Submitted by tim on Sun, 09/22/2024 - 16:22 Photo: Janice St. Onge, president of the Flexible Capital Fund, at Shelburne Vineyards, in which the Flex Fund is an investor. Photo: Baldwin Photography by Joyce Marcel, Vermont Business Magazine The more you learn about Janice St. Onge, the president of the Flexible Capital Fund, the more you understand why some Vermont things are truly unique and special: It's the people. St. Onge, 61, is a true pioneer in the investment community, one who has been working quietly to improve the economy for several decades. She created the for profit Flex Fund, as it is called, in 2011, at the request of the Vermont Sustainable Jobs Fund (VSJF). Its specialty: providing flexible risk capital, including revenue-based financing, for young companies in Vermont's food system, forestry and clean technology spaces. “My current role in the Flexible Capital Fund is that we are making loans and what I would say are alternative investments,” St. Onge explained. “If we were doing equity investing, we would potentially purchase a little bit of ownership in the business by providing them with capital. Most of the capital we provide to companies is in the form of loans, so it has to be repaid back.” If these companies went looking for venture capital for funding, at some point they would have to be sold to pay back the investors. If they went to a bank for a loan, they would have to pay principal and interest at a fixed loan rate, whether they were making money or not. At the Flex Fund, they might be able to arrange for some breathing space. “We can be more flexible, because sometimes a company that we have in our portfolio hits upon bad times — like what happened with COVID,” St. Onge said. “They just couldn't make their loan payments. So we were willing to be flexible and say, 'Okay, we'll give you three months of no payments. So you can get back up and running, or even figure out how you're going to take the business in a different direction.'” Since its launch in 2011, the Flex Fund has made 45 investments totaling $9 million in 24 companies operating in food, forestry and clean technology sectors. Some other interesting stats: 92 percent of full-time employees at Flex Fund companies were paying living wages to employees; Flex Fund companies spent $19.7 million or 32 cents of every dollar in sales to make purchases from local vendors; over the last 13 years, the Flex Fund's investment in its portfolio companies have helped those companies leverage almost $198 million in debt, equity and grants to grow. This resulted in a leverage ratio of $29.45 in additional capital for every dollar the Flex Fund invested. The companies it likes produce clean, renewable energy; they reduce waste; they support affordable and sustainable housing solutions; they reduce carbon emissions and eliminate single-use plastic; they provide sustainably produced, affordable food products using ingredients from local farmers; and they leverage local renewable resources. The fund does not lend money to startups. “It's more like companies that have already been in business and are growing, and need more money to grow, to hire more people to purchase equipment, to do sales and marketing, ads, etc,” St. Onge said. “So we're helping companies in those sectors that are important to Vermont, like food and forest products and climate change, get more flexible capital than they might otherwise get.” Currently, St. Onge is raising a second fund of $15 million. Although many people use the word pioneer to describe her, St. Onge is not entirely comfortable being described that way. “Well, I certainly didn't invent the kind of investing that we're doing, by any stretch,” St. Onge said. “But there weren't a lot of organizations using the kind of investment structure that we were. So we took that and said, 'Okay, we can make this work for Vermont companies, because it's really a good solution.' And we've learned a lot since then.” St. Onge lives in Stowe and is a former International Ski Federation (FIS) World Cup freestyle skiing judge; she has always led a double life: one in finance and one as an outdoor adventurer. Being a business magazine, we are focusing more on her creative investment skills, which she talks about with openness, honesty and sincerity. But when she talks about skiing and sailing, that's when her face brightens and her eyes come alive. So expect to find in this story some talk of competitive skiing, the Olympics, and boats as well as numbers. St. Onge does her job mainly alone. She has no staff. Not even a secretary. She jobs out the back-office stuff to her mentoring organization, the VSJF, and mostly answers the telephone herself. She has two oversight boards that help her. One is an investment committee that researches companies, and one is a management board. Christine Donovan is the chair of the Board of Managers. “When Janice researches and identifies and does her own due diligence on potential companies that fit the Flexcap Fund mission, she then develops a very detailed financial package working with the leadership of the company,” Donovan said. “A separate Investment Committee reviews the financial details in great depth and does their own due diligence, and collectively with Janice, recommends which companies should be considered for investment by the Board of Managers. So the companies that we review with Janice have already gone through a very rigorous investment due diligence process.” The Board of Managers get briefed by St. Onge about the history of the company and how the company aligns with the Flex Fund investment mission. “Then we make decisions on which of the recommended investments to pursue,” Donovan said. “We also have oversight over the annual budget. We receive, with Janice, the annual financial audit and the management report that comes with the audit and we provide strategic planning, critical thinking and professional support to Janice and other members of the team.” According to Donovan, the word that best describes St. Onge is “phenomenal.” “She is a national leader in impact investment for those interested in revenue-based financing,” Donovan said. “She's brilliant in her ability to identify leading-edge growth stage companies that are