Investing in GridShare Crowdfunding

This article originally was published here: https://www.greenchipstocks.com/articles/investing-in-gridshare-crowdfunding/80021

There’s no question that crowdfunding has revolutionized independent fundraising. With as little as a compelling video presentation posted to a crowdfunding website, entrepreneurs have been able to raise millions of dollars for their projects.

It is also totally revolutionizing renewable energy.

Rather than attempting to work with incumbent energy leaders, cleantech entrepreneurs are turning to the public at large to raise money for solar, wind, and biofuel projects.

The next step is equity crowdfunding, which will make a whole lot of small-time energy investors wealthy for the first time in their careers.

Equity crowdfunding is a version of the fundraising method popularized by sites like Kickstarter, Indiegogo, and Gofundme. However, instead of asking a huge pool of investors for small amounts of money in exchange for a reward, it’s asking a huge pool of investors to put money into a project in exchange for a stake in its outcome.

In other words, independent investors can buy small equity stakes in new enterprises.

We’re extremely excited about the possibilities this will offer.

Unfortunately in the US, we’re still waiting for full-scale equity crowdfunding to be allowed under the Jumpstart Our Business Startups (JOBS) Act. As it stands right now, only high-dollar “accredited investors” can claim a stake in new projects.

To be considered an accredited investor in the United States, there are a handful of criteria that must be met.

For example, accreditation can be given to a bank, charity, insurance company, small business, employee benefit plan, or a trust/corporation with assets or value greater than $5 million.

For individuals to qualify, they either have to have a net worth of at least $1 million, or they have to have made more than $200,000 in each of the last two years.

Your Average Joe investor doesn’t even get to walk in the door.

For this type of investor, the crowdfunding model is only applicable to charitable or rewards-based investing (I.e. They pay into a project and get a reward of some sort, instead of equity in the project).

If the JOBS Act is successfully amended, then anyone will be able to contribute small sums of money in exchange for an equity stake of an energy project.

As much as this accreditation can be considered a stumbling block, it certainly isn’t stopping new clean energy crowdfunding sites from launching.

Another New Contender

GridShare LLC recently launched a new crowdfunding platform, which focuses on cleantech and renewable energy. Like other cleantech crowdsourcing sites we’ve talked about recently, such as Abundance Generation, Trillion Fund, and Skipso, GridShare includes both rewards-based, and equity crowdfunding options. The site is arranged in a familiar way, with individual pages dedicated to clean energy projects which users can browse. It includes a tabbed interface with an “Invest” tab where users are presented with the option to donate money, buy equity, or finance debt.

This is one of the things about the site that’s so compelling. A single project can accept investments from the crowd and still accommodate local laws. A UK-based investor, for example, can pledge money for an equity stake while a non-accredited US investor can donate money.

Right now, only accredited investors in the US can obtain an equity stake, but it’s still very early days for the site.

Since it’s so new, there are only four renewable energy projects for investors to choose from: two biofuel, and two solar. It’s obviously just getting its feet on the ground so it can be ready for equity crowdfunding when it becomes a law.

Though there are a handful of clean energy crowdfunding sites in their early stages right now, GridShare singles out Mosaic as the service it’s really trying to differentiate itself from.

In reality, though, the two services are quite different.

Mosaic focuses exclusively on solar projects, and connects borrowers looking to finance new solar projects with qualified investors who lend money and get paid back with interest. It’s not so much crowdfunding as peer-to-peer solar lending. GridShare is more traditional crowdfunding, and it includes many different types of clean energy, not just solar.

While GridShare is still tiny, and has no successful fundings under its belt yet, it could be the best looking renewable energy crowdfunding site that is live today. Ease of navigation and ease of investment are two reasons why Kickstarter became so successful over its competitors.

Of course, attractive funding campaigns were one of the main reasons Kickstarter took over the crowdfunding space. When social network The Diaspora Project launched its campaign on Kickstarter, it garnered a ton of positive media attention and drew thousands of new users in. At around the same time, another project called LunaTik received a lot of press of its own, and drew in a different set of new users.

For a new crowdfunding site to succeed, it needs attractive campaigns as much as it needs an effective interface and payment system.

GridShare is halfway there.

This article originally was published here: https://www.greenchipstocks.com/articles/investing-in-gridshare-crowdfunding/80021

Investing in GridShare Crowdfunding originally appeared in Green Chip Stocks. Green Chip Stocks, your personal guide to investing in green, sustainable, alternative, and renewable energy stocks.