Elizabeth Ü

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since Aug 19, 2014
Bolinas, CA
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Recent posts by Elizabeth Ü

Regarding that CA Farmlink document: unfortunately they are still in the midst of updating it (apologies, I had previously believed that the update had been completed), so there's no way currently to get your hands on it... but it should be available in the next few months.

I just spoke with Ali at CA Farmlink and she says you can contact her (ali@cafarmlink.org) for more information about when the new-and-improved version will be out, and how to get a copy.

-Elizabeth
4 years ago
Ah ha, thanks Ann, for further details... you're in an interesting spot, certainly. Before a big marketing push, and before you've attracted legions of adoring fans, you're right, crowdfunding of any sort doesn't make much sense!

What most people do in this situation is max out personal savings and credit cards. Not very exciting or innovative...

For the amount of $ you're talking about (ie, $25-50k), Peer-to-Peer lending (also known as P2P lending) is an interesting tool that many people have not heard of, and in some situations, it could be helpful, which I'll try to spell out here. Peer-to-peer lending a terrible name because you don't actually get the loan funds from people you know (which is what the word "peer" implies to me); it's usually complete strangers, and increasingly, institutions, that lend you the money through the online platforms.

In the US the two P2P platforms are Lending Club and Prosper. These are good options if you have a good credit score; if you don't, you either can't use the platform at all to get a loan, or your interest rates will be a lot higher. If you do have good credit, then you should be able to get a loan at a much better interest rate (ie, lower) than you'd be able to get from a bank for a line of credit or a loan... if you can get a small loan at all from a bank, which is not as easy as people think!

Lending Club and Prosper are really better for PERSONAL loans than business loans for a few reasons (one of which being that at least one of them doesn't offer business loans, and the one that at least did a couple years ago charged more for them as they were riskier to lenders), so you'd likely be applying in your own name rather than as the business entity. The way I usually recommend that people use these platforms is to get a personal loan to help consolidate other debts at a lower rate than what you might currently be paying to your creditors.

Microloan programs are another potential source of debt financing that isn't so much innovative as it is invisible to many entrepreneurs. (In the US, a microloan is anything below $50k.) More importantly than the money though, in my opinion, is that the organizations that provide microloans usually also provide a whole bunch of other important services to small business owners, and often the training that they provide can open the door to many other financing (and other types) opportunities! You can find microenterprise development organizations in your area here.

If you're fortunate enough to have a local Slow Money group where you are, make sure you're part of their conversations about how we can better use our savings and retirement and investment dollars to better support our local farmers and food producers, and you'll be well-situated to meet and continue the conversation with values-minded investors.

***

There are lots of other more innovative ways to find financing for businesses once you have lots of lots of customers who know who you are and that you're engaging with regularly, though social media or an e-newsletter or even just in person at the farmers market. For instance, Farm Fresh to You has a Green Loan program that offers lenders interest in the form of the vegetables that they deliver, and apparently the #1 question they get regarding the program is "how much do I have to loan you so that my entire veggie order would be covered by the interest?" Pretty cool! Just keep in mind that there are many laws you need to comply with before you offer any investment opportunity to the public... you don't want to get yourself in trouble by just thinking you can make something up and start pitching it to your whole newsletter! Definitely talk to a lawyer who is well-versed in securities law.

-Elizabeth
4 years ago
Ah, OK, I have a clearer sense of where you're coming from now... and I'm completely unqualified to answer what permaculture can do, as I don't claim to speak for them.

Have you been following this thread, Starting from Absolute Zero? Yes, getting onto farmland is important... and yes, owning farmland has its advantages. But if we agree that this is difficult-to-the-point-of-impossible in so many situations... then what?

I'm certainly not attempting to minimize the issue, and the organizations I listed (particularly Agrarian Trust) have far better-developed analyses of the problems and potential solutions than I do!