leading Vermont and our region to a carbon-free economy in a just and equitable way.” St. Onge has a “deep commitment” to diversity, equity and inclusion, Donovan said. “And she understands that when the Flex Fund makes investments, we're not investing just in the company,” Donovan said. “We're investing in the people in that company. Janice brings to her leadership an enormous amount of empathy, understanding and humanity in the way she interacts with the companies we're considering and the companies that we do invest with. And that continues with the leadership as they continue through their growth and their business opportunities and challenges once we've made our investment.” St. Onge's business acumen is impeccable, Donovan said. “Our member investors have their money very well placed in Janice's hands,” Donovan said. “And the Flex Fund stands as a socially responsible investment that pays investors dividends over time, while doing excellent work in our state and region.” The VSJF is a nonprofit dedicated to “nurturing the sustainable development of Vermont's economy” in the fields of agriculture and food systems, forest products, waste management, renewable energy, and environmental technology sectors. St. Onge remains on their management team. “Janice has been a real pioneer in this integrated capital movement, not only in Vermont, but nationally,” said Ellen Kahler, the longtime VSJF executive director. In 2007, Kahler hired St. Onge to figure out a way to do socially responsible investing in Vermont. The Flex Fund was her answer to the challenge. The VSJF had already been around for 12 years when Kahler hired St. Onge. “Our enabling statute gave the sustainable jobs fund the authority to do loan making,” Kahler said. “But we were never given state funding to do that. So when I hired Janice, given her background, she seemed like the perfect person to investigate what types of capital were missing in the state.” St. Onge has since made herself a leader in flex funding, Kahler said. “Janice is often one of the first people leading forward and hoping that other people come along,” Kahler said. “It takes a lot of courage and bravery to step out and try something different that the more traditional capital provider world doesn't do. I think she's very strategic. And she's really passionate about people and about the planet. She really wants a future that her kids and eventual grandkids can grow up in.” St. Onge is now a national figure, Kahler said. “Janice is called on the phone by people all over the country who are following what the Flex Fund is doing and want to create similar funds in other places,” Kahler said. “Sometimes it goes through and sometimes it doesn't, but people outside of the state definitely know about her. She is known in the integrated capital world as an innovator.” The best words to describe St. Onge are “visionary,” “brave” and “humble,” Kahler said. Photo: Janice St. Onge, president of the Flexible Capital Fund. Photo: Baldwin Photography “She doesn't want the spotlight on her,” Kahler said. “She really wants it on the companies she is investing in. And oftentimes she's investing in companies that other types of investors don't necessarily want to take a big risk on. Maybe because the technology is new, or the product is totally new. But she sees ahead at why that product is so important to filling a gap in the marketplace or solve a climate change problem.” Kahler mentioned Flex Fund investment in a company that takes crushed glass and turns it into gravel. And one in Maine that is taking wood from Vermont, Maine and New Hampshire and turning it into fiber insulation. “These are like really innovative, cutting edge new products that are solving climate change,” Kahler said. “That are good quality jobs that are making a difference to the planet as well.” When she came to VSJF, St. Onge had already enjoyed a successful career working in Vermont's Dept. of Economic Development, in banking, and serving as the director of what was then known as the Vermont Business Center at the University of Vermont. To make things more difficult, just as St. Onge took the VSJF job, the destructive recession of 2007-08 hit the economy. It was difficult for businesses to have access to any form of capital at all. St. Onge examined what she calls the “capital continuum,” to see if there were any gaps that could be exploited. She put together a team and spent several years seeking to fine-tune what was missing. One member of the team was Lawrence Miller, an entrepreneur who founded Otter Creek Brewing, served as Secretary of the Agency of Commerce and Community Development, and is currently Senior Advisor for Mission Investments at the Vermont Community Foundation, which is an investor in the Flex Fund. Miller was in on the beginning. One of the first things he did was fly Kahler and St. Onge to their first meeting in his private plane. “Janice was looking at the capital continuum in Vermont and identifying gaps,” Miller said. “At that time, this set of financing tools did not exist in Vermont. And there were not many examples elsewhere in the United States. There was an example over in New Hampshire. And back when I had Otter Creek Brewing I found a private plane was a great way to get around the northeast. The people we were visiting were right next to the Concord airport, so it made sense as a time saver that day to fly her and Ellen to the meeting in my Cessna.” Through the research they did, “Janice created something that was entirely new to Vermont, and one of the big differentiators for the Flex Fund,” Miller said. “Most venture capital funds are working on a model where they're trying to collect businesses that might do 10 times growth, 100 times growth, right? And they'll put together a portfolio and they'll nurture the ones that work. And they'll starve the ones that don't. And, you know, this balance for big returns is the venture model.” St. Onge wanted something else. “I did a lot of market research,” St. Onge said. “I talked to a lot of businesses in Vermont about why they couldn't get financing. The market had collapsed and banks weren't lending, and there wasn't a lot of venture capital money out there for growing companies. So there was