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Foreign Dollars for an American Dream

Entrepreneurs in the United States don’t always need to look to venture capitalists for help. One enterprising tea startup in Brooklyn is getting key backing from the government of Ecuador.

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Tyler Gage, Runa and Guayusa
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Guayusa is an Amazonian beverage from Ecuador not yet on everyone’s radar. But early this year, the government of Ecuador approved a $500,000 equity investment in Runa, a fledgling U.S. company that plans to make this caffeinated high-antioxidant drink a household name both here and abroad.

“It’s the first time the Ecuadorian government has invested in a small green business,” says Tyler Gage, 25, co-founder and president of Runa, a company based in Brooklyn, New York, which officially began selling its products in the United States last October. “And the good thing about the equity investment is, after six years, the government will transfer a certain percentage of their shares to the indigenous communities that Runa supports. The investment also gives Runa the right of first purchase for the remaining shares.”

Talk about a brewed jolt of financial energy for Runa—it means “fully living human being” in one of the indigenous languages of Amazonian Ecuador—which projects sales of $350,000 for 2011.

Gage and co-founder Daniel MacCombie, vice president of operations (a third co-founder is a behind-the-scenes supporter), worked for about two years to set up Runa’s shingle and secure other funding. Steve Verde, vice president of sales, joined the company late last year.

Gage, who had traveled to South America as a teenager, was no stranger to the smooth-tasting guayusa (why-YOU-sah) beverage, whose leaves come from a holly tree. Guayusa contains less caffeine than coffee, but more than black tea and yerba maté.

About three years ago, while Gage was on a trip to Ecuador and other South American countries to conduct research for an academic anthropology project, the Brown University undergrad experienced an environmental disconnect—and the proverbial light-bulb moment.

“Many farmers in the Ecuadorian rain forest where guayusa grows and thrives almost exclusively were cutting down native trees so they could grow commercial crops like corn,” he says. “I realized we could partner with these communities and create a market for culturally valuable Ecuadorian products from the native holly tree and prevent deforestation.”

In the fall of 2008, Gage, who was also enrolled in an entrepreneurship program at Brown University, created a business plan with two other classmates to cofound a company to sell guayusa using a sustainability model. After graduating that December, Gage and MacCombie began to chase after money.

How did they know where to look in Ecuador?

“I networked ferociously,” says Gage, who certainly benefited by being able to speak fluent Spanish.

In mid-2009, the company applied for and received a $50,000 grant from the Ecuadorian government’s export division. In the process, the duo established a strong relationship with one of that sector’s administrators. Several months later, that same official suggested that Runa might be a good candidate to receive an equity investment from the country’s ministry of production.

“The entire process involved a lot of due diligence on the part of the government,” says Gage, noting administrators paid particular attention to how the principals were spending their money. But what he believes really helped seal the deal was the comprehensiveness of their business plan, which had won competitions at Brown and at the state level.

“Our market research was very thorough, and we addressed topics that included natural products industry trends, bottled teas, and energy drinks,” says Gage. “There was a real convergence between functionality, sustainability, and unique sourcing.”

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