Counterintuitive Countertops: IceStone

While shiny, new, stone countertops may be a must-have on HGTV shows, the truth is stone countertops are not very green. While this is troubling for our planet, it does present a very interesting business opportunity—an opportunity IceStone of Brooklyn, NY has seized. IceStone manufactures countertops and other surfaces made from a 100% recycled glass and cement matrix. But it isn't only the product that's green.

IceStone is a triple-bottom-line company, meaning they set goals for the company that will advance people, planet, and profits. The business operates out of a renovated, day-lit factory in the Brooklyn Navy Yard. They use soy-based lubricants in the machines, and have implemented a rewards program for employees who bike or walk to work. Getting a business that is devoted to green manufacturing in Brooklyn funded and functioning was no easy task.

IceStone co-founders and co-CEOs, Miranda Magagnini and Peter Strugatz, met at a socially responsible angel investor conference in Atlanta nearly 20 years ago. The two went on to co-invest in a few deals as private angel investors, and were both consulting when they decided the time was right to buy a company that they could not only fix fiscally, but could add socially responsible values to.

"What I wanted was a company that addressed a growing environmental concern that was cash flow positive, but the owner wanted to retire to Florida and had no children to take over the business," says Magagnini. "Instead, Peter brought me this sort of bankrupt company about six years ago. The owner had spent a lot of money to build a totally inefficient plant. We came in and bought everything at a public auction for about $25,000."

The partners then had to figure out how they were going to make the product, because while the previous owner bought all the equipment, he never produced any countertops. The next step was to raise funds to design and create the product. But Magagnini and Strugatz weren't willing to compromise on their values in order to appease investors; so they set out to find "patient capital."

Patient Capital

IceStone's roster of investors reads like the who's who of the socially responsible business movement. "Gary Hirshberg, chairman, president, and CEO of Stonyfield Farm; Ben Cohen, co-founder of Ben & Jerry's; Lisa Lorimer, former president and co-owner of Vermont Bread Company; and others, are all leaders in sustainable businesses that really loved what we were doing and got behind us," says Magagnini.

"We actually have no venture capital in the deal – there are 71 angel investors. That's been a very interesting road to go down because we didn't go out to the 'vulture' capitalists who would say, 'Okay, we're going to give you $5 million, but we expect to cash out in three years. What's your exit strategy?' We felt that we needed patient capital to really grow the business. We were able to raise about $15 or $16 million and make business decisions that were a little different from how other people might have approached a very capital intensive business."