June, 2009

Day two of the SJF Summit on the New Green Economy offered participants the chance to have a facilitated conversation about challenges and opportunities in the new green economy.  Sessions were held on issues that entrepreneurs face, the needs of rural and urban communities for economic development, and issues unique to the Triangle region of North Carolina.  We’ve picked out and posted to this blog some of the most interesting and useful insights from these sessions and paraphrased or quoted the participants.   Please feel free to leave your own comments or suggestions!

ENTREPRENEURS OFFER GREAT IDEAS, BEST PRACTICES

What do you need to know to be a successful entrepreneur in the green business space?  Lots of great ideas were offered up at the Entrepreneurship Strategy Session during SJF’s Green Economy Summit.  Top of mind for entrepreneurs: every relationship matters.

Other nuggets of advice:
•    Don’t despair if capital investment seems to only go to the big guys.  Our panel argued that micro-lending is an available, viable option for smaller firms.
•    Notes one participant: there are many new debt options. Lightly collateralized loans up to $50,000, and lending up to $200,000, might be an option. While this might not be much money for capital-intensive companies, it can be helpful for service businesses.
•    When you’re short on people-power or fresh ideas, tap business school students.  Our panel found them to be eager and socially motivated.  Moreover, to have students working on a discrete project that relates to their studies can be a real win-win.
•    Work on that elevator pitch!  As one participant emphasized: “say in a few words what the market opportunity is. Entrepreneurs have too many words and grand ideas. Instead, say ‘here’s the need, and here’s how we’ll address it in a differentiated way.’”
•    Be clear about the shortest path to revenue and breakeven point.  Small and income-generating is better than big and in the red.
•    Find an investor who cares about the problems you are working to solve. “If you’ve got them by the heart, the wallet is close to follow.”

The entrepreneurs also had ideas as to the most pressing needs for budding green entrepreneurs:
•    The need for experienced mentors: “How can we connect people with a business background to mentor those who have the heart but no business experience?”
•    The need for seed funding: “Many environmental or mission-driven businesses don’t fit the formula for lending because they don’t have a track record. But they’re visionaries, and they’re the ones we [the market] need to figure out how to fund.”
•    The need for good metrics to measure social and environmental performance.

Day two of the SJF Summit on the New Green Economy offered participants the chance to have a facilitated conversation about challenges and opportunities in the new green economy.  Sessions were held on issues that entrepreneurs face, the needs of rural and urban communities for economic development, and issues unique to the Triangle region of North Carolina.  We’ve picked out and posted to this blog some of the most interesting and useful insights from these sessions and paraphrased or quoted the participants.   Please feel free to leave your own comments or suggestions!

BUILDING THE NEW GREEN ECONOMY IN NORTH CAROLINA’S TRIANGLE REGION
The Triangle Region strategy session participants identified some local resources for green business entrepreneurs including:
•    The Sustainable North Carolina Business Council
•    North Carolina Sustainable Entrepreneurs Group
•    NC Board of Science & Technology
•    Advanced Energy

Some of the next steps that the SJF Green Economy Summit strategists considered to develop green business in the Triangle included:
•    Organize like-minded investors
•    Look for ways to collaborate
•    Develop great business plans
•    Have more say in policy development
•    Collect information for faith-based initiatives embracing the green movement

Day two of the SJF Summit on the New Green Economy offered participants the chance to have a facilitated conversation about challenges and opportunities in the new green economy.  Sessions were held on issues that entrepreneurs face, the needs of rural and urban communities for economic development, and issues unique to the Triangle region of North Carolina.  We’ve picked out and posted to this blog some of the most interesting and useful insights from these sessions and paraphrased or quoted the participants.    Please feel free to leave your own comments or suggestions!

IN RURAL COMMUNITIES MONEY REALLY DOES GROW ON TREES

Here’s a thoughtful take-away from the SJF Summit strategy session on rural economic development: the glass is half full, not half empty.  In terms of green jobs potential, rural communities have great bioenergy and other assets, and are rich in natural capital.  However, new strategies for marketing and corporate development are needed so that private money, including venture capital and angels, can effectively reach small-or-medium-sized businesses in rural economies.

The Summit strategists concluded that rural communities may have missed the Internet explosion, but they don’t need to – and shouldn’t – miss the ‘green’ explosion.  How can these communities get in the game?
•    Increase access to capital.  One reason interest and enthusiasm from investors is lacking is because the capital needs are smaller in rural areas than elsewhere. One potential area of interest to investors could be community infrastructure.
•    Develop workforce training in new skills related to new green industries
•    Develop low-tech employment opportunities in green industries for entry-level employees
•    Recognize rural and urban needs are different!  Urban strategies may not work in rural communities.

