Energy Shares Gears Up To Bring Equity Crowdfunding to Retail Investors

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Energy Shares Gears Up To Bring Equity Crowdfunding to Retail Investors
Photo by Red Zeppelin on Unsplash

The Inflation Reduction Act contains almost $400 billion in funding for clean energy initiatives. There’s $250 billion for energy projects. $23 billion for transportation and EVs. $46 billion for environment. $21 billion for agriculture, and so on. With so much cash flowing into the sector, the possibilities for investment and growth are gigantic.

These investment opportunities, however, have typically been inaccessible for everyday retail investors until much later in a company’s development–after an IPO, usually. Meaning that the best returns are likely to be captured by banks and other institutions who have the capital and financing to invest large sums of money earlier in the process.

That’s where Pasadena-based Energy Shares comes in. The company wants to help democratize access to these investment opportunities and simultaneously give early-stage utility-scale energy projects another revenue stream.

The concept of equity crowdfunding–even in the green energy economy–isn’t completely novel.

Back in 2016, the United States saw its first “equity crowdfunding” platforms hit the market after the Obama administration greenlit the investment strategy in the JOBS Act by allowing companies to sell securities online. Since then platforms like WeFunder and StartEngine have come online as a way to offer everyday people exposure to asset classes that have typically been restricted to institutional investors.

The JOBS Act originally allowed early-stage companies to sell up to $1 million dollars in securities through crowdfunding. But buoyed by the program's early success, legislators increased the amount to $5 million in May 2021.

Five million dollars is a lot of money to most Americans, but it doesn’t go very far when setting up a utility-scale solar or wind farm. With costs averaging around $1 million dollars per megawatt, large scale solar farms can easily run into the hundreds of millions of dollars.

Which is why Energy Shares is focused on providing the funding for everything that needs to happen before construction starts. Like StartEngine or other similar equity crowdfunding platforms, Energy Shares collects a fee from the project developers in exchange for access to their platform.

“[Companies] need capital to be able to cover all the fees associated with all the filings: Getting the land rights; getting the government permits; there's a number of environmental studies you have to do,” says Mark Kapczynski, Energy Shares Chief Marketing Officer. “So you have to study all of that stuff to even see if a project is viable. All of that obviously costs money, and the developers need those resources to be able to ultimately build these projects out.”

Kapczynski says the exact fee structure is still being worked out–the company is still in its pre-launch phase–but similar equity crowdfunding platforms typically charge a 3.5-5% transaction fee. Investors do not have to pay to use the platform and Kapczynski says that investor money never goes to Energy Shares. If a company fails to raise its target amount, the money is simply returned to the investors.

Energy Shares’ success may ultimately boil down to whether they can convince investors that their climate-specific platform offers enough advantages, says Douglas Cumming, a professor of finance and entrepreneurship who studies crowd equity funding at Florida Atlantic University. Otherwise, its’ more likely those companies will opt to go with a more established generalist platform like StartEngine.

In addition to providing access to investors, Energy Shares also leverages its parent company, Solariant, to offer expertise and strategic guidance to companies as they attempt to get their projects permitted and approved. Solariant has been investing in solar projects across the United States since 2012 and has developed 2.5GWh of utility-scale solar energy and storage storage systems.

The good news for Energy Shares according to Cummings, isthat the crowd equity model, as a whole, has been thriving in recent years. Since the JOBS Act passed, roughly 5,000 companies have turned to crowd equity funding, and Cumming’s research shows that about 63% of those raises have raised their target funding. He also highlights research showing that crowd-funded companies are also less likely to be fraudulent than their traditional counterparts–a fact that he says may be attributable to the “wisdom of the crowd.”

“You have thousands and thousands of people looking at these things,” says Cumming. “[Investors] can look at the characteristics of the campaign. Is it reasonable, what they're offering? Is there some sort of feasibility of it working out? The crowd seems to be pretty good at evaluating the quality of projects.”

As mentioned, Energy Shares is still in a “pre-launch” phase, meaning only a limited number of investors can access it, but the company is conducting a pilot project in the form of a 75-megawatt solar farm called “New River” in Florida. If all goes well, and the platform runs smoothly, Energy Shares will look to add listings and finance more and more megawatts as the country continues its transition to renewables, though Kapczynski is reluctant to give specifics on how big or how quickly the company wants to grow. “Sixty percent of electricity in America is still produced by fossil fuels, so we hope to have an impact and make a change there,” says Kapczynski. “Because ultimately with people buying EVs, having clean electricity produced behind the scenes, that's truly how we can make a positive impact on on climate change and ultimately help our planet as well.”

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“Millions of Dollars Completely Wasted”: Without Neuromarketing, Tech Firms’ Ads Get Lost in the Noise

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Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to and find him on Twitter @Samsonamore.

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How Token and Tixr Plan To Take on Ticketmaster in L.A.

