Equity crowdinvesting makes clean energy and climate finance accessible to everyone
This global pandemic is forcing us to examine a lot about our lives. It’s time to shift our thinking so we emerge from this crisis with a more healthy, inclusive and sustainable economy that makes our communities more resilient. We each have the power to vote, not just at the ballot box, but also with our dollars and our time. Raise Green is focused on the latter two -- we offer you tools to create or invest in local clean energy projects or climate solution companies.
Private equity investing isn’t new, but in the past, for the most part only “accredited investors,” or wealthy people who earn more than $200,000 a year or have a net worth of over $1 million, were allowed to take part. In theory, this was to protect new and vulnerable investors from making bad decisions and to help them avoid financial ruin, but the flip side was that ordinary citizens were denied the opportunity to invest as they saw fit. Research shows that investors who seek impact should allocate capital to sustainable companies whose growth is limited by external financing conditions (i.e. private companies), so if non-accredited investors want to have impact, their choices are severely constrained. For example, AngelList, the world’s most popular online investing platform, only allows accredited investors to invest.
That all changed in May 2016, when the United States Securities and Exchange Commission (SEC) launched the new rules under the name "Title III" (full name: Title III of the Jumpstart Our Business and Startups (JOBS) Act, also called Regulation Crowdfunding, or Reg CF for short). President Obama signed the bipartisan act making it easier for small companies to fundraise. For the first time in the U.S., this change enabled any and every American to "be able to go online and invest in entrepreneurs that they believe in", as President Obama said. What makes this policy exciting is:
Entrepreneurs can now raise up to $1 million in a 12-month period from non-accredited investors through crowdinvesting offerings; and
Investors can invest a limited amount per 12-month period based on their income and net worth, so they’re still have some protection.
Fast-forward to today. A global pandemic is bearing down on our communities and families, economic uncertainty, climate change, and income inequality are escalating on a daily basis. These impacts are damaging public health and endangering lives and livelihoods, hitting the poorest and most vulnerable disproportionately. Many small businesses are failing, and the Federal government and big banks are failing to lead or provide sorely needed relief. There has never been a more important time to enable inclusive growth.
Thankfully, most world leaders are acting to manage the crises. In the U.S., State and local elected officials are stepping up to lead the response to the coronavirus and the ensuing economic downturn. On the more long-standing climate crisis, nations of the world have agreed in the Paris Agreement on climate change that "holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, would significantly reduce the risks and impacts of climate change”. Nations also agreed to Sustainable Development Goals that seek to eradicate poverty, hunger, and other societal-ills by the end of this decade. But individuals need something to do to get involved. We have the frameworks in place, now we need people to implement.
In the United States, the new economy is taking shape, and it is a distinctly local economy. There is a renewed call for "community-driven" climate solutions, and people are looking for empowering tools to take action in the face of these mounting societal challenges. The Green New Deal is an attempt by the government to strengthen local economies, and proposes "directing investments to spur economic development, deepen and diversify industry and business in local and regional economies, and build wealth and community ownership, while prioritizing high-quality job creation and economic, social, and environmental benefits in frontline and vulnerable communities, and deindustrialized communities". But we don’t have to wait for the government to act, we already have many of the tools to make this a reality, and crowdinvesting gives everyone the ability to do just that.
Why we're fired up
Raise Green aims to democratize the ownership of the clean energy and green infrastructure needed to transition the global economy away from harmful carbon pollution. The verified local impact that this type of blended capital and collective action creates will help move us toward an inclusive and prosperous sustainable society that we all own and benefit from. It means a level playing field for inclusive economic growth, by giving all citizens opportunities to originate climate solutions, and invest in a climate-resilient future.
President Obama used to have a plaque on his desk that read: “hard things are hard”. To solve hard problems like climate change without exacerbating issues of social justice and wealth inequality, we need to work together. Because more impact investors mean more climate solution projects, and more climate solution projects means more social and environmental innovation and progress. This is what it looks like to finance a safe, inclusive, and climate-resilient future that we all can own and benefit from.
Why you should be ready to go
We need you to be a part of the new local clean energy economy. We started this company to answer the question: What do we do at the end of the march? Today, it seems the better question is, what do we do at the end of the quarantine? Whether you invest your time, or your money, we hope you will join our growing collective of dedicated changemakers building a brighter future together. If you’re interested in sustainable community development, impact investing, climate action, or inclusive growth, Raise Green is the place for you.
As we often say here on the Raise Green team, there is wood to chop! Let's get to work. Sign up today to get started.
This is not a Research Report, should not be construed as investment advice, and does not constitute a solicitation to sell or an offer to buy securities relating to any products referenced herein This blog represents a business discussion only and the views of individuals at Raise Green. Investing in Crowdfunded investments is risky and speculative. Please see FAQs on this Site for more information.
Citations: 1- https://www.zora.uzh.ch/id/eprint/162661/ 2- https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfunding 3- https://obamawhitehouse.archives.gov/the-press-office/2012/04/05/remarks-president-jobs-act-bill-signing 4- https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement 5- https://sustainabledevelopment.un.org/?menu=1300 6- https://www.scribd.com/document/456454101/Evergreen-Action-Plan#fullscreen&from_embed 7- https://www.congress.gov/bill/116th-congress/house-resolution/109/text