report on the practical experience of res project ... · wirtschaft und infrastruktur gmbh & co...

ThisprojecthasreceivedfundingfromtheEuropeanUnion’sHorizon2020researchandinnovationprogrammeundergrantagreementN°646435.

ReportonthepracticalexperienceofRESprojectfinancingusingcrowdfunding

WP2.4

Authors:AbundanceInvestmentLtd

CrowdFundRESUnleashingthepotentialofCrowdfundingforFinancingRenewableEnergyProjects

PracticalexperienceofRESprojectfinancingusingcrowdfunding

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Technicalreferences

ProjectAcronym CrowdFundRES

ProjectTitle UnleashingthepotentialofCrowdfundingforFinancingRenewableEnergyProjects

ProjectCoordinator ThomasMaidonisWIRTSCHAFTUNDINFRASTRUKTURGMBH&COPLANUNGSKG(WIP)[email protected]

ProjectDuration February2015–January2018(36months)

v Date Beneficiary Author

1.0 15/04/2016 Abundance/KarlHarder&RobertvanMaaren


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DisclaimerThisprojecthasreceivedfundingfromtheEuropeanUnion’sHorizon2020researchandinnovationprogrammeundergrantagreementNo646435.Thesoleresponsibilityforthecontentofthisreportlieswiththeauthors.ItdoesnotnecessarilyreflecttheopinionoftheEuropeanUnion.NeitherINEAnor the European Commission are responsible for any use that may be made of the informationcontainedtherein.While this publication has been prepared with care, the authors and their employers provide nowarranty with regards to the content and shall not be liable for any direct, incidental orconsequential damages that may result from the use of the information or the data containedtherein. Reproduction is authorised providing the material is unabridged and the source isacknowledged


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Tableofcontents

Technicalreferences...................................................................................2

Tableofcontents........................................................................................4

ExecutiveSummary....................................................................................6Challengesandlessonslearned..................................................................................................7FundRaiseData..........................................................................................................................8

DescriptionofCaseStudy.........................................................................10Overviewofplatformcasestudy...........................................................................................10Overviewofprojectcasestudy..............................................................................................10

PlatformOneplanetcrowd........................................................................12PlatformDescription..............................................................................................................12OneplanetcrowdProjectCaseStudy1:BiomassPowerPlant.................................................15

PlatformGreenCrowding/Bettervest.....................................................19PlatformDescription..............................................................................................................19BettervestProjectCaseStudy1:HotelMagnetbergCHPPlants.............................................22GreenCrowding/BetterVest:BelgiumExperience................................................................27

PlatformLumo..........................................................................................29PlatformDescription..............................................................................................................29LumoProjectCaseStudy1:SERGIESSAEML...........................................................................31

PlatformAbundanceInvestment.............................................................35PlatformDescription..............................................................................................................35AbundanceProjectCaseStudy1:UpperPitforthieWindgenPLC...........................................38AbundanceProjectCaseStudy2:BNRGGorsePlc..................................................................41AbundanceProjectCaseStudy3:REGWindPower.................................................................45

PlatformCONDA.......................................................................................49CONDAProjectCaseStudy:CleanCapital,SolarpowerplantLärchenholz.............................50

Conclusion:ComparisonofCaseStudies..................................................53PlatformConclusions.............................................................................................................53PlatformRegulatoryDescription..............................................................................................53Website(Platform)capabilities................................................................................................53


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Investmentproductdescription...............................................................................................53Platformsdeveloperonboardingprocess................................................................................54Investmentinformationprovidedtoinvestors........................................................................54OngoingServicetoBorrowersandInvestors...........................................................................55PlatformOperationalPerformance..........................................................................................55

Overviewofprojectcasestudy..............................................................................................55RESDevelopermotivations......................................................................................................55FundRaiseDescription.............................................................................................................55Challengesandlessonslearned................................................................................................56FundRaiseData........................................................................................................................58


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ExecutiveSummaryThis report contains case studies from four of Europe’s leading renewable energy systems (RES) crowdfundingplatforms,thereisonecasestudyfromOneplanetcrowd(theNetherlands),BetterVest/GreenCrowding(Germany),Lumo (France)and threecasestudies fromAbundance (UnitedKingdom).AcasestudyofCONDA fromAustriahasalsobeenincludedinordertoalsocoverAustriawhichisatargetcountryintheproject.Thecasestudiesprovideadetailedviewofhoweachplatformissetup,regulatedandoperatesitsbusinessaswellasanoverviewofindividualprojectsthathaveraisedfundsontherespectiveplatforms.Thedatasetislimitedsoitisnotsimpletostatisticallyanalysethecasestudiestogaininsightintoplatformsuccessdriversorinvestorpreferencesbutitispossibletohighlightdifferencesandsimilaritiesbetweenplatformsforfutureanalysis.The report aims to contribute to a better understanding of how platforms operate, identify the challenges facingplatformsbutalsothedriversofgrowth.Thereportisintendedtoinformthedevelopmentofbestpracticeguidelinesfor newplatformsentering themarketor existingplatforms consideringdiversifying into theRESmarket, it is alsointendedtogiveinsightsintopolicyrecommendations.Coreareasofsuccess:Platform regulation:The regulatoryenvironment ineach jurisdiction isverydifferent;withFrancehaving themostrestrictivecrowdfundingregulation(ofthefivecountriescoveredinthisreport).Itisnotpossibletodrawaclearlinebetweenregulatoryregimeandthegrowthofacountry’scrowdfundingplatformsfromthecasestudiesinthisreport,butwithanunderstandingofwhatsupportsgrowthondifferentplatforms it isclear thatcertainrestrictions in theFrench market almost certainly limit growth. In particular the inability of French platform Lumo to operate asecondarymarketandtotakeonnonnationalsasclients is feltto limitgrowth.Thisreportwouldrecommendthatthe French regulator review their crowdfunding policy framework and perhaps draw on the experience of otherjurisdictionssuchastheNetherlands,GermanyandtheUK.Platformtechnology:Thereportexaminesthewebsite(technology)capabilityofeachplatform.Thereportfindsthatthe platforms all conduct the core investment process in a robust manner but that Abundance has the mostsophisticated platform in terms of broader functionality, however at this point in the development of REScrowdfundingtechnologydoesnotseemtobeacoredriverofgrowth.Asthemarketdevelopsthiscanbeexpectedtochangewith investors looking for increasing levelsof sophistication in theirpost investment service for instancegreater number of tools to help people understand how their investments are performing or tools to help withsecondarysaleof investmentsandeventuallyascompetitiongrowsstarttoselectplatformsbasedontheirbroadertechnologicalcapabilities.Platform investment instrument:AllplatformsarefocusedonprovidingRESdeveloperswithdebtfinance,whichisnotsurprisinggiventhatthemajorityofthecapitalintherenewablemarketisdebt.LumoandAbundanceusedebtsecurities (Bonds and Debentures) while Oneplanetcrowd and Bettervest / greencrowding use loans. This split isdriven primarily by regulatory and legal issues in the respective countries which mean that different frameworksfavourtheuseofdifferentinstruments.Platform developer onboarding: The report finds that RES Crowdfunding platforms appear to have advancedprocesses for conducting project due diligence and take care to ensure that the projects raising capital on theirplatformsarewell run.Noproject is launchedon toaRES crowdfundingplatformwithoutaduediligenceprocessbeingconducted,asstandardallplatformsappeartoconductfinancial,technicalandlegalduediligenceonprojects.Investmentinformationprovidedtoinvestors:Thereportfindsthatacrosscrowdfundingplatformsthereappearstobebroadrecognitionthatadownloadableofferdocument isrequired,this iseitherduetoregulatoryrequirements(Bettervest and Abundance) and/or simply from an understanding that it helps the investment sales process(OneplanetcrowdandLumo).


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Platformoperationallearnings:Aftersalesserviceprovidedtoinvestorsandborrowers:thisreportfindsthatallplatformsprovidesomedegreeofongoing information to investors, there also appears to be a focus on ongoing borrower management servicesprovidedbyplatformssuchasmonitoringtheoperationalandfinancialperformanceofprojects.Firmsdescribehowthey conduct ongoing financial due diligence ensuring that project performance matches forecasts and they alsocheck annually that funded projectsmaintain their key contracts and relevant insurance covers. This ongoing duediligence runs counter to many people’s perception of crowdfunding and it’s a positive indicator of theprofessionalismoftheREScrowdfundingsector.In terms of broader after sales service only Abundance currently operates a secondary market for its investors.HoweverapartfromLumo,which isrestrictedfromoperatingasecondarymarketforregulatoryreasons,theotherplatformscoveredindicateanintentiontodevelopsecondarymarketsastheirplatformsmature.RESdevelopermotivations:thereportfindsthatdifferentplatformstargetdifferentRESdevelopermotivations.ThedominantapproachistofillgapsinthedebtmarketforsmallerRESdevelopers.LumoappearstobetheonlyplatformthatisfullyfocusedonworkingwithdeveloperswheretheideaofcommunityengagementistheprimemotivatorforworkingwithaRESCrowdfundingplatform.Fundraisedescription: thisreportfindsthatallplatformsappeartoutilisedigitalandsocialmediabasedmarketingtools.Abundance, the largestof theplatforms,hasused traditionaladvertising tactics.Oneplanetcrowdprovideaninterestingalternativeapproach - they list reward-basedcrowdfundingprojectswheretheprojects thenbring theirownfunderstotheplatform.Oneplanetcrowdthereforeaimstoconvertthesereward-basedfundersintoinvestors,inessenceusingtherewardprojectstodothemarketingforOneplanetcrowd.For RES projects there is often also a motivation to mobilise people living locally to the RES projects to becomeinvestors,thereforethereisoftenafocusonlocaleventsandcommunity-drivenmarketingefforts.Amoredetailedresearchprojectwouldneedtobeconductedtofullyunderstandhowmarketingspendtranslatestoeurosraisedandwithoutthisitisdifficulttocomparetheeffectivenessofthesedifferentstrategies.

Challengesandlessonslearned

Growingthecrowd:Forallplatformsandperhapsnotsurprisinglythesizeoftheirinvestorbaseandcostofacquiringnewinvestorswasthecorerestrainttogrowth.Buildingawarenessofrenewableenergybasedcrowdfundingandtheexistingplatformsiskeytoscalingtheindustry.Toaddressthismanyplatformslaunchsmallerprojectsatthebeginningtogrowabaseandbuildconfidence.Thereisalso a focus from platforms on building relationships with their investors because repeat investment is central toscalingplatforms.Regulationisadriver:Goodregulationisakeydriverofgrowthandineachjurisdictionthereareregulatoryissueswhichcouldbetackled.No platform is asking for the reduction in regulation per se, but instead that the regulation is designed with fullconsiderationof the risks andoperationalmodelsof thesenewbusiness. Poorlydesigned crowdfunding regulationcancurtailgrowthofplatformsandalsocreaterisksatthedetrimentofconsumers.France: there are a number of constraints on the sectorwhich it is felt could be removedwhile not undermininginvestor protection. Enabling crowdfunding platforms to operate secondary markets and onboard non Frenchinvestorsarekeyrequirements.


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Germany:The2015promulgationoftheGermanRetailInvestor’sProtectionActprovidesgreaterclaritytoinvestorsandRESdevelopers. Forexample, if certain criteriaaremet, aprospectusmustnotbepublished.Yet, there is stilluncertaintyasregardsparallelinvestmentsfromthecrowdandprofessionalinvestors.UK / EU: Abundance is a MiFID firm and operates a bulletin board as its secondary market. The bulletin boardoperates a little like ebay, however Abundance is limited in how it can operate its bulletin board and specificallycannotallowbuyersandsellerstoconcludetheirsaleontheplatform.Investorsthereforehavetoconcludetheirsaleoff platform via email. If Abundance wanted to enable on platform conclusion of sales the bulletin board wouldpotentially be categorised as a Multi Lateral Trading facility under MiFID, this would significantly increase theregulatorycapital requirementsof thefirm.Acrowdfundingplatformdoesnotrequiremanyof theextracapabilitythat aMTFpermission provides (specifically twoway pricing), therefore there is an argument to create regulatoryspace so that amore advanced form of Bulletin Board can operate but one that stops short of offering fullMTFcapability.PanEuropeanStandardsCurrentlyitisdifficultforcrowdfundingplatformstooperateacrossborders.ForinstanceLumoisnotabletotakeoninvestors fromoutsideFrance,whileAbundanceeven though ithasaEuropeanPassport isnot free toadvertise inFrance.TherewillbesomeadditionaluncertaintyaroundtheimpactoftheUK’sexitnegotiationswiththeEU.Therearealsocrossborderissuesstemmingfromdifferentinterpretationsofprospectusdirectivesaswellasthefactthatthecostofestablishingandoperatingcompaniesthatissuedebtsecuritiesvariespercountry.Projectsseekingfundsvia Abundance need to have a public limited company (PLC) structure. Incorporating and running a PLC vis-à-vislimitedcompanyposenotablyhighernotary,accountancyandadmincosts incountrieslikeGermany.ForSMEsthiscanbeadealbreaker,particularlyintheefficiencysectorwheretheaverageprojectsizeissmaller.ThereappeartobediscrepanciesintheFrenchruleswheretheyrequireplatformstohaveretailinvestmentadvicepermission,thisisa significantly higher level of regulatory control than any other European country where it is standard forcrowdfunding to be offered on an unadvised basis. In the UK there are requirements for investors to pass anAppropriateness test before investing - this assesses the client’s understanding of the key risks of investing ininvestments offered by Abundance. A pan-European harmonization of downloadable offer documents would beanotherstepintotherightdirection,providinggreaterclarityandtransparencytoinvestorsandRESprojectsalike.

FundRaiseData

Withalimiteddatasetthereisnoscopetoconductstatisticalanalysisofthecasestudydatasotheanalysishasbeenlimitedtoaqualitativereviewofthedatatodrawoutdifferencesandsimilaritiesbetweenplatforms.Age: there does appear to be a consistency in the age breakdown of investors with investment on average fairlyevenlyspreadacrossthedifferentbrackets,butwithless investors inthe66+agesomethingthat ispossiblyduetotheonlinenatureof crowdfunding.Crowdfundingpossibly represents anewmodel forengagingyounger investorswithsavingsintoinvestinginrenewableenergy.Runrate:AbundanceonaveragehasthehighestrunrateonitsprojectswithOneplanetcrowdcominginsecond.TherunratehasincreasedovertimeonAbundancewhichcanbeexpectedasthecommunityofinvestorsgrowsandtrustintheplatformincreases.Abundanceisthelongestrunningplatformsoitcanalsobeexpectedtohavethehighestrunrate.Itisdifficulttocomparerunratesbetweeninvestmentortechnologytypesduetothesmallnumberofcasestudies,butonethingthatisclearfromthelimiteddatasetisthattherunrateonAbundanceshorttermdebenture(1year)issignificantly higher than the long term debentures it offers, indicating that investors tend to prefer shorter terminstruments.


