This Ag-Tech Incubator Offers Both Independence and Assistance
This story appears in the September 2015 issue of Entrepreneur. Subscribe »
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Many agricultural-technology entrepreneurs are farmers who’ve taken to their garages or workshops to build mechanical devices that solve common agrarian problems. To serve such inventors, government officials in Ottawa County, Mich., developed the Great Lakes Ag-Tech Business Incubator.
This three-year program—piloted in 2014 and now operating as an independent nonprofit—doesn’t corral startups into a communal workspace. Instead, participants work solo at home, periodically meeting with mentors in county government conference rooms to work on commercializing their equipment, machines, software or other ag-tech inventions.
“Farmers are very independent,” says Mark Knudsen, the incubator’s executive director. “A lot of them don’t want to rub shoulders with suits and ties.” But in the event a participant does need an office, workshop or warehouse, the incubator will broker a deal with regional landlords, he says.
Entrepreneurs receive guidance on patents and trademarks, focus groups, pilot programs, pricing, manufacturing, distribution and marketing. In exchange, they agree to give the incubator 2 percent of their gross annual sales once their companies become profitable, with a contract buyout available after nine years.
So far, half a dozen Michigan-based companies have joined the incubator. The program considers startups of all stages, as long as the profit potential is high. “Our target is to have 15 high-quality businesses at the end of three years,” Knudsen explains.
GrassRoots Energy, which manufactures $100,000 to $500,000 ethanol-extraction machines, is one of those companies. “We had the system operational,” says co-founder Frank Van Kempen. “But the business planning and the permitting through the government—all that was beyond our capabilities.”
Great Lakes Ag-Tech has already assisted GrassRoots with business planning, marketing and permitting of its products.
“They gave us a shot in the arm,” says Van Kempen, who hopes to sell one or two machines this year and 10 in 2016. “They opened doors for us.”