Rural communities have big potential to develop their natural capital assets. One attendee noted that Latin American countries are beginning to protect their forests rather than cutting down the trees and are then using carbon credits to trade in the European market. U.S rural communities now have a once-in-a-lifetime opportunity to respond to the interest of the energy industry in biomass production by exploiting their bioenergy assets.

The lack of a trained workforce and matched skill sets are two of the biggest hurdles for rural communities. There may be lessons to learn here from urban communities, which use empowerment strategies to build capacity through leadership.  The best organizations are market-based networks, like farmers’ cooperatives, or are organized around a sector (energy products, forestry products) to serve large market.

Words of wisdom: to be successful, the regions themselves need to organize to develop an infrastructure.  One key need is on-the-ground leadership that’s sustained over time.

SJF’s Summit on the New Green Economy attracted a great deal of attention from the news media.  Cleantech, sustainability and green jobs are all compelling themes that draw press coverage.  Check out what various media outlets are saying about the conference at these links below:

The Herald Sun: SJF Ventures Brings Conference Home

Independent Weekly: Green Businesses, Earning Green

The News & Observer: Conference Set on Green Economy

Triangle Business Journal: SJF ‘Going Green,’ with $50M-$75M Fundraiser

After a successful two days, our SJF Summit has come to a close.

We thank all our panelists, attendees and SJF staff for an inspiring and informative event.  Those in attendance were clearly fired up about our emergent green economy, and this Summit provided many tools, techniques and best practices that investors, economic developers, entrepreneurs, government officials and others will be able to apply to their ventures.

We hope you are enjoying our new blog and welcome your comments and feedback.  Let us know what content you’re looking for and we’ll work hard to provide it.  This is only the beginning for cleantechinvesting.com.  Our Summit proved to be a great launching pad for the site, but stay tuned for much more cleantech and green jobs information from this resource and other SJF blogs.

As we look ahead, don’t forget to sign up for SJF’s upcoming Employee Financial Stability Webinar on June 16, 2009.  You can register and learn more at www.sjfund.com.

Thanks for reading!  Stay tuned for much more from SJF.

Jeff Wolfe had a simple call to arms for SJF Summit attendees to wrap up the two-day event this afternoon: go develop and promote alternative energy in order to “save the planet.”

“We will win not by losing our senses, but by finally gaining control of them,” said Wolfe, CEO of Vermont-based groSolar. “This is the moment.  Let’s go do it.”

Wolfe ended his lunch keynote with this inspirational message.  Before he got there, he laid out a bleak picture of the current times: a huge, crippling recession, global warming and a dependence on oil for energy.  But all of these trends, Wolfe noted, open up great opportunities for wholesale change.

Wolfe and his wife, Dori, began groSolar, an SJF portfolio company, in 1998.  The solar energy firm has exploded and now has 200 workers.

“GroSolar is a fantastic example of what our economic system can do and repeat,” he said.

Wolfe advocated for “endeavor” capital over venture capital.  The distinction, he said, is that venture capital sometimes makes a problem in order to solve it, while endeavor capital would be organized around fixing existing problems.

So how do businesses, investors and others move forward in promoting sustainable energy sources?  Wolfe had a few ideas.  Among them: mission statements should include the mantra, “in harmony with the Earth”; the public sector should make investments without expecting an immediate return; business should ditch its old ways and find new techniques; and labor interests need to be involved in dialogue.

Right before lunch, SJF Summit attendees could go to a variety of information and strategy sessions.  These groups were intended to be conversational and to help investors, economic developers and others get useful information they could apply to their efforts to build the new green economy.  Here is a look at the “Accessing Stimulus Funds” strategy session:

Ernst & Young’s Paul Naumoff knows the federal stimulus is a complex system of funding.

“It really is a daunting task just to understand (how the funds) add up,” he said.

Naumoff helped SJF Summit attendees make sense of some of the $787 billion in federal funding during a strategy session before lunch.  He focused on money that businesses and other entities can tap for tax credits and other incentives.  Much of that funding is available to spur alternative energy research and implementation, he said.

Among the available pockets of money are $2.3 billion in tax credits for makers of advanced energy infrastructure.  He said the federal government will consider many factors as they sift through grant applications, including the degree to which an area needs a stimulus.

Naumoff noted that while the stimulus programs are carefully constructed to prevent entities from “double dipping,” there are additional state and local incentive packages available that can help businesses get more assistance in developing and deploying green technologies.

Naumoff went over a number of different federal grant programs.  One provides incentives for battery technology in alternative vehicles.  “We need to improve the technology, so they’re looking for opportunities there,” he said.

He noted that while there is lots of money directly at the federal level, attendees could have greater success pursuing millions in funds at the state level.  Those state dollars are allocated from the federal government.

