A US-Greek agriculture company will attempt to issue $7 million in a crowdfunded offering this week. The money will be used to acquire small farm in Greece and convert them into organic producers. The company believes that it can run them more efficiently as one large enterprise. This has been a fundamental driver in consolidation within the worldwide agriculture industry for decades.
While this offer is characterized as common stock, the stock is expected to pay a 7% dividend so that, in fact, this offering acts more like non-traditional mortgage funding.
I am following the story because I am considering working on behalf of a U.S. based aquaculture company on a similar crowdfunding offer. I expect that US farmers and aquaculturists will increasingly rely on crowdfunding rather than traditional lending in the years ahead. Successful offers take lots of planning but can lower the farmer’s overall cost of capital over the long term.