Our Work Experience with Debt & Equity Raises

Here are 16 ways to consider … which one or ones are right for your situation?

The capital marketplace has evolved greatly in recent years.  It is still true that the classic “Three C’s” of credit — Credit Score, Collateral, and Cash Flow — are essential to debt funding for most projects, but rarely is that sufficient.  Equity investors also look for creditworthy companies, but not for reasons you might think.

Diversity in the investor ecosystem

Even within the renewable energy, cleantech and social/environmental impact communities, equity investors vary widely as to industry and technology preferences, capacity and number of deals per quarter or year, cost of funds, expectations for returns, accounting constraints or appetite for tax equities (tax credit benefits), preferred deal structures, stage and minimum/maximum investment size, approval processes and willingness to fund R&D.  No two are exactly alike.  The result is a set of unique investors that are as different as people, investment portfolios or points on a compass.  Knowing these differences in essential when taking deals to them.  You simply must do your homework.  Lenders also differ widely, although along fewer dimensions.

Relationship investing

The ideal scenario for any project or venture is to gain sufficient interest from multiple investors (including ones with whom your company has a track record and established relationship) to let them compete for the best offer.

In3 believes in the competitive market’s ability to consistently beat what developers can achieve by relying solely on long-standing personal relationships.  Because each investor’s appetite varies widely during the year depending on where they stand versus budget, it’s impossible to know in advance which investors will be able to offer the best deal.  Positioning your company to have investors (including ones with whom your company already has an existing relationship) to compete against one another is particularly important if you want to negotiate the level of carried interest and other terms your firm believes it deserves.

Venture or project developer orientation

While In3 has a deep appreciation for the issues facing technology innovation and commercialization, and we have served for many years as venture catalysts (see affiliated In3 Group services in3inc.com), we generally do not “partner” or join development teams.  Rather, our greater contribution is through leveraging experienced engineers, technical experts and contractors to help your team get the most value from projects.

Perspective

There is a growing trend among some of the larger investment and infrastructure firms to provide financing to the same projects in which they have an advisory mandate. We believe this makes it difficult to be as aggressive as needed when pursuing competing sources of financing.  Over the years, In3 has steadfastly maintained its independence from any single financing source, so that it can bring your company the best the market has to offer.  We are designated loan originators, packagers and advisors for several sources of debt, including arms-length debt facilities, and are thus required to maintain objectivity, just as a lawfirm would when representing their clients’ interests.  

Transaction closing expertise

In3 has the enviable record of having closed over 92% of those transactions taken to market.  Several factors account for this:

• Superior packaging:  In3 is expert at presenting complex investment opportunities clearly and succinctly.  We finds that lenders and investors respond best to achievable and realistic financial projections, with all potential risks identified up-front, along with a plan for mitigating them. In3’s reputation with investors for clarity and straight dealing helps ensure that your company’s project will get the attention it deserves.  Most of the transactions In3 handles require considerable analysis and positioning before they can be taken to market.  It’s not unusual for this process to take up to two months, but this effort is often necessary given the “short attention span theater” that investors use to decide whether to pursue an opportunity.  Keeping the investor interested enough to keep reading and listening is a skill that we have developed over many years of practice.
• Healthy Competition:  In3 believes in the competitive market’s ability to consistently beat what is achievable by relying on existing investor and lender relationships.  Healthy competition between investors usually yields the best results for all parties.  Each investor’s appetite varies widely during the year, depending on where they stand versus budget and other factors, it’s impossible to know in advance which investors have the characteristics to be able to offer the best deal.  In3 is highly experienced at running competitive auctions for asset sales as well as for debt and equity placements.  Positioning your company to have all eligible investors (including ones you already know) compete against one another is extremely important to being able to negotiate the best terms.
• Reputation for bringing good deals: Prior to forming In3 Group and Renewable Energy Investor Forum, founder Daniel Robin had the rare opportunity to become an equity partner in several companies with ambitious development plans, and ultimately he had to live with the results of his decisions. This early formative experience enabled In3 to gain the reputation with investors and lenders for structuring project investments that stand the test of time and deliver long-term value.

In3 management and affiliated Renewable Energy Investor Forum principals stay informed through conferences, symposia and events.

We periodically meet with investors via REIF sessions to understand and update investor’s “sweet spot” profiles, chairing conferences and moderating panels at investor-oriented events where senior investors meet to share their views on the market, strategies and structuring techniques. We recently co-produced and chaired RenewFi (Opportunities in Renewable Energy Finance), here in California, with excellent results and lessons learned.

In3 Finance founder Daniel Robin is a regular speaker at renewable energy project finance conferences on such topics as non-bank development finance availability, renewable energy finance structures, funding small hydro, W2E, biomaterials and bioplastics.

In3’s reputation for clarity and straight dealing helps ensure that your company’s projects will get the investor attention they deserve.  See clients for our history.