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

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In Episode 49 of The Wendel Forum(originally aired on February 2, 2012, on 960 KNEW AM radio), show host Dick Lyons welcomes Stuart Rudick of Mindful Investors, LLC, a San Francisco Bay Area-based private equity fund focused on investments in natural food and product companies and technology that supports healthy lifestyles.

Stuart Rudick of Mindful Investors

Stuart Rudick of Mindful Investors

Stuart has been committed to investing in these types of companies for more than 30 years. His interest in companies with a focus on sustainability and healthy lifestyles emerged from his personal development as a yoga practitioner and vegetarian.  As healthy living became more important to him, he also moved toward investing in sustainably-minded companies.

In the early days, he found himself involved in companies in areas ranging from wind power to rice growers who had developed a closed-loop system that used the stalks for rice paper, rather than burning them.

Dick and Stuart discuss the investing trends they have observed during the past couple of decades and the rise of the natural food and organic products marketplace.  Stuart had a front row seat to the evolution of some of today’s well-known companies, such as Whole Foods Market, Seventh Generation and Odwalla.

Mindful Investors’ current interests focus on consumer facing companies in areas such as food and beverage, healthcare and technology platforms that support healthy lifestyles. Not surprising, there is a lot of activity in web and mobile development that supports functionality for applications such as bar codes to track the carbon footprint of a product, rich media like video to promote products, and platforms for distributing coupons and discounts.

Stuart shares the Mindful Investors approach to investing, including insights into time horizons and exit expectations related to investments in their portfolio.  He also acknowledges some of the challenges and strategies related to ensuring that when a company is sold, the parent company keeps the integrity of the product post-sale. 

As one of the early B Corps, he’s also a fan of the recently enacted legislation in California for Benefit Corporations (AB 361 – Huffman), which Wendel Rosen attorney Donald Simon had a hand in drafting.

So what is Stuart’s advice for young businesses? 

  • Realize from the start that you will need to raise capital, and a lot more than you think you’ll need. 
  • Bring in like-minded investors who are connected to your values in order to build trust. 
  • Bring in experienced senior level people to advise and guide you through your growth to better avoid errors and accelerate the growth of your company.

Post Links:

Listen to the interview with Stuart Rudick:  Episode 49 of The Wendel Forum(27:37 mins; mp3)

Mindful Investors website:  www.mindfulinvestors.com

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

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

In Episode 45 of The Wendel Forum(originally aired on December 17, 2011, on Green 960 AM radio), show host Bill Acevedo chats with Matt Bauer, President and co-founder of BetterWorld Telecom.  BetterWorld provides voice and data services to small- and medium-sized businesses and focuses on relationships with companies and nonprofits that support social justice and sustainability.

Matt Bauer - President and Co-Founder of BetterWorld Telecom

Matt Bauer, President and Co-Founder of BetterWorld Telecom

The interview touches on a number of subjects. Matt describes BetterWorld’s approach to business, the importance of running a “mission-driven” company, and legislative and economic trends he sees as opportunities for small businesses to succeed, particularly in this sickly economy.

A part of the $2 trillion global telecommunications industry, BetterWorld’s competitors are companies like AT&T, Version and Quest – companies not generally recognized as leaders in sustainable social circles.  BetterWorld has been mission-driven from the beginning, balancing people, planet and prosperity and focusing on serving organizations with similar goals.

They have also created a number of alliances with organizations such as 1% For the Planet (they’ve been a member since 2006) and are a certified B Corporation (in fact, they are a founding member of B Lab).  The company considers these types of organizations so important that it has committed to giving 3% of gross revenues (not just profits) to support social justice and sustainable causes.

BetterWorld’s mission goes beyond simply donating money to organizations; the company is attempting to change the fundamental paradigm related to how people work as a way of enabling companies to reduce their carbon footprint.  The company invested in research and analysis resulting in a program they call BetterWork.  On their website you can download a white paper that describes how to lower costs and carbon emissions, while increasing profits and employee morale through telecommuting, video, web conferencing and other communication tools.

A busy man, Matt is also involved in a number of activities to influence his industry and support small business.  In a recent editorial that ran on http://www.thehill.com(The Hill’s Congress Blog) and http://www.triplepundit.com/, Matt addressed the issue of Net neutrality and the regulatory structure necessary to create a relatively even playing field for carriers like BetterWorld against the giants of telecom.

And because most of BetterWorld’s customers are small business (with under 100 people), they see first hand the economic challenges facing this market segment.  Realizing that capital to fund business growth is harder for small companies to get in this economic environment, Matt has been tracking some emerging non-traditional capital-raising solutions.  He and Bill explore some of the pros and cons of two newly popularized funding solutions for small businesses – crowd funding and Direct Public Offerings (DPOs), including some of the trends and legal issues associated with these two evolving areas of small business finance.

Show Notes:
For the next couple of weeks The Wendel Forum, like many of your favorite television and radio programs, will be running “Best Of” episodes.  On Saturday, December 24, tune in for a rebroadcast of Episode 36, in which Bill Acevedo and Donald Simon discuss the recent passage of Benefit Corporation legislation in California (AB 361).  Companies will be able to take this new form of corporate entity beginning January 1, 2012.  They are joined by Erik Trojian, Director of Policy for B Lab.

On December 31, we will rerun Episode 21, Part I of the compilation interviews conducted at last June’s San Francisco Business Times Cleantech & Sustainability Awards.  Companies featured in the program include:

  • InterContinental San Francisco
  • Propel Fuels
  • Primus Power Corp.
  • Numi Organic Tea

Post Links:
Listen to the interview with Matt Bauer: Episode 45 of The Wendel Forum(27:34 mins; mp3)

BetterWorld Telecom website: http://www.betterworldtelecom.com

BetterWork web page: http://info.betterworldtelecom.com/how-to-lower-costs-and-carbon-emissions-while-increasing-profits-and-employee-morale?hsCtaTracking=4fd1a1ce-e997-4c9f-ba6d-70c0cd896e52%7C43b6cc83-e720-4716-b881-1fb93cb5fd74

Green 960 AM Radio website: http://www.green960.com

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

In Episode 39 of The Wendel Forum (originally aired on November 5, 2011 on Green 960 AM radio), show host Dick Lyons speaks with Cynthia Ringo, Managing Partner of DBL Investors.  Cynthia was also on a panel at the California Cleantech Innovation Conference held in Oakland on November 2-3, which the firm sponsored. And on the heels of his recent trip to Korea, Dick presented at the conference discussing issues cleantech companies should consider when looking to expand in global markets.

DBL Investors is a San Francisco-based venture capital firm with a double bottom line investment strategy. They focus on companies that value their communities and the environment, in addition to favorable profits.  What kind of companies are in their portfolio?  A pretty wide range, many with names you’ve heard, representing a variety of aspects of the cleantech economy, including alternative energy, solar, green vehicles, bio materials and fuels, and lighting.

Cynthia and Dick discuss the types of companies that appeal to DBL.  They find themselves working with companies in almost a proprietary manner to develop social, environmental, and economic benefit in communities in which the companies operate.  Portfolio companies are generally looking to transform neighborhoods and communities. 

Of course, DBL is an investment firm, so financials and returns are measured as one might expect.  But beyond that, twice a year DBL also issues a report to their investors on a number of qualitative and quantitative metrics that they employ to analyze the portfolio on factors such as the number of jobs created in low- to moderate-income areas, employee diversity and opportunity, and green initiatives.

The conversation explores the topic of international growth for cleantech companies.  Dick and Cynthia discuss issues related to when companies should start to consider the foreign market opportunities, as well as hurdles, including foreign certifications and entity ownership and partnership requirements imposed in some jurisdictions.  Many countries (such as China and Korea) require the company to form a joint venture with a party in that country, raising possible complications to protecting intellectual property, among other challenges. 

Cynthia mentions some of the cutting edge technology coming out of a few of the companies she works with, wich include Solar City, BrightSource Energy, Solaria, Tesla, OPX Bio, and Primus Power.

Take a listen and then drop us a line with your thoughts on impact investing and the market for cleantech innovation in the current economy.

 

SHOW NOTE:
Tune in at 11:30 a.m. on Saturday, November 12, 2011, to hear Dick’s conversation with the Chairman and Executive Editor of GreenBiz.com, Joel Makower.

 

Post Links:

Listen to the interview with Cynthia Ringo: Episode 39 of The Wendel Forum (27:43 min, mp3)

DBL Investors: http://www.dblinvestors.com/

California Cleantech Innovation Conference: http://www.grow-california.com/conferences/clean-tech-innovation/

Dick Lyons website bio: www.wendel.com/rlyons

Green 960 AM radio website: www.green960.com

In Episode 37 of The Wendel Forum(originally aired on Green 960 AM radio on October 22, 2011), show host Donald Simon talks with Randy Hawks of Claremont Creek Ventures to discuss current trends in the cleantech investment landscape. 

Claremont Creek Ventures is a venture capital firm investing in early stage information technology companies.  Their East Bay location allows them to work closely alongside many excellent research-driven “incubating institutions,” such as UC Berkeley, UC Davis and the Lawrence Livermore and Berkeley Laboratories.

According to Randy, the investment climate is actually seeing some positive moves, despite what you read in the papers.  He claims that there is a 12% uptick in 3rd quarter investing over 2nd quarter in the cleantech space this year.  And Northern California is a great place to be in this sector.  We still get 35 – 40% of the deals being done in the United States and about half of the total dollars.  While the early part of the year saw increased IPO activity, the overall venture capital investment climate is stronger now than it has been in the past couple of years.

Donald and Randy discuss the impact of the research and development funded by U.C. Berkeley and local labs.  Historically, these types of institutions have not been as nimble as some of the private schools and institutions when it comes to licensing the technology they develop.  Even so, the fundamental “game changing” research that they can inspire sets a great stage for technology to evolve into the marketplace.

Further, Randy shares his view on the market shift in the types of deals being done.  Previously bigger amounts of money went to fewer projects. More recently the trend has move toward smaller deals that look like early stage software technology deals.  The models of lean investing that have been previously used in the technology industry are becoming more popular in cleantech.  Deisgn, develop and deploy runs parallel to programs for customer engagement to speed the time to market and ensure a strong company launch.  While these tactics have been used for consumer internet companies for a number of years, other industries including cleantech and healthcare are adopting the tactics.

The two wrap up with a brief discussion of the common pitfalls that Randy has seen with early stage companies when they neglect some fundamental legal issues in their early development.  So often, young companies start out with a couple of friends and a handshake. That may be a fine way to start out, but ignoring issues regarding how the company will be structured and who owns what rights to innovation can lead to problems down the line.  As he says, “It matters if you’re successful.”  So what are the three key areas that deserve attention?  Randy suggests:

  1. Corporate Formation 
  2. Intellectual Property and Licensing
  3. Employment

If you’re interested in hearing more perspectives on the investment climate and meeting some of California’s “Game Changing” clean tech companies, check out the California Clean Tech Innovation Conference happening in Oakland on November 2-3.  Randy will be a panelist at the Energy Efficiency session.  Go to the conference website for more information or to register. 

California Cleantech Innovation Conferencecleantech conference icon
November 2-3, 2011
Kaiser Center Auditorium

At the Kaiser Center in Oakland CA, you will see California’s leading Clean-Tech policymakers… Hear from “Game Changing” Clean-Tech companies on Energy Efficiency, Water, Recycling & Environmental issues along with renewables such as Solar, Water, & Wind & Green transportation. Also speaking will be Clean-Tech experts from California’s leading Universities & Federal Labs, as well as numerous Angel Investors, Venture Capitalists & Private Equity Funds. Grow-California brings all the influencers together at one Clean-Tech Conference.  http://www.grow-california.com/conferences/clean-tech-innovation/

Post Links:

Interview with Randy Hawks of Claremont Creek: Episode 37 of The Wendel Forum (27:35 mins; mp3)

California Cleantech Innovation Conference website: http://www.grow-california.com/conferences/clean-tech-innovation/

Claremont Creek Ventures website: http://claremontcreek.com/view.cfm/3/Home

Green 960 AM radio website: http://www.green960.com/main.html

Donald Simon website bio: www.wendel.com/dsimon

In Episode 34 of The Wendel Forum(originally aired on October 1, 2011 on Green 960 AM radio), show host Dick Lyons speaks with Flory Wilson, Director of International Standards at B Lab.  Flory has been instrumental in helping to develop a new rating system for impact investing in North America and around the world – GIIRS.

In their discussion, Flory and Dick discuss the origin of “impact investing,” a term that really only came into popularity about three years ago. Impact investing refers to investors placing capital in companies and funds that deliver positive financial returns while delivering positive social and environmental impacts on their communities.  The concept is relatively simple, but achieving a reliable way to measure, verify and report on a company or fund’s impact has been a challenge, leaving investors with no real way to gauge their impact investments.

Investors knew how to judge returns on their money – profits (just look at the bottom line).  But what has been lacking is a way to analyze and report the other two contributors to the triple bottom line (referring to people, planet and profits). 

The GIIRS crew has spent the last couple of years setting up a framework for reporting and verifying the results of entities that might be desirable vehicles for impact investors.  The audit process takes into account such aspects of a company as governance structure, entity ownership structure, workforce engagement, community support, and environmental footprint.  They look at how the company manages the supply chain and distribution structure and the actual environmental impact of the company’s products and services. 

When assessing a fund, the rating system takes into account the fund manager’s track record, how they screen investors and portfolio companies, how rigorous their standards are, how they manage the investment over time, and their investment exit strategies.

Flory explains some of the reporting features and the review process, as well as the types of businesses and funds that are currently participating in the program.

GIIRS recently had a “coming out” party of sorts at the Clinton Global Initiative Annual Meeting in New York.  During this event held September 20-22, 2011, fifteen pioneer investors with $1.50 billion in impact assets, declared their preference for GIIRS-rated funds and companies. They included JP Morgan, Prudential, the Rockefeller Foundation, private equity funds, family foundations and philanthropic organizations, as well as international public sector financial institutions.

Listen in to the episode and let us know your thoughts.  Will these types of metrics have a significant impact on the future of investing?  What might be the next steps in this evolution?

SHOW NOTE:
Tune in on Saturday, October 8, 2011, to get a sneak peak preview of Sustainable Industries Economic Forum featured speakers Bonnie Nixon, executive director of  The Sustainability Consortium, and Alex Bogusky, founder of the FearLess Revolution.  The Forum will be held on October 20 in San Francisco and there is still time to get your ticket by visiting the Sustainable Industries website.

Post Links:

Listen to the interview with Flory Wilson: Episode 34 of The Wendel Forum(27:45 min, mp3)

GIIRS website:  www.giirs.org

Clinton Global Initiative Annual Meeting website info: http://www.clintonglobalinitiative.org/ourmeetings/2011/default.asp?Section=OurMeetings&PageTitle=CGI

Sustainable Industries Economic Forum website: http://sustainableindustries.com/events/economic-forums/sustainable-industries-economic-forum

Dick Lyons website bio: www.wendel.com/rlyons

Green 960 AM radio website: www.green960.com

In Episode 29 of The Wendel Forum(originally aired on August 27, 2011 on Green 960 AM radio), show host Dick Lyons sits down to chat with Nick Flores, Director of Investment and Entrepreneur Services for Investors’ Circle.

Investors’ Circle (IC) is a network of more than 150 angel investors, professional venture capitalists, foundations and family offices that are using private capital to promote the transition to a sustainable economy. Since 1992, Investors’ Circle has facilitated the flow of $146 million into 225 companies and small funds addressing social and environmental issues.

Of note, Investors’ Circle and SJF Institute announced a merger effective July 1, 2011.

In his conversation with Dick, Nick discusses the investment network and some of the many opportunities they have for sustainable businesses to obtain exposure to investors.

Companies in the portfolio are generally not start-ups, but are operational having started with friends and family investors. The investors who participate in IC want to know that the business founder has some skin in the game. Once the company is ready to raise its Series A round of stock, it’s time to submit to IC.

Of the types of companies that IC serves, there are six primary sectors. They are identified as:

  • Cleantech, Energy & Environmental solutions
  • Sustainable Consumer Products
  • Education (focused on K-12)
  • Health, Biotech & Wellness
  • Community and Economic Development
  • Social Media and Software

IC has a number of opportunities throughout the year for companies to showcase their business to the investor community. Currently, they are promoting both an Online Venture Fair (September 14) as well as their Fall 2011 Venture Fair in Philadelphia.

Show Note:

Tune in to Green 960 AM radio on Saturday, September 3, 2011 at 11:30 a.m. for an interview with Rory Bakke, President of Sustainable Concepts Studio and Director of Sustainability at GreenBiz. She’s been working with Underwriters Lab to develop the environmental health and sustainability standards for companies. While there are many forms of product certification, this comprehensive set of standards is meant for the enterprise or organizational level.  Should be an interesting discussion.

Post Links:

Listen to the interview with Nick Flores: Episode 29 of The Wendel Forum (mp3)

Investors’ Circle website: http://www.investorscircle.net/

Press release re Investors’ Circle and SJF Institute merger: http://investorscircle.net/accelsite/media/2796/IC%20SJF%20Merger.pdf

SJF Institute website: www.sjfinstitute.org

Dick Lyons website bio: www.wendel.com/rlyons

Green 960 AM radio website: www.green960.com