New Venture Lab: Equipping Christian Entrepreneurs

Question

We are interested in starting an Alpaca farm.  Do you think this is something investors might be interested in investing in?

Answer

There are a whole host of dimensions that you should consider in terms of attempting to raise venture capital for any venture, let alone an Alpaca farm.  See my blog post Just Say No to Venture Capital to give you a sense for what you are up against when you try to raise capital for any business.

But let’s say that you decided to press on and you do raise some capital from an investor.  In other words, you were 1 in 4,000, you have the best business plan the investor had seen all year, you offered the best return and you were the most impressive entrepreneur they had met that year, etc.  What might it look like if you did take investment capital to fund your Alpaca farm?  I will get creative here and give you two completely made up scenarios of what it might be like:

Dream Scenario - You gaze out of the picture window of your historic farmhouse at the Alpacas grazing peacefully in the meadow.  You are exceeding plan, all of the Alpacas are healthy and thriving, your investor is happy and life is grand.

Nightmare Scenario - Your investors grind you down with daily emails demanding to know what you are going to do about the falling prices of Alpaca meat and wool (turns out Alpacas were a fad and not a sustainable trend); demanding to know what you are doing to lower costs; and demanding to know when they are going to get their money back.  You slog through the daily animal chores questioning how a small herd of Alpacas can suck up so much of your waking hours and wondering why you ever thought it was a good idea to enslave yourself to such a demanding investor.

As an alternative to raising venture capital, here are two suggestions on what I would recommend instead:

To See What It Might Be Like - Manage a farm with an animal operation for a friend for two whole weeks while they go on a much-needed vacation.  This should give you a sufficient indication for what it takes to take care of animals.

Creative Ideas for Launch - If you already have a farm, just start with one pair of Alpacas - rather than an entire herd -  to limit your risk and to see if you like the animals and the work necessary to care for them.  You can also test your ability to market your output.  If all goes well, you can grow your herd from there.  If you do not already own a farm, find a friend with a farm and lease enough pasture from them for your initial pair of Alpacas so you can test your idea.  This should keep your costs and risks much lower while you work to perfect your plans.