scale
Speaker:conventional chemical-intensive agriculture. So if you're doing anything outside
Speaker:of that, those people don't know how to underwrite it. So we came out of
Speaker:the gates knowing that we were a little more creative than that,
Speaker:those types of financing, and knowing that we would be a little more hungry for
Speaker:deals. So we began competing or developing some
Speaker:creative financing structures, both on the debt side with loans
Speaker:and on the equity side with bringing outside investors. And it's proven to be a
Speaker:successful model thus far because the one thing those
Speaker:farmers, as they come to us, are looking for is flexibility. And they've been told
Speaker:a lot of times, they've been told no, just because they're doing something different.
Speaker:Vertical farming is a great example of that. People don't understand it. We've
Speaker:started to build some expertise in it. So we know what,
Speaker:not only what investors like, but what is likely to succeed
Speaker:from a business model or likely not succeed from a
Speaker:business model. So, and because we've made some mistakes and
Speaker:we've seen companies do well and companies struggle, and
Speaker:we have a little better idea and we've decided, you know, way over the past
Speaker:6, 7 years, we've built up a level of expertise that
Speaker:makes us more comfortable with working with these farmers and hopefully makes them more comfortable
Speaker:working with us. Versus just going to a bank or Small Business
Speaker:Administration or something like that. Something that just came to mind as you
Speaker:were sharing your earlier experiences breaking bread with some of these different cultures and
Speaker:that being the basis for developing relationships. Did you find as
Speaker:you started to have conversations with farmers, you know, there's a trust factor
Speaker:involved, especially with banks? I imagine there's a long history of like farmers
Speaker:not trusting banks and banks, you know, not really being confident in farmers'
Speaker:ability to pay back loans and things like that. So, you know, there's
Speaker:probably a rocky relationship when it comes to money and farms that goes
Speaker:way back. And so did you encounter some of that early on? And I imagine
Speaker:your experiences probably helped with that. Definitely. And we still do. I mean,
Speaker:we constantly have people come to us that say they hate their bank.
Speaker:They hate bankers. They hate their bank. They hate the system. And
Speaker:it's understandable. The banking system is kind of
Speaker:because It's highly, highly regulated. A lot
Speaker:of bankers have to be conservative, just in their DNA,
Speaker:and they can't try new things because they're not allowed to. And that the more
Speaker:heavily regulated the industry gets, the worse it becomes.
Speaker:And right now we're at kind of one of those low points in the cycle
Speaker:where banks just simply aren't lending. So if you're a
Speaker:farm, want to start a farm or want to expand your farm, there's not a
Speaker:lot of options for you right now, especially if you're doing something like regenerative
Speaker:agriculture. Or vertical farming. So that's good for our
Speaker:business. When you look at a deal, part of the
Speaker:challenges with farms is obviously they can promise, and in the beginning you were
Speaker:dealing with open field, right? So there's the challenges of being able
Speaker:to produce or say that you're going to be able to produce what you
Speaker:can do. So what were some of the early needs of the first
Speaker:deals? What were they looking for? They're looking to expand operations. Is it
Speaker:equipment or Where was the need early on? Yeah,
Speaker:so let's just take a vertical farm, urban farm, for example.
Speaker:There's a lot of different aspects to that. There's the real estate aspect where
Speaker:you're going to either lease a space or buy a building, repurpose a
Speaker:building. There's obviously the growing equipment, very specialized growing
Speaker:equipment. It's capital intensive. You have some people have built their own,
Speaker:which is interesting. And we've seen some people do that successfully. Other people You
Speaker:know, as the industry matures, there's more and more options,
Speaker:more and more technology available from the grow lights to
Speaker:the control systems, to the planting mediums, vertical
Speaker:or horizontal, or, you know, whatever you're growing. And then operating costs,
Speaker:which is something a lot of people, when they're putting together these business plans, they
Speaker:don't spend a lot of time or thinking about. They're more interested on the
Speaker:growing piece, not so much the, oh gosh, I gotta I've got to stay in
Speaker:business for while I build, you know, while I grow things. And
Speaker:so, you know, as we've kind of seen some of these, and then especially, you
Speaker:know, electricity is crazy and those prices, inflation has
Speaker:driven up those prices and input costs and all those sorts of
Speaker:things have to be taken into account. So
Speaker:we've talked to a lot of the farmers that want to get into this business
Speaker:or have, and, you know, those early deals we did, a lot of that was
Speaker:kind of assumed that it would go okay and, you know,
Speaker:wished away some of the problems. And now we've seen as the industry's matured a
Speaker:little bit, you know, both on large-scale growers and small-scale growers,
Speaker:that there are some challenges, real challenges. And, but we're
Speaker:still very, very bullish on the, this sector and
Speaker:we're, you know, want to continue to help people invest in it.
