How to Fund Your Dream Ranch
Harvest Returns is a company that connects outside investors with ag producers to not only help producers obtain funding, but also connect others with agriculture. Chris Rawley joined Shaye Koester for a podcast interview to discuss how using outside investors is an opportunity for farmers and ranchers to start or grow their dream operations without having to jump through the hoops of the banking world.
Chris Rawley and his partner Austin Maness started Harvest Returns in 2016. Chris has a background in investing, and Austin has a background in agriculture. “We saw that there was a really strong need, especially in the ranching and the livestock world, for outside investors. Outside funding was needed besides traditional ag credit or bank loans for these operations to expand, grow their business or even start new operations,” said Rawley. Harvest Returns is now one of the few places that create opportunities for outside investors to have a stake in agriculture. The size of their investor pool is approximately 13,000 today.
Producers turn to Harvest Returns for a variety of reasons. “One reason producers come to us is that they have already sort of tapped out maybe their credit with a bank, or maybe they're just starting out. They also might not be able to secure a loan. The other reason they like us is because we're flexible with the types of investments we offer,” said Rawley. Whether you are a first-generation rancher or have generations behind you, there is an opportunity to work with Harvest Returns through loans or investments. This team likes operations that are focused on regenerative practices but keep an open mind to all the ideas out there.
Why do the investors get out of this? The outside investors want to make sure they get their money back and see a return on what they’ve invested. They also want to be involved in agriculture. After all, it is the reason we are all alive! Some investors like to visit operations and see how their money is being spent, but these are passive investments, which allows farmers and ranchers to have full control of how they operate. These investors consist of a variety of individuals. Some of them have ag backgrounds and others have never stepped foot on a farm or ranch.
The folks at Harvest Returns look for two main things when deciding who to work with, experience and business sense. They want to know how long you have been working in the industry or if you are young, they want to know who your mentors and trusted advisors are who will be helping you. Business sense is also crucial, as making sure investors get their money back is a critical part of the process. Submitting a business plan is also a part of the application process. “Only 5% of those who apply make it onto the platform and of that 5% only 80% fund,” said Rawley. The team at Harvest Returns does help in creating business plans and video pitches for promising applicants. They understand that most people have never done these things before.
So, what’s your dream operation and what’s holding you back from starting it? Before you assume you need to take the traditional route to fund your dreams in agriculture, think about how outside funding might be a more flexible option for your own team.
