In Episode 85 of The Wendel Forum (originally aired on November 17, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Kelly Boyd, founder of My True Nature, a line of natural body care products for children.

Kelly Boyd, founder of My True Nature

After Boyd’s first child was born, a baby nurse introduced her to natural products for kids.  Always interested in cooking and in organic foods, Boyd, a corporate securities lawyer and tech company executive, began developing her own formulations for personal care products, including bubble bath, shampoo, lotion and body wash.  She gave the products to friends, who tested them for her.  One of the things she learned in the process was how sensitive people are to scents.  In the process of finding the right formulation with the right scent, Boyd made more than 300 batches of her products.

After her second child was born, Boyd quit her job, and she and her husband financed and launched My True Nature.  Using all natural, largely organic ingredients, My True Nature products are manufactured locally in the Bay Area.  She describes them as “mainstream green,” meaning they look and feel like comparable mainstream products.  For example, the shampoo and body wash suds up and the bubble bath does, in fact, bubble.

Initially, Boyd sold the products to friends, who helped spread the word by putting the products in gift bags at birthday parties.  Later, she began selling online, including offering group deals through sites like Groupon.  Some of her products are now in “brick & mortar” stores, but the majority of her sales come from the big internet retailers, such as Amazon.com.

Boyd says that it was important that she not have investors in her company.  With her experience in the legal and tech company worlds, she knew investors would demand, and rightfully so, that she spend her entire time and energy on building the company.  And she knew that she would feel responsible to do so.  Instead, without having investors to answer to, she can devote the time and energy she wants to her children.  She recognizes that her company will grow more slowly, but the real payoff is that she can be the kind of mom she wants to be.

Boyd believes the rigidity of corporate jobs is contributing to the emergence of a generation of mothers who are starting companies.  In fact, Boyd believes there’s no better time than now for a woman to start a business.  There are funding sources particularly looking for women entrepreneurs, especially women launching green businesses.

Do you know green mompreneurs like Boyd?

Post Links:

Listen to the interview with Boyd: Episode 85 of The Wendel Forum (27:46 mins; mp3)

My True Nature Website: http://www.mytruenature.net

960 KNEW AM Radio Website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

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In Episode 84 of The Wendel Forum (originally aired on November 10, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Aaron Binkley, Director of Sustainability at Prologis, and Rich Chien, PACE program manager at San Francisco’s Department of the Environment.

Richard Chien

Richard Chien, PACE program manager at SF’s Department of the Environment

San Francisco’s PACE program uses stimulus funds to improve the environmental performance and reduce greenhouse gas emissions from the City’s existing building stock.  Part of the Department of Energy’s green building policy, PACE launched the commercial building program a year ago.  It’s first project is Pier 1, the headquarters of Prologis, the country’s largest industrial real estate company.

Aaron Binkley

Aaron Binkley, Director of Sustainability at Prologis

At a cost of $1.6 million, the PACE-Prologis project will include rooftop solar panels and energy efficiency upgrades.  Specifically, the building will receive retrocommissioning of its heating and cooling systems (primarily related to software, controls, valves and motors) and a full lighting retrofit (replacing bulbs and some fixtures; adding sensors and daylight capture equipment). When it’s completed in 2013, the project will reduce energy purchases by one third from last year’s baseline.  All of the building’s tenants (including the Port of San Francisco) will benefit, and savings will be applied to all occupants on a pro rata basis.  The changes have been calibrated so as to not generate excess energy that needs to be sold back to the grid.

Piloted in Berkeley in 2007, the PACE program uses local governments’ taxing or bond-issuing authority to fund projects that have a public benefit.  The PACE-Prologis project is 100 percent privately funded, with bonds issued to private investors. Repayments are made through the property tax billing system, which allows for longer terms (up to 20 years). The property is the collateral and repayment obligations transfer to the new owner if the building sold.  The interest is federally taxable and California tax-free.

A challenge to the PACE program is that the loan agreements from residential and commercial lenders typically prevent land owners from further encumbering their properties without the lender’s approval.  Since the PACE bonds are repaid through increased property taxes, the bonds are effectively senior in security to the lenders’ loans.  Some lenders may be reluctant to approve PACE financing unless they are confident that the resulting energy savings will translate into a sufficiently higher property value so that their positions are not impaired.  One approach to lender reluctance is for the lender itself to purchase the PACE bonds.  In that case, the lender is only subordinated to itself and gets the benefit of the investment in the PACE bonds.

