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This is basically a variation on the SolarCity business model, but focusing on commercial properties. There is probably a business here, but not one that tries

This is basically a variation on the SolarCity business model, but focusing on commercial properties. There is probably a business here, but not one that tries to recruit individual investors because it will only be profitable at scale, and the kind of financial backing needed to do this is available to qualified teams. The recruiting individuals thing is basically an admission that this team does not have access to that kind of backing. A perusal of the LinkedIn profiles for the team shows a set of people with no relevant experience and probably no business running this kind of company. The low dollar amounts also emphasize this aspect.

arcticbull 4y ago
I see, your argument is that like (for instance) LendingClub, the economies of scale always favor large investors, and that this platform simply cannot get large investors onboard. That may be due to a lack of connections, or due to some other potential fundamental issues with the business model. At the end of the day if the business is sound it makes more sense to target fewer large investors - not many, smaller ones. If this model makes sense, it would probably just pivot like LendingClub and cut off access for small investors. And if not, small investors will be holding bag. I buy that.
- foobiekr 4y ago
  No one in their right mind wants to build a pseudo-investment company dealing with tons of small investors in the few hundreds of dollars to few thousands of dollars range. The only thing missing here is a crypto coin. If they really have a business model that can yield 8+% annual, assuming they get a cut, then they would raise real capital and not deal with randos. They don’t.
  - yepnopemaybe 4y ago
    We will never work with crypto because we care about our investors and don't intend on defrauding them. There are plenty of small retail investing companies that deal with small account sizes. Acorns, Robinhood, etc. come to mind. Over time, I'd hope that our average account size would be in the 10K+ range, but depending on CAC, small dollar would be fine. Our innovation here is investment UX. The realized return might be a point or two north or south of 8% depending on the risk profile we go with - not far off course for the industry. Our current accredited investors get about 10%, but that's with tax equity incentives we might not be able to pass to retail investors. We will be 100% transparent about our pricing model.
    - chiefalchemist 4y ago
      I'm ~20 pages from finishing the book "Local Dollar, Local Sense" by Michael Shuman. Your approach is refreshing and creative yet (I presume) SEC compliant. Kudos for letting the unaccredited have an influence on the future too. https://m.youtube.com/watch?v=Q9WkwIX2MHA https://m.youtube.com/watch?v=Q9WkwIX2MHA
  - qiqitori 4y ago
    There's quite a few companies doing this where I live (Japan), e.g., https://change-x.jp/equipment https://change-x.jp/equipment. One important clause I saw was that the ownership of the panels automatically transfers back to the operating company after the panel's useful lifespan (defined to be 20 years). I also saw an example that originally did small investors but then at some point found a large investor, but can't remember their name at the moment. Similarly, what do you think about the fact that solar panel manufacturers and all inbetweeners could "just" build their own power plants rather than sell to individuals?
    - Ekaros 4y ago
      Solar panel companies are in business of making the panels, wholesalers are in wholesaling business, those who install are in installation business. Each setup to be somewhat optimal in their own segment. This just looks like extra costs for actual running of sola plant. Compared to straight up existing structures for funding.
  - throwaway2037 4y ago
    I think they only need a return on equity that is similar to residential (rental) real estate. For many places, that is 2-5% after taxes.
  - joshvm 4y ago
    P2P lending is a thing, and was quite popular in the UK until most of the big players (e.g. Zopa) went private. You can invest a small amount, usually as low as $100 and it goes either to personal or business loans. There are companies that offer both. Usually they'll offer automatic diversification, so every $10 goes to a different investment. Your point is valid though. These places typically lend to companies that would struggle to get loans from banks. While I've worked for legitimate places that had this problem, you do need to ask why these places need crowdfunding. A lot of them are sole proprietors who want to start e.g. a food company. So it's still up to you as an investor to understand the risk and to go through company financials before lending. With personal loans you usually get details of default rates, etc.
  - Animats 4y ago
    The only thing missing here is a crypto coin. There's a "wallet". They keep your returns until you ask for them and get them to pay out. If you're really buying a solar panel, you're buying a depreciating asset. Someday the solar panel will wear out and your investment is gone. So the return has to cover the amount invested. An annual percentage rate is not the way to evaluate this. What you buy does not seem to be resellable. It looks like you're stuck with it for the life of the hardware. Who audits this thing? This is almost exactly the classic situation in SEC vs. Howey, where investors bought trees in an orange grove. So this is probably an unregistered public offering.
- yepnopemaybe 4y ago
