Obama officials set up rural initiative at Georgetown
Two Agriculture Department officials in the Obama administration have set up an initiative at Georgetown University’s McDonough School of Business to try to continue to interest Wall Street investors in rural American businesses.
The origins of the “Rural Opportunity Initiative“ go back to then-Agriculture Secretary Tom Vilsack’s decision late in the administration to ask Matt McKenna, a former PepsiCo executive who was also his college roommate, to become a senior adviser and try to get investors to back some of the projects that the Agriculture Department was having a hard time financing because Congress kept cutting its budget.
Through McKenna’s efforts, CoBank agreed to establish a $10 billion rural infrastructure investment fund and USDA also set up two rural business development funds to attract private capital to projects that had USDA’s imprimatur.
When the Obama administration came to an end, McKenna and USDA Rural Business-Cooperative Service Administrator Sam Rikkers convinced Georgetown’s McDonough School of Business to start the new initiative. It is part of the school’s Global Social Enterprise Initiative which was set up to help companies create social value as well as profit, and to help nonprofits build partnerships and achieve their goals.
ROI’s role is to study rural economic development and promote the value of rural America with investors to back businesses that will create jobs in rural America. A major focus will be to help already-established small businesses that can expand their markets if they get more capital and business knowledge.
“There is a gap between the traditional sources of money and how to invest in rural America,” McKenna said. “People just don’t try that hard. You have to lead people in there.”
Rikkers said the initiative needed the “prowess” of a university business school in the nation’s capital, but that he and McKenna also recognized that it needed a rural base, and have convinced three land-grant partners, Purdue University in Indiana, Iowa State University and Mississippi State University to be part of the effort. The ROI also has a memo of understanding with USDA’s National Institute of Food and Agriculture to work together, but no financial commitment from the department.
McKenna and Rikkers hope they can achieve their goals of profitability and rural prosperity through conferences to inform the investment community about opportunities in rural America, workshops for potential entrepreneurs to learn how to approach investors, awards for business school students who have ideas for new businesses in rural America and an investment fund.
ROI held an initial informational session with Washington lobbyists and government officials in June. and has now scheduled its first rural investment forum in Des Moines on Nov. 2. It will be co-sponsored by Iowa State University.
McKenna and Rikkers said they are now raising money for the awards to the entrepreneurial graduate students and to establish the investment fund.