01. Sub Ag Bank


This page will discuss the idea of a Suburban Agriculture Bank.

There are a number of sustainable companies in MoCo that could benefit from having capital to expand their companies.

The Suburban Agriculture Bank, or sub-ag bank, is meant to be an institution to raise capital for these companies. The word “bank” was chosen to describe this activity because traditional banks have the role of funding traditional agricultural. The sub-ag bank, at this early stage, however, will not strictly speaking be a bank, but will have activities similar to a bank, as outlined below.

Someone who is experienced in a field of agriculture, such as farming, ranching, running a winery, etc. can apply for a loan to expand an existing business or start a new business. The numerous lending institutions have certain requirements that can be met by someone who has the right work background.

However, these banks, funds, non-profit grant distributors, are not set up, in general, to lend money for what we are calling suburban agriculture. Once sub-ag has established itself as a profitable venture, sub-ag companies will be able to go to traditional lenders for capital.

Until that point, the sub-ag Bank will step into the financial vacuum.

The bank has three roles:

(1) To directly connect investors with companies.

Say someone has a large portfolio and wants to invest 5% of it in local, sustainable agriculture. The investor understands the investment will be a relatively long term, relatively low return investment — a so-called slow money investment. The sub-ag bank will work to match such an investor with local companies.

(2) Crowdfunding.

The sub-ag bank will run crowdfunding efforts for local companies.

(3) Market Fund.

The sub-ag bank will create a general fund that will invest in the market, that is, in several local companies, on behalf of a group of investors.