The Startup Fighting to Save the American Farm with Modern Finance

0:00Rural economies impact urban economies. We just don't always see it day to day.

0:05Allie Garfinkle:Most farmers in America are running their businesses on razor thin margins. And out of every dollar you spend on food, they see about five cents. Now the margin structure is too squeezed and volatility is too high. You're at the knife's edge too often. Those numbers are starting to show up in a real way. According to public filings, more than 300 farms filed for bankruptcy in 2025. That's a 46 % increase from the year before. But here's the part that almost nobody realizes. A huge number of farms are still managing their finances on pen and paper. In this episode, I sit down with Mackenzie Burnett.

0:38Allie Garfinkle:She's Ambrook's co-founder and CEO, and we discuss how she's building an AI-driven financial toolkit that is designed specifically for American farms and farmers. I'm Allie Garfinkel, and this is Termsheet. Now, before we get to our interview with Mackenzie, on to this week's news. Now, this week's news is last week's news is next week's news, the SpaceX IPO. Last week, we got the news that SpaceX has confidentially filed to go public. Now, we've been hearing for a while that this is going to happen, but seeing the reports come down marks another step in what is going to be the biggest IPO in history by all counts.

1:17Allie Garfinkle:This is an IPO that is approaching$2 trillion in projected valuation. Now, if you're sitting there trying to think, okay, like, is that a big deal? The answer is it is a massive deal. On one hand, it is going to test retail investors' appetite not only for Elon Musk's companies, but for AI and where a lot of folks in tech see the future going, but it's also going to be a test for the private markets. One of the fundamental mechanics in the private markets over the last few years has been something called secondary sales. Now, if you're uninitiated, secondary shares are much like shares in any other company.

1:47Allie Garfinkle:For instance, if you're out there buying stock of Disney, you can, in theory, actually also buy stock in Anthropic or OpenAI or SpaceX. And that has been the case for the last 5 years, 10 years, 15 years. Secondaries have increasingly become a way that people are able to get into companies that are still private. Now, here is the problem. A lot of folks have been buying secondaries in SpaceX for a very long time. There are a lot of people caught up in this. A lot of people are going to be caught up in the SpaceX IPO. a lot of people who would be caught up in an IPO for anthropic or open AI. The other thing, too, that you need to remember here is the line between the public and private markets has been blurring for a long time.

2:28Allie Garfinkle:But we forget that a lot of the tools by which that is happening are not very well regulated, and a lot of them are not stress tested. And the thing about a SpaceX IPO, on one hand, is going to be, I'm sure, very celebratory for a lot of people, but is also going to be, in a lot of ways, the first big test for how the private markets have evolved. If you have feelings about this like I do, please leave a comment, shoot me an email. This is one of my favorite things to talk about. If there is something you want to know or you want me to look into, please let me know. This is something I am going to be spending a lot of time on in the lead up to both the SpaceX and OpenAI prospective IPOs.

3:03Allie Garfinkle:And now we're going to switch gears to one of my other very different favorite topics, farms. Here's my interview with Mackenzie. Hi, this is actually our first time meeting in person. Meeting face to face. How does it feel? It feels great. You mean you look great. Thank you. I was like monochrome. It's incredible. We'll do full monochrome next time. I am so excited to talk to you because this is a topic that our audience probably has not thought about for more than five seconds in their life. We are here because you are one of my favorite people to talk to about the state of farming in America.

3:35Allie Garfinkle:So last year, over 300 farms filed for bankruptcy, and that's an almost 50 % increase from the year before. You've talked before about the system being antiquated and failing farmers. What is the antiquated system and why is it failing? Antiquated system is maybe folks are on desktop software that they bought 20 years ago or they're really relying on paper ledgers, spreadsheets or bringing a box of receipts to their account at the end of the year. It's not because they are bad at doing the business. It is that it is a complicated business to run. And usually those activities are done by full time financial professionals on, let's say, like at a startup company.

