Japanese pharmaceutical tycoons Sachiko Kuno and Ryuji Ueno created Halcyon Incubator two years ago in a mansion they had purchased in the District’s toney Georgetown neighborhood. Through their S&R Foundation, they recruited start-ups with ideas that they thought showed the right mix of social mission and market potential and began offering five-month, live-in entrepreneurial immersion courses for those they invited.
The jury is still out on whether Halcyon’s projects will survive commercially. But two years in, the incubator’s start-ups have a surprisingly strong record in raising private capital, seen as a first step toward viability for many new companies.
Halcyon program director Ryan Ross says that 45 percent of Halcyon’s 32 alumni companies have raised an initial round of seed funding from investors or donors, totaling $10 million among them. About half report that they are generating revenue.
“We want to create this environment of an army of incredible social entrepreneurs that’s showing you can both drive return and [social] impact. They’re not at odds,” Ross said.
Halcyon’s unique setup, in which there are no membership fees and the incubator doesn’t take an equity stake, has attracted an eclectic mix of pie-in-the-sky businesses that strike a stark contrast with the District’s government-minded business ecosystem.
There’s Coral Vita, a for-profit venture that wants to grow coral reefs in contained “farms” on beaches and sell them to developers and governments at tropical tourist hubs. Founders Sam Teicher and Gator Halpern are longtime divers who wanted to help revitalize reefs but felt that a for-profit venture could be more powerful than a preservation nonprofit group.
“We consciously chose to go for-profit because it’s the best way to tackle this problem,” Teicher said. “From a financial sustainability standpoint, it’s tough to go grant-to-grant, donation-to-donation.”
They have raised about $320,000 from “social-impact investors,” people and organizations offering private capital for charitable causes.
Another Halcyon start-up is Up Top Acres, which has five rooftop farms set up around the District. A partnership with José Andrés’s ThinkFoodGroup placed an organic farm on the top of the building that houses its Oyamel, an upscale Mexican restaurant in the District’s Penn Quarter neighborhood.
A D.C. regulation designed to encourage “green roofs,” essentially rooftop gardens that help control rainwater runoff, means the company doesn’t have to pay rent on any of its farms.
Another food-related start-up called Local Roots sets up mobile organic farms inside tractor-trailers, which the company hopes to sell to grocery stores and wholesalers.
Founder Dan Kuenzi’s team has three working farms set up and has been pulling in revenue for two years. He wants his mobile farms to eventually be cost-competitive with large-scale agriculture and to be maintained by one person with minimal training.
Ross says these businesses can contribute something unique to the District’s start-up scene: “Do we want to be the hub for the next best dating app? Or the hub for the next social enterprise that’s going to change the world?”