Seedlings

Trolling Industry Waters for Investors

When EVentures executives first came up with the idea forRooster.com, an online agricultural marketplace that allowsfarmers and suppliers to buy and sell fertilizer and othersupplies and equipment, executives knew they'd have toovercome agriculture's famously slow acceptance of newtechnology, as well as competition from other agriculturalstartups. So Cargill hedged its bets by persuading industryexperts like chemical giant Dupont and Cenex Harvest States,a producer-to-consumer cooperative system, to invest inRooster.

According to Ben Arndt, Rooster's former marketing director,that roster of industry investors has given the company somevital credibility. "One of the things that made Roosterattractive to a lot of the people who came here was the factthat we had Cargill and the industry players versus aVC. It's a completely different dynamic," Arndt says. Forexample, venture capitalists often take a learn-as-you-goapproach, gathering industry understanding even as they opentheir wallets. But at Rooster, the founding companiesdispense deep industry knowledge as well as capitalfunds. Arndt also finds that his industry backers helpeliminate some of the inevitable questions from potentialcustomers about the viability of dotcom startups in thecurrent business climate. "As we try and sell our products,we get: 'Is dotcom still in?' 'Is it safe?' 'Are you goingto go out of business?" Arndt says. "We try to say, 'Pleasedon't lump us in. We are backed by the industry."