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Mean / median investment: Abundance has the highest mean investment but at the same time due to its lowminimuminvestmentamounthasthelowestminimuminvestment.Evenwithitslowminimuminvestmentlevelthemedianinvestmentlevelisaboveaverage,possiblythisisdrivenbythematurityoftheplatform.Non-national investors:AbundanceandOneplanetcrowdaretheonlyplatformswhotakeoninvestorsfromoutsidetheirhomecountry.Abundancehaveseentheirproportionofforeigninvestorsperprojectincreaseovertime,thisislikelylinkedtoincreasedawarenessacrossEurope.Financial Inclusion:REScrowdfundingplatformstendtooffer lowerminimuminvestmentamountsthantraditionalRESinvestmentsandtheevidencefromthecasestudieslistedinthisreportshowthatasignificantnumberofsmallerinvestorsparticipateoneachoftheplatforms.Theindicationsarethatcrowdfundingisengaginganewdemographicofinvestorswithrenewableenergyandthereforebroadeningoutthenumberofstakeholdersintheindustry.


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DescriptionofCaseStudy

Overviewofplatformcasestudy

Belowisasummaryofthesectionscontainedineachplatformcasestudyandwhattheycover.1. PlatformRegulatoryDescriptionThissectionoutlinestheregulatorystatusoftheplatform,thesectionalsoexploresanyuniqueregulatoryfeaturesaswellastheplatform’sabilitytooperateacrossborders.2. Website(Platform)capabilitiesThissectionoutlinesthecapabilitiesoftheplatform’swebsite,identifyingthemainattributesthattheplatformoffersclientsaswellasidentifyingkeyfeaturesthattheplatformoperatorfeelsareimportantfortheoverallsuccessofitsoperations.3. InvestmentproductdescriptionThissectionoutlinestheinvestmentproductsusedbytheplatform,differentplatformstypicallyfocusonequity,loansorbonds,butsomewillofferavarietyofdebtandequityoffers.4. PlatformsdeveloperonboardingprocessThis sectionoutlines theprocess thataplatformgoes through to recruitRESdevelopersand theduediligence theplatformundertakesbeforelaunchingaspecificprojectonitsplatform.5. InvestmentinformationprovidedtoinvestorsThissectionoutlinestheinformationtheplatformprovidestoprospectiveinvestorsontheinvestment.6. OngoingServicetoBorrowersandInvestorsThissectionoutlines thework that theplatformdoesafter the investment is raised in termsofservice toboth theinvestorsandtheRESdeveloperswhohaveborrowedmoney.

Overviewofprojectcasestudy

Belowisasummaryofthesectionscontainedineachprojectcasestudyandwhattheycover.

1. CompanyandtechnologydescriptionThissectionprovidesadescriptionoftheRESdevelopercompanythatisraisingfundsaswellasadescriptionoftherenewableenergytechnologythatisbeingusedbythecompany.2. CompanyCapitalStructure


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Thissectionwilloutlinethecapitalstructureofthecompany,for instancewhoownstheequityandthedebtinthecompany.Leadingonfromthisitwilloutlinewherethecrowdfundedfinancewillsitinthecapitalstructure.

3. Investmentproductused(loan,equitybond)andtermsThis section leadson fromthesectionabove toprovide fulldetailon thestructureof the investmentmadeby thecrowd.4. RESDevelopermotivationsThissectionexploresthemotivationsoftheRESdeveloperforusingcrowdfundingtoraisetheirfinance.5. FundRaiseDescriptionThis section details how the platform went about marketing the fund raise and raising the capital for the RESdeveloper.6. FundRaiseDataThissectioncontainsthequantitativedataonthefundraiseincludingdetailonspeedofraiseanddemographicsofinvestors.7. Challengesandlessonslearned.Thissectionoutlinesanychallengesidentifiedbytheplatformandlessonslearnedfromthecasestudyprojectitselformorebroadly.


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PlatformOneplanetcrowd

PlatformDescription

1. PlatformregulatorydescriptionOneplanetcrowd InternationalB.V. is theoperating companywhich isa full subsidiaryofOneplanetcrowdB.V., theholdingcompany.Oneplanetcrowdhasbeengranteddispensationtoactas‘brokerinredeemablefunds’,asreferredtoinsection4:3oftheFinancialSupervisionAct(Wetophetfinancieeltoezicht,orWft).ThismeansthatOneplanetcrowdisallowedtobe intermediary in the provision of loans by consumers to entrepreneurs and organisations. Entrepreneurs can befunded to a maximum of €2,5 million in one year. Oneplanetcrowd is under the supervision of the Netherlands’FinancialMarketsAuthority(AutoriteitFinanciëleMarkten)andreportstothesupervisorevery6months.Oneplanetcrowd is a multi-lingual platform and promotes reward campaigns outside the Netherlands, mainly inGermany.LoansandconvertibleloancampaignsarenotofferedoutsidetheNetherlands.2. Website(Platform)capabilitiesOneplanetcrowdcore function is crowdfunding throughamultilingualmulti-finance-modelplatform. In additionan‘incrowd’ functionality is offered with which entrepreneurs can raise funds in a private online environment. Forpayment services and the escrow account Oneplanetcrowd makes use of payment service provider Buckaroo.Oneplanetcrowdoffersarepaymentservicetoentrepreneursforrepayingtheloans,whichisn’tdonethroughitswebapplication but through manual support services. Entrepreneurs are offered XML batch payment files. ThereforeOneplanetcrowdisfurtherdevelopingtheITinfrastructure,includingsoftwaremodulesofferingdetailedinsightintheloan portfolio and offering wallet/holder accounts fromwhich balance can be (re)used to invest in new projects.Finalization of the loan administration system and wallet services is expected for December 2016. Developing acommunication tool for entrepreneurs on the platform to inform the crowd with automated quarterly businessupdatesisinplanningfordevelopment.3. Investmentproductdescription.Oneplanetcrowdoperatesrewards,loans&convertibleloancrowdfunding.Itsrenewableenergycrowdfundingdoesnotusetherewardmechanism.Fundingperiodsgenerallyare45or60days.Entrepreneursrepayloansannuallyoveranagreedperiodof time,generally2 to7years.Renewableenergyprojectsgenerallyhavea longer loanperiod (5yearsormore).4. Platformsdeveloperonboardingprocess:

4.1 Developermarketingprocess

Oneplanetcrowd does not focus on developers specifically. In order to find new projects they use the followingmarketingchannels:

• Conferences&events:speakingatconferencesandevents• Quickscanonthewebsite• NetworkofStartGreenCapital(initiatorofOneplanetcrowd)


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• PR:focusongeneratingPRintradepressaswellaspublicpress• Recentlystartedapartnershipwithathirdpartyspecializedinstructuringenergyprojects.

4.2 PlatformDueDiligenceProcessandrequirementsOneplanetcrowdconsidersititsdutytoassesstheentrepreneursandtheirprojectsbeforetheyarepublishedonlineonthecrowdfundingplatform.Allentrepreneursfollowtheapprovalprocedure:Initial screening:Afterashort intakecall,personal interviewsareheldonOneplanetcrowdpremises.Basedon theinitial data provided by quick scan/mail/ telephone it is decided if the project fits the platform criteria& financialproducts.Handing in documentation: When deemed suitable the entrepreneur will be asked to supply the followingdocumentsandinformation:

• Proofofidentity.Acopyhereofisrequestedinordertoascertaintheentrepreneur’sidentity.• ChamberofCommerce(KamervanKoophandel,orKvK)registrationnumber.Thisistodeterminewhether

theorganisationisregisteredandwhethertheentrepreneurislegallyentitledtorepresenttheorganisation.• OfficeforCreditRegistration(BureauKredietRegistratie,orBKR)listing.Thiswillshowanyrecordof

outstandingpaymentsorcreditrepaymentsinthenameoftheentrepreneur.• CertificateofGoodConduct.• Financialprospectus.Historicaldata(includingannualreportandrecentbalancesheet)andprojectionsof

resultsandreturnsexpectedinthefuture.• Businessplan.Startingentrepreneurswishingtoobtainasubordinatedconvertibleloanfromthe

crowdfundersmustturninabusinessplan.• Copiesofcontractsandpermitscrucialtotheproject/company.

Interview&analysis:Evaluationof the financialprospectus iscarriedoutbyexperiencedbusinessanalystsatStartGreenCapital.Theprospectusmustforecast-insofarascanbereasonablyprojected-thattheenterprisewillbeabletomeetitsfutureobligationstothecrowdfunders.Finalizing documentation:When theproject isdeemedsuitable theagreementsentered intobyentrepreneurandcrowdfunder upon investment in the project are drawn up by Oneplanetcrowd and then submitted to theentrepreneurforapprovalpriortoonlinepublishing.

Project Live: Once the approval procedure and signing of the project agreement between entrepreneur andOneplanetcrowdhavebeensuccessfullycompleted,theentrepreneur’sprojectispublishedonline.Theprojectpagewhich will eventually be published online, with the entrepreneur video and the different investment buttons, isreviewedbyOneplanetcrowdforclarity,transparencyandcompleteness.Oneplanetcrowd has a Service Level Agreement with Start Green Capital for using the services of Start Green’sinvestment associates and financial business analysts at cost price.With StartGreen’s analysts,Oneplanetcrowd isfully equipped to scan the project and carry out financial, technical and legal due diligence. If needed, an expertreviewcanbeacquiredfromtheextensivenetworkofOneplanetcrowdandStartGreenCapital.5. Investmentinformationprovidedtoinvestors

Informationontheprojectisprovidedontheprojectpageandmorerecentlyadownloadableinvestmentdocumenthasbeensuppliedcoveringallvitalproject/companyinfo,includingareportfromtheanalystsanddetailedinfoonthefinancialtermsapplicable.


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6. OngoingServicetoBorrowersandInvestors

6.1 Postinvestmentservicetoinvestors

Oneplanetcrowdprovidesthefollowingpostinvestmentservicetoitsinvestors:

• Info&updatesfromtheproject

o Everysixmonthupdatesaregivenbytheentrepreneur.o Financialdataofthelasttwoquartersandaforecastforthecomingtwo.o Updatesonmilestonesreached,highlights

• Checkwithentrepreneursiftheyliveuptotheirobligations

o Rewardobligationsaremonitoredandifneededactionistakentomakesureentrepreneurdeliverso Ifrepaymentofloansdoesnotoccurontime,Oneplanetcrowdcontactsentrepreneurtodiscussa

suitablesolution.Ifneeded,platformwilllegallysupportthecrowdandwillmediatebetweentheentrepreneurandthecrowd.

o Ifentrepreneurscannotmeetobligations,Oneplanetcrowd’scustodianagentwillexecutethesecurityrightsonbehalfoftheinvestors.

6.2 PostinvestmentservicetoRESdevelopers

PostinvestmentOneplanetcrowdprovidesrepayingfundsbacktoinvestors.7. PlatformoperationalperformanceOneplanetcrowd uses linear or bullet loans with a fixed annual percentage rate. Oneplanetcrowd monitorsrepaymentstothecrowdandcurrentlyallrepaymentstoinvestorsinRESarematchingforecast.8. Platformoperationallearnings

8.1 StartupOneplanetcrowdlauncheditswebsitewith10projectswiththeintentiontoattractalotofcrowd.Unfortunatelyonlytwosuccessfully raisedthetargetamount. It isbetter tostartwith2-4projects thatarehighlyappealingtoa largecrowdandusethattogeneratemediaattention.

8.2 OngoingtopicsOneplanetcrowd has learned several lessons along theway. These include not developing all your IT yourself andtrying to sourcemodular standardisedapplications. Alsowithholding fromautomating all of yourprocessesbeforeyougolive,becauseyoudon’tknowyourneedsuntilyougetstarted.Automate/implementmoreITgraduallywhenyouknowyourneeds. Inthebeginning,whenyouaresmall, it’s finetodopartsmanually.Thesemanualprocesseshelpyoutounderstandyourautomizationneeds.Thequalityofyourduediligenceof theprojects, is in theendthequalityofyourservice: itdetermineshowmuchcapitalflowsbacktoyourinvestorsaccordingtopredictedreturns.Havingexperiencedandqualifiedstafforexternalexpertsforyourduediligenceiscrucial.

8.3 ScalingtopicsDon’thire staff too juniordue to capital limitations.Attract seniorexpertson the relevant topics. Itwillmakeyougrow faster. Your IT in the end is crucial and must be built on reliable frameworks and in a modular structure.Oneplanetcrowd(OPC)isoftheopinionthatacrowdfundingplatformteamshouldbeorganisedalongsideitscriticalsuccess factors.Withonespecialistheadingeachdepartment/success factor: communitymanagement,project andpartner acquisition, IT and operations (due diligence newprojects,monitoring funded projects), as outlined in thechartbelow.


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OneplanetcrowdProjectCaseStudy1:BiomassPowerPlant

1. Company&technologydescriptionOneplanetcrowdhasworkedwithacompanythathassuccessfullyexecutedseveralprojectsinthemainfocusareas(office parks, community pools, nursing homes, residential areas) from feasibility to the operations phase. ThecompanyservestheDutchmarketforcommunity-scalewoodfuelheating,itbuildsandmanageslocalbiomasspowerplants that generate heat from wood. A flexible service offering has been developed to implement wood energysolutionsreplacinggas-fuelledsystems.2. Companycapitalstructure

The company developsmid-size biomass power plants all over the Netherlands. Financing is structured through acombinationofbank loansandsubordinatedbondsthatare issuedbytheFuellingtheFutureFund. Inadditionthenew customers of the wood fuel heating plants will sign a 20 year purchase agreement and pay a one timecommissionequaltothesavingontheinvestmentforasystemfuelledbygas.

AftertheinitialinvestmentsduringthedevelopmentandbuildingoftheplanttheequityinvestedviatheFuellingtheFutureFundarereplacedbyasubordinatedloanviacrowdfunding.This‘freed’capitalwillthenbeusedtostart-upanewprojectandpayforthefinancingintheinitialphase.

3. Crowdfundinginvestmentproduct(loan,bond,share)Thecrowdfundingproductusedinthisprojectisasubordinatedloan,withabulletrepaymentanda5yeartenor.Theinterestrateis7.5%,tobepaidannually.4. RESDeveloperMotivations

4.1. Rationalforusingcrowdfunding

Opportunityfor localcommunitytoparticipateintheinvestment.ThesubordinatedbondoptionhasaninvestmentthresholdofEUR100k(limitedbyregulatoryprovisions).Crowdfundingmakesitpossibleforpeopletoparticipateforaloweramountandbepartofthesuccessofthecompany.Oncethecrowdfundhadtakenplace,thecompanyalsonoticedthattheprojecthelpedthemwithrespecttomarketing/PRandusefulcontactsforfutureprojects.

4.2. Rationalforusingspecificplatform


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Oneplanetcrowdwasusedfor itsspecific focusonandexpertisewithprojectswithasustainableandsocial impact.Oneplanetcrowdhasanactivecrowdofmore than17,000 investors specifically interested inprojectswithbothanattractivefinancialreturnaswellasapositiveimpactontheworldwelivein.

4.3. RationalforchoiceofinvestmentstructureThecompanywanted toattractdebt to free-up theequity in theproject, so that theequitycouldbe releasedandusedtoinvestinthedevelopmentofnewprojects.Theloanneededtobesub-ordinatedbecauseoftheexistingbankloan.

5. Fundraisedescription

5.1. Descriptionoftargetaudience

TheOneplanetcrowdtarget ismiddlehigher incomeinvestors lookingforanalternative investmentoptionfortheirsavings.

