This article was originally published at Memphis Daily News.
Jan Bouten, a partner in Innova, the local early stage investment capital group, has some basic standards when deciding on startup companies to invest in.
He looks for “a solid team with a lot of experience in business” and the founders of AgriSync, an Iowa ag tech startup, checked that box.
“We talked to farmers. We talked to equipment manufacturers. We talked to dealers. There was nobody who said this is a stupid idea,” Bouton said of the road to some early-stage investment by Innova, the biosciences technology and bioag fund created by the Memphis Bioworks Foundation.
“They had plenty of customers, which is always a good sign,” he added. “Paying customers are easy to get. People that keep paying you are harder to get. … You have to deliver quality service every month time after time. Otherwise they can just walk away.”
So when Jerrod Westfahl, the head of finance and operations for AgriSync, made his pitch at the AgLaunch part of the Mid-South Farm & Gin Show this past weekend, he had a lot more than just an idea he needed money to further develop.
“It’s really about building the business at this point, acquiring more customers, and doing that to scale requires some investment that our revenue would otherwise cover,” Westfahl said. “First and foremost we are looking for just a little broader awareness about who we are and that we exist and that we’ve solved some real problems.”
AgriSync has about 150 companies using its SmartPhone-based app that he describes as “basic software technology.”
“The human element of farming and food sometimes gets overlooked with all of the other tech innovation that’s happening in agriculture,” Westfahl said. “We think people are on the critical path to cause a change in food and farming for the long run. We’ve created a tool … that allows farmers and advisers to do remote visual video for support. It’s kind of like Skype and Facetime but a whole bunch of other real special bells and whistles that make it particularly useful on the way farming gets done.”
AgriSync and the other 14 startups that made pitches at the Farm & Gin Show this month are either alumni of the AgLaunch accelerator program, currently in the accelerator, have received investment from Innova or are in the due diligence phase of consideration for investment by Innova.
The experience provides traction for the annual meeting of AgLaunch and the Farm & Gin Show, which this year marked its 66th anniversary.
“We’re actually doing deals,” said Pete Nelson, president of AgLaunch. “All of these companies are connected with our farmers in the Mid-South doing trials.”
And this year for the first time, a state grant pilot program reimburses farmers for buying commercial technology through the AgLaunch program and offers valuable feedback about what Nelson says is the priority – “real world ag problems.”
The farmers are a large part of determining whether an idea is something that matters to what they do every day.
“We are totally accessible,” Nelson said of AgLaunch. “But what we do is we put your idea into the database. The farmers help screen it. The investors, it enters a rigorous process and it changes with every iteration as you go through the program.”
A common rule among those on all sides of the AgLaunch presence at the Farm & Gin Show forum is that just about any business plan can be a much better plan in a year’s time.
Initially there was some gap in the farmers’ experience and that of the startup owners, especially those who work in tech.
But as business plans change and there is more continuous interaction between the two groups, investors like Bouten are seeing something else they value – startups with lots of software and farm experience.
Westfahl said the earliest uses of AgriSync have been in precision ag to “take a look at a complex situation and get better help faster.”
Westfahl is anxious to expand the market for the technology into the South.
Nelson wants Memphis to be the place where investors, startups and farmers intersect.
“The work at Agricenter – there is a real strategic business plan,” Nelson said. “The dream is really starting to move. It is a dream of, ‘we want to be the best place for bringing in ag-tech companies to market.’ And we want to be the best place for women and minority entrepreneurs in agriculture. That is starting to resonate with investors.”