By JESSE KORNBLUTH
Published: Sep 7, 2011
Category: Food and Wine
Anybody want to order a gorgeous seed catalogue for $5?
Or, better, invest in a seed company?
This story behind this offer --- this extremely urgent offer --- begins in 2003.
After 21 years working in venture capital, Barbara Melera was more than ready to move on. But when she had lunch with a friend who also worked in venture capital, she expected nothing more than a pleasant hour of griping and gossip. Instead, her friend had a life-changing idea.
“I know a company you could buy,” she said, “but if you buy it, we won’t be friends.”
“It’s in terrible shape. And you’ll jump in --- and drown.”
Her friend wasn’t exaggerating. The company owned no computers. Shipping labels were created on a Smith-Corona electric typewriter. The accounting department was still using file cards.
But Landreth Seed was a sacred name in American gardening. Founded in 1784, it’s America’s oldest seedhouse. It introduced Americans to the zinnia (1798), the white-fleshed potato (1811) and the tomato (1820). It is revered for its vast range of heirloom seeds. With a new generation of gardeners sprouting up across America, Landreth was positioned to become the gold standard for high quality seeds.
So Melera and her husband Peter, a professor at the Robert Wood Johnson Medical School, bought Landreth. The years of 7-day, 80-hour weeks began. Business started improving. But the seed company needed seed capital --- and no VC or investor would step up.
In 2005, Melera told her story to Liz King, a wealthy Californian who had learned about Landreth from Melera’s cousin. King was captivated. She loaned the company $75,000.And it did it again. And again, until Landreth owed her $250,000, plus interest, due in five years.
The biggest issue: Liz King wanted her money. As Melera tells it, she asked King if she’d be willing to convert the loan to equity --- or give Landreth more time to repay it. King declined and turned the matter over to her lawyer.
Those turned out to be plague years. Landreth was battered by a busted economy, equipment failures, website glitches and a perpetual lack of capital. “You name it, there’s been an issue,” Malera says.
From here, it gets murky. Malera was too broke to hire a lawyer, so she handled King’s 2010 demand for repayment herself. Or didn’t handle it --- struggling to make payroll, she never approached King’s lawyer with a repayment plan. She says she didn’t receive notice of a court date or the judgment that she had defaulted. And so, she says, she was stunned to learn on August 31 that she had only 30 days to pay the loan plus interest --- or lose the business.
It’s not as if Melera has spent the past year cultivating her home garden. She’s actively pursued potential investors or lenders. She’s written letters to foundations. She’s courted the wealthy, cashed-out entrepreneurs, agriculture conglomerates and investment bankers. She raised not a dollar.
Barbara Melera is now reduced to an urgent request for help: “We need to sell 1 million catalogs to get rid of all of our debt, please help the oldest seed company in America!" That appeal has radiated from Landreth’s Facebook page to gardeners across the country; in a matter of days, 2,000 people have paid $5 for Landreth’s new catalogue, a thing of beauty printed in America on quality paper. At this rate, selling a million catalogues in less than a month seems impossibly ambitious.
In fact, Landreth only needs to book a million catalogue orders if it’s intent on paying off, as Melera writes, “all of our debt.” But her most urgent priority is Liz King’s $250,000, plus interest. And to pay that off, Landreth needs to sell “only” 250,000 catalogues by the end of the month --- or sell fewer catalogues but have massive seed orders roll in.
Hearing Melera’s story, you understand her wish for another year or two to settle Landreth’s debts. The company was profitable last year on sales of $500,000; it will be more profitable this year on sales of $600,000. And as more Americans decide they don’t want to grow vegetables from genetically modified seeds, sales of Landreth’s authentic heirloom products could grow dramatically.
Reality check: Time, for Landreth, ends on October 1.
If I were Barbara Melera, I’d be sweating blood. To my surprise, she’s both worried and guardedly optimistic. But then, she’s been digging in the soil for 55 of her 61 years. She’s got a very green thumb --- her gardens grow. And so, she believes, will this one.
Note: Whatever her troubles as a business owner, Melera is a stellar gardener. I was pleased to note she uses the raised bed gardening methoddiscussed here --- and adopted by many of you.