4. Under capitalized
$40K initially from myself
√ $1M installed.
Choosing low cost equipment
√ Replacing for growth.
Lack of operating capital
√ Patient terms with growers and suppliers.
√ RBC Line of Credit since 2012.
Cost of interest on borrowed money.
No fixed land assets to offer security.
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5. High Cost of Growth
10-20% per year
Never optimal production levels
Always re-investing the margins
√ Versus developing working capital.
Always spending for the future
√ Marketing, staff, consultants, plans.
√ Before the revenues arrive.
Costly ventures and innovation
√ Some good and some bad (costly).
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6. Government Lenders
Canada Small Business Financing Program.
√ Farms not eligible.
√ Apply through your bank.
√ 85% loan guarantee.
√ Finance 90% of capital assets up to $500,000.
√ May require 25% personal guarantee.
√ Costs 2% registration fee and Prime +3%.
Business Development Bank
√ Must be 2 years in business.
√ Flexible terms. Higher risk and cost (prime + 3%).
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7. Grant Programs
Eastern Ontario Local Food
Conference7
Agriculture Adaptation Council: $15,000
NRC – IRAP: $69,400, 3 projects.
CME-Smart: $67,000, 2 projects.
Ag Canada Youth Hire program: $10,000
EODP: $17,142, 3 projects
Atlantic Canada...: $5,000
EODF and FEDDEV: possibly in the future
8. Private Loans
Promissory notes
Not regulated.
Simple one page, not guaranteed.
Various terms 1-3 years, 6-10%.
Currently $245,000, 14 people.
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9. Shareholders
I remain the only common shareholder.
√ Special Preferred Shareholders.
Highly regulated. You need a lawyer.
√ No sales to the public.
√ Accredited, close family, friends, and associates.
Fixed value.
Discretionary fixed annual dividend 6%.
Currently $684,000 from 24 people.9
10. Expansion Program
Budget $1.8M to move and expand.
√ Mix of subordinate debt & commercial debt.
Pitching to mainstream investors:
√ Merchant banks, equity firms, investment funds,
venture capital, agri-business.
√ Cannot meet their expectations.
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11. Go back to the organic community
Mission minded impact accredited investors.
√ Offering subordinate debt.
External accreditation as a Benefit Corp.
√ To validate our commitment to a triple bottom line.
√ Our score of 86 out of 200, minimum 80 points.
√ Average 84 out of 1941 sustainable companies.
√ Average 105 out of 504 B Corps.
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12. Channels to Impact Investors
RBC Generator.
√ $10-million for social and environmental ventures.
MARS Center for Impact Investing
√ Pitch fairs and Social Venture Exchange.
Mission Markets Exchange
√ Financial Marketplace For Sustainable Capitalism.
Slow Money
√ Annual conference, Boulder CO
√ Investing in food, sustainable ag, communities.
√ Pitch fairs and networking.
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