Podcast Transcript: Franz Hochstrasser, Democratizing Clean Energy Investments

Announcer (00:04): Welcome to another episode of the Solar Podcast. Today Dave is talking to Franz Hochstrasser co-founder of Raise Green. They talk about Franz's years in the Obama State Department, his role in coordinating the Paris Agreement and his newest venture Raise Green, which is making investing in clean energy projects available to investors of all sizes. Let's get right into it on the Solar Podcast. Dave Anderson (host) (00:36): Well, everyone, thanks so much for joining us and welcome to the Solar podcast. Thrilled to have Franz Hochstrasser with us. I'm going to certainly have him give a little bit of his bio, but just reading off of the cliff notes and also from a reliable LinkedIn page, he's a lecturer at Yale. He also received a master's degree from the same university. He has a master's in Engineering Management, but with an emphasis, and I think why our listeners are going to be particularly interested to hear about, with an emphasis on sustainable finance and clean energy in business. More recently, he's both an entrepreneur as well as the CEO of a really fantastic and exciting company that we're going to want to hear a lot about, and we're certainly going to spend a lot of time on that. But Franz, welcome to the show. Franz Hochstrasser (Guest) (01:19): Thank you so much, Dave. It's an honor to be here. Dave Anderson (host) (01:22): Yeah. So I know that you have kind of a long background in spending a lot of time in politics, at least on the peripheries, but I'd love to get, if you wouldn't mind just diving into it a little bit with our listeners, about your background starting maybe early days and then working on into where you are today. I think we're going to spend the majority of our conversation talking about your kind of current projects that you're working on, but we might have to pause and take some time on how we got there. Franz Hochstrasser (Guest) (01:46): Certainly. Well, happy to go back in time a little bit here to move forward. And today is election day. It to me, holds special meaning for multiple reasons, and I've spent about nine years of my life working for Barack Obama, starting out as a lowly hope-filled field organizer back in Iowa in 2008, knocking on doors, making phone calls and working to build a list of supporters and then get them to vote on election day. So that community organizing really has put inclusivity and democracy at the core of my value set and has driven my professional career ever since. And thankfully, we did win that election back in 2008. It was historic for numerous reasons, and I was very fortunate to be on a staff call the following day with the President and the Vice President elect. And Joe Biden actually said on the call, "To all you field organizers and all you staff out there, if you want a place in Washington, we've got one for you to come and deliver on the change that you've been working on." (03:00): And to me, that was the first time I thought about going into government. But eight years later, I was leaving the Obama administration having worked for the Department of Agriculture, the White House Council on Environmental Quality and also the US State Department to help negotiate the Paris Agreement. So that trajectory really was like being strapped to a rocket and riding it all the way to the moon and came out the other side with whole set of passions as well as motivations to really ensure that we transition our economy as quickly as we possibly can, but also in a way that is equitable to the low carbon solutions that are necessary to tackle the climate crisis. So that's it in a nutshell. Dave Anderson (host) (03:51): Yeah. So you spent a lot of time, I think, when you originally started campaigning with Obama, were you as passionate then about climate and the climate crisis as you are today, or has that kind of changed and molded over time? Franz Hochstrasser (Guest) (04:08): Well, as a young person, I was very excited about working in politics, and particularly for this transformational leader who has leveled us up as a nation in so many ways and made us pursue our higher ideals. And at the time, I had some experience coming out of the environment program at the University of California, Santa Cruz, of looking at environmental issues and also working for a business while I was a student that did environmental planning consulting. So that was really the issue that I sort of dabbled with at a younger age, but I was just more excited about electoral politics at the time, and that really crystallized over the course of the campaign and then ultimately service and government to become a career in climate and clean energy. Dave Anderson (host) (05:07): Yeah, I'd love for, you talked about the work that you had done specifically around the climate crisis for the Obama campaign. To what level were you involved with that effort? Franz Hochstrasser (Guest) (05:20): As a campaign staffer, I was involved only in the sort of front lines of organizing. So literally we would make phone calls from 5:00 PM to 9:00 PM every night, and then the next day we would organize our lists and we would go and knock doors, and we would spend most of that time recruiting volunteers. So it was all very electoral organized or electorally oriented and not oriented towards working on policy in any way, particularly in my campaign days. It wasn't until I got to DC and moved into working on the Recovery Act and the Recovery and Reinvestment Act, because the previous largest climate investment in US history, $90 billion out the door at the US Department of Agriculture that I really started to wrap my head around