Sean Eldridge walking the walk

Sean Eldridge. (photo by Dan Barton)

Sean Eldridge. (photo by Dan Barton)

So far, Sean Eldridge has done exactly what he said he would do.

In 2011 the moneyed young newcomer to the area founded Hudson River Ventures with the stated purposes of empowering Hudson Valley entrepreneurs and helping build their businesses. Last year he announced that his business intended to make strategic investments ranging from $50,000 to $500,000 in small businesses in the Hudson Valley. He opened an office in Kingston.

This January he and his husband, Chris Hughes, often described as “the Facebook mega-millionaire,” bought a large, modern house in Shokan for a reported $1,922,500. According to New York Magazine, they also have a $5 million estate in Garrison and a $5 million loft in Soho.


“The Hudson Valley is where Sean and Chris have put down their roots,” explained Eldridge spokesman Mike Morey in January. “They live in Shokan, 10 minutes away from Sean’s office in Kingston, where he runs Hudson River Ventures.” (Try not to drive that fast on Route 28.)

Not only does Eldridge now occupy the same office space on Kingston’s Wall Street as previously occupied by Congressman Maurice Hinchey and before that by Congressman Matt McHugh, but he’s planning on running for the same political office as well. In February he filed papers with the Federal Elections Commission to explore running for Congress as a Democrat in 2014. He seeks to oppose incumbent Republican congressman Chris Gibson, who is expected to run again. Said spokesperson Mike Morey at that time, “Sean is giving serious consideration to running.”

The same week in February that Eldridge announced his political interest, Mike Oates, who as executive director of the Hudson Valley Economic Development Corporation had been collaborating closely with Eldridge, announced he was quitting to take the same title at the latter’s Hudson River Ventures. Oates is known for his tireless advocacy of strategic clustering, described by Michael Porter, the Harvard Business School pioneer of the concept, as “the geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are present in a nation or region.”

The Hudson Valley is Eldridge’s “geographic concentration.” As of this past week, Eldridge, who turned 27 last Wednesday, had put money — some loans and some equity positions — into nine small businesses in the region: three in Dutchess County, two in Orange, two in Westchester, and one each in Ulster and Sullivan counties. Included have been two small distilleries and a brewery, two restaurants, a farm market, a hydroponic farm, a chocolatier and an Ulster County breadmaker. Further announcements of projects currently in the investment pipeline are imminent, Eldridge promised last week.

The business investments that have been consummated include Bread Alone (Ulster), Prohibition Distillery (Roscoe), Gigi’s Hudson Valley (Rhinebeck), Hudson Chocolates (Poughkeepsie), Poppy’s Burgers and Fries (Beacon), Continental Organics (New Windsor), Black Dirt Distillery (Pine Island), RiverMarket (Tarrytown), and Peekskill Brewery (Peekskill). Eldridge can speak with enthusiasm about the details of each of them.

Though all Hudson River Ventures investments thus far have been in the food and beverage industries or in agriculture, Eldridge is intent on diversifying the portfolio. He has targeted investment in advanced manufacturing, innovative technology and tourism. In May he announced a $250,000 personal contribution to establishment of an advanced manufacturing center at SUNY New Paltz. He said at that time that Hudson River Ventures was prepared to invest another $500,000 in companies in the region which were incorporating 3D printing in their enterprises.

There’s been a lot of buzz about 3D printing as a revolutionary technology with the capacity to transform manufacturing processes in many industries. Early adopters will have a business edge, the partners in the New Paltz-based manufacturing center hope.

Who stays? Who goes?

We in the mid-Hudson area live on the fringes of a larger world which follows different rules than we do in regard to space and privacy, particularly in the case of celebrities, the very rich, the very notorious and other kinds of notables. The status-stricken New York City culture can be relentless in its pursuit of flamboyant forms of fame. Sean Eldridge has proved an easy target.

“Insatiable New York City has by long custom exploited the upstate counties for their scenery, their food and their antiques (not to mention their water),” observed Michael Calderone in the British national newspaper The Guardian on July 11. “But how far up the [T]hruway do you have to drive to buy a congressional seat? It’s a question the Republicans are taking seriously. Party leaders fear the GOP-held 19th district, 80 miles north of the city, could fall to an insurgent bid by Sean Eldridge, the husband of Facebook mega-millionaire Chris Hughes, The New York Times reported Thursday.”

Noting that upstate residents had “gotten a pretty good look at the downstate crowd over the years,” The Guardian article drew its conclusion about upstate attitudes. “They’re happy to host urban escapees over any long weekend,” it said. “Everybody’s happy for the business. But the custom is to go back where you came from by Monday.”

This readily observable custom, though confirmed by Thruway traffic patterns, disguises the effect of New York City on Hudson Valley economic development. As commutation patterns, real-estate purchases and voting trends all demonstrate, not everyone who comes to the Hudson Valley dutifully heads back to where they came from at the end of the weekend.

Many city people put down tentative roots in the Hudson Valley. Many extol the region’s many virtues. Some express interest in investing in its businesses. A considerable number stay. But it remains almost impossible to know which ones will stay around and which ones won’t.

Learning curve

Chris Hughes’ current major interest is The New Republic, the venerable New York-based magazine of which he is publisher and editor. At the time he bought a majority interest in the magazine in March 2012, Forbes magazine estimated his wealth at more than $600 million.

According to a New York Magazine profile of him last December, Hughes wonders how serious journalism will survive in a digital age. He thinks it’s important that it does. One answer, he believes, is what he calls long-form journalism — the kind that he wants his magazine to produce. His role is not just to produce a magazine, he told one interviewer: “We have to be convening conversations.”

Sean Eldridge likes the concept of entrepreneurship, classically defined as the transformation of innovation into economic goods through the introduction of new ideas or forms of organization. Since he’s dealing with his own family capital, gained through a series of shrewd and happy accidents rather than through inherited wealth, he has a lot of leeway in how he manages his nest egg. He’s not as constrained by immediate considerations of risk or reward as a banker would be, nor solely by long-term return on capital the way a venture capitalist is.

Hudson River Ventures uses what it calls a double-bottom-line approach. While all funds have a conventional bottom line to measure their fiscal performance, Hudson River Ventures uses a second bottom line to measure performance in terms of positive social impact.

Hudson River Ventures is part of the growing number of non-banking institutions often referred to as the shadow banking system. Hedge funds specializing in lending to small businesses often charge high interest and only do deals in which their financial positions are well protected in case of bankruptcy. For borrowers, they are the lenders of last resort.

Eldridge, new to the business and eager to pioneer within it, has a much broader outlook. His investment fund is not a hedge fund, he says. He sees himself as a patient investor who is strengthening the small businesses of the region. By and large, the Hudson Valley has lacked the attention of such a focus. Eldridge will be learning as he goes.

The support from Hudson River Ventures has come mostly in the form of loans. But there are exceptions. “We provide equity when partners are involved,” said Eldridge.

An evolution toward venture capital, in which the investor seeks debt or partial ownership in exchange for investment capital, is one possible route for a maturing Hudson River Ventures. Successful financial entrepreneurship won’t hurt his reputation in the rarefied circles in which he sometimes travels.

As a couple, Hughes and Eldridge are heavily invested in liberal politics and in gay rights. They have invested generously in these causes, and continue to do so. Hughes, who played a central role in shaping the new-media image of Barack Obama, counts many powerful New York State political figures among his and Eldridge’s friends. The couple has been to state dinners at the White House, and they’re very well connected.

That insider position has yielded political capital. When polling data showed that candidate Cecilia Tkaczyk had a chance to win the local state Senate seat she was contesting in 2012, for instance, they were one of two major financial contributors who provided the last-minute funds to push her over the top. The Democratic establishment is unlikely to forget that.

Eldridge and Hughes are not the first immigrants to the area to seek simultaneous membership in both a larger and a smaller world. If these two small-town-bred celebrities hadn’t wanted ever to leave the bright lights behind, they would have moved to the Hamptons. They didn’t. Perhaps reasons other than the pursuit of a congressional career played a part in their decision.

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