We spent the last few months updating our business model while ensuring that we stay true to our mission of unlocking the hidden value in cattle.

We conducted numerous focus groups with potential and existing investors. The central theme in the feedback received was that Livestock Wealth needed a simpler way of communicating what investors can expect when investing in livestock.

Reducing Conception Risk

The biggest driver of success in any beef farming operation is ensuring that cows become pregnant every year. For investors, the first year is very predictable since you are already starting off with a cow that is confirmed pregnant. For the cow to conceive again the second year the following five variables must align perfectly:

  1. The cow must be in good body condition when giving birth.
  2. There must be no shortage of nutritious grass and supplementary feed
  3. The cow must maintain the body condition while feeding itself and a calf
  4. The cow must be able to take the bull within three months of giving birth
  5. The bull must be effective in covering all the thirty females assigned to him within the three-month mating period.

Failure to conceive in that three-month mating period means the cow can only try again during following year’s mating period, thereby reducing the number calves expected for the current year. This negatively affects the income of the farm and the income per cow for investors.

Improving Predictability for Investors

The success of fellow companies such as Uber has hinged on enabling the customer to predict, for example, when their pick-up will happen (in minutes) and predict how much the fare will be thereby removing any anxiety to the user. We have taken a leaf from those ahead of us and adapted in the following manner:

1. Start every year with a pregnant cow

Investors like to own cows that are pregnant because they are not in control of the factors that affect conception. Farmers then take responsibility for the cows that do not become pregnant in subsequent years and avail only pregnant cows for ownership by Livestock Wealth investors.

2. Pregnant Cows: Limit the Investment Period to 12-months

The initial investment case was like a marriage contract with a lifetime commitment. Limiting the investment term to 12-month intervals will open Livestock Wealth to investors with a short-term outlook, while being able to cater to the long-term investor through the option to re-invest. This gives the power to choose back to the investor.

3. GrassBeef Calves: Limit the Investment Period to 24-months

Similarly, initial investment case for the grass-beef calves was like a marriage contract with a lifetime commitment. We have also updated this to ensure that when the calves have matured to 500kg, the owner gets all the proceeds from the sale and then gets to decide to re-invest.

4. Adding more farmers to the platform

Livestock Wealth currently plays the role of the farmer for the Fairplay, Rietfontein and Richmond farms. Our strategy has been to source cows from different farmers and move them to our farms, like growing a large family in a few months through adopting children rather than organically.

We did however have the foresight of piloting the outsourcing of the farming with the Makolobane farm and now have nearly almost two years of experience in it.

In the next few months we will be adding more farmers and farms to our platform. When a farmer partners with us, he is able to raise funding by listing some of his cows on our platform and still maintain them on his farm on behalf of our investors. The smart farmers will then be able to work with our investors to grow their farming operations.

Livestock Wealth than plays the role of the match-making site between farmers who want to grow their farms with investors looking to invest in cows.

What changes for you, the existing investor

We strongly believe the above offering is better for investors since it ensures that you never have to feed a cow that will not feed you. It also keeps farmers on their toes since they must avail another pregnant cow should they still need your investment in their farm.

Over the next three weeks I will personally get in touch with each of you to canvass your input and buy-in. This pivot is not as complicated as the Remain or Leave referendum, that said we value each of you and want to make sure that everyone understands the direction the company is taking and is fully bought in.

Conclusion:

If you go to our website today, you will notice we have already started testing the new offering with new investors with great success.

Yours in Wealth,

Ntuthuko Shezi

Cow Executive Officer