Solar Company Can "Crowd Fund" $100 Million, Regulators Say
A solar energy company in Oakland has gotten the OK from state securities regulators to raise a lot of money -- up to $100 million -- from regular people on the Internet. Even without much-awaited federal rules on crowd funding, the online movement is taking off in California.
Solar Mosaic is already doing crowd funding. On Sunday, small-time investors flocked to the company's website and, in just six hours, committed $150,000 for solar panels for San Diego's Ronald McDonald House. Investors expect a 4.5 percent return -- mainly from the charity's energy bill payments.
Solar Mosaic founder Billy Parish said, "We felt there was a lot of pent-up demand, but I didn't know there was that much pent-up demand."
Parish expects that demand, and his crowd-funding business, will now reach a whole new scale. The state decided last week to let Solar Mosaic take up new projects without filing a new registration every time. Read the company's prospectus here.
Parish said, "People can now be literally invested in a clean-energy economy in a way that they weren't before."
We asked regulators at the California Department of Corporations if their decision was unique. They declined an interview, and have not yet submitted a written comment. Their decision to allow solar investments from so-called unaccredited investors - people whose net worth is less than $1 million -- is limited to California residents.
Securities lawyer William Carleton eats, breathes and blogs crowd funding. Even though only Californians can invest, Carleton said, "It's a huge change. All the securities lawyers I know, even one that's been in the business for 40 years, there's never been a time where there's so much change."
Carleton pointed out that other California businesses such as AngelList also have been figuring out legal manuevers to raise money online.