IceStone: Investing In Small Business Doesn’t Just Mean Start-ups
As I continue to celebrate Small Business Week with reports of my investing in small businesses (see previous posts here and here) I would like to point out that investing in small business is not restricted to start ups. Even after mastering the challenges of a start-up, many new companies reach a point where they require additional funding to achieve growth and sustainability.
Recently I made a huge (for me) investment of over $1 million and a personal commitment (I volunteered to serve as one of three managing directors) in IceStone LLC, a company in which I was an angel investor six years ago. I had served on its Advisory Board of Directors since 2005.
IceStone manufactures counter tops out of recycled glass and cement in the former Brooklyn Navy Yard in New York. By developing imaginative combinations of various sizes and colors of post consumer glass, the company has produced a beautiful line which competes successfully with the finest marble and granite counter tops. Furthermore, the company has always been committed to being a leader in environmentally friendly manufacturing.
From the beginning the company had great promise and soon became a darling of the green building industry. However, casting the combination of crushed glass and cement to meet the company’s exacting standards presented one quality control challenge after another. It took until 2008 to install state of the art equipment and resolve all of its manufacturing issues, just in time for the collapse of the construction market. For years the challenge was to meet the growing demand; now the problem was the demand had virtually disappeared.
The company was out of funds and risked closing. The two managing partners could not agree how to move forward. They asked the Advisory Board to resolve the dispute and create a plan for the future. We did. Graciously one of the managing partners resigned. Larry Lunt, another major investor and fellow board member and I agreed to join the remaining partner, Peter Strugatz, as managing directors. With three managing directors we were assured decisions could be made quickly. (Read more about this management lesson and others in my book.)
We moved the COO Michelle Gibson to the post of President and CEO to give her the power to act. She immediately put in systems to resolved production, marketing, and control issues. We managing partners raised an additional $3 million dollars mostly from existing partners.
IceStone survives and has begun its move to cash flow sustainability. The dedicated staff of 46 employees were able to keep their jobs, and the American consumer has the option of a beautiful countertop made in America of recycled material from an extremely environmentally conscious company.