These are great questions, no doubt about that, and the moment is critical given the enormous amount of farmland that is about to change hands merely by fact of the aging ownership. I look forward to hearing what permaculture would offer by way of design responses to all of this.

Elizabeth
4 years ago
So today I'm excited to draw some connections between the various forms of capital that I referenced above, what Ann said directly above, and the "rich dude" that Troy mentioned in his post... and I need to apologize to Ann right from the get-go, because a forum is very challenging way to have a "conversation," and I don't really know what experiences you have had that led you to write what you did... and my experiences have led me to quite opposite conclusions.

Here goes:

I'm willing to bet that D Logan has all sorts of other capital to draw from, if not financial capital; so in fact, there is no starting from ZERO. We all have something valuable to bring, and often, what we take for granted about ourselves (or what we think everyone else has too, so it's not unique) is exactly the thing that someone else desperately needs.

I'm also willing to bet that no "rich dude" is going to invest in a permaculture-related project unless (s)he finds something of value in that project, or more likely, in the PEOPLE who are part of the project. Maybe it's the beneficial outcomes of the project that they're excited about. Maybe you are really cool and have lots of friends and get invited to all the potlucks and they want to bask in a bit of your glow. Maybe they just sense that you're cut out to do something amazing and they want to support you in that. The trick is that you Just Don't Know until you start talking, and if you're curious about who that person is and what makes them come alive, you'll ask the right kinds of questions to learn those details.

And finally, I'm putting money on the likelihood that if you treat Rich Dude like a bag of dollars that you're trying to get your hands on... you're not going to get very far in building that relationship. Similarly, if you genuinely believe that all people with money (or in control of money, ie, bank employees or people who invest other people's money) view their money as the only / the most valuable resource out there, that's what you're going to see... because if you don't believe that there are people who have money who are interested in using it to improve their communities... or make reparations for their family's actions generations ago... or to learn something new... or to create a really cool permaculture oasis where they can hang out with their families AND make a tangible contribution with their skills and time and connections... or to otherwise be an engaged citizen that shows up with what they have... you're never going to find them. Worse -- and egad, I wonder how often this is happening on this forum -- you're alienating them with your language and the assumption that there is nothing of value that they can bring.

My experience working with a variety of stakeholders in the "good food" or sustainable agriculture or social justice movements (whatever you want to call this bigger thing that permaculture would address) is that the people who are most successful at attracting interest of all kinds, whether that be volunteer support, or customers, or like-minded investors, you name it, are the people who are excited to learn how anyone who is interested may be able to participate. Many people with money would love to be included in projects that they believe in, and are waiting to be asked to be a part. Lynn Twist's book The Soul of Money is the classic text that explains (much more eloquently than I am here) the mindset and philosophy that I am just uncovering the iceberg-tip of here...

Bootstrapping is one way of going about your business. So is trying to do everything yourself. You might find yourself free of "strings," and burnt out and lonely with nobody else who feels they have a stake in your endeavor. A healthy ecosystem has a niche for everyone.

If you make no assumptions about what people want, you are free to discover what kind of mutually-agreeable arrangement you can negotiate between parties, and this is true in financial relationships just as much as any other kind of relationship. Sure, a lot of "traditional" financial agreements are not stacked in an entrepreneur's favor, but to say that ALL financial agreements force one to give up equity and/or control is just inaccurate. I will concede that the innovative and creative examples are not always easy to find, and writing a book full of them was my attempt to highlight some of the great ones that I've seen over the last 10 years of working in this space!

Ann, I realize that you have asked me to illustrate some of these innovative examples yet, and I haven't done so; there are just so many, and it's helpful to have some context. I see that you've now provided more context, so I will work on responding tomorrow. I just couldn't bear to leave this thread hanging without a beacon of hope to people who still believe -- rightfully so -- that it IS possible to find what you are looking for... even if it doesn't necessarily come in exactly the form you may have been expecting.

