Hartford Business Journal

12 Hartford Business Journal • September 7, 2020 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusiness.com T he co-founder of Con- necticut's largest home- grown solar firm, flush with millions of dollars in proceeds from selling the business a few years ago, has even larger aspirations for his next venture. Michael Silvestrini has been quiet since he and his partners sold Middle- town-based Greenskies Renewable En- ergy in 2017, a business they built up over nine years into one of the highest volume commercial and industrial solar installers in the country. Nothing was publicly disclosed about the financial terms of the sale to California renewable energy inves- tor Clean Focus Yield (which has since resold the business to infra- structure fund JLC), but a recent U.S. Securities & Exchange Commission filing shows the 2017 deal had an en- terprise value of $165 million, which means former CEO Silvestrini, even as a 25% owner, made a major return on the $35,000 family loan he used to start the company back in 2008. "You really can't call it anything other than a phenomenal perfor- mance," Silvestrini told the Hartford Business Journal in a recent inter- view. "It's the type of money that's offered my family and I the opportu- nity to work a hell of a lot less." While he wouldn't reveal exactly how much he netted personally, he said it amounted to an approximate- ly 400-times multiple compared to invested capital. Silvestrini, 40, could retire now, but he's not done with renewable energy by a long shot. His new venture is called Energea, launched with childhood friend and fellow Connecticut energy entrepre- neur Christopher Sattler. The Old Saybrook-based startup, which has about a dozen employees so far spread across several countries, aims to employ the same type of busi- ness model that made Greenskies suc- cessful, but on a global scale — bun- dling energy contracts for solar, hydro, battery storage and other clean energy projects in Brazil, the Carribean and Rwanda, as well as the U.S. and else- where, and with a unique twist. Energea is billing itself as the first U.S.-based crowdfunded renewable energy platform. The company recently got the green- light from the SEC to begin advertising and selling equity shares in its project portfolios to investors, who can pur- chase them through Energea's website. The company says it has also made arrangements with IRA retirement ac- count custodians who can allocate part of their investment mix to Energea, which is targeting (but cannot prom- ise) market-beating returns. The company is currently selling shares in two project portfolios, for commercial and community solar projects in Brazil. A U.S. portfolio is coming soon, according to Silves- trini, who spoke to HBJ from the U.S. Virgin Islands where he was scouting solar projects, and more could follow. The 2012 Jobs Act, which took effect in 2016, allows each of Ener- gea's portfolio companies to raise as much as $50 million per year through equity crowdfunding. The company has crowdfunded about $1 million so far in its quest to raise up to $10 million to $15 million within a year, which the company can supplement with debt and partners' capital, Silvestrini said. If the company meets those tar- gets, it would be a significant feat, as clean energy remains a small part of the overall crowdfunding space, said Sherwood Neiss, principal of Crowdfund Capital Advisors LLC, a Miami-based advisory firm focused on equity crowdfunding. Since the Jobs Act kicked in, nearly 1,700 companies have raised a com- bined $438 million in investments. Of that amount, a mere 45 companies were in the clean-tech space, raising $14.4 million, Neiss said. However, there are signs that clean-tech crowdfunding is on the rise, as developers seek to overcome barriers to accessing capital from banks and other traditional sources. "Data show the [clean-tech] market is rapidly evolving, with 2020 poised to be the biggest year despite the pandemic," Neiss said. A mini-IPO Equity crowdfunding allows anyone to buy a stake in a company, not just the wealthy accredited investors who typically invest in private businesses. The technical name for the crowd- funding under the Jobs Act is Regula- tion A or "Reg A," and the equity raises are often compared to a miniature version of an initial public offering conducted by a public company. However, Reg A offers companies raising money lower costs and less regulatory red tape, compared to an IPO, and also tends to give founders the ability to keep a greater degree of control over corporate decisions. Silvestrini's partner, Sattler, co- founded Norwalk-based retail energy supplier North American Power, which California energy generator Calpine acquired for $105 million around the same time Greenskies was sold. "We had been on very parallel jour- neys," Silvestrini said of himself and Sattler, who now lives full time in Brazil, a key market for Energea. The longtime friends aren't rely- ing solely on internet strangers' money. They are also investing their own capital — $7 million in total so far, Silvestrini said. They've also booked a few early wins, including an acquisition and subsequent exit from a solar and storage project in Rwanda, which Silvestrini said yielded an approxi- mately 14% return. The co-founders have traveled to- gether frequently and are both board members of a Kenya-based wildlife conservation and anti-poaching non- profit called the Big Life Foundation. There are a few fellow Greenskies alums along for the ride at Energea too, including Chief Technology Offi- cer Gray Reinhard, who built Green- skies' project management software. Old Saybrook is Energea's cor- porate home, and it may expand in Connecticut in the future, but its operation for now is farflung, with the management team spread across several states and countries, including an office for accountants and others in Rio de Janeiro. "We're hunting premium assets and living on Zoom," Silvestrini explained. Little projects add up Since selling Greenskies, Silvestri- ni said he's been traveling the world, often with his wife and two children. In meetings with solar companies in South America, Latin America, Europe, Africa and Asia, he gleaned that many are having trouble accessing capital to Going Global After 'phenomenal' return on 2017 solar sale, CT's Silvestrini aims even higher Investor interest accelerates Since equity crowdfunding first launched, the number of people investing in the SEC-regulated offerings has accelerated each year, according to Miami-based Crowfund Capital Advisors, which says the running total invested as of Aug. 2020 was $438 million. The past four months alone have already seen more crowdfunding investors than all of fiscal year 2019. Fiscal Year No. of investors 2017 60,984 2018 92,383 2019 111,237 2020 264,297 2021* 131,099 Total 660,000 Source: Crowdfund Capital Advisors Notes: Crowdfunding fiscal years start in May, as equity crowdfunding launched in May 2016; 2021 figure is for the first four months of the current fiscal year. Mike Silvestrini, one of Connecticut's leading solar entrepreneurs, has launched a new company with global ambitions. Pictured here is a renewable energy project in Kigali, Rwanda, in which Energea invested. PHOTO | CONTRIBUTED

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