For instance, he said North Carolina’s state energy office received $266 million in stimulus funding from the U.S. Department of Energy.  Those money breaks down as follows: $132 million for weatherization; $76 for state energy programs; and $58 million for energy efficiency and conservation block grants for local governments.

While quick to note that he doesn’t know all of the best approaches to accessing these funds, Naumoff did give a few pointers.  For example, he said stimulus fund applicants should have good documentation and give a narrative to explain the need for monies in their local economy.

“You need to be very complete and accurate,” he said. “You just need to make sure you do all your paperwork.”

Attendees also were able to hear about various Web sites that allow users to learn about funding and incentives.  Those include: grants.gov, fedconnect.net, ccr.gov and dsireusa.org.

The strategy session allowed attendees to jump in with questions and comments.  One attendee offered the greater suggestion that applicants begin with the back of the document and work their way to the front; he said that approach could be better for timing reasons as applicants try to turn in all of the paperwork.

Naumoff also took time to discuss examples of strong state-based programs.  He named Tennessee’s Clean Energy Technology Grant, the “Renew Energy” initiative and Ohio’s Advanced Energy Program as case studies.

The stimulus passed just months ago, and Naumoff noted that hardly any of the money had been spent at this point.

“Certainly in the next 24 months there will be a lot more dollars flowing,” he said.

Our Green Economy Plenary, which was moderated by SJF’s David Kirkpatrick, featured five capital markets leaders who offered a multitude of useful nuggets as we look to invest in the new green economy.  The panelists were: Andrew Kassoy, of B-Lab; Ariane van Buren, of Ceres; Mark Pinsky, of the Opportunity Finance Network; Kathleen Starr of the F.B. Heron Foundation; and Don Shaffer, of RSF Social Finance.

Here are just a few of the points and takeaways from the plenary:

Kassoy noted the need for social and environmental standards in the green marketplace.  He compared such a system to the LEED standards used for environmentally sustainable building practices.

Pinsky offered a glimpse into his group, which is a network of community development financial institutions across the United States.  He said there are 800 such CDFI’s in America today.  “We’re trying to figure out how to do better in the CDFI world,” he said.

Starr said there is a misconception that entities that are doing positive work with social impacts have to lose out financially in some way.  She said that’s certainly not the case.

Shaffer told attendees they should consider ending their bank accounts with organizations like Bank of America and Wells Fargo and invest in credit unions such as Self-Help that are more focused on social benefits.

Van Buren discussed how her organization, Ceres, helps investors and organizations promote sustainability.  She said Ceres works with state treasurers and individual state investment funds.

Panelists also encouraged Summit attendees to visit several Web sites to get more information about capital.  Here are some of those resources: greenforall.org, moreformission.org and missionmarkets.com.

Self-Help Credit Union Founder Martin Eakes received a standing ovation from a packed ballroom of SJF Summit attendees this morning after giving a commanding and inspirational keynote about the need to embrace to trusteeship and sustainability.

Eakes, a national leader in CDFIs and in the fight against predatory lending, said it’s important to be a trustee for the poor and disadvantaged.  He told a story of how a borrower visited him and explained how he had been hoodwinked into making a bad refinancing deal on his mortgage.  He said this case pushed him into starting the Center for Responsible Lending, which is affiliated with Self-Help.

He said it will take some time to get over the mortgage meltdown.  “It’s going to be four or five years before we have a recovery,” he said as he showed a graph to illustrate the housing crisis.

Eakes noted that many subprime loans were designed so they would fail.  He said more than 50 percent of black residential mortgage holders have subprime loans, a problem he called a “walking neutron bomb.”  And he said the effects of this crisis will hurt nearby homes.

“It becomes an infection for the four or five houses around it,” he said. “You end up with this epidemic that becomes a downward spiral.”

He said Self-Help has been trying to get vacant, foreclosed homes back on the market.  Just last week, he said Self-Help sold homes in hard-hit areas for $1,500 a piece.

But Eakes said there is hope that Americans can turn things around.

“I believe that suffering and self sacrifice can heal the corrosion that’s taking hold of this country,” he said.

As he closed, Eakes neatly wrapped up his message against predatory lenders with this call: “While it is true that we love our enemies, sometimes we have to stop them first.”

Janet Cowell, NC state treasurer, kicked off the second day of the SJF Summit by reminding attendees that the Old North State is in a good place to tap into the emerging green economy.

“North Carolina’s a state that is well-positioned to take advantage of this movement,” Cowell said.

Cowell, a former SJF employee and state legislator who was elected as North Carolina’s first female treasurer last fall, praised SJF for organizing the Summit and convening a variety of leaders who want to collaborate to create good green jobs.

She called on Summit attendees to offer state government officials feedback to help get the economy flowing again.

“I hope that you can help the government sector identify the barriers and policies that need to be changed,” she said.