by improving the energy efficiency of american homes by 25%, we accomplish the equivalent of taking...
TRANSCRIPT
By improving the energy efficiency of American homes by 25%, we accomplish the equivalent of taking 1/2 of
all passenger cars off the road.
Building Performance Upgrades Intelligence
Eric Doub, CEO and [email protected]
303-440-7176, 303-550-6001
EcoSmart Certified Properties
VisionEcoSmart benefits people and the planet through energy and performance upgrades for existing buildings and envisions achieving national scale with significant profitability.
Upgrade large inventories of existing buildings with the EcoSmart Certification System to provide superior economic returns through proprietary, repeatable and licensable packages of Business Systems and Technical Tools, while maintaining industry leadership through continuous innovation.
Mission
Goal by 2018Upgrade 20,000 properties per year and generate revenues of $25M
• North America’s First Zero Energy Home - In 2005 Eric Doub designed, built and tested Solar Harvest, the first zero net energy custom home in a cold climate in North America
• Eric Doub co-wrote the US Green Building Council Guidelines for green remodeling - National Standards for renovation and home performance upgrades analogous to LEED
• Media: Over 50 major features including New York Times, Washington Post, Discovery Channel, HGTV
• Won more than 20 awards including the US Department of Energy’s “Builders Challenge Award” and enjoys international recognition.
Leaders in Technology
Licensing Partners Contractors
• Many thousands of potential Licensing Partners in North America
• Business Model assumes 20,000 upgrades per year performed by Licensing Partners in year 5
• Average revenue of $950 per building from license and project fees
• Whole-Systems One-Stop Solution Model
• EcoSmart Certification: Tailored to clients and markets
• Rapid conversion from assessment to action - 46 separate measures
• Potential scale of dozens of buildings per day per Licensing Partner
• High-volume deal flow from EcoSmart’s market relationships
EcoSmart Certified Properties
Intelligence by:Production by:
Building Performance Upgrades, At Scale Building Performance Upgrades, At Scale
Hydronic Radiant Systems, Garage Ventilation Safety Systems, Lighting – LED and CFL, Air Sealing, Pressure Balancing – whole house, Water – Point of Use Conditioning, Air Conditioners, Water Recirculation Systems, Retro Commissioning, Continuous Commissioning, Air flow Tuning, Water – Whole House Conditioning, Carbon Monoxide Detectors, Heat Pump Heating Systems, Spot Ventilation Systems, Attic Insulation, Combustion Gas Safety Checks, Radon Mitigation, Energy Star Roofing, Solar Electric grid tied, Wall insulation, Energy storage and microgrid, Vehicle to Building VSB, Vehicle to Grid V2G, Crawl Spaces Sealing/Insulation. Daylighting – Solar Tubes Skylights, Integrated Drainage Planes, MVAC Systems, Lighting Controls, Windows, Glazing Solar Control, Chimney Balloons, Water-Efficient Plumbing Fixtures, Attic Hatch Air Sealing, Solar Thermal, Ceiling insulation, Security Systems, Advanced Evaporative Coolers, Air Purification Systems, Bulk Water Management, Fresh Air Systems, Duct Sealing, Hydronic Furnaces, Humidification Systems, Water Heating, Gas Furnaces, Scheduled Maintenance, High Performance Doors
Building Performance Upgrades Implemented by
Licensing Partners
Building Performance Upgrades Intelligence by EcoSmart Certified Properties
One-Stop Solution, Whole System Approach
• Assessment / Audit• Scope - Whole Building Approach
- Human comfort and use• Engineered Specifications• Projected Savings Report• Loan and Tax Rebate Documents
• Pricing• Planning and Best Practices• Supervision• Final Assessment• Monitoring• EcoSmart Certified Properties
Features and Benefits
• Efficient technical interfacing with Contractors
• Constant upgrades to best tested building technology
• Speed of 30, 40, 50 … Buildings/Day
• Training and Support for installation crews
• High Performance Business Systems and Technical Tools
Market Sizeo One Trillion Dollars of lending for energy
efficiency next 10 years in the US. (1)
Market Segmentso Property Management
Companieso REO (Real Estate Owned)o Home Owners Associations o Large Remodeling Contractorso Real Estate Investors
Markets
o 80 million US homes need energy upgrades
o Commercial Retrofits Potential Market next 10 years: $220 billion(2)
(2) Pike Research – Energy Efficiency Retrofits for Commercial and Public Buildings 3Q/2011
(1) Gilbert P. Sperling, U.S. Department of Energy, Colorado Energy Efficiency Finance Summit, August 2010
Markets Market Trends
o Commercial Retrofits currently growing at a rate of 26% percent per year. (Rocky Mountain Institute)
o By 2020, the market for retrofits in commercial buildings will reach $152B worldwide. (Pike Research)
o Growing awareness of energy efficiency benefits by general population, corporations and governments point to a sustainable positive trend in the industry
o In 2012 Florida announced privately backed funds of $550M for commercial energy upgrades, and the city of Sacramento announced $100M of lending in California, leveraging market growth.