this gap where companies couldn't get a loan or an investment to grow their business.” Missing was a for-profit investment company that would provide funding in the form of flexible loans for young businesses. So St. Onge set one up. “The Vermont Flexible Capital Fund was a fitting name that describes what we do, provide flexible, patient financing to growing businesses,” St. Onge said. This kind of investment offers less return than venture capital investors want, but provides more long-term stability, St. Onge said. “Those of us who are investing in the Flex Fund are really expecting something more like an 8 percent return, not a 20 percent return,” Miller said. “It's a lower-risk profile because of the type of thing it is. And it also doesn't push the entrepreneur towards an exit, making them sell their business at a high multiple as their primary objective. It allows them to build their business in a way that's most suitable for themselves in their market.” Miller jokes that St. Onge is “a recovering banker.” “That's something to know about her,” he said. “She's overcome some of her cultural risk and tolerance around investing, however, because banks don't take on this kind of risk.” Miller said the word to describe St. Onge is one rarely used to describe a banker: “compassionate.” “She is dedicated and persistent,” Miller said. “The characteristics that made her a successful skier are sort of the same characteristics that make her successful in what she's doing. She's willing to take some risks. She keeps practicing. She takes feedback really well. She always remembers to ask for feedback. She's wicked smart, but she doesn't let her ego get in her own way. She keeps learning.” St. Onge is willing to let her passions influence her play, Miller said. “There are a lot of people in the business world who tend to separate their personal identity from their professional identity,” Miller said. “But she's able to bring all of that authenticity forward. That becomes really important when you're dealing with companies that are in trouble. It can be incredibly stressful for the entrepreneur. So to be able to be an investor that's trusted, that's compassionate, that's helping people make some of the most difficult decisions that are ever going to make professionally. Is really valuable. She brings that at a level that's really neat to watch.” St. Onge is a big supporter of female business empowerment, Miller said. “She's championing women in business,” Miller said. “She's leaning on her invested companies to make sure they have representation on the board from women. We know statistically, right, that investment committees that are diverse outperform nondiverse investment committees. And we find that to be true in management teams as well, right? Teams that are able to bring different perspectives to bear are able to make better predictions and exercise better judgment because they've got that better view. And she's just been particularly good and effective relative to making sure that women's perspective is included in business and government.” Since the Flex Fund is a for-profit lender, volatile interest rates could be involved here. But they are not. “We customize our financing to a company's mission and business goals,” St. Onge said. “The Flex Fund is the only licensed lender in Vermont, and one of few investment funds in the New England region, that uses what is called revenue-based financing (RBF) as an alternative to investing equity.” RBF is based on selling a piece of a company's future revenue stream from sales of their product or services instead of the company selling shares of itself. “An RBF loan is considered debt that has to be repaid over time,” St. Onge said. “Repayment is made monthly based on a percentage of revenue until the loan is repaid at a multiple of the original amount borrowed. RBF loans do not have an interest rate. RBF payments are made over a fixed time period like 5 years or until we reach the multiple on our loan” This kind of capital is not low-cost. “We are more expensive than a traditional bank loan because we don't require collateral, or a personal guaranty,” St. Onge said. “Since we don't ask as much of a borrower to secure our loan, we are taking on more risk, and our expected return reflects this.” Sometimes a company will need a longer term to pay off a loan. “This is what we offer,” St. Onge said. “And in addition to RBF loans, we will invest via subordinated debt, patient equity and convertible note structure, as well as provide non-financial support, such as business coaching when it is appropriate for our portfolio companies. Subordinated debt works essentially as a bank loan that is subordinated to other senior debt and is repayable only after other debts have been repaid.” Reading character is the name of the game here. Sometimes companies default. "One of my lessons learned early on in this work is 'don't lend to jerks,” St. Onge said. “We made a loan early on to an entrepreneur who was really good at selling himself as a seasoned businessperson with the opportunity to grow his business. But in the end, after we wrote the check, he wasn't honest with us about the financial trouble he was in. He was so behind in the rent that the landlord threatened to kick him out.” This man sent St. Onge an email one day saying that he was walking away from the business and leaving everything behind. “He defaulted on our loan and never looked back,” St. Onge said. “He also defaulted on his bank loan and walked away from that as well. I ended up having to work with the bank to give us permission to sell the inventory he had left behind just to get some of our capital back. The hardest part of this job is to really know whether someone has enough integrity to work with you when they hit hard times, or whether they will just up and run when the going gets tough.” This was a hard but early lesson. “Since then I've learned to do a thorough job of checking character references,” St. Onge said. “While we've had other companies in our portfolio to close their doors due to COVID or other circumstances, they have all worked with us — except for the person in this example — to wind down their business and take responsibility for their mistakes. The nature of our business is to take risk. We invest in people, not companies. And, getting to know someone personally before you write the check is really important.” Just like other investment funds, the Flex Fund has to raise capital. “We raised capital ourselves back in 2011 and 2012 and 2013 from what are called 'accredited investors,' meaning people who are either high net worth individuals or organizations like the Vermont Community Foundation that were interested in our mission of mitigating climate change and building healthy food systems, and doing that locally through business, businesses that were growing,” St. Onge said. People lined up to praise St. Onge for this story. For example, Rob Miller, now the CEO of East Rise Credit Union (formerly VSECU), was her boss in the Howard Dean Administration when he was Commissioner of Economic Development. He calls St. Onge “a breath of fresh air in terms of the approaches she took.” “We were sort of young and naïve then,” Rob Miller said. “But on one hand she had really good technical knowledge and capabilities. Not just technology, but she came from the banking community so she kind of understood business. And it was really good to have someone like that in the department at the time. Since then I've watched her from afar as she set up the Flex Capital Fund. That kind of financing is unusual in Vermont.” Vermont has a spectrum of capital options, from private equity or traditional debt and everything in between. “But flex capital wasn't really available in Vermont before,” Rob Miller said. “And I don't think that it's available by anyone else other than the Flex Fund. She not only is providing access to capital that's really valuable and wasn't here before, but she's doing it with a purpose and a mission. And I think that's what is really unique. It's not just the kind of capital that she is making available to Vermont businesses. It's the way in which she's gone about doing it that I think is really important.” It is the social component that interests him. “It's the philosophy,” he said. “They look at the impact on Vermont. They look to insure that the companies they are investing in meet certain requirements and are doing good beyond just trying to earn a profit for their business. They have a multiplier effect in Vermont that actually is making this a better place for everyone.” Rob Miller especially admires St. Onge's ability to be calm and deliberative. “She's a very calming influence when everything's going crazy,” he said. “She can come in and really make sense of things, and she does so in a way that engenders competence, which I think is really special. Janice's capability gives her an incredible bandwidth. She's doing the work of multiple people by herself. She has an incredible ability to process much more than any other person.” St. Onge is defined by her passions, he said. “I know she has that about sports, generally,” he said. “But she has a passion for what she's doing. She is passionate about making a difference, and about doing things in ways that benefit our communities, our people, and the businesses. So it's not necessarily a passion that bubbles out of her in tremendously visible ways, but it's kind of a quiet intensity that I think is really important. Not to mention that she's just an incredibly good person. Genuine, authentic, kind, cares about people, does the right thing. Those are her inherent capabilities.” Karin Chamberlain is the director of impact investments at Clean Yield Asset Management, which works with high-end investors who have portfolios based around social and environmental criteria. Clean Yield had already vetted St. Onge for its investors by the time Chamberlain met her, and it had at least one investor already in the Flex Fund. “On my second day of the job, I went to what is called the Farm to Plate conference at Killington,” Chamberlain said. “It's a gathering from the Vermont Sustainable Jobs Fund. It's a gathering of practitioners and farmers investors to talk about agriculture, food production in Vermont. That's where I met Janice. What I found really interesting, when I first met her, was her depth of knowledge and her ability to explain and articulate the work that she was doing. She had a way of explaining that was very clear to people who did not necessarily have a background or exposure in financial services, or to the specific type of investing she was doing.” Chamberlain called St. Onge “a very creative thinker.” “One thing that's really important in finance and investing is that the company gets the right capital at the right time,” Chamberlain said. “Sometimes you need a loan, sometimes you need equity, and sometimes you need something in between. And Janice is very good at understanding what form of capital a company needs to help them be successful at their stage of growth.” For example, Chamberlain mentioned an exceptionally successful Vermont barbecue company called Vermont Smoke & Cure, out of South Barre. “They basically were operating — and this is just my understanding — in the back of an old converted garage,” Chamberlain said. “And then they wanted to expand. They needed investments to build a new facility so they could produce more of their products. And so the Flexible Capital Fund invested in them. And after a few years they were bought out, and there was a very nice return to the investors for such a short period of time. So that was an unexpected success story in that it was not expected to happen so quickly.” Once the company was sold, it did not abandon Vermont. “You really want to keep the business in Vermont and Vermonters employed,” Chamberlain said. “And sometimes there is a silver lining if the entrepreneur sells the company. Oftentimes employees have ownership in the stock. So employees get a very nice payout from the sale of the company. The entrepreneur can use that money that they earn from selling their company to start another company in Vermont. And I have seen that sometimes the employees go out and start their own company now that they have money to do it. So selling the company isn't necessarily always a negative thing for Vermont. And I know that when Smoke & Cure was sold, they put specific provisions in it as far as keeping operations in Vermont and sourcing from Vermont, to make sure that it wasn't just uprooted and disappeared. And they continue to operate in Vermont.” St. Onge is a clear communicator who keeps the success of her entrepreneurs close to her heart, Chamberlain said. For example, during COVID, St. Onge instigated regular Zoom meetings with her entrepreneurs. Photo: Janice at VBSR gathering. Courtesy photo “They had meetings with other companies in the portfolio to discuss strategies on 'How do we get through this?'” Chamberlain said. “Like, 'I'm facing this challenge.' 