A decade ago, I was briefly on the cleantech beat.
While solar and wind energy are now cheaper than fossil fuels, most investments made then failed.
Deflation is the reason. As costs declined, prices declined faster. This put continuous pressure on manufacturers, and on business models.
Something similar happened with technology stocks and cleantech. I spent most of my career covering this revolution. An IBM (NYSE:IBM) S/360 created enormous value in 1973, but falling costs meant it needed replacing long before its useful life ended. The same with the IBM PC I bought in a store 10 years later.
Today, renewable energy is energy harvesting. Solar panels and wind farms are being replaced by simpler devices. Larger systems are connecting to the grid with batteries, and preparations to resist climate change are underway.
This makes StartEngine a good place to seek green energy investments and cleantech. Here are some reasons:
Startups Are Hot
Companies are valued priced above fundamentals when they’re conceptual.
In a market dominated by deflation, companies can get in big trouble as they scale. That’s why early solar companies like First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) failed to ignite in the last decade. The faster they grew, in terms of production, the more cost pressure they were under.
Companies come to StartEngine when they’re in this conceptual stage. They are looking for capital to get good ideas off the ground. Like any venture capitalist, you get maximum profit by getting in early, then selling after the initial public offering.
Risk Can Be Spread
A second reason to invest in a place like StartEngine is that you can spread your risk among several investments. Costs are low, most companies fail, but that shouldn’t be fatal.
There are many great ideas out there. I wrote about one recently, IX Water. I was skeptical, but I could be wrong. If you buy several ideas like this, however, chances are at least one will make it.
Think like a venture capitalist. Half their investments will fail. Maybe half the rest will barely make back their cost of capital. Half the rest will be marginally profitable. A few, however, will take off and justify the rest.
Good Ideas Go Fast
When an idea is a good one, it can be snapped up quickly.
An example is Flower Turbines. You’ve heard of how big wind turbines kill birds. They do. Flower Turbines makes smaller turbines that are less dangerous, but when scaled could produce even more energy.
The company sought $713,000 at a valuation of $26 million, and it’s already gone. There’s now a waiting list for stock, and the price will likely be higher.
Big Ideas Are Essential
Energy harvesting requires a new infrastructure, based less on wires and transformers than batteries that can turn intermittent power sources into reliable grid power.
As battery storage scales, many idea technologies, materials, and ideas will be needed. Storen wants to raise $12.4 million at a $40.4 million valuation, and you can still get in on the offering. The minimum investment is just $480, at $6 per share.
Ideas Beyond Energy
Climate change creates opportunities beyond energy.
One is flood control. Locking Line Barriers is producing Waterblocks, flood barriers that connect like Legos to quickly scale flood control where it’s needed.
The company plans to produce not just the blocks, but installation and storage services related to them. As this was written they had raised $448,000, with a target of $1.07 million. This came from 959 investors with a minimum investment of $200. You still have time to be one of them.
The Bottom Line
StartEngine lets you think like a venture capitalist by investing in cleantech. That’s the way you want to think if you’re to make big money in renewable energy.
Let 1,000 startups bloom. You can be part of the revolution. Spread your bets and some are bound to fly.
On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks