With clean technologies maturing, there are more opportunities for funding mirroring other industries. Funding doesn’t consider the technology the risk but evaluates the investment based on having a high probability of making a realistic market return. Instead of looking for a unicorn, they are looking for a horse. They aren’t looking for the high risk billion dollar potential, but a low risk guarantee to make a return on investment. Alternative models are being developed to articulate the return on investing in Clean Energy, that identify returns older financial models haven’t. This is good for the movement to clean energy, but doesn’t really apply to many innovative startups. 

Looking at IEA reports and CleanEdge Indexs, we can see an increasing amount of investment going into later stage clean technologies. These are technologies in generation, electric grids, mobility, and buildings.

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The Startup space has a lot more complex options opening up. One of our favorite is grant funding like CalSEED . Grants provide funding that doesn’t have requirements similar to lquity or loans.

Here are some grant resources you should check out:

1. CalSEED
2. OpenGrants.io
3. ARB grant wizard
4. Dept of Energy
5. Momentum

The benefit of many of these is they put you into an ecosystem that will help you advance your technology and company. You can jump into the ecosystem in California without applying by going to EmpowerInnovation.org. Not all grants are perfect and there is competition for them. If you want to learn more about working on grants, contact us.

Friends and Family, Angel Investors, and Venture Capital are still a route all startups need to prepare for BUT they now have additional tools that can leverage more funding. Like Crowdfunding Equity. We have seen Crowdfunding support local companies in clean tech like Wind Harvest International who raised nearly 1.5 million. In the past there has been a lot of skepticism in this method, because of regulation and the quantity of small investors, but there are more professionals that can guide you through it. Because of this acceptance, companies can leverage Angel Investors and VCs to be “first in”, signaling to others on the crowdfunding platform the investment has potential.

The past year there has been a lot of fundraising through Special Purpose Acquisition Company or SPACs. A SPAC is another way to take a company public so it can raise funds on the market. SPACs are not giant slush funds magically dropping money on cool technology. They are much more like large institutional investors who have an existing channel to acquire companies. With a bull market we will probably see more of them because it represents and easier way to fundraise, but being listed on the market has setbacks and early-stage companies should focus on getting to a minimal viable product.

Creating a minimal viable product and selling it is the best way to raise money. It is proof a company can build a product or service someone will give them money for. So, if you are that early stage startup, find out how you can get to that point. Interview 100 potential customers before you build anything. Build the simplest thing and show it to them, say, is this what you want? Repeat until one says, “Can I buy that now”.  

Generating Sales supporting your early stage growth is the best way to fund your company. Since investors are always risk adverse and want to be the last money in, it is companies that seem not to need funding that often get it. So keep your focus on generating revenue and connect with CleanStart events like our discussion with Moneta Ventures and Spotlight Company Pitches.

Check out some past pitches:

The theme of our April MeetUp was the advantage of doing clean tech deployments by engaging entire communities compared to the usual “door-to-door” approach, particularly in disadvantage communities.  If you didn’t attend, this is one MeetUp you definitely need to view the recording of it on our YouTube channel and to tell your friends about it. It was that good. 

The big question of the evening was how to spread the benefits of cleantech more equitably and how to open doors for local innovators at the same time. The offshoot of the discussion was that even in higher income communities, engaging more people and giving them more local control would also improve the deployment of cleantech. 

Jacobe Caditz, from SMUD’s Community Education and Technology Department, presented the Energy Careers Pathway program which is training the local workforce to be able to handle the installation of cleantech equipment and its successes to date. But the discussion drew in a lot more that SMUD is offering in the way of incentives, in the preferences for using products from local companies, and in being open to broaden the scope to include things like enhanced broadband and support for EV carsharing.  SMUD has recognized that achieving its recently adopted goal of Zero Net Carbon Emissions by 2030 will require actively engaging communities. SMUD is open to good ideas how to do this.  We are all so lucky to have SMUD willing to be creative.

Grace Park-Bradbury, COO of NY-based BlocPower, talked about her recent return to California to bring the BlocPower approach here. BlocPower wants smarter, greener, healthier buildings for all, including indoor and outdoor air quality. They have identified a “trust gap” in many communities that inhibits people from adopting the technologies that would deliver that.  Their approach has been to local residents of multi-family buildings as a group and developers at the same time to become that trusted resource that can make projects happen. To facilitate this, BlocPower has come up with an easy financing solution to allow projects to proceed with no upfront money needed from the users.  They have done over 1000 projects like this already back east and are now spreading the word to the west.  Grace is from Chico and is now located in Oakland as they start some of their first west coast projects there.  

BlocPower looks for local vendors and installers for their projects, and Grace was very pleased to hear about all the companies here that were eager to join in.  Having grown up here, she is very familiar with the opportunities for projects in the Central Valley.  What she needs is to identify actual projects on which she could focus to expand their footprint here.

Ariane Ortegaray of GRIDAlternatives was able to add many examples of work they are doing with a variety of communities in the Central Valley.  They are very much in-tune with the idea of spreading the decision making and spreading the power withing the communities they want to serve.  GRID tends to focus more on single family residences and BlocPower has in the past focused on multifamily situations, but both said they were willing to spread their wings in a collaboration.  Ariane said GRID has also been using some innovative financing techniques focused on donations, but that BlocPower would potentially make much more available.  

On the question of the scope of a community-based project, all three of our presenters said that it would be great to extend to fast WiFi installations, community car-sharing, more available charging, adding amenities to projects like cleaning up local parks and schoolyards as well as fixing other community buildings structurally.  Whatever it takes to engage the community and give them a larger purpose in undertaking a project.  

There seemed to be good alignment among the speakers on the amplified benefits of the community-based approach.  Uzoma Okoro of Eco-Alpha added positive comments on their willing to collaborate as well.  There were lots of exchanges of contact information for following up.  To make it happen here, it’s all a matter of focus and where to start.  Suggestions welcome.  

This is definitely not the last discussion we will host on this topic given the potential for lower customer acquisition costs for our local cleantech product companies and for opening doors to trying out new innovations from our startups.