The Great Lakes Ag-Tech Business Incubator in West Michigan has scored a new sponsor: GreenStone Farm Credit Services, an East Lansing, MI-based financial institution that is the largest agricultural lender in Michigan and northeast Wisconsin.
As part of the new partnership, GreenStone will contribute $25,000 to support the commercialization efforts of the incubator’s startups, along with financial counseling and business finance training. GreenStone will also offer loans to qualified ag-tech startups. The incubator’s other sponsors include Barry and Allegan counties, Consumers Energy, BizStream, and the Watson Intellectual Property Group.
Paul Sachs, who manages the incubator from the offices of Ottawa County’s planning department, called GreenStone “a phenomenal corporation” that has strong ties to Michigan’s agricultural community. “Their interest is really a natural fit,” he said.
The Great Lakes Ag-Tech Business Incubator offers a slightly different model from most incubators: Instead of taking a percentage of its startup clients’ equity, the incubator instead opts for a percentage of the company’s future sales. Once a farmer-entrepreneur joins the incubator, he or she receives assistance with product validation, patent filings, market and consumer acquisition, regulatory permits, business plan development, supplier connections, and management team recruiting. The incubator does not make a capital investment in the startups it works with.
“Our services are customized for each individual client,” Sachs said. “There’s no standard template.”
Since the incubator opened its doors in late 2014, it has worked with a number of entrepreneurs, but in true early-stage form, two of those efforts—a drone startup and greenhouse management software company—have since petered out after the technology failed to make it through the validation process. The incubator is currently servicing two startup clients, ethanol-production equipment maker Grassroots Energy and Synergy Power, which is developing an engine that can run on waste heat. Sachs expects to add more clients in the coming months and is leading a webinar this afternoon with ag-tech students at the University of Michigan as part of his outreach.
“We’re trying to get the word out that we exist and make connections with the statewide entrepreneurial services ecosystem,” Sachs said. “There are so many players in the field—it’s a matter of finding the right organizations to partner with. We’ve been surprisingly effective without any marketing.”
For now, the incubator will continue to concentrate on luring Michigan-based entrepreneurs into its program, partly as a condition of the funding it received from the state legislature. However, Sachs said he might open the program up to entrepreneurs across the Great Lakes region in the future.
“We’re taking it one step at a time,” he added. “When we talk with farmers, they might not even recognize they have an invention to solve farming problems. Even if they don’t want to start a company, we help them license their product. We have the ability to assess their technology, determine if it’s viable, and help them earn a little supplemental income.”