Regulations Driving Markets
Seattle WA Ch 20.920. Affects multifamily and commercial buildings and reports are required since April 2010
Washington State Bill 5854. Affects non residential and state buildings and reports are required since January 2011
New York City Local Law 84, Bill 476-A.. Affects commercial buildings and reports are required since May 2011
Washington DC CAEA. Affects non residential buildings and reports are required starting July 2011 thru 2014 progressively
San Francisco CA Ch.20. Affects commercial buildings and reports are required since October 2011 thru 2014 progressively
Oregon House Bill 3535, Affects residential rental and commercial buildings and reports are required since January 2012
The information above is an abstract of State Laws and City Ordinances, and therefore incomplete and not fully descriptive. For complete text of laws and ordinances please refer to each state and city’s websites.
California Assembly Bill 1103. Affects non residential buildings and reports are required since January 2012
Austin TX Ch 6,7. Affects non residential buildings and reports are required starting June 2012 thru 2014 progressively
Philadelphia PA Bill 120428. Affects large commercial buildings and reports will be required starting June 2013
Minneapolis MN Bill is being drafted and would affect state and commercial buildings 2013 thru 2016
Boulder CO City recruits commercial building owners to develop standard procedures for energy performance ratings and regulations for 2014
Legislation requiring benchmarking of energy use and public disclosure thereof
Competitors
No single Company with more than 10% of market share *(*our research based on available data)
Companies in Local Marketso No Company with repeatable and scalable Integrated Solution Model
Competition in the USo Next Step Living - MA (raised $18.2M in December 2012)o Green Homes America – FL, SC, NY, NJ, VA, CA, UTo The Mark Group – PA, NJ, DE o Well Home – CA, CO, MD, MI, NH, MA, PA (Not Integrated Solution)
Mom and Pops Nation Wideo Sell only one product or service, such as a Solar Panel Installer -
Narrow focus with no whole building approach
Even at the pace of each company implementing 20,000 projects per year, treating tens of millions of homes and businesses represents markets with room for many players.
Value proposition for Residential
Certified Property
Comfort Health Performance
Bottom line Benefitso Energy savings, money savingso Safer for residentso Comfortable temperatureso Better air to avoid asthma and allergy
problemso Safeguards from escalating bills and
extreme weathero Spend less on energy, more on food
and health careo EcoSmart Certified Property
Problemo Toxic leaky houseo Lousy airo High energy billso Cold and hot rooms
Solutiono EcoSmart Integrated Solutiono Assessmento Engineered Scopingo Financial Solutions Packageo Upgradeso Fast implementationo Verifying Performanceo Maintaining Performance
FutureFit Your Home™
Value proposition for Commercial
Certified Property
Performance Health
Value
Bottom line Benefitso Healthier employees
• Less absence due to illness• Fewer restricted activity days
o Higher productivityo Corporate Environmental
Stewardship and Competitive Edgeo Lower Costs of Maintenance and
Operationo Longer contracts and higher retention
Problemo High energy costo Cold or hot areaso Low air qualityo Toxic workplaceo Low productivity environment
Solutiono EcoSmart Energy Coachingo Rapid and complete assessmento Optimal Engineered Priced and
Actionable Scopeo Financial Solutions Packageo Faster implementation at least costo Reliable certified performance
Validation from important market player
Prospect: WaypointSegment: REO, Rental to Rehab Portfolio: 1,800 homes growing at the rate of 35 homes/day with $1B secured Jan. 2012 to buy more
• “We need to come up with a set of energy standards, some sort of certification to communicate to renters”
• “..being more comfortable, feeling better with good air quality, and being protected from rising energy costs, renters stay longer in their homes. They are more reliable clients, leading to lower costs for us.”
• “Certified homes will be more attractive to renters and ultimately more attractive to buyers”
Real-time 2012 Example
$ 31,000,000 Contract opportunity for EcoSmart Certified Properties over 5 years
What they say:
Colin Wiel – Co FounderGary Beasley – Managing Director
Value proposition for
Problemo No in-house capability for one-stop Building Performance solutions o Fast-changing technologies and practiceso Need for verified results with tangible measurements and returns
Solutiono EcoSmart Platform provides rapid, consistent quality conversion:
• Rapid and complete assessment• Optimal Engineered, Priced and
Actionable Scope• Faster implementation at least cost• Reliable certified performance• Training and certification of workforce
Bottom line Benefitso Optimal results at controlled budgets and short implementation timeso Tenants who pay lower energy bills don’t fall behind on rento Happier tenants stay longero Houses don’t stay empty as long
Property Management CompaniesAnd Real Estate Owned Portfolio Companies
“Green properties rent and sell faster, and for more.” - Early EcoSmart investor and Boulder landlord
Financial Value Proposition for InvestorsMarketso Addressable markets in the Trillion dollars rangeo Market is durable and trends to expansiono Minimal current competition o Low risk of competition based on piracy or artificially underpriced services
Companyo Eric Doub’s connections and national reputation continue to generate
opportunitieso Well positioned for large contracts in the hundred million dollar range o Because of reputation Company has been attracting top talent in the US
Sustainable Competitive Advantageo ESH has first-mover advantageso ESH has revenue based on a repeatable and scalable model o Software and I.P. protectable
Investment Returns o Potential for rapid growth in market shareo Market share growth generates shareholder valueo 5X to 7X returns expected for investors in year 5
Good for Profit (Bottom Line One)• Financing abundant to support Building Performance Upgrades• Very large market opportunities• Industry leadership • Right product at the right time
Triple Bottom Line for Investors
Good for People (Bottom Line Two)Individuals• Good jobs that will always stay in America• Comfort, health and savings• Greater stability for homeowners in times
of hardshipCommunity and Country• Economic Vitality• Energy Independence and National Security
Good for the Planet (Bottom Line Three)• Drastically reduces gross Carbon Footprint of buildings that account for:o 72% of all electricityo 40% of primary energyo 39% of carbon emissions
• By improving the energy efficiency of American homes by 25%, we accomplish the equivalent of taking 1/2 of all passenger cars off the road.
