3c hapter - Index of
3c hapter - Index of
3c hapter - Index of
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Slow Money 155<br />
that overrode that impulse. His operation, Milk Thistle Farm in<br />
New York’s Hudson Valley, was exactly the sort <strong>of</strong> enterprise that<br />
Slow Money aims to support—a local, sustainable, growing dairy.<br />
By now, Hesse was under the protective watch <strong>of</strong> John Friedman,<br />
a chain- smoking lawyer who had recently moved with his wife to<br />
the Hudson Valley, leaving behind the cramped studio they had<br />
long shared in Greenwich Village.<br />
Freidman had read about how Hesse was trying to raise money<br />
from customers and “potentially getting into trouble.” In return<br />
for learning the dairy business, and perhaps some fresh- raised<br />
pork, Friedman <strong>of</strong>fered to help Hesse raise money for a new processing<br />
plant and keep him on the right side <strong>of</strong> the law. “Most<br />
farmers don’t have the fi rst clue about how to structure a deal, and<br />
can’t afford someone like John,” said a clearly grateful Hesse.<br />
Freidman’s fi rst order <strong>of</strong> business had been to put together an<br />
<strong>of</strong>fering memorandum so that Milk Thistle’s informal plea to customers<br />
for funding complied with securities laws (the <strong>of</strong>fering was<br />
permissible under Reg D, rule 504, if they registered with New York<br />
State, says Friedman). But soon it became clear that, to raise the<br />
$850,000 Hesse required, another approach was needed. So here<br />
they were at Slow Money, like everyone else, in search <strong>of</strong> solutions.<br />
Milk Thistle was in the sweet spot <strong>of</strong> the fast- growing market<br />
for high- end, grass- fed organic milk. It is, by nature, a fragmented<br />
market made up <strong>of</strong> tiny dairies (large brands like Horizon, owned<br />
by Dean Foods, are technically organic but use industrial- scale practices).<br />
Milk Thistle had been growing at 100 percent a year and was<br />
generating pr<strong>of</strong>i ts without the benefi t <strong>of</strong> a large operation to spread<br />
costs over. If Hesse could just get funding for a new plant and perhaps<br />
a bigger farm, he could take Milk Thistle to the next level.<br />
Hesse and Friedman talked to pr<strong>of</strong>essional investors and private<br />
equity types in Santa Fe and at a series <strong>of</strong> similar conferences<br />
for so- called patient capital. At one event, they met a potential<br />
private equity investor in an elevator—which tickled Hesse since<br />
Friedman had tutored him on the importance <strong>of</strong> the short but<br />
pithy sales pitch known as the “elevator pitch.” After drawn out<br />
negotiations, however, the deal fell through. Meanwhile, Hesse<br />
was spending so much time away from the farm trying to raise<br />
money that his employees teased him that he could no longer