What is CollectiveSun?
We help nonprofits that want to go solar, and we do it with a crowd lending platform.
From a financial perspective, the worst thing a non-profit can do is go to their community, ask for a bunch of donations, and use that to buy a solar system. If an organization buys their own solar system they’re basically paying double because they can’t utilize the available tax credits and incentives that are available to other commercial entities and home owners.
When I hear “crowd lending platform” the first thing I think of is Kickstarter. Does it work similarly?
It’s a lot like Kickstarter or Indiegogo except instead of making a donation you’re making an investment, and that investment pays back with annual principal interest payments.
So it’s more like Kiva?
Yes, but with interest. And Kiva money received back has to roll forward to other projects, but with our platform investors actually receive a check.
For community members, they’re investing in a project for a non-profit project they care about and getting interest back, and the non-profit is saving money on their energy bills. We use the term “impact investing,” because it’s both an investment and a form of philanthropy.
It sounds like you’re targeting non-profits and relying on that non-profit’s network to get projects funded. So you don’t necessarily care if people know about you, you care if non-profit organizations know about you, right?
The audience for investments is typically the long tail of the non-profit, the people that really care about the organization that aren’t necessarily donors. We explain to non-profits that this is meant for people that may have never donated before. If a person follows you – gets your newsletter, follows you on social media – but isn’t engaged, this is a great way to get that person participating in your non-profit.
Let’s say you’re raising $100k. It doesn’t matter if you get 1 person writing a $100k check or 1,000 people writing a $100 check. It’s simple for us to aggregate and automate the process, which means more people can participate and that’s the essence of crowd funding.
If I invest $100 in a campaign, how likely am I to get my money back and how likely am I to get my money back WITH interest?
We’re very upfront with people that this is not a risk-free transaction. The funds invested are used to build a solar system and then we sell discounted power to the non-profit. We use the revenue from that discounted power to make annual principal and interest payments to the investors. So people get paid back as long as the non-profit keeps making payments, which means they’re bearing the risk of the non-profit defaulting.
How did CollectiveSun get started?
As a CPA and LEED-AP, my professional and personal interests are in the intersection of sustainability and business. I had worked on renewable energy project finance modeling and entity structures for larger corporate entities. However, I saw how frustrating it was for non-profits who wanted to go solar. I serve on 4 different nonprofit boards and wanted to do something to serve nonprofits that also utilized an accounting skill set and my personal interest in sustainability.
Why did you apply to EvoNexus?
The attraction of EvoNexus was the community. We were already in a co-working space, but it didn’t have the sense of community you find at EvoNexus: the supportive services, the mentoring, and the camaraderie.
The peer learning has been incredibly helpful. Just being able to lean over and go, “hey I’m having this problem,” and find out that someone else is having the same problem or has solved that problem is incredibly beneficial. It’s a little bit of founder’s therapy in a sense, which is encouraged by the open space.