How could the PACE program impact your community?

Post Links:

Listen to the interview with Binkley and Chien: Episode 84 of The Wendel Forum (27:44 mins; mp3)

For information about PACE, visit: www.greenfinancesf.org and www.pacenow.org  

Prologis Corporate Responsibility Web Page: http://www.prologis.com/en/responsibility.html

960 KNEW AM Radio Website: http://www.960KNEW.com

Dick Lyons’ online profile: http://www.wendel.com/rylons

In Episode 80 of The Wendel Forum (originally aired on October 13, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Elliot Kallen, founder and CEO of Prosperity Financial, a San Ramon, Calif.-based money market fund with $200 million under management.

Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum

Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum

Years ago, socially responsible investing meant simply avoiding investing in so-called sin products such as tobacco or the defense industry.  Increasingly, though, socially responsible investing means more. While it can mean investing in green companies, the issue is somewhat muddy.  For example, is it socially responsible to invest in a solar module product if the parts were made in China and the manufacturing process included toxic chemicals that ended up in the water supply?

Not surprisingly, therefore, everyone has a different opinion of what it means to be socially conscious.  Generally, though, it means thinking about doing the right thing and considering every facet – from environmental issues to a company’s shareholder governance and charitable activities to the private activities (such as aiding the Nazis) of a company’s founder.

In addition, there are different approaches to socially responsible investing.  For example, an investor can proactively support companies that are doing good things for society or devote a portion of a portfolio to green companies. Alternatively, an investor can simply seek the highest possible return on investments but then commit to donating 10 percent of those earnings to a socially responsible cause.  Kallen recommends finding an advisor who will listen to your goals.

What does socially responsible investing mean to you?
Post Links:

Listen to the interview with Elliot Kallen: Episode 80 of The Wendel Forum (26:55 mins; mp3)

Prosperity Financial Website: http://www.prosperityfg.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile:http://www.wendel.com/rylons

In Episode 79 of The Wendel Forum (originally aired on October 6, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Peggy Cross, founder of Bay Area-based EcoTensil, which produces eating utensils made from sustainable materials.

Peggy Cross of EcoTensil

With a background in packaging and marketing, Cross developed a whole line of certified compostable eating utensils made from “silky smooth” paperboard, similar in mouth feel to a soda cup.  The taster spoons are a particularly better alternative to plastic tasters, which are made from petroleum in China and are used for two seconds at ice cream shops, grocery stores or at trade shows, yet will exist on the planet for thousands of years.  In contrast, EcoTensil’s taster spoon offers efficiencies in storage, shipping and waste management, and companies using it can offer customers something obviously greener.  Interestingly, EcoTensil’s first clients, which still represent 25 percent of her business, were prisons because users can’t hurt themselves or others with a paper spoon.

In launching EcoTensil, Cross learned that everything in the start-up world takes longer than you think and costs twice as much money.  As a result, she recommends not launching a start-up without an abundance of tenacity and perseverance.  She also says that entrepreneurs should not just want to make money, but they must also have a passion for what they do.

Wouldn’t you like to ditch the splintery wooden taster spoon?
Post Links:

Listen to the interview with Peggy Cross: Episode 79 of The Wendel Forum (27:49 mins; mp3)

EcoTensil Website: http://ecotensil.com/about.html

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 78 of The Wendel Forum (originally aired on September 29, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Scott Potter, managing partner of San Francisco Equity Partners, a private equity firm that specializes in consumer products growth companies.

Scott Potter of San Francisco Equity Partner

Scott Potter, San Francisco Equity Partners, in The Wendel Forum studio

Potter’s firm partners with companies that have demonstrated a proven demand for their products.  So while there’s no consumer adoption risk, the companies are usually facing operational and scale challenges to reach the next level. Typically, they are $5-10 million companies poised to scale their businesses, often to north of $100 million.

Identifying these optimal risk-reward companies is more science than art.  San Francisco Equity Partners is particularly focused on its companies’ channel strategy.  That is, a given beauty product can’t successfully be sold at both Sephora and Wal-Mart.  Channels include food (Safeway), drug (Walgreens), mass (Wal-Mart), club (Costco), prestige (specialty retailers and department stores) and direct-to-consumer (online and direct-response TV).  Determining the right channel for products is often a company’s key to success.

A growing channel is the so-called natural channel, as epitomized by Whole Foods, which is separate from the traditional grocery channel.  But Potter’s firm specializes in natural products that are targeted for the mass channel.  Companies targeting this channel should not ask consumers to pay more for an inferior product “just to save the fish,” Potter says.  Rather, the product’s value proposition has to work in and of itself outside of sustainability and natural missions.  The prime example is Method products.

When San Francisco Equity Partners first invested in Method, it was producing just hand and cleaning products.  It has evolved to include bathroom and specialty products and even successfully launched into the competitive laundry space.  Early on, Method knew it would never have the marketing budget of Proctor & Gamble.  So it chose to overinvest in packaging, focusing on the point of sale: when product is on the shelf.  Method’s in-house design team devised a distinctive look, including the bottle molds, and focused on the aesthetic and the user-experience (such as the one-hand laundry detergent dispensing system). With the “design baked into the products,” Method aspired to be like Apple.

At what kind of store are you most likely to purchase natural products?

Post Links:

Listen to the interview with Scott Potter: Episode 78 of The Wendel Forum (27:48 mins; mp3)

San Francisco Equity Partners Website: http://www.sfequitypartners.com

Method Products Website: http://methodhome.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 77 of The Wendel Forum (originally aired on September 22, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Dr. Jay Udani founder and CEO of Medicus Research, a contract research organization for the natural health products industry, including botanical drugs, dietary supplements and functional foods.

Dr. Jay Udani of Medicus Research

Dr. Jay Udani of Medicus Research

Dietary supplements give people choices in their health care. Whenever manufacturers of dietary supplements make formal claims – such as “supports healthy joints” – the supplements must undergo clinical trials and testing, akin to pharmaceutical testing.  Dick and Dr. Udani discuss how both enforcement of and consumer interest in clinical trials for dietary supplements is increasing.  Even major food manufacturers, such as yogurt manufacturer Dannon, have received letters from the FDA about their formal health claims.

Whereas pharmaceuticals are chemicals that interact with the body by targeting a pathway or organ, dietary supplements assist the body in better performing normal, healthy functions.  As a result, clinical trials of supplements must be done on healthy people. Supplements can take longer than drugs to show effects so the best way to test the efficacy of supplements is for the individuals in the clinical trials to track how they’re feeling over time.  Udani’s research program uses iPods to monitor individuals, whose responses may be both subjective and objectively measurable. When evaluating a clinical trial, consumers should examine how the supplement was tested, the population used and the measuring tools.

When taking dietary supplements, does clinical testing matter to you?
Post Links:

Listen to the interview with Dr. Udani: Episode 77 of The Wendel Forum (27:52 mins; mp3)

Medicus Research Website: http://www.medicusresearch.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 76 of The Wendel Forum (originally aired on September 15, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Ben Lee, director of business development at San Francisco-based CircleUp, a crowd funding platform founded in April.

Ben Lee of CircleUp

Ben Lee of CircleUp

CircleUp provides an online mechanism for consumer products companies and retailers to reach out to a broad network of potential investors, who may fund the companies in exchange for equity. CircleUp, which affiliated with WR Hambrecht, takes a commission.

So far, they’ve received 600 applications; they’ve selected 10 companies and four – including a baby skin care brand and an organic food brand – have been successfully funded.  CircleUp’s team serves as a curator for the investors. In evaluating companies, they look for businesses with $1 million to $10 million in annual revenue.  Usually these companies are seeking to raise $500,000 to $2 million to launch new products and achieve the next stage of growth. The typical investment is $5,000 to $25,000 (while each company’s offer is different, these are generally in the form of preferred stock shares); CircleUp assists with larger transactions offline.

While CircleUp streamlines what can otherwise be a year-long funding process, raising money through the platform can still take several months. Although CircleUp selects companies and presents opportunities, investors must do their own due diligence.  Like any private company investment, crowd funding is risky and the investment horizon may be three to seven years.

Lee says CircleUp’s goals include enhancing the ecosystem around consumer products, helping as many small consumer brands get financing as possible, and making sure CircleUp’s platform is a great experience for investors and companies.

Have you participated in crowd funding?  What do you see as the biggest opportunities and challenges to this form of financing?  

Post Links:

Listen to the interview with Lee: Episode 76 of The Wendel Forum (27:56 mins; mp3)

Circle Up Website: https://circleup.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons