In Episode 95 of The Wendel Forum (originally aired on April 13, 2013, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Deven Clemens and Gregg Bagni, directors of White Road Investments.

Deven Clemens of White Road Investments

Deven Clemens of White Road Investments

Founded in 2008, White Road Investments is venture capital firm backed by several current and former executives of Clif Bar.  (Clemens is senior director of corporate finance at Clif Bar.  Bagni is president of Alien Truth Communications and former marketing vice president at Schwinn Cycling & Fitness.)  The company invests in health and active lifestyle businesses, including consumer products and outdoor companies.

Clif Bar is motivated not just by financial return but by a five-pronged philosophy, which is to promote the sustainability of its planet, community, people, business and brands. That same philosophy applies to White Road Investments. Clemens and Bagni are specifically looking to fund companies that are mission-driven and that will have a positive impact on the environment and community. The directors want to work alongside entrepreneurs who are eager to learn, grow and do more good. In particular, they’re interested in investing in new categories and new products. For example, they’ve funded a dehydrated pet food company. Currently popular categories in the health space include gluten-free products, plant-based proteins, raw foods, minimal-ingredient foods and bike businesses in urban markets.

In particular, White Road Investments funds with companies with $1 million to $25 million in revenue, with a particular focus on those in the $2 million to 7 million range. An investment can range from $750,000 to $2 million with $1 million being the sweet spot.

The company’s directors want to get deeply involved in the companies in which they invest, beyond simply a quarterly check-in. Realizing that great businesses may take awhile to succeed, the focus of White Road Investments is longer term than most VC firms. In addition to funds, White Road Investments offers companies its expertise, including marketing, operations, strategy, finance, branding and sales advice, as well as “connective capital,” the ability to provide connections from its directors’ longstanding business relationships. White Road Investments also offers the resources of Clif Bar, including the ability to test new products with Clif Bar consumers, who are usually the perfect target demographic.

What new healthy products do you predict to emerge?

Post Links:

Listen to the interview with Clemens and Bagni: Episode 95 of The Wendel Forum  (27:30 mins; mp3)

White Road Investments Website: http://www.whiteroadinvestments.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’ online profile: http://www.wendel.com/rlyons

In Episode 84 of The Wendel Forum (originally aired on November 10, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Aaron Binkley, Director of Sustainability at Prologis, and Rich Chien, PACE program manager at San Francisco’s Department of the Environment.

Richard Chien

Richard Chien, PACE program manager at SF’s Department of the Environment

San Francisco’s PACE program uses stimulus funds to improve the environmental performance and reduce greenhouse gas emissions from the City’s existing building stock.  Part of the Department of Energy’s green building policy, PACE launched the commercial building program a year ago.  It’s first project is Pier 1, the headquarters of Prologis, the country’s largest industrial real estate company.

Aaron Binkley

Aaron Binkley, Director of Sustainability at Prologis

At a cost of $1.6 million, the PACE-Prologis project will include rooftop solar panels and energy efficiency upgrades.  Specifically, the building will receive retrocommissioning of its heating and cooling systems (primarily related to software, controls, valves and motors) and a full lighting retrofit (replacing bulbs and some fixtures; adding sensors and daylight capture equipment). When it’s completed in 2013, the project will reduce energy purchases by one third from last year’s baseline.  All of the building’s tenants (including the Port of San Francisco) will benefit, and savings will be applied to all occupants on a pro rata basis.  The changes have been calibrated so as to not generate excess energy that needs to be sold back to the grid.

Piloted in Berkeley in 2007, the PACE program uses local governments’ taxing or bond-issuing authority to fund projects that have a public benefit.  The PACE-Prologis project is 100 percent privately funded, with bonds issued to private investors. Repayments are made through the property tax billing system, which allows for longer terms (up to 20 years). The property is the collateral and repayment obligations transfer to the new owner if the building sold.  The interest is federally taxable and California tax-free.

