More than 1,000 cleantech companies are expected to launch or be accelerated by the $369 billion 'climate bill' element within the new US Inflation Reduction Act, according to a recent CNBC report.
US President Joe Biden's climate bill will commit $128 billion in tax credits over the next ten years to businesses shifting to greener power sources.
A further $60 billion will go to helping the US industry deliver clean-energy technology, such as solar panels and electric vehicles.
Donnel Baird, CEO of BlocPower – which aims to retrofit green energy into older buildings – expects big tax breaks for both consumers and his company because the bill: "dramatically lowers the cost to building owners and homeowners of clean energy upgrades. It creates a new Green Bank to provide flexible capital to clean energy projects that Wall Street can leverage."
Carmichael Roberts, spokesperson for the Breakthrough Energy Ventures climate fund founded by Bill Gates, said:
"The venture capital dollars will flow in a lot faster from areas that may not have been investing in an area, but now… we're going to have a real path to scale with the best and the brightest people, and the best companies being created."
The bill is also set to significantly benefit cleantech companies raising capital through equity crowdfunding using either Reg CF or Reg A+ and/or Reg D institutional investment. Crowdfunding has jumped from $8.61 billion in investment in 2020 to $113.52 billion last year – a 1,021% increase, according to Pitchbook data.
Meanwhile, publicly listed companies are losing value. Just 14 of the last 97 recently launched IPOs have seen a share price improvement from their first-day trading price to the end of August 2022. The remaining 83 saw a decrease, according to data published by IPOScoop.
These figures could indicate the real growth potential for investors remains while they are private - and those waiting for them to go public often arrive too late to the party to realize value.
Uber is a key example. Valued at $5.4 million when it was just one year old, the firm went public in 2019 and is valued at $80 billion. Shares started at $45 but lost more than 7% in the first day. By the close of business on the 31st of August 2022, it traded at $28.74 per share.
This highlights the benefits of investing much earlier when exciting private companies are still in their key growth stage. It could mean real value for investors investing in cleantech and climate change innovation through the private market.
The CNBC report featured a handful of cleantech companies who were going to benefit greatly from this legislation, including Michael Jansen, CEO and founder of pioneering urban Digital Twin Tech company Cityzenith, who was named in the Global Excellence Top 40 CEOs of 2021 list, has a track record of delivering 17x return on investment in his last private venture with Sequoia Capital.
He said: "President Biden's new climate bill is a green light for companies like ours tackling the challenges of climate change and will no doubt help aid our future capital raising success."
"As a private company using equity crowdfunding, we have added 6,000+ investors and advocates as well as $15 million in investment to date and seen our share price increase by 161% in the last two years.
"We are now on the way to completing our current $20 million Regulation A+
"If we did not have these new regulated opportunities, we would not have
been able to raise the capital and create the traction we have. As a result, we are starting to attract interest from larger institutional investors and those retail and other accredited investors."
Big truck electric vehicle start-up ATLIS is also a testament to this, raising $32m to date through over 20,000 investors using Regulation A+ equity crowdfunding.
ATLIS is revolutionizing battery technology from the ground up with the world's first AMV Cube Cell, capable of charging from 0-100% in less than 15 minutes while providing consistent performance in any environment.
"The fast pace and major oversubscription of our most recent raise speak volumes towards the attractiveness of our cutting-edge products, patent applications, and development path we have mapped out and shared with our followers," said ATLIS President Annie Pratt.
Crowdfund Insider's upcoming webinar provides everything you need to know about raising capital under a Regulation CF. what do you need to know to raise money under Reg CF? What is the difference between a Funding Portal or a Broker Dealer? What do you need to prepare for a Reg CF offering and how can you promote the investment opportunity?
Learn this and more from industry experts at this webinar taking place on Thursday 29th of September 2022 by registering here.