'And this is how I'm addressing that.' Sharing experiences and providing that support group to each other. So she really wants to make sure that the entrepreneurs are successful.” St. Onge has a gambling streak, Chamberlain said. “She's willing to take calculated risks,” she said. “In every kind of venture fund, you're going to have success stories and you're going to have some companies that do not succeed for a variety of reasons. And when you're doing investing like this, you want to make sure that you are taking some risks. If you have 100 percent success rate, maybe you're not taking enough risk.” Chamberlain called St. Onge's work “remarkable and groundbreaking.” “What she has accomplished, as one woman running a fund, is incredibly impressive,” she said. “There are no other funds like this in New England. She's definitely a pioneer in creating this kind of a fund. She understands that for many companies in Vermont, in this current environment, especially those involved with natural resources or agriculture or renewable energy, they need time to build their company slowly. And by growing slowly and methodically, they create a really good foundation and can be successful. And hopefully, you know, they stay in Vermont.” Now that the first Flex Fund is winding down, on the whole, how did Clean Yield's investors do? “Well, we haven't gotten the final numbers yet, but my understanding is that there has been a positive return financially,” Chamberlain said. “And there have been quite a few success stories with the companies that we're invested in, benefiting Vermont with new jobs and good salaries. And that's equally as important to our clients as the financial return.” Clean Yield has already lined up clients for the second fund. Vermont is not the only state in which St. Onge works. The Flex Fund is also investing in companies in Maine. “The reason she's doing some stuff interstate is there's not necessarily enough deal flow in one geography at any given time to support particularly a larger fund,” Lawrence Miller explained. “And we have a regional economy. So there is some value of that. Some of the mission investors, they don't care about the geography. The Vermont Community Foundation, because we've got a place-based investment mission as well as those other screens, we're saying we really want to make sure you do continue to invest in Vermont. But the state board boundaries are a little artificial from an economic perspective.” Early Life St. Onge was born in New Jersey, where her father had a contracting business. The family were passionate skiers who owned a second home in Killington. She has a brother who is 12 years older and a sister who is five years older. “I am the baby in the family,” St. Onge said. “After my brother graduated, my dad was anxious and really interested in getting out of the rat race in New Jersey. And so our family moved up when I was just done with kindergarten. I had the summer to get acclimated and then I started first grade. So I grew up in Killington with my sister. I went to Union High School and then transferred to Mount St. Joseph Academy, in my junior year, and graduated from there.” St. Onge's father continued his contracting business. Her mother worked doing administration and bookkeeping. “My parents really instilled in me a sense of kindness and community” she said. “They were always helping out their neighbors. We had one family, who at the time when I was growing up in high school, their whole family and ours did a lot of things together. And as a senior in high school, when I was a sophomore, this person was injured in a basketball accident and ended up in a coma. And his name was Lenny Burke. We were very close to the family and my family was there from day one. It really influenced how I saw the importance of staying engaged with the community and being there to help others.” From his obituary: “Lenny was in a coma for 46 days, during which time the community that had always embraced Lenny, continued to do so.” He died at the age of 56, a nearly 40-year survivor of traumatic brain injury, He helped “Vermont to lead the way in providing community-based (non-institutional) rehabilitation for survivors of TBI.” St. Onge said that her parents also taught her optimism. “My father was always looking at the bright side, whether there was tragedy like with our family friends,” she said. “So optimism was certainly a very important piece that they taught me growing up. The alternative is to not see the good things. We have enough of the alternative right now, in the way in which our world is so divisive.” Her father taught her how to ski. “My dad was a great sportsman,” St. Onge said. “He instilled the love of the sport in my mind. My mom? Not so much in downhill, but after we moved up to Killington she did more cross country skiing than anything else. She and my dad had a really great relationship. They did a lot together, but they did a lot apart. They had their own lives around friendships and I really appreciated that. My mom was her own person. And my dad let her be her own person. So those were some of the things that I took away from growing up in that family.” St. Onge became a competitive freestyle skier. She was on her high school team and coached there her last year. “I ended up going to the U.S. National Ski Championships in Sugarloaf my junior year,” she said. “And that was that. I was like, 'Okay, I think I'm done with this. I'm gonna move on.' I coached the Killington freestyle team, and some of the younger kids for a while. One of them went on to become a U.S. Ski Team member. I don't know if it was the result of me. Probably not.” She was also a