5.2. Descriptionofchanneldeployed

ThemainchannelistheOneplanetcrowdwebsite.TrafficisgeneratedbyboththeentrepreneurandOPCthrough:

• Directmail• Socialmedia• PR• Events

5.3. Descriptionofmessaging

Themessagingusedisearnadoubledividend:aReturnonInvestmentalongwithasocietalimpact.6. DescriptionofexampleactivitiesDirectmailingnetworkentrepreneur,weeklynewslettertoOneplanetcrowd’s17.000newslettersubscribers,pushingtheprojectsviafacebook,linked-in&twitter,generatemediaattentioninnationalandlocalpress.7. FundRaiseData

Platform OneplanetcrowdProjectName BiomassPower

PlantTechnology BiomassLocation Netherlands FinancialInstrument LoanTermPeriod 5yearsInterestRate/IRR 7.5%Dateraisestarted 15-Jan-15Dateraiseclosed 08-Feb-15DaysOpen 24


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TotalAmountRaised EUR290,000Numberofinvestors 116 MeanInvestmentAmount EUR2,500MedianInvestmentAmount EUR1,000 SmallestInvestment EUR500LargestInvestment EUR30,000 Investmentrunrate EUR12,083 Youngestinvestor(age) 21Oldestinvestor(age) 74 MeanAge 49MedianAge 48.3 %inagebracket: 18-35 5%36-50 49%51-65 38%66+ 8% %Male 78%%Female 22% %Investorsfromoutsideplatformhomecountry

2.58%

8. Challengesandareasforimprovement

8.1. DescriptionofchallengesThecorechallengesforOneplanetcrowdare:

• Buildingalargercrowd• Increasingtherateofreturnforthecurrentcrowd• BuildingpartnershipswithRESdeveloperssothattheybecomerepeatissuers.• Findinggoodprojects

8.2. Descriptionofsuccessdrivers

ThecoredriversofsuccessforOneplanetcrowdare:


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• TrackrecordofsuccessfullyfundingprojectswithhighPRvalue(Snappcar,Peerby,iLost)• TrackrecordofmothercompanyStartGreenCapital(asco-financier)

8.3. Descriptionofmistakes,lessonslearntFunders of Oneplanetcrowd projects seem to prefer a fixed return on their loans, rather than a variable financialreturnbasedontheamountofenergygeneratedintheproject.Previousvariablereturnrenewableenergyprojectshaddifficultiesinraisingfinance.Thisprojectgotfundedwithintwoweeks,muchquicker.

8.4. Identifyanypolicyasks

Nothingfromthisprojectcreatedapolicyask.


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PlatformGreenCrowding/Bettervest

PlatformDescription

GreenCrowdingcollaborateswithbettervest,aGermancrowdfundingplatform.Bettervest&GreenCrowdingonlyfundrenewableandenergy-efficientprojectsontheirplatforms.Thefinancial instrumentsavailablefor investmentsaresubordinatedloans(partiarischeNachrangdarlehen).Thecasestudyreferstoanenergy-efficientprojectthatwassuccessfullyfundedonbettervest’splatform.1. PlatformregulatorydescriptionBettervest is subject to theGerman regulatory framework. On July 10th 2015, the Retail Investors’ Protection Act(Kleinanlegerschutzgesetz)enteredintoforceinGermany.TheActcoverssubordinatedloans,whichareclassifiedasinvestmentproducts.Othernoteworthychangesarethattherearenoprospectusrequirementsuptoathresholdof€2.5millionfundingperprojectandthatthemaximuminvestmentofprivateinvestorsis€10,000.Bettervestholdsa§34fGewOlicenseandisfullycompliantwiththeregulatoryframeworkgoverningitscrowdfundingactivities inGermany.Untilnow,non-Germancrowdinvestorscannot investviatheplatform.Yet,theplatformcanfundRESprojectslocatedoutsideGermany.2. Website(Platform)capabilitiesBettervest isanonlinecrowdfundingplatformwherenon-professional investorscanfinancerenewableandenergy-efficient projects. Online payment and contract signature processes adhere to high technical and regulatorystandards. Investors can follow-up on their investments online. The client account area shows customer-specificinformation suchasnextpayment, contracts andupdateson their investments. Thereareno cashand investmentaccountsavailableontheplatform.Cashisdirectlypaidintoclientbankaccounts.Asecondarymarketmechanismisnotimplementedtodate.3. Investmentproductdescription.Bettervest intermediates subordinated loans toprivate,non-professional investors. Loans fundedby the crowdarepaid out to project owners after a successful funding period. The funding period can last up to 180 days. Projectownersrepayloansannuallyoveranagreedperiodoftime.4. Platformsdeveloperonboardingprocess:

4.1. Developermarketingprocess

Bettervestreliesuponanestablishednetworkofinstallationcompanies,energyadvisorsandothercompaniesinthesector.Someprojectowners findbettervestviagoogle searchengine,othersare recommendedbyexistingprojectowners.Wordofmouthpromotion,speechesatconferences,aswellas features inmagazinesandnewspapersareanotherrouteoftakingnewprojectownersonboard.Aspartoftheprocess,bettervestdirectlycontactspotentialclientsviamailandphone.

4.2. PlatformDueDiligenceProcessandrequirements


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BettervestrequirethatRESdevelopersusingtheplatformcanbring30%ofthefundingrequirementstotheplatformthemselves,bettervestthenaimtosupplytheremaining70%.Eachprojectfundedbybettervestmustundergoatechnicalandfinancialduediligenceprocessintwosteps.Firstly,bettervestcarriesoutanassessment.Secondly,anindependentenergyconsultantassessesthetechnicalviabilityoftheproject.Bettervestcanrecommendenergyconsultants.Eachprojectowneralsoreceivestechnicalsupportfrombettervestandhasaccesstoanetworkofinstallationcompaniesviabettervest.Duringtheduediligenceprocess,projectownersmustanswerthefollowingquestionsamongstothers.

• Generalinformationo Descriptionofprojectandintendeduseoffunds.o Statementofyourmotivationtobefinancedbybettervesto Arethereanyconflictsofinterest,sayforexampleyourcompanyhassharesinbettervestor

receivespaymentsfrombettervest?• Financialinformation

o ShareholderAgreement,incaseofaLimitedLiabilityCompany(LLC),alistofshareholderso Certificateofregistration,whichshouldnotbeolderthan6months,includingtheownershipand

representationrelationships,identityoftheshareholders,andmanagerialandsupervisoryexecutives(address(es)anddate(s)ofbirthinclusive).

o Copiesofidentificationdocumentsofallauthorisedrepresentatives.o Financialplano BalanceSheetsofthepastthreeyearso Rentalcontracto Contractingdocuments

• Technicalinformationo Sizeandtypeofthecurrentsystemo Productdatasheetofproductsunderusageo Theenergyconsumptionofthecurrentsystemoverthepastthreeyearso Fullmaintenancecontractsincludingprices

Dependingonthetypeoftechnology,additionalquestionsmustbeanswered,suchas.

• CHPorheatinginstallationo Dimensionofheatedsurfaceinm2o Construction/setupdiagramofthenewplant(providedbyimplementer)o Loadprofileandenergyconsumption

• LEDo Installedovervoltageprotection

• PV,WindorBio-energyprojecto Allnecessarypermits:buildingpermit,networkapprovalo Landleaseorownershipcontractforthecountryo Lawexcerptsregardingthespecifiedcompensation

5. Investmentinformationprovidedtoinvestors

Investors have access to a great array of technical information, most noteworthy energy consultant reports,installationoffers,datasheetsofusedproductsaswellasadetaileddescriptionoftheprojectitself.Withregardstofinancialdata,theinvestorshaveaccesstoannualaccountsoftheloanparticipants,theratingreportofthecompanymadebytheleadingGermansolvencyratingcompany“Creditreform”aswellasthe“investmentinformationsheet”,a document requestedbyGerman law,whichwill also be deposited at the “BaFin” theGerman financial conductauthority.Inaddition,picturesandvideosabouttheprojectandtheprojectownerareavailableontheplatform.



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6.1. Postinvestmentservicetoinvestors

Afterfundingiscompleteandoncetheright-of-revocationperiodof14dayshasranout,70%oftheloanispaidoutto the project owner. The remaining 30% is paid out once the project owner provides proof that the technicalimplementationisinitiated.Loansfundedviabettervestarepaidbackannually.Iftheprojectownermissesayearlypayment,theinvestorhastherighttocanceltheirinvestment.Contractually,theinvestormayterminatetheloanagreementwithimmediateeffectoffullrepayment.Claimsofallexistingandfuturecreditorsaremetpursuant§39Insolvenzordnung.Investorscanseeallinvestmentsandimportantdatasuchastaxinformationandaccruedinterestsintheirloginarea.Additionally investors canaskquestionsviamail, Facebookorphoneandget support in caseofproblemswith theprojectowner.EachinvestorsignsacontractwiththeRESdeveloperonline.ThecontracthasbeenacceptedbytheRESdeveloperupfront in an offline version and has sent this version to bettervest. Then the investor receives this contractwithelectronicsignatureviaemail.

6.2. PostinvestmentservicetoRESdevelopers

Bettervest takes care for the entire after-funding process. The project owner only has to pay their yearly annuity.Afterthefundingisdone,bettervestinitiatesthepayoutofthefundingsumtotheprojectowner,andremindsthemifneededtosendneededinformationforthepaymentsteps.Bettervestaddressesallquestionsfrominvestorsunlessfurther information isrequiredfromthe loanparticipant.Additionally,bettervestremindstheprojectownertopayhisyearlyannuity.The loan participant pays its yearly annuity to the project account, which is managed by an independent escrow(Treuhänder). Once the payment arrives on the account, the escrow distributes the respective payments to allinvestors,paymentsgostraighttothebankofthecrowdinvestor.Fundedprojectsarecloselymonitored.Theloanparticipantprovidesregularfinancialandtechnicalupdates.Financialfilingsandauditreportsareassessedaswellas independentcreditratingsoftheloanparticipants.Repaymentsarecloselymonitored. Over the life-span of the loan, data and independent reports on technical implementation andenergyconsumptionareevaluatedamongstothers.7. Platformoperationalperformance38outof39projectsmatchedforecastandactualcashreturned.8. Platformoperationallearnings

8.1. StartUpPhaseAkey learningfrombettervestwastosettherightpriorities.This isvery important,particularly inthebeginning. Itmattersforpickingtherightmarketniche,typeofprojects,mediaoutletsandotheractivities.

8.2. ScalingPhaseInordertoscale,bettervestprioritisesqualityoverquantity, inparticularduringtheduediligenceprocess it isveryimportant to pick the right projects. It is time-intensive to evaluate projects - spending a lot of time on assessingprojects thatarenotpresentedontheplatform in theendorcannotbe fundedharmthecost-effectivenessof theplatform'songoingactivities.Theplatformonlygetspaidwhenaproject issuccessfully funded.However, theworkand costs of assessing projects is done upfront. For the reputation of the platform, it is also very important that


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projectspresentedon theplatformadhere tohighquality standards.Pastperformanceofprojects is an importantindicatortoinvestors,givingthemtrust.Anotherimportantoperationallearningwasthatclosecooperationwithenergyefficiency,financeandcrowdfundingprofessionals created greater efficiencies and benefits. Effective collaboration resulted in more tangible results intermsoffundedprojects.Successalsodependsontheteammembers.Theteamasinanystartupissodecisiveinmakingitasuccessorfailure.

BettervestProjectCaseStudy1:HotelMagnetbergCHPPlants

1. Company&technologydescriptionTheprojectconcerns the installationof twocombinedheatandpower (CHP)units inHotelMagnetberg, located inBaden-Baden, Germany. The combined output of the cogeneration units is 20 KW electric and 40.1 KW thermalpower,leadingtoannualCO2savingsofapproximately95.78tons,29.4%vis-à-visitspreviousCO2emission.Thetotalcostoftheprojectwas€172,250.Theinvestmentyieldsareturnof7%overaperiodof7years.ThecrowdfundingcampaignstartedonOctober30th2015foraperiodof3months.Thesoughtcapitalof€172.250wasfullysourcedwithin37days.Previously, natural gas-fired centralheating supplied thehotelwithheat,whilepowerwasbought from thepublicgrid.Thepowerandgasconsumptionoftheyear2014 isshown inthefigurebelow.Accordingtothe independentenergyreportofIngenieurbüroPeterWünsch,totalpowerdemandwas338,192kWhandtotalnaturalgasdemand735,448kWhHoin2014.Figure1.EnergyconsumptionpriortotheCHPinstallation,2014

Source: Ingenieurbericht PeterWünsch, September 13th 2015, “Prüfbericht PlausibilitätsprüfungWirtschaftlichkeit,BHKWHotelMagnetbergBadenBaden“,Saarbrücken,Germany.TwoidenticalCHPcogenerationunitshavebeeninstallednexttotheexistingnaturalgasboiler.Abufferstoragehasbeeninstalledforheatingwater.TechnicaldetailsoftheinstalledCHPunitsareasfollows.Type:InDop


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Make:20TOElectricalnetpower:20.0kWThermalpower:40.1kWThermaloutputofthecombustiongas:64.2kWOverallefficiency:93.7%Buffer:2,000litersOverhaulnecessaryafter40,000operatinghoursTo generate heat and power, the CHP requires 955 210 kWhHo per annum natural gas as input. The CHP unitsgenerateapproximately543,219kWhperannumheatwhichcoversaround86%ofthehotel’sannualdemand.Theresidualheatdemandof91,940kWhisgeneratedviatheexistingboiler.Simultaneously,thenewlyinstalledCHPunitsgenerate around 273,652 kWh power each year, of which 232 605 kWh per year is delivered to the hotel. Thiscorrespondsto68.8%ofthehotel’sannualpowerconsumption.Asurplusof41,407kWhisfedintothepublicpowergrideveryyear.Theextent towhich theCHPcanbeused tocoverenergyneeds isbasedupon the load responseof the referenceelectric energy of 2014. Duringwintermonths the CHP is expected to run at full loadmost of the time. In otherseasons,theCHPisassumedtorununderfullloaduntilthebufferstorageisfullycharged.Thanks to theCHP installation, significant CO2 savings canbe achieved. Previously, the hotel’s power demandwassuppliedbythegrid.TakingthemeritorderoftheGermanpowersupplyintoconsideration,annualsavingofabout95.78CO2tonscanbeachieved,theequivalentannualconsumptionofeightfamilyhomes.TheunderlyingrationaleisthatlesspowerisproducedviaconventionalpowerplantswithaworseCO2balancethantheCHPunits,suchascoal-firedpowerplantsandplantswithoutwasteheatrecovery.TheinputofnaturalgaswithCHPisnowhigherthanitwaspreviously.However,theCHPalsoproduceselectricity.Inreturn,externalenergysupplyfrompowerplantsisnolongerneeded.Thus,theprimaryenergybalanceoftheprojectisimprovedaftertheinstallationofthenewsystem.

