Can the power of crowdinvesting help kickstart a revolution in climate solutions?
The CLIME-IT project aims to build an equity crowdfunding, or crowdinvesting, platform specifically for technologies and businesses that are working toward climate solutions. Here's why you should care.
I'm a big fan of the power of crowdfunding, at least in broad terms, as I've seen some really great projects and products get the financial backing they need via platforms such as Kickstarter and Indiegogo. But crowdfunding has some limitations, and not just the risk factor either, which keep it from being a much bigger influence on markets and innovation.
Essentially, crowdfunding has become (and perhaps always has been) more of a pre-order platform than a true business funding mechanism. Many backers are more concerned about getting their perk than they are about the company's financial health and long-term impact, and maybe rightly so, as the perk is their return on their investment. And a successful crowdfunding campaign can help businesses in the short term, by boosting sales and helping them get through a cash crunch for materials or production. But when it comes to large-scale change, where the long view is appropriate, an investment is usually preferable to a pre-order, both for the investor and the business.
Taking on big challenges can require some major capital, and the way that businesses can get that money is from investors, who will then be able to profit from the businesses' success (or lose it from their failure, as the case may be). But there's (at least) one major hole in that investment model, which is that only accredited investors, who are those with a net worth of at least $1 million or an annual income of at least $200,000, can participate in the success of these startups. The rest of us are stuck with being able to pre-order the latest smartphone accessory on Kickstarter...
That's about to change, though, with the implementation of new SEC regulations due to the JOBS Act (Jumpstart Our Business Startups), which will allow for non-accredited investors (the rest of us) to participate in investing in startups and other businesses through equity crowdfunding. And once that happens, it may open up a whole new gateway to capital for businesses that don't fit into the traditional 'box,' including those that could help drive innovation in fields such as renewable energy, as well as other climate solutions.
One potential project, CLIME-IT, might be a practical way to leverage the power of the crowd, which when combined with new equity crowdfunding rules, could be put to use doing something other than taking pre-orders from yet another solar phone charger on Indiegogo. The platform aims to be the go-to site for crowdinvesting climate solutions, potentially benefiting not only the investors and the companies raising the money, but also our shared future.
Dan Tefft, also known as the TreeBanker, is a serial entrepreneur and a "capital coach" for social entrepreneurs, and CLIME-IT is his vision for helping us transition to a more sustainable world, by taking advantage of the new equity crowdfunding ecosystem, which will enable a blend of conscious capitalism, impact investing, and crowdinvesting. Here's the pitch:
"At Clime-IT.com, carbon-reducing businesses and clean-tech developers post their projects and WE, the Crowd, along with green-minded impact investors and institutional investors, invest in them and become part-owners of those companies."
And staying true to the 'power of the crowd' mentality, CLIME-IT is soliciting financial backing via a crowdfunding campaign on Indiegogo, which seeks to raise at least $100,000 to cover some of the initial expenses of building the eventual $1.6 million platform. That's an ambitious goal, but if reached, could be pivotal in opening up the climate solution investing market to a greater number of people, while also enabling potential low-carbon entrepreneurs and businesses to get access to a more diverse pool of funding.
"Clime-IT™ is about giving visibility to clean-tech and low-carbon projects and providing opportunity to green-minded, sustainability-driven investors."
You can find out more about the platform at the website.