New age venture financing in renewable energy: Geothermal Renewable energy venture financing home

New age venture financing in renewable energy:


Geothermal comprises five times as much energy production in America than solar energy and three times more than wind energy. With ever-cheaper technology and increased demand, consumer use of geothermal is on the rise, too. Many potential and proven ways to obtain and utilize geothermal energy often trigger investors' appetites and interest in the industry. Products can be converted on micro or lucrative levels. Unfortunately, there are also heavy remote siting restrictions. Taking this sector's climate into consideration, following are the basics for new geothermal ventures seeking financing.

Current strategy to follow

The basics

Geothermal is largely less expensive to utilize than its renewable counterparts. This gives entrepreneurs an advantage in that it becomes easier to illustrate 'bottom-line' benefits of the technology to investors, as lower costs often reveal inarguable savings in the nearer future. Be sure to stress the bottom line in pitching to investors emphatically through charts and outright repetition.

Because geothermal resources and their use is diverse and abundant, hedging away risk in investing in your venture can be done through diversification illustration, as in other sectors. However, if your firm isn't as diversified as you'd like to be, stressing the whole sector's differentiating potential and current patterns can be effective. Just be sure to subtly tie the points in somehow with relevance to your firm. Your young venture will likely come off as less vulnerable and concentrated.

Be sure to make it clear that geothermal won’t be a victim of its own success and abundance. Stress your firm's unique operations that require a no-brainer when fathoming the public at large paying a sound premium. Make sure that you’re prepped for countering inquiries about your products’ potential commoditization.

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  • Other tips and tricks

    Unless you have a geothermal plant in operation, stay clear of angel investors. You'll likely be wasting your time. Instead, focus on small- to mid-cap mutual or hedge funds. Private equity and banking should be dealt with on roughly the same scale until a plant is in full swing and top form.

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  • Copyright Alex Stehr, 2008. — ContactHome