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New Funding Sources for Food-Related Businesses

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New Funding Sources for Food-Related Businesses MSU CENTER FOR REGIONAL FOOD SYSTEMS NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES THIRD EDITION APRIL 2017 NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES TABLE OF CONTENTS SECTION 1: INTRODUCTION 5 Before You Begin, Do You Have a Business Plan? 6 What Type of Financing Do You Need? 7 SECTION 2: CROWDFUNDING 8 Barnraiser 8 Foodstart 14 CircleUp 9 FundRazr 15 Credibles 10 Indiegogo 15 Crowdfunder 11 Kickstarter 16 CrowdMole 11 Lendio 16 EquityEats 12 Localstake 17 Foodie Crowd Funding 13 Patronicity 18 SECTION 3: START-UP ACCELERATOR RESOURCES 19 AccelFoods 19 food-x 20 Food Hatch 20 SECTION 4: MISCELLANEOUS RESOURCES 21 Ben and Jerry’s Foundation, Grassroots Organizing Northwest Michigan Farm and Food 20/20 Fund 30 for Social Change Program 21 Opportunity Resource Fund (OppFund) 31 Farm Aid Grant Program 22 Patagonia 32 Greenstone Farm Credit Services 23 Prosper 33 Kiva 24 Robert Wood Johnson Foundation, Lending Club 25 Culture of Health Prize 34 Metro Community Development (Flint Area) 26 RSF Social Finance 35 Michigan Good Food Fund 27 SPARK (Ann Arbor) 36 Natural Capital Investment Fund 28 Whole Foods Market, Local Producer Loan Program 37 Northern Initiatives 29 Women’s Foundation (Michigan) 38 MSU CENTER FOR REGIONAL FOOD SYSTEMS // NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES 2 TABLE OF CONTENTS (continued) SECTION 5: ADDITIONAL SOURCES OF FUNDING INFORMATION 39 Michigan Small Business Development Cetner, Business Accelerator Fund 40 State of Michigan, Department of Agriculture and Rural Development Rural Development Fund Grants 41 Specialty Crop Block Grant Program 42 Value-Added Grant Program 43 USDA, Agricultural Marketing Service Farmers Market Promotion Program (FMPP) 44 Local Food Promotion Program (LFPP) 45 USDA, Farm Service Agency Farm Storage Facility Loan Program 46 USDA, Food and Nutrition Service Farm to School Grant Program 47 USDA, National Institute of Food and Agriculture Agriculture and Food Research Initiative (AFRI): Agricultrual Economics and Rural Communities 48 Agriculture and Food Research Initiative (AFRI): Improved Sustainable Food Systems 49 Beginning Farmer and Rancher Development 50 Community Food Projects Competitive Grants Program (CFPCGP) 51 Small Business Innovation Research (SBIR) 52 Sustainable Agriculture Research and Education (SARE) 53 USDA, Rural Development Business and Industry Guaranteed Loan Progam (B&I) 54 Community Facilities Grant and Loan Program 55 Rural Business Development Grant (RBDG) 56 Rural Cooperative Development Grant (RCDG) 57 Rural Economic Development Loan and Grant (REDLG) 58 Rural Energy for America Program: Renewable Energy System and Energy Efficiency Improvement Guaranteed Loan and Grant Program 59 Socially Disadvantaged Groups Grant (SDGG) 60 Value-Added Producer Grants (VAPG) 60 MSU CENTER FOR REGIONAL FOOD SYSTEMS // NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES 3 Authors Corresponding Authors Anel Guel, Rich Pirog, Graduate Student, Director, Department of Community Sustainability, Center for Regional Food Systems, MIchigan State University MIchigan State University (1st edition) (all editions) Rich Pirog, Nick McCann, Director, Specialist, Center for Regional Food Systems, Center for Regional Foods Systems, MIchigan State University MIchigan State University (all editions) (3rd edition) Rachel Kelly, Research Assistant, Acknowledgements Center for Regional Food Systems, MIchigan State University The authors wish to thank Susan Cocciarelli and (3rd edition) Kathryn Colasanti with the Michigan State University (MSU) Center for Regional Food Systems (CRFS) Nick McCann, for their review of the 1st edition of this document. Specialist, Marty Gerencer of Morse Marketing Connections, LLC Center for Regional Foods Systems, also provided comments on specific sections of the MIchigan State University 1st edition, and Kathleen Reed, MSU Department of (3rd edition) Community Sustainability graduate student helped with the 2nd edition. We also wish to thank Andrea Taylor Wimberg, Sexton, and Liz Gensler at CRFS, Kelsey Grimshaw at Graduate Student, CRFS for her suggestions with layout and design on Department of Community Sustainability, the 2nd edition, Amy Bond-Nelson Moore of Bond MIchigan State University Creative for layout and design of this 3rd edtion, (2nd edition) and Robin Miner-Swartz for copy editing of the 3rd edition. Support for this work comes from the W.K. Emily Kim, Kellogg Foundation and the Kresge Foundation. Undergraduate Student, Department of Community Sustainability, Photo Credits MIchigan State University (1st edition) Page 5: Farm with rainbow near MSU Student Organic Farm—MSU Center for Regional Food Systems Abby Harper, Specialist, Page 7: A woman packaging bags at Kansas City CSA Center for Regional Food Systems Distribution—MSU Center for Regional Food Systems MIchigan State University (1st edition) Suggested Citation Guel, A., Pirog, R., Kelly, R., McCann, N., Wimberg, T., Kim, E. & Harper, A. (2017). Funding sources for food-related businesses: Third edition. East Lansing, MI: MSU Center for Regional Food Systems. Retrieved from foodsystems.msu.edu/ resources/food_business_funding_sources MSU CENTER FOR REGIONAL FOOD SYSTEMS // NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES 4 NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES SECTION 1: INTRODUCTION Purpose of This Directory This directory provides an overview of various sources of financing that may be available to food hubs and other food-related businesses. This directory is a partial listing of what may be available across the United States; some examples may not be a good match with your particular circumstances. The format for this directory was initially informed by a listing of funding resources for food-related businesses found on the Food+Tech Connect website, a media and research company building a network for food innovators and entrepreneurs (foodtechconnect.com). Many of the funding sources listed in this directory are available for local food- related businesses across the United States, but several additional funding websites are specifically for Michigan. All the information for each funding entity has been researched through its own website. How the Directory Works The directory is divided into several category sources: crowd funding, accelerator, miscellaneous (non-Federal), and additional Federal resources. Each entity listed under these four categories will have the title of an entity, a URL of its website, a description of how it works, funding focus, funding limit, qualifications, and the entity’s financial geographic area. MSU CENTER FOR REGIONAL FOOD SYSTEMS // NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES 5 BEFORE YOU BEGIN, DO YOU HAVE A BUSINESS PLAN? At any stage of your business’s growth and While this directory is not intended to serve as development, an essential component of continuing a business-planning guide, below please find success is having an updated three- to five-year several resources for creating a business plan: plan that outlines how a company will grow its business and generate revenue. A good plan will • Building Successful Food Hubs: outline a business’s current state, resources, and A Business Planning Guide for Aggregating and abilities as well as a vision of where, when and how Processing Local Food in Illinois the business is to grow. The business plan serves familyfarmed.org/wp-content/uploads/2012/01/ as a guiding document, allowing all employees IllinoisFoodHubGuide-final.pdf and shareholders to have a unified vision of the • Minnesota Department of Agriculture, business goals, a trajectory for goal achievements, Starting a Food Business in Minnesota and a framework for assessment and evaluation. mda.state.mn.us/~/media/Files/food/ business/startingfoodbiz.ashx Having a well-thought-out business plan is especially important when seeking new lenders and investors. Many governmental resources provide access A plan should show the company’s long-term ability to business planning guides and templates: to generate profit in order to meet debt obligations and become self-sufficient. Potential investors, • The United States Small Business Administration whether large or small, will want reassurance that sba.gov/writing-business-plan your business has a plan for financial stability in the future. It will also help you better assess • Michigan.gov what type and size of funding is necessary. michigan.gov/som/0,4669,7-192-29943---,00.html • Missouri Business Development Program missouribusiness.net/article/guide- to-writing-business-plan/ In addition, the Michigan Small Business Development Center offers workshops around the state regarding business planning: • Michigan Small Business Development Center sbdcmichigan.org/get-started/ MSU CENTER FOR REGIONAL FOOD SYSTEMS // NEW FUNDING SOURCES FOR FOOD-RELATED BUSINESSES 6 WHAT TYPE OF FINANCING DO YOU NEED? New Hampshire Community Loan Fund designed Capital Compass, an online educational tool to help food businesses understand the factors that affect the type of capital owners may consider. The tool is not designed to make decisions for the business or a financier. Please check out the link below to see what type of capital fund may be most appropriate to consider for your business. Tutorial and directions are available in the link. communityloanfund.org/capital-compass Useful Definitions for Capital Compass: Debt: Traditional method of a lender offering a certain dollar value of credit (loans) Royalty: Growth financing structured as a revenue-sharing agreement Equity: Selling
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