Totalcostoftheprojectis€172,250.Itincludesthecrowdfundingintermediaryandescrowfee.AndreasCordierHotelbetriebsgesellschaftmbHboughttheCHPunitsfromtheinstallationandservicecompany“W&SWärmeundStromServiceGmbH”.Furthermore,afullmaintenancecontracthasbeenagreedupon.Themaintenancecontractisvalidfor10yearsatmaximumoperatinghoursof7,000hoursperyear.Thecontractincludesallrepairs.Incomparisontothepreviousenergyandmaintenancecosts,thenewlyinstalledCHPisestimatedtogenerateannualcostsavingsof€32,201.2. Companycapitalstructure

The3-starSuperiorHotelMagnetberghas76beds,arestaurantandawellnessarea.Itwasfullyrenovatedin2012.AftertheinstallationoftheCHPunits,nofurtherhotelrenovationsareinplanning.Theloanparticipantisthelimitedcompany“AndreasCordierHotelbetriebsgesellschaftmbH”.Thelimitedcompany“AndreasCordierHotelbetriebsgesellschaftmbH,”runsandownstheHotelMagnetberg.SinceJuly2011,Mr.AndreasCordieristheonlyshareholderofthecompanyaswellasCEOofHotelMagnetberg.The project costs of €172,250 were completely funded by the crowdlending campaign. Andreas CordierHotelbetriebsgesellschaft mbH did not personally invest equity. The only financial instrument used to finance theprojectisthesubordinatedloancrowdfundedviabettervest.ThesubordinatedloansourcedviacrowdfundingispartofAndreasCordierHotelbetriebsgesellschaftmbH’sbalancesheet.Theprojectisthusnotring-fencedviaaspecialpurposevehicle.


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By the endof 2014,AndreasCordierHotelbetriebsgesellschaftmbHhad total assets of €292,311. In 2011AndreasCordier Hotelbetriebsgesellschaft mbH took a bank loan to finance renovations. In 2014, the financial liabilitiesamountedto€223,931.Despitethefactthatalossof€49,319wasnotcoveredbyshareholders’equityin2014,thecompanywasallowedtoassumethatan“indebtness”isnotapplicableinthebankruptcylegalsense(§19InsO)duetoproperon-goingoperations.“Creditreform”isthe leadingsolvency index inGermany. Itprovidesanassessmentofthecreditworthinessandtherisk of default for companies. Companies are scored between 100 (excellent credit) and 600 (inadequate credit /suspension of payments). The solvency index for “Andreas Cordier Hotelbetriebsgesellschaft mbH” is 349, whichimpliesbelowaveragecreditworthiness.3. Crowdfundinginvestmentproduct(loan,bond,share)Thesubordinatedloansoughtequals€172.250.Therepaymentperiodissevenyearswithanannualinterestrateof7%.The loan isstructuredasaso-calledfixed-ratemortgage loan(Annuitätendarlehen).Annual loanpaymentsarefullyamortized.Therepaymentamountsarefixedforsevenyears.Theannualrepaymentdateissetthesamedaytheloanwasinitiallytransferredtotheloanparticipant.4. RESDeveloperMotivations


Thehotel’srationaleforusingcrowdfundingwastoseekfundingtoimplementefficientpowergenerationtechnology.Bettervest intermediates a crowd-funded subordinated loan, which does not interfere with other liabilities of thehotel.Anotherimportantrationalefortheuseofcrowdfundingwasthepositivemarketingeffect.Thehotelbenefitedfromatailoredmarketingcampaignviathebettervestplatform.Newsaboutthehotel’senvironmentallyfriendlyinitiativeweredisseminatedacrossonlineandofflinemediachannels.Asanexample,bettervestundertookapressevent inthe hotel while the funding was running. The positive image campaign not only led to a successful crowdfundingcampaignbutalsohelpedthehotelwinnewguests.Forexample,thehotelofferedinvestors,whoinvestmorethan2,000€,agift-voucherforastayoverofonenightwithabreakfastbuffet.


The rationale for using bettervestwas partly due to bettervest’s technical experience and know-how. Its tight duediligenceprocessandnetworkofexpertsgavethehotelfurthercertaintythatthetechnicalviabilityoftheprojectwasthoroughlyassessed.Moreover,bettervest’sexpertise inmarketingenergy-efficient investmentswasan ideal fit fortheprojectowner.Another important decision-making factor was bettervest’s 100% success rate. Until now, all projects put onbettervest’splatformhavebeenfullyfinanced.

4.3. RationalforchoiceofinvestmentstructureBettervest intermediates subordinated loans. The financial instrumentdidnot interferewithother liabilities of theprojectowner.



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5.1. Descriptionofmarketingactivity

Bettervest used various online and offlinemedia channels, and held a press event in the hotel during the fundingcampaign.


Bettervest’s targetaudience ismadeof individualsabove18yearsofagewhoare interested in sustainableenergyprojects, social projects (asmany of our projects have a social aspect, for example our projects in Africa) and thetechnicalaspectofourprojects.


Marketingchannelsusedtopromotecrowdfundingcampaignsincludethewebsite,newslettertoregisteredinvestors,socialmedia (e.g.Facebook, twitter,etc.)aswellasnationaland localmagazinesandnewspapers. Inparticular thelatterchannelistypicallydeployedincooperationwiththeprojectownertomaximizetheeffectiveness.

5.4. DescriptionofmessagingBettervest’s key message is that energy efficiency and renewable energy projects are for free. They pay forthemselvesbyreducingtheenergybill.Theloanparticipantthusonlyrepaysitsenergysavingcosts.

Apartfromthat,bettervest’sphilosophyisaholisticapproachofenergyprojectscombinedwithenergyefficiencyand further sustainable steps.Global energy transitionwill onlyoccur if “normal” citizens are -> everyone is achangemakerdogoodandtalkaboutit

6. DescriptionofexampleactivitiesSoonafteraprojectis launchedonline,newslettersaresenttoregisteredinvestors.Inaddition,Facebookpostsaredraftedabouttheproject.Foreachproject,avideoonthekeymessagesoftheprojectismade.The case study is a good example of combinedmarketing efforts of bettervest and the project owner. The hotelhosted for example a press event to spread thenews about the energy efficient crowdfunding campaign.Anotherinitiativeofthehotelwastogiveinvestorswhoinvestedmorethan€2,000agiftvoucherforaone-nightstayatthehotel.Theinitiativesresonatedwellwithmedia,theoverallimageofthehotelaswellasthecrowdfundingcampaign.7. FundRaiseData

Platform Bettervest/

GreenCrowdingDeveloper HotelMagnetberg ProjectName n/aTechnology Energyefficiency/CHPLocation Germany FinancialInstrument LoanTermPeriod 7yearsInterestRate/IRR 7%Dateraisestarted 30-Oct-15


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Dateraiseclosed 06-Dec-15DaysOpen 37 TotalAmountRaised EUR172,250Numberofinvestors 133 MeanInvestmentAmount EUR1,257MedianInvestmentAmount EUR500 SmallestInvestment EUR50LargestInvestment EUR10,000 Investmentrunrate EUR4,655 Youngestinvestor(age) 22Oldestinvestor(age) 78 MeanAge 42.6MedianAge 43 %inagebracket: 18-35 33%36-50 41%51-65 22%66+ 4% %Male 86%%Female 14% %investorsfromoutsideplatformhomecountry

0.00%


8.1. Descriptionofchallenges

Thecorechallengesforbettervestare:

• Costandtimeofduediligence:Checkingandcarryingoutduediligenceofprojectsistime-consumingandcost-intense.Themarginsarelimitedasprojectsquicklybecometooexpensive.

• Projectselection:Anotherchallengeistofindtherightprojects.Still,manyprojectownersarenotawareofthebenefitsofcrowdfunding.Itisthusabigchallengetoselecttherightprojectswhileremainingextremelyefficient.


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8.2. DescriptionofsuccessdriversThecoredriversofsuccessforbettervestare:

• Acommonlyunderstoodlegalframeworkthataccountswellforunderlyingriskscoulddrivesuccess.Inparticular,harmonizationacrossEuropeanregulatorysystemswouldbeagreatenablertoexpandthemarketreach,leadingtoscalability.

• Reputationandknowledgeaboutcrowdfundingareotherimportantsuccessfactorssincetrustisanimportantingredienttogrowthebusinessinthelongerterm.

8.3. Descriptionofmistakes,lessonslearnt

• Alessonlearntisthatinvestorswillbedoubtfultoinvestifonlineinformationaboutaprojectisincomplete.

Thus,adeepdiscussionwiththecrowdisveryimportanttounderstandwhatkindofinformationisrequiredandinwhichmanneritshallbepresented.

• Spendingtoomuchtimewiththewrongprojectownercankillacrowdfundingplatform.Thereforemeasures

mustbeimplementedtofindoutataveryearlystageandrapidlyifaprojectisworthspendingtimeon.

• Thisiswhyaselectionprocessframeworkisimportanttoimplement.


A global regulatory treatmentwould greatly benefit the industry. In particular across Europe, harmonized policieswouldleadtogreatergrowthinthecrowdfundingindustry,thefinancingofmoreenvironmentalfriendlyprojectsandagreaterengagementofcitizensintherolloutofcleantechnologyacrossEurope.

GreenCrowding/BetterVest:BelgiumExperience

GreenCrowdingcollaborateswithbettervest,anotherGermancrowdfundingplatform,whichfinancesrenewableandenergy-efficientprojects.Thefinancialinstrumentintermediatedviatheplatformaresubordinateloans(partiarischeNachrangdarlehen).TheplatformissubjecttoGermanlawsgoverningcrowdfundingactivities.

Due to its extensive network in Belgium, Green Crowding also initiated projects in Belgium. One reason to enterBelgiumwas the financial viability of projects. The underlying green certificate system provides better returns forsmall- tomid-scale renewableandefficiencyprojects inBelgium than inotherEU countries. The size, locationandrisk-returnprofileoftheenvironmental-friendlyprojectsinBelgiumappealtocrowdinvestors.Thesuccessofenergycooperatives in Belgium also led to the conclusion that it was a good market for crowdfunding renewable andefficiencyprojects.

ApipelineofprojectswasalreadyinitiatedinBelgium.Oneproject,a117kWpsolarroofinBelgium,wasidentifiedasthe first project to be financed. Theunderlying financials and locationof theproject in Brusselswas a good fit. Inaddition,theprojectownerhadasuccessfultrackrecordandapipelineofsimilarprojects.

Green Crowding GmbH investigated how costly and time-consuming it would have been to extend its license toBelgium.Afteramorethoroughresearch,thefinalconclusionwasthattheunderlyingsunkcostsofbeingfullylegallycompliantinBelgiumwasnoteconomicviable.

Mostimportantly,itwouldhavetakensignificanttimetoundergoalladministrativeburdensimposedbyBelgianlaws.The project owner, which is also an SME, had a deadline to finance the project. By the time that all legal,


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administrativeandresultingtechnicalfeasibilityworkwouldhavebeenputinplace,thedeadlinewouldhavehadlongpassed.Moreover,thesunkcostswouldhaveputsignificantfinancialpressureonthecrowdfundingplatform.

Itwasalso testedwhetherenough fundingcouldbesourcedviaGermancrowd investors.Themarketingpull fromGermancrowdinvestorsoftheprojectsuggested,however,otherwise.OnereasonwasthatGermancrowdinvestorsare not fully aware of the Belgian green certificate system. Thus, their trust in putting their savings towork for arenewable project in Belgiumwas lower than for German projects they fully understood. Another reasonwas theproximitytotheproject,despitethefactthatBrusselsislessthan300kmtotheGermanborder.Yet,therewasnotenoughinterestfromregionalandnationalinvestors.

To make the project happen, a cooperative was launched instead of financing the project via crowdfunding. Thecooperativesucceededinraisingtheneededfunds.Theprojectownercould leverageon initialdiscussionsandduediligenceproceedingwithGreenCrowdingtoraisefundssuccessfullyviathecooperative.However,thecrowdfundingplatformdid,notbenefitfromtheeffortsandworkputintotheproject.

InBelgium,thereisalreadyasuccessfultrackrecordofenergycooperatives.Theprocess,timeandunderlyingcostsrelatedtothelaunchofanenergycooperativeareslimmerforlaunchingacooperativethanacrowdfundingplatforminBelgium.

RegulatoryDescription:Prior toMay 2014, no specific legislation addressed crowdfunding activities in Belgium. Consequently, companiesoperatinginBelgiumhavebeensubjecttosignificantregulatoryuncertainty.Uncertaintiesrelatetothequestionwhetherdirectofferingsviacrowdfundingqualifyasaregulatedfinancialservicerequiringa licenceasan investment firm.Asaconsequence thegrowthof crowdfunding inBelgiumhasbeenveryslow.Onlytwocrowdfundingplatformshaveofferedservicesthatcouldinprinciplefinancerenewableprojects.Onecompany issues exit-sharing notes (“Notes”),which are debt instruments through a holding company. The holdingcompany is a professional company, typically a particular venture capitalist, co-investing along with the crowd.Anothercompany,whichoffereddirectequityparticipationhadtosuspendoperations.Ithadtoavoidthepotentialapplicationoftheregulatoryframeworkapplicabletoinvestmentfirmsbywaivingitsentirefeesforitsservices.TheBelgianActof25April2014includedvariousprovisionsamendingtheProspectusActof16June2006onpublicoffer of investments instruments and came into force on 17 May 2014. Under the Prospectus Act the followingoperationsdonotqualifyasapublicofferof“investmentinstruments”.

• ThecrowdfundingcampaignraiseslessthanEUR300.000;• AmaximuminvestmentofEUR1.000perpersonandperprojectisraised.1

1http://www.thales.be/language/en/crowfdunding-in-belgium-the-2014-report-3/


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PlatformLumo

PlatformDescription

1. PlatformregulatorydescriptionLumo is authorized and regulated by the AMF (Autorité des Marchés Financiers). Lumo is authorised to arrangeinvestments, in formofsharesandbonds (nonconvertible)up to1m€peryear,witha totalmaximumof5m€, foronlycertaintypesofcompany(SA&SAS)andtoadvisecustomersoninvestingupto1m€perproject.Lumohasnocapitaladequacyrequirementandcannotpassportitsoffersacrossborders.2. Website(Platform)capabilitiesLumo’splatformhasallthecapabilitiestoperformcrowdfundingcampaigns.ButduetoAMFrequirements:

o Lumocan’thandlecashfromcustomers: ithastouseaPSP(PaymentServiceProvider).ThereforeLumoopensane-wallet foreachof itscustomer.Cashreturnsarepaid intoclientse-wallet, fromhereclientscanre-investthefundsinfutureprojectorwithdrawtheirfunds

o ForregulatoryreasonsLumocannotorganizeasecondarymarketonitsplatform,itscrowdfunded

investmentsarethereforeineffectnontransferrable.3. InvestmentproductdescriptionLumofocusesonarranginginvestmentsviaprojectfinanceseniorbonds,butprojectfinancejuniorbonds,corporatejuniororseniorbondscanbeproposedtoodependingontheissuerandtheproject.Inmostproject finance formatureRES,adeveloperhas tocommit20%of the totalamountof theproject cost toobtain 80% financing by a bank via a loan. Lumo’s project finance senior bonds are usually issuedwith the samematurityandrateasthisloan.4. Platformsdeveloperonboardingprocess:

4.1 Developermarketingprocess

AsapioneerinFrance,LumohasbeeninvitedtomanyconferencesandworkinggroupsrelatingtocrowdfundingforRES.ManyofLumo’sRESdeveloperpartnersderivedfrommeetingatevents,SERGIESwasoneofthem.Sincethen,Lumohasamorepro-activeonboardingprocessandisamemberofalmostallnationalassociationofRESdevelopersinFrance.