A challenge to the PACE program is that the loan agreements from residential and commercial lenders typically prevent land owners from further encumbering their properties without the lender’s approval.  Since the PACE bonds are repaid through increased property taxes, the bonds are effectively senior in security to the lenders’ loans.  Some lenders may be reluctant to approve PACE financing unless they are confident that the resulting energy savings will translate into a sufficiently higher property value so that their positions are not impaired.  One approach to lender reluctance is for the lender itself to purchase the PACE bonds.  In that case, the lender is only subordinated to itself and gets the benefit of the investment in the PACE bonds.

How could the PACE program impact your community?

Post Links:

Listen to the interview with Binkley and Chien: Episode 84 of The Wendel Forum (27:44 mins; mp3)

For information about PACE, visit: www.greenfinancesf.org and www.pacenow.org  

Prologis Corporate Responsibility Web Page: http://www.prologis.com/en/responsibility.html

960 KNEW AM Radio Website: http://www.960KNEW.com

Dick Lyons’ online profile: http://www.wendel.com/rylons

In Episode 80 of The Wendel Forum (originally aired on October 13, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Elliot Kallen, founder and CEO of Prosperity Financial, a San Ramon, Calif.-based money market fund with $200 million under management.

Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum

Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum

Years ago, socially responsible investing meant simply avoiding investing in so-called sin products such as tobacco or the defense industry.  Increasingly, though, socially responsible investing means more. While it can mean investing in green companies, the issue is somewhat muddy.  For example, is it socially responsible to invest in a solar module product if the parts were made in China and the manufacturing process included toxic chemicals that ended up in the water supply?

Not surprisingly, therefore, everyone has a different opinion of what it means to be socially conscious.  Generally, though, it means thinking about doing the right thing and considering every facet – from environmental issues to a company’s shareholder governance and charitable activities to the private activities (such as aiding the Nazis) of a company’s founder.

In addition, there are different approaches to socially responsible investing.  For example, an investor can proactively support companies that are doing good things for society or devote a portion of a portfolio to green companies. Alternatively, an investor can simply seek the highest possible return on investments but then commit to donating 10 percent of those earnings to a socially responsible cause.  Kallen recommends finding an advisor who will listen to your goals.

What does socially responsible investing mean to you?
Post Links:

Listen to the interview with Elliot Kallen: Episode 80 of The Wendel Forum (26:55 mins; mp3)

Prosperity Financial Website: http://www.prosperityfg.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile:http://www.wendel.com/rylons

In Episode 78 of The Wendel Forum (originally aired on September 29, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Scott Potter, managing partner of San Francisco Equity Partners, a private equity firm that specializes in consumer products growth companies.

Scott Potter of San Francisco Equity Partner

Scott Potter, San Francisco Equity Partners, in The Wendel Forum studio

Potter’s firm partners with companies that have demonstrated a proven demand for their products.  So while there’s no consumer adoption risk, the companies are usually facing operational and scale challenges to reach the next level. Typically, they are $5-10 million companies poised to scale their businesses, often to north of $100 million.

Identifying these optimal risk-reward companies is more science than art.  San Francisco Equity Partners is particularly focused on its companies’ channel strategy.  That is, a given beauty product can’t successfully be sold at both Sephora and Wal-Mart.  Channels include food (Safeway), drug (Walgreens), mass (Wal-Mart), club (Costco), prestige (specialty retailers and department stores) and direct-to-consumer (online and direct-response TV).  Determining the right channel for products is often a company’s key to success.

A growing channel is the so-called natural channel, as epitomized by Whole Foods, which is separate from the traditional grocery channel.  But Potter’s firm specializes in natural products that are targeted for the mass channel.  Companies targeting this channel should not ask consumers to pay more for an inferior product “just to save the fish,” Potter says.  Rather, the product’s value proposition has to work in and of itself outside of sustainability and natural missions.  The prime example is Method products.

When San Francisco Equity Partners first invested in Method, it was producing just hand and cleaning products.  It has evolved to include bathroom and specialty products and even successfully launched into the competitive laundry space.  Early on, Method knew it would never have the marketing budget of Proctor & Gamble.  So it chose to overinvest in packaging, focusing on the point of sale: when product is on the shelf.  Method’s in-house design team devised a distinctive look, including the bottle molds, and focused on the aesthetic and the user-experience (such as the one-hand laundry detergent dispensing system). With the “design baked into the products,” Method aspired to be like Apple.

At what kind of store are you most likely to purchase natural products?

Post Links:

Listen to the interview with Scott Potter: Episode 78 of The Wendel Forum (27:48 mins; mp3)

San Francisco Equity Partners Website: http://www.sfequitypartners.com

Method Products Website: http://methodhome.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 76 of The Wendel Forum (originally aired on September 15, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Ben Lee, director of business development at San Francisco-based CircleUp, a crowd funding platform founded in April.

Ben Lee of CircleUp

Ben Lee of CircleUp

CircleUp provides an online mechanism for consumer products companies and retailers to reach out to a broad network of potential investors, who may fund the companies in exchange for equity. CircleUp, which affiliated with WR Hambrecht, takes a commission.

So far, they’ve received 600 applications; they’ve selected 10 companies and four – including a baby skin care brand and an organic food brand – have been successfully funded.  CircleUp’s team serves as a curator for the investors. In evaluating companies, they look for businesses with $1 million to $10 million in annual revenue.  Usually these companies are seeking to raise $500,000 to $2 million to launch new products and achieve the next stage of growth. The typical investment is $5,000 to $25,000 (while each company’s offer is different, these are generally in the form of preferred stock shares); CircleUp assists with larger transactions offline.

While CircleUp streamlines what can otherwise be a year-long funding process, raising money through the platform can still take several months. Although CircleUp selects companies and presents opportunities, investors must do their own due diligence.  Like any private company investment, crowd funding is risky and the investment horizon may be three to seven years.

Lee says CircleUp’s goals include enhancing the ecosystem around consumer products, helping as many small consumer brands get financing as possible, and making sure CircleUp’s platform is a great experience for investors and companies.

Have you participated in crowd funding?  What do you see as the biggest opportunities and challenges to this form of financing?  

Post Links:

Listen to the interview with Lee: Episode 76 of The Wendel Forum (27:56 mins; mp3)

Circle Up Website: https://circleup.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

[The following post is written by Wendel Rosen Green Business Practice Group Partner Donald S. Simon in response to a recent article addressing legislation that allows for the formation of benefit corporations.  Regular readers of The Wendel Forum will remember we have covered Benefit Corporation in prior episodes.]

A REAL WORLD RESPONSE TO A PROFESSORIAL CRITIQUE

I just read the article entitled “The Truth about Ben and Jerry’s” in this Fall’s edition of the Stanford Social Innovation Review (SSIR).  This article challenges the reasons Ben Cohen and Jerry Greenfield have given for approving the company’s sale to Unilever.  It also argues that recent legislation creating benefit corporations is unnecessary because traditional corporate law allows social entrepreneurs to accomplish their goals equally well.  The article advances erroneous, incomplete and misleading analysis of applicable law and evidences a lack of appreciation for how business and law interact in the real world, outside the halls of academia where the authors reside. 

Green Business attorney Donald Simon

Wendel Rosen’s Donald Simon helped draft and promote new Benefit Corporation legislation (AB 361)

I was not involved in the Ben & Jerry’s transaction; however, I was co-chair of the California Benefit Corporation Legal Working Group that authored the California benefit corporation law (AB 361) I provide this brief response to rebut some of the key inaccuracies in the SSIR article.

The article presents a misleading discussion of corporate law.  Corporate law differs from state to state.  The article claims that most states do not require corporate directors to maximize shareholder value (i.e., profits) and instead allow directors to consider the interests of other stakeholders impacted by the company’s actions, such as employees, community and environment.  This is a gross and misleading overstatement.  In fact, directors are permitted to consider broader stakeholder interests only in states that have adopted so-called “constituency statutes.”  Such statutes have been adopted in less than two-thirds of U.S. states.  And among those that have adopted constituency statutes, each state defines a different list of stakeholders whose interests the directors may consider.  For example, some states allow directors to consider the company’s impact on the environment, while most do not.  In states that do NOT have constituency statutes (including California), directors lack statutory authority to consider stakeholders interests and must act exclusively based on the interests of the corporation and its shareholders.

What about Delaware?  The most surprising omission in this article (among many) is the authors’ failure to mention Delaware.  Writing an article on American corporate law without discussing Delaware is like writing a history of the space program without mentioning the Apollo moon landings.  Because companies can incorporate under the laws of any state they wish (regardless of where they’re physically located), Delaware sought to dominate the market by providing companies what they seek most – legal certainty.  Delaware has achieved this by creating the largest body of corporate law and a specialized (Chancery) court system dedicated exclusively to such matters.  As a result, more companies are incorporated in Delaware than any other state.  When a court in any other state considers issues of corporate law that have not already been definitively answered by higher appellate courts in their state, they typically look to Delaware court decisions for guidance. 

Delaware is critical to this discussion because in a high-profile case from 2010, where eBay sued the founders of Craigslist (eBay vs. Newmark), the Delaware Chancery court reaffirmed the shareholder primacy rule made famous in Dodge v. Ford, ruling that “[p]romoting, protecting, or pursuing non- stockholder considerations must lead at some point to value for stockholders.”  The following excerpt from the court’s decision is instructive:

“[Craigslist founders, Newmark and Buckmaster] did prove that they personally believe craigslist should not be about the business of stockholder wealth maximization, now or in the future.  As an abstract matter, there is nothing inappropriate about an organization seeking to aid local, national, and global communities by providing a website for online classifieds that is largely devoid of monetized elements.  Indeed, I personally appreciate and admire [Newmark's and Buckmaster's] desire to be of service to communities.  The corporate form in which craigslist operates, however, is not an appropriate vehicle for purely philanthropic ends, at least not when there are other stockholders interested in realizing a return on their investment. … Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form.  Those standards include acting to promote the value of the corporation for the benefit of its stockholders.  Thus, I cannot accept as valid … a corporate policy that specifically, clearly, and admittedly seeks not to maximize the economic value of a for-profit Delaware corporation for the benefit of its stockholders….”

The authors’ failure to discuss Delaware law and the Craigslist case, while mentioning an obscure 1953 case from New Jersey, is puzzling.  Surely they were aware of these well-known legal precedents that refute the central theme of their article.

The Article misunderstands the purpose and need for new corporate forms.  The article correctly notes that companies can incorporate in one state while locating and doing business in another.  Because of this, the authors argue that there is no need for other states to adopt benefit corporation legislation because a handful of states already have.  The authors are apparently unaware that states like California impose their key corporate laws (including shareholder primacy) on all companies doing business in their state, regardless of where they are incorporated.  See Cal. Corporations Code section 2115(b).  This critical fact illustrates the danger of making simplistic generalities about a legal system that differs in each of the 50 states.

A quick primer of how law works in the real world.  Although neither of the article’s authors were involved in the Ben & Jerry’s deal and apparently never spoke to anyone who was, they claim to know more about the thinking, motivations and legal concerns than the principals and lawyers who lived it.  Ben & Jerry said they accepted Unilever’s higher offer over lower ones because their lawyers (correctly) advised them that doing so could expose them to personal liability if a shareholder chose to sue them for not maximizing their profits by taking Unilever’s higher offer. 

The authors apparently read the company’s corporate documents, from which they devised legal arguments they believe would have enabled Ben, Jerry and their board of directors to prevail in such a lawsuit.  While their analysis makes for an excellent law school essay question, it is divorced from the reality that governs such transactions. 

In the real world, cases aren’t decided by attorneys or professors declaring what they believe the law should be.  They are decided by lawsuits, trials and lengthy appeals that can take five or more years to reach a final conclusion.  How many businesses do you know that can wait in limbo that long, especially on critical decisions like who will own the company?  Ben & Jerry’s lawyers also (correctly) advised them that they could be held personally liable for losses claimed by their disgruntled shareholders.  The authors dismiss this fact by saying that Ben & Jerry could have sued the company to recover any personal losses based on indemnity provisions in the corporate documents.  I’m sure Ben & Jerry’s lawyers discussed this, and equally sure it provided Ben & Jerry little comfort.  After spending years in litigation losing one case and paying the verdict out of their own pocket, I suspect nothing would sound less appealing than spending six or seven figures litigating a new case pursing their indemnity claim against the company they no longer own or control.  The delay and costs attendant to litigation, coupled with the inability of companies to remain in limbo while awaiting a final decision, is the central reason why there are so few reported cases addressing these issues. 

The article ignores the central advantage that the Benefit Corporation provides.  The article conveys the authors’ opinion that social enterprise does not require benefit corporations or any of the other new forms provided by recent legislation, while ignoring the benefit they provide.  That benefit is legal certainty, which as noted above, is a critical commodity.  Social entrepreneurs operating as a traditional corporation are like guinea pigs waiting to be called for an experiment.  So long as all the shareholders remain mission-aligned, the experiment will be a success.  But shareholders and their attitudes often change over time, and in traditional corporations, the result is often a dilution of the company’s original social or environmental values.  If the values-driven shareholders control the company, then they can do as they wish and roll the dice to see if they’re sued.  And if they do, they’ll experience the thrill of litigation, with expensive legal fees, years of watching the slow grind of our legal system and the excitement that comes with never knowing how it’ll end until the appeals have been exhausted or a settlement is reached.  For the gambler, this sounds as fun as betting the company payroll on a roulette wheel in Vegas.

The benefit corporation was created for the more temperate social entrepreneurs who prefer not to be a legal guinea pig.  The benefit corporation was created for them so that they don’t have to worry about their continued ability to operate their business in a socially responsible manner.  No questions, no uncertainty, just clarity and peace of mind so that they can focus their attention on their business instead of threats to their vision of what that business should be.

Donald Simon
Partner, Wendel, Rosen, Black & Dean LLP
Oakland, California
September 17, 2012

In Episode 73 of The Wendel Forum (originally aired on August 18, 2012, on 960 KNEW AM radio), show host Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Lindsay Riddell who covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times.  They discuss a number of trends in the cleantech environment.
 
Lindsay Riddell photo

Lindsay Riddell covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times

Biofules and Biochemicals

Bill and Riddell start of the conversation with a discussion of what’s happening in the Bay Area biofuel and biochemical industries.  Companies in this space are looking for a variety of approaches to break down or convert renewable materials into fuels, soaps, chemicals, oils, food products, fragrances and others that typically rely on petroleum-based production.
 
With the economic downturn, capital became increasingly scarce and companies had to scale back or retool their plans for expansion.  Now, as these companies mature, they are undertaking new approaches for attracting venture investment.  The more established companies have created a roadmap for some of the emerging companies. 
 
Organizations such as the California Institute for Quantitative Biosciences (QB3), which is a joint venture between the University of California campuses at Berkeley, San Francisco, and Santa Cruz, are helping to accelerate innovation and bring discoveries to market more quickly.  Riddell discusses some of the strategies these companies are taking to survive the short term and thrive in the long term.
 

Investment trends

 
Not surprising, with the economic downfall of the past few years, Riddell acknowledges that investor enthusiasm has waned.  She observes that there is still money available for good ideas, but the investment community has been behaving more conservatively. Meanwhile, there are still resources in places like Greenstart, a startup accelerator that works with companies focused on solutions that combine cleantech and IT.  Software applications that address issues such as energy efficiency are still finding some success in the marketplace.

Carbon Data

Riddell recently wrote an article on Facebook’s voluntary reporting on their carbon footprint.  She and Bill discuss the pros and cons of releasing this data and the market pressures at play for companies to become more transparent in their operations.  This move is likened to Wal-Mart coming out several years ago with a commitment to dedicate shelf space to products that have higher levels of sustainability.  It’s clear that these big companies can have incredible influence in the marketplace and change expectations for both consumers and investors.

Electric Vehicles

The Bay Area is home to a thriving network related to the electric vehicle industry – car manufacturers, battery manufacturers, chargers and application developers for locating electric car chargers, crowd-sourcing for charging – the list goes on.  Some of the more interesting new developments include apps for available parking spaces with charging stations, car sharing apps, and there’s even an app that essentially takes the act of hitchhiking to the internet. Most of these are mobile technologies that employ various aspects of GPS tracking.
 
What do you consider to be the most important clean tech trends in the Bay Area?  What’s just over the horizon?
 
Post Links:
 
Listen to the interview with Lindsay Riddell: Episode 73 of The Wendel Forum (27:47 mins; mp3)
 
San Francisco Business Times website: www.bizjournals.com/sanfrancisco
 
Follow Lindsay Riddell on Twitter: @LRiddellSF
 
California Institute for Quantitative Biosciences:  http://qb3.org/
 
 
960 KNEW AM Radio website: http://www.960KNEW.com
 
Bill Acevedo’s online profile: http://www.wendel.com/wacevedo

In Episode 61 of The Wendel Forum (originally aired on May 5, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Rachel Barge, a partner at Greenstart, which is a San Francisco start-up accelerator.  Greenstart helps new companies that use software to solve clean tech problems. 

Rachel Barge of Greenstart

Rachel Barge of Greenstart

Twice a year, Greenstart, which launched last year, sifts through hundreds of applications and offers a handful of clean-tech start ups seed-stage venture capital as well as training in the company’s 12-week boot camp. Specifically, Greenstart invests $15,000 in exchange for a 15% equity stake, it makes a $100,000 convertible loan and it provides concentrated training.  The three-month academy “crams two years of development into three months,” according to Barge. Entrepreneurs learn to validate their technology (proving customers exist for the product), develop a 12-month execution plan (including building the team and honing the financial model), and communicate (to investors, team members, channel partners and customers).  Entrepreneurs are paired with mentors, including executives from cutting-edge companies like Tesla and Pandora. The program’s culmination is “Demo Day,” during which the start ups pitch hundreds of potential investors.

Software, Barge explains, is key to what she calls “clean tech 2.0.” For example, the collaborative consumption trend, which replaces ownership with use and access, requires new software platforms.  That’s why Greenstart selected for its program Scoot Networks, which provides shared electric scooters that customers can unlock with an iPhone. 

Barge explains Greenstart’s unique application for companies that want to apply to the Greenstart program.  The entrepreneurs must state the dirty energy problem they’re solving and explain their technology in just 250 written characters and a two-minute video.  The accelerator is particularly interested in working with fast-to-market products.  The company’s first class included SmarterShade, a self-tinting windows company; Sylvatex, which cheaply mixes biofuels with diesel; Wa.tt, a consumer web app company that “gamifies” energy use on Facebook; and Tenrehte, a wireless system for managing energy flowing through electrical plugs.

Post Links:

Listen to the interview with Rachel Barge:  Episode 61 of The Wendel Forum (27:36 mins; mp3)

Greenstart website: http://www.greenstart.com

SmarterShade website: http://smartershade.com/

Tenrehte website: http://tenrehte.com/

Sylvatex website: http://sylvatex.com/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

Photo of Danae Ringelmann

Danae Ringelmann of Indiegogo visits The Wendel Forum to discuss crowdfunding.

