Impact investing – details for investees

Types of Financing

• PROJECT: For developers seeking project finance in excess of $1 million, we will invest during the construction (post final engineering drawings) and take-out phases in projects and will provide funding at the developer, general partner (GP) and project levels.
• ENTERPRISE: For entrepreneurs with financing needs ranging from $100,000 to $2,000,000, we create flexible finance structures based on the expected performance of the technology. As we are not venture capital investors, our approach is to rely on the credit worthiness of the purchasers rather than on the strength of the enterprise. To serve the need of growing enterprises with several products, we can invest the funding exceeding $500,000 that enables the entity to reach greater penetration and scale using milestone reward-based financing structures. Our preference is to invest post venture capital but pre Series A or bank financing.
• FUND: For private equity and debt funds, TAF will invest up to $500,000 in mandate-aligned debt funds where returns are expected within three years. We will also make similar investments in strategically aligned patient capital funds which have nominal expectations for returns prior to seven to ten years.

Are we well matched?

What’s your technology readiness?

• Concept stage or only bench proven: We won’t invest. But get in touch so we can learn more and see if there are other ways we can support you.
• New/Early stage: Will consider investing if founders’ equity is invested; there are experienced executives and team members, and a pipeline of potential projects with several verging on our having entered into an LOI.
• Demonstration after one or more successful field tests completed: Will consider investing.
  • Financing vehicles: Mezzanine for construction, long-term project financing, either as subordinated debt with participation in cash flows or LP or both
• Proven outside of North America: Will consider investing.
  • Financing vehicles: Non-control position in the developer, building internal capacity to close the pipeline and build more pipeline opportunities

What’s your enterprise maturity?

• Venture capital or pre-venture capital: We won’t usually invest but contact us so we can get to know you.
• Post venture capital: Will consider investing if you’re a cash-flow positive multiple-product vendor with large markets in and beyond the GTHA.
  • Financing vehicles: Convertible and other types of subordinated debt, with upside.

Current finance focus

We are interested in any enterprise or project that has significant potential to reduce carbon emissions and air pollution. At the moment, we’re particularly interested in financing:

• Renewable energy: Development and implementation of innovative alternative low-carbon energy supply options. Recent example: a project run by BerQ RNG
• Building energy efficiency: Energy efficiency retrofits and new construction projects in large and mid-sized buildings (commercial, industrial, residential – not single-family), including fuel-switching
• Transportation: Efficiency, electrification, modal shift, transportation demand management and other opportunities to reduce emissions associated with personal and freight transportation
• Waste reduction and de-carbonization: Products, services and projects that are transferable to an urban context and that significantly address emissions
• Conservation and carbon-reduction behavior: Products, services or projects that promote low-carbon behavioural changes, e.g. by reducing building energy usage or singe-occupant car trips
• Projects based on a technology that has been proven in another market already

Investment Process

What happens after a potential investee contacts TAF? Usually:

1. We complete research to get to know the industry, the business, and the management team and determine if there is a fit for both sides.
2. If there’s a fit, we introduce the opportunity at an Investment Committee meeting and get some direction on pricing and structure.
3. We will work with the business to complete our due diligence and negotiate a non-binding term sheet. At this stage we require detailed financial information as part of any application for investment, including, but not limited to, financial statements; an overall project budget if applicable; and the identification and status of all other funding.
4. We make a full application to the Investment Committee.
5. If the application is successful, we make a presentation at the next Board of Directors meeting and ask for approval. Board meetings occur every four months and usually occur 45  days after a calendar quarter end. The Board is the final arbiter.
6. If the application is approved by the Board, we move to close.