[INTRODUCTION]

[0:00:07] ANNOUNCER: This is Financial Climate. Can innovations in finance help the world decarbonize? How can trillions of dollars of assets be redirected to catalyze a net zero economy? We explore these questions through conversations with innovators, experts and investors from around the world. Here's your host, Alex Roth.

[OVERVIEW]

[00:00:34] AR: Most of the time, if you want to invest in private investments, like private equity, or venture capital, or certain types of private loans, you have to have at least a million dollars in net wealth, not including your house, or you have to make at least $200,000 in annual income. The reason for the restriction is that the government wants to protect non-rich people or unsophisticated investors, who might be at risk of getting burned by investments that are either high risk, or that only disclose limited information.

But in 2012, Congress passed a law with the support of the Obama administration, creating an exception for certain types of crowdfunding provided through online platforms. The relevant regulations were finalized in 2016. Now, people who are not accredited, that is regular folks can participate in some private investments with certain limitations.

Franz Hochstrasser, my guest today, figured these new rules could allow small individual investors to help crowdfund a transition to a green economy, while potentially allowing them to reap financial rewards for doing that. So, in 2018, he co-founded a company called Raise Green, where he's the CEO. I sat down with Franz to better understand his vision for Raise Green. I wanted to learn how the platform facilitates financing of green projects and companies, while helping climate related entrepreneurs navigate regulatory and legal requirements.

I wanted to know how Raise Green creates opportunities for small investors to participate in privately funded clean energy projects, and climate related startups. And I wanted to understand better how it balances potential financial risks against not just returns, but also environmental and climate benefits. Here's our conversation.

A note to listeners, nothing in today's episode, or any of our episodes should be taken as financial or investment advice.

[INTERVIEW]

[00:02:38] AR: Franz Hochstrasser, welcome to Financial Climate.

[00:02:41] FH: Thank you so much for having me on. Delighted to be here. Longtime listener, first time caller.

[00:02:47] AR: Right on. You are the co-founder and CEO of Raise Green. So, to start with, can you just say briefly what Raise Green is and what it does?

[00:02:58] FH: Certainly. So, raise Green is a climate investment platform. We actually call ourselves the climate investment platform, because we are really the only occupant of the market that allows for retail investors, folks who make less than 200,000 a year, have less than a million in net worth, or sometimes called non-accredited investors to invest directly into private companies that are building clean energy projects, or climate tech companies.

So, we are an SEC and FINRA registered marketplace, that enables this meeting of private businesses raising capital to deploy climate solutions with those individuals that want to put their money to work in those alternative assets, to move the dial on climate as well as, have the opportunity to make a return when they do it.

[00:03:49] AR: Very interesting. My understanding is you guys do both debt financing, as well as potentially equity financing for early stage climate tech startups. Obviously, those are very, very different markets in terms of how they're typically financed. So, maybe just starting with the debt piece of it, if I'm understanding, right, it sounds like that was the piece that you guys began with?

[00:04:11] FH: That is spot on. We have financed pretty much every imaginable type of security at this point, across 24 different climate deals. So, that has included debt on a one-year term with a yield that's sort of comparable to the one year note, and actually issued those with the Connecticut Green Bank, which I know you've featured previously on your podcast. Those were actually pretty groundbreaking, because that was the first green bond certified regulation CF offering in the country as far as we know.

But everything from that one year note up to – we've done three-year notes on community scale solar, and we've done five-year debt notes on refinanced solar projects, one on a school for example, and then we've done even longer durations. We had a 12-year amortization schedule. In addition to those fixed income products, debt markets, we've issued preferred equity that pays at a fixed income rate, but also has a potential for an equity kicker. And then, full on simple agreement for future equity, which are typically used in venture financing, early stage angel investing, and also convertible notes, and even common equity.

[00:05:25] AR: Can you talk a bit more about the relative differences among the types of projects or ventures on your platform that are typically funded by debt versus equity?

