This spring, millions of people poured into the streets to show their dismay with the Trump administration’s backward-looking environmental agenda, including its pullout from a global accord to combat climate change that many Americans support. Now, citizens concerned about the fate of the planet can do more than protest; they can invest in climate-friendly solutions.
A new crowdfunding platform called GridShare is the first, and so far only, Regulation Crowdfunding portal to focus on cleantech and renewable energy projects.
That platform offers a rare opportunity for everyday investors to directly invest in U.S.-based clean energy solutions. Cleantech investments tend to be available only to wealthy “accredited” investors and venture capitalists. For example, New York-based Clean Capital, an online marketplace for cleantech investing, is open only to accredited investors. One early crowdfunding site, Solar Mosaic, let unaccredited investors lend money for solar projects, but the company shifted its business model a couple of years ago.
“We want to open this up to the masses,” says Jack Jacobs, a cleantech lawyer who founded GridShare along with Jon Norlin, a lawyer with extensive experience in structuring energy deals.
GridShare just received a green light from the SEC and FINRA in February. To date, the crowdfunding portal has listed five projects, all of which are currently open for investment. The range from a $350,000 community solar project in Eau Claire, Wisconsin, to Gorge Wind, which is raising $100,000 in construction bonds to finance a wind project in Oregon.
Jacobs says GridShare is “technology-agnostic,” and will list any kind of cleantech venture, though personally he is partial to community-based projects like Eau Claire’s. The offerings may be structured as equity or debt.
A Focus on Solutions
For Jacobs, it’s an opportunity to combine his lifelong interest in protecting the environment with historic new securities law changes that allow brand new models to take root. Jacobs spent a decade as an environmental lawyer, until a stint advising a cleantech-focused venture capital firm got him excited about working on solutions, versus the mundane compliance that environmental law often entails. “I saw it as a much more true solution to environmental issues,” he says.
He went back to school to get his Masters of Law (LLM) and founded Cleantech Law Partners, a renewable energy law firm he still runs today. Working with cleantech clients, Jacobs found he was constantly being asked to help them raise money. He created a database that could help match interested investors with cleantech ventures in need of capital, with the idea of turning it into something bigger. The project never went anywhere, but “then the whole JOBS Act thing happened,” he says. “By allowing companies to post an offering to the general public, it really opened a whole new world of investing.”
GridShare at a Glance
Based: San Francisco
Type of Intermediary: Regulation CF portal
Offering types: Debt & Equity
Focus: Renewable energy projects and clean tech ventures
Fees: 5% of amount raised. Optional services also available for a fee.
That’s when the idea for GridShare was born. Jacobs teamed up with Norling, who he first met while a student at Lewis & Clark Law School where Norling teaches classes on renewable energy and climate change.
Ramping up Renewables
Activity on GridShare has been modest to date. But GridShare is a new platform in a brand new crowdfunding industry that is still gaining its footing. The biggest challenge, according to Jacobs, is awareness: “Not enough people know that it exits,” he says of crowdfunding in general. GridShare, he says, is “great for the environment, great for project developers, and great for investors, because some of these projects are offering serious returns.”
Indeed, energy projects can be attractive investments.
The Eau Claire project involves Pristine Sun, a leading player in developing and operating small utility scale projects in the west, and XCEL Energy, the fifth largest utility in America. When completed, the project will be able to provide energy to about 164 homes and businesses. The project is offering promissory notes that pay 20% per year in interest, according to the GridShare website. The bonds being offered by the Gorge Wind project will pay 10% per annum.
A Trump Bump?
And despite its environmental stance, the Trump administration could give GridShare and the clean energy field in general an unwitting boost “If federal government is taking less of an interest in renewables, which they clearly are, and the majority of Americans see this as something that’s important and that they want to support, they have very few ways to take action,” says Jacobs. “We are one of the few ways to do that.”
He adds: “I’d rather the federal government step up their policy, but if you want to look at it as an opportunity for a platform for like us, I’ll take it.”