Halcyon, the social entrepreneurship organization anchored by a flagship incubator in Georgetown, is moving deeper into the investment arena with the creation of a new funding vehicle.
The nonprofit is launching the Halcyon Microloan Fund, powered with $100,000 from D.C.'s Kimsey Foundation, to distribute to D.C.-area startups in Halcyon’s programs that are seeking alternatives to traditional backing such as bank loans or venture dollars. It’s the institution’s latest effort to carve out new funding funnels to early-stage founders — including women, people of color and social entrepreneurs — as longstanding inequities continue to plague the financing landscape.
“Part of what we’ve been doing is listening both to our ventures and to the ecosystem about where there are funding gaps and seeing where we can plug in,” said Dahna Goldstein, chief investment officer for Halcyon, which doesn’t take equity in the companies that come through its programs.
“Venture capital, angel investing — going that equity route isn’t necessarily the right path for lots of companies; initially, it’s not an available path to a lot of companies,” she said in an interview. “Not every company that needs capital to grow needs to raise a seed round.”
Any entrepreneurs who have gone through Halcyon’s programs can apply for loans up to $10,000. Halcyon expects to make about 10 or 11, depending on the applicants and how much each of them seeks, Goldstein said. The organization isn’t requiring credit checks or taking collateral, and is offering low interest rates. It’s also expects to have high repayment rates, so it’ll be able to make more loans going forward, she said.
“Part of our thesis here is that because we know the founders, because of the way we’re vetting applications and really trying to align with the business needs, we think we’re going to have high repayment rates, and higher than industry average — we could be wrong about that, but we’ll find that out — and then use that to raise more money so that we can make more loans,” Goldstein said.
The microloan program is a pilot, which means Halcyon plans to learn through the process before ultimately creating an evergreen fund, Goldstein said. “We saw an opportunity to help provide a different type of access to capital to entrepreneurs that we know, that are working in the D.C. area, that have the potential to unlock revenue and are just missing that critical little bit of funding.”
That starts with the program’s first microloan recipient: Anika Hobbs, Halcyon alum and founder of Nubian Hueman, an Anacostia and Baltimore retail business focused on goods made by people of color. The funding, the exact amount of which Halcyon declined to disclose, will enable the company to expand its inventory and build up marketing.
“Considering all that we face and have been through, these are the right funds at the right time for my business,” Hobbs said in a statement.
She was a good fit for the program because she was able to pivot quickly to online sales during Covid and find a product-market fit, despite her main experience being in brick and mortar, Goldstein said. “She is the type of entrepreneur and the type of business where there’s a clear market, she has great communication channels and an opportunity to generate more revenue if she’s able to get out there more,” she added.
The microloan fund is Halcyon’s latest addition to a small but growing portfolio of funding engines, following its creation of Halcyon Angels to make investments in young social impact ventures. So far, the network has backed D.C. student loan startup MPower Financing, Richmond data analytics company MajorClarity and Cambridge, Massachusetts-based renewable energy startup Solstice.
Halcyon separately noted that following the angel network and microloan fund, “the public announcement of a third project already underway is forthcoming.” It wasn't immediately clear if that third project is the fund Halcyon started raising in 2019. Goldstein declined to share details on that fund at this point.
Goldstein, one of our 2021 Fire Awards honorees, was promoted to the chief investment officer position in July — her second promotion since starting with Halcyon in November 2019 to lead the angel investing arm. She was named director of impact investing in February 2021. That’s in addition to running a startup of her own.
Halcyon, now with 15 employees, is hiring “pretty heavily” on the incubator side with an eye toward expanding its programming, Goldstein said. It currently has grant writer, program director and coordinator positions open.
Halcyon, a spinout of the D.C.-based S&R Foundation led by co-founder and CEO Kate Goodall, reports that 258 fellows have come through its programming, and 156 of its alumni ventures have raised more than $180 million.
