Artem Milinchuk | FarmTogether
Artem Milinchuk
Founder and CEO of FarmTogether, a technology-enabled farmland investment platform that allows direct ownership of institutional quality farmland.
What Is FarmTogether? What Is The Mission And What Problem Are You Solving?
FarmTogether is a technology-powered, online marketplace for farmland investing. We provide investors with access to institutional quality US farmland investments.
We provide access that was historically limited and thoroughly underwrite every investment offered on our website. In addition, we make the investing process as seamless and enjoyable as possible; though our platform, investors have a single place to browse investments, review due diligence materials, and sign legal documents, all securely online.
Farmland investing can be an attractive component to a long-term real asset investment strategy. Owning farmland and leasing it to farm operators can provide investors with stable returns that are generated from both capital appreciation and lease income. The historical returns of the NCREIF Farmland Index have shown the asset class’ potential to provide healthy returns with proven downside protection.
Our mission is to democratize farmland investing - we aim to provide institutional and retail investors with greater access and options to invest in farmland while providing farmers and farmland owners access to cheaper and more flexible sources of capital.
What Is Your Background? What Led You To Starting Your Own Company? And How Did You Choose This Space?
I was born in Soviet Union and raised in Russia. One unique aspect of growing up in the Soviet Union is that most people had what you call “subsistence blocks”, or “datchas”, which were small patches of land.
Unike today where people take up gardening as a hobby, we had to plant otherwise we’d go hungry. As a result I have a deeply ingrained belief that land is precious. Food is essential to life, and that's why I love being in this space. Especially today in this environment, it’s really nice to be building around something as real as it gets.
On the other side of things, I believe that finance done well can lead to wealth and prosperity for everyone. I want to bring good financial tools and creative financial capital to farmers and farmland, and drive large impact for land.
I’m really passionate about what we’re building and I’m in it for the long run.
What Have Been Both Your Favorite And Least-Liked Parts Of Your Entrepreneurial Journey? What Have Been Your Most Challenging And Most Exciting Moments For You And The Company?
My favorite part is talking to farmers and investors. It’s incredible to build something that people want.
My least favourite is just being patient with the fact that still a lot of people don’t know farmland or farming; I need to be patient with educating people, dispelling common myths, etc. But it’s ok, all part of the job. :)
The most challenging has been finding the right team to work with. Our mission requires a lot of different skills, a lot of different people working together and finding those types of unique people takes time.
The most exciting is whenever we have a new deal on the platform. We look through literally 100s of deals, we say no to so many things and whenever one makes it through it’s a little bit like a piece of art that you’ve been working on for months and are finally ready to show it to the outside world. It’s exciting, it’s frightening, it’s humbling.
What Was The Fundraising Process Like For You? Tell Us About Your Investors And What You Use The Money You’ve Raised For.
I can’t tell you too much right now, but I will say that there’s a lot of interest in the agricultural industry, and our business as a whole, especially with our hand in regenerative agriculture and sustainability with the increasing focus on climate change and rise as a public and global priority. We’re contributing to something that’s bigger than ourselves, and it’s really exciting to be a part of a company with such a big mission and impact.
Right now I’m in the middle of fundraising and the biggest hurdle is that we’re creating something brand new, it’s a merge of investing tech, financial management, AI, agricultural tech… A lot of investors aren’t quite sure where to place us yet. That makes this really exciting because we know we’re on the cusp of something really big. If it was easy, everyone would do it.
How Does Farmland Generally Compare To Other Asset Classes? How Do You Think This Will (Or Won’t) Change In The Future?
The historical returns of farmland investing have been uncorrelated to conventional assets and securities, such as stocks, bonds, real estate, timber, and even short-term agricultural commodity prices, which results in a diversified portfolio that may be more resistant to adverse market conditions.
Can You Walk Us Through A Work Day? What Does A Typical Day For You Look Like From When You Wake Up Till You Go To Sleep?
No work day is the same for me, obviously as a start-up, there’s a thousand and one things that can be done each day. If anything, there’s not enough time in the day, and I think that sentiment is mirrored across all of our employees.
Right now I’m focused a lot on the sourcing side of things and AI, as well as funding. That’s taking up a big portion of my focus and time.
With COVID, our team is fully remote, although that’s been the case even before the pandemic, as we have employees spread out around the world. It’s a really cool culture and team to be a part of, truly international. We hire for great talent regardless of location, and that’s been key in finding the right players, expertise, and skillset for the team.
