Several years ago, Blue Marble Ice Cream opened its first retail store in the Boerum Hill section of Brooklyn, near to the home of Derek Denckla, founder and director of Foodshed Investors NY, an angel investors network dedicated to placing funds aligned with Slow Money Principles.
At the time, Denckla had small children who screamed for ice cream. As an environmental activist and green real estate developer, Denckla was immediately impressed with Blue Marble’s sustainable interior design, using recycled and repurposed materials and designating separate waste bins for recyclables — becoming more standard in NYC now, but highly unusual five years ago. Also unusual at the time was the provision of a special play area for toddlers – a godsend for parents with young children — and utensils and bowls made from compostable materials. Then, to top things off, Blue Marble made a big deal about sourcing its cream locally from organic farmers, a commitment not made by any other brand in NY. Denckla wondered: “Who are these amazing people behind this place?”
He would soon find out. Denckla was introduced to CEO Jennie Dundas in Fall of 2011 by a mutual friend. However, he was disappointed to hear that just closed its first round of capital raising from Friends and Family. Denckla and Dundas stayed in touch through an investor who participated in that first funding round, Elizabeth Crowell, who is also a member of Foodshed Investors NY (formerly NYC LION until 2014), a project of Slow Money NYC (managed by Denckla Projects).
In the interim, Dundas moved from Brooklyn upstate to enroll her son in the Hawthorne Valley Waldorf School, bringing her in daily contact with Hawthorne Valley Executive Director, Martin Ping, whose granddaughter attended the same school. Ping has been an important supporter of Slow Money and a major force in the local, sustainable food movement in NY. Ping spoke very highly of Dundas to Denckla as well.
So, when Dundas approached Denckla in the Fall of 2013 with a possible fundraising round, he jumped at the opportunity to explore possible investment in Blue Marble Ice Cream by Foodshed Investors NY. Denckla invited Dundas to apply to be screened by investors by first presenting her business model before the Slow Money NYC community at our October 2013 Meetup hosted by The Moderns, where she gave a great slide show about her sustainable approach to food business and scooped some delicious ice cream for a crowd of 60 or so. She was a big hit with the Screening Committee of Foodshed Investors NY. Blue Marble Ice Cream was invited to pitch on February 26, 2013 to our angel network of Accredited Investors.
At the Foodshed Investors NY meeting, Dundas presented with Billy Barlow, Director of Culinary and Production, and Acting Chief Financial Officer, John D’Aquila. Investors had an immediate and intense interest and a Deal Committee was formed, led by Amanda L. Fuller, whom Denckla had met and at Slow Money National Gathering in Boulder, CO and who was invited to join Foodshed Investors NY . Fuller scheduled a very well-attended site visit to Blue Marble’s local production facility in Sunset Park, Brooklyn. Investors were delighted with the alignment of the business with Slow Money Principles, something hard to find. For instance, until recently, Blue Marble bought almost all its cream from MOOMilk, a company featured at a previous Slow Money Gathering.
Even more salient for investment, Blue Marble Ice Cream was that rare company that had well-organized financials, clear use and modest amount capital sought, reasonable valuation. This was an easy deal for investors to love — highly unusual for most enterprises seen by Foodshed Investors NY. Also unusual was how quickly investors moved, Deal Champion Fuller expressed interest in obtaining terms immediately. Shortly after receiving the Term Sheet and Subscription Agreement, however, Foodshed Investors NY was informed that existing investors had committed to fund more than 3/4 of the capital sought — leaving too little for the number of interested investors drawn from Foodshed Investors NY to participate.
Foodshed Investors NY had never experienced any competing demand on a deal like this before. Fuller asked Blue Marble’s principals if they would be willing to oversubscribe the funding round. Two weeks later, one of the founding partners, Alexis Miesen, agreed to sell a portion of her interest in the company to make it possible for five of the most interested investors (who committed first) to participate in the round: Denckla and Fuller were joined by Claude Arpels, Steve Fondiller and Aileen Gribben,
However, there were several other members of Foodshed Investors NY who were disappointed that they missed the window to place funds in this round. Dundas assured us that she would return to the group with a Series A Offering in the next two years, which helped settle the matter.
The five committed investors then engaged an attorney from the law firm Seward and Kissel to review the deal documents, sharing the legal costs up to an agreed upon capped amount. Investors commenced to negotiate terms and reached a mutual understanding about a month afterwards. The Closing was settled this week on July 16 and July 25, 2014 with all five investors in two tranches.
Foodshed Investors NY closed the funding of Blue Marble Ice Cream four months after its investor presentation, nine months from its slide show at Slow Money NYC Meetup and three years after Denckla first wanted to explore investing. Now, we believe this is the sort of slow, steady development of relationships that pays off for all sides to a transaction required to support sustainable local food business who helps restore our local food system.