Solar Power Social Enterprise Raises $1M In Equity Crowdfunding

Apr 30 2014, 7:11pm CDT | by

Let’s just say social  entrepreneur David Levine owes a big “thank you” to the Jumpstart Our Business Startups Act (JOBS). Passed in 2012 , it allows startups, including social enterprises, to tap a new source of financing–equity crowdfunding.

Levine founded Geostellar, a  four year old online solar marketplace that also aims to map the solar power potential of every residence in the U.S., while demonstrating to homeowners their potential cost savings. 

Recently, however, while embarking on an effort to raise $1 million in order to revamp his business model, his biggest financial backer decided it wouldn’t continue funding the enterprise, putting a major damper on Levine ‘s efforts to convince other folks to get in on the act.  Then Levine listed his Martinsburg, WV-based company on Return on Change, a crowd- funding platform for social enterprises (I wrote about it last year) and, thanks to some smart maneuvering , was able to raise the money anyway.

Levine, a serial entrepreneur, raised $2 million in an angel round in 2011 and $14 million in a second round the next year. But right as he launched another fundraising effort, his major investor decided for strategic reasons it wouldn’t participate. “It makes it very difficult to raise another round if your major investor won’t keep investing,” he says.

According to Levine, the investor agreed to reset all of the preferred stock to common stock , allowing Levine to raise money at a lower valuation without hurting the company or other investors.  They worked out a recapitalization plan in which Levine would invest some of his own money, raise more money ($1 million) and sell current investors more stock at the new low price.

Then,  Levine heard about Return on Change and decided to see if he could raise $1 million in three months through the site. Shortly after listing, an investor proposed he make an investment through a self-directed IRA.   Levine then learned from the company’s custodian that, if Geostellar could register its preferred stock offering as a security with the custodian,  an investor could move his or her retirement account into a new  one, which would purchase the preferred stock, maintaining the tax advantages. With that, according to Levine,  investors started clamoring to join in.  He raised the money successfully.

What does the Geostellar system do? Basically , homeowners enter an address and the average cost of their monthly electricity bills on a web site, then Geostellar’s technology presents a clear comparison of the benefits and costs of solar leases, loans and cash purchases. The “secret sauce”, as Levine puts it, is technology using 3-D imagery, which allows you to zero in on your home on a map  and see through  infrared colors how much sunlight your residence can get and the solar power potential  for your abode. Then you can click on various installation financing options—say, leasing or paying in cash—and see what kind of return you’d get and how quickly it would take to start saving money.

With the funding , Levine plans to overhaul his sales approach. Instead of  relying on solar power installers, he’ll use door-to-door sales teams employing a mobile app with which they can explain the results to homeowners, along with call centers and an arrangement with the Spirit Foundation in Austin, which trains veterans to do home energy audits, among other tasks. 

 The system has data on about 80 million homes. Says Levine, “Now we’re working our way through the Midwest and South.”

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Global entrepreneurship summit boost for SMEs
Marrakech, Nov 22 (IANS) Nine agreements were signed between the Moroccan General Confederation of Enterprises (CGEM) and several small and medium enterprises (SMEs) as well as between major Moroccan banks and start-ups at the 5th Global Entrepreneurship Summit (GES 2014) held in Morocco.
 
 
NASA's flying saucer among 'Best of What's New'
Washington, Nov 22 (IANS) NASA's Low-Density Supersonic Decelerator (LDSD), a spacecraft that aims to facilitate the safe landing of future Mars missions, has earned a place in the the Popular Science magazine's "Best Of What's New" list.
 
 
Indian helping to light up Gambia (Diaspora Feature)
Banjul (Gambia), Nov 22 (IANS) Like many Indians who are proving to be philanthropists around Africa, Ram Mohan has set up a social business called Comafrique Intelizon Initiative and has embarked on the replacement of candles in villages in the Gambia with solar lights from India.
 
 
Leopards in human areas not conflict animals: Study
New Delhi, Nov 22 (IANS) Leopards in human areas are not always "stray" or "conflict" animals but residents with strategies to thrive in human dominated areas, says the first GPS-based study of leopards in India.
 
 
 

Latest from the Network

Davis Cup final: Switzerland nudges ahead with doubles win
Lille, Nov 23 (IANS/EFE) Superstar Swiss duo of Roger Federer and Stanislas Wawrinka put their country ahead in the Davis Cup final with a 6-3, 7-5, 6-4 victory over the French pair of Richard Gasquet and Julien...
Read more on Sport Balla
 
Former police official arrested over students' disappearance in Mexico
Mexico City, Nov 23 (IANS/EFE) A former deputy police chief and suspected member of the Guerreros Unidos ("United Warriors") drug cartel, that allegedly, is involved in the disappearance of 43 students in Mexico...
Read more on Politics Balla
 
Iran to allow UN inspectors access to Marivan nuclear site
Tehran, Nov 23 (IANS) Iran decided to allow UN nuclear inspectors access to its Marivan nuclear site, Atomic Energy Organisation of Iran (AEOI) said Saturday. "We are ready to provide a controlled access to the...
Read more on Politics Balla
 
Kendall Jenner feels she is like Hannah Montana
Los Angeles, Nov 23 (IANS) Model Kendall Jenner, who is seen in a reality TV show "Kourtney and Khloé Take The Hamptons", says she feels "like Hannah Montana" while juggling between fashion and TV. Hannah Montana,...
Read more on Celebrity Balla
 
Iran nuclear issue: Kerry holds talks with Gulf foreign ministers
Vienna, Nov 23 (IANS) US Secretary of State John Kerry held talks with the foreign ministers of UAE, Kuwait, Qatar and Bahrain on the Iranian nuclear issue Saturday. Earlier, Kerry delayed his departure from Vienna in...
Read more on Politics Balla
 
Professor Green not ready for kids
Professor Green and Millie Mackintosh are not ready to have children. The 30-year-old rapper - who is married to the former 'Made in Chelsea' star - has revealed they do not want to have a baby yet because their dogs...
Read more on Celebrity Balla
 
Taylor Swift's midriff mystery
Taylor Swift doesn't want people to know she has a belly button. The 'Blank Space' hitmaker admitted she chooses not to wear tops which reveal her midriff because she wants to keep her fans guessing as to whether she...
Read more on Celebrity Balla
 
Wilko Johnson: 'I shouldn't be here'
Wilko Johnson believes he ''shouldn't be here'' after battling cancer. The 'Game of Thrones' actor was given the all clear in October following a 17-month battle with pancreatic cancer, and has recalled the ''marvellous...
Read more on Celebrity Balla
 
Penelope Cruz joins Ben Stiller in 'Zoolander 2'
Los Angeles, Nov 23 (IANS) Actress Penelope Cruz is all set to star with actor Ben Stiller in the film "Zoolander 2". According to Deadline magazine, details of Cruz's role in the sequel of "Zoolander" has not been...
Read more on Celebrity Balla
 
No general election in Pakistan before 2018: Nawaz Sharif
Islamabad, Nov 23 (IANS) Pakistan Prime Minister Nawaz Sharif said Saturday that a general election would not be held in the country before 2018. He thus rejected the demands by the opposition Pakistan Tehreek-i-Insaf...
Read more on Politics Balla