Creating Jobs by Commercializing Food and Agriculture IP
In 2023, Big Idea Ventures committed to launch the Generation Food Rural Partners (GFRP) Fund to invest $125 million over seven years in rural communities through industry-oriented investments in the food and agriculture sectors. Given the foundation of the food and agriculture system is born out of university research done across the United States, GFRP will partner with universities focused on innovations in food, protein, and agriculture technologies to fund 40 new companies which will impact 3,000 entrepreneurs. These companies will in turn create living wage jobs in rural communities across the US to build the next generation of food and agriculture technology companies. Investments in these new companies will help advance overall economic development and livelihoods in rural communities across America.
To capitalize on the challenges facing today’s corporate and lending environment, the Principals have created Generation Food Rural Partners I, L.P. (the “Fund”) . The Fund applied to participate in the Rural Business Investment Program as a Rural Business Investment Company (an “RBIC”) to permit the purchase of partnership interests by Farm Credit System institutions pursuant to regulations by the USDA. In January 2023, the Fund was granted its RBIC license by the USDA.
Through this, Generation Food Rural Partners commits to investing $1 million each in the creation of 40 new companies based on university intellectual property, with opportunities for follow-on investments totaling $85 million to the companies over seven years. The Fund’s team has partnered with a software company to build a machine learning platform that aggregates intellectual property from the Fund’s partner universities. That pool of IP is then filtered based on i) CAGR in the target sector, ii) level of competition, and iii) the level of industry interest. Once the Fund’s team has identified strong IP, they will begin to form a management team around the IP, license the IP from the university, and move forward with commercialization. The Fund currently has 23 committed partner universities.
These companies will create living wage jobs in rural communities across the United States and build the next generation of food and agriculture technology companies. The Fund and its team have extensive experience building companies and creating synergistic connections between startups and legacy food and agriculture businesses.
The Fund has assembled a network of enabling function partners to assist portfolio companies to hit the ground running on things from payroll and fractional CFO services to intellectual property legal counsel. This will allow the new company’s management teams to focus on building the business and not on administrative duties.
December 2023 to June 2024
The first tranche of capital will total $1 million each to create 40 new companies, deployed over approximately 12 to 18 months, and will be used to bring on the management team, license intellectual property, and begin commercialization efforts.
July 2024 to December 2030
If the new company meets its milestones, the Fund will deploy up to an additional $4 million per company of follow-on capital to drive commercialization and enter the market once the first tranche is fully utilized by the new company. The second tranche will be deployed once the new company has achieved its stated goals and milestones. The 40 new companies may not all make it to the follow-on round of capital. The total Fund will be deployed over a 7-year investment period.
Rural communities in the United States have always been the center of our country’s food production and this fund is one way to help those communities continue to grow economically into the future. As the US economy shifted from manufacturing to service-oriented businesses, talent has been steadily leaving the rural communities for locations of innovation and opportunity. Our goal is to stem this tide and create those very same centers in rural communities.
The Fund is primarily thematic and intends to make investments in rural communities through industry-oriented investments in the food and agriculture sector. The Principals have the experience in company building and network establishment to accelerate the growth of these burgeoning technologies into successful, rapidly growing businesses that will drive economic development in rural communities.
The future of the food and agriculture system is being born out of the research being done across the United States. The Fund partners with universities with promising research focused on innovations in food, protein, and agriculture technologies. The Fund has two Venture Discovery Directors (VDD) who are primarily responsible for understanding the university IP landscape and the university ecosystem in food, agriculture, or protein. The VDD and Principals have significant experience in creating companies and investing in the Fund’s areas of focus and have built the definitive network of subject matter experts needed to successfully commercialize these technologies.
Big Idea Ventures are primarily seeking limited partners to invest in the Fund. Big Idea Ventures are also seeking commercialization partners in supply chains of the food and agriculture industries. These commercialization partners will join in bringing the technology to market
The Fund has assembled a network of enabling function partners to assist the portfolio companies to hit the ground running. From payroll and fractional CFO services to intellectual property legal counsel, the Fund’s team has created a strong network of enabling function partners. This will allow the new companys’ management teams to focus on building the business and not on administrative duties.