Solar Mosaic, an Oakland, California-based startup that is creating a crowdfunding platform specifically for solar energy projects, has taken on $2.5 million in Series A funding.
The round was led by Spring Ventures with the participation of Serious Change, Jim Sandler, Steve Wolf, Tom Chi, and a group of angels from the “Toniic” investor network. The round was first disclosed in an SEC filing that surfaced earlier this week which was reported on by GigaOM’s Earth2Tech blog. Today the company confirmed the funding and disclosed more details.
Solar Mosaic, which also goes by just Mosaic, says it wants to be the “Kickstarter for solar” — enabling people to invest their own money into solar energy projects large and small. To date, the company has facilitated the crowdfunding for five projects in its beta mode, in which more than 400 people invested more than $350,000 in five rooftop power plants in California and Arizona. The company says it will use the new funding to build out its platform for crowdfunding on a larger scale.
Now, the Kickstarter comparison may not be completely accurate: According to Solar Mosaic’s website, investors earn a return from each project’s eventual revenue — so it seems to be facilitating actual equity investing, not the donation model used by sites such as Kickstarter. Today, only accredited investors are legally allowed to invest money into private companies in exchange for equity — and to receive accreditation, individuals must meet certain criteria such as having a net worth in excess of $1 million. Existing crowdfunding public platforms like Kickstarter allow people to fund projects on a “donation” basis — they can’t receive a stake in the company in return.
However, the JOBS Act signed into law last month contains passages that remove that restriction, allowing virtually anyone to invest in private companies. Crowdfunding as it stands right now is already huge — more than $1.5 billion was raised with crowdfunding methods last year alone — and the recently-passed JOBS Act will soon opening up the floodgates even further for a brand new investor class to enter the scene. The crowdfunding aspect of the JOBS Act is still being reviewed by the SEC, so Mosaic may be teeing up its widescale public launch until it goes live.
Overall, I think Solar Mosaic seems like a smart idea that comes at a smart time.Thanks to debacles such as Solyndra’s, government bodies and traditional venture capital firms are now a bit skittish about investing in solar energy and green projects. Opening up the space to crowdfunding could give the industry the jolt it needs to keep innovating. Of course, people looking to donate money have to be very careful here — but that is always the case, isn’t it?