Plant a dollar and watch it grow: Harvest Returns links investors, farmers

Harvest Returns co-founder and CEO Chris Rawley

Investors looking to diversify a portfolio from traditional stocks and bonds typically go to real estate.

But agriculture investments can be just as lucrative, if not more so, says Harvest Returns co-founder and CEO Chris Rawley.

“[Agriculture] is a lot like real estate as an investment because you’ve got something solid and tangible,” Rawley said. “It’s not just a stock you’re investing in. You’re investing in something that’s associated with the land.”

Rawley is a Dallas native with a military background. He served as a Navy officer in the ‘90s and has spent the past 25 years active in the reserves.

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When he left active duty, he came back to Texas and started working in commercial real estate, where he says he got the real estate and alternative investment bug.

Rawley holds a bachelor’s degree in political science from Texas A&M University and an MBA from George Washington University.

With his educational and alternative investment backgrounds in mind, he decided to start an investment business.

As he was looking for business inspiration in 2016, the equity crowdfunding model was taking off in real estate thanks to platforms such as RealtyShares and Realty Mogul, where people could invest a fairly small amount of money in private real estate.

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He decided to bring the crowdfunding investment model to a new venue — agriculture. He brought the plan to his partner, Austin Maness, an Army veteran, and the idea for Harvest Returns was born.

Based in Fort Worth, Harvest Returns is an online agriculture investment platform that acts as an asset manager, matching investors with private agriculture deals, and helps farmers raise capital through the equity crowdfunding model made possible by the Jumpstart Our Business Startups (JOBS) Act, signed into law by President Barack Obama April 5, 2012.

The act required the U.S. Securities and Exchange Commission to write rules and issue studies on capital formation, disclosure and registration requirements.

After the passage of the JOBS Act, equity crowdfunding took off in real estate investments, as Title II of the act removed general solicitation restrictions, allowing capital to be raised and deals to be advertised more publicly.

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Rawley lives in Parker County and he says he’s exposed to ranchers, farmers and people growing and raising crops on a daily basis. He explained that as people are talking more about responsibly sourced ingredients and farm-to-table meals, he thought why not invest in the people who produce the food?

“We want to invest in a farm, help a farmer grow his farm and realize his dreams,” Rawley said. “You can do that via our platform.”

Rawley said there are three things driving agriculture investments: global demographics, diversification and returns possibilities.

On global demographics, Rawley explained that, just as people need cotton and wool fiber for clothes, they need timber for houses and new construction, and they need farm products for food.

As far as diversification in an investment portfolio, agriculture is not correlated with the stock market. Rawley said that if someone’s portfolio is primarily made up of stocks and bonds, he’s going to want something in it for when the market makes a major correction.

“If you look at farmland, say U.S. farmland, over the long term, it actually out-pays the S&P 500, out-pays gold, out-pays inflation,” Rawley said. “The returns are there for people wanting to look for them.”

Harvest Returns’ platform offers a variety of risk and return profiles, Rawley said.

Investors wanting a steadier return can choose an investment backed by a contract with a major company. But the platform offers deals with higher risk – for example, the project is overseas – for higher returns.

Everything in the investment process is done online through Harvest Returns’ online platform and dashboard.

All tax documents, agreements and disclosures are signed electronically, and money is transferred via wire or online.

Then, as time passes, updates on the farmer’s progress and investment return will be available through both the dashboard and email updates from Harvest Returns.

The type of investors for whom Harvest Returns’ platform is intended are people who want to diversify their portfolio with assets not correlated to the stock market, Rawley said.

Pension funds, insurance companies, university endowments and others already use this type of investment, he says.

“Since the ‘80s, institutions have really been involved in agricultural investment, but now because of this equity crowdfunding model, it’s possible for somebody without tens of millions of dollars to get involved on a much lower scale,” Rawley said.

Harvest Returns’ minimum to invest is $5,000 for some deals.

He noted, however, that this type of investment isn’t for someone looking for an immediate return.

Rawley said that most of Harvest Returns’ deals are three years or longer, which can keep people’s money tied up. Although it may take longer to see the returns, Rawley said, once they do come in, they may be higher.

“It’s a great investment tool for people who are saving for retirement and may not need that money for 10 or 20 or 30 years even,” he said. “That’s the same reason that institutions are investing in it. … They don’t need their money right away, but they want to grow their wealth over the long term.”

From its Fort Worth base, Harvest Returns works with investors and farmers across the globe from Texas, Arizona, Nevada and Florida to Brazil and Belize, India and West Africa.

Rawley says more than 100 farmers from around the world have come to Harvest Returns, putting them at a deal flow of more than $350 million.

But Harvest Returns doesn’t list all the deals its offered.

The Harvest Returns team vets all potential deals, looking at the sponsor, the farmer’s track record, the market for the farmer’s crop, production methods and other factors before deciding to offer the deal on its platform.

Only a very small percentage of the proposed deals make the cut, he said.

“Our business is based on integrity. We want to connect investors with farmers who have a very tangible investment that they’re selling,” Rawley said.

The company wants to deal with both investors and farmers who have high standards of integrity.