Clean tech and social entrepreneurs focused on climate change solutions struggle to find the capital they need to launch and expand their businesses.
Ironically the flip side of the problem also exists. Institutional, accredited and non-accredited impact-investors struggle to find qualified projects in which to invest.
As this problem persists the planet continues to warm and transition to a Low-Carbon Economy languishes.
The United States’ JOBS Act of 2012 (Jumpstart Our Business Startups Act) authorized the creation of online investment platforms similar to Indiegogo, except investors actually INVEST in businesses, not simply donate to them.
The new laws associated with the JOBS Act allow:
1) Businesses to broadcast the fact they are raising capital through social media
2) Average citizens to invest in startups and other private equity offerings
Clime-it’s solution is to create an online investment platform based on these new laws, that presents investment opportunities to the public and directs investment capital to climate change solutions.
From the Section “Our plan” of Clime-it platform:
“We have developed a system that can play a significant part in the creation of a sustainable future. The system is based on the new SEC regulations provided by the JOBS Act of 2012 (final rules issued in May 2016).
Clime-IT™, when ready for operation in 2016, will be an online Equity Crowdfunding (Crowdinvesting) platform. It will promote projects focused on renewable energy and climate change solutions who will be raising capital ranging from $500K to $50M per year.
We’ve begun building a team of scientists, academics, financial modelers, platform developers, a world-class marketing group, fired-up sustainability graduates, and a securities attorney who has specialized in the JOBS Act since its inception. We are also creating strategic alliances with a number of organizations in the USA and Canada that will ensure the quality of projects posted on Clime-IT™.
Given the newness of this industry, there is a lot of confusion and misinformation out there. We will include a substantial educational component to help entrepreneurs maneuver through the process of raising capital under these new regulations and to guide new investors through the process as well.
In the spirit of the JOBS Act (Jumpstart Our Business Startups), successfully funded businesses will post positions that need to be filled and make Clime-IT™ a hub for green jobs.
Our business model also includes a grant system to help cover some of the various fees involved in preparing to launch a crowdinvesting campaign (CPA for audited financials, securities attorney for legal compliance, marketing content and production).
We will also promote a climate of shared resources and create a community of support for all the players involved.
By providing resources for start-ups to ease and speed up their capital raising process, we increase their odds of success. By providing investors with statistically above-average success rate projects, we increase the odds of successful investments. By increasing the number of successful capital raises, projects have access to an ever-growing pool of investors and in turn, Clime-IT™ can provide them with more resources.
Our over-all strategy is one of circular economy in that it is restorative, self-sustaining and regenerative.”
Objectives and beneficiaries
The objective is to build efficiency into the process of connecting impact investors with projects and businesses focused on climate change mitigation and adaptation.
Strong points of the practice
The current system for most entrepreneurs to find capital to launch or expand their businesses is inefficient and ineffective. Many viable business concepts and technologies "die on the vine" due to the lack of capital to move forward.
Currently there are no other equity crowfunding sites focused strictly on an inclusive array of climate change solutions. With the ever-growing awareness and concern about the need for climate change solutions, this creates a "sweet spot" for innovation. Macro economists opine that the world will spend between $2-$12 trillion USD in the next couple decades to address climate change. Our business model can scale to manage a significant portion of that investment.
Sourcing projects from Cleantech Open and other cleantech business incubators will provide the Clime-it site with high-quality investment opportunities for our investors, with a statistically above-average likelihood of success.
Expected results and benefits for climate change adaptation and mitigation
"Grassroots climate solutions are our best hope for solving the climate rises. Climate conscious citizens are gathering in ever-larger numbers demanding solutions. Our model will allow climate conscious entrepreneurs to flourish and climate conscious investors to profit from the co-creation of the low carbon economy".
Replicability potential of the practice
The business model can be expanded to other regions of the world depending on how laws for raising capital are regulated.
Clime-it has received requests to license the model to cities and regions - for example: Boston.clime-it.com, Jakarta.clime-it.com, Brazil.clime-it.com.
Expanding in this way will give local investors the opportunity to support local cleantech entrepreneurs, participate in "Think Global - Act Local" and allow climate-focused startups the opportunity to present the fact they are raising capital to a world-wide audience on a trusted platform.
[Editor's Note: All information published as submitted by the author(s). Minor edits may have been made to increase readability and understanding.]