[00:05:34] FH: So historically, we have been about 50% project finance offerings and about 50% venture capital offerings. One way to think about that is you know that project finance typically needs debt and typically delivers fixed income, because the sale of electricity through a power purchase agreement gives the developer of that project, a reliable set of Cash Flows scheduled out over time, as that end user or off taker pays their electricity bills, that developer can repay their investors on that fixed income schedule.

Now, that developer will also need equity, ultimately, to get started. Oftentimes, we can play the role in helping them catalyze that they called sponsor equity in the project finance world. But most of our project finance deals, solar projects, or energy efficiency upgrades have been structured as debt. In the venture side, equity really is how you lock in that ability or the capability of being able to realize outsized returns, because the value of that equity needs to be able to expand. If you've already pledged a certain payment schedule, it can't happen. You get paid first as the debt holder, if you're investing in fixed income, because you're senior to that equity, but you would get paid out before those equity holders realize anything. But if there's great gains to be realized, and holding equity is the way to do it.

[00:07:09] AR: You mentioned a bit earlier about funding the installation of solar panels on the roof of a school. Was that a typical type of project that Raise Green would facilitate financing for? I imagine the arrangement for a solar project would differ from state to state. But maybe you can explain sort of generically how a typical project like that is structured?

[00:07:28] FH: They do differ. They differ from utility area to utility area. But in general, the basic model, if you think about a developer of a project, sort of journeyman who says, “Hey, I know how to build a financial model. I know how to go to a school superintendent or board, and ask for a lease of the roof of the school, and offer discounted electricity to that school.” So that the one that we have done, actually, this was almost exactly the case. The one on the school, that is. Developer out of out of Colorado, came to us and we have this solar project on a private school up in Vermont, it's about 500 kilowatts. We want to refinance it and take the debt, take the future cash flows, use them to repay debt, and then use the capital now to go out and develop new projects.

That was the motivation of that developer. They own and operate the project, and then they also now have taken on, roughly 50 investors who have put money in at a fixed income rate, to get repaid over five years, and recoup their investment and make a profit. That's a pretty typical way to do a refinance. For those developing a project for the first time, the New Hampshire project I just mentioned, they came with some sponsor equity already, like they've secured the lease option on the community center. And then they use the crowdfunding raise to borrow a chunk of debt from the crowd to finance the upfront costs and make the installation. So, that would be also a fairly typical way to use Raise Green.

[00:09:11] AR: I see that makes sense. The ones you have funded then, that are those early stage companies, are they typically tech firms? Because one of the things I think of is that the traditional way of funding some of those early stage tech companies is through venture capital. So, do you see yourself, Raise Green as working in a similar arena in terms of the types of companies and the types of deals that you seek in that area? Or do you see it as something different?

[00:09:36] FH: I'll back up because I think the way that I approached this, and the way that we at Raise Green do, is sort of because this market is so nascent, that of regulation crowdfunding, because there's so much innovation going on in the climate tech space, as well, we're really evolving with the evolving market. So, in a way, our exploration of those different insecurity types through those 24 offerings, all of which had different terms, although somewhere in a series of this issuing the same type of security, and in the same kind of series. But all of that, exploration really is to kind of define the efficient frontier of the crowdfunding market. To understand where our investor base, our community of 3,000 investors and 20,000 members who follow us and engage with Raise Green, where they want to put their money, both from a risk return profile standpoint, and from an impact standpoint on the environmental and social attributes that go along with these projects and these companies we work with.

So, in some respects, yes, there is a venture capital component to what we're doing in taking in submissions from over 400 companies and screening down to this last 24 set of deals that we've actually gone forward and issued on the marketplace. It is an alternative capital source to venture capital or angel investing. It is angel Investing, and it is venture capital, it's just open to everyone, and it's more inclusive, ultimately, than needing to be a limited partner in a fund that's going to deploy on your behalf. You can actually decide which company you want to put your money into, and do it yourself.

[00:11:23] AR: Sure, maybe just to be a little more specific. I guess one of the things I was interested in learning more about is one of the issues that I'm sure you're very well aware of regarding venture funding, is that typically the model venture capital funding has been obviously extremely successful in making the United States an engine of innovation for half a century or more, it's been tremendously successful. But it has some serious drawbacks.

One of the drawbacks is that their business model of a venture fund is they collect a bunch of money from basically wealthy individuals and institutions and so on. So, they have this huge bunch of money, and then they select a bunch of companies to early, very early stage companies to fund. But as you very well know, their basic business model is that they're looking for explosive growth. They're looking for the next, Uber, the next Facebook, whatever it is, and they recognize that most of their companies will either maybe be profitable, but at a modest scale, or not be profitable at all, and they're counting on a very small minority to be spectacularly successful to the point that none of the others matter.

That I think, can be pretty problematic for many early stage companies, like to take a oversimplified example, if you and I were opening a pizza parlor down the street, it would be disastrous for us to seek venture capital funding, because the only way that would work is if we proliferate it to 8,000 pizza parlors in the next – across the country in the next few months.

So, I guess what I wonder is, have you found or do you expect that this model of funding early stage companies might create opportunities for companies that are really great businesses, but don't necessarily fit into that venture model of having the potential to be growing so explosively? Or is that not part of the intention?

[00:13:05] FH: Well, it's a tremendous overview of venture strategy, I think, is spot on in the way that many VCs operate their funds, and what their aims are in dispersing those investments over, call it 10 companies hoping that one to three really hit big, and understanding that really, less than 10% of venture backed businesses or ventures actually succeed in producing meaningful returns at all.

So yeah. I mean, take the pizza parlor example, is that kind of business venture backable? Likely not, with those types of investors. But that's what alternative investments are all about, and that's what they enable is iterations on a on a model. So, that is really where we're pressing the frontier of this market. It goes back to those roots that was describing the beginning where we saw inefficiencies within capital markets in small private solar deals, for example, at the commercial and industrial scale. A community center that is building a 56-kilowatt array in New Hampshire was the most recent offering on our marketplace. Prior to using Raise Green, likely would have struggled to get a bank loan based solely off of the project finance numbers, because it was a small project, because it's not going to have astronomical returns. But also, if it gets built, it's going to have pretty reasonable yield.

So, that requires a little bit of different thinking and banks and financiers of solar now are starting to treat it as a non-esoteric asset class, a well-accepted one, and that's great because it makes the financing process more efficient because it's replicable, and we're trying to create those replicable models for all different types of climate tech ventures. So, whether that's the work that we're doing with the clean fight accelerator program and the energy storage cohort there to come up with inclusive financing models to deploy more battery backup and energy storage technologies. Or it's designing a convertible note that works specifically for a venture that is half solar developer and half, really explosive growth style model of the software company. Those are all things that require certain degrees of iteration and that's what we're glad to be able to do and have done.

[00:15:31] AR: Do you expect that as you pioneer some of those methods of financing and pioneer the financing of some of those projects, that they will become easier to fund by banks or other mainstream financial institutions? And then you'll move on to other areas? Or how do you expect that to evolve over time?

[00:15:50] FH: I mean, definitely, that that would be fantastic. One of the lessons I've taken throughout my career is one that I got as a field organizer back on the 2008 Obama campaign, where the first rule of an organizer is you are an organizer, which means everywhere you go, you're always talking to people about the opportunity to drive more attention to your candidate. 

But secondly, is the idea of organizing yourself out of a job. So, you've been effective when you know that you have enough support from volunteers that you don't need to do the phone calls anymore, because you got sufficient crew to reach enough voters. In a way, Raise Green is kind of pushing the envelope on these models to make them replicable. And certainly, we want to be able to be a tool that's useful to a first time or second or very experienced solar developer, for example. And that's why we developed software to take the journeys that we have developed on these first kind of cohort of projects, and then lock them into a workflow that can be followed by feature developers.

As we build out our template library of different legal documents that support those different types of securities issuances, we're trending toward making them more replicable through software and through repeatability that makes scale easier. Certainly, if we do that well enough, at some point, the high finance world will come knocking and want to get access to these asset classes that have been de risked, because we've laid the groundwork over time.

[00:17:33] AR: So, you did touch on your background with the Obama administration, which I'm glad you did. I hope you could talk a little bit more about that, because I think it's a pretty unusual background for, well, maybe for anyone because it's an unusual set of opportunities. But unusual, particularly for entrepreneurs to have had as much experience in government as you have. And I just would be interested to hear first a little bit more about what that was like and what your experience was there. And then, maybe you could talk also a little bit about how you see the relationship between government action and private action with regard to how to solve the climate crisis.

[00:18:09] FH: Serving in the Obama administration was among the greatest honors of my life. I worked on his campaign back in Iowa in 2008, and just got very wrapped up in the ideals that that he represents, and was able to go about ultimately, purveying in the form of governance as president for two terms. So, what was that experience like? I mean, just a pure honor the whole time.

One of the things I say sometimes is it was kind of like being strapped to a rocket. We knew that there was a finite amount of time. We knew that there was only so much that we were going to get done, and yet we wanted to do so much, and we did do so much, by way of, from day one pushing forward the Recovery Act, which was the previous largest investment in climate in US history.

Back in 2009, I was at the US Department of Agriculture, working on getting those dollars out the door in Congressional Relations, getting letters from every Congress person saying, I support this project in my district, and then getting to write back and say, “That's great. Let's get these things funded to the White House”, where I helped put together the President's Climate Action Plan at the Council on Environmental Quality, and organized engagement opportunities around both the policy process, as well as around the political process. It was fascinating to be there at that time and do that work.

[00:19:35] AR: Yeah, it sounds like just an amazing set of experiences and contributions. How has that colored your viewpoint as far as the role of the private sector versus the public sector?

[00:19:46] FH: It has been instructive for me, and it also, I think, is something that I, as much as I – I sometimes call myself a recovering politico, because I did fight those battles, both rhetorically and as a public servant, as well. But at this point, I'm running a business and we work with folks of all stripes, and anybody who wants to invest their money into the types of projects and companies that we that enlist on the platform. We welcome it. No judgment. We're not interested in fighting political proxy wars as part of a company. And frankly, it's, it's alarming to me that we are seeing a backlash on sustainable investing.

Because of that very reason, and that free market economics are the basis of decision making in the US, and that has been sort of the touchstone for our American system of capitalism for as long as we we've been a country. So, to try to censor that or push it into a box and is counterproductive from an economic growth standpoint. We are, at Raise Green, pleased with our momentum and our ability to try to raise awareness around climate investing, raise the opportunity for there to be ways for everybody to do that, and will continue to provide that service in a nonpartisan way.

[00:21:16] AR: Well, that's great. I understand you have an interest in bringing about positive social change, in addition to making money, but you're organized as a for profit business. So, how is your model of making money different from or similar to more traditional financial institutions?

[00:21:31] FH: To be clear about our business model, we are effectively in the way that an investment bank takes a company public through an IPO, and then takes service fees for doing the work of analyzing the deal, structuring the paperwork, ensuring that is compliant with the legal and regulatory regime that applies, and that there's full disclosure to the investors. We play that role just in private markets for small companies. We take a listing fee up front to list the deal. Once we raise the capital successfully, we get a success fee, when all the money actually closes.

The interesting part about being a funding portal is that we don't actually hold any of the cash or securities on our books. It's all held in third-party escrow. So, we never touch the money. All we do really is vet the deals apply our screen of projects and company selection, and then ensure that those companies are properly disclosing the risks that are related to their being successful. And also, being clear about what the opportunity is, what the security type is, what it does, for the investor in the event that they are successful, and they do get repaid. That's the service we provide.

As I mentioned here, we build software as well, the originator engine, that kind of systematizes, all of this. And ultimately, though, what we're building is a community, and we want it to be the largest climate investing community in the world, where we have hundreds of thousands and ultimately millions of Americans and people across the world, deciding where they want to put their money, whether they want a solar project down the street from their house to happen, or they want an opportunity to realize those types of astronomical gains that venture capitalists are seeking, they should have that autonomy to decide, and the choice architecture that Raise Green offers them as a decision maker really is our job, and what we get paid for.

[00:23:36] AR: Great. And then going back to what we were talking about earlier with the venture capitalist, I suppose that's one difference right there, what you're saying is that you guys don't take a percentage ownership of those early stage companies, at least not typically. Right? Whereas that would be the bread and butter of what the venture capitalists do.

[00:23:51] FH: Yeah, exactly. We do have flexibility in our business model, and we, in the past have used that flexibility to take a security stake, as compensation in the same class and type as is being sold in the offering. As I said, in the past, we've structured some deals where rather than taking the full upfront fee, we'll take some of that in the form of securities. So, this is all part of iterating at that kind of cutting edge of innovation and trying to push the limits on what works for a developer to do more projects more quickly. What works for a climate entrepreneur to actually have the working capital that they need to wait for their technology to make it through this valley of death, and out the other side of commercialization? Because this is a new industry that has sprung up in the last, really, couple of decades. We have no time to waste in getting it right with the climate crisis bearing down.

[00:24:52] AR: So, we talked a bit about how Raise Green wouldn't have been possible until the last few years, because historically regulations have prohibited some all investors, the so called non-accredited investors from participating in many types of private investments. I understand that for a long time, some people have been frustrated by those accredited investor rules, and that's understandable in the sense that they can be seen as paternalistic, instead of saying, “Hey, you, individual investor can't decide how to invest your own money.” And there's also some inconsistency in the rules.

For example, there are a number of other forms of investing that are highly risky, that are permissible, like people invest in crypto. And we've seen also a rise in trading platforms like Robinhood, that are aimed at small investors buying publicly traded securities, and some of these platforms enable the use of derivatives, which can greatly increase the riskiness of people's investment positions.

So, in a way, this loosening of rules around private investments that made Raise Green possible, it just amounts to equalizing treatment relative to other kinds of investments that are already allowed. But I'm curious if you ever have worries about the flip side. What I mean is, what if some people get caught up in the enthusiasm around Raise Green investments so that they overextend themselves or take risks they shouldn't. As a result, less well-off people take on financial risks or incur losses that they can't afford. Is that a concern? And how do you think about that?

[00:26:22] FH: Well, absolutely. Our key obligation as a FINRA member and member of the Financial Industry Regulatory Authority is to protect the investor and particularly, to protect the retail investor from as much as possible from undue risk. Every investment carries risk. Private investments into illiquid securities, carry a different layer of risk that without being able to provide financial advice, I can't characterize exactly what that is. But what I can say is that it's different. So, your concern is well founded, and it's something that – it kind of comes down to the individual.

I'm reading this book by Cass Sunstein on how change happens, and he talks about how there's a kind of John Locke-ian view of, don't tell me what I can't do, that rejects paternalism outright, just simply in a reactionary way. And then there's this sort of Madisonian view of you decide, I don't really want the mental tax of needing to make a decision, and we see even within our little universe of a few thousand folks, we see the gamut.

[00:27:31] AR: You also talked about Raise Green as a platform, obviously, for climate related or green oriented type investments. So, what sort of process do you guys have for vetting the kind of social credentials of a project to ensure that it's not just, I mean, an extreme example would be Exxon comes and says, “Hey, we're going to drill this great oil well, that's better than some other oil well.” That's not probably going to qualify. So, what are the standards or process used to vet those kinds of things?