Speaker:What were some of the differences you saw as you started to move into transactions
Speaker:that were more vertical farming based As opposed to what you would— were,
Speaker:had been doing up until that point in like open field farming? Yeah, it was
Speaker:under— going back to risk and understanding risk is people just didn't understand the
Speaker:risk of vertical farming, that there are significant risks.
Speaker:You can have diseases. We had one of our vertical farmers lose an entire basil
Speaker:crop and cause some challenges. We had
Speaker:other people assume it's going to be easy. And
Speaker:yeah, you're not breaking your back out outside in the heat or the cold,
Speaker:but You're, it's still a very manual
Speaker:intensive labor type of thing, you know, moving, you know,
Speaker:harvesting and planting and, you know, it's a different, it's not necessarily that
Speaker:backbreaking work, but it's a lot to grow, but also to run the
Speaker:business side of things, including the distribution, the sales, the
Speaker:marketing. Maybe the hard part is standing out at a farmer's market all day on
Speaker:a Saturday, you know, trying to sell what you've grown or, you know,
Speaker:hustling to make deliveries or, you know, Selling to restaurants
Speaker:and sending your samples all around to restaurants, however you're distributing for,
Speaker:say, a small-scale vertical farm. So people
Speaker:sort of these early deals, and even sometimes today we see it, people
Speaker:just don't think about what does the execution
Speaker:of this, of this business look like? Because you
Speaker:can grow, you can set up a business and you can grow and you can
Speaker:maybe sell a little bit, but There's a fine line between having an
Speaker:expensive hobby and having a business that can grow and make money
Speaker:for people involved. And on our side, it's even,
Speaker:there's even more challenges because you've got investors that you have to
Speaker:provide a return to. And so that's another thing
Speaker:that people just don't necessarily think about when they're, they have this sort of dream
Speaker:of, I'm going to start a vertical farm. There's a lot involved with doing
Speaker:that. I think what we've seen obviously with some of the
Speaker:closings, restructurings, bankruptcy filings of recent
Speaker:news, and we're seeing more of that than ever and everyone's calling it the
Speaker:trough of disillusionment that we're in now when it comes to, to CEA
Speaker:or specifically vertical farms. And I think a lot of what we're
Speaker:seeing is people felt that they were a technology company as opposed to
Speaker:being without having any experience in farming. And I think we're seeing how
Speaker:that has played out. I imagine given your, all your
Speaker:life experiences, you've become a pretty good judge of people
Speaker:and you can tell who's in it for real and who's not.
Speaker:So what are some of the common traits when you've seen and you've had
Speaker:so many conversations with people and you've decided who you want to
Speaker:work with? What are some common traits in those people where you can see
Speaker:that they do have a chance for success? Yeah, I mean, just an hour
Speaker:ago I had a call with a Vertical farming company
Speaker:that started out on the technology side
Speaker:and they had to prove, you know, you develop the technology, but you've got to
Speaker:prove it works. So you have to be a farmer too, or do some pilot
Speaker:programs. And now they want, well, they were sort of the farming, they wanted to
Speaker:do farming and then they were technology. Now they're pivoting to selling the technology,
Speaker:licensing the technology. So there's a lot of not
Speaker:sure people or a lot of companies right now, they're not sure which direction they're
Speaker:going to go. So. They started out as a technology
Speaker:farming company, hoping that they could do it all.
Speaker:Well, the two are very distinct. You know, growing a tech company
Speaker:requires generally fast growth, high levels of
Speaker:investment. Sooner or later, you do have to provide a
Speaker:product that you can sell for a profit. Whereas
Speaker:a farming company has to start out making profits from the get-go,
Speaker:or else they're not going to be in business very long. And so those
Speaker:2 dynamics work against one another if you're trying to— the
Speaker:AeroFarms and the Plenties and all these companies, AppHarvest that we've seen
Speaker:sort of trying to do both things. So now we're seeing more of
Speaker:a differentiation in the industry where you're either a farmer
Speaker:or you're a tech provider. And that's a good thing. We've— the companies
Speaker:that we've worked for that we've helped thus far, although some of them have
Speaker:done some of their own technology, they're primarily farming production farms.
Speaker:So they went in, they acquired or leased or bought or whatever, somebody
Speaker:else's technology and put it to work. In some cases they've kind of
Speaker:hand-created their own, built their own, a lot of PVC
Speaker:pipes and growing trays and all that sort of thing. And that's an okay model,
Speaker:but the business is still very much
Speaker:dynamic, this sector. And we want to
Speaker:fight. Some people know the story of Ray Kroc, you
Speaker:know, and McDonald's and how he created this whole
Speaker:fast food industry. Essentially, it was a crazy idea back when
Speaker:he did it. And we're looking for the Ray Kroc of the
Speaker:kind of small urban farm where somebody figures out how to do it
Speaker:profitability and then can scale it. Because if you want to scale a vertical farm
Speaker:or especially an urban farm, it's going to have to be, I don't think it's
Speaker:going to be the way the The big, some of these companies that we just
Speaker:mentioned did it. I think it's going to be small farm makes a
Speaker:profit and replicates it over and over and over again.
Speaker:So that's who we're looking for. We've invested in some of those. Some of them
Speaker:are kind of trudging along, not really going gangbusters, but
Speaker:either somebody in our current portfolio, they might have that breakout moment,
Speaker:or somebody new might come to us and we'll invest and they really figure out
Speaker:how to do it right. And The other thing I would
Speaker:mention about vertical farming is it is very much regional.
Speaker:A lot of these technology companies were trying to create a one-size-fits-all sort of
Speaker:business model of technology, but that's just not the way. It's like any other
Speaker:farming, you know, a lot of it is very much location-based. I mean,
Speaker:now you don't have, you don't necessarily have drought or weather,
Speaker:but you have, you know, labor costs vary from Uh,
Speaker:an urban area to a suburban area in some regions.
Speaker:Weather, although these are controlled environment, weather is huge
Speaker:because if you have to pay massive heating costs or have some
Speaker:sort of massive heating system for your vertical farm in the winter, that's gonna be
Speaker:a lot different where the farmers down here in Texas where
Speaker:the summers are, it's 109 out, just like it is today, and
Speaker:they have to cool this and control the humidity. And that takes,
Speaker:and run their grow lights, and that takes a lot of electricity.
Speaker:So all those factors need to be taken into play. And if you're
Speaker:starting up a farm and you just think, oh, I'm going to, I went up
Speaker:and visited this farm in New York and I'm going to put it down in
Speaker:Alabama, that's probably not going to do well for you
Speaker:without taking those environmental factors and
Speaker:cost factors into consideration. Yeah, that's a very important
Speaker:point and it almost lends itself to specialists
Speaker:or consultants who kind of understand the intricacies of the different
Speaker:regions. And maybe like if you are doing a farm in
Speaker:Southeast or versus Northwest of the United States, you're going to
Speaker:have completely different climate considerations. And I think there's probably
Speaker:space there for someone and maybe there's specialists in each region who understand
Speaker:and saying, hey, if you're coming down here, I can tell you the lay of
Speaker:the land and what you should expect in terms of energy costs as well,
Speaker:which is a real big consideration. So when
Speaker:farmers are getting started and how far along
Speaker:their life cycle are they before they start to consider, you know, needing some
Speaker:help with financing in terms of like, you know, how long they've been in
Speaker:business? It depends. And I'll start by
Speaker:saying some of the early farms we did that we raised
Speaker:capital for, it was a different fundraising environment. So 3 to 4 years ago,
Speaker:not only was indoor farming more novel and people were
Speaker:excited about investing in it, the funding environment writ
Speaker:large was different. So somebody could come to us with not much more
Speaker:than a plan, an idea, maybe a location
Speaker:picked out, some things like that, and raise a
Speaker:considerable amount of money to start this farm from scratch.
Speaker:Whereas today, traction is always a word we use a
Speaker:lot and we want to see You know, not only
Speaker:financial traction is like, have you had other people invest? That's always a
Speaker:helpful thing. Nobody wants to be the first check writer necessarily
Speaker:when you're raising capital, although we have on many occasions. We've been the
Speaker:last money in, first money in, and kind of in the middle there.
Speaker:But if you've got a really grand plan, then you're going to need,
Speaker:I'm just throwing out a number, $5 million, and you've only got
Speaker:$200,000 and you come to us and you might raise, You know, the average
Speaker:check that we're going to write is going to be
Speaker:$200,000 to a couple of million dollars. That's kind of the range of
Speaker:what our raises are. We're not doing, you know, Series F
Speaker:rounds where we're writing $150 million checks like some of the indoor farming
Speaker:companies got. Now they've pretty much blown through all that cash.
Speaker:So traction is important. Experience is another
Speaker:important thing. So, you know, if a new— somebody wants to
Speaker:start a brand new farm, And they come to us, like I said, 3 or
Speaker:4 years ago, if you had no farming experience, you would probably
Speaker:walk away with a check. Now I want to know that you've not only
Speaker:do you know how to grow stuff, but do you know how to sell
Speaker:stuff and sales and marketing, or do you have somebody on your team? So
Speaker:ideally you have a team where there's a sales and
Speaker:marketing and business acumen and somebody with a growing acumen.
Speaker:agriculture side of things. It's very rare that you're going to get
Speaker:somebody that's good at both of those skill sets because they're so
Speaker:different. The selling piece is vastly different. And we'll see
Speaker:couples, husband, wife, whatever kind of couples sometimes, and that can work
Speaker:if maybe the woman's into the growing and the husband's into the sales and marketing
Speaker:and accounting and all that stuff. That's the model that could work. Or you've
Speaker:got a team, something larger scale, you've got a team together and you've got aspects
Speaker:of All those things and finance and, you know,
Speaker:because it's all about reducing the risk for us and for our
Speaker:investors. So the more you can show that traction
Speaker:in ability to execute, that's a really
Speaker:intangible thing. It's hard in entrepreneurship to predict.
Speaker:I mean, it's one thing to have a good idea and we see that all
Speaker:the time and to even have a nice business plan. It's
Speaker:another thing to be able to execute a business plan. So we look for people
Speaker:Even if it's not, they haven't, you know, we don't necessarily need somebody that's started
Speaker:a successful indoor farm before, but have you ever started something
Speaker:and finished something and done it successfully? That's really, really important. And it
Speaker:doesn't matter. Scale is not as important as
Speaker:just proving that you can do something. And so a lot of times
Speaker:we'll get, you know, people that have really high smart
Speaker:academic technology patents, all this kind of
Speaker:stuff. What else have you done besides, you know, come up
Speaker:with ideas and patent things? I want to see some proof of
Speaker:execution or that maybe you're the idea guy and then you
Speaker:have a person on your team that can do the execution piece. So it's a
Speaker:very holistic type of business and
Speaker:that's, we want to see teams that have that wide
Speaker:approach. Is it safe to say that you've gotten better as an organization
Speaker:at looking at companies who are coming to you for that funding
Speaker:and because of all the aspects of the business that you're now putting under the
Speaker:microscope, having a better idea of like who's going to have a chance for success?
Speaker:Yeah, 100%. Like I said early on, we made mistakes. Some of those mistakes included
Speaker:due diligence and probably selecting some farms for
Speaker:funding that wouldn't pass today. You know,
Speaker:hindsight's always 20/20, that sort of thing. But part of that is just
Speaker:iteration and experience, good and bad. And
Speaker:we see maybe 30 deals per month and maybe
Speaker:5 of those are indoor. So we see these over and over and over again.
Speaker:I've probably talked to 3 indoor farmers in the past week.
Speaker:So there's a lot of, especially these days, there's a lot more
Speaker:deals chasing less capital than there was
Speaker:several years ago. If there's an indoor farm
Speaker:owner listening and is Excited about the opportunity to
Speaker:grow and obviously is in the need and thinking about financing,
Speaker:prior to having a conversation and picking up the phone and calling
Speaker:Harvest Returns, like how can they think about the best way
Speaker:to prepare themselves for this first conversation with you so
Speaker:they put themselves in the best light so they know that
Speaker:they want to be taken seriously and given everything they've heard in this episode,
Speaker:you want to make sure that they have a positive outcome with you? You know,
Speaker:there's probably some things that they could do, everything you've probably talked about, but maybe
Speaker:there's some other due diligence on their part that would put them in the best
Speaker:light for you guys. Yeah, Harry, I'd say probably the number
Speaker:one thing is to understand your financial
Speaker:projections. That's really, really important. And
Speaker:you'll hear the phrase these days, unit economics
Speaker:thrown out a lot. A lot. A lot. Well, you know, and you wouldn't
Speaker:hear that 3 or 4 years ago, where if you're gonna sell me a head
Speaker:of lettuce or a little bundle of
Speaker:basil and it costs $5 and you can
Speaker:only sell it for $3, I don't wanna see that. And if you can't
Speaker:explain that to me, I definitely don't wanna see that. So understand your
Speaker:numbers. And I know not everybody's a financial genius, but there are plenty
Speaker:of people out there who are. So seek that help.
Speaker:There's plenty of consultants out there specifically in the indoor farming
Speaker:industry, financial consultants. And I'd just say
Speaker:entrepreneurs and new companies writ large,
Speaker:accounting is boring and it's very
Speaker:mundane. And, you know, especially if you're kind of the entrepreneurial
Speaker:mindset where like, I just want to make stuff happen, which is great. That's kind
Speaker:of me. But if you don't have that accounting, if you don't
Speaker:understand your numbers and Or have somebody that can do that for you, then
Speaker:you're not gonna have a successful business, period. So I don't know, I don't care
Speaker:what you're doing, you know, but farming especially. So pay
Speaker:attention to your numbers and try to understand and be able to
Speaker:articulate your numbers before you approach anybody for capital,
Speaker:whether it's a bank loan or a company like ours that
Speaker:has some financing available. So on the other side of the
Speaker:transaction, obviously you help pull together investors who are interested
Speaker:in this space, and I imagine, you know, a lot of them, probably are getting
Speaker:cold feet based on what they're seeing happening in the past couple years. So can
Speaker:you talk a little bit about, because I know, I think most people don't get
Speaker:too much of an insight into what's happening and into how you build those relationships
Speaker:on the investor side. So what do those conversations look like?
Speaker:Yeah, so we have a pool that we've grown
Speaker:slowly and surely of 14,000
Speaker:investors, and that's, those are all people that
Speaker:have signed up for our platform that are interested in investing in
Speaker:some aspect of agriculture. And
Speaker:they vary widely, you know, they all have some means because our
Speaker:minimum investment is $5,000, $10,000, but
Speaker:in many cases it's higher. And so they've got some
Speaker:financial savvy. They've got, most of them are accredited investors, which there's a
Speaker:definition of what that means. It's just high net worth or high income earners.
Speaker:And they all have some interest in agriculture, and that interest varies
Speaker:significantly across individual investors. So
Speaker:some, we have people that only want to do livestock
Speaker:because they come from a, you know, that sort of background
Speaker:or they like that industry. We have complete opposite. We have some investors
Speaker:who are vegans and they will only do veganic
Speaker:investments, and that's just a thing. And then there's kind of in the middle, you
Speaker:know, people that We personally have a, you know, as a company, we have a
Speaker:sustain— a bias towards sustainability. We have a bias
Speaker:towards doing things that make sense for the environment,
Speaker:whether that's the climate, biodiversity, watersheds.
Speaker:And those last 2 you don't hear enough about because they're overshadowed
Speaker:by the carbon discussions. So
Speaker:reducing, you know, the footprint on watersheds, reducing the
Speaker:chemicals that flow into the watersheds, and then reducing Impacts to
Speaker:biodiversity, you know, to negative impacts to biodiversity are very, very important. So
Speaker:we have some of those, those investors that they really want to orient them,
Speaker:their money towards those sort of projects. Then we have some that
Speaker:just don't like the stock market and want alternative investments, and they've heard
Speaker:farming and agriculture, there's something to it and they can make money. And we have
Speaker:some of those too, and some, you know, Venn diagram of
Speaker:overlap of those sort of things. So We love talking to our farmers, but
Speaker:we like to hear from our investors and hear what they're interested
Speaker:in. And the primary way we do that is to see what they
Speaker:actually invest in when we put up in front of them on our platform.
Speaker:Our typical raise, we gather these small checks of $5,000,
Speaker:$10,000, $25,000, and we put them all together and then we'll write a significantly larger
Speaker:check, 30 to 40 investors represented in an
Speaker:LLC. And then we invest in a farm or we loan money to the farm
Speaker:or whatever. case may be. And these days, investors,
Speaker:here's how the environment has changed in a nutshell. One, the
Speaker:risk-free rate has increased. So where people
Speaker:a year ago, 2 years ago, they had money in a savings account,
Speaker:money market, certificate deposit, treasury bill that was making 1% or
Speaker:less, a lot less. Now they can just put their money and
Speaker:get guaranteed 5% returns in one of those vehicles. So
Speaker:if you come to me and say, hey, we're going to get a 6% return
Speaker:in my investing in my vertical farm, that's just
Speaker:not going to do it because there's this level of risk. So we're going to
Speaker:need to see a higher return. We're going to need to see
Speaker:the financial projections that are going to get you that return and all these other
Speaker:things, risk mitigation that I've talked about and the ability to
Speaker:execute. So the bar is a lot higher now, unfortunately, for
Speaker:companies raising capital than it was just a few years ago. Because
Speaker:investors don't want to lose money. They're trusting their money,
Speaker:hard-earned money, to an entrepreneur, and they want to see
Speaker:that that entrepreneur, that she knows what she's
Speaker:doing or that he's not just going to run away with the money. And that,
Speaker:you know, there's obviously a difference between fraud and poor execution,
Speaker:but that poor execution is, and we've got ways that we do the
Speaker:due diligence to prevent the fraud most of the time, but that poor execution is
Speaker:Can lead to bad results. So I imagine there's
Speaker:ways for folks who are interested in becoming an investor and who
Speaker:have specific needs and interests. You mentioned
Speaker:veganism, interest in regenerative agriculture,
Speaker:obviously a concern with all the chemicals that are being used in the growth of
Speaker:these traditional crops. They can schedule some
Speaker:time with you, or there's probably information on the site to kind of narrow down
Speaker:and see where there's opportunities. And projects they could invest in that speaks to what
Speaker:they're passionate about. Yeah, for sure. I mean, we've, you know, part of this, many
Speaker:investors, they've never invested in agriculture before. So our platform is the first
Speaker:opportunity they've had to do it. So we've tried to,
Speaker:education is a big part of what we do and we get a lot of
Speaker:content out there, blogs and videos. And, you know, I go on some podcasts like
Speaker:this to kind of help educate people on both sides of the
Speaker:business. But of course, I'll get on a Zoom one-on-one or a phone call
Speaker:one-on-one with any investor that wants to talk to us. We provide
Speaker:webinars. So every time a deal comes up, we'll do a webinar and that'll be
Speaker:an opportunity for the farmer, the business person to speak
Speaker:directly to the investors and take their Q&A
Speaker:so they can better understand the farm before they invest. Of course,
Speaker:investors want to visit the farms before or after the investment.
Speaker:They can do that. That's kind of, if you work with us, you have to
Speaker:be open to having investors come visit your facility. Can't be anything
Speaker:super secret that You don't want to share with people. Yeah, believe me,
Speaker:we've seen some of that. And, but so there's a real
Speaker:educational piece on the investor side, and we think that's
Speaker:important because it's, that's the way you're going to get more people
Speaker:interested in funding, especially this
Speaker:sector, vertical farming. And, you know, I'm sure because you
Speaker:do this and we do this, we believe in this sector. We believe it's important.