these issues in a meaningful way. Dave Anderson (host) (06:21): And so then you worked at the State Department and you became the point person, and this is the part I'd love for you to dive into a little bit, but you became the point person for setting up meetings that ultimately led to the Paris Agreement. What did that specifically entail? Franz Hochstrasser (Guest) (06:37): Yeah, and also noting that this is the first week of COP27, the 27th meeting of the conference of the parties to UN Framework Convention on Climate Change. I've said it a few times before. This is the process that I was deeply, deeply involved in while working at the State Department under special Envoy for Climate Change, Todd Stern and ultimately Secretary Kerry. And by the time we got to Paris in December 2015, we had been working on getting this agreement to be closer to being finalized and ultimately to finalizing it there at the COP21 for really the past eight years, because it started with COP15 in Denmark. (07:32): And so I swooped in in 2014, started at the State Department, and by the time we got to Paris, I was in a position where I was coordinating all of the US delegation meetings, bilateral meetings with the ministers on the other side. So the Minister of Environment from South Africa, the COP presidency, Laurence Tubiana, and many of the other foreign leaders and dignitaries that John Kerry was sitting down with, that President Obama was sitting down with, and that my immediate boss, Todd Stern, was sitting down with. Dave Anderson (host) (08:10): Wow. And at some point, was it during that time or was it post Barack Obama that you went back to school at Yale to get your master's degree? Franz Hochstrasser (Guest) (08:20): Yeah, it was afterward. That was my walk in the woods after giving the government my twenties. So I actually mailed my Blackberry and iPad back to the State Department from my first day of classes at the Yale School of Environment. So that was my post administration life and an opportunity really to reinvent what I was and what I could contribute to the climate movement. I came out of the experience of having worked in government with two main kind of motivations. One was that I had seen over the last eight years that finance really was the biggest blocker for progress, whether it be globally or locally in deploying climate solutions. So I knew we had to scale up finance immensely. At the time I was leaving the government, there was an estimated $300 billion a year flowing into climate solutions. (09:26): Now there's an estimated 800 billion to a trillion, but as many of the leaders at COP27 this week are starting to say, we need something in the order of 3.5 to $6 trillion per year flowing into this space. So I wanted to work on that very intensely. But the second thing was that we need more people involved. So the talent pools that were working on climate back in 2015 needed to expand exponentially to draft a whole host of new, brilliant people from tech, from manufacturing, from services and sales and marketing in every sector of the economy ultimately, that needs to transition to low carbon solutions. So anyway, I answered more than you asked, but I think those two motivations in leaving government are what led me to direct my studies toward sustainable finance and ultimately to found Raise Green. Dave Anderson (host) (10:32): Yeah. You've said previously that one of your passions, at least I've seen you said, is solving the climate crisis. There's two things I want you to do. One of them is to help us define what the climate crisis is? But secondarily, I want you to talk about as part of the transition from working on these problems at the highest levels from the political sector, to now working on them at a more grassroots level with your existing project that you have, which is Raise Green. And we're going to talk a lot about that. But maybe if you don't mind just talking about, for our viewers, help us to define as you see it, and perhaps as a lecturer at Yale, how you might define the climate crisis? Franz Hochstrasser (Guest) (11:14): Sure. Haven't been asked to explain that in a while, but at its base, our society runs on fossil fuel driven machines for the most part, whether that's the gas boiler that most of us have in our closet or the electricity grid that predominantly and historically has run on coal and natural gas or the automobile that we drive that runs on gasoline. Those sources of energy lead to carbon emissions, greenhouse gas emissions specifically of various types. So it's not just carbon, it's also hydrofluorocarbons, which we've just got a major amendment passed to the Montreal Protocol to address that, called the Kigali Amendment. But it's predominantly CO2 that gets caught in the atmosphere and leads to the greenhouse effect heating up the planet. (12:30): And over the course of the past, really since the industrial revolution of the late 1800s, we have as a society because of those greenhouse gas emissions heated the atmosphere to the tune of about one to 1.2 degrees Celsius. And the estimates now are that if we don't act urgently to completely effectively cut off our carbon emissions in the next eight years or so, according to the Intergovernmental Panel On Climate Change, we very well may find ourselves exceeding 1.5 degrees Celsius of warming globally and find ourselves in a circumstance where the floods and the droughts and the hurricanes and the other extreme weather events that result from climate change begin to become irreversible. So that's what we're trying to avoid, and that's the problem we're trying to solve. Dave Anderson (host) (13:41): Yeah, so the IPOC report that you're referencing suggests that we have a fairly small window where we can actually make an impact, where the temperatures become essentially irreversible, at least there would be little that humans could do to intervene to reverse it, I think is the suggestion there. So with the problem well defined now, you worked on it again, politically at the highest levels, and now working on it on a more of a grassroots level. Tell us a little bit about how you transitioned out of the political sphere and now are doing what you're doing and maybe that's a good segue to introduce your existing passion project. Franz Hochstrasser (Guest) (14:21): Certainly. So going into COP21, the Paris Agreement being the result of that, with all 196 nations adopting the very first durable, ambitious, and flexible framework to address the problem collectively, countries hadn't come around to that level of specificity about what the problem was, how to deal with it, and what needed to be done in order to tackle it. And so when that happened, it was a tectonic shift because it really laid the groundwork for countries to organize themselves with their nationally determined contributions, but then more importantly, for all of the supporting civil society, cities, states, companies, faith-based groups, NGOs, to also reorganize themselves toward implementing against those big targets that the government has or that governments of the world have. And so to me that was like, hey, this is a tremendous business opportunity for us to do this, but it's also a moral imperative that those of us, particularly who have benefited from historical advantages, work on solving this problem together. (15:54): And so that led me, again, back into school with those two main things, wanting to get more people involved, wanting to get more capital flowing into climate solutions. And that's where I found a co-founder and launched Raise Green. And Raise Green is a climate investment platform. It already has thousands of members who are investing as little as a hundred dollars and as much as our largest investors, half a million dollars directly into clean energy projects at the local scale like solar on a school or into climate tech companies that are, some of which are building the breakthrough technologies like low carbon plastics that are going to help us decarbonize industry and those harder to abate sectors of the economy than the energy or transportation or building sectors. Dave Anderson (host) (16:52): And outside of the moral imperative, what's the incentive that the investors have to be part of the platform, the thousands of investors that you have as part of the Raise Green platform? Franz Hochstrasser (Guest) (17:05): Yeah. Well, this is where I go back to one of the things I learned at the Yale Program on Climate Change Communications, which is, people often think that the most motivating human emotion is fear. And oftentimes I will ask a crowd of folks, what do you think it is? And fear is always the answer, but what the YPCCC found is that actually pride is the most motivating human emotion, if we can draw it out of folks and give them something meaningful. So what I think about from the standpoint of Raise Green is we are trying to give everybody an opportunity to put their money where their heart is, own a piece of the clean energy infrastructure or a company that's going to build it, and be proud of benefiting from that transition to clean energy and to low carbon and climate resilient society. So not only can they feel good about assuaging their climate anxiety, which many of us increasingly have, but they can also make money while they do it. So that's hopefully a double whammy win-win that everybody can get behind. Dave Anderson (host) (18:28): Maybe you can give the elevator pitch if an investor were interested or considering Raise Green. Is it a fund model where I as an investor would be able to put my 100 to half a million dollars in and then have it ride along others? Or is it where I get to choose individual investments based on the merits of any individual investment? Franz Hochstrasser (Guest) (18:50): No. So it's the latter. You would get to choose what you put your money behind, and that's where I think it becomes really exciting because we have folks who are building solar projects in low to moderate income neighborhoods on the rooftops of schools. We have folks that are building company or industry leading climate tech businesses to deploy more energy efficiency for multifamily housing. And you can pick, and we also work with one of the largest and the first Green Bank in the US, the Connecticut Green Bank to issue green bonds certified notes. So of those options, you as an individual investor can pick what story and what investment type you're most excited about and put your money directly into that project. So we think that leads to, again, the ability to feel proud about what you're putting your money into and really invest with your values. Dave Anderson (host) (20:04): And do these investments, are they typically like a debt instrument where you're issuing loans that are ultimately paid back with a coupon? Or is it more of equity investments? Is it a combination? What's the operation usually look like for the financial instruments? Franz Hochstrasser (Guest) (20:19): Yeah, great question. We have offered now virtually every imaginable type of security. And when I say security, I mean either a debt instrument or an equity instrument. So we've sold about 80% of the investments that we've had are debt, which means that they pay out at a fixed rate over a fixed period of time. And then the other 20% are sort of equity style offerings, some of which are venture deals with simple agreements for future equity or convertible notes that would turn into equity once that company does qualified financing down the line. Dave Anderson (host) (21:02): So that must create, I mean, because of all the different financial instruments you're using from a regulatory perspective, there must be a lot of complications with that. How do you bring someone that wants to make a small and minor investment in, that wouldn't necessarily meet the Reg D or the sophisticated investor SEC requirement? How are you managing through all of the regulatory parts of being able to put these investments together? Franz Hochstrasser (Guest) (21:33): Yeah, that's a great point, Dave. And to me it comes down to thinking about and using the tools that we have available to open up access to investing, as well as open up access to capital formation in a way that historically has been barred. So 90% of Americans that are not wealthy, who don't make more than 200,000 a year or have more than a million in net worth, up until 2016, they could not invest in private companies for the most part. That all changed in 2012 with the Jobs Act that President Obama signed into law. And then the SEC's Finalization of Regulation, Crowdfunding, and that is what we use at Raise Green to enable non-accredited investors that the 90% of Americans who are not rich to invest directly into private companies. Dave Anderson (host) (22:34): So it's a crowdsource model and they're able to go to the platform, look through different investments and make strategic investments on their own. Do you offer any assistance for people that are looking to make investments or how does the platform handle those sorts of things? Franz Hochstrasser (Guest) (22:52): So we are an intermediary that is responsible for diligencing the projects, ensuring that they are qualified to sell securities in the eyes of the SEC and FINRA, which is the Financial Industry Regulatory Authority. They're our regulators and then also diligencing the investors. Doing a, Know Your Customer Anti-money Laundering check on every investor, and then ultimately sort of consummating the transaction between investor and issuer. And so we do not provide financial advice. We can't provide financial advice based on our registration. And so it really is useful for anyone who's thinking about investing, read our blog, read our frequently asked questions to get educated about what the options are. And then ultimately, if you want advice, consulting a registered investment advisor or a money manager as you add Raise Green securities to your portfolio, is certainly something that is a good idea. Dave Anderson (host) (23:55): And in terms of how you decide whether or not as an intermediary, an investment meets the minimum regulation requirements to be a part of the platform, do you also provide help in pricing the security or in pricing the debt or the coupon? Or do companies have complete liberty to do that on their own? Franz Hochstrasser (Guest) (24:16): Yeah, we like to say that we provide three things to the companies. So we give them the ability to set their own financing terms, so the flexibility to do that. The ability to have credibility behind their raise, because they're using an SEC Infin registered platform. But then third, to really access customers in a way that, to turn them into raving fans and investors or turn them into investemers as some people are calling it in the crowd investing industry. And we work with them to structure the deal, to price the security appropriately based on the market. My co-founder is, and our chief investment officer, Jackie Logan, has background of 20 plus years in capital markets, came to us from Goldman Sachs thankfully. (25:14): And so we keep our finger on the pulse of both the debt markets as well as the early stage venture financing markets to ensure that we are giving all of the services that we possibly can to make sure that entrepreneurs who are heroically trying to solve this climate challenge, have all of the best information and can come to market with the right price and appropriate security type. Dave Anderson (host) (25:45): Yeah. Do you have some examples of some successful investments that have happened? And why I say successful, I'm talking about projects that have been financed through your platform that have come to fruition and enjoyed a measure of success. Franz Hochstrasser (Guest) (26:00): Yeah, definitely. We've got a handful of them now. We've done about 20 securities offerings over time. So a couple that I would highlight. One was early stage financing for a water filtration company. They built this really awesome tap water filter for the developing world. And when we started working with them, they hadn't even finalized their prototype, but now they're actually out in market selling these things at an affordable rate to end users in Guatemala and helping them purify their water and solve their water security issues. So that's a really exciting one that I always like to dip back into. It is called OLA Filter. You can check them out. And then another one, very high profile company now is called Block Power. And we worked with them to raise actually close to $3 million through a debt security that we worked to structure with them, that goes to a portfolio of energy efficiency upgrades on multifamily housing projects. And then we've also worked with the first Black woman founder of a community solar company in the US to help her raise an initial round as well. Dave Anderson (host) (27:21): So this is called the Solar Podcast. So I might ask you to dive a little bit more into what other types of solar projects have come across the platform. Franz Hochstrasser (Guest) (27:30): Certainly. Yeah. Well, we have done everything along the life cycle of a solar project. So everything from development capital, which that one I just mentioned really was predominantly development capital. Which means very early on a company taking money and using it to take the next step in the project, whether it be interconnection applications or design and construction phases. We've also helped with construction phases of projects, an alternative to a bank driven construction loan. And then once the project is built, we've done a refinance of a solar project, about a 500 kilowatt solar project out of Vermont on a school for the developer to take capital out of the deal that was already built in generating electricity and selling at a discount to that school and put that new money back into developing new projects. Dave Anderson (host) (28:44): Yeah, so I would imagine that's kind of a longer term investment note. What is the typical duration for an investment that's done on your platform? Franz Hochstrasser (Guest) (28:57): Yeah, so on debt, we've done everything from a one year note that has yields that we peg off of the US Treasuries. Clearly they have a premium because they're more risky. And I actually can't quantify risk, so none of this is investment advice. But we've done a one year note, we've done a three year note, we've done five year notes, and we've also done seven year Preferred Equity, which kind of acts like a debt instrument and pays out on a fixed rate and then a 12 year note, which was the block power note. Dave Anderson (host) (29:40): So you've been doing this for five years now, I would imagine there's been a couple of bumps on the road. What have been the biggest surprises that you've encountered as you've been running the business for the last five years? Franz Hochstrasser (Guest) (29:51): Oh, I think the biggest surprises have been how quickly the climate tech industry is growing. It is really exciting how fast it's happening and it's about damn time, honestly. You could bleep that out if you need, but it's just astonishing. I mean, you look at climate tech from the VC perspective back around the time that I was at the White House and it was in the order of a few billion, maybe five to 10 at the peak of Cleantech 1.0. Last year it did $60 billion into climate tech. This year it's projected to potentially even double that. (30:40): So the money is starting to flow in from private sources and the companies themselves also are proliferating at a rate that I think is genuinely shocking and in all the right ways, because it has to go that fast. In fact, we're behind still, in terms of getting solutions out as quickly as the problem is intensifying. So yeah, that would be the big one. But then speaking from an operator perspective as the CEO of the business and also the Chief Compliance Officer, I think that this is more so I feel something that every founder probably experiences, but things just take longer than you want them to, regardless it seems like of what it is. So staying assiduous and staying just dogged about deadlines I've really learned is vital to advancing anything in an early stage company. Dave Anderson (host) (31:52): So having worked on both sides, do you feel like the biggest opportunity or areas for opportunity or the most critical areas are going to happen more on the political specter or more in the private arena in terms of trying to make the biggest impact against this climate crisis we previously defined? Franz Hochstrasser (Guest) (32:10): Well, I think governments are still the biggest single lever, and we see that here in the US with the passage of the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the Chips and Science Act being what could amount to 600 or $800 billion of federal spending flowing into the economy. But that six to $800 billion that's anticipated to come from those large chunks of legislation are projected by Credit Suisse, which they put out an internal memo that got circulated and had a great piece written up on it in the Atlantic by Robinson Meyer. I would strongly recommend to anyone who wants to pick up on this thread. That money is projected to leverage $1.7 trillion of private capital flowing into this space over the next 10 years. So I think it has to be both. They go hand in hand, but the private sector needs to get more aggressive and more intentional about what it is doing to deploy capital into some of the riskier technologies that we know are essential to reducing emissions and time to avert runaway warming. Dave Anderson (host) (33:45): So Raise Green recently raised its own investment capital as well. Did you use your network for raising that money or did you go to more traditional sources? Franz Hochstrasser (Guest) (33:55): Yeah, well oddly, the FINRA rules don't allow us to sell our own securities on our own marketplace. That would be a nice thing to be able to do, but we weren't able to do that. So we actually used an AngelList Roll-up vehicle for part of it to allow for smaller dollar investors to come in and then raised the larger amounts from angel investors predominantly, and also some small VCs as well. Dave Anderson (host) (34:28): So with that 1.7 trillion that you're talking about, that's flooding in as a result of the six or $800 billion that's coming more directly because of the government lever that we talked about, what's the vision that you have for Raise Green in terms of how many of those dollars are going to be filtered your way and what's the role that you think you guys are going to have over the next handful of years? Maybe you can give us a forward statement or a vision statement for where you see the business