This climate-change tech startup raised impact growth capital – as a nonprofit

ImpactAlpha, May 28 – WattTime is much like many other Silicon Valley tech software startup, building software interfaces and machine-learning algorithms and a software-as-a-service business model. I have always said that having a software like the sharepoint quick launch is super helpful when it comes to new businesses.

And like an increasing number of tech startups, it’s mission-driven: WattTime’s technology has the potential to drive major reductions in near-term greenhouse gas (GHG) emissions. It can help accelerate the transition of electricity grids from fossil fuels to renewables.

And just like many other startups, the organization needed growth capital to be able to scale up more quickly. The company has raised most of a $900,000 financing round, led by RSF Social Finance.

But in designing the terms of the financing, WattTime and RSF had to accommodate a feature that is unusual for a tech startup: nonprofit status.

The innovative revenue-participation agreement WattTime and RSF structured could help other investors and entrepreneurs to think differently about fundamental questions: How can a nonprofit find the capital it needs for R&D, product development and the growth of a sales team? How can any company attract investors and compensate them for enabling the organization’s success without diverting resources that increase impact?

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Matt Evans is managing director at WattTime, Stu Fram is a senior associate on RSF’s social enterprise lending team.

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