Inside a humid 10,000-square-foot room in a former mattress factory a few blocks inward from the Newburgh waterfront are 28 circular salt-and-fresh-water tanks, each about 14 feet in diameter, four feet high, and each containing thousands of shrimp. Proprietor of Eco Shrimp Garden Jean Claude Frajmund assures visitors that his shrimp are grown sustainably and free from chemicals, pollutants, antibiotics and hormones. They are never frozen.
His secret sauce, he says, is a biofloc formula that nurtures select bacteria in much the same way as real yoghurt does. The bacteria levels are tested many times daily. If the nutriment mix isn’t right, Frajmund explains, the shrimp suffer. Not good, he says empathetically. “We want them happy.”
The business currently produces about 350 pounds of fresh shrimp every week, and Frajmund has three employees. His ambition, he says, is to produce 100,000 pounds a year, an amount equal to what New Yorkers consume in a day (more than the consumption of salmon and tuna put together).
Eco Shrimp, which Frajmund says is the only urban shrimp farm in the nation (“I’m a city guy”), gets most of its eleven-day-old post-larval broodstock through overnight shipment from Florida. Into the first tank the baby shrimp go to grow.
On Friday, July 29, the Kingston-based fledgling Hudson Valley Startup Fund made its first investment, signing papers committing to Eco Shrimp Garden up to $175,000 of the $1.15 million it has raised from 44 investors. In a photograph of the occasion, HVSF co-manager Chad Gomes of Esopus is shown handing a $25,000 check, representing the first tranche, or portion, of the transaction, to Frajmund. Both men are smiling.
Eco Shrimp Garden sells almost entirely at New York City markets, Union Square Greenmarket and fancy restaurants. On greenmarket day in Union Square, he reports, he has no trouble selling out by early afternoon. He boasts that he could easily sell ten times as much as he does, and that 80 percent of his purchasers become return customers. He has what seems to be the foundation of a good business.
Posted prices in Newburgh start at $26 a pound, and go up to the high thirties for the largest ones. To the thought that the price point seems relatively high by local standards, he replies that he’s disrupting the industry and that his product is worth the difference. Since despite his website’s claim to the contrary he didn’t have anything for retail sale that Thursday afternoon, there was no way to test the proposition.
How was Frajmund able to secure outside financial participation for a business less than a year old? The HVSF was brought to his attention by Orange County attorney Austin DuBois, who does legal work for some of the startup fund’s investors and who has recently become an investor in it himself. DuBois, vice chairman of the Newburgh city Industrial Development Authority and a member of the Pattern for Progress board, is well connected in regional business circles.
The vetting process was methodical. Frajmund completed the application process to determine whether he fit the HVSF criteria. He made an introductory pitch to a meeting of about 40 people at Marist College in January. He then met with a steering committee of six or seven HVSF members, and in April made a 15-minute presentation to the entire group, followed by a 15-minute Q&A and a 15-minute group discussion. “I was the visionary,” Frajmund says.
The next step was a grilling by a due-diligence team, where Eco Shrimp’s background, finances, business model and strategy were discussed. At the June HVSF meeting, the structure of the deal was broached for the first time.
The first portion of the investment money would go to a study of Eco’s scalability. How can the business evolve to its full potential?
With 44 investors, five of whom are managing directors (Tony DiMarco, Chad Gomes, Paul Hakim, Johnny LeHane and Noa Simons), HVSF has a lot of business experience to lean on. “Someone’s an expert on every aspect of business,” DiMarco explains. “There’s a kind of collective wisdom.”
The mission of the organization is as much to provide mentorship as seed capital. But its strength goes well beyond the identification of businesses which offer high growth potential, like Eco. The managing directors, who meet every Friday morning in Kingston, know almost all the local players focused on the region’s economic development. The entire group will hear at its monthly meetings about the progress of the companies in which HVSF has invested. Over time, the members will get to know each other even better. HVSF’s activities add an ingredient that can strengthen the entrepreneurial culture of the Hudson Valley.
Frajmund has a colorful past. He grew up in Brazil, and in the 1980s once lived in a fishing village where eating shrimp was breakfast. Living with his family on the Upper West Side 30 years later, he came across an article on indoor shrimp farming that revived his interest. That was four years ago.
He says he feels “comfortable” with the people who agreed to fund Eco Shrimp. The HVSF has done well by him. “My feeling is that their main goal is not money,” he says.
He has learned the lingo. He was pleased to learn that his business combines profitability, social responsibility and environmentalism — the auspicious “triple bottom line” that many progressive business experts espouse.
Frajmund has signed on to HVSF’s mission. His collaboration with the group represents a happy marriage of visions. “We need to help small business,” he says.
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