Health Enterprise Development Initiative Final Presentations = Success!

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There was an impressive array of projects on display at last week’s Health Enterprise Development Initiative (HEDI) final presentations. From art quality fermentation crocks to a program incentivizing food stamp use at farmer’s markets, a healthy mix of business, nonprofit and government interests were joined together to tackle our city and county’s most pressing food and health issues.

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HEDI is a training program for entrepreneurs creating companies fostering healthy eating, active living, promoting health for consumers, suppliers, and communities.  Attendees were treated to a diverse display of perspectives that many truly appreciated. Hadar Iron of In Ferment said that the event had “transformed the way I think about my business.” Kirsten Wysen of Public Health Seattle King County was so encouraged by the experience that she simply asked us “when’s the next one?”

For the past 11 weeks, eight organizations have been participating in this mini-accelerator co-created by Slow Money NW, Pinchot’s Center for Inclusive EntrepreneurshipKickPublic Health Seattle-King County, and GPS Capital Partners. All are healthy food and community enterprises serving or representing disadvantaged communities. The participants were both for-profit and non-profit , which added to the learning. In conversations the non-profits appreciated the for-profit perspective as it was different yet aligned by underlying values and goals.

Besides the goal of providing accelerated training, a goal for this first HEDI round was to determine if there was another approach to addressing community health goals. Public Health Seattle King County provided an evaluator that followed the project through the eleven weeks. She did entry and exit interviews and observed video tapes of presentations the enterprises made at the first and last meetings, comparing progress towards the stated outcomes. The result? She measured  some of the most impressive gains she has ever seen!

Participants are feeling more financial confidence in their mission-driven business models. Some have pivoted their business model, and some are searching for funding or financing. But the belief that they can have a significant impact on regional food, health and wellness issues remains as strong as ever.

Stay tuned as we’ll have several upcoming stories centered around the crossroads of health, community and food.

Meet Ric Brewer, Snail Rancher

Ric Brewer has an unusual passion: snails. And what do you do with such a passion? Start a snail ranch, of course. Ric started Little Gray Farm in 2012. He has been participating in the Health Enterprise Development Initiative (HEDI) and recently took time out of his busy snail ranching schedule to tell us about his business and the impact of participating in HEDI. 

Tell me about Little Gray Farm. 

LGF is, to my knowledge, the only commercial escargot cultivator in the U.S. We are based on five acres in Quilcene, WA, which is on the Olympic Peninsula. Nearly all the escargots currently consumed in this country are canned ric in shelland from overseas. We have the ability to grow our own, so in a sense it’s a food security issue. Ironically enough, I bought the property before I actually planned on raising snails and then discovered it is on nearly the same latitude as the Burgundy region of France, the prime growing area for escargot, so it seemed only fitting that I pursue this.

Snails are gaining popularity worldwide. In France, they cannot keep up with the demand and are now importing 60% of the snails it uses! Seattle is a hub for creativity and innovation so it’s the perfect place to launch a domestic snail ranching industry.

What difference are you trying to make in the food system?

Although there are other people on very small scales selling wild snails in the U.S., I am trying to attempt two things: make a sustainable business that actually grows the snails in a controlled, permaculture based environment so that the life cycle is controlled from egg to adult, and also propagate heliciculture (the cultivation of snails) as a viable industry in this country.

I also want to “democratize” snails; they are an underutilized animal protein that is actually very healthy, when not drenched in butter. Plus they are a very versatile ingredient and can be used in a myriad of menus.

What goals do you have for the business? 

brewer1A few years ago I put together a recipe book, or general guide, on how to incorporate this easy protein into your diet. I’d love to work with a local chef to develop some unique recipes we can promote together. Some of my favorite ways to eat snails are on pizza on in ravioli with parmesan. They’re delicious!

In the short term, we are looking to buy a commercial, chamber-style vacuum sealer machine to ensure we have a fresh, safely packaged product. People can contribute through May 31st on Indigegogo and sign up for fun rewards like a snail in a sweater.

How has HEDI helped you refine your business model? 

