Jacob Israelow is the founder of Dirt Capital Partners, an investment platform that partners with regenerative farmers and ranchers to help them secure long-term access to the land they farm—and ultimately own it. He left Goldman Sachs and returned to the New York area in 2012, bringing a background in real estate and investing and a growing interest in local food systems. After spending about a year talking to hundreds of farmers, land trusts and others across the Northeast, he built Dirt Capital around a simple question: could investment capital help good farmers become landowners without taking value away from them?

The mechanic at the heart of Dirt Capital is a lease-purchase model. The fund buys a piece of farmland alongside one specific farmer or rancher, signs a ten-year lease with a purchase option locked in at a pre-agreed price at year five and again at year ten, and lets that farmer buy the land back once their business, and their balance sheet, have caught up. It is a way to get farmers onto land conventional lenders will not yet finance, without turning them into permanent tenants.

In this episode, Koen and Jacob dig into what sits underneath that model: how Dirt Capital manages real estate risk while leaving the farm business risk to the farmer, why regenerative practices do not automatically make land worth more, what happens when a purchase does not go to plan, and how a firm that has put roughly $80 million to work over the past decade is about to try to raise $100 million for its next fund.

FROM GOLDMAN TO REGEN FARMER FINANCING

Jacob says he “slow walked” into the regenerative space. His path to farmland investing traces back to his childhood where he grew up with a large vegetable garden in a suburban US backyard, in a family that celebrated and prepared food constantly, and with two grandfathers who were children of immigrants and started food businesses of their own. After a career in Goldman Sachs, he returned to the New York area in 2012, increasingly curious about food cultures, supply chains and local food systems. As he talked to farmers and others in the Northeast, one need kept coming up: farmers wanted to own the land they were farming. That became the starting point for Dirt Capital.

“Is there a way to invest in farmland, right, like as an asset class in a way that’s fair and equitable to farmers who are excellent land stewards and have profitable business models, and then do it in a way that can attract values-aligned investor capital?” — Jacob Israelow

THE FARMER FIRST MODEL

What Jacob heard repeatedly was that farmers wanted to own the land they were farming. Dirt Capital designed a structure that is a 10-year lease with a purchase option at a pre-agreed price after five years and again at the end of 10 years. Dirt Capital uses a relatively low, fixed appreciation rate, designed so that the purchase option is generally ‘in the money’: when the farmer goes to a bank for financing, the property should appraise for more than the option price. That built-in equity can make the final transition to ownership easier.  That finite exit is central to the model.

“Each project we do from the outset, we intend, and the farmer or rancher we’re working with intends to buy the property from us in a five to ten year period of time […] There’s kind of this mutual intention at the beginning, this defined path to land ownership at this pre-agreed price.” — Jacob Israelow

REGENERATIVE FARMLAND ISN’T WORTH MORE … YET!

One of the sharper surprises in the conversation is Jacob’s answer to a seemingly obvious assumption: if regenerative management makes land healthier and more resilient, shouldn’t that land be worth more? In Dirt Capital’s experience, usually not. Land is worth more when there is a market of buyers willing to pay more for those qualities; not simply because the soil is healthier.

“So, there’s not a kind of thesis around like, you make land more productive either by regenerating soil or getting a premium for organic; that doesn’t automatically translate into a higher land price. It only does in certain situations.” — Jacob Israelow

REAL ESTATE RISK VS. FARM BUSINESS RISK

A major lesson from Dirt Capital’s first eight years and more than 30 deals was to be very clear about which risks the firm is equipped to take. Dirt Capital is willing to take on complicated real-estate situations—estate issues, conservation easements, subdivisions, housing and development pressure—but does not want to underwrite the uncertainty of trying to grow a farm business.

“We need to work in close partnership with a local investor or a nonprofit organization or land trust—someone who really has a lot of connection to the project and skin in the game, who really knows the local context better than we do, and is a real, true partner, not just an advisor or paid consultant.” — Jacob Israelow

IMPACT REPORTING FROM $15, $50 TO A $100M FUND

Dirt Capital’s fund sizes track its own growth: a $15 million third fund still mostly in the Northeast, a $50 million target for Fund IV — the firm’s first national fund, which closed oversubscribed at $54 million — and now a $100 million target for the next one. The jump in ambition tracks a jump in rigor. For its first three funds, Dirt Capital barely reported on impact; the team was too small to spare the time. That changed in 2023, when Fund IV launched alongside a new framework built around four pillars: ecological stewardship, farmer equity, community benefits, field building, and 21 tracked outcomes. Almost 40% of Fund IV’s projects have supported land ownership for farmers of color.

“We’re about to launch our next fund, and we’re going to try to make it much larger, double our last one, and raise 100 million now. But it feels like there’s a growing group of investors who are really committed to high-impact integrity projects that have relatively low risk of loss of capital and are going to produce a modest return, which is how we think about us, and we’ve been doing it for a while.” — Jacob Israelow

ISLANDS OF COHERENCE AND RELOCALIZING AGRICULTURE

Reflecting on the broader goal of farmland investment, Jacob cites a concept attributed to Nobel laureate Ilya Prigogine: ‘When a complex system is far from equilibrium, small islands of coherence in a sea of chaos have the capacity to shift the entire system to a higher order.’ Dirt Capital views each partner farmer as an island of coherence—a steward in a deep, loving, and reciprocal relationship with their land and community.

When asked what he would do with a magic wand, Jacob advocates for eliminating fragile global supply chains and relocalizing agriculture. Pointing to initiatives like New England’s 50/50 plan (aiming to produce 50% of the region’s food locally by 2050), he emphasizes that supporting regional, mid-sized regenerative farmers is the key to food security, rural economic vitality, and ecological restoration.

“Our food system is a complex system that is really far from equilibrium. It leads to unequal access to food, produces a mass amount of inexpensive, unhealthy calories that lead to illness, destroys soil, pollutes air and water, and hollows out rural communities — it’s highly efficient, but really lacks resilience.” — Jacob Israelow

OTHER POINTS DISCUSSED ON THIS EPISODE:

• Housing and infrastructure challenges: How Dirt Capital incorporates staff housing solutions into real estate deals to overcome labor retention barriers for regional farm operations.
• Capped investor returns: Structuring deals with baseline hurdle rates, returning capital, and sharing 50/50 upside with farmers to maximize land affordability.
• Limits to scale in agriculture: Why individual farm units have optimal ecological and human scales, and why Dirt Capital focuses on scaling via portfolio width (30-35 farms per fund) rather than mega-farms.
  

LINKS:

• Dirt Capital Partners 2025 Impact Report
• Bread and Butter Farm: https://breadandbutterfarm.com/
• New England’s 50/50 plan
• Women of the Earth PBS Documentary
• Other epsiodes on Transition Financing for Farmers

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.