4.2 PlatformDueDiligenceProcessandrequirements


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Lumo works with a selected group of high-quality project developers and is focused on building long-termrelationshipswiththem.LumopreferstofinanceapipelineofprojectsoriginatingfromthesameRESdeveloper.DueDiligenceProcessLumoisonlyofferingretailinvestorspre-financedprojects,thathavebeenfinancedbyprofessionalplayers(banksorRESdevelopers);Lumoisthenofferingretailinvestorstheopportunitytoco-financetheseselectedprojectsalongsidetheseplayers,Lumothereforedoesnotfullyexittheprofessionalinvestors.Lumo is therefore not re-inventing thewheel and is not re-doing a full due diligence process on the projects it isselecting.Lumo’saddedvalueisnottojudgethefinancialbankabilityofoneproject,itreliesontheprofessionalco-investorstoprovidethisduediligence,insteadLumofocusesontheproject’s‘socialbankability’.ThismeansLumomakessuretheprojecthasbeenwellperceivedbyallitsstakeholdersforinstancelocalauthoritiesandtheneighbourstotheproject.Lumohasrefusedtotakeonsomebankableprojectsbecauseoftheconflictstheycreatedaroundthem.


Beforeseeingthefinancialoffers,potentialinvestorsreceiveariskwarning,thewarningcoversthefollowing:

• Potentialriskoflosingcapital• Illiquidityoftheproposedfinancialproducts

Duringtheinvestmentprocesstheinvestorswillreceive

• 5to10pagestermsheetforthebondoffering(Terms&Conditions)• Simplifiedbusinessplan• Compulsoryinformationdocumentabouttheissuer(2to5pages)• Lumo’semployeesareavailabletoanswerquestionsbymailduringtheinvestmentprocess

Aftertheinvestmentprocess,theinvestorswillreceive:

• RESproductionnumbers,atleastyearly• Alertemailforpaymentbeingmadetotheclientse-walletaccount.


6.1 Postinvestmentservicetoinvestors

• Energy&financialproductionnumbers&generalupdatesabouttheproject• E-walletmanagementservices(annuitiespayment),cashbeinghandledbyourPSP(PaymentService

Provider)• possibilitytoofferitsbondstorelatives(over18yearsold)

6.2 PostinvestmentservicetoRESdevelopers

• Investorrelations• E-walletmanagementservices(annuitiespayment),cashbeinghandledbyourPSP(PaymentService

Provider)• bondsregistraradministration

7. Platformoperationalperformance


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AllofLumo’sprojectsarematchingforecastandactualcashreturned.8. Platformoperationallearnings

8.1 StartUpPhaseAtthestartupphaseLumo’skeychallengewasnavigatingtheregulatoryregime.Inadditiononeofthekeysuccessfactorswasinconvincingdevelopersandbankstotryoutatestoffer.

8.2 ScalingPhaseInordertoscale,Lumohasfounditimperativetobuildrelationswithclientswhichhaveapipelineofprojects(verydifferentfrommostothercrowdfundingactivity,whereraisesareoftenaone-offactivityforabusinessorproject).Convincing more banks to work with them will also prove fundamental, as is finding the right balance betweenlocalretailinvestorsansprojectsatalltimeonwebsite.

LumoProjectCaseStudy1:SERGIESSAEML

1. Company&technologydescription

SERGIESisaSAEML(SociétéAnonymed’EconomieMixteLocale):alocalprivatecompanyissuedfromapublic-privatepartnership:SERGIES isownedby85%byapublic structure: theElectrificationSyndicate fromLaVienne (aFrenchcounty)and15%by3privatefinancialinstitutions.

SERGIEShasadiversifiedportfolioofRESassets(WindandSolar)producingaround120GWh/year,equivalenttotheconsumptionofacityof60000people.

SERGIESwascreatedin2001todevelopRESfortheElectrificationSyndicate.

2. Companycapitalstructure

SERGIEShasacapitalof10,100,010€asof2014/12/31.TofinancetheIteuilproject,SERGIESput200k€Equity,RetailInvestor150k€inJuniorDebtand1,550k€camefromabankloan.

3. Crowdfundinginvestmentproduct(loan,bond,share)

• Financialinstrument:juniorcorporatebond• Maturity:9years• Interestrate:3.19%,annuity• Subscriptionperiod:31July-16November2015• Issuance:30November2015• Issuer:SERGIESSAEML(SociétéAnonymed’EconomieMixteLocale)• Nosecondarymarket• Nominal25€,maxinvestment2k€(forthefirst2monthsofthecampaign),Total150k€

4. RESDeveloperMotivations



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ThereasonsforSERGIEStousecrowdfundingare:

• SERGIEShadrequestsforlocalresidentstobeabletoparticipateintheirprojectsasearlyas2008.• BeforeIteuil,SERGIEShad2successfulcrowdfundingcampaignswithLumoandwantedtotestiton

abiggersizeproject.• La Région Poitou-Charentes offers an incentive for crowdfunding and SERGIES wanted to take

advantageonit.Theincentivetakestheformsofacashpaymentforevery1EinvestedbysomeonefromtheRegion:

• 1€ofsubventionfor1€investedbysomeonefromtheRégionbutupto250€perperson

• Upto50k€perproject,or30%oftotalcost,whicheveristhelowest


• LumowasthepioneerforREScrowdfundinginFrance.• LumoisbasedinLaRochelleandSERGIESinPoitiers,thereforeweareinthesameRégionandinthe

sameeco-system,includingabaseoflocalretailinvestors.• Wefirstmetasearlyas2013,beforecrowdfundingwas‘legalized’inFrance.• Lumohasaspecificinteresttoworkwithpublic-privatepartnership.

4.3. Rationalforchoiceofinvestmentstructure

• SERGIES isnot creatinga SPV (SpecialPurposeVehicle) foreachoneof the ‘small scale’PVprojecttheyarebuilding,sothe‘CorporateBond’structurewaschoseninthiscase.

• Inordertodelivertoretailinvestorsashortermaturityandhigherinterestrate,the‘JuniorBond’waschosenovertheseniorone.


5.1. Descriptionofmarketingactivity

• FirstLumoisusingitscustomerbasetofindinvestorsforanewproject.• Thenapressreleaseandsomeotherpublicrelationtollsareusedtospreadthenewsabouttheproject.• Digitalmarketingviasocialnetworkcanbeusedtooinsomecases.

Thiscommunicationeffortstartsusuallylocallyandthenisspreadglobally(France)closetotheendofthecampaign.Thisstrategyvariesdependingonthegoaloftheclient(RESdeveloper),whocouldhaveapreferencebetweenlocalinvestorsandglobalvisibility.


• Localretailinvestorsinterestedbylocalinvestment• ‘Green’retailinvestors(andmoregenerallyspeaking‘ImpactInvestors’)interestedbyrenewableenergy

investment


Lumoisusingdifferentmarketingchannelsdependingonthecrowdfundingcampaigngoals:

• PhysicaleventstopresenttheRESprojects• Pressreleaseforpapermedium• Pushonsocialnetwork(mainlyLinkedInandtwitter)


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• VideotobepromotedonLumo’swebsite

5.4. DescriptionofmessagingLumoisusingvarioussetsofmessagestoreachdifferentinvestors:

• receivethesamereturnasthebank• knowwhere/howyourismoneyworking• investlocally• investingreenenergy

6. DescriptionofexampleactivitiesLumoandSERGIESorganizedaneventinPoitierstospreadthewordabouttheirprojects.Advertisinginalocalpaperwas financed by Lumo to present the RES project, but not the financial offer. Currently regulatory restrictions inFrancemeanthatthefinancialpromotioncannotbeadvertised.7. FundRaiseData

Platform LumoDeveloper SERGIES ProjectName IteuilTechnology PVLocation France 1,4MWFinancialInstrument CorporateJuniorBond(Debt

Security)TermPeriod 9yearsInterestRate/IRR 3.19%Dateraisestarted 31-Jul-15Dateraiseclosed 16-Nov-15DaysOpen 109 TotalAmountRaised EUR150,000Numberofinvestors 193 MeanInvestmentAmount EUR777MedianInvestmentAmount EUR250 SmallestInvestment EUR25LargestInvestment 20025€ Investmentrunrate EUR1,376 Youngestinvestor(age) 21


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Oldestinvestor(age) 79 MeanAge 44MedianAge 43 %inagebracket: 18-35 35%36-50 35%51-65 22%66+ 8% %Male 76%%Female 24% %Investorsfromoutsideplatformhomecountry

0



NottobeabletocommunicatetheinterestrateandmaturityonthebondinmeetingswasachallengeforLumoandespecially for theRESpromoter. This restriction is a regulatory constraintand something Lumo is lobbying tohaveremoved.

• ForthisprojectLumoneededtoraiselargerticketsizeasbefore.• Longterm(9to15years)maturityofLumo’s investmentproduct isseenastoo longformostretail

investors,especiallyasLumocan’tprovideliquidity.

8.2. Descriptionofsuccessdrivers

• LumohasgoodbrandrecognitioninitsRégion.• SERGIEShasaverygoodreputationinthesameRégion.• Lumo’strackrecordofsuccessfullyreturningmoneyonpreviousprojectssince2012.• SupportfromtheRégioneco-system.


Lumohasdifferentkindofinvestorsforitsbonds,theyneedtobeaddressedbydifferentmeans.


• Lumoislobbyingforataxbreakfor‘localgreenbonds’• It is near impossible not to talk about the interest rate andmaturity, especiallywhen competitors

withsimpleragreementscandoit,isfoundtobecounterproductive.SoLumoisaskingforaremovalofthisconstraint.


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PlatformAbundanceInvestment

PlatformDescription

1. PlatformregulatorydescriptionAbundance Investment Ltd is authorised and regulated by the Financial ConductAuthority (525432). Abundance isauthorised toarrange investments inunlistedcorporateDebenturesandShares issuedby renewableenergypubliclimitedcompaniesanddistributetheseinvestmentstoordinaryretail investors2andprofessionalclients.AbundanceisaMiFIDfirmandhasaEuropeanfinancialservicespassportenablingittooperateacrosstheEEA.2. Website(Platform)capabilitiesAbundancehasthefollowingfunctionsonitsplatform:

• Cashaccounts:enableclientstoholdcashontheplatform• Investmentaccounts:enableclientstoholdinvestmentsontheplatform• Childaccounts(cashandinvestment)• SIPPaccounts–UKpensiontaxwrapper(cashandinvestment)• ISAaccounts–UKsavingstaxwrapper(cashandinvestment)• Secondarymarket:‘ebay’likemechanismenablingpeopletotradeinvestmentstheyhavepurchased.• Portfoliotools:arangeoftoolstohelppeopleunderstandwhattheyhavepurchased.

WithAbundancespecialisinginlongtermdebtinstrumentsitidentifiesthesecondarymarketasakeyfeaturefortheplatform.InadditiontoaccesstheUKtaxincentivisedinvestmentmarkets,theplatformsabilitytocreatesegregatedaccountsforasingleclient(General,ISAandPensionaccounts)enablesAbundancetomarketdifferenttaxwrapperstoitsmembers.3. Investmentproductdescription.AbundancefocusesonarranginginvestmentsinDebentures.

ADebentureisaCorporateBondandintheUKisa“DesignatedInvestment”.Adesignatedinvestmentisasecurityoracontractually-basedinvestment,thatfallswithincertaininvestmentsspecifiedinPartIIIoftheUKFinancialServicesand Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (as amended). Such investments include(amongothers)Debentures,shares,governmentandpublicsecurities.DesignatedinvestmentsfallunderMiFID.

In the UK Debentures are issued by public limited companies (plc), debenture holders therefore benefit from theprotections that the plc company structure provides. For instance they are required to produce audited annualaccountsandthereareadditionalcontrolsandresponsibilitiesoncompanydirectors.

2 Financial Conduct Authority defines ‘ordinary retail investor’ as retail clients who are neither sophisticated investors nor high net worth individuals.


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4. Platformsdeveloperonboardingprocess:

4.1. Developermarketingprocess

Abundance does not have a sophisticatedmarketing strategy for RESDevelopers, to datemost of their developerclientshavecometothemviawordofmouth.Activitiesthatthebusinessdoesconductinordertomarket itselftoRESdevelopersareasfollows:

• Conferences:thefirmfocusisonspeakingengagementsatconferences.• PR:GeneratingPRintradepressaswellasnationalpress

4.2. PlatformDueDiligenceProcessandrequirements

Abundanceoperatesafive-stageprojectduediligenceprocess.

Phase1:InitialscreeningInitial phase will gather key facts about a project to check fit with Abundance’s criteria and objectives. Forinstance,Abundanceexcludesanydevelopmentcompaniesthatdonothaveatrackrecordofsuccessfuldevelopmentbehindthem.Abundancedoesnotraisemoneyforstartupdevelopersfromretailinvestors.Phase2:FirstmeetingIf the initial screening has not already involved a face-to-face meeting with the controlling shareholders, this isarranged.Itspurposeis:

• togetabetterunderstandingoftheobjectivesofusingapublicoffertoraisefunds

• toassessshareholders’understandingofandwillingnesstoembracetheresponsibilitiesofmakinganoffertothepublic

• togainafullerunderstandingoftheproject,theproposedtermsofthefundingandthelongertermobjectivesoftheprojectowners

• toexplaininmoredetailthestepsinvolvedinpreparingforapublicofferanditsmarketing

• tooutlinetheresponsibilitiesofthedirectorsoftheissuingcompany,bothduringtheofferandsubsequently.

Phase3:CommercialsuitabilityAfullerreviewofthefinancialmodelandtestingofkeyassumptionstoensurethattheproposedprojectwillsatisfyallstakeholders’commercialobjectives.TargetreturnstoinvestorsareestablishedatthispointandformpartofanInitialTermSheetwhichisappendedtotheengagementletterbetweenAbundanceandtheissueranditscontrollingshareholder(s).Termsmayvarybeforelaunch,buttargetreturnsareexpectedtoremainunchanged.Phase4:DetailedduediligenceAbundanceadoptsaprojectfinance-likeduediligenceexercise,whichgenerallytakes6-8weeksforafirst-timeissuer,tosatisfy2requirements:

• thefinalphaseofdeterminingwhetherwethinkaprojectanditsshareholdersshouldbepromotedtoourcustomers

• toenableustoconfirmthatanymaterialsusedtomarkettheoffercomplywiththeFinancialPromotionsregulations


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• Duediligencecoversalllegal,accounting,andtechnicalaspectsofaproject.Thirdpartytechnicalreportsarerequiredforallprojectsaswellasthirdpartyreviewofthefinancialmodel.

Phase5:BoardsignoffAbundance board approval is required before any new mandate is taken on. Prior to launch, the Board is takenthroughanoverviewoftheduediligenceprocessanditsfindings,andanythingelsepertinenttoadecisiontomarket.Abundance requires all its issuers to retain legal counsel to advise them on the public offer and the directors’obligations.


AbundanceprovidesanOfferDocumenttoinvestmentswhichisdownloadedfromtheirwebsite.Inadditionthereissummaryinformationheldonthesite,howeverinvestorshavetoconfirmtheyhavereadtheOfferDocumentbeforeinvesting.Astheoffer isbelow£5mit isexemptfromtheProspectusDirective,butthedocumentproducedbyAbundance iscomparable in detail. The document is reviewed by lawyers and then signed off by Abundance as a FinancialPromotion.For investors buyingdebentures on the secondarymarket there is debentureperformancedata for them touse –specificdataisenergyproductionagainsttargetandcashreturnedagainsttarget.All clients before investing are shown generic platform based risks, the clients are also warned to read the Offerdocumentcarefullytoensuretheyunderstandtheprojectspecificrisks.Clientsneedtoconfirmtheyhavereadandunderstoodtheserisksbeforebeingallowedtoinvest.InadditionclientsareshownandmustconfirmacceptanceoftheAbundanceplatformTermsandConditions.


6.1. Postinvestmentservicetoinvestors

Abundanceprovidesanongoingservicetoinvestorsthroughtheprovisionofthefollowing:

• AssetManagement:monitoringtheperformanceoftheunderlyinginvestmentandtheissuingcompany.

• Secondarymarketservices:providingfreesecondarymarketservicestoinvestors.• Data&updatesfromtheproject:provideinvestorswithongoinginformationontheperformanceof

theirinvestmentandthecompany.• Cashhandlingservices:manageanycashreturnstoinvestmentsandmoneymovementsrelatedto

secondarymarkettrades.• Taxwrappermanagement:AbundanceisanISAManagerandalsoadministerselementsofitspension

offer,whererequiredthefirmthereforeinteractswithHMRCtoprovideongoingdatainlinewithitsresponsibilities.

6.2. PostinvestmentservicetoRESdevelopers

Abundanceprovidesthefollowingongoingservicestoitsborrowers:

• Investorrelations:Abundanceisthepointofcontactfordebentureholders,RESdevelopers

thereforedonothavetohandlequeriesfromtheirinvestorsonadaytodaybasis.


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• Debentureregistrarservices:Abundanceholdstheregisterofdebentureholdersonbehalfoftheissuerandupdatesthisifthereareanydebenturesales.Thefirmalsothereforemanagesanycashreturnspaidbythedeveloper.

7. PlatformoperationalperformanceAbundance uses Forecast Cash Returned against Actual Cash Returned as the investment performance metric.Abundancehaschosenthismethodbecause theystructureamortisingdebentureswherea fixedamountofcash isreturnedeachyear,thismeanstheirinterestratesstartlowbutincreaseovertimeasthesameamountofcashispaidoutonadecreasingamountofoutstanding.Intotal,Abundancehaspaid€2,640,247.40toinvestors.Thisequatestoanaverageforecastperformanceratioof101.31%.8. Platformoperationallearnings

1.1. StartUpPhaseAbundancebecamethefirstregulatedcrowdfundingplatformintheUK,whichhasbeencrucialforbuildingtrustwithdevelopersandinvestors–aswellasunderstandingtheregulatoryenvironment. Inthestartupphasetheplatformhas to be very dynamic – always changing and improving operational processes. By engaging closely with therenewableenergyandfinancesectors,itisimportanttohavesufficientexpertiseonboard.

1.2. ScalingPhaseInthescalingphaseAbundancewillbelookingtoexpandcapabilitiesinthesecondarymarketanditsofferingoftypesof investments – particularlywithin tax-freewrappers. Thiswill help attractmore investorswho don’t havemuchexperienceinvestinginRES.Inaddition,itwillbecrucialtobalancethesupplyofnewprojectsontheplatformswiththe ability to raise themoney,making sure the number and size of projects doesn’t grow too quickly for the alsogrowinginvestorbase.

AbundanceProjectCaseStudy1:UpperPitforthieWindgenPLC

1. Company&technologydescription

UpperPitforthieWindgenPLCisacompanythathasbeensetuptoown,operateandmanageasingle500kWwindturbineontheUpperPitforthieFarmnearStonehaveninAberdeenshire.ApowerpurchasingagreementisinplacetosupplyNorthEasternFuels(awoodchippinganddryingbusinessonUpperPitforthieFarm).


UpperPitforthieWindgenisrunbytwodirectorsandshareholders,oneofwhichisalsodirectorshareholderofNorthEasternFuels.Abundancehasbeenappointedtoarrangeasecondlong-termdebenturetorefinancethisproject.


The investment is a fixed return transferrable Debenture with a term period of 1 year. The debenture offers aninterestrateof12%.ThedebenturewasthefirsttimethatAbundancehadofferedashorttermconstructionbond,itrepresentsasignificantdeparturefromtheirstandardmodel.4. RESDeveloperMotivations



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UpperPitforthieWindgenwentforcrowdfundingforthefollowingreasons:

• Developerfaceduniquechallengeswiththeprojectwhichmeantthatitrequiredamorebespokefundingsolution.Specificallytheprojecthadtoraisemoneyquicklytofinanceconstruction,inadditiontheproject’sgridconnectionwasnotduetocomethroughimmediatelythereforeintheearlyyearstheincomewasrequiredtobegeneratedsolelyviaapowerpurchaseagreementwiththeFarmhostingtheproject.TheseriskscouldbemanagedandinvestorsprotectedbutitrequiredextensiveworkonAbundancetoputthecorrectmitigantsinplace,thisisworkthatmoretraditionalfunderswerenothappytodo.


• Abundance’strackrecordfinancingsingle500kWwindturbines:Abundancehaveraised

approximately£4.5mfor4similarprojectswhichwillmakeitpossibletorefinancetheprojectafterthewindturbineisbuilt.


UpperPitforthieWindgenareusingdebtastheywouldliketoretainownershipandcontrolovertheassets,theyareusingshort-termdebtastheprojectisscheduledtofitinwithotherdevelopmentsontheUpperPitforthieFarmandaimstosetupalong-termdebtarrangementthroughAbundanceDebenturesoncetheturbinehasbeenbuilt.


5.1. DescriptionofmarketingactivityTheproject followedAbundancenormalmarketing strategy,but in additionAbundance talkeddirectly toHighNetWorthinvestorsintheirnetworksothattheofferwaslargelypre-placedbeforeitwentlive.


Mainstreamethicallymindedretailinvestorswhoarelookingforshort-termincomegeneratinginvestments.


CurrentlypredominatelydirectthroughtheAbundancewebsitewithtrafficdriventothewebsiteviatraditionalanddigitalMarComms.

5.4. DescriptionofmessagingWin/Winmessagewhichemphasisesthe investmentasgeneratingapositiveoutcomeforsociety/environmentaswellasadecentreturnfortheinvestor.6. DescriptionofexampleactivitiesUsing brand led outside communications backed up with investment need led conversion adverts online and innewspapers.7. FundRaiseData

Platform Abundance


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Developer WindGen ProjectName UpperPitforthie

WindgenTechnology WindLocation England FinancialInstrument DebtSecurityTermPeriod 1yearInterestRate/IRR 12%Dateraisestarted 24-Nov-15Dateraiseclosed 03-Dec-15DaysOpen 9 TotalAmountRaised EUR3,045,000Numberofinvestors 408 MeanInvestmentAmount EUR7,463MedianInvestmentAmount EUR1,400 SmallestInvestment EUR7LargestInvestment EUR315,000 Investmentrunrate EUR338,333 Youngestinvestor(age) 19Oldestinvestor(age) 94 MeanAge 47MedianAge 46 %inagebracket: 18-35 26%36-50 36%51-65 30%66+ 8% %Male 76%%Female 24% %investorsfromoutsideplatformhomecountry

4.17%

InvestorResidentCountries Belgium


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Denmark Finland France Germany Italy Malta Portugal Switzerland



Thisproject faced specific challenges– forexample it hada tight timescale togetbuilt to secure the feed in tariffprice,thereforethemoneywasrequiredquickly.TheraisewasalsothelargestraiseAbundancehadperformedandalso the first timeAbundancehadofferedpure construction risk to their investor base. Tomanage the risk of notraising the cash quickly a high interest ratewas put on the debenture but also a provisional offer documentwasproducedaheadoftheformallaunchwhichwasusedtopreplacethedebenture.

8.2. DescriptionofsuccessdriversStrong brand builds trust with potential clients: Abundance has built a track record of on target investmentperformancethereforeinvestorstrustedtheplatformwhentheyofferedadebenturewithadifferentriskprofile.

8.3. Descriptionofmistakes,lessonslearntThe fund raisewas very successful, the combinationofpre-placementworkandhigh interest rateensureda rapidfundraise.


Nothingfromthisprojectcreatedapolicyask.

AbundanceProjectCaseStudy2:BNRGGorsePlc

1. Company&technologydescriptionBNRG Gorse Plc (BNRG Gorse or Gorse) is a company set up to own and manage ground-mounted solar PVinstallations that are 249kWp in size in the south and south-east of England. BNRG Renewables funded theconstructionoftheprojectintheearlymonthsof2014.CashraisedfromAbundanceinvestorswasusedtorefinancethetwositesinKentoncetheprojectswerecompletedandgeneratingelectricity.



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BNRGGorsePlcisownedbyBNRGRenewablesLtd.ThedirectorsofBNRGGorsearealsodirectorsofBNRGRenewables.BNRGRenewableshaspreviouslyusedtheAbundanceplatformtoraisecapitalforHooSolarin2013.BNRGGorseequityisownedbyBNRGRenewables,Abundanceinvestorssupply100%ofthecompanydebtviathedebentureissue.


TheinvestmentisafixedreturntransferrableDebenturewithatermperiodof20years.ThedebentureoffersanIRRof7.35%andpaysoutafixedamountofinvestmentincomeandcapitalevery6months.Thecapitalispaidbackinequalinstalmentsacrossthetermperiod.4. RESDeveloperMotivations


BNRGGorsewentforcrowdfundingforthefollowingreasons:

• Engagepublicinvestors:thedeveloperiskeentobroadenparticipationinUKrenewablesandfeelspublicinvestmentcanhelpwiththis.

• Sourceofcapital:thedeveloperwantstoownandoperateaportfolioofsolarfarmsandhasstruggledtofindaffordable20yearfinancefortheirprojects.


BNRGGorsedecidedtogoaheadwithAbundancebecause:

• AbundanceistheonlyplatformintheUKproviding20yearprojectfinancetypeofferandbeyondcrowdfundingisalsooneofthefewplacesofferinglongtermprojectfinance.

• ThedeveloperhasusedtheAbundanceplatformpreviouslyforthesuccessfulHooSolarproject.

4.3. RationalforchoiceofinvestmentstructureBNRGGorseareusingdebtas theywould like to retainownershipandcontrolover theassets, theyareusing longtermdebtastheprojectdoesnotgeneratesufficientcashtopaybackcapitalinashorterperiod.5. Fundraisedescription

5.1. DescriptionofmarketingactivityTheprojectfollowedAbundancenormalmarketingtemplate.


Mainstreamethicallymindedretailinvestorswhoarelookingforlong-termincomegeneratinginvestments.

5.3. DescriptionofchanneldeployedCurrentlypredominatelydirectthroughtheAbundancewebsitewithtrafficdriventothewebsiteviatraditionalanddigitalMarComms.


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5.4. DescriptionofmessagingWin/Winmessagewhichemphasisesthe investmentasgeneratingapositiveoutcomeforsociety/environmentaswellasadecentreturnfortheinvestor.6. Descriptionofexampleactivities

Usingbrandledoutsidecommunicationsbackedupwithinvestmentneedledconversionadvertsonlineandinnewspapers.

7. FundRaiseData

Platform AbundanceDeveloper BNRG ProjectName BNRGGorseTechnology PVGroundLocation England FinancialInstrument DebtSecurityTermPeriod 20yearsInterestRate/IRR 7.25%Dateraisestarted 04-Dec-13Dateraiseclosed 27-Jun-14DaysOpen 205 TotalAmountRaised EUR1,022,000Numberofinvestors 569 MeanInvestmentAmount EUR3,585MedianInvestmentAmount EUR350 SmallestInvestment EUR7LargestInvestment EUR70,000 Investmentrunrate EUR4,985 Youngestinvestor(age) 18Oldestinvestor(age) 84 MeanAge 46MedianAge 45 %inagebracket:


44

18-35 30%36-50 32%51-65 29%66+ 9% %Male 78%%Female 22% %investorsfromoutsideplatformhomecountry

2.11%

InvestorResidentCountries Denmark Finland France Germany Greece Italy Norway Switzerland


8.1. DescriptionofchallengesTheprojectat the timewasoneof the largest raisesofferedbyAbundance, itwas thereforechallenging to fill theproject in a timely fashion. Also as the project was one of the earlier projects by Abundance, the lack ofmaturesecondarymarketwasaturnoffforpeoplewhenfacedwitha20yeardebenture.

8.2. DescriptionofsuccessdriversThekeydriverofsuccessonthisprojectwasthefactthatthedeveloperhadalreadyraisedmoneyontheplatformandthatprojecthadperformedwell.

8.3. Descriptionofmistakes,lessonslearntn/a


Fordebtsecuritybasedplatformsensuringthatthere isawell functioningsecondarymarket isessential.Abundancebulletin board secondarymarket is demonstrating itself toworkwell, it operates a little likeEBay, but the customer experience could be improved if there is amore flexible understandingofwhatconstitutesaMultilateralTradingFacility(MTF).CurrentlywhentradingontheAbundancebulletinboardclientsneedtoconcludetheir tradeoffplatformtoavoidbeingclassifiedasanMTF- itwouldprovideamuchbetter investmentexperience ifclientscouldconcludetheirtradesontheplatform.Seetheendofthedocumentformoredetails.


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AbundanceProjectCaseStudy3:REGWindPower

1. Company&technologydescriptionREGHighDownPlcwassetuptoown,operateandmanageasingle500kWwindturbinenearthevillageofPensilva,Cornwall.REGHighDownisownedbyRenewableEnergyGenerationLtd(“REG”)andisrunbyREGWindpowerLtd(alsopartof theREGGroup) throughanAssetManagementAgreement. Theprojecthas laterbeen sold toa fundmanagedbyBlackRock,theglobalinvestmentmanagementfirm.


REGHighDown is runby5directors,oneofwhich is theCEOof theREGGroupandtheothershavevariousotherrolesinthecompany.ThewindturbinehasbeenconstructedandfinancedbyREGthroughashareholderloanandthecapitalraisedbyAbundanceinvestorwenttopayoffthatloan.


TheinvestmentisavariablereturntransferrableDebenturewithatermperiodof20years.ThedebentureoffersanIRRof8.4-9.3%andpaysoutinterestandafixedamountofcapitalevery6months.Thecapitalispaidbackinequalinstallmentsacrossthetermperiod.

4. RESDeveloperMotivations


Engagepublicinvestors:thedeveloperiskeentobroadenparticipationinUKrenewablesandfeelspublicinvestmentcan help with this. At the time that REG decided to work with Abundance there was growing pressure from theGovernmentforonshorewinddeveloperstoopenupprojectsforlocalinvestment.HighDownbecameatestcaseforthecompany.

4.2. RationalforusingspecificplatformREGWindpowerdecidedtogoaheadwithAbundancebecause:

• REGhasstruggledtofindaffordablelong-termfinance,payingoffshareholderloanfreesupcapitalforcompanytotakeonotherprojects.AbundancecombinedlocalinvestmentwithfixingaspecificfinanceneedforREG.

• Abundanceprovidedauniqueopportunityforthedeveloperstoengagemembersofpubliclocallyandfurtherawaytoengagewithrenewableenergy.


