ABOUT THIS EPISODE
Jim Schultz from Open Prairie talks about Funding AgTech Startups
Agricultural Tech Investment Discussion
Mary welcomed attendees to the "Stuck Time to Improv" session and introduced Jim Schultz, an investor, as the guest speaker. The discussion focused on the agricultural tech industry, highlighting its potential for startup businesses and the importance of preparation when approaching investors.
Agtech Investment Strategy Requirements
Jim discussed his focus areas in agtech, including automation and robotics, data optimization for farmers, and biologic technologies replacing synthetic chemicals. He outlined three key requirements for considering new equipment or technology proposals: understanding the channel strategy for reaching farmers, having field trial data across different crops and conditions, and having expertise on the team through advisors or board members.
Agricultural Technology Entry Mistakes
Jim discussed common mistakes made by new entrants in the agricultural space, highlighting three key issues: implementing a direct-to-farmer channel strategy, which he noted is difficult and slow to build revenue; and insufficient field trial data to prove technology effectiveness. Jim provided an example of a hypothetical robot weeding technology, suggesting the need for proper testing and validation before market entry.
Field Trial Data Distribution Strategy
Jim discussed the importance of understanding field trial data, particularly when testing different crops like tomatoes, cabbage, and corn. He suggested that ag retailers and farm co-ops, rather than traditional Cooperative Extension services, are better channels for reaching farmers. Jim provided an example of The Equity co-op in Effingham, Illinois, which has approximately 8,000 farmer members, highlighting the potential reach through such partnerships. Mary confirmed the need for beta testing with farmers.
AI Deployment in Agriculture Opportunities
Jim discussed potential AI deployment opportunities, particularly in John Deere's FieldView technology which provides farmers with field insights from tractor and combine diagnostics. He noted that while higher-yielding crops might not always taste better, there are opportunities to modify crops for different properties like oil content in soybeans or fiber content in corn. Jim also mentioned current market prices for soybeans and corn, explaining that farmers need prices around $12.50 for soybeans and $5 for corn to be profitable, which is above current trading levels.
Agricultural Technology Investment Opportunities
Jim discussed investment opportunities in agricultural technology, highlighting the potential for premium opportunities in corn and soy production, as well as organic farming initiatives. He emphasized the importance of a well-prepared marketing deck, including details on channels, field trials, team composition, and financial models for potential ag tech companies seeking investment. Jim noted that out of 500-600 deals reviewed annually, only 2-4 are funded, underscoring the need for strong presentations to get through the selection process.
Some useful links: Open Prairie - https://www.openprairie.com/
The Equity - https://www.theequity.com/
Shenandoah Valley Organics - https://www.farmerfocus.com/
