Fledge, a New Social Enterprise Incubator, Opening in Seattle
Could Seattle become a center of innovation for social enterprise? Mobile and tech startup veteran Michael “Luni” Libes is betting on it with Fledge, a new incubator aimed at fostering companies that hope to improve society.
Libes is calling these ventures “conscious companies,” and the second part of that phrase is key—Seattle-based Fledge is not for non-profit organizations. Instead, Libes is looking for entrepreneurs who want to build a real business that happens to strive for a positive effect on the world.
Unlike most of the business incubator/accelerator programs that have exploded across the country in recent years, Fledge is not focused on companies in the tech industry. It sounds like applicants can be in just about any sector you might think of, as long as they’re aiming for consumers who want to improve the environment, energy use, health, food, community, and so on.
Libes, most recently at the mobile-data company Ground Truth (now Mobile Intelligence Solutions), got the idea after advising budding entrepreneurs through the University of Washington and Bainbridge Graduate Institute. Libes says students would come up with socially focused business ideas that showed promise, but those plans would typically get set aside once the people involved moved on to their new jobs.
“Most of those ideas get dropped on ground,” Libes says. “There’s no stepping stone from `I have a newly minted MBA’ to `I have an up and running company.’” The idea was developed further through the recent Social Enterprise Weekend, which Libes helped organize in Seattle.
Fledge is taking applications now for its first group of proto-companies, from which a final group of about seven will be selected. Some of the details are still being ironed out—the companies will work together for the eight-week program in Seattle, either at space provided through the HUB Seattle or the SURF Incubator, Libes says.
Fledge itself is a business. Libes has started a company, not an investment fund, to run the incubator (although he is looking for more investors). It’s a hybrid of the standard tech incubator model—taking 3 percent of equity in the companies involved—and revenue-based financing, with the standard $7,000 cash stake considered a loan to be paid back with revenue. That’s like the revenue-based financing offered by Seattle’s Lighter Capital, among others.
The money returned to Fledge in the form of paid-back revenue financing can be recycled into new loans, while also turning a profit, Libes says.
I don’t have any hard numbers, but Seattle certainly has a concentration of the type of “conscious consumers” that Libes wants businesses at Fledge to serve. Examples of companies targeting these folks run the gamut from big businesses, like Starbucks and REI, to local players like PCC Natural Markets. Nationally, think of companies like Tom’s Shoes or even Craigslist, which has a community-based ethos at its core.
So why this project after a long career in the tech industry? Libes says the eight months that he’s spent as an adviser to early stage companies has shown him that there is huge potential for entrepreneurs outside of the tech sector. As we discussed in this story on Seattle’s Stockbox Grocers, many of the technology tools and startup principles develop for tech startups can also be employed to help decidedly non-techie businesses get off the ground as well.
Helping to develop more infrastructure to support those businesses is also a good way to “give back to the whole city,” he says. “I won’t claim that I can help absolutely any company—I have no manufacturing experience,” Libes says. “But when it comes to taking some raw ideas and turning it into a product to take to the market to make money, those are the same no matter what.”