As the population of the world grows towards 10 billion people by around the year 2050, the earth is going to have to accomodate with a doubling or even tripling of the global food supply. There is a crowdfunding and Peer to Peer Lending company that makes this urgent concern part of its primary and everyday business. AgFunder is the platform that is putting investors together with agricultural startups and small businesses in an effort to address this vital concern. They and other observers believe this will be the best investment sector for the upcoming two decades.
AgFunder Intro & Background
2014 represented a banner year for AgTech businesses. Over $2.36 billion was fundraised through 264 financing arrangements. Venture Capitalists invested aggressively in companies that are setting the new technological standard for the ways we produce, grow, and even distribute food across the globe. During this time, investors funneled $82 million in seed capital to 121 different startups throughout the Agribusiness industry, with the ones oriented towards efficiency in farming being the predominant beneficiaries. Precision agriculture came in as the principal attraction within this sub-industry, raking in more than $30 million that was disclosed. AgFunder is at the forefront of this movement as the principle crowdfunder and P2P Lender in the agriculture space.
AgFunder Founder and Management Team
Co-Founder & CEO Rob Leclerc, PhD., is a renaissance man of sorts with a background in science, engineering, and entrepreneurship. He is among the leading national experts on AgTech thanks to his wealth of experience and his PhD from prestigious Yale University. With more than 15 years of both quantitative and qualitative experience as engineer and scientist and more than four years in global agriculture, Rob is the co-founder of AgFunder. He has been widely published in such publications as Harvard Business Review, TechCrunch, Nature Journals, and Financial Post. He has also spoken, keynote addressed, and chaired literally dozens of worldwide conferences pertaining to technology, food and agribusiness, and fintech. He also sits on the world's foremost AgTech conference, the Advisory Committee for the Ag Innovation Showcase. Forbes Magazine in 2014 awarded Rob as a member of their “Up and Comers” list. Rob has given interviews to Forbes, LA Times, Entrepreneur, CNBC, Reuters, and FastCompany.
Co-Founder & COO Michael Dean provides more than 20 years of business management, project development, and legal experience to AgFunder and its team. He manages all origination of deals and daily operations, as well as execution on the platform itself. Before co-starting AgFunder, he founded and ran an African Agribusiness named SeedRock Africa Agriculture.
Co-Founder & Head of Marketing Melissa Tilney brings a wealth of different experiences to the team at AgFunder, from public companies and the world of startups. She served at Elance (now known as Upwork), the biggest platform for online global freelance hiring where she oversaw 25% of the company's business in job categories. Prior to this, Melissa worked in American and Asian agriculture and food responsibilities at Boston Consulting Group.
Though AgFunder is not primarily in the business of facilitating loans for its startup and small business ventures on the platform, it does handle a certain type of loan known as a convertible note. This interesting investment begins life as a loan, paying between 5% and 7% per year in an interest that accrues throughout the note's term. Once the terms spelled out in the convertible note have been achieved, it converts to equity interest in the underlying company. Startups are able to gain funding in difficult circumstances this way as valuing a company is not always easy when the venture is new or has not been in operation long enough to have clear financials. Early investors are rewarded by the opportunity to gain both interest that is pre-set and an equity stake in the company once it reaches a certain point of development. The loan interest is not payable until the end of note term or when the note converts to an equity holding with this type of convertible note loan. AgFunder also permits loan financing to be arranged between investors on the platform and its startup and small business enterprises.
How AgFunder Works
Startups on AgFunder start out by applying for funding via creating a profile. They must first pass a vetting process by providing complete materials on the offering, as well as a short pitch video that helps to construct an effective profile for investing in the company and its concept. Once companies are approved by AgFunder, they determine their minimum and maximum funding goals and the time frame over which the campaign will actually run. Should the company achieve its fundraising target before the campaign is over, then the company is awarded its investment. This is an all or nothing campaign, so firms should not set too high a fundraising bar that they can not hope to possibly reach, as nothing is received unless the full goal is met before the deadline (that the company itself sets) for the fundraising term expires.
Investors gain access to what are described as among the most thrilling opportunities for Agribusiness and AgTech when they join the platform. All of these select opportunities are first screened and reviewed by AgFunder's own investment committee. Access is open to both accredited investors and larger institutions that are investors. Because AgFunder specializes so heavily in identifying and sourcing the agribusiness opportunities on the market, new companies that are looking for agricultural-related capital infusions know to come to them.
Venture Capitalists, large institutions, or Family Offices benefit from this by no longer having to find and extensively vet deals. Accredited investors gain the ability to participate in the greatest AgTech and Agribusiness opportunities on the market. These types of offerings were previously completely unavailable to smaller to medium sized investors. Now these accredited investors have a level playing field to participate in the big boys club investments in agriculture and agribusiness operations.