4:18And so it's usually these husband and wife couples, if not, you know, there's other structures, obviously, as well. But these are family run businesses that are spending most of the time working on running the business, not on the financials of the business. The reason why that system is failing is because where you could have had the margin structure to kind of get by with really only, you know, doing a good job at being a craftsman or a farm. Now the margin structure is too squeezed and volatility is too high. You're at the knife's edge too often. In the most simplistic terms, imagine the least technical person you know.

4:52What does Ambrook do? So Ambrook, we build financial tools, so software for farms, ranches, and increasingly other types of businesses in what we call the real economy. You can think of processing or anything along the supply chain. So processing, general contracting, trucking, real estate. But we started with farms, and most of our customers are farms today. And by financial tools, what we mean are accounting software, banking, invoicing, bill pay, inventory management, that kind of stuff.

5:24Allie Garfinkle:Now, tell me a little bit about the origin story, because this is I hear hundreds of startup pitches a week. When this came through into my inbox, I was like, I haven't heard this one before. So what is the Ambrook origin story? Yeah. So the mission of Ambrook is it has always been and we have always sort of been orienting around how do we help build a more prosperous and resilient America? And when you dig into that question, you know, enough, you you hit a farm. Just the backbone of a lot of the resources that get produced in the U.S., not just actually food, but a lot of byproducts as well.

6:02Any of these natural resource industries are really at the heart of the U.S. economy, and they're very both naturally and nationally strategic, which is why you have a lot of infrastructure that is built around supporting agriculture in any country. So that was the core mission of the company. There's a long history that I have with agriculture and love for that in particular, but really started the company about six years ago with two of my friends from college. This is a very lofty mission. Like what does it actually look like to do this in a very kind of more grassroots American dynamism way, I would say, than something more top down and really wanted to work with, have the opportunity to work with millions of small businesses across America to do so.

6:47Allie Garfinkle:But why do farmers need their own financial software in the first place? A farm is unique only in the sense that it's kind of overly complicated for the size of business it is or the type of like staff it has to actually run the finance side of the business. And so they're really farms are really I think you can you can basically map a like an accounting system on a two by two of like, is it a single P &L or multi P &L business? So does it, you know, is it does one business line or a bunch of different business lines or locations or something? And then the other axis is, is it balance sheet light or balance sheet heavy?

7:29Balance sheet heavy basically doesn't deal with like the real world in some way, right? Like physical assets and liabilities and different entity structures.

7:38Allie Garfinkle:This isn't enterprise SaaS. We have things that go bad here. Yeah, exactly. Yeah. And so I think that that's exactly. And so farms are like all the way on this category that a lot of the existing like software out there was built for much simpler types of businesses, but they don't have the team or resources to onboard to like the hundred thousand dollar version of that. And I think we ended up realizing that like actually what a lot of these businesses were missing going back to the mission of the company, which is how do you build a more prosperous and resilient America? like if you think of it from the grassroots, they're missing a sense of real-time visibility into where they're making and losing money.

8:09Like they're not able to just like inspect their business and ask a simple feeling question, which is like, how much should I price, you know, this milk for or something? Like that's actually a really complicated like enterprise and managerial accounting question. They all should probably have CFOs, right? To like answer, but they don't. The beauty of software is that you can pick at those types of problems and questions and you can make things easier. There's a lot of things now that have made that a lot easier to be able to build software to answer those types of questions without requiring someone to be full-time in the books all the time.

8:38Allie Garfinkle:Tell me a little bit about some of the use cases. Like you mentioned pricing milk. What are some other things like that so someone sitting listening to this can imagine how this actually works for a farmer or a rancher? So a good example is we have one of our customers does is multi-enterprise. So it's the multi-PNL aspect. So they don't just grow crops, but they also have a rental business with Airbnb and they do wedding venues. So imagine that's sort of a common farm nowadays is like trying to spin out more and more ways to get different types of income. They had budgeted$35 ,000 for the rental side of the business.