  What we are doing is super simple. Equity ownership in real, operating solar panels. There is nothing particularly synthetic or structured about these investments (i.e. like BNPL, etc.) We need enough scale to move a large (20M+) facility, but beyond that scale will only help insofar as bringing on follow on investments and referrals becomes a bit easier. We may also do some institutional stuff, but for the time being, we are 100% consumer focused and always will be. Our innovation is to bring a consumer experience and true design focus to investing. Instead of treating retail investors like tiny little hedge funds, we design the product to match their expectations of what 'ownership' should be.
  - foobiekr 4y ago
    That is not a competitive differentiator.
    - yepnopemaybe 4y ago
      Show me where I can buy an operating solar panel if I don't have a suburban rooftop. Would make my life so much easier!
      - ac29 4y ago
        You can buy dividend paying shares of companies who operate utility scale solar power plants. No, those shares dont equal a specific panel, but should that really matter to an investor?
        seoaeu 4y ago
        Owning a specific solar panel seems strictly worse. What if yours malfunctions and has to be replaced? Averaged over all the solar panels in the plant that might be a negligible risk, but if you own just one then you could be the unlucky investor that randomly suffers a total loss
        chiefalchemist 4y ago
- sanxiyn 4y ago
  I think REIT is better comparison. I agree large investors are better, but that does not mean small investors are worthless.
yepnopemaybe 4y ago
We've lined up a number of finance partners to help facilitate transactions. Our first priority on our seed raise will be to bring some qualified finance experts in house. We've been working with accredited investors who are making 100K+ investments for entire solar facilities. We think of those transactions as our training wheels as we build out our software, financial knowledge, and design. As we evolve to a larger scale we will certainly bring on specialists to support the product.
- hef19898 4y ago
  Naïve question, utility scale solar is a solved problem with lots of different financing solutions available. Why go for retail investing / crowd funding? And why does the industry need design and software knowledge it doesn't have already? and wouldn't be financial knowledge in that industry one of the core things to bring on-board from day one?
PragmaticPulp 4y ago
> The recruiting individuals thing is basically an admission that this team does not have access to that kind of backing. I would assume they plan to finance the large installations and then pay off the financing by re-selling the projects to retail investors in increments mapping to approximately 1 panel. In theory they'd only need to keep enough working capital to fund installations until PTO (power turn on) at which point they could "sell" them to retail investors and turn over the capital for the next install. In practice I'd be worried about what happens if (or when) the company goes out of business. Does my initial investment disappear and someone else now owns the solar installation? This feels like an offer to become an investor in a risky solar install without any of the actual rights that come from being an investor in a solar install. If the company fails for whatever reason, your solar install goes to the company's investors and you get nothing. A much better structure would be to operate as a solar holding and operations company and allow people to invest in the company (eventually publicly traded). This lets the investors keep actual ownership of the company and panels, not just some notional ownership on their platform that disappears the moment anything changes. The way it's proposed here, they're breaking the traditional investment ownership chain and replacing it with some IOUs on the platform. What you really want is to own shares of the company that owns the solar installs, otherwise you get nothing and have no claim as a creditor when the business stops working.
- akelly 4y ago
  I don't want shares of a speculative solar startup, I want a safe solar investment with predictable returns. If a company goes bankrupt then shares go to zero, the assets are sold, and the proceeds split between everyone they owe money to. So structuring customer investments as a loan is safer for the investor, no?
- hef19898 4y ago
  That is a nice way for operators / investors in utility scale solar to improve their cash position. The banks backing those utility scale projects, I assume, love the idea. On a general note, so, it seems people are coming up with lots of ideas to drop their investments on unassuming retail investors. Kind of makes sense, with potentially increasing interest rates, recovering their investments that might be affected by that sounds like a good idea.
Havoc 4y ago
>The recruiting individuals thing is basically an admission that this team does not have access to that kind of backing. I don't think that is a given - crowd funding can raise significant sums these days
- yepnopemaybe 4y ago
  I have the resources to simply hire a bunch of people to do stuff, but it turns out the best people aren't going to drop on a dime and build your product for you before you have validation, knowledge, a story, and cogent plan. We are 5 months old (though I was working on this solo for more than a year before that), and in that time I've built the team that will build this product.
- pyrale 4y ago
  > I don't think that is a given - crowd funding can raise significant sums these days Crowd funding is great as a sales vehicle (i.e. the people that invest in you will buy your product in the end). I don't remember a successful example where the crowd was purely there to invest.