Speaker:We believe it's important to diversify the food system and to grow more
Speaker:food, more places, more sustainably. And the only
Speaker:way we're going to do that is if we can convince investors that it's a
Speaker:good idea to allocate capital to do that.
Speaker:So that's why we're in this. Yeah.
Speaker:Very helpful information. Thanks for sharing that. And we'll make sure that all that
Speaker:information is available in the show notes. A couple of questions as we
Speaker:wrap up. What's a tough question that you've had to ask yourself recently?
Speaker:Oh, wow. I guess the question is, where is our company going? You
Speaker:know, like any company, you have a business trajectory. And
Speaker:I think we're, we don't call ourselves a startup anymore. We're past that stage.
Speaker:We've kind of gone through those scary first 5 years where we almost went out
Speaker:of business 2 or 3 times and almost ran out of money 2 or 3
Speaker:times that we're at more of a stage of which way are we going to
Speaker:go? How are we going to grow? So I personally ask myself, what is
Speaker:my future with this company that we started? And, you know,
Speaker:not every founder stays with the company forever because not every founder has the
Speaker:skill sets to run a startup, medium-sized company,
Speaker:growth company, large company, whatever. That's probably a question
Speaker:I contemplate every now and then. I've been leaving some time at the end of
Speaker:these conversations for an opportunity for you
Speaker:to speak to this industry because obviously there's a lot of founders,
Speaker:CEOs, folks who are very tied into this industry want to
Speaker:hear what's happening. So is there a message that you have
Speaker:for the vertical farming industry that's top of mind for you?
Speaker:Yeah, for us specific on the financing and the investment side is
Speaker:focus on profitability over growth at this stage.
Speaker:The days of people throwing money at your business plan
Speaker:without an expectation for a return, with just an expectation
Speaker:of subsequent funding rounds and some sort of exit based on that
Speaker:or over. So investors want to see a path to
Speaker:profitability, a quick path to profitability. So refine your
Speaker:plans to achieve profitability as quickly as possible.
Speaker:That's helpful advice, probably in any industry, but
Speaker:specifically for this audience, given everything that's been happening. So Chris, I
Speaker:want to thank you for your time. This has been extremely educational and
Speaker:helpful, and I think it's going to be very interesting for a lot of folks
Speaker:Here to hear what's happening because as with any business,
Speaker:cash flow is king and running a successful business is really
Speaker:important, but also partnering with people who believe in the vision and
Speaker:also that they can trust, I think is important. And I think we've definitely
Speaker:established that's something that's in the DNA of Harvest
Speaker:Returns and yourself. So I think people are going to be paying close attention
Speaker:to what we've talked about here, but also just to learn more. So
Speaker:Website is harvestreturns.com. Is there anywhere else you want to send folks
Speaker:to learn more or start a conversation with you? Hey, you can visit all our
Speaker:social media. We've got some great clever social media people on
Speaker:Instagram and Facebook and Twitter and X, whatever it is these
Speaker:days. All those things. So yeah, find us and reach out to us
Speaker:and of course pick up a phone or email. We'll answer those too. We don't
Speaker:have bots. We have people. Thanks again for this
Speaker:enlightening conversation. I really appreciate it. All right. Awesome. Thanks a
Speaker:lot, Harry. $680 million poured into precision
Speaker:ag last year. Autonomous weeding robots dominated, and John
Speaker:Deere made 2 acquisitions in 3 months. A food company, not an
Speaker:equipment maker, bought a robotics startup to protect its own supply chain.
Speaker:The deals are accelerating, the money is moving, and the winners are already
Speaker:separating from the pack. If you're investing, building, or buying in
Speaker:this space, you need the full picture before your competitors do. Get it. The
Speaker:2025 Precision Agriculture Intelligence Report from
Speaker:iGrow News is now available. Get your copy today at
Speaker:igrownews.com/precision.
