New Ideas in Energy Finance: Crowd Funding

From time to time I will start highlighting some groups that are finding new ways to solve some of the many energy financing challenges that we face. I will be looking at both groups that are finding ways to fill gaps as well as companies that are rethinking old approaches to energy finance.
I thought I would start this series with a look at Greentown Labs, which is actually in the midst of both building a platform to fill a gap in the energy finance marketplace and exploring the use of new financing techniques, namely crowd-funding, to try and take their vision to new heights.
Greentown Labs is a cleantech incubator based in Boston (though in the process of moving to new and expanded space in neighboring Somerville in September). The idea – started two years ago – was to provide early-stage companies a place to not just collaborate on ideas and share services, but to have space to actually build the energy hardware of tomorrow. The lab has all of the things you’d expect to find at an incubator – collaborative space, mentors, and inspiration, but what sets it apart are the work areas – more than a dozen projects were underway on the lab floor (which boasts a machine shop and an electronics shop to go with the more typical software platforms and office-like work space), ranging from systems that fit on a table top to 40 foot long welding projects. Rather than my experience with most incubators – something along the lines of coffee shop meets office meets collaborative space – Greentown looks 1 part incubator and 2 parts mad scientist workshop.
Executive Director Emily Reichert explains that the space is designed for “clean energy entrepreneurs to build physical prototypes in a lab and operate their businesses in co-located office space. This creates a community of collaboration — shared tools, resources and ideas — that accelerates the progress of our companies and keeps the costs of operating a startup more reasonable.” It is the kind of workspace that the founders of Greentown realized was lacking in cleantech ecosystem – space where an idea can go from drawing board to real working prototype before a fledgling company is typically able to raise enough funding to secure its own dedicated lab space.
While there is no doubt that software and data are part of the energy industry of the future, harnessing energy is still a nuts and bolts business, and Greentown’s early results are impressive. According to founder Jason Hanna, Greentown is already home to 28 organizations, 100 employees, and a vibrant community that is helping to grow the clean energy ecosystem. The waiting list has ballooned to more than 15 companies, without any marketing or recruiting. Other success includes more than $25 million raised by member companies so far, 14 patents awarded, and a large collection of awards and grants. Two early graduates, Promethean Power Systems and OSComp Systems look on the availability of Greentown as the bridge that allowed them to successfully build proof of concept before being ready to aggressively fund raise.
With success comes the need to grow (accelerated by redevelopment plans for their current Boston Seaport neighborhood). In September, Greentown will leave its Boston home and move to better, larger space in neighboring Somerville. Even without the Boston address the new space is expensive. To raise funds for the move – one which both the city and the state are excited about – Greentown is looking to several sources. Joseph Curtatone, Mayor of Somerville, announced that Greentown Labs is the first recipient of a $300,000 working capital loan as part of the city’s new one million dollar revolving innovation fund. At the same event, with Governor Deval Patrick in attendance, the Massachusetts Secretary for Energy and Environmental Affairs, Richard Sullivan, announced that the Massachusetts Clean Energy Center would provide a $150,000 loan at a ceremony to celebrate the start of renovations on the new facility.
To fill out the equity requirement and other capital needs for the move Greentown has turned to crowd funding. There were three key reasons for pursuing crowd funding:
1) Greentown needed capital. Despite substantial help from loan programs, developing new lab space that can grow the vision is expensive and crowd funding seemed like it could be the path to fill some of the capital needs (and early returns are good, with more than half of the goal raised so far).
2) With crowd funding becoming part of the fundraising landscape, Greentown leadership saw this as an opportunity to learn crowd funding first hand.
3) The Lab sees itself as a key part of the cleantech community, running dozens of events, programs, and initiatives (some weekend long) and having hosted more than 5,000 visitors last year, and crowd funding seemed like a natural expansion of this community building exercise.
It may be in that third reason for pursuing crowd funding, making fund raising part of the community experience, that Greentown is realizing the most value. The ability to harvest funding from non-traditional sources is clearly exciting for new energy technologies, companies and enterprises. However, the ability to raise capital while simultaneously realizing public outreach and community engagement targets can’t be understated. Naturally building awareness and demand through the fund raising process provides new connections, applicant companies and even a new group of industry “champions” who are focusing on both the fund raising campaign and the Lab’s future.
This isn’t the first innovative use of crowd funding in energy (there have been several, with perhaps Solar Mosaic, the most well-known example), but it does seem like Greentown has found a very valuable application of this new fund raising approach. The Lab has found a way to link harvesting community relationships to drive investment while simultaneously building the supporting community for its efforts, effectively creating a cycle of engagement and growth. Whether this success can translate into the broader energy marketplace is an open question – Greentown certainly isn’t a typical energy endeavor – but it is certainly worth following.
Anyone interested in learning more about crowd funding or Greentown Labs can visit Greentown Grows.

Source: energytrendsinsider BY ELIAS HINCKLEY ON AUG 29, 2013


This RSS feed URL is deprecated, please update. New URLs can be found in the footers at [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

Crowdfunding bid to cut car cover for millennialsThe TimesAn insurance start-up that claims it can reduce premiums for millennials will launch a £15m initial coin offering (ICO) next month in another sign of the growing frenzy over digital currencies. InsurePal will use the funds rais [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

CoinDeskKickstarter ICO? Don't Count On It Says Crowdfunding Leader ...CoinDeskThe company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business. Coming in response to the news yesterday that compet [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

CryptoCoinsNewsCrowdfunding Giant Indiegogo Looks to Make ICOs MainstreamCryptoCoinsNewsCrowdfunding platform Indiegogo has a plan to help initial coin offerings (ICOs) break into the mainstream, even as the U.S. Securities and Exchange Commission (SEC) is ramping up its oversight of [...]

CFB Finance


  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |