Why a book?
The marketplace of finance for food-based businesses is much like a farmers market: the entrepreneurs seeking capital to finance their ventures are the customers, the capital providers are the vendors, and the different financial tools are the fruits and vegetables available for sale.
Just like at a farmers market, customers shop with a variety of needs in mind, and each vendor offers a unique combination of wares… and many of the differences are invisible.
We can’t answer the question “which type of apple is best?” until we know what you plan to do with your apples; otherwise, it’s impossible to steer you toward the most appropriate variety. Do you want to eat them right away? Assemble a couple of your grandmother’s pies, in which each tender slice remains recognizable when served a la mode? Or do you want the apples to simmer into a perfectly smooth applesauce? Or maybe you plan to put your apples in cold storage to last you through the next apple season?
Similarly, each capital tool behaves in a different way, and one might be more appropriate than another depending on, for instance, the long-term vision you have for your venture, how long you’ve been in business, how you earn revenues, and how quickly you intend to grow… if you want to grow at all!
At the same time that we’re identifying the most appropriate types of financial tools, we can further refine your choices by learning more about your values and priorities. When it comes to apples, some people want to buy local if at all possible, some prefer the produce grown under organic or biodynamic conditions, others seek visual perfection. Some people just want the lowest price, and others will buy anything so long as their favorite farmer is selling it.
Likewise, financial tools and capital providers, which include individual investors and institutions like banks or venture capital firms, differ greatly in terms of their commitment to certain values. You’ll want to ask some very specific questions and listen carefully to the answers to determine whether or not you’ve found a good fit, regardless of whether you’re looking for the most mission-aligned partner, the lowest prices, or the most favorable terms.
Once you have finally identified the “right” financial tools, it’s entirely possible that you won’t be able to find a capital provider or investor that is willing to accept your terms, or the financing option you like best may not be legal in your situation… much the same way that certain apple varieties are not always in season, or might not grow locally. Then what? Do you take whatever you can get, or do you decide to grow “organically” without outside capital?
Many seasoned entrepreneurs will tell you that the way that the financing arrangements they ended up with either allowed them to build the business of their dreams, or forced them down roads they had no intention of following. But while there are entire bookstore shelves and television channels dedicated to helping amateurs to aficionados navigate the world of food, there are precious few resources to help entrepreneurs understand the capital options appropriate to food businesses – from “traditional” loans and venture capital, to the ever-evolving range of innovations in community-based financing.
There was no comprehensive guide to the Food Finance Marketplace. Hence… Raising Dough: The Complete Guide to Financing a Socially Responsible Food Business.