A BUCK’S weekend isn’t your typical breeding ground for business ideas but that’s where the concept for ag-startup Cultivate Farms first appeared.
Natural resource manager, Sam Marwood, Melbourne, and beef cattle farmer Tim Hicks, Albury, were celebrating the groom-to-be when Tim expressed his desire to own his own land.
“What if there was some sort of crowd funding business where people could invest in young people to own their own farms?” he despaired.
Mr Marwood nodded. Days later, he was still nodding.
“I started brainstorming ideas and over the coming weeks I refined the concept,” Mr Marwood said.
The result was Cultivate Farms – an equity crowdfunding platform which pairs investors with young farmers.
“We find farms and investors and match them up.”
The model, which is currently being tested by Tim and his wife Tegan (both co-founders), would require investors to take an equity stake of up to 20 per cent in the farm. The term of the investment would be a minimum of five years and during that time the farmers would be paid a wage to operate the farm.
Cultivate Farms would take a five percent stake in each farm and work and supply farm advisers to ensure the business provided an annual return of four per cent to the investor.
Investors could be high net worth individuals, companies or retiring farmers who would like to keep a connection to their land.
Mr Marwood said under this model farmers could own their own land in their 20s, rather than in their 50s and 60s. This could drive economic development in regional towns.
“Regional Australia is struggling because young people don’t have enough capital. We want to rejuvenate communities and we think we’re onto a possible solution,” he said.
So far, more than 40 farm businesses have registered their interest with Cultivate Farms.
Their five year goal is to have 20 farms running across Victoria and NSW.