Seek guidance of a qualified professional financial advisor even for green investing. A large majority of businesses fail for many reasons.
Access Early-Stage Green Investing With Sun Fund
Early-stage green investing is now accessible not just to the well-heeled. Sun Fund makes green investing available to everyone in more ways than one. The New York Times says a raft of IPO’s for the retail investor will become available over the next two years. Those offers were sparked by venture capitalists, hedge funds, and other private investors who will be taking their long-awaited gains out as the public puts their money in.
There are options for all investors to get the same kind of early-stage growth exposure to green impact investment stories.
(Check out our offer at www.StartEngine.com/sun-fund-dc).
1. The Sun Fund Green Investing Guide: How to Aim for Pre-IPO
Green investors may want more than just knowing they’re investing in a company that doesn’t harm the environment. (See our post on fossil fuel divestment.) While some may be happy with even negative returns on their investment knowing they are helping the environment, others may want to find a real business solution that incentivizes all stakeholders to grow a worldwide answer to a global problem.
Here’s our opinion of how to pursue green investing in early-stage opportunities.
Investment for Everyone
Now even non-accredited investors can try to find the Next Great Thing while also investing their conscience without facing a high barrier to entry.Title 3 Regulation Crowdfunding (equity crowdfunding, not buying early versions of products like on Kickstarter) makes early-stage investment available to everyone.
Potential green investors can start by looking over this list of FINRA-member platforms. (NOTE: Your mileage may vary. Not all of these are live. Some just have placeholder copy.)
In our experience, a funding platform’s search engine is not the best way to look for a specific type of green investing opportunity on a platform (i.e. typing in the word ‘solar’ may not give you all results on the platform relating to the solar energy industry). In addition to using a website’s search box, you should also manually view all offers on the platform to screen through them. (We know this is extra work, but it can pay off by showing you interesting offers that were not tagged internally for the search engine.)
Once you find offers, here are some ways of sizing them up to see whether they might scale up to an IPO with you along for the ride.
Vision and Ethics Matching
The company’s product and the way they make their product should align with your sensibilities.
The Business
Does this business exist solely as a profit-making persuit, or does it satisfy more requirements that you might have? In addition to impact investing, does the business perform any socially responsible investment requirement of your interest? Can it displace something you find objectionable with something that both causes less environmental harm and empowers people globally?
Scalability
Scalability is an important consideration for any investment especially in tech. Sun Fund’s PIP is a truly scaleable platform that will open renewable energy investing, and green investing, to the world.
When you think about demand to be met by the business, consider global demand. For our purposes, that’s a product’s ability to meet demand, and a business’ability to supply global demand. Consider:
- How much money does the world spend on this product annually? Is it growing or declining?
- Are there incumbents — previously existing companies with market share — that can easily compete with this newcomer? All an incumbent has to do to displace a newcomer is develop a competing technology and then offer that product to their customer base. A large incumbent will fight tooth and nail to keep their customers.
- Is this business segment just too esoteric to grow? If you have enthusiasm for the product, maybe just figure out where you can buy it: You may get more enjoyment out of your money as a consumer of that product than as an investor.
- Try to identify other constraints to this product’s growth: there can be cultural, geographic, and more limits to global acceptance.
Also: Was this business an ongoing concern before they started fundraising? Did they know how to market to their customers and profit? If not, that could be more risk to investors.
The Team
A team should work together for a while and figure out their business before they take money from investors.
The owners of the company should be apparent to you because they should be ultimately accountable to you.
Was the team in-place and working together profitably before appealing to the public on a funding website? If not, that may increase your risk of losing your money. A team’s inability to work together is a leading cause of business failure.
Does this team have a relevant education and/or previous achievements in the business sector they’re working in? Or at least are they experienced in one that is closely-enough related that they can plausibly function in their new business context?
A team that feels assembled solely for this one purpose could be a risk for investors.
The Structure
Structures not only protect investor interests, they help the business grow.
If a company is offering equity in exchange for your hard-earned cash, you should understand how your rights work as an investor. If you need definitions of terms, there are plenty of investor-based websites to consult. Ask yourself:
What is the structure of this offer?
Are you getting debt or equity in the company?
Are the investors’ rights protected in front of the founders? Do investors get certain rights and protections that are met first before the owners get paid? If the owners come first in the structure, that’s a risk to investors seeing their return.
In Summary
An IPO may give you upside exposure to a larger company with lower risk, but at that point, investor money that remained on paper may quickly leave the company to repay those early-stage, high risk investors leaving crumbs for the retail investor. While equity crowdfunding has higher risk, a diversified bet on multiple companies could be interesting and affordable upside exposure investors simply can’t get elsewhere.
2. Sun Fund’s Producer-to-Investor Platform
Detailed here, Sun Fund’s Producer-to-Investor Platform (PIP) makes renewable energy projects transparent and easy for impact investors, energy producers, and energy consumers alike. For the first time, socially responsible investors can invest wholly or fractionally in renewable energy investment projects according to their credit-worthiness and risk in a way that’s easy to understand to both energy producers and consumers.
Our blockchain, internet-of-things platform will take down the final technological barrier to building out the under-served market of small-to-medium renewable energy projects.
Questions or comments may be made on our FINRA-regulated platform, www.StartEngine.com/sun-fund-dc, with thanks.