Obtaining financing for agri-food and food processing ventures has always been notoriously difficult, especially for small to mid-size enterprises. Banks are often unwilling to loan to businesses they see as risky projects or to those without equity, and venture capitalists often require more return on investment (ROI) than these operations are able to provide.
These sorts of roadblocks have been the motivation behind the growth of the Slow Money Movement, a U.S. investment system that attempts to support local agri-food businesses by changing the current thinking on investment strategies and the nature of profit. Founded by Woody Tasch, former chairman of the Investors’ Circle and a pioneer in finding funding for philanthropic causes and sustainable ventures, it is based on the principles of Tasch’s 2008 book Inquiries into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered, and on the Slow Food concept, which, among other ideas, emphasizes the support of local food systems.
According to the website www.slowmoneyalliance.org, Slow Money aims to “bring money back down to earth.” Going beyond simply ethical investing, the Slow Money Movement tries to get investors to re-think what ROI means to them. It encourages them to consider investment as a long-term process that connects them with their local economies, while helping to boost the growth of agri-food. It talks as well about building a “nurture capital industry,” that promotes healthy local business enterprises, rather than investment for the sake of a quick profit.
While the Slow Money Movement is still at a grassroots level in the U.S., many Canadian agri-food producers and processors hope the concept will find acceptance among financiers north of the border. Others aren’t so sure, and are hesitant to trade traditional funding schemes and sources such as banks, for a wider range of small-scale investors who, they fear, have the potential to meddle in company management. So in keeping with the nature of Slow Money, it may be some time before we see any of the traditional financial sources embracing the movement’s philanthropic principles. But with the North American economy still in flux, it’s certainly a concept worthy of consideration.