REGHighDownwould like to retain ownership and control over the assets, they are using long term debt as theprojectdoesnotgeneratesufficientcashtopayback inshorterperiodandwould liketo freeupcapital to takeonotherprojects.5. Fundraisedescription


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5.1. DescriptionofmarketingactivityTheprojectfollowedAbundancenormalmarketingtemplate.


Mainstreamethicallymindedretailinvestorswhoarelookingforlong-termincomegeneratinginvestments.


CurrentlypredominatelydirectthroughtheAbundancewebsitewithtrafficdriventothewebsiteviatraditionalanddigitalMarComms.

5.4. DescriptionofmessagingWin/Winmessagewhichemphasisesthe investmentasgeneratingapositiveoutcomeforsociety/environmentaswellasadecentreturnfortheinvestor.6. DescriptionofexampleactivitiesUsing brand led outside communications backed up with investment need led conversion adverts online and innewspapers.7. FundRaiseData

Platform AbundanceDeveloper REGWindPower ProjectName REGHighDownTechnology WindLocation England FinancialInstrument DebtSecurityTermPeriod 20yearsInterestRate/IRR 8.4-9.3%Dateraisestarted 13-Feb-14Dateraiseclosed 15-Jul-14DaysOpen 152 TotalAmountRaised EUR2,100,000Numberofinvestors 672 MeanInvestmentAmount EUR3,125MedianInvestmentAmount EUR700 SmallestInvestment EUR7LargestInvestment EUR140,000


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Investmentrunrate EUR13,816 Youngestinvestor(age) 18Oldestinvestor(age) 94 MeanAge 46MedianAge 46 %inagebracket: 18-35 28%36-50 32%51-65 31%66+ 9% %Male 77%%Female 23% %investorsfromoutsideplatformhomecountry

2.53%

InvestorResidentCountries Denmark Finland France Greece Italy Luxembourg Netherlands Norway Switzerland



Thekeychallengewasthat theprojectwas the largestAbundancehadtakenontodate,soAbundancehadtoputsignificantresourcesintogrowingitsinvestorbaseandfindinvestorslookingforlong-termprojects.

8.2. DescriptionofsuccessdriversThekeydriversofsuccesswere:

• Theprojecthadahighreturnrate.• Theprojectwaswithawell-establisheddeveloper,anAIM-listedcompany,whichhelpedbuild

investorconfidence



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Nothingtoreport


N/a


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PlatformCONDA1. PlatformRegulatoryDescriptionCONDAisorganisedasacorporation.Inordertostartabusinessasacrowdfundingplatformtheauthorisationforthebusinessofaninvestmentcounsellingandtheauthorisationforbusinessconsultancywasneeded.Whentheplatformwasstartedthebusinessofinvestmentplatformswasnotknown,thereforetheywentfortwobusinessauthorisationstomakesurelegalprerequisitesaremet.2. Website(Platform)capabilitiesThekey featuresof thewebsitearean investmentplatform to invest into companies, further there is adiscussionfora, a newsroom and a pagewhere details of projects are presented. In addition to that a blog is provided. Theplatformitselfcanchecktheidentityofinvestors.3. InvestmentproductdescriptionAtCONDAonlysubordinatedloansareofferedtoinvestors.Inthecaseoffinancingstartupsinvestorsgetaninterestrateinreturnandadditionallyabonusbasedonthevalueofthecompany.Whensmallandmediumsizedcompaniesarefinancedinvestorsgetaninterestrateinreturnandabonusbasedonthevolumeofsales.ThesecondoptionwillonlybechosenbycompaniesthatalreadyhaveapositiveEBIT.4. PlatformsdeveloperonboardingprocessProjectsofferedtoCONDAwillbefirstscreenedbyan innovationscoutthatmakesafirstanalysis, ifacooperationwiththecompanyisdesirable.AfterwardsanadvisoryboardwilldeepentheassessmentandaMini-DueDiligencewillbemade.Incaseofenergyprojectadditionalexternalexpertiseisneededinordertoassesstheprojects.5. InvestmentinformationprovidedtoinvestorsAtCONDAInvestorsgetsupportwiththefinanceplanandthebusinessplan.Informationisprovidedatthewebsite.Furthertheyhavethepossibilitytoaskquestionsattheonlinesection.6. OngoingServicetoBorrowersandInvestorsThecompaniesareaccompanieduntiltheyleavetheplatform.Usuallyasubordinatedloanhasaninvestmentperiodof5to10years.Inthistimequarterlyreportsarechecked.


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CONDAProjectCaseStudy:CleanCapital,SolarpowerplantLärchenholz

1. CompanyandtechnologydescriptionToimplementtheprojectaGmbH(LTD)wasfounded.TheGmbHbelongsto80%tothecompanyJanach,20%ofthecompany is owned by Clean Capital. TheGmbHhas 35.000 Euro equity. the restwas financed by a bank loan andequity.However,itwasnotonlyasolarpowerplantthathasbeenfinanced,butalsotherenovationoftheroof.Itisstillpossiblethattheequitywillbeincreasedforfurtherprojects.Finallyasolarpowerplantwith150kWpwasrealised.Afeedintariffof18,12Centhasbeengrantedfor13years.Theprojectwasrealisedintwosteps.In2014onepartoftheprojectof15kWphasbeenrealisedandin2015thesolarplantwascompleted.2. CompanyCapitalStructureTheequityofthecompanyamountsto35.000.Thefinancevolumeoftheprojectwas330.000Euro.About50% isequity,about50%abankloan,while145.000wasraisedthroughcrowdfunding.

3. Investmentproductused(loan,equitybond)andtermsAsaninvestmentproductforcrowdfundingsubordinatedloanswerechosen.4. RESDevelopermotivationsFortheprojectdeveloperthemainmotivationwastorealisealargescaleprojectwithcitizenparticipation.Theyalsowanted to give local investors thepossibility toparticipateand theywanted toattract attention for their company,cleancapital.FinallythisworkedoutandCleanCapitalwasinvitedtomanypresentations.Furthertheinvestmentvolumeoftheprojectwasveryhigh.Itwasalwaysthetargetoftheprojectdevelopertogetprojectfinanceoverabankbutnonrecourse.Butitwasdifficulttogetabankloanforthewholesum.Thiswouldhaveonlybeenpossibleiftheywouldhaveprovidedprivatesecurities,likebuildingsortheirflat,whichtheydidn'twanted.5. FundRaiseDescriptionOn implementing the solarplant, theywenton theassumption thatCrowdinvestorswant somethingexciting. Theydon'twant to invest insomethingboring.Theywanthighyieldsandshort-termyields,while takinghighrisks.Theythinkthatthisworksoutperfectly for financingStart-upsandCONDA, theplatformtheychose isspecialised inthis.The platform itself supported the projectwith facebook-entriesand newsletters, but themain part of thework toidentifyinvestorswasdonebytheprojectdevelopers.Finallythemajorpartofinvestorswasmobilisedbytheprojectdevelopers.CleanCapitalhadtheadvantagethattheyhadalreadyexperienceinfinancingprojects.Thereforetheyknewhowtogetto investors.Thiswashelpful inmobilising interested investorsasmobilising investorsthroughtheplatformwaslesssuccessful.Thisisthereasonwhytheprojectdeveloperstatedthattheywillnotdoasecondprojectinthatway.The costs for theplatformwere veryhigh, about10%of the investment volume.As the yieldsof solarprojects inAustriaarevery low,thesecostsareperceivedasveryhigh.These lowyields inAustriaaremainlyduetoasubsidyschemethatgrantsfeedintariffsonlyforaperiodof13years, inGermanythefeedintariff isgrantedfor20years.Therefore the yields are higher and according to the project developer, it works out better there to include acrowdfunding platform. Clean Capital will keep on organising citizen participation models, but they will not do acrowdfundingcampaigninthisformagain.6. FundRaiseData


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IngeneralCleanCapitalwantedthatinvestorsdonotinvestmorethan5.000Euroeach.Ingeneralalotofsmallscaleinvestorscouldbemobilised.Mostpersonswereolderthan40yearsandusedcrowdfundingasanalternativetothesavings book. One investor contributed 20.000 Euro, in total about 50 persons participated. On average peopleinvested2.500Euro.7. Challengesandlessonslearned.As a project developer using a crowdfunding platform can be useful, if the platform is capable of mobilising theinvestors and the costs are acceptable. If theprojectdeveloperhas tobear the costs andalsohas tomobilise theinvestors,thanitisnotfeasible.ForCleanCapitalthisformoffinancinghasnotproventobeworthwhile.Still,CleanCapitalhadverygoodexperienceswithcitizenparticipationmodelsandwillfurtherworkonthis.Therearemanysmallcooperativesandsmallcitizenparticipationmodelsthatworkedoutverywell.Theregionalidentificationisveryimportantaswell.Ontheotherhand,financingovercrowdfundingplatformsisseenasratherdifficultastheyarespecialisedonfinancingStartups.Inthisaspecttheyhaveagoodnetworkofinvestors.ProjectsasthesolarpowerplantLärchenholzprovedtobeverydifficultontheotherhand.CleanCapitalstatedthattheyarenotthinkingaboutanotherprojectlikethis.

CrowdfundingforRESinAustria-anoverview1. CrowdfundinginAustriaAustriaisoneofthetargetcountriesoftheCrowdfundResproject,whilecrowdfundingusinginternetplatformsisstillat an early stage in Austria. Themarket for crowdfunding has started to develop recently and new crowdfundingplatformsemergedinthelastyearsattractingmoreandmoreparticipants.InAustriacrowdfundingplatformsmainlyusingequity-basedcrowdfundingtoprovidefinanceforstartups.Further,someplatforms specialised inprojects for sustainability andenvironmentalprojects.Whenengaging in the fieldofrenewableenergy,crowdfundingisusedmainlyforraisingfundsforequityforthecompany.Thereisalsoinvestmentin concrete projects or technologies but not in power plants or installations. In that instance also reward basedcrowdfundingisused.OneexampleistheMini-Solar-panelcalled“Simon”thatÖkostromAGwantedtodevelop.TheystartedaCrowdfundingCampaignin2015withtheplatform“1.000x1.000”.Intotal985fundersgave654.223Euroandenabledtheprojecttobefunded.TheinvestorswerepromisedaMini-Solar-panelasreward.Interestingly crowdfundingplatformsdidnot start toengage in the fieldofproject financing for renewableenergyinstallations, with the exception of the project Lärchenholz with the crowdfunding platform CONDA, which wascompletedin2015.Aspointedoutinthecasestudyabove,theprojectdeveloperwasnotverysatisfiedandwillnotstartasecondprojectinthatway.Themainreasonwasthatmobilisinginvestorsovertheplatformdidnotworkoutaswellasexpected.Theprojectdevelopershadtofind investorsmainlyontheirown.Thereforetheirconclusionisthatcrowdfundingplatformsarespecialisedinfinancingstartups,butarenotverygoodinprojectfinancing.However,thisnegativeexperiencecanbealsoduetothefactthatthiskindofCrowdfundingisnotverycommoninAustria. It may also be the case that crowdinvestors aremore interested in financing startups and have differentexpectationsregardingthelevelofriskandyieldsforfinancingrenewableenergyprojects.ThisissomethingthatalsorenewableenergyexpertCorneliaDanielGruber(2015)highlights.Sheexplainedthattheannual returns are too low for crowdfunding platforms in order successfully engage crowdinvestors in projectfinancingforrenewableenergyinstallations.


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2. PotentialforcrowdfundingplatformsWhilethecrowdfundingplatformsdonotengageinprojectfinancingforrenewableenergyprojectsyet,manyexpertsseepotentialforfutureinvolvement.FortheenergyadvisorGeorgGünsberg,crowdfundingviainternetplatformsisverytangibleandofferseasyadministration.PeterMolnar,formerdirectoroftheClimateAllianceAustria,acoalitionof954municipalitiesinAustria,wouldwelcomecrowdfundingplatformsengaginginthatfield,andexpectspositiveeffects tomunicipalities. This effect could be even strengthened by using the platform as an information hub formunicipalities.Critical feedbackcamefromElfriedeSixt,acrowdfundingconsultantandauthorof thebook“SchwarmfinanzierungundCrowdfunding“.Shearguesthatcrowdfundingplatformsarealsointerestedintheirownannualyields.Thiscanbecostlytomunicipalities.Municipalitiesandprojectdevelopersthereforehavetheoptiontosimplycollectmoneyontheirownandsavethemoneyfortheservicesofaplatform.Shesaidthatusingcrowdfundingshouldbetakenintoconsideration,ifthemarketingeffectisimportanttotheclient.Thereforethecostsoftheplatformarepartlyoffsetbythemarketingeffectgeneratedthroughthecrowdfundingcampaign.IncontrasttothatMatthiasKomarek,whosupportsmunicipalitiesinsettingupsolarenergyprojectsinlowerAustria,identified potential for cost reductions through crowdfunding platforms. If standardised legal and financialmodelswere offered to municipalities or project developers, costs for legal consulting could be saved. Further, manymunicipalitiesorprojectdevelopersareworriedabout legalconsequencesiftheirmodelusedwasnotapprovedbythe legal authorities. Actually many municipalities were faced with legal problems in the past by the financialauthorities inAustria fornot settingup financemodelsproperly.Thereforestandardised financialand legalmodelsoffered by a crowdfunding platform that are legally proven, could be another beneficial point for crowdfundingplatformstoenterthemarket.Ingeneralthelegalenvironmentwouldallowforcrowdfundingplatformstoenterthestage.GregorLässer,lawyerinthefederalstateofVorarlberg,statedthatingeneraltheissuanceofbonds,sharesandsubordinatedloanswouldbesuitable for crowdfunding in Austria as well. But he also identified disadvantages: many citizens are engaging infinancingregionalrenewableenergyprojectsbecausetheregionalidentityisimportanttothem.Ifinternetplatformsattract investors that are far away from the planned installations this would also have negative impacts on theregionalcharacterofprojectsandcouldhaveimpactsontheacceptancebylocalcitizens.


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Conclusion:ComparisonofCaseStudies

PlatformConclusions

PlatformRegulatoryDescription

The case studies highlight that the French regulatory environment is significantly more restrictive than otherjurisdictionsandthatthisinturnperhapscurtailsthegrowthofLumo,somethingthatisarguablytothedetrimentofFrench investors, RES developers and the French crowdfunding industry. The restriction on operating a secondarymarket, advertising rates of return and limiting investment to only French investors does not appear to increaseinvestorprotectionifanythingitunderminesprotectionforinvestorsbyweakeningthecrowdfundingbusiness.IntheUK market platforms can operate a secondary market and advertise interest rates and this has now been donesuccessfullywithnoconsumerdetrimentforanumberofyears.Fromthecasestudies,theregulatoryenvironmentofGermany, the Netherlands and the UK appear to have struck the right balance between investor protection andplatform freedom and the platforms appear to be developing robust business off the back of the regulation. Ifregulationdoesnotallowplatformsthespacetogrowtheninvestorswillloseout,astheplatformstheyareoperatingonwillneverreachscale.Conclusion: This report would recommend that the French regulator should review their crowdfunding policyframeworkandperhapsdrawontheexperienceofotherjurisdictionssuchastheNetherlands,GermanyandtheUK.

