The Shift to Renewable Energy – InvestMend and Sam Kramer (’18)
If you were to think of an entrepreneur’s qualities as tools in a builder’s toolbox, flexibility would likely be the level; just as a good builder needs a level to adjust measurements and designs, every serious entrepreneur needs flexibility to adapt his or her business. Cornell Environmental and Sustainability Studies student Sam Kramer (’18) recognizes this; in fact, he has lived it through his renewable energy investment company, InvestMend.
“I started InvestMend because I saw that people building solar farms needed more access to capital,” Kramer explained. “My idea was to put a project online and connect developers with investors looking to build solar farms.”
Over time, however, Kramer questioned how InvestMend could make a greater dent in the industry. According to Kramer, the market still needed more education about why renewable energy investments were viable. By pivoting with InvestMend, he felt he could drive his passion for renewable energy further.
“I recognized over the past 6 months that these investment opportunities require me to sit down with investors more than just putting them online. I need to explain to them what’s happening; it requires more of an investment firm feel than a marketplace online.”
For more on InvestMend and its plans to drastically increase investment into renewable energy, read Sam’s thoughts below:
Why is an investment in renewable energy a good investment?
Investments in solar provide compelling risk-adjusted returns which come from government tax incentives that will remain in place until at least 2023. These returns are exciting because they’re sourced from an impact investment that builds our clean energy future while being from low-risk sources like the Federal Government and the IRS.
What’s your process for finding a new investment like?
First, we start with project sourcing. We connect with a few project developers, mainly ones my cofounder and I have worked for in the past. We call them up, email them, or meet them in person. Hopefully, they say they have a project, and then we do due diligence with the criteria on what we look for in an investment opportunity. If we believe in the developer, we negotiate an agreement that’s mutually beneficial. Then, we take that investment to investors, which is what we’re starting right now.
What’s your value proposition?
We do more than just sell the investment. We have to source the investment as well, but it’s a combination of sourcing, due diligence, and selling. Our main value proposition for investors is tax relief through solar energy investments. We’re offering a financial solution they did not previously have access to.
Do investors accept lower rates of return because the impact of renewable energy investments is higher?
I don’t think so. We try not to emphasize impact. We only include one slide on that in our deck; it’s not greenwashed. It’s a consideration investors make, but investors make this investment because of the return.
Why do you think it’s important to meet with investors instead of just explaining things online as you had originally envisioned?
I recognized there were a lot of people who hadn’t been confronted with this investment opportunity before, and because of that, it’s not something that’s easily understood and grasped by putting it online. It required me to go through it in detail and describe the opportunity specifically. The goal is that as we start doing it, and once we have investors doing it the first time, they’ll be more willing to make the investments online.
What challenges have you faced so far in pivoting?
Our first challenge was describing the investment opportunity simply. We’ve gone through 50 iterations of our investment deck. Every time we meet with an investor and get their feedback, we refine the deck a little bit.
How have you built the network?
I’ve spent two years doing this stuff. Every single person that demonstrated any interest in InvestMend, I kept in my Excel spreadsheet. I’m now comfortable reaching back out to those people and saying I have something to show them. A lot of it is the Cornell network, and referrals are huge. One person introduces you to one other person, who introduces you to two other people, etc.
Has anything changed about your passion for InvestMend since pivoting?
We’ve always had the same goal: to increase the investment in this industry. If my mission was to make a dent in the industry, that’s stayed the same, which has made the transition easier. A startup is about change and dealing with stress, and so long as we get closer to our mission, it’s fine with me.
For more on InvestMend, visit the website or contact Sam and his team here.