Raise Green: Invest in Climate Action Projects (2021 Review)

Raise Green is an innovative crowdfunding platform that lets you invest in climate projects with as little as $100. Learn if it’s a good option for you.

SustainFi August 18, 2021

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Rating: Good (4.0 / 5)

Summary

  • Investment Type: debt and equity investments
  • Minimum Investment: $100 (projects can specify a higher minimum, such as $500 or $1,000)
  • Targeted Return: varies; past projects advertised annual returns from 4.25% to 20%
  • Maturity: varies; past projects offered terms from two years to 12 years
  • Liquidity: none
  • Open to non-accredited investors
  • Fees and expenses: none charged to investors on the platform

Pros

  • Easy access to pre-vetted investments in clean energy and cleantech companies
  • Open to non-accredited investors
  • No fees charged to investors
  • Invest with as little as $100

Cons

  • New platform with a limited track record
  • Few investment opportunities at a time
  • No secondary market for your investment
  • Lending to and investing in startups is highly risky

What is Raise Green?

Raise Green is the first crowdfunding platform for clean energy and cleantech projects in the U.S.

Founded in 2018 by Franz Hochstrasser, a former Obama White House appointee on energy and climate, and Matt Moroney, a data scientist, Raise Green offers everyday people a way to back clean energy solutions.

Equity crowdfunding platforms let you invest small amounts of money in businesses in return for a financial stake in the company. (You may have heard of Kickstarter. It is also a crowdfunding platform, but instead of getting an ownership stake in a business, you get a product or support a creative endeavor.)

There are many equity crowdfunding platforms, but only Raise Green is solely focused on climate solutions.

Until recently, only venture capitalists and private equity investors were able to back climate change solutions. Up until 2016, when the Securities and Exchange Commission adopted Regulation Crowdfunding, all but the wealthiest Americans were excluded from investing in private companies. Now, pretty much anyone can be an impact investor.

Raise Green is backed by Greentown Labs, a Boston area-based incubator for clean energy and cleantech startups.

What projects can you invest in through Raise Green?

As of August 2021, Raise Green has offered nine investment opportunities through its platform. The last one recently closed to new investors, but there will be more going forward.

Prior offerings included:

Ola Filter Corporation

Ola Filter seeks to end water poverty with affordable filters in the developing world. The company has designed an easy-to-use, affordable water filter it plans to produce in developing countries like Guatemala. They think they can scale to serve the two billion people that need this technology. Ola Filter was raising capital to design, manufacture, and distribute the filters.

National Energy Improvement Fund (NEIF) Climate Action Investment Notes

NEIF helps finance the transition to energy-efficient and resilient buildings. It is the only B Corp energy efficiency lender, lending to consumers and businesses to finance efficient heating, ventilation, air conditioning, and other efficiency upgrades. The company has already raised several rounds of financing through Raise Green.

BlocPower Energy Services Climate Impact Note

BlocPower LLC is a Brooklyn-based climate technology startup that retrofits energy-wasting buildings to make them more energy-efficient. Since 2014, the company has retrofitted more than 1,000 buildings in disadvantaged communities in New York City, with projects underway in 25 cities.

Elm Lea Renewable Energy Solar Refinance Notes

This offering let investors finance solar power for an innovative school in Vermont.

Spring Garden Barbados AD Debt Notes

This innovative offering let investors finance the conversion of organic waste into green energy and fertilizer in Barbados. The project was sponsored by the West Indies Rum Distillery to eliminate its carbon footprint. Commensurate with the risks, this project offered a 20% annual return to investors over its two-year term.

Most businesses on the platform raise relatively small amounts, from up to $150,000 to up to $1 million.

How does Raise Green select the offerings on its platform?

Raise Green screens all projects on the platform using five factors:

  • Revenue: Does the project have a clear revenue stream, and what is the status of the contracted cash flows?
  • Ambition: Is the project reducing greenhouse gas emissions, air pollution, and income inequality? Is the idea compelling and ambitious? 
  • Impact: Has there been measurable progress, growth, and social proof? Will the proposed project be able to generate the impact it intends to create?
  • Social: Are the originator, founding team, and organizations socially conscious and responsible? 
  • Environmental: Is the project going to make the world a better place by creating environmental benefits?

What are the investment terms on the Raise Green platform?

Minimum investment. Raise Green requires a minimum investment of $100. However, most projects on the platform to date set higher minimums, such as $500 or $1,000. 

Investment term or maturity. Varies by project. So far, investment terms on the platform ranged from two years to 12 years.

Liquidity. You should be prepared to hold on to your investment until maturity. There is no secondary market so that you can’t just resell your investment to someone else.

Annual returns. Vary by project. Advertised returns on the platform so far varied from 4.25% to 20%. 

Of course, impact investing can also be fulfilling beyond the financial return. After all, you are helping a climate-friendly business get off the ground.

What you get if you invest varies by investment. When you invest on Raise Green, you get a financial stake in the project or business, but the type of that stake can vary.

Most of the investments on the platform so far were debt investments. With a debt investment, you lend money to a business and get repaid by a specific date. You also receive annual interest until you are fully repaid.

One investment, the Ola Filter Corporation, was in the form of a Simple Agreement for Future Equity (SAFE). With a SAFE, an investor makes a cash investment in a company but gets company stock at a later date, in connection with a specific event (usually when the company raises equity.)

In the future, Raise Green could offer other investment types, such as common equity.

Non-accredited investors are allowed. So far, all investments offered by Raise Green were open to non-accredited investors. (Other crowdfunding platforms frequently reserve some investments for accredited investors. Accredited investors typically need to make over $200,000 a year for two years or have a net worth of over $1 million, excluding their primary residence.)

Minimum amount raised. Businesses that list on the platform set a minimum amount they need to raise, usually from as little as $10,000 to as much as $150,000. If, for some reason, the fundraising isn’t successful and doesn’t hit this minimum amount, you get your money back. 

How do I invest?

If you want to invest, you need to:

  • Create your account online
  • Provide personal information including your net worth, income, SSN, and payment information
  • Pick a project
  • Decide how much you want to invest
  • Invest

Is Raise Green safe?

Crowdfunding and investing in startups generally is risky. Most startups fail, so you could lose all the money you’ve invested. You should only invest what you can afford to lose.

Until the repayment date, you won’t be able to exit or sell your investment, so definitely do not invest your emergency fund savings.

In addition, Raise Green is a new platform that has launched a limited number of offerings. It doesn’t have a track record, and it’s hard to say how robust its diligence process is when selecting investments.

💰 Takeaway

  • Raise Green lets you become an impact investor with as little as $100
  • So far, it’s the only platform that exclusively targets green opportunities and climate change solutions
  • Having said that, it’s a new platform and investing in startups is inherently risky: don’t invest what you can’t afford to lose

🔔 Looking for other ways to invest with impact? Check our guide to investing in communities and small businesses.

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