- Discovery and Sourcing of Opportunities in Agribusinesses – AgFunder delivers both large and late stage investment opportunities alongside angel investor opportunities. They constantly consider companies from around the globe that are involved with agricultural production and processing, biofuels, agribiotech, precision agriculture, robotics, and agriculture investment funds.
- Syndicate Investing – They allow syndicates to form and tackle large investment funding projects as a group. The Venture Capital firm manages the investment in the syndicate on behalf of the various participating investors.
- Due Diligence – The due diligence here is performed by the agriculture professionals in AgFunder’s capable research team. They typically consider any good innovative early stage companies that are searching for funding from as little as $250,000 to both large established companies and investment funds that are looking for $100 million and more in investment.
- Valuation and Terms Determinations – While AgFunder permits the companies themselves to set out both the valuation and terms for their own equity offering deals, the company reserves the right to pass on any opportunity that they believe is not properly or realistically termed and is valued at a disadvantage to the potential platform investors. The purpose of AgFunder's fundraising activities is to find companies with solid plans to increase value with their businesses and products from the proceeds.
- Exit Prospect Review – AgFunder is only really on the hunt for companies who have identified and outlined their specific and viable exit prospects so that their investors will have semi-liquid investments that they can exit sooner rather than later through a hoped for trade, sale, or IPO.
- Provides Pipeline of Deals – Users are able to access vetted and high-quality deals on the AgFunder platform.
- Variety of Types of Investment Opportunities – Investors obtain access to debt investments, equity, and even hybrid investments, such as convertible notes.
- Range of Investment Amounts Permitted – On this platform, you can invest a minimum of $5,000 to a maximum of $100 million in appropriate deal offerings.
AgFunder is based in the New York City metropolis. Their single office is located at 500 7th Avenue, 17th Floor, New York, New York 10018.
AgFunder Interface Screenshots
AgFunder cares about the safety and security of their clients and your personal and financial information, in particular that which is Personally Identifiable Information that they maintain in their possession. They boldly state that despite making the most reasonable efforts to secure this information and access to it, they will not be held liable for any breaches of or failure to protect this information, whether it is an accidental failure or otherwise. They also absolve themselves of any responsibility for any of their associated third parties who have your information and suffer a hacker attack or breach of security.
The platform's protection of your data and information comes down to the capabilities of the 128 bit SSL software and the accompanying encryption of all data transmitted between your computer and server and their servers. They claim to encrypt not only information transmitting between their servers and your server, but also information that they maintain on their servers before and after the transfers.
They also employ third party providers who have access to your address, name, social security number, e-signatures, and financial and payment information on their servers, who similarly make their best efforts to protect this personal data and financial information. It always makes us uncomfortable when P2P and crowdfunding platforms attempt to wash their hands of any failure and stress their lack of culpability in data protection long before any such failures have actually even occurred. Investors have to be so careful, as AgFunder is all too quick to point out and remind us.
AgFunder Complaints and Ratings
The BBB does not maintain a file on AgFunder. We also did not find any complaints or other ratings while performing an online search for such ratings or complaints.
AgFunder Customer Support
The site gives out the CEO Rob’s email address, plus three other email addresses. There is no live chat help provided. The phone number and company address are not readily available on the site, but they were traceable on third party websites. Clearly the company does not want you to call them on the phone.
AgFunder Costs & Fees
Investors do not have to pay to belong to AgFunder or to invest in any of their companies. Companies which are raising funds might be charged a minor transaction fee for the deals that they execute on the platform that go to an AgFunder nominated broker-dealer. This is not a profit for AgFunder, but a pass-along cost.
Final Words on AgFunder
AgFunder provides unprecedented insider-like access to accredited and institutional investors who are interested in investing in bottom floor opportunities in the Agribusiness and AgTech. They provide presentation materials, as well as technical documents, regarding the companies, but this is only a starting point they are quick to remind you. You are encouraged to perform your own research and due diligence before investing in companies that have a high rate of failure, as startups do. AgFunder gives you an excellent checklist of questions to ask during your own personal due diligence to assist you with the process. This is good advice and a process to go through no matter which startup company or P2P Lending opportunity in which you choose back.
Pros of AgFunder Review
- AgFunder opens up a whole brave new world of investing to small to medium-sized investors who are interested in participating in the traditionally wealthy investor-dominated sector.
- Syndicates provide yet another avenue of access to larger deals in which smaller investors might not otherwise be able to participate.
- Hybrid investment-like convertible notes provide investors an interest payment and an equity stake in these startup opportunities.
- The platform is free for investors and mostly free for fundraising entities.
Cons of AgFunder Review
- Investors must still be accredited in order to participate in these ventures, at least until the new SEC rules eliminating this antiquarian restriction are lifted early in 2016.
AgFunder Review Summary
AgFunder provides the traditionally wealthy investors' access to fantastic and timely opportunities in Agribusiness and AgTech. The free to invest in platform gives you a choice of debt, equity, and hybrid investment types to pursue with regards to the various companies seeking finance and funding.