Seed Funding for Artesian Farm

Investor: Max M. & Marjorie S. Fisher Foundation
Investee: Artesian Farms
Asset Class: Private Debt - Seed Funding
Investment Amount: $50,000
Impact Sector(s): Agriculture & Food; Employment & Job Related
Date of Investment: 2014
Projected Exit: 2018
Financial Return Goal: Below Market Rate
 

The PRI program at the Max M. and Marjorie S. Fisher Foundation has been active for the past three years. Its mission has four pillars, one of which centers on the Detroit area in its support of early education, success in college, and access to jobs. The foundation is a strong advocate for attracting investment to local Detroit businesses from venture capitalists, institutions, individuals, and philanthropic organizations.

 

Phillip Wm. Fisher, the foundation’s vice chairman, is the founder of Mission Throttle, an impact investingfirm dedicated to propelling the success of social entrepreneurs. His familiarity with the space has helped the foundation to be well-versed in the need for capital to flow to Detroit’s small businesses—especially ones with the promise of stable job creation and training for the community.

 

Artesian Farms is a hydroponic produce-growing facility in the Brightmoor neighborhood of northwest Detroit. Its purpose is not only to run a thriving business, but also to transform and revitalize the lives of its employees in an economically depressed area. Artesian Farm’s founder, Jeff Adams, is a social entrepreneur whom the foundation already knew and trusted. Furthermore, Mission Throttle was involved in the early stages of the enterprise, and the nearby Skillman Foundation was a co-investor. Potential investment was fully vetted and the players were trustworthy, but it was still high-risk. However, the Fisher Foundation was ready to lead by example, ultimately lending Artesian Farms $50,000, alongside an identical amount from the Skillman Foundation. The venture raised an additional $300,000 from a group of investors for a total of $400,000 in start-up funding.

 

This opportunity arose out of existing relationships with the business’ founder, Mission Throttle, and the Skillman Foundation. Ultimately, it relied on Mission Throttle’s expert due diligence and risk assessment of Artesian Farms. This aided an internal discussion on the risks associated with the investment it was willing to assume before it was ready to invest.

 

Skillman Foundation invested $50,000 and the founder raised $300,000 from a group of local investors.

 

The investment will return 4 percent interest over a three-year amortization, with interest only in year one and repayment of principal scheduled for years two through four. The intended social impact is to create jobs, economic development, and healthy food alternatives in the hard-hit neighborhood of Brightmoor.

Impact transactions can take a long time to come to fruition. It took almost 18 months from the time the social entrepreneur contacted the foundation for an impact investment until the deal closed. During that time, various funders came together to provide technical assistance to the entrepreneur and share due diligence in order to get all aspects of the transaction to the point where it was investment-ready.