lifeguard during the summers to earn extra cash. She chose to do her college work at the University of Utah, primarily because it was known to have “the greatest snow on earth.” Photo: Janice (second from left) in 1987, part of Park City Ski Resort's Ski Host team. Courtesy photo “It was on the license plates,” St. Onge said. “But it was also a chance for me to get as far away from home as an 18-year-old can get, and just be on my own. I paid for most of my schooling after freshman year through work study, and I ended up becoming a freestyle skiing judge to earn extra money in college. I was able to get an apartment with friends from sophomore year on. I bought my own car. So I figured things out along the way through having to be on my own in a place where I couldn't come home on the weekends. You know, you can't just hop on a plane in Utah to get back to Vermont. So that was a really a time when I learned how to be independent.” She studied marketing with a minor in French. She also got herself licensed as an international freestyle judge. “So I was able to judge World Cup freestyle skiing events all over the world,” she said. “I was in Japan. I was in Australia when 9/11 happened, and I was stranded there. What most people don't know is that I was the first woman in the United States to be certified to judge an Olympic freestyle skiing event. That was my big claim to fame. But after I got to that level, I had two young kids and it was getting to where I had to take my vacation time to actually do these freestyle skiing competitions at the World Cup level. And I was like, 'It's probably time to focus on my family.'” St. Onge is married to Lee St. Onge. They have two grown children. Her husband is the documentation manager for a software systems company. She met him at Sugarloaf at a ski competition. At that time she was working in Vermont for a ski company. She moved to Connecticut to be with him and took a job at People's United Bank (now M&T Bank). “I got into their retail training program,” St. Onge said. “So I was in the retail side of the branch management with the bank for probably four or five years and then moved into commercial real estate lending. I had a whole portfolio of projects. And then the last two years, I was in their finance department doing human resource-related culture building. You know, acting as a liaison between training and education for the finance department employees.” While there, the St. Onges took a big risk. They quit their day jobs to sail a boat up the Intercoastal from Florida to Rhode Island. “It was before we had kids,” she said. “My husband's dad passed away and left a sailboat in Florida. This was in 1992. I knew nothing about sailing but my husband's been on boats all his life. Both his brothers have sailed around the world and one of his brothers lives in Indonesia on his boat. That was the biggest risk I've ever taken, quitting my job knowing I didn't have a job when we came back. And we took three months, fixed up his dad's boat in Florida and brought it up the intercoastal. Then I got my job back. I don't know how that happened.” Later, St. Onge did two years towards an MBA at the University of Connecticut, but she stopped before she earned the degree. “I never finished because at the time I was working full time and had two very young children,” she said. “I intended to go back, but I never did. I found that I had enough experience with everything else that I've done over the years. That's my life MBA, so to speak.” She is an alumnus of the Snelling Center for Government’s Vermont Leadership Institute and a 2018-19 Fellow of the Justice Economy Institute. Coming Home The St. Onge family returned to Vermont when Lee St. Onge took a job working for an early stage technology company. “In Connecticut we were both working and commuting probably anywhere from 45 minutes to an hour and a half a day, and putting our kids in daycare, and it just wasn't the lifestyle that we wanted,” St. Onge said. “We wanted to be able to spend more time with our kids. Not get stuck in traffic, not be in the rat race. So he took the job at this early stage company, I came up, we all moved up to Vermont, we bought our house in Stowe and have been there ever since.” Obviously, St. Onge's career has never taken a straight and narrow path. In Vermont she left banking to work with the company her husband was working for. “So I was in senior management there, and then ended up going to the Vermont Department of Economic Development,” St. Onge said. “I worked as their technology business development director for about three or four years. And that was where I really got engaged with the entrepreneurial community and helping technology businesses and entrepreneurs connect with resources at UVM.” She learned about angel investing and funding businesses, then moved over to UVM for two years to help launch what at the time was called the Vermont Business Center. “I worked for Continuing Education helping the Vermont business community access resources like education, training, research, etc at UVM,” she said. The through-line for her different jobs is prepping people for leadership success. “When I was working at People's United Bank, in providing loans to companies that were in the real estate side of things, I got my start,” St. Onge said. “So I learned about credit analysis, how to underwrite a loan, what the financial ratios look like and that sort of thing. Then when I moved into my position in the State of Vermont, in economic development, I could expand on those skills. Now I know how to help a company understand their financial statements and help them figure out what kind of capital they might need to grow their business.” It is all about making and building relationships with investors and capital providers. “The relationships were with lenders to help those companies grow, helping them find the right staff, and helping them find a location for their new business or what have you,” St. Onge said. “From there, moving to the university, it was more about education and training for leadership. So what does the CEO and entrepreneur really need from the standpoint of how do they become a better leader, a better manager, build a culture that's going