A web site where people can go to invest their private money into local community-led microgeneration projects in return for a premium on their investment has gone live.
Microgenius takes the crowdfunding concept of getting large groups of people to pool their money and points it at local sustainable energy projects – cooperatives and community benefit societies – such as solar panels for schools, village wind turbines or hydro turbines in country parks.
Not only does the site allow people to support the environment, their communities and get a return on their money, but it also provides the starting point for the community groups that want to kickstart projects, allowing them to offer shares for their schemes.
Microgenius founder, Emily Mackay, says community-based green energy is taking off on the back of the government's two subsidies for green energy generation – the feed-in tariff (FIT) for electricity and the newer renewable heat incentive (RHI) for heat as well as power purchase agreements (PPAs) with energy retailers.
She says a further government initiative for a new community-level tariff which could come into force later in the year if approved is a further demonstration of just how seriously community energy is being taken, all schemes that Microgenius launched projects can benefit from.
Recent community projects such as Brighton Energy, Westmill Solar and Pennine Power are examples, says Mackay, of the sorts of project that could use Microgenius as a national platform to efficiently promote and manage their share offers.
The Microgenius platform is designed to provide a single and straightforward place where investors and projects can come together to participate in these projects, where they can go, pick projects and then purchase them as you would anything else on Amazon or Ebay. The site opens up the possibility of local schemes gaining national interest and could even provide a way for people who have moved on to invest back into their home towns.
It is this unique combination of a community, environmental and financial dividend that can draw people to the web site and it's not just those with looking to do something green, it's for people making decisions about their money across the board says Mackay.
"We compete with all institutions that are asking for your money, from the savings accounts of regular banks to more sophisticated investments. But the community share offers on Microgenius are good for you pocket, good for the environment and good for communities, and Microgenius isn't trying to take a massive middle man cut.
"We think that's innovative, progressive and responsible. And a national platform for community shares specifically is also a UK first. Community shares in coops and community benefit societies is a form of investment that's been around since the 19th century so it's not new fangled, just they didn't have the aggregation technology then we benefit from today."
Mackay founded the company less than a year ago and has been working on the project all of 18 months, to which she is now dedicated full time ("and then some.")
Like so many statups, the business was based on a need she identified when looking for the service herself. "I wanted to participate in a microgeneration project, but was told it's not technically possible to install solar panels because the shape of my roof means it is not viable," says Mackay.
"I then looked online for a web site to tell me how I can give my money to someone else's system, thinking there must be people who want to install but can't afford it."
Mackay never found that site so she created it using the Crowcube platform to handle the crowdfunding functionality: "So everyone is in safe hands."
The company has been bootstrapped with what are relatively small amounts of money diligently spent. A key hurdle to overcome was the many legal implications of such a scheme, essentially what would the legal relationship be between all the partners, would the money be considered loans or equity, were there tenancy issues to overcome.
A lot of specialist questions that needed answering before serious work on the platform could begin. The money to pay for the counsel eventually came through Anglia Ruskin University which awarded Mackay £10,000 in December 2011 through its Centre for Enterprise Development and Research's (CEDAR) Enterprise Fellowship Scheme.
A further £4k came from UnLtd, the Foundation for Social Entrepreneurs and then she benefited from what she describes as a lot of pro bono from some eminent specialists and then CEDAR and the StartupLab at ARU. This, together with Mackay's hard work, has enabled her to build a platform that's ready for its first share offer just 18 months on from work began on the concept.
Mackay is now seeking further investment, but as with most not-for-profits – which Mackay says Microgenius must be in order to align itself with the sector it serves – funding is particularly tough. The company is limited by guarantee, not shares, so the traditional Cambridge funding road for tech companies of angel and VC money is not appropriate as there's no real equity to sell.
The alternative is then a more corporate route, company's with ethical, community or environmental concerns at the forefront of their thinking.
"I'm looking for a loan, participatory agreement (revenue sharing) or sponsorship from a forward-thinking organisation, for example a progressive company interested in enhancing its social and ethical reputation."
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