-Elizabeth
4 years ago
Something keeps coming up more and more strongly in my mind as I read between the lines of many of the questions posed in this section of the forum, and Eric alluded to this in an answer in a different thread...

Buying "my own land" or starting "a new business" or developing "a new permaculture demonstration site" or anything else new might not actually be the most appropriate way to achieve your goals, make the most efficient use of resources, take the best advantage of your unique skills and whatever else you bring to the party, etc... though it certainly seems to be the preferred option based on the questions here. Why is that, I wonder?

There are so many forms of capital: financial, social, ecological, intellectual, cultural, experiential... I realize that this part of the forum is dedicated to finances, AND let's not lose track of the other forms, as they will also be crucial in launching a new venture, or supporting an existing one.

If you are in fact starting from "zero," one possible path toward your dream (and I don't make any assumptions about what that is!) would be go get some experience working with others who are doing something similar to what you want to do... while perhaps getting out of debt, and even building your savings, in the meantime. Even if you find yourself in a position where you are not actually earning money while contributing to a project that's not "yours," if you are intentional about it, you can make significant gains in the other types of capital.

It doesn't matter whether you're looking to commercial lenders (such as banks or credit unions) or foundations or individual people to support your endeavors; they'll all want to see that you manage money well, you have a clear plan in place, have demonstrated that you can accomplish what you have said you would do, and you have actual experience in the field you plan to go into.

Quite frankly, I would hope that you would want to prove to YOURSELF, first and foremost, that the numbers related to your idea add up in a spreadsheet, and that you have what it takes, spiritually, physically, and otherwise, to DO that work... before you take the biggest risk of all: dedicating your precious time and life energy to this dream. Crunch the numbers and get some good experience on the ground and you'll be in a much better position to raise money from others if and when the time comes to launch out on your own.

-Elizabeth
4 years ago
Hi David,

people absolutely can -- and many do! -- spend and/or invest ethically / sustainably / according to their values / locally / organically / insert-the-buzzword-of-the-day-here ...as a way to promote change. So it sounds like we're in agreement there

FYI for people who are interested: the latest term/lingo/buzzword that relates to INVESTING with an attempt to create some positive change is "impact investing" so if you want to Google that up you'll find all sorts of organizations and resources...

As far as whether or not I see myself as part of this movement, I've been rolling my sleeves up in this realm (primarily as it relates to raising money and investing, not necessarily spending... though you can't buy products that don't exist for lack of funding to create them, so it's all connected, ha!) for the last decade through my work with the following organizations, all of which people interested in these topics might want to check out:
--Slow Money is perhaps the most relevant to the Permies.com audience, and to you personally, given the Slow Money work that's happening in France:

Inspired by Woody Tasch's book Inquiries into the Nature of Slow Money: Investing As If Food, Farms and Fertility Mattered, published in 2009, the Slow Money Alliance is bringing people together around a new conversation about money that is too fast, about finance that is disconnected from people and place, about how we can begin fixing our economy from the ground up... starting with food.

Through Slow Money national gatherings, regional events and local activities, more than $35 million has been invested in over 300 small food enterprises around the United States since mid-2010. Nineteen local Slow Money chapters and 10 investment clubs have formed. Slow Money events have attracted thousands of people from 36 states and 9 countries. Over 34,000 people have signed the Slow Money Principles. The first international Slow Money investment—a $20,000 loan to a solar dairy in Switzerland—has been made. Slow Money France is in the early stages of organizing, and inquiries about chapter formation have been received from Canada, Australia and Japan.