arcticbull 4y ago

I see, your argument is that like (for instance) LendingClub, the economies of scale always favor large investors, and that this platform simply cannot get large investors onboard. That may be due to a lack of connections, or due to some other potential fundamental issues with the business model. At the end of the day if the business is sound it makes more sense to target fewer large investors - not many, smaller ones. If this model makes sense, it would probably just pivot like LendingClub and cut off access for small investors. And if not, small investors will be holding bag. I buy that.

foobiekr 4y ago
No one in their right mind wants to build a pseudo-investment company dealing with tons of small investors in the few hundreds of dollars to few thousands of dollars range. The only thing missing here is a crypto coin. If they really have a business model that can yield 8+% annual, assuming they get a cut, then they would raise real capital and not deal with randos. They don’t.
- yepnopemaybe 4y ago
  We will never work with crypto because we care about our investors and don't intend on defrauding them. There are plenty of small retail investing companies that deal with small account sizes. Acorns, Robinhood, etc. come to mind. Over time, I'd hope that our average account size would be in the 10K+ range, but depending on CAC, small dollar would be fine. Our innovation here is investment UX. The realized return might be a point or two north or south of 8% depending on the risk profile we go with - not far off course for the industry. Our current accredited investors get about 10%, but that's with tax equity incentives we might not be able to pass to retail investors. We will be 100% transparent about our pricing model.
  - chiefalchemist 4y ago
    I'm ~20 pages from finishing the book "Local Dollar, Local Sense" by Michael Shuman. Your approach is refreshing and creative yet (I presume) SEC compliant. Kudos for letting the unaccredited have an influence on the future too. https://m.youtube.com/watch?v=Q9WkwIX2MHA https://m.youtube.com/watch?v=Q9WkwIX2MHA
- qiqitori 4y ago
  There's quite a few companies doing this where I live (Japan), e.g., https://change-x.jp/equipment https://change-x.jp/equipment. One important clause I saw was that the ownership of the panels automatically transfers back to the operating company after the panel's useful lifespan (defined to be 20 years). I also saw an example that originally did small investors but then at some point found a large investor, but can't remember their name at the moment. Similarly, what do you think about the fact that solar panel manufacturers and all inbetweeners could "just" build their own power plants rather than sell to individuals?
  - Ekaros 4y ago
    Solar panel companies are in business of making the panels, wholesalers are in wholesaling business, those who install are in installation business. Each setup to be somewhat optimal in their own segment. This just looks like extra costs for actual running of sola plant. Compared to straight up existing structures for funding.
- throwaway2037 4y ago
  I think they only need a return on equity that is similar to residential (rental) real estate. For many places, that is 2-5% after taxes.
- joshvm 4y ago
  P2P lending is a thing, and was quite popular in the UK until most of the big players (e.g. Zopa) went private. You can invest a small amount, usually as low as $100 and it goes either to personal or business loans. There are companies that offer both. Usually they'll offer automatic diversification, so every $10 goes to a different investment. Your point is valid though. These places typically lend to companies that would struggle to get loans from banks. While I've worked for legitimate places that had this problem, you do need to ask why these places need crowdfunding. A lot of them are sole proprietors who want to start e.g. a food company. So it's still up to you as an investor to understand the risk and to go through company financials before lending. With personal loans you usually get details of default rates, etc.
- Animats 4y ago
  The only thing missing here is a crypto coin. There's a "wallet". They keep your returns until you ask for them and get them to pay out. If you're really buying a solar panel, you're buying a depreciating asset. Someday the solar panel will wear out and your investment is gone. So the return has to cover the amount invested. An annual percentage rate is not the way to evaluate this. What you buy does not seem to be resellable. It looks like you're stuck with it for the life of the hardware. Who audits this thing? This is almost exactly the classic situation in SEC vs. Howey, where investors bought trees in an orange grove. So this is probably an unregistered public offering.
yepnopemaybe 4y ago
What we are doing is super simple. Equity ownership in real, operating solar panels. There is nothing particularly synthetic or structured about these investments (i.e. like BNPL, etc.) We need enough scale to move a large (20M+) facility, but beyond that scale will only help insofar as bringing on follow on investments and referrals becomes a bit easier. We may also do some institutional stuff, but for the time being, we are 100% consumer focused and always will be. Our innovation is to bring a consumer experience and true design focus to investing. Instead of treating retail investors like tiny little hedge funds, we design the product to match their expectations of what 'ownership' should be.
- foobiekr 4y ago
  That is not a competitive differentiator.
  - yepnopemaybe 4y ago
    Show me where I can buy an operating solar panel if I don't have a suburban rooftop. Would make my life so much easier!
    - ac29 4y ago
      You can buy dividend paying shares of companies who operate utility scale solar power plants. No, those shares dont equal a specific panel, but should that really matter to an investor?
      - seoaeu 4y ago
        Owning a specific solar panel seems strictly worse. What if yours malfunctions and has to be replaced? Averaged over all the solar panels in the plant that might be a negligible risk, but if you own just one then you could be the unlucky investor that randomly suffers a total loss
        chiefalchemist 4y ago
sanxiyn 4y ago
I think REIT is better comparison. I agree large investors are better, but that does not mean small investors are worthless.

