25 Years After Tiananmen Square, This Rebel Is Using Wall Street Money for a Food Revolution
Shen Tong believes sustainable food businesses can change the world, and he’s going to throw around $200 million in venture capital to prove it.
Shen recently launched Food-X—tagline: “feeding a food movement”—a New York City–based business accelerator program that finances and mentors sustainable food companies. Two to three times a year, Shen will pull together a group of 10 to 15 early-stage food start-ups, funding them to the tune of up to $50,000 each and bring them to New York City for three months for a “combination boot camp–mini MBA.” The first class graduated in December, and applications for the spring program are currently being accepted.
But can an army of new food businesses provide an alternative to the behemoth, profit-driven industrial food system?
Shen, 46, is counting on it. And the investor, entrepreneur, poet, and activist has never shied away from staring down powerful interests and demanding change.
At 21, while he was studying biology at Peking University, he became an “accidental leader” in the Tiananmen Square protests, in which students, factory workers, and pro-democracy activists demanded reforms from China’s hardline Communist government. He sat at the negotiating table with party officials in spring 1989. On June 4, as Chinese Army tanks fatefully rolled down Changan Avenue, past his house and into the square, Shen pleaded with soldiers to stop shooting at unarmed protesters.
Twenty-five years later, Shen is married with three kids, has started and invested in numerous companies, and serves as partner at venture capital firm SOSVentures—Food-X is backed by the company’s $200 million fund. Yet despite all appearances, Shen hasn’t lost the activist spirit he honed in Tiananmen. He may be playing with Wall Street cash, but Food-X is about more than ever-increasing dividends.
“The food problem is really a problem of poverty,” he says. “When you add a little money and access to information, the problem goes away.”
There’s more than a little bit of money being funneled into food businesses these days. Food start-ups are getting venture funding left and right. Food + Tech Connect has called it a “fundraising frenzy,” while TechCrunch has declared it a “VC gravy train.” Food technology company Hampton Creek, with its egg-free mayonnaise and other vegan products, hauled in $90 million in 2014 from a handful of V.C. firms and angel investors, for instance. In New York City, food start-ups have seen unprecedented access to capital, leading publications like Edible Manhattan to declare, “It’s never been a better time to be a food entrepreneur.”
But all funding is not equal, Shen says. “We need to balance incentivizing entrepreneurship and innovation with the need to connect with social and environmental values,” he says. “Why can’t we do well by doing good? Sometimes that pays off.”
As an impact investor, Food-X is different from typical food business investment in three main ways: Its support of early-stage start-ups (most investment occurs in later stages); the length of time it puts into the 10 to 15 companies per cohort (at least 10 years); and its insistence on investing in companies with a strong social mission. Start-ups work with mentors like Ben Cohen of Ben & Jerry’s, culinary veteran Dorothy Hamilton, and antihunger activist Joel Berg.
In the next decade, as many as 500 sustainable food start-ups could come out of the program, connecting Americans to the sources of their food, supporting small farmers and producers, and generally sticking it to the industrial food system.
One of them is Nextdoorganics, a Brooklyn-based “super CSA” and member of Food-X’s just-graduated inaugural cohort. Three years into its existence, the company—which delivers boxes of local food and artisan products throughout New York City—fulfills more than 2,000 orders per month, and it brought in revenues of $900,000 in 2014. Founder and CEO Josh Cook says that while many investors seem to be preoccupied with funding companies that will “come in and dominate the food system,” he thinks the future food business landscape will be much more widely distributed, more “fractured.” The folks at Food-X understand this, he says.
“What does an investor want at the end of the day? A return on their investment. Sometimes, that means a sense of goodwill being created,” he says. “[Food-X] is very mission focused, and we’re very mission focused—they’ve been a really good partner for us.”
Both as a protester and as an investor, Shen has sought to engage in ventures with sights set on significant social change. In 2011, he even became something of a mentor and poet laureate to the protesters of Occupy Wall Street.
“The idea of the Occupy movement is that there has got to be some equilibrium, some human face, to this alienating concept [of] profit after profit,” he says. “There has to be some balance between self-interest and fairness.”
But why the focus on food? The systemic problems with the industry hit home for Shen several years ago when his daughter came home from her public school hungry, repulsed by the lunch served in the cafeteria. While Shen and his wife could easily pack a healthful lunch for their daughter—which they did—they realized that these substandard school lunches were symptoms of a larger, systemic issue.
He’s inspired by companies like Panera and Chipotle that are “doing well by doing good,” which is why the start-ups Food-X funds and mentors must be “systemically disruptive to the current practices of the industrial food system.”
For consumers seeking to opt out of that system, this should come as great news.