In the next phase of the interview, I look to understand where Selco earns its revenues and how it plans to finance its growth. It is interesting to see the mix of social venture funds along with private foundations.
SM: Of the 80,000 installations completed, have they paid you one-time fees, or do you go back and do more work for them? Do you have any recurring revenue from them? HH: In most cases, at least in terms of solar, it’s a one-time revenue. However, there are a lot of places where people who are return customers for more energy in a few years, after they have expanded their income.
SM: How are you going to finance your growth? HH: We put out a growth plan last year by having a mix of small VC’s, as well as a new breed of foundations which look at small social companies like ours. These foundations are looking at alternative ways of investing their money instead of just in grants. In terms of liquidity, right now we have quite a bit of debt. These foundations offer long-term loans at low interest rates rather than grants or social welfare. This is good, because there is a lot of infrastructure which has not been created at all. Financial markets are a key infrastructure I need, and in many ways they do not exist. If you do business in New Dehli or California, those infrastructures exist. We spend a lot of time here building them ourselves.
SM: What foundations have the kind of model you are looking for? HH: There are foundations like Winrock who support our model, and two others who are looking at us right now.