9:19And they thought that they were on track for that. But with Ambrook, and they've only been on the platform for a couple of months, and they actually realized that they were overspending already on that by, you know, about$15 ,000. Now, for some people maybe who normally listen to your podcast, maybe$15 ,000 is not that much, you know, money in the P &L of a much larger business. But for a business that's doing, you know,$200 ,000 a year, it's a huge portion of their margin. And so really being able to like get someone a real time sense of where they are making and losing money so they can make decisions in real time to course correct.

9:53Our customers are the average farm or a lot of these small businesses across the area, but it does maybe it swings year to year, but, you know, maybe 5 % margins if you're lucky. And so that's it's not a lot of wiggle room, you know, to make mistakes.

10:07Allie Garfinkle:So the independent farms that are producing a huge portion of our food, a substantial portion of our food, our business is running on 5 % margin. Yeah, some data that just came out that the farmers see about five cents of every food dollar in America. Five cents? Five cents. Five cents. Tell me a little bit about the role technology plays in agriculture. Because on one hand, if you look at history, some of the earliest technological innovations are plows. They're related to farming, right? at the same time I think there is a perception that farming has lagged behind in technological innovation what do you make of that so I actually put the foot it down you're like okay we're in it now so every farmer in America like has a smartphone it's not like you know it's like they're finding out about Ampric on Facebook right I've noticed actually it's a common question I I hear sometimes from investors or even candidates which is like oh are farmers like digitally native and it's like no they're just as digitally native as anyone who uses consumer technology it's just that startups kind of have you know that we kind of live in a bubble where a lot of software is built for us and so we benefit from a lot of really great modern ui and so a lot of what software farms are using lags behind the hardware that they're using they're all on the latest like john deere or even sometimes they're choosing to opt for like older units that are easier to repair, but they are making a choice basically actively.

11:33They haven't historically had as much of a choice on the software side. That is a big reason why I think Ambrick, you know, Ambrick exists to help fix that. But I think it's from a relationship to technology perspective, sometimes it has been easier for them to do things on paper ledgers because the business itself is, in an ironic way, at a level of complication that like software doesn't, the existing software didn't really help with. And so it was, rather than figure that out, it was easier to kind of remain on spreadsheets or paper ledger. I mean, 50 % of our customers are coming off of pen and paper.

12:04There are millions of businesses in the U.S. that still run on effectively paper ledgers and spreadsheets and not any accounting software at all. We are, for half of our customers, their first business software really that they're using in a real way. And so they had choice before, you know, but it's just like they're choosing to work with Ambrook because we actually are solving their problem.

12:24Allie Garfinkle:When you think about those first customers, what was it like sort of getting a yes? I imagine there was some skepticism you encountered originally. There certainly is an incentive to be cost conscious. What were those first conversations like? So just give you a sense of like the how hard it is, I think, to get initial conversations. I want to know exactly how hard it is. Like it took us, I think, three years to convince 30 farms to switch over to Ambrook. And then it took us - 10 farms a year? I know. And then it took us like another two years to get to where we are today, which is over 7 ,000 customers on the platform.

13:04And it was also because the product was like, you know, the product is in a much more developed place now, but like you have to start somewhere, right? And so to convince our first customers to switch off of something like QuickBooks or to move on to us for their financial operating system, really, we did all sorts of stuff. We found one of our customers was like the brother of someone that I had talked to. You know, another one was like, we ran some very early Facebook ads. This was before QuickBooks was made for cowboys. But that were basically just like, do you hate QuickBooks and are you a farm?

13:37And like, we had someone call. It's straight to the point. We had someone call up and they're like, I do hate QuickBooks and I am a farm. And they've been like one of our like one of our instrumental customers like since the beginning. So I think it was like it wasn't glamorous. You know, we did like one of them was like we were a small team and I kind of like made this half joke, like half promise to the team. I was like, if you get us a customer in Hawaii, we will do our next retreat in Hawaii.

14:06Allie Garfinkle:Did it happen? Oh, yeah. So like it's very like two people on our team just like crushed through cold calls until we got like a like a farm in Hawaii. So we all went to Maui to go and onboard that customer. You all went to Maui to go see that customer. What kind of farm is it? It was it's this really cool. Actually, the customers is Hana Ranch is the end of like the road to Hana. Have you ever been in Maui? And so they do all sorts of really interesting things. They do some cattle, some horses. Thinking about those three years where you were picking up 10 customers a year, what were those conversations like?