going? Franz Hochstrasser (Guest) (34:53): Yeah, certainly. We're all about mobilizing more capital and mobilizing more people to make it an equitable transition so that the benefits of the investments that are happening today, flow to as broad of a population as possible. So by 2025, I mean, we intend to have a network of hundreds of thousands of investors and have mobilized a billion dollars in private capital to flow into those types of clean energy projects and climate companies. And I think about it, I love this sort of anecdote from Warren Buffet where if you look at the S&P 500 or the largest market cap companies 20 years ago, and then you look at the list of the largest market cap companies today, they're all different. Not a single one that's on that list today, was there 20 years ago. In 20 years though, what will be the largest market cap companies in the world? (36:00): I'd be willing to bet that it's going to be climate smart businesses that have worked to solve the climate crisis and developed and deployed the types of solutions that are necessary to reduce emissions, to grow the economy, to grow jobs in a way that it really is going to be the industry of our lifetime. So I'm excited about playing a role as an intermediary to help activate the on average 40% reduction in technology costs that come from the Inflation Reduction Act tax credits and make those more broadly accessible and profitable for individual investors that might just want to put a hundred bucks into the clean energy future. Dave Anderson (host) (36:50): Yeah. So currently of the thousands of investors, you have said the investments range anywhere from a hundred dollars to 500,000. Do you expect that to change over time? Do you think you'll always have space for the $100 investor, but will there be potentially opportunity for the much larger investor to be part of the platform as well? Franz Hochstrasser (Guest) (37:10): Yeah, definitely. We are intentional about democratizing access to the investments that we list. Otherwise, we would be a private equity or a fund model. And many folks who have started out with the idea of doing what Raise Green is, have pivoted into those potentially more lucrative but less equitable forms of business. And that's totally their prerogative. Our mission and our commitment is to maintain a position where we can broadly offer securities to whoever wants to buy them. So that's core to who we are and what we will continue to do it for as long as we're able. Dave Anderson (host) (38:03): What sort of advice as a lecturer and as well as an entrepreneur and spending as much time as you do in the political sector, what advice would you have to others that maybe don't want to dedicate their lives at the level that you have to solving the climate crisis, but could still be involved? Where do you tell people to start? I think that's always a difficult conversation, is the problem feels so big. Franz Hochstrasser (Guest) (38:23): Yeah, fair. Yeah, I mean, so three quick stats maybe to answer that question. One would be 85% of individual investors as polled by Morgan Stanley want to invest in sustainable options. And 99% of millennials polled also want to invest in sustainable options. The third stat is that 91% of human adults on the planet today have a smartphone within arm's reach every hour of every day of their lives. And so putting those together, I would say that making it easy for anybody to take action in a way that is as simple as a couple of minutes on your smartphone, picking a project that looks interesting to you and putting a hundred dollars in really is why Raise Green exists and something that should be accessible to whoever it is that even thinks about this, just occasionally for an hour a week or something. (39:31): But yeah, I mean the bigger step toward that would be that like you're doing, Dave, helping spread the word. Using whatever talents that you have and whatever skill sets that folks possess to work in climate, work on climate solutions. We need everybody and anybody that cares about frankly, the stability of our society in our lifetimes to get involved in this fight. And everybody has a role to play and can contribute significantly. Dave Anderson (host) (40:11): Does Raise Green attempt to, in any way, sort offer any quantitative evidence of the impact that any of these investments might make in terms of decarbonization? Franz Hochstrasser (Guest) (40:25): Yeah, that's an excellent question. So we're a member of the Partnership for Carbon Accounting in Financials, which is a network of the largest financial institutions of the world, as well as us as a teeny little speck on that map. So we are working on our disclosures under PCAF, but for the individual that's putting in a hundred bucks, we're also working to deliver them a dashboard that allows them to understand exactly how much emission reductions they're causing with that investment. Right now it comes in the form basically of an annual report that happens a year after an offering is completed, that we work with the companies to file and kind of report out on progress. So working to make that more real time is something that's on our roadmap and something we are excited to provide because we saw with Kiva, people love being able to follow what their money's doing, and the more that we can remind people that they've put their money to something meaningful, the prouder they'll get of having done that and the more likely they'll be to do it again. Dave Anderson (host) (41:41): So how do you then vet whether or not an investment might meet the minimum standard for decarbonization to rise to the level of being an impact investment to be on the platform? Franz