Website(Platform)capabilities

In terms of platform capability Abundance appears the leader in terms of platform sophistication with multipleaccounttypes,afullyfledgedsecondarymarketandfullmoneyprocessingcapability.Lumo,BettervestandOneplanetcrowdappeartohavesimilarfunctionalityfocusedonfundraisingandallplatformsappeartodeliverthecoreinvestmentprocessinarobustfashion.Austria’sCONDAlimitedsuccess incrowdfundingforRESprojects doesnot appear tobederiving froma lackof platformcapabilities, but rather fromothermarketfactors.Conclusion: At this point in the development of RES crowdfunding technology does not seem to be core driver ofgrowth.Thoughasthemarketdevelopsthiscanbeexpectedtochangewithinvestorslookingforincreasinglevelsofsophistication in their post investment care and perhaps starting to select platforms on their broader technologycapability.

Investmentproductdescription

Allplatformsusedebtinstruments(loansorbonds),thisissomethingwhichisnotsurprisingbecauserenewablesarepredominantlydebtfinanced,withoftenprovidingup100%oftheprojectsCAPEXrequirements.Themarketfordebtisthereforesignificantlylargerthantheequitymarket.Inadditionbyfocusingonthedebtelementthecrowdfundingplatforms are not responsible for the management of the asset, but can leave that to the project owners andrenewablesprofessionals.ThedominantmodelusedistheprovisionofdebttoanSPVwhichholdsthegeneratingasset.TheoutsidertothisistheBettervestprojectwhere the loan isprovideddirectly to thehotel for thepurchaseof theasset. This arguablyincreasestherisktothecrowdfundinginvestors,becausetheinvestorisdirectlyexposedtothewiderrisksassociated


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withtherunningofthehotelaswellaspotentiallyhavinglessrightsovertheassetincaseoftheHotelgoingoutofbusiness.Thereisalsoatendencytousesubordinateddebtforthecrowdfundedelement,somethingthatcanbeseenintheOneplanetcrowd,BettervestandLumoprojects.However,inthesecasesthetermsareimprovedtoreflecttheriskinthecaseoftheOneplanetcrowdloan.Conclusion: To date the RES crowdfunding covered in this report appear to have maintained a careful balancebetweenriskandreward,itisimportantthiscontinuesastheplatformsstarttoscaleoverthecomingyears.

Platformsdeveloperonboardingprocess

REScrowdfundingplatformsdonotappear todoactiveadvertising to recruitdeveloperpartners,across theboardthereappearstobeafocusonbuildingrelationswithaselectedgroupofdeveloperssothatrepeatbusinesscanbedevelopedwiththesedevelopers.Thereappearstobeacrosstheboardarecognitionthatdetailedduediligence isrequiredwithallplatformshavingcomprehensiveprocessesforassessingtheviabilityoftheproject.WhetherthatisanoutsourcedprocesssuchaswithLumowhere thecrowdareput inonly ifaprofessional investor/ lenderhasalreadycommitted to lendmoney, toprocesses such as Abundance, Oneplanet crowd and Bettervest where experienced internal teams (and externaltechnicalexperts)assesseach individualproject. Incomparisonto thewidercrowdfunding industry,which includesstartupanddonationcrowdfunding,standardsforduediligenceprocessesarehigherforthefourREScrowdfundingcompanies. Abundance seems to take further steps and,where required, demand changes to projects in order tomitigaterisk.Conclusion:RESCrowdfundingplatformsappeartohaveadvancedprocessesforconductingprojectduediligenceandtakecaretoensurethattheprojectsraisingcapitalontheirplatformsarewellrun.

Investmentinformationprovidedtoinvestors

Lumo,BettervestandAbundanceallprovidespecificriskwarningsthataclienthastoclickthroughbeforetheyareable to read the full investment information. In all three cases this is prescribed by their respective regulators. InAbundanceandBettervestcasesthisdoesnotappeartohavecurtailedgrowth.Allplatformsprovideorhavetheintentionofprovidingadownloadableinvestmentmemorandum.Oneplanetcrowdis currently building this functionality in to their process. In the case of the other platforms there is a regulatoryrequirement to provide a detailed investment memorandum. Bettervest and Lumo provide a range of secondarydocumentationtosupportthesalesprocess,butonAbundanceapartfromaveryshortsummaryoftheprojectdonotprovide any other information. The regulation in theUKmeans investors are focusedon a single documentwhichshouldcontainalltheinformationtheinvestorrequirestomakeaninformeddecisiontoinvest.Allplatformsdoprovidesomeadditionalsoftercontentsuchasphotosandvideostosupportthesalesprocess.Conclusion:thereappearstobebroadrecognitionthatadownloadableofferdocumentisrequiredthatiseitherdueto regulatory requirements (Bettervest and Abundance) and/or simply from an understanding that it helps theinvestmentsalesprocess(OneplanetcrowdandLumo).Currentlythereisnoevidenceregardingwhatinvestorsprefer-anarrayofdocumentsorasinglesummarydocument-butweexpectthatthiswillbecomeclearerovertime..


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OngoingServicetoBorrowersandInvestors

All platforms provide ongoing services to borrowers and investors – this includes project updates and generalinvestors relations and interest repayments. Most platforms tend to monitor the financial and operationalperformanceoftheproject(forinstancecheckingthecompanyhasitsvariouscontractsandinsurancesinplaceanduptodate).Abundanceisalsouniqueinprovidingasecondarymarketservicetoitsclients.Conclusion:allplatformsprovidesomedegreeofongoing informationto investors.Abundance is theonlyplatformproviding after sales service, though at this point it is not clear that this translates directly into broader sales orreputationalbenefit.

PlatformOperationalPerformance

Withoneexception,alltheplatform’sprojectsarematchingorexceedingtheirforecastedperformance.Conclusion:Thisspeaksparticularlywellfortheplatforms’duediligenceprocessesandforecastingabilities.Whileitispossiblethattheforecastfiguresmayusealowbasescenario,theforecastsareattractiveenoughtoraisesubstantialinvestmentfromthepublic.GiventhestrongperformancefiguresfortheREScrowdfundprojects,thisgivesinvestorsgreaterconfidencetoinvestinfutureprojectsandsetsthebasisforahighergrowthtrajectoryforREScrowdfunding.

Overviewofprojectcasestudy

RESDevelopermotivations

There are two reasons forRESdevelopers to seek crowdfunding for their projects.Ononehand it is thedesire toengage the public with their projects or business and on the other hand it is a simple desire for cash. In somecountries therearemovestoobligatedevelopers tooffercommunities thechanceto invest, in theUKfor instancethisanagendawhichisbeingadvancedanditisstartingtocreatesomenewprojectopportunities.Different platforms appear to be driven by different factors. Lumo for instance is primarily driven by developers’desiretoengagethepublic.Lumo’sdeveloperpartnersdonotappeartohavetroubleraisingcapitalbutincreasinglyare facing localopposition toprojectdevelopment soenabling local investment isperceived tohelpmaintain localsupport.CONDAalsoaidedaRESDeveloperseekingtowidenpublicparticipation.Bettervest,OneplanetcrowdandAbundanceappeartobefillinggapsintheRESdebtmarketworkingondealswhereeithertraditionalfinancewillnotoperatebecausethedealsizeistoosmallorbecausetheprojecthassomeuniquecharacteristicswhichmeansitdoesnotmeettraditionallendingrequirements.SMEsseekingfundsviabettervestalsousethecrowdfundingcampaigntoconnectwiththeirclients(hotelvisitors,gymvisitorsetc.),improvetheirimageandbefeaturedinlocalmedia.Conclusion:differentplatformstargetdifferentRESdevelopermotivations,butthedominantapproachistofillgapsinthedebtmarketforsmallerRESdevelopers.

FundRaiseDescription

Bettervest is theonlyplatformthatprescribesthat theirborrowersshouldbringaproportionof the fundingtotheplatform themselves. This is a tactic used quite often on equity or reward crowdfunding platforms, but bettervestseem to be unique in the RES crowdfunding space in adopting this tactic. RES raises aremuchmore conventionalinvestmentoffersthanaveragecrowdfundingcampaignandtheplatformstendtooperatemoreinlinewiththepeertopeerlendingmodelwheretheyarecompetingwithtraditionalfinance,thereisthereforeadesiretobeseenasatrustworthyfundingpartnerwhocanmeetalltheborrowersneeds.


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All the platforms deploy the online social marketing tools such as Facebook, Linkedin and other digital tools andcertain platforms have experimented with advertising to help support their fundraises. Some platforms have alsoinvested in offline marketing, including print media and events. From the data supplied in the case studies thisappearstohavetranslated intohigher investmentrunratesandhigher individual investmentamounts.What isnotclearfromthecasestudiesistheeffectivenessofthesecampaignsintermsofmarketingcostper€raised.Oneplanetcrowdhavereliedonusingnetworkstobuilditscrowd.Theyrunarewardbasedcrowdfundingplatformaswell asan investmentbasedplatform,on the rewardbasedplatform theprojectsbring theirownnetworks to theplatformtherebybuildingtheoneplanetcrowd,Oneplanetcrowdthentryandconvertapercentageofthesepeopleintoinvestors.Conclusion:allplatformsappear toutilisedigitalandsocialmediabasedmarketingtools,Abundancethe largestoftheplatformshasusedtraditionaladvertisingtactics,Oneplanetcrowdprovideaninterestingalternativeapproachastheyrunrewardbasedprojectstoattractfunderstotheirplatformandsubsequentlyaimstoconverttheserewardbased funders into investors. Lumo builds upon trust and engagement in local communities. Bettervest providesinvestment opportunitieswith shortermaturities. It launched smaller projects at the beginning, building a base ofrepeatinvestors.Sincemostofbettervest’screditorsareB2CSMEslikehotels,theyalsomarkettheprojectsonandoffline.Withoutdetailedworkonmarketingspendagainsteurosraiseditisdifficulttocomparetheeffectivenessofthesedifferentstrategies.

Challengesandlessonslearned.

Growingthecrowd:Forallplatformsandperhapsnotsurprisinglythesizeoftheirinvestorbaseandcostofacquiringnewinvestorswasthecorerestrainttogrowth.Buildingawarenessofrenewableenergybasedcrowdfundingandtheexistingplatformsiskeytoscalingtheindustry.Regulationisadriver:Goodregulationisakeydriverofgrowthandineachjurisdictionthereareregulatoryissueswhichcouldbetackled.No platform is asking for the reduction in regulation per se, but instead that the regulation is designed with fullconsiderationof the risks andoperationalmodelsof thesenewbusiness. Poorlydesigned crowdfunding regulationcancurtailgrowthofplatformsandalsocreateextrarisksfortheinvestors.France: there are a number of constraints on the sectorwhich it is felt could be removedwhile not undermininginvestorprotection.Enablingcrowdfundingplatformstooperatesecondarymarkets,advertiseinvestmentratesandonboardnonFrenchinvestorsarekeyrequirements.Jurisdictions like Germany recently overhauled the Retail Investor’s Protection Act with the intention of providingbetter investorprotectionandcertaintytocrowdfundingplatforms.Yet, there isstilluncertaintyasregardsparallelinvestmentsfromthecrowdandprofessionalinvestors.UK/EU:AbundanceisaMiFIDfirmandoperatesabulletinboard,whichoperatesasasecondarymarket-alittlelikeEbay.Abundanceislimitedinhowitcanoperateitsbulletinboardandspecificallycannotallowbuyersandsellerstoconcludetheirsaledirectlyontheplatform.Investorsthereforehavetoconcludetheirsaleofplatformviaemail. IfAbundancewantedtoenableonplatformconclusionthebulletinboardwouldpotentiallybecategorisedasaMultiLateral Trading facility underMiFIDwhich increases the regulatory capital requirements of the firm significantly. AcrowdfundingplatformdoesnotrequiremanyoftheextracapabilitiesthatanMTFpermissionprovides(specificallytwo way pricing), therefore there is an argument to create regulatory space so that a more advanced form of asecondarymarketcanoperatebutthatstopsshortofofferingfullMTFcapability.


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PanEuropeanStandardsCurrentlyitisdifficultforcrowdfundingplatformstooperateacrossborders.ForinstanceLumoisnotabletotakeoninvestors fromoutsideFrance,whileAbundanceeven though ithasaEuropeanPassport isnot free toadvertise inFrance. Costs and time of entering another Europeanmarket are too high right now. There are also cross borderissuesstemmingfromdifferentinterpretationsofprospectusdirectiveaswellasthefactthatthecostofestablishingandoperatingcompaniesthatissuedebtsecuritiesisverydifferentindifferentcountries.


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FundRaiseData

Thissectioncontainsthequantitativedataonthefundraiseincludingdetailonspeedofraiseanddemographicsofinvestors, where available. There is not sufficient data to make any definitive statements on major trends incrowdfundingforRESprojects,butafewgeneralisationscanbemadehowever.


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Age: there does appear to be a consistency in the age breakdown of investors with investment on average fairlyevenlyspreadacrossthedifferentbrackets.Therearepredominantlylessinvestorsinthe66+age,possiblyduetotheonlinenatureofcrowdfunding.Crowdfunding isamodelwhich is therefore likely toengageyounger investorswithsavingsand investing.Oneplanetcrowd isanoutlier in that itdoesappear tohaveanoticeablyoldercommunityofinvestors-itsmeanis49yearsoldwhileBettervestseemstohaveanoticeablyyoungercrowdwithameanof42.6.Thereisnotaclearreasonforthisdifference,furtherresearchisrequiredtounderstandwhatdrivesthisdifferenceandwhetherthisissomethingspecifictotheNetherlandsorOneplanetcrowditself.Though on the average Abundance appears to have an audience that sits in the middle it does lay claim to theyoungest(18)andoldestinvestor(94).Sex:Onallplatformstheinvestorbaseispredominantlymale.ItmaybethecasethatwomenarelessinterestedininvestmentorinRESprojects,butthereisnotenoughdatatomakeanyconclusions.Moreresearchwouldbeneededonwhythereisasignificantgenderdisparityconsistentacrosstheplatforms.Runrate:AbundanceonaveragehasthehighestrunrateonitsprojectswithOneplanetcrowdcominginsecond.TherunratehasincreasedovertimeonAbundancewhichcanbeexpectedasthecommunityofinvestorsgrowsandtrustintheplatformincreases.Abundanceisthelongestrunningplatformsoitcanalsobeexpectedtohavethehighestrunrate.Itisdifficulttocomparerunratesbetweeninvestmentortechnologytypesduetothesmallnumberofcasestudies,butonethingthatisclearfromthelimiteddatasetisthattherunrateonAbundanceshorttermdebenture(1year)issignificantly higher than the long term debentures it offers, indicating that investors tend to prefer shorter terminstruments.Mean / Median investment: Abundance has the highest mean investment but at the same time due to its lowminimum investment amount has the lowest minimum. Its median investment level is above the average of thedifferentplatforms.Thisseemstobelinkedtothematurityoftheplatform.Non national investors: Abundance and Oneplanetcrowd are the only platforms able to take on investors fromoutsidetheirhomecountry.Abundancehaveseentheirproportionofforeigninvestorsperdealincreaseovertime,thisisprobablysimplylinkedtoincreasedawarenessacrossEurope.Financial Inclusion:REScrowdfundingplatformstendtooffer lowerminimuminvestmentamountsthantraditionalinvestmentandagroupofinvestorsareinvestingsmallersumsofmoney.Thisseemstoindicatethatcrowdfundingisengaginganewdemographicofinvestorswithrenewableenergyparticipationthanhaspreviouslybeenthecase.

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