[00:27:59] FH: Certainly, we're not financing oil wells on Raise Green, although we have had folks come to us and say, “Hey, can you finance enhanced oil recovery? For example, which is a very fascinating technology.” But yes, so when I say these companies are vetted, that's me and personally, in my team, applying a framework that we call the Raise model, to each of each of the deals that come in and running them through a process internally. So, that's our sales and onboarding process, and the decisions are of which projects to take kind of come down to. Is the project likely to generate revenue? Or is it already – if it's a project finance company, is it already contracted to be able to generate revenue? Like they've signed a power purchase agreement, or they have an off taker identified, who has given them site control and is ready to sign a power purchase agreement? And then is the team ambitious?

So, the A part is ambition. Is the team ambitious, but also experienced? So, are they likely to deliver on their plan? And then, is the project impactful both from a social and environmental perspective? Because part of what I think is missing, well, and it's increasingly mainstreamed around environmental and climate justice, but has historically been missing and has been sort of a recent development, is that the question is who's benefiting from us deploying these new technologies. It's not necessarily just now a matter of whether we build enough clean energy and enough low emission development or carbon sequestration or what have you. But are the benefits of those technologies being deployed, flowing to a broader base of people?

Can we use this transition to actually also address some of the historical economic inequities that have plagued society for many generations? I believe we can, and that is what Raise Green offers the opportunity to do, is to use this tool and not just prioritize speed, and not just prioritize scale, but also prioritize resilience and community involvement and benefits.

[00:30:18] AR: That's great. Yeah. So important, especially with climate being an issue that exacerbates those issues of equity at basically every possible level, right?

[00:30:26] FH: Certainly.

[00:30:27] AR: Another thing I wanted to ask you about is the tension between, on the one hand financial returns, and on the other hand, doing social good. Sometimes those things line up very well, like for people who made a lot of money investing in Tesla. But then there are other situations where those things may be at odds. Some people within the broader movement for green investing, push institutions and individuals to divest from fossil fuels or related assets, and they also encourage investment in green kinds of securities. Part of the idea for some people is that by discouraging investment in fossil fuels, they'll drive up the cost of borrowing or the cost of capital for fossil fuel investments.

At the same time, by directing a lot of assets toward investment in green projects, they hope to drive down the cost of capital for green investments. But what that means, of course, as an investor, is that if that theory holds true, and if you focus only on green investments, that means that in some cases, you may receive a lesser return as a result of the greater interest on the part of the investing public in those things.

So, how do you think about that tension? Do you think the investors on your platform recognize that as part of their intention to have a concessionary component to the capital where they intentionally accept a lower return, in order to provide a better financing arrangement for those projects? Or do they have a different viewpoint?

[00:31:46] FH: It's fantastic question. Borders on financial advice. I'm not going to say too much, but I will say is that every investment on our marketplace has different terms. They're all available at raisegreen.com. They're publicly available, unlike many of the private venture deals that most Americans representing 90% roughly, of non-accredited investors and $5 trillion in checkable, deposits in household net worth have not had access to. These terms are publicly available.

We try to provide as much information and educational material around what those different security types and different return profiles can and do look alike. But it is useful for folks to actually talk to financial advisors, as they consider making investments, particularly alternative investments that are highly illiquid. And yet many folks, again, who use Raise Green are happy to take a concessional return to make what we consider to be financial additionality happen. 

So, that's allocating capital into inefficient markets, is one of the best ways to actually generate significant impact. The other is, as you said, to basically move money out of certain asset classes and into others, so that you affect the cost of capital on those others, which is a bigger game, often done through stakeholder voting, or proxy voting, and is largely reserved to public equities. But in this sense, this is the other side of the impact coin.