We have daily and weekly company-wide check-in, lots of zoom calls, a lot of slack communication and online collaboration tools. Everyone here truly eats, drinks and sleeps the business, not just because there’s a lot of work to be done, but because we’re all really passionate about the space we’re in and what we’re building.
Who Are Your Cofounders Or People Who You Work Very Closely With? How Do Their Skills Supplement Yours?
The team comes from diverse experience in farmland and tech. Together we’ve deployed over $1.2B of capital into agriculture, so you’re in good hands. We’ve worked at large organizations, major pension funds and investment funds, such as Prudential, Amerra, and Ontario Teachers’, which are some of the biggest investors in farmland these days and have been investing into agriculture for many years, decades.
How Has COVID-19 Affected Your Business And What Have You Done To Adapt To Any Changes?
High level, in Q1 2020 when everything else was already down almost 20 to 50%. Farmland had its second negative quarter I believe, where the total return was -0.1%. This is very resilient, it barely moved. For the year it will be a positive year, already Q2 2020 numbers are in and farmland is up 0.6%.
When we drill down to more individual subsegments, we have seen some markets impacted a little due to COVID. For example, transportation issues at the ports of San Francisco and LA have caused some challenges in getting crops to international markets, and that has caused some price pressures.
But overall, when we think about farmland versus the particular return for a farmer, it is very different. Farmland makes its returns from rent, and that rent is typically paid an unusually upfront. Cropland is actually in March, permanent crops it’s a bit more varied. Overall what you see is that, will the farmer walk away from the lease. With annual cropland, you can easily find another farmer. The impact on that to the actual farmland owner has been minimal.
You do have a portion of your returns that are crop revenue shares. Those have suffered a little bit, but overall you’re not looking at what we saw in April at a 50% drop to your portfolio. Not even close. Instead of seeing 4% crop yield, you might be seeing 3.5%, so really not that much of a difference.
In terms of long-term trends post COVID, what we’re seeing is that people around the world are becoming much more conscientious about safety, health and how they go about their day to day life. US food is of the highest quality in the world. We expect that demand to be a major tailwind for US food products moving forward.
What Is Your Favorite Quote And Why Does It Resonate With You?
“When something is important enough, you do it even if the odds are not in your favor." -Elon Musk
You can’t just not do something because it is hard. In fact, all the things in life worth doing are hard.
What Are The Top Three Most Important Skills A Modern Day Entrepreneur Needs In Order To Be Successful?
Conviction. Persistence. Agility.
Smarts are overrated in entrepreneurship. The fact is that any idea you thought of 10,000 other people thought of as well. Execution is all that matters. I put the three skills here in order of importance. Let’s unpack this a bit:
Conviction. You have to have to have to have conviction in your idea. And it better come from a place of real analysis, introspection, research and objective view of reality. I KNOW in my bones that farmland is a good investment and an asset class waiting to be discovered by all. I KNOW this because I spent 10 years in finance and global capital markets and this is a no-brainer to me.
Persistence. Everything will take longer than you think. Approaches will not pan out. Team hires will go wrong. List goes on and on. You have to be in it for the long haul and you have to keep going no matter what, drawing strength from Conviction.
Agility. Sometimes persistence turns into stubbornness. You have to be humble, nimble, listen to the market and try our many different things as your initial go-to-market idea might prove wrong. While a startup you can afford to make many more mistakes than an established company. Take this opportunity and go make those mistakes. Go at it with ease of relaxed determination and enjoy the journey.
Tell Us A Story Of An Experience You Had That Taught You An Invaluable Lesson.
A 7-yr old son of a friend of mine was doodling something or doing homework or something. At one point he stops and says “Oh no! I made a mistake...”. And then, without skipping a beat he goes “... but it’s ok, my life is still good” and keeps going.
So much wisdom! I hope we can all be like this kid. There is the acknowledgement of a mistake, and forgiving yourself for it (sometimes this is the single hardest part as an adult), remembering the bigger picture, being grateful for this life overall and then having the passion to carry on despite a mistake.
If You Can Have A One-Hour Meeting With Someone Famous Who Is Alive, Who Would It Be And Why?
Elon Musk, hands down. If I can achieve just 1% of what this man has done I’d be content with my life.
What Are Your Top Three Favorite Books?
What Does Success Mean To You?
Working on meaningful things with great people.