yepnopemaybe 4y ago

We've lined up a number of finance partners to help facilitate transactions. Our first priority on our seed raise will be to bring some qualified finance experts in house. We've been working with accredited investors who are making 100K+ investments for entire solar facilities. We think of those transactions as our training wheels as we build out our software, financial knowledge, and design. As we evolve to a larger scale we will certainly bring on specialists to support the product.

hef19898 4y ago
Naïve question, utility scale solar is a solved problem with lots of different financing solutions available. Why go for retail investing / crowd funding? And why does the industry need design and software knowledge it doesn't have already? and wouldn't be financial knowledge in that industry one of the core things to bring on-board from day one?

PragmaticPulp 4y ago

> The recruiting individuals thing is basically an admission that this team does not have access to that kind of backing. I would assume they plan to finance the large installations and then pay off the financing by re-selling the projects to retail investors in increments mapping to approximately 1 panel. In theory they'd only need to keep enough working capital to fund installations until PTO (power turn on) at which point they could "sell" them to retail investors and turn over the capital for the next install. In practice I'd be worried about what happens if (or when) the company goes out of business. Does my initial investment disappear and someone else now owns the solar installation? This feels like an offer to become an investor in a risky solar install without any of the actual rights that come from being an investor in a solar install. If the company fails for whatever reason, your solar install goes to the company's investors and you get nothing. A much better structure would be to operate as a solar holding and operations company and allow people to invest in the company (eventually publicly traded). This lets the investors keep actual ownership of the company and panels, not just some notional ownership on their platform that disappears the moment anything changes. The way it's proposed here, they're breaking the traditional investment ownership chain and replacing it with some IOUs on the platform. What you really want is to own shares of the company that owns the solar installs, otherwise you get nothing and have no claim as a creditor when the business stops working.

akelly 4y ago
I don't want shares of a speculative solar startup, I want a safe solar investment with predictable returns. If a company goes bankrupt then shares go to zero, the assets are sold, and the proceeds split between everyone they owe money to. So structuring customer investments as a loan is safer for the investor, no?
hef19898 4y ago
That is a nice way for operators / investors in utility scale solar to improve their cash position. The banks backing those utility scale projects, I assume, love the idea. On a general note, so, it seems people are coming up with lots of ideas to drop their investments on unassuming retail investors. Kind of makes sense, with potentially increasing interest rates, recovering their investments that might be affected by that sounds like a good idea.

Havoc 4y ago

>The recruiting individuals thing is basically an admission that this team does not have access to that kind of backing. I don't think that is a given - crowd funding can raise significant sums these days

yepnopemaybe 4y ago
I have the resources to simply hire a bunch of people to do stuff, but it turns out the best people aren't going to drop on a dime and build your product for you before you have validation, knowledge, a story, and cogent plan. We are 5 months old (though I was working on this solo for more than a year before that), and in that time I've built the team that will build this product.
pyrale 4y ago
> I don't think that is a given - crowd funding can raise significant sums these days Crowd funding is great as a sales vehicle (i.e. the people that invest in you will buy your product in the end). I don't remember a successful example where the crowd was purely there to invest.