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Farmer-owned Investment Group Grows Profits

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Almost everything you eat and drink starts with the hard work of farmers. Every day the modern farmer contends with extreme weather, drought, and disease, but new technology is making it easier for farmers  to bring fresh food to American tables. The unique investor group, Ag Ventures Alliance, supports promising early-stage agricultural technology companies that are developing technology to increase productivity and profitability at the ground level while promoting a healthy farming ecosystem.

Ag Ventures Alliance was started by three farmers looking to increase demand for their corn in 1998. “They wanted to take control of their future,” shared Spencer Stensrude, Executive Director of Ag Ventures Alliance. “This was during a time, actually similar to the last few years, where commodity prices were very low, there was excess supply, and they wanted to do something about the future of corn production for Iowa farmers.” 

These small Iowa family farmers invested in a new technology coming to ethanol plants that soon paid out with large dividends to the families and friends who invested early. Out of these first investors, Ag Ventures Alliance was born, with the mission to invest in agriculture technology (ag tech) that will disrupt the agricultural industry and create a better future for farmers.

The Rowbot embarks on a field trial made possible through Ag Ventures’ early investment in the promising technology. Photo courtesy of Ag Ventures.

“We’re making venture capital investments in startups that are kind of at the intersection of different enabling technologies and agriculture,” Stensrude shared. “Every investment we make is with the ambition of increasing farm profitability.” 

With over 30 companies in their portfolio, Ag Ventures is growing, but they are still a relatively small investor. Often writing $100,000 into a seed round for startups looking to hire their first team members or develop their prototype. Stensrude commented, “I think that that’s where you can kind of make the biggest impact and biggest difference with supporting these ambitious founders and entrepreneurs that are trying to launch something that’ll change the world.”

Ag Ventures is different from traditional investment companies. “The thing that’s most unique about Ag Ventures Alliance is that we’re owned by farmers,” said Stensrude. “We’re structured as a cooperative. We have about 300 family farm members, and those are the owners of this organization.” 

Every company Ag Ventures invests in needs to be approved by the organization’s investment farmer committee, which means Ag Ventures is made up of subject matter experts who happen to be the end-users of the developing technology. That idea led to Ag Ventures’ newest program, The Farmer Trial Network, which connects start-ups with farmers willing to field-test their inventions for a sliver of equity or ownership in the companies. 

The Rantizo crop-spraying drone up close and personal, at a field-test facilitated in part by Ag Ventures. Photo courtesy of Ag Ventures.

“We’ve been grateful to have Ag Ventures Alliance as an early investor in Rowbot and look forward to continuing partnering with them as we grow the business,” Kent Cavender-Bares, Rowbot Systems CEO, shared with The Business Download. Ag Ventures’ portfolio includes ag tech investments such as cover crop laying “rowbots,” which are aptly named drones that spray crops without damaging the soil, and emerging technologies in the digital carbon capture and sequestration market. “As farmers, we’re definitely trying to build a healthy ecosystem, and that is what we’re trying to support in the startup world.” 

Ag Ventures hopes to leave a legacy of opportunity for farmers to thrive, and every deal they make supports the next generation of farmers. “We are seeing this regenerative agriculture movement that is decreasing inputs and increasing soil health to make higher quality crops,”  Stensrude said. “I am hoping that creates more opportunity for there to be more farmers out there –– reverting back to a situation where people can make a living off of smaller farms –– providing specialized products and higher quality.”

As a cooperative investment company made up of multigenerational farmers, the team at Ag Ventures is continuing to follow in their founders’ footsteps. “From the very beginning, it was a grassroots small group of farmers trying to change the future for themselves,”  Stensrude shared. “We’ve really just continued down that path, and we did kind of widen the scope and where it’s not necessarily investing in these technologies just for farmers in North Iowa. We’ve got more members than that now, but we have continued that mission of investing to improve farm profitability.”


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