JOBS Act Passes Senate Vote

On March 22, 2012, the United States Senate passed the Jumpstart Our Business Startups Act (the “JOBS Act”) by a 73-26 vote. (The House of Representatives passed a separate version of the bill on March 8, 2012.) The JOBS Act includes a number of items intended to make it easier for small businesses to gain access to capital. In passing its version of the legislation, the Senate made some amendments to the JOBS Act that the House had previously passed, so it will be going back to the House for a vote on the amended bill shortly.

Senate changes to the crowdfunding legislation include:

  • Companies that use crowdfunding must provide financial statements to investors 
  • Companies seeing between $100,000 and $500,000 need to get independent accountants to review statements 
  • Companies seeking more than $500,000 in capital must have audited financial statements
  • Crowdfunding campaigns will be limited to $1 million for a single company

This should be welcome news to entrepreneurs, start ups, and small businesses. The JOBS Act, while a positive step forward to create opportunities for access to capital, is not the only avenue that entrepreneurs and fledgling companies can pursue, though.

Danae Ringelmann of Crowdfunding Website Indiegogo Visits The Wendel Forum:

In Episode 52 of The Wendel Forum (originally aired on March 3, 2012, on 960 KNEW AM radio), show host Bill Acevedo chats with Danae Ringelmann, co-founder and chief operating officer of Indiegogo.

According to the company’s website:

Indiegogo is a crowdfunding platform where people who want to raise money can create fundraising campaigns to tell their story and get the word out. Indiegogo is also a place to discover what people all over the world are passionate about and how to get involved.

This fundraising platform is used by small start up businesses, artists and performers, and nonprofit causes from more than 200 countries.

With a noble goal of democratizing capital and leveling the funding playing field, the company has launched more than 70,000 campaigns since getting going in 2008. Danae explains the process of crowdfunding and some of the unique feature that Indiegogo brings to the table.

She also shares some stories around successful campaigns and several lessons the company has learned along the way, including the fact that “people fund people,” not just ideas. Since it’s so important to provide a face for your cause, they have built a number of tools to guide you into a successful campaign. Their easy online wizards help you set up your account, and they provide ideas and tools to help you promote your cause.

What would motivate people to donate to a campaign on a site like Indiegogo? Danae says there are four primary reasons – to support a specific cause, to take advantage of the perks offered related to a campaign, to participate in something larger than oneself or to gain a cash return on investment (profit participation). NOTE: Until the JOBS Act legislation is sorted out, that last one is currently illegal for these models, so Indiegogo currently does not support that motivation. They do, however, support the first three.

The appeal of Indiegogo is quite easy to understand: the beauty of the platform is that people can actively engage in something they care about without quitting their day job. Listen in – we think you’ll agree!

Post Links:

Listen to the interview with Danae Ringelmann: Episode 52 of The Wendel Forum (27:36 mins; mp3)

Indiegogo website: www.indiegogo.com

Jumpstart Our Business Startups Act (JOBS Act) Legislative Text: http://thomas.loc.gov/cgi-bin/query/D?c112:4:./temp/~c112vr3i3D::

960 KNEW AM Radio website: http://www.960KNEW.com

Bill Acevedo’s online profile: http://www.wendel.com/wacevedo

“Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.”

William Shakespeare, Hamlet, Act 1, scene 3, lines 75-77.

Whether the wisdom of Old Polonius’s words to his son Laertes still holds sway is subject to debate when it comes to investing in green initiatives.

A recent study by the Filene Research Institute and Hall Associates Consulting, LLC indicates that credit unions have strongly invested in those who want to make green purchases, such as fuel efficient, hybrid or electric vehicles or home efficiency upgrades.   The study finds that such lending programs attract borrowers who are low credit/default risks, spur credit union membership growth in important market niches, and promote business growth.

To learn more about the study and to view a video summary go to http://filene.org/publications/detail/finding_sustainable_profits.

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