I’m not a numbers guy, so when it became time to create a spreadsheet, I looked on it with dread. But when it was explained that a spreadsheet is basically telling a story of your business, it made much more sense. After all, we WANT people to know the story of our business! Even though it’s still not my favorite activity, each iteration of my spreadsheet gets a bit easier.

What advice do you have for other farmers and food businesses?

Expect creating your business to be hard, very hard. There will be times that you want to throw in the towel. There will be times you’re wondering if you’re crazy for doing it. But if you really feel it is your passion, your destiny, then you must do it. Regret is the only thing that lasts forever.

HEDI Update: Good Food Bags Explores New Business Models

Good Food Bag is a program of Seattle Tilth, an environmental nonprofit celebrating its 36th year of inspiring and educating people to safeguard our natural resources while building an equitable and sustainable local food system. Jess Bitting, the Good Food Bag Coordinator, has been participating in the Health Enterprise Development Initiative (HEDI) and recently sat down with Slow Money NW to discuss her experience with the program.

Tell me about your program.

The Good Food Bag program is run out of Seattle Tilth’s Rainier Beach Urban Farm and Wetlands, which is the largest urban farm in Seattle. It provides a weekly distribution of bags of fresh produce, taken to community hubs where people are already gathering. We target the neighbors of the farm, many of whom are low income and have limited access to healthy food.

The program has been running for over a year and we’ve distributed 2,000 Good Food Bags to 200 families, totaling over 5,000 pounds of nutrient dense produce.

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Photo Credit: Seattle Tilth

What difference are you trying to make in the food system?

We want to focus on a way to not just provide access to healthy food but to also save members time by bringing it to places where they are going daily. Our current focus is on childcare and senior centers through partnerships with Tiny Tots and Southeast Seattle Senior Center.

Organizations such as food banks offer mainly shelf stable options, whereas we focus on fresh food. This also provides the opportunity to talk about seasonality and nutrition. We include recipes that are quick, healthy and easy to make, and are approved by the registered dietician we have on staff.

What goals do you have for the program?

Like so many community-based organizations, we have limited capacity so we think it’s important to grow sustainably. That being said, we think this is a powerful model and would love to see it grow, or other organizations take it on in their own communities. We recently met with the City of Seattle and they are putting together a toolkit that will make it easy for others to replicate the program.

We would also like to expand our infrastructure, including adding more cold storage space. If you’re interested in supporting the growth of this program and the Rainier Beach Urban Farm & Wetlands, please visit our campaign page.

How has HEDI helped you refine your business model?

We are gaining a lot of insights from the program! We are confident the Good Food Bag program has great potential but we need to refine our model and make it more financially sustainable before we can increase the scale of our operations. Currently, our cost to pack a Good Food Bag is greater than the $5 price point, so external funding and donations are subsidizing the true cost of each bag. Our current industrial food system is also heavily subsidized, but it does not favor fresh produce or earn farmers a fair price for their production, so we need to be creative in making fresh local produce as affordable and accessible to all while making sure the people that grow and pick our food can stay on the land. We are also having conversations about who (beyond the customers) benefits from our work and how we can collaborate for ongoing success.

What advice do you have for other non-profits taking on social enterprise projects?

Prioritize your strategy and planning! Our program operates all year so it can be a challenge to find the time and resources to work on the bigger picture. Working with a program like HEDI has allowed us to do this important work and we are already seeing how it is changing our conversations about the future.

 

 

USDA Announces $78 Million to Boost Local Food

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Regional food received  an impressive new spurn of funding from the USDA last week. The money is split between the Rural Development Business and Industry Guaranteed Loan Program ($48 million) and available grants from Agriculture Marketing Services ($30 million) targeted at giving much needed federal investment in “food hubs, farmers markets, aggregation and processing facilities, distribution services, and other local food business enterprises.” 

Locally sourced food now accounts for roughly $7 billion a year  in sales but with any emerging sector, cash investments are needed to continue its growth, and its exciting to see the USDA taking a proactive approach and creating new funding options for farmers, growers, and sellers of locally sourced food.

This comes in tandem with the 2014 Farm Bill tripling the funding for and renaming the existing Farmers Market Promotion Program (FMPP) to allow grants to support regional food system infrastructure, as well as direct marketing programs for farmers.

These new funds are available to a wide variety of regional food stakeholders including; cooperatives, non-profit organizations, corporations, partnerships or other legal entities, Indian tribes, public bodies or individuals.

The USDA is accepting applications for the funds on a rolling basis, so our Northwest regional food developers should get their applications in ASAP.

You can read all the details in the USDA’s press release here.

Early Registration for Food Systems Financing Web Course

cdfa-logoThis Friday (May 9th), is the last day of early bird registration for the Intro to Food Systems Financing Web Course from the Council of Development Finance Agencies.

This 2 day full immersion course (June 4-5), will address the financing challenges associated with growing, processing, distributing, marketing, and selling food. This is an opportunity for those looking to better understand financing options available to new and emerging food entrepreneurs. The course will discuss capital investment opportunities from federal, state and local governments, tax credits, loan and grant programs, as well as ways to build partnerships in your arena.

During each session, attendees can raise their hands, ask questions, comment on presentations and take interactive polls. CDFA’s Course Advisor moderates the WebCourse to ensure speaker and participant interaction throughout.

The early bird price is $550.00 for members and $675.00 for non-members and goes up $50.00 after this Friday.

This is a great opportunity to learn about how to catalyze your endeavor and find the type of funding designed for your specific needs.

For more information and to register for the event click here.

Time is Money… and Money is Time

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This weekend I broke ground on book #7 in the series, The Next Step: The Realities of Startup Funding.

The key lesson is that for startups, money is time.  Or more specifically, money buys your a faster time to market and a potentially faster path to profits.

This is not how venture capitalists or Angel investors talk about money.  For them, money is fuel.  Which, from their perspective, is true too.  Investors invest in order to turn $1 into $10… as quickly as possible.  The tool they use to make that happen is money.  Their masses of dollars are aimed at entrepreneurs who can most quickly turn investment dollars into revenue, and revenue into exits.

Back at the majority of startups, which never raise money from those “professional” sources, money and time are tradeoffs, however, typically with a big limitation on the quantity of money.  With money, you can hire an employee or contractor to build your product or your website or whatever you need built.  You can purchase a list of sales leads or hire a salesperson to make calls all day to qualify leads.  Or, without money, you can do all of this yourself, which will take more time.

As I work with and teach entrepreneurs, I find very few who understand this tradeoff.

It seems as if all the news coverage of the high-flying, highly-funded startups has taught most entrepreneurs the venture capitalists’ story of money.  Have idea.  Raise money.  Make millions.  That second step, “raise money” is talked about as a given, almost a right of all entrepreneurs.  Meanwhile, the reality is that less than 3% of all startups in the U.S. raise money from Angel investors, and far less than 1% from venture capitalists.

Given those stats, what most entrepreneurs should be thinking about is a different story.  Repeatedly questioning, how can I turn my idea into reality without a minimum of funding.  Self funding to start.  A bit of crowdfunding.  Customer revenues as growth capital.  All with a minimum of trading dollars for time.

Time is money is chapter 1 of the new book.  The remainder will cover bootstrapping, crowdfunding, the business model of investors, and the odd story of how startup valuations come about.

If you are an entrepreneur looking for help with your startup, there are six other book in The Next Step series already published, covering the startup process, financial planning, marketing and sales, pitching, splitting founders equity, and an extension to the Business Model Canvas.  All can be found in paper and Kindle on Amazon.com, or as an online subscription and online class at lunarmobiscuit.com/the-next-step.

11 Questions with Local Investor Jean Johnson

DSC02486_2Jean Johnson is a member of the Seattle Impact Investor Group and an investor in the Local Food Fund. She and her husband, Peter Miller, are co-owners of Essential Baking Company, the region’s largest organic commercial baking company. She considers herself a relatively new impact investor and recently sat down with Slow Money NW to talk about what she has learned and her experience as an impact investor and with the Local Food Fund.

 

How long have you been an impact investor?

I first heard the term impact investing at a philanthropy workshop in San Francisco in the fall of 2012. It was introduced as a philanthropic tool, a way to blend my philanthropic goals with our investment interests. When I returned to Seattle, my husband and I connected with the Seattle Impact Investing Group, which was just forming at the Hub.

That said, my husband and I had made several impact investments for years, mostly at the micro scale, but weren’t using that term. We felt driven to move beyond the traditional investment models of giving our money to a big institution’s fund and mostly ignoring it. For example, we made a small loan to Lumana for a tomato cannery in Ghana which was repaid with interest.

Why do you make impact investments?

Impact investing has allowed me to merge my values with my financial interests. Rather than thinking in terms of creating assets in one part of our lives so that we can give away a certain percentage of those assets through philanthropy, impact investing merges the two. My investments now can be an extension of my values.

I also love getting to know the businesses I invest in and imagining how they can change and grow. There is a lot more meaning in that than the paperwork I receive in the mail updating me on my traditional investments.

Why food?

Food is the nexus of a lot of our interests and a way to frame what we were already doing but felt scattered. Taken broadly, food can be an environmental play or a social justice play. Also, as co-owners of Essential Baking Company, organics specifically and food generally have been long-term passions for us.

People and organizations are throwing around the phrase “resilient regional food economy.” What does that mean to you?

For me, a resilient regional food economy creates space for small and medium growers to make a living while creating distribution channels that allow for food to be delivered throughout the economy, so that everyone in the region has access to that fresh local food. Farmers and the community benefit through increased economic activity, improved health outcomes, and farmland that is saved from development.

You mention that you consider yourself a new impact investor. How have you educated yourself to learn more about the space?

A lot of reading! The Stanford Social Innovation Review has a number of great articles, including a series by Paul Brest, the former head of the William and Flora Hewlett Foundation. I also recently took an online finance class through Coursera, and plan to look for other courses that will give me the vocabulary and understanding to evaluate prospective investments.

I’ve also learned a lot through my participation in Seattle Impact Investing Group, especially through doing due diligence for the Local Food Fund.

What did you learn from participating in the Local Food Fund?

I learned that it is really hard to say no. There are a lot of great companies out there, creating social change through their businesses, but we couldn’t invest in them all. Working with other members of the fund was a fantastic process. The group had a high level of compatibility and came to decisions easily. There was an unusual openness in seeing all questions as valid, which made it a learning experience for everyone.

I also was surprised to learn that business and investment decisions can be creative and interesting. Previously, I had avoided the field, assuming it was uninteresting and dry. Instead, I found much of the decision-making process fascinating and came out of the experience wanting to learn more so that I could make more educated decisions.

How has it affected how you’ll approach other deals?

Before I participated in the SIIF round, I thought of impact investing as being just a shade removed from philanthropy. My attitude was to view return as almost optional — icing on the cake. I did not pay much attention to due diligence and the potential for return. The SIIF process made me realize that in order for this sector to grow and attract investors, it has to work on both sides of the equation; you can adjust the returns on the financial and impact sides, but both need to be there.

Where do you see the industry evolving? Where is there room to grow?

There is a huge rush into the field, and a need to sort out what is true impact investment and what is impact investment light. What we really need are new investment vehicles and investment advisors who see them as a viable option.

What do you look at when you consider investing in a company?

Of course I look at all the same things as making a regular investment, but I also want to see that the company’s mission and values are essential to the company’s operations, not just an added layer. Leadership is also really important. I have to believe in the team that is running the company.

 Beyond the group investments from the Fund, were you inspired to make additional loans to those who weren’t selected as part of the final 3? Why?

Yes, we made additional investments in two businesses and are maintaining contact with several others that we may invest in when the time is right.

One of the businesses, Our Table, has a leader who brings his high tech business experience to the field of sustainable agriculture. He spent years looking at the industrial agriculture system and how to disrupt it. The investment is risky, but it has the potential to prove a completely new cooperative structure that connects consumers to their food.

What advice do you have for other investors?

Don’t overthink it – just start. Just take a small amount and do something because the learning is in the doing. Figure out what you have to invest, talk to other people who are doing it, and find out how you can get involved.