Hochstrasser (Guest) (41:53): Yeah, so we use what we call the Raise Model to assess that. First and foremost, the R is actually focused on revenue because particularly if it's a debt offering, we need to ensure that the company has the ability to pay back the investor at least, or service the debt that they're borrowing. But then on the impact side, we look at the ambition of the team. So is the team equipped with the skill sets and knowledge in this sector and on the technology that they're working on? And then is the impact that they're trying to create both socially and environmentally demonstrable. So I know from my background that deploying distributed solar at the scale of call it a megawatt, is going to have varying impacts based on where it is in the country or this idea of locational marginal emissions being something that is cause for variation in the amount of impact that a given project will have. (42:56): But my team also now is trained in and has looked at around 400 deals in total. And so we've gotten quite good at taking a quick input of data from the company, understanding, are there scientific merits behind this? Is it likely to result in the types of impacts that are intended by the founder or the company owner? And do we feel good about that from Raise Green's standpoint for who we are as a business and what we want to represent an offer to our investors? Because ultimately they're looking at us and coming to us because we represent ourselves as such, and so we hold ourselves to that standard as well. Dave Anderson (host) (43:44): That's great. And of the 400 companies you've vetted, how many actual offerings have been on the platform so far? Franz Hochstrasser (Guest) (43:44): 20. Dave Anderson (host) (43:52): 20 so far. That's amazing. Well, it's been fascinating to visit with you, Franz. I mean, I might just ask you in the last couple minutes we have together what, outside of Raise Green, what gets you excited about solar in general? A question that I ask most people that come on the show. Franz Hochstrasser (Guest) (44:13): Yeah. Well, I'm a huge, huge fan of distributed generation, the sort of puzzle pieces of the grid, which is this the most amazing machine that humans have ever built that allows us to draw electricity from wherever it's being generated at all hours of the day. I think the puzzle pieces that are represented by distributed generation are so fascinating because they totally flip the script on this arcane model of generation and consumption where the power companies generate and consumers consume and allowing those consumers to become pro consumers, to generate their own electricity, feed it back into the grid, store it, deploy it at their whims with energy management systems. I think that the FERC Order 2222 is tremendously exciting about what's going to happen to the grid and what it means for those distributed generation developers, owners, operators, and investors over the next decade as we seek to draw in as much clean electricity as possible and share it abundantly. So what has me stoked right now. Dave Anderson (host) (45:43): Franz, it's been absolutely fascinating to visit with you for the last hour. I'm sure that there's going to be people that are interested in taking a look at some of the fantastic companies that are available for investment on your platform, as well as individuals that might say, "Hey, I'm in the solar space. I actually think that we might be an investible business on the platform." Where should they go and what should they do if they're interested in being part of your cause? Franz Hochstrasser (Guest) (46:06): Yeah, so if you're a founder and you want to raise a community round, or even if you just want to carve off a chunk of the funding round that you're raising through private VC sources and sell it to the crowd to let more folks invest in, own and benefit from your growth as a business, or you're a clean energy developer and you want flexible capital on your own terms, come to Raise Green. You can sign up for a consultation. We can get you up on the platform in a matter of weeks. (46:39): And then if you're an investor that's curious about things that you can do to put your money to work to make the world a better place and reduce emissions, go to raisegreen.com. We have a whole host of offerings at invest.raisegreen.com, which is our marketplace. You can browse them, you can ask questions, you can join our investor days, or you can just sign up to our newsletter and we'll notify you as deals come up. So would love to have anyone and everyone listening at least subscribe to our email list and keep making strides to help us tackle this generational challenge. Dave Anderson (host) (47:22): That's fantastic. And I love to see the private markets trying to solve these big world problems. And the reality of it is that any of us as individuals, these really large problems, sometimes they feel too big to solve. But the truth matter is it's the collective us are the ones that are going to make the biggest difference. And so starts with the individual. So I'm fascinated or I'm thrilled, Franz, that you're creating a platform that individuals can participate in that way. So thanks again for coming on. It's been absolutely fantastic and exciting to learn about your platform. I will certainly spend some time at investraisegreen.com, myself, to take a look at some of those offerings as well. So thanks so much. Franz Hochstrasser (Guest) (48:01): Well thank you for the signal boost, Dave. It means a ton. And the great work that you and your podcast team do goes a long way. So I really appreciate you having me on. Thanks so much. Dave Anderson (host) (48:12): Thank you.