And:
--Investors' Circle is the oldest, largest and most successful early-stage impact investing network. Together with hundreds of angels, venture capitalists, foundations and family offices, we have propelled $172 million plus $4 billion in follow on investment into 271 enterprises dedicated to improving the environment, education, health and community.
--The Business Alliance for Local Living Econonies (BALLE): By connecting leaders, spreading solutions, and attracting investment toward local economies, BALLE advances the Localist Movement to create real prosperity for all.
--RSF Social Finance (formerly the Rudolf Steiner Foundation) exists for the purpose "to transform the way the world works with money." Pretty inspiring! Here are their values:

Spirit… The primary role of money is to serve the highest intentions of the human spirit.
Trust… People are best served by financial transactions that are direct, transparent, and personal, based on long-term relationships.
Interdependence… Economic success will be defined by social and ecological impact, not by financial results alone.
Community… Networks and associations will be increasingly important in the circulation of money.
Innovation… A deeply entrepreneurial culture is required to generate breakthrough ideas at the intersection of social change and finance.
Equality… All those seeking to align their values with their money will have access to opportunities for investing, lending, and giving.



4 years ago
Hi Amos,

Do also check out your local Small Business Development Center (SBDC); these are a program of the SBA. Through your local SBDC you can find all kinds of great (and often free!) business advice on a wide variety of topics, including those that you mentioned. Find your local SBDC here.

I hope you're also following this thread here on Permies.com, where we're talking about the business entity structures and resources for comparing them!

--Elizabeth
4 years ago
Another very juicy -- and challenging, and often controversial -- topic!

To start, it feels important to say that although Jay may have decided that the options he listed are not for him, many in his list have worked, and are still working, for many people. The point that he does make clear, and that I hope everyone will read loud and clear, is that not all options will work for everyone, in every situation. I'm a bit wary of blanket statements that say "this doesn't work" without going into details, because what doesn't work for some might well work for others, in just the same way that what does work for some might not work for others... it all really depends on what you're trying to do, how, why, and with what, right?

As I'll probably say in many different threads in many different ways over the course of this Q&A, my favorite strategy for finding something that will be a good fit for you... whether it's a land agreement, investment dollars, a breed of chickens, a business partner, a life partner, anything... is to do the following:

1. Get REALLY CLEAR on your own values, goals, timeline, constraints, connections, predilections, etc etc etc. Don't skimp on this step! It's the most important one, as you can get very distracted during the next step...
2. Do your research and find out what is actually available where you are, or at least applicable.
3. Narrow down your list of options and ask anyone who will talk to you what their experience has been with those options.
4. Talk to the people you'd be partnering with. See if you "click." Listen closely to what they are saying their values and needs are.
5. Negotiate an agreement that comes as close as possible to meeting everyone's needs.
6. Honor the agreement. If something's not working, talk about it, and renegotiate.

Often, as Jay points out, there just isn't a good match. Which is a bummer, particularly as this issue of getting onto land is, as he also points out, a huge crux in the sustainable food movement in general, particularly in the Ag of the Middle zone where you're bigger than a market garden but don't want to be beholden to market fluctuations in price / lack of brand loyalty / etc etc inherent in trying to sell to an undifferentiated commodity market.

SO... where else to go for resources and advice? Here are some amazing organizations who are making it their mission to address these issues (in the US):

The Agrarian Trust, here's a glimpse of what they're up to:
--Create and promote regionally-appropriate models that conserve productive farmland dedicated to sustainable agriculture, and make the land available to next-generation producers.
--Expand and enhance the financial, legal, and technical assistance networks that are central to the political and economic success of the next generation of American agrarians;
--Facilitate and develop the social and intellectual networks required to overcome the present cultural economy of industrial agriculture.
--Replicate successful models, scale up the rate of farmland succession.

On the homepage of their Resource Library, CA Farmlink has some really helpful Fact Sheets that break down some of the most common lease models that they've seen work, each including Benefits, Considerations, and tips for Preparing to do each of the following:
--Cash Lease
--Cash Lease from Government and Non-Profit Organization
--Crop Share Lease
--Ground Lease
--Lease-to-own

They also recently released a new version of a publication that covers a whole bunch of other ways for farmers (beginning and/or established to get on land, but I can't find it... I will make a phone call to see if/how it is currently available.