14:41Allie Garfinkle:What were the questions they were asking you? What did it take to persuade them? And was it the same every time in some ways or was it completely different for every person? It got more and more similar near the end of that 30 than at the beginning. And I think that can kind of symbolize like that's what finding product market fit kind of looks like. By the end of the 30, you kind of know how the conversation is going to go. but by conversation two you're in you're in data points yeah yeah and I think convincing that I mean our first I think 15 or so customers we onboarded by hand as in we like in person we would usually fly take a connecting flight to a regional airport and then drive two hours to where the farm was and we would sit down with them by their computer and we would move them over onto the software manually and that was so important in terms of learning and then it was like a big deal when we moved to video onboarding but what customer number did you move to video onboarding it was like 15 or 20 something like that yeah and so for two years give or two years yeah we were onboarding people like in person you learn a lot from from doing that um but the you know the types of questions are all sorts of questions it was like anywhere from if folks hadn't had Had it moved to cloud-based software before, there's a lot of security questions related to that, that folks are still considering, right?

16:01We don't think about that initially in tech as much. And there's that to, you know, can it handle X, Y, or Z edge case, which in the beginning, those edge cases were actually more main cases that we couldn't handle, right, until we built that in. And so there are a lot of things that the speed and the pickup is not just the team's ability to learn how to objection handle or to do those types of things, but it is also like the product itself getting better. from the realization that, oh, we're missing this whole huge chunk of a workflow that we have to go and build. How do you think about customer acquisition costs?

16:33Allie Garfinkle:Because it sounds like it, especially at the beginning, it took a lot to acquire a customer, not just in terms of money, but in terms of time. How do you think about scaling down those costs? Yeah, totally. You want to basically find channels that get less expensive over time, not more expensive over time. The pretty normal cost curve for any SaaS product, but you do the things that are non-scalable, And then you basically realize that actually in the states in which we have more than 1 % market share today for farms, our CAC is half of the states where we have, let's say, 10 to 25 bps of market penetration.

17:07And the delta there is social proof. The delta there is word of mouth. And so we actually are seeing costs get down over time as more and more folks know other people who are on Ambrook. And the social proof can kind of sell itself. At a certain point, it's a network effect. Yeah, exactly.

17:21Allie Garfinkle:When you think about the state of farming in America, what does this audience need to know? I think farmers are more resilient and more fragile than people maybe appreciate day to day. I think over the past 30 years, you've essentially seen a hardening of the supply demand or like the inputs, outputs, basically, that most commodity agriculture. There are some farms that are diversifying, which is a strategy that increasingly folks are employing. Diversification is good business. Diversification also brings more complicated bookkeeping, which is where Ambrick helps. But let's say the vast majority of agriculture in the U.S.

18:02is still commodity agriculture. You have like wars will affect that now, right, because the price of fertilizer basically is like very much, very much tied to what's happening in the Middle East. um and so there's there's there's a sort of hardening of that um and and i think in that way there's there's a fragility to it there is a year over year like margins are getting thinner and thinner for a lot of these producers which which forces sort of a diversification effort but there's also a resilience which is that this has always been the case in agriculture like commodity markets go through cycles and you have to essentially like plan in the good times for the bad times And that is just a known, you know, I think with a lot of our talking to our customers, it's just so much respect for for our customers.

18:51But there is this almost like deep acceptance of the external factors that could just like weather the weather, you know, that could just wipe, you know, a whole season's worth of effort if it rains.

19:04Allie Garfinkle:Is it kind of a is it a serenity per thing at a certain point? Except accepting what you cannot. Yeah, exactly. you cannot change and i think the courage to change the things i can the wisdom to know the difference yeah exactly yeah and i think that there's there's just like a deep resilience in that and i think that like and i i think the the mission of ambric is how do you help tease that out so that the that resilience time frame can look longer and longer rather than just thinking through these very short-term cycles um which buying them time yeah buying them time and i think that i think that like most america it's not just farms like most americans today are living paycheck to paycheck right and i think you can extend that when we're on these different risk timelines, like, of course, like, folks aren't going to be thinking about, like, multi-generational things like climate change or something like that.