Andria Moore

Andria is the Social and Engagement Editor for dot.LA. She previously covered internet trends and pop culture for BuzzFeed, and has written for Insider, The Washington Post and the Motion Picture Association. She obtained her bachelor's in journalism from Auburn University and an M.S. in digital audience strategy from Arizona State University. In her free time, Andria can be found roaming LA's incredible food scene or lounging at the beach.

How Token and Tixr Plan To Take on Ticketmaster in L.A.
Evan Xie

When Taylor Swift announced her ‘Eras’ tour back in November, all hell broke loose.

Hundreds of thousands of dedicated Swifties — many of whom were verified for the presale — were disappointed when Ticketmaster failed to secure them tickets, or even allow them to peruse ticketing options.

But the Taylor Swift fiasco is just one of the latest in a long line of complaints against the ticketing behemoth. Ticketmaster has dominated the event and concert space since its merger with Live Nation in 2010 with very few challengers — until now.

Adam Jones, founder and CEO of Token, a fan-first commerce platform for events, said he has the platform and the tech ready to take it on. With Token, Jones is creating a system where there are no queues. In other words, fans know immediately which events are sold out and where.

“We come in very fortunate to have a modern, scalable tech stack that's not going to have all these outages or things being down,” Jones said. “That's step one. The other thing is we’re being aggressively transparent about what we’re doing and how we’re doing it. So with the Taylor Swift thing…you would know in real time if you actually have a chance of getting the tickets.”

Here’s how it works: Users register for Token’s app and then purchase tickets to either an in-person event, or an event in the metaverse through Animal Concerts. The purchased ticket automatically shows up in the form of a mintable NFT, which can then be used toward merchandise purchases, other ticketed events or, Adams’s hope for the future — external rewards like airline travel. The more active a user is on the site, the more valuable their NFT becomes.

Ticketmaster has dominated the music industry for so long because of its association with big name artists. To compete, Token is working on gaining access to their own slew of popular artists. They recently entered into a partnership with Animal Concerts, a live and non-live event experiences platform that houses artists like Alicia Keys, Snoop Dogg and Robin Thicke.

“You'll see they do all the metaverse side of the house,” Jones said. “And we're going to be the [real-life] web3 sides of the house.”

In addition, Token prides itself on working with the artists selling on their platform to set up the best system for their fanbase, devoid of hefty prices and additional fees — something Ticketmaster users have often complained about. Jones believes where Ticketmaster fails, Token thrives. The app incentivizes users to share more data about their interests, venues and artists by operating on a kind of points system in the form of mintable NFTs.

“We can actually take the dataset and say there’s 100 million people in the globe that love Taylor Swift, so imagine she’s going on tour and we ask [the user], ‘Would you go to see her in Detroit?’ And imagine this place has 30,000 seats, but 100,000 people clicked ‘yes,’” he explained. “So you can actually inform the user before anything even happens, right? About what their options are and where to get it.”

Tixr, a Santa-Monica based ticketing app, was founded on the idea that modern ticketing platforms were “living in the legacy of the past.” They plan to attract users by offering them exclusive access to ticketed events that aren’t in Ticketmaster’s registry.

“It melts commerce that's beyond ticketing…to allow fans to experience and purchase things that don't necessarily have to do with tickets,” said Tixr CEO and Founder Robert Davari. “So merchandise, and experiences, and hospitality and stuff like that are all elegantly melded into this one, content driven interface.”

Tixr sells tickets to exclusive concerts like a Tyga performance at a night club in Arizona, general in-person festivals like ComplexCon, and partners with local vendors like The Acura Grand Prix of Long Beach to sell tickets to the races. Plus, Davari said it’s equipped to handle high-demand, so customers aren’t spending hours waiting in digital queues.

Like Token, Tixr has also found success with a rewards program — in the form of fan marketing.

“There's nothing more powerful in the core of any event, brand, any live entertainment, [than] the community behind it,” Davari said. “So we build technology to empower those fans and to reward them for bringing their friends and spreading the word.”

Basically, if a user gets a friend to purchase tickets to an event, then the original user gets rewarded in the form of discounts or upgrades.

Coupled with their platforms’ ability to handle high-demand events, both Jones and Davari believe their platforms have what it takes to take on Ticketmaster. Expansion into the metaverse, they think, will also help even the playing field.

“So imagine you can't go to Taylor Swift,” Jones said. “What if you could purchase an exclusive to actually go to that exact same show over the metaverse? An artist’s whole world can expand past the stage itself.”

With the way ticketing for events works now, obviously not everyone always gets the exact price, venue or date they want. There are “winners and losers.” Jones’s hope is that by expanding beyond in-person events, there can be more winners.

“If there’s 100,000 people who want to go to one show and there's 37,000 seats, 70,000 are out,” he said. “You can't fight that. But what we can do is start to give them other opportunities to do things in a different way and actually still participate.”

Jones and Davari both teased that their platforms have some exciting developments in the works, but for now both Token and Tixr are set on making their own space within the industry.

“We simply want to advance this industry and make it more efficient and more pleasurable for fans to buy,” Davari said. “That's it.”