to help attract and retain good employees?” And then came the call from Ellen Kahler and the VSJF. “When I came on board there as deputy director, I helped with their business coaching programs,” she said. “And at that point, Ellen indicated that they were interested in identifying whether there might be a way to actually become a capital provider themselves. We're doing all this business coaching and helping with advisory capacity, but companies still need capital. And these are companies in really important sectors of food and forestry and climate change. They're not getting the right amount of capital. So then I took that project on and that's what led to what I'm doing today.” Photo: Janice & family at pre-wedding party, Rangely Lake, Maine. From left to right: Husband Lee, Janice, daughter Mackenzie, son-in-law Sam Morse, and son Austin St. Onge. Courtesy photo How It Works For a good example of the positive effect that St. Onge and the Flex Fund can have, look at Encore Renewable Energy, a clean renewable energy company. Encore is a recipient of two Flex Fund loans. (St. Onge's son, Austin, 26, now works for Encore as a senior associate in finance & investment.) “We got involved with Janice in 2016,” said Encore CEO and founder Chad Farrell. “We had two different financings. The first was a $500,000 commitment. And then, a couple years later, we were able to secure a million dollar commitment. In both cases Janice was able to bring in additional capital resources to the table. Not all of the money was coming from the Flexible Capital Fund, but all of the paper and the contracts and the legal documents were. We were facing one lender, even though she brought a number of different outside investors to the table under that same umbrella.” Back then the company had a business model with highly variable revenues based on project development activities that required up front work and costs before leading to project construction and sales. Encore is headquartered at Hula in Burlington but is active all over Vermont as well as New England, New York and the mid-Atlantic states. It also has projects in development in the Midwest, specifically in Illinois. Farrell called St. Onge a mentor as well as a resource. “Back in the early 2010s, we were raising money through friends, family and fools,” Farrell said. “We were really just bootstrapping the business and rolling profits from projects into the growth of the business. By working with Janice, we've certainly grown over the years and benefitted tremendously.” There were many times when the company was doing preliminary work that would later lead to revenue. It needed financial support until the business was earning money and could pay back the fund. “So instead of having a more traditional monthly debt payment, we only had to make payments when we actually received revenue,” Farrell said. “That was extremely beneficial for a business such as ours, that has less predictable, less stable, less, more sporadic revenues. Janice was extremely instrumental in helping us increase the visibility of the business during that growth phase as well.” When COVID came around, revenue faltered. “During COVID she allowed moratoriums on debt service payments, while we all collectively sort of struggled to understand what the business — what any business — would look like moving through that period of extreme uncertainty,” Farrell said. As a result of grants secured by the Flex Fund, additional training resources were provided. “For example, I was provided with a business coach, which sort of helped us navigate not only the transition to a more hybrid working environment, but also to issues that relate to team accountability,” Farrell said. “Janice just continued to help us build out a growing business with tools that were not otherwise on my desktop. So I think the Flexible Capital Fund is a tremendous avenue for business growth in the state of Vermont, and increasingly, beyond.” St. Onge also encouraged Farrell and Encore to become more diverse. “For a business in a steep growth phase, Encore had holes on the team they needed to fill,” St. Onge said. “In the past, they had self-financed new hires, but they were bumping up against the capacity to self-fund relative to the opportunity they saw in the market. Our capital provided additional bandwidth on the team, which enabled them to grow their pipeline and revenue.” Diversity became a guiding concept. “As we become a more diverse country, we want our business to look like the rest of the country,” Farrell said. “Janice would provide resources that illustrated the financial benefits of having a more diverse business. At the time that we received Janice's initial funding, I believe we were five, maybe six middle-aged white guys. Now I believe our headcount at this point is 44, and we have a significant number of women, we're very diverse as related to age and as related to race. We've really engaged around a diversity journey that Janice has helped us initiate.” Encore has paid back all the loan money, and Farrell credits the Flexible Capital Fund for helping to build its success. “I think it's safe to say that without the Flexible Capital Fund coming to Encore at the time that they did, we just wouldn't be where we are today — a thriving renewable energy project development company that is recognized throughout the region, and increasingly, nationally,” Farrell said. St. Onge agrees. “Encore, which has since paid us off, viewed our capital as catalytic — since we lent them capital, they have more than tripled their revenue and quadrupled the number of high-quality jobs provided by the company,” she said. “Encore's most recent financing, a transition to becoming an independent power producer, was a $150 million commitment from a climate economy focused infrastructure fund in Zurich, Switzerland.” Women's Investing When she is not raising a new capital fund, St. Onge is one of the founders of the Vermont Women's Investment Network, now blended into the Northern New England Women's Investment Network. This makes all kinds of sense for the Flex Fund. “The Northern New England Women's Investors Network (NNEWIN) is a volunteer gig and not associated with my full time work in running the Flex Fund,” St. Onge said. “I'm one of the co-founders of this loosely knit network along with Louisa Schibli in Vermont. NNE WIN is a coalition of women across New England who are interested in learning more about — and actively participating in — angel and impact investment opportunities.” NNE WIN currently sponsors tri-state events throughout New England, and has active regional meetings in Maine, New Hampshire and Vermont. These meetings and group events provide opportunities for women to expand their knowledge of investing, to meet and network with like-minded women, and to get more involved and engaged in investing in their communities. (website: www.nnewin.org .) “We started the network over six years ago because most of the investors in New England were white men, and there were very few women investing privately in companies,” St. Onge said. “NNEWIN was formed to help educate women about impact and angel investing and build confidence to invest in alignment with their values.” The Future The Flex Fund has been investing in Vermont and New England businesses for 12 years now. “So, while we still have businesses that are part of our portfolio, meaning we invested in them and they have not yet fully repaid us, we need to raise more capital in order to do new loans and investments,” St. Onge said. “So, in total we are raising between $10-15 million so that we can continue to invest in food, forestry and renewable energy companies for another 12 years. If we are successful in raising this money, I will continue to be the Flex Fund president and keep doing this work.” With the new fund, St. Onge is working with a female partner who might, if they reach their goal, be able to come on board as a fund manager, thus relieving St. Onge of at least some of the heavy lifting. “So we'll have two people managing the portfolio and running the company,” St. Onge said. “And we'll still maintain our relationship with the VSJF to help us on the management side.” It is difficult in this political and economic climate to raise $15 million in investment funds. St. Onge is doing a lot of talking and an equal amount of listening and vetting. “You have to be very careful,” St. Onge said. “A lot of companies will tell you it's very interesting because of the way interest rates are right now. You can put your money safely in a CD for 5 percent right now. Also, there's a lot of divisiveness in this country. I think the environment and the uncertainty, until we get through the election, is challenging people. And it's clearly impacting the flow of money, both into funds and into companies as well. Those are the two things that I've observed personally.” Many of the Flex Fund's early investors are interested in coming back for a second round. “We have a lot of investors who are willing to roll over their investment into the new fund,” St. Onge said. “So that's positive.” Food issues have become highlighted. “We do a lot of talking to people who are interested in the food system space, who want to see New England do a better job of feeding ourselves, as opposed to getting food from California when COVID hit that supply chain,” St. Onge said. “So how do we improve our food system right here in New England?” Investors are also interested in companies that are reducing carbon emissions. “And we're looking at the other community foundations in Maine and New Hampshire,” St. Onge said. “We're talking to banks. We're talking to high net worth Individuals who have money that they are interested in investing in doing things in alignment with what they value. So we're having a lot of conversations in a very challenging time to raise capital. But I'm hopeful we'll get there, so that we can keep doing this work.” Diversity may be a key part of St. Onge's pitch, but she is talking to many people — and some of those are even men. “We're agnostic,” she said. “We love folks who are high net worth individuals, nonprofit organizations, philanthropy, and philanthropic organizations who are interested in mitigating climate change and keeping our lands working in New England. I'm tapping into the women's network. We've already got folks in conversation. Right now I think about 60 percent of our investors are women. But I think we're a good fit for a lot of organizations and banks that are looking to reinvest in their community and do it in a way that's unique. Because we're somewhat unique in how we invest and who we work with.” St. Onge will start investing when she reaches $10 million, she said. “We're halfway to $10 million,” she said. “We've got about $5 million committed right now.” St. Onge may still be too young for retirement, but half her heart is still in sport; her son-in-law hopes to be competing in the next Winter Olympics. “My daughter is married to a US Ski Team member,” she said. “He is a downhill skier. My daughter was in Paris at the Olympics, because she works for the US Olympic Committee. So all sports have been a big piece of who we are. And if I could, I would have loved to have stayed in the ski industry. But I couldn't afford it. At the time I was making minimum wage and I needed to cover my expenses. But that's a big piece of who I am and who my family still is.” So while St. Onge has her work cut out for her with the next round of the Flex Fund, she would like to slow down at some point. “I just can't even imagine not working right now,” she said. “But seven to 10 years out, I'd love to be able to wind down. My husband and I both love to travel. And clearly we have people we can go visit on boats and fun places. And hopefully watch my son-in-law in the Olympics in Italy in a couple of years. So that would be fun.” Photo: Janice and her husband watching their son-in-law race in the World Cup Downhill Skiing Event at Beaver Creek, December 2023. Courtesy photo To learn more about what's next for the Flex Fund, click here Joyce Marcel is a journalist in southern Vermont. In 2017, she was named the best business magazine profile writer in the country by the Alliance of Area Business Publishers. She is married to Randy Holhut, the news editor/acting operations manager of The Commons, a weekly newspaper in Brattleboro. To support vital journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!
