By: Charles Carey, Founder – CIG Companies
As any business leader knows, creating a successful business relies on attracting adequate financing, especially during the critical first stages of development and the scaling process. As a serial entrepreneur, I have changed my approach to funding on a contingent basis to leverage the specific challenges and opportunities in given sectors.
In growing CIG companies, I used the 100% Project Funding Model to finance entrepreneurship and startups. Now, I focus on sustainable infrastructure and real estate development, so my approach is necessarily different.
Here, I explain the rationale behind these two approaches and the considerations that led me to switch from one to the other.
The 100% Project Funding Model, Explained.
When I first started, my primary goal was to enable entrepreneurs to get their startups off the ground and create long-term profitable enterprises. Traditionally, many entrepreneurs do this by securing partial funding from multiple sources.
However, doing that raises some common problems. For instance, pitching to multiple financing sources and managing the subsequent relationships is often complicated and time-consuming, distracting the venture’s leadership from growing the business. Even more headaches emerge if the multiple funding sources have conflicting interests.
For a new business to fulfill its potential, it needs stable, reliable funding that aligns with its core mission. That’s why I created the 100% Project Funding Model.
The main idea behind this approach is to provide a new company with full financial backing from a single source. In other words, we provided complete financial support for our projects upfront. By doing this, investors can eliminate typical funding hurdles and streamline the approval process. Project leaders can focus on execution rather than fundraising, while our team provides comprehensive due diligence. This groundbreaking model promotes innovation and growth, jump-starting new enterprises while managing risk at the same time.
However, as my focus shifted towards sustainable infrastructure and real estate development, I soon realized we needed to shift to a different approach.
New Opportunities in Renewable Energy and Sustainable Development
New laws have established regulations that require companies to examine their sustainability and manage their carbon footprint. These include the Corporate Sustainability Reporting Directive in the EU, which mandates that companies track and report data on their social and environmental impact. In the US, the Inflation Reduction Act of 2022 put penalties in place for corporations that emit too much carbon. In 2023, the Securities and Exchange Committee (SEC) passed new rules that require companies to be transparent about their emissions.
Indeed, the whole world is moving toward sustainability and renewable energy. This transition requires the creation of efficient, resilient infrastructure for green alternatives on a massive scale.
Meanwhile, financial markets for green bonds and loans pertaining to sustainability have matured. According to a European Commission study, “green bonds have enjoyed extraordinary growth since they were first issued in 2007.”
These factors have opened up unprecedented opportunities in sustainable infrastructure and real estate. When I changed my focus toward these new areas, however, I didn’t take the 100% Project Funding Model with me. It no longer fulfilled our needs for these large-scale projects.
How Our New Hybrid Model Improves Diversification
The 100% Project Funding Model aims to reduce financial risk for entrepreneurs while shifting it to the funding entity. For large-scale renewable infrastructure and sustainable development projects, managing such risk can be challenging.
In consequence, my team and I needed to develop a new funding model to confront the unique challenges of these new sectors. Our current approach distributes the risk and investment more broadly. We utilize a hybrid funding model, incorporating elements of traditional project financing with innovative financial instruments.
One of our primary methods leverages green bonds and sustainability-linked loans to fund projects that meet stringent environmental, social, and governance (ESG) criteria. This shift aligns our funding strategies with broader market trends and regulatory frameworks.
We also deploy real estate investment trusts (REITs) to pool investor capital for large-scale real estate projects. REITs provide liquidity and diversification for investors while ensuring robust funding for developments. This improves our access to a broader pool of investors, resulting in a more stable and sustainable funding ecosystem.
This diversification also allows us to support a wider range of projects. For instance, we are currently constructing a vertical solar energy operation in the U.S. that manufactures top-tier photovoltaic cells domestically and generates power from cutting-edge renewable energy installations. Meanwhile, we are also developing exclusive residential communities like Magnifica, which combines advanced technology — such as AI-based and advanced SaaS platforms — with sustainable practices for eco-friendly living.
Finance for Times of Massive Transformation
The world is undergoing a massive transformation toward renewable energy and sustainable development. While these projects promise profits for savvy investors, their immense scope also raises challenges. That’s why my team and I have moved away from the 100% Project Funding Model to a hybrid one that diversifies our holdings.
— Charles Carey, Founder of CIG Companies, is a serial entrepreneur, author, and leader in renewable energy and finance. He is also the creator of the “100% Project Funding model,” a pioneering financing approach that has been recognized and approved for its ability to fully fund projects pre-construction, promoting swift and comprehensive project development. His career has been marked by a series of successful ventures in various sectors, including technology, finance, and renewable energy.
Disclaimer: “This content is for informational purposes only and is not intended as financial advice, nor does it replace professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions.”
Published by: Khy Talara