Equity Trust is another organization that has done some really innovative work around getting farmers on land. Yes it's true, easements are not always available, and their work shows that they can be very helpful in keeping farmland affordable for farming! The link above will take you to their Resources for Farmers, which include model documents and several publications on the topics of this thread.

Hope these help!

-Elizabeth

***

P.S. An aside re Detroit's urban ag situation, since Kim brought it up: there is enormous controversy surrounding what's happening there, from a social justice perspective... here's a video on the subject featuring my fellow Food & Community Fellow Malik Yakiniof Detroit Black Food Security Network: Future Cities video. And a 2012 Huffington Post article from Eric Holt Gimenez,
Executive Director, Food First/Institute for Food and Development Policy.
4 years ago
Hi All,

I was just on the CA Farmlink website and found these great resources with regard to choosing business entities in the USA, which led to my discovering even more of the same:

The IRS's business structures overview
(Note: this site does not cover the newfangled entity structures at all, despite their being legal and happening in many states)

Farm Business Structures Fact Sheet from NCAT
(Note: their conflation of B Corp and Benefit Corporations is inaccurate, and this doc doesn't cover L3Cs or Flexible Purpose Corporations)

Within the document above is this list of additional resources (I didn't click through to see if I had any opinions about these):
• Agricultural Marketing Resource Center
www.agmrc.org/business_development/starting_a_business/creating_a_business/legal-organizational-structure
• Information about B-Corp: www.bcorporation.net/what-are-b-corps
• Information about cooperatives on the ATTRA website: https://attra.ncat.org/marketing.html#cooperatives
• IRS Website for Employer Identification Number
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-(EINs)-
• New England Small Farm Institute
www.smallfarm.org/main/for_new_farmers/resources_by_topic/business_planning
• Small Business Information, Business Structure Essentials
http://sbinformation.about.com/od/ownership1/a/llcincorporated.htm

This should give the Americans reading this thread lots to go on in terms of further entity structure research!

Elizabeth
4 years ago

the advantage of sole proprietorship (sometimes called DBA) is that it is very easy to set up.



I'd add to this by saying that if you haven't given any thought to what entity structure you want to set up, or filled out any paperwork and paid fees... then you're automatically operating as a sole proprietor. Which means that you and your business are the same entity. If you're calling the business anything other than Your Name (ie, Cherry Hill Farms), then legally you are supposed to go through the process of establishing your "DBA" name.

Let's dig a bit deeper into the liability issue that Eric mentioned. Let's imagine that someone you've paid to staff your farmers market booth drops a case of zucchini on a shopper's toe, causing a serious injury, and they sue you for negligence or incompetence or whatever it is... if you're a sole proprietor, the person can come after all your PERSONAL assets, such as your house, not just the assets of the business. Same thing for a partnership; the person can come after your personal assets, and the assets of any formal partners of the business.

If you're organized as an LLC or a corporation, then they can only come after the assets of the LLC or corporation. Your personal assets, and the personal assets of any other investors or partners in the business, are protected by the law.

The other major consideration in choosing an entity type is taxation. How do you -- and/or your investors, current or future -- want to be taxed? In sole proprietorships and partnership and S corps, all revenues are considered personal income (for you, you and your partner(s), or all shareholders, respectively) for tax purposes. LLC and C corp taxes are handled differently, and there are taxes for both shareholders and the LLC or the corporation itself.

Note that this info is only relevant in the US, and that I am neither an attorney nor an accountant, so please check in with your professionals before making any decisions

AND in many states, there are new entity options that are some versions of the above, including Flexible Purpose Corporations, Benefit Corporations, and L3Cs... that are specifically for values-based businesses (specifics vary depending on the structure). There is also B Corporation certification, which isn't actually an entity structure, but a certification for entities. If people are interested in this topic I can say more.

-Elizabeth
4 years ago