19:47I've just always been interested in, like, the rooting in sort of the realities of where most Americans are today and kind of solving problems from that lens.

19:54Allie Garfinkle:We are at war in Iran. It seems like, from what I've been reading, it's created kind of a perfect storm for farmers. Commodity prices around corn, soybeans were already coming down. There was debt pressure already for a lot of independent farmers. And the war in Iran has affected farmers. Can you talk about what you're hearing from your customers? It's a little bit of like, if it's not one thing, it's another. And in ag, you have different things that go up and down. So like when, when like, you know, crop prices are, might not be favorable, like cattle prices are sky high. And so like our cattle ranchers are doing great, you know, like in terms of some of the prices that they're seeing in the, in the markets right now, obviously that affects everything.

20:33But I think that the bigger thing, And your point is that these types of shocks to the system, if they don't always move together at the same time. And so, you know, fertilizer prices spiking does not correlate at the same time as like crop prices going up. And so you see the squeeze. And I think that's really what people are worried about is like the timing, basically, of these shocks and these squeezes in a way that maybe you if you didn't see the war coming. Right. Then you might not have hedged correctly. and I think those are the types of things that do worry folks.

21:06Allie Garfinkle:How bad is the squeeze right now? It's not as bad as it probably will get, but it's certainly not great. How bad do you think it could get? The reality is things have gotten slightly worse every year for U.S. agriculture for a long time. I think that's maybe what I'm talking about with the resilience or the resignation maybe, which is like something has to change. It has always been hard, so of course it will continue to be hard. Exactly, and so there's this resignation. I think that it's a little bit of like frog boiling in a pot of water sort of thing. And so like, yes, it's bad. Yes, it will get worse.

21:41The thing about like agriculture was just different, I would think, than like other industries along the supply chain is that you do that. The government is incentivized to give everyone a floor in the form of subsidies or other types of like support, which you do. You did see sort of like that with the trade war in China. Right. You saw a lot of payments out to to a lot of different types of U.S. farms. You do see some of it, but it's it's not it doesn't cover like everything, basically. So, yeah.

22:08Allie Garfinkle:Bearing in mind that farms, it sounds like, have always been tough businesses and the macro climate and the geopolitical climate has only made it tougher. What is it going to take for the tide to turn if that is possible? I think in order for, you know, tide to turn in U.S. agriculture more broadly, you're already seeing this with the folks who have been able to figure out something different. but it is it does look different it is not the same as like the last 50 years of commodity agriculture and i think you're already seeing that with a lot of actually are a lot of are the new farmers and ranchers on the platform for ambric they tend to be a little bit younger and they tend to actually have structures and and ways of doing things that are a little bit different so maybe it's actually like three friends that go in on a plot of land because land is quite expensive or there's just like you know folks have are growing even commodity crops but they also have this like these side businesses basically that they're hustling the airbnb you know the airbnb it's like i think there's a sense of like farmers have in the in sort of the the history of america farmers were always our first entrepreneurs and so that will continue to be the case and so i actually i think that people will figure it out people are really good at figuring it out um but the goal is essentially like how you give people the tools in order to do that farmers and ranchers and other business owners in the real economy are also the original 996ers so wait no say more about that actually like what do you think uh people miss about the role of farmers as entrepreneurs not just today but in american history no please yeah i mean i think i mean not to wade in to to that discussion but like do it do it do it i i just i think that it is both brutally hard and still a choice people make every day to show up and build these types of businesses and they are not glamorous they do not get a lot of press they do not you know but they're doing it because for like the love of the game as much as anything and like stewarding a family legacy that is the most worthwhile thing that if i can play a small part in helping folks live the lives, the types of lives that they want to live and live the type of American dream that they want to live, then I will be very happy.