[00:33:22] AR: To the extent you'd be comfortable or able to talk about it, another thing that'd be really interesting to hear about is the financing of Raise Green itself. I understand that at least partially, you're funded through some sort of crowdfunding mechanism yourself. Can you talk a bit about that, and also about your other sources of financing? And we talked a little about the venture capital model of funding, which places some early startups under huge pressure to grow enormously. I don't know if that's part of Raise Green’s plans, or if you've been able to find ways around that through crowdfunding or other sources, too, but anything you feel like sharing on that subject will be really interesting to hear about,

[00:34:01] FH: Just like any startup, we have had our own journey through raising money and raising capital. Always be raising as people sometimes say in the founder circles. Over time, we've raised about $2.7 million in total capitalization to date, that has mostly come through private investors. So, angel investment, predominantly some venture capital from TechStars, and ABN AMRO through an accelerator program. And then we have just launched our very first crowdfunding campaign ourselves. Unfortunately, we can't do that on our own marketplace, because that would be against the FINRA rules. But we are using Wefunder for it. Wefunder.com/raisegreen. We'd love to have folks go and check that out. You can invest as little as $100.

And on this one because I'm actually raising for our own company. I can say, we've been able to effectuate some really significant milestones as a company, including leveraging more than a thousand pounds of CO2 reduction per $100 invested on our marketplace. We've won the 2022 impact investing platform of the year from Environmental Finance Magazine. And we're only getting started. So, we would love to welcome as many investors as are interested, and all the details are on that Wefunder page.

The sky's the limit here with this model, I think, because it is inclusive, and it does bring more people into the fold, in a way that you can constantly organize around, and we just launched a group of impact partners that are helping us to extend our reach. We have some amazing folks from everything from students to really experienced venture capitalists and entrepreneurs, to actual clean energy developers, to religious leaders, who are part of that program. And the community that we're trying to build, and that we are building at Raise Green is meant to be foundational and transformative, and we want as many people involved as we can get. So, we're putting our stock where our company values are, and we're selling our own securities to keep building.

[00:36:15] AR: As we're getting to the end of our time here, what do you see for the future of Raise Green? What are the areas where you see the most expansion? And what's your vision for how you'd like Raise Green to grow and develop further?

[00:36:30] FH: Well, I'll take that for a second from the macro standpoint. When we finished the Paris Agreement Negotiations in 2015, there was about $300 billion with a B, flowing globally into climate solutions.

Last year, the same group, the Climate Policy Initiative, put out a report that said we're now over 800 billion a year. So, we've more than doubled in less than 10 years. And yet, we need to be at $4.5 trillion per year, between now and the end of the midcentury 2050 to truly deploy at a scale where we have a decent chance of curbing the worst impacts of climate change. So, within that mix, about $55 billion was deployed from households, and we look at that American household net worth number that Bloomberg puts out of $5 trillion, sitting in savings and checking accounts making virtually no return at all. We go, “How do we how do we get to 5 trillion globally?” Well, if we tap even just enough to triple or quadruple that household deployment level, we're well on our way.

So, at Raise Green, we want to deploy more than a billion dollars through our marketplace, by 2025, and that would be a gigantic leap. But the Inflation Reduction Act that was passed last summer and signed into law, anticipate or there's anticipation from that, that it's going to catalyze more than a trillion dollars in deployment into US climate solutions. That's a number from Credit Suisse. So, we want to be, again, a tool to make that happen more rapidly, and in a more inclusive way.

[00:38:16] AR: Well, it's been really fascinating to learn about these creative ways that you're using finance to catalyze action on climate change. And I look forward to hearing about how your tremendously, interesting and innovative enterprise continues to evolve. Franz Hochstrasser, thank you so much for talking with us.

[00:38:35] FH: Well, Alex, it’s absolutely my pleasure and very much appreciate you having me on. Excited to see the episode come out and share it broadly. So, we'd love to have any and all of your listeners check us out at raisegreen.com, and many, many thanks again for your time and consideration.

[00:38:50] AR: Absolutely, yes. And we'll put a link to those resources in the show notes so people can find out more as well.

[END OF INTERVIEW]

[00:38:57] ANNOUNCER: Thank you for listening to Financial Climate. If you enjoyed the show, you can help us grow by rating us on Apple, or Spotify, or wherever you get your podcasts. Our website is http://www.financialclimate.fm, and you can email us at feedback@financialclimate.fm.

[END]