Phase I (nearing completion)
o EcoSmart upgrades over 165 test field homeso Develops and proves systems for licensable platformo Positions for multi-million-dollar contracts o Quality of services is illustrated by high rates of
customer satisfaction
Seed Round: Over $1.2M raisedObjectives Achieved: Launch and Develop Business Model; Build Up Revenue Stream Opportunities; Producing & Positioning
o The next capital leverages talent and converts existing and new market opportunities into accelerating revenues
Project Manager-Based Jobs:>$30k
Home Performance Upgrades: <$30k
• Launch Company & Prove Systems
• Earn Revenue in Local Markets
Year 1
2M
3M
Present (This Round Funded)
Operational Break Even
Reve
nues
(Tr
ailin
g 12
mon
ths)
Revenue Projections – 1 Year
1M
Q1 Q2 Q3 Q4
Phase I
Phase II• Continue to ramp up sales• Develop Platform• License to first “test” Partners• Position for Portfolio Markets
Note: No Commercial sector revenues included
165 Homes to date
Phase II Continues
$2M Jobs on cue
100% Annual Growth
Post Money
Local Direct Services:Home Performance Upgrade Jobs <$30K
Local Direct Services:Project Manager-BasedJobs >$30K
Phase II (next)
Second Round Offer: $950,000Objective: Increase revenues from $1M to $5.5M through engaging opportunities built up in Phase I
o 2nd Phase of Platform Developmento Ramp up sales in 3 market segments
• Local Residential Building Performance Upgrades• Local Residential Project Manager-Based• Property Management and Real Estate Companies,
including Property Inspection trade associationso Trials with Licensing Partners
Phase III Positioning for Liquidity Event
o Ramp up with strategic partnerso Revenues of $25M projected in year 5 and $7M in
EBITDAo Phase 4: Sale to strategic or financial buyero Create potential for sale to strategic or financial buyer
in year 4+ o Expected 5X to 7X returns to investors
Third Round Offer: $3MObjective: Increase revenues from $5.5M to $25M
The Financial Projections furnished in this document are based on assumptions only and there can be no assurance given as to the attainment of the Projections to which any such “forward-looking” statements may apply.
Local Direct ServicesProfitable Division for Continuous
Platform Enhancement
Year 1 Year 3Year 2
5M
10M
15M
20M
Licensing Technology Nationwide to
Qualified Partners
25M
Revenue Projections - 5 Years
Phase IIINational Markets
Phase IRegional
Markets
Phase II Regional Markets
Year 4 Year 5
Position for Liquidity Event
Projected 5X-7X Returns to Investors
Position for Liquidity Event
Projected 5X-7X Returns to Investors
Note: No Commercial sector revenues included
Develop
Scale
Local Direct Services:Profitable Division for Continuous
Platform Enhancement
20,000 Buildings/year
Operational Break Even
165 Buildings Upgraded
165 Buildings Upgraded
Launch & Grow
Operational Break Even
Reve
nues
(Tr
ailin
g 12
mon
ths)
Present (This Round Funded)
Post Money
Growing Through Measured Steps
Founders$900K
Round A$1.1M
Residential BPUs
Round B$945K
(Initiating Q1 2013)
Round C$ 3M
LBS
Growth orAcquisition
Capital
ContinuedGrowthand/or
Full or PartialExit Options
Launch Develop Scale
2009-10 2010-12
EcoSmart Homes EcoSmart Certified Properties With Licensing Partners
2013 2014 2015 Forward
Seed Capital Round A Round B Round C Additional Rounds
PMB Project Manager-Based Remodels
Round A accomplished incrementally
Substantial growth above expectations
in Q1 2013
Residential Building Performance Upgrades
Sizes of boxes do not represent revenues. For revenues please refer to the graphs on the page above.
Licensing-Based Services “Test Market”
LBS
Licensing-Based Services National
Market
LBS
- - Launch Company & Prove Systems
- Earn Revenue in Local Markets
- Continue to ramp up sales- Develop Platform
- License to first “test” Partners- Position for Portfolio Markets
- Grow Sales in National Markets - Continue R&D in Local Markets
Phase I Phase II Phase III
1025 Rosewood AvenueBoulder, CO 80304
www.EcoSmartHomes.comEric Doub, CEO303-440-7176