Sustainable industries can benefit from green lenders |
The Business Journal of Phoenix - September 30, 2005Gone are the days of investors pouring their millions almost exclusively into technology companies. Firms across the country that are involved in sustainable industries are being funded by a new breed of progressive investors. The solar power industry, for example, has secured untold millions of dollars from private investors, including blue-chip venture capital firms. Other emerging sectors include the "green" building industry, organic food and body products, and wind energy. Owners of a young firm in Phoenix want to capitalize on the escalating interest in sustainable businesses by becoming an asset for "organic entrepreneurs" who are in search of funding to expand their ventures. Rochelle and Stephanie Lebhar have formed Organic Ventures in Scottsdale. The mother-daughter duo helps socially responsible companies find financing. The pair analyzes a client's business, writes a free business plan and then works to match it with interested investors. The Lebhars earn a fee if a client gets a funding deal. With the organic and natural products industry climbing 20 percent a year and sales exploding into the billions of dollars, their timing is perfect. What's not perfect, though, is the location of the company's client base. Most customers and investment contacts are located outside the state. "I'd love to see more companies here in Arizona get on the bandwagon," Rochelle Lebhar said. One company taking advantage of Organic Ventures' services is Nu-World Amaranth Inc. of Naperville, Ill. Founded in 2001, it makes amaranth-based fare for people who have allergies to or who are intolerant of certain foods. Amaranth grains are highly nutritious and can be used to make cereals, baked goods and pasta, for example. Jim Beahling, Nu-World's chief financial officer, said the company has been funded with loans and a small venture capital investment. It now needs an additional $2 million for working capital and new equipment. Organic Ventures, he said, is looking for that money. "The first rounds we did on our own and the biggest challenge we encountered in a niche industry was to truly get people to understand what all of this means," Beahling said. "We have a business to run so to be able to have the time to go out and educate investors is tough," he said. "Raising money is a full-time job. Organic Ventures provides critical awareness and an educational link. They also have experience in fundraising, so we're also paying for their contacts." A controller in the real estate industry for 25 years, Rochelle Lebhar worked in New York City for commercial and residential developers. Six years ago, she decided to join her daughter as a Phoenix resident, and two years ago they launched the company. Stephanie Lebhar has worked in the financial industry for 15 years. She traded commodities, equities, and fixed income securities for international brokerage firms in New York and Arizona. "People were surprised on our focus," Rochelle Lebhar said. "We only want to help people who are trying to better our environment and lead healthier lives." According to the Organic Trade Association, the U.S. organic market is projected to reach $30.7 billion by 2007 -- a compound growth rate of 21.4 percent from 2002. "Organic" is a labeling term that denotes products made using materials and practices that enhance the ecological balance of natural systems and that integrate parts of the farming system into an ecological whole, according to the association. In Phoenix, organic businesses have pop-ped up in several industries. One new company is Organically Grown for You, a provider of farm-fresh fruits and vegetables to customers Mary Maio, a spokeswoman for Organically Grown For You, said it's encouraging to see conventional grocery stores beginning to carry organic produce. "You have Henry's, Sunflower Markets and Sprouts opening up everywhere in the Valley, broadening the selection of organic needs," she said. "You'll also find organic juice bars are becoming high in demand and more restaurants are using organic produce and natural meats. It's clear people are wanting to live a healthier lifestyle, and that is beginning to spread out to organic and all natural products across many different markets," she said. The U.S. Department of Agriculture reports that organic products are available in nearly 20,000 natural food stores and 73 percent of conventional grocery stores. "It's in every segment and people are doing extraordinary things with food, toothpaste, shampoo, clothing, housing, solar," Rochelle Lebhar said. "It's everything that affects our lives." Organic Ventures: www.organicventures.biz. Organically Grown For You: www.og4you.com. |