Ep. 80 From Traveling Cook To $100M+ In Renewable Energy Projects Around The World With Mike Silvestrini

Welcome to the NextLevel Income show where it's our goal to raise your income, your investments and your life to the next level. I'm your host, Chris Larsen. Get a free copy of our book@nextlevelincome.com just click on the book link. If you put your address in, I'll even send you a copy. Also, if you're an accredited investor, be sure to check out our InvestLink. We have our new self storage fund available for investment as well as other institutional quality investments in such assets as multifamily and mobile home parks. Check it out at the Invest link or on today's show, you're going to hear from Mike Silvestrini. Mike is an enviro capitalist. He has traveled the world as a chef and now he's done hundreds of millions of dollars in renewable energy projects and he can allow investors to come in for as little as $100 and both do good and make money. Hey, have you heard of the Multifamily Investor Nation Summit? It's coming up on January 20th through the 22nd. It's a three day information packed event for multifamily investors with over 1000 attendees and over 50 speakers, including yours truly. You will hear from experts about finding deals, raising capital, underwriting strategies, selecting markets and so much more. Go to mfinsummit.com to grab your ticket. That's mfinsummit.com to grab your ticket and use promo code nextlevel. That's all caps. Next level to get a hundred dollars off. Whether you are new to multifamily investing or a seasoned investor, you do not want to miss this event. Join me at the Multifamily Investor Nation Summit. Visit mfinsummit.com joining us today is Mike Silvestrini, co founder and managing partner of the Energia, a renewable energy retail investment platform. Mike and his team took his first company, Green Skies renewable energy, from inception to a successful exit in 2017. Today he's now focused on connecting investors to renewable energy projects and making it easier for ordinary investors to participate in an asset class he views as profitable and impactful. Mike, welcome to the show.

Hey, thanks Chris. Appreciate you having me.

Yeah, absolutely. Before we get into your background, I want you to tell people the story of how your kids go to school on a boat.

Yeah, it's a true story. We decided when Covid made everything strange, we sold our house because it was a great time. It was a seller's market for sure. Then we moved to Breckenridge. With ski season out there. And then after that, we moved to the Caribbean. We're now in the British Virgin Islands and we live on this little island called Scrub island. And the kids go to school on another island called Tortola. So they take a boat over a little piece of the Caribbean Sea before school every day. And it's been an adventure. And they developed a whole different set of skills. They sort of surfing and snorkeling instead of maybe soccer and traditional American pastimes. So it's been really fun seeing them have an opportunity to have this experience.

We're coming down. We're coming down to visit like this.

Come on down, buddy. Anytime, anytime.

That's fun. We could spend a whole episode talking about that because really what we're all about is helping people find their path to financial independence and ultimately be able to do things that you've done with your family, Mike. So I know we align on that, but I'd love for you to share a little bit more about your background, how you ended up where you are today before we really dive into what your company's got going on right now.

For sure. Yeah. It really is a path to financial independence. And that's really was a main objective of mine. And I knew that business was going to unlock a lot of opportunities for me. And after finishing grad school, I started my first company. And it was a solar energy company called Green Skies. This is back in 2007, and up until that point I had really. I'd been a chef for many years. I had been a backpacker, sort of. I was in the Peace Corps. So no real experience with business. But turns out that all of those life experiences do prepare someone for a world in business and as an investor as well, because I've really relied on those past experiences, the hard work ethic that I learned in the professional kitchen, and the global perspective that I learned from backpacking around the world every day. I still continue to use those skills to make great decisions about what to invest in, where I see the puck sort of moving towards, and also to put the work effort in that's required to be successful. Shortly after starting my own first company, and I'm sure many of your listeners have done that, and it's not the easiest thing, but if you're wild enough and bold enough and you can live off a very small amounts of cash for a long period of time, then you can do it. And we started getting some contracts, and I remember in the old days doing a couple hundred thousand dollars project, a solar project, like, whoa, this was Like a brand new level of economics for me. Grow. Growing up in the middle class in Connecticut, my dad was a journalist, a newspaper man, and my mom was a nurse. So seeing how a business functioned and then going out and striking what at the time were huge deals for $200,000 transactions, I was like, wow, there's really no limit to this. And then those kept snowballing and a couple years into selling solar energy projects, we got lucky and we signed deals with Walmart and with Target in the same month. And then that company, Greenskies, which I co founded and ran for nine years, started to become a service provider to those juggernaut companies. So we were developing and owning solar assets and selling the electricity from those projects to customers like Amazon and Walmart and Target and utility companies and municipalities and other large businesses. So it really blossomed as an enterprise and it was fun to be part of that. And along the way I learned what it was to hold a real asset. And after selling the company, I went from being asset rich and cash light to cash rich and asset light. And it was fairly uncomfortable to my surprise. And I actually prefer having the assets. And fairly quickly, after selling Green Skies, started up another solar energy company to take that capital and convert it back into solar equipment. An asset class that I love and that I'm sort of made for. And it's. My career is based on this particular asset class. And we did that. I partnered up with a buddy of mine from really nursery school, his name is Chris Saller. Been friends our whole lives. And he had just sold an energy company at the same time. And we both do nonprofit work in Kenya with a group called Big Life, where we started off as sort of anti poaching and has evolved into ecological systems management organization. It's really fantastic. Nonprofit. So anyways, we were talking during our Big Life experience and decided to start a company ourselves to invest our capital into renewable energy assets. We found another hydro power plant down in Brazil that we just love. This thing was some smashing returns. It was an exciting project. It was in Rio and I thought, this is so much fun. I wanted to open up this investment opportunity to friends and family. So that's how Energia was born, by taking our personal investment strategies and trying to share that with other people. And then that wasn't enough for us. So we started to figure out ways to open the investment opportunity up to even more individuals and then found out Regulation A, which is an SEC qualification that we utilize at Energia to take these renewable energy portfolios and share Them broadly with any US investor accredited or not accredited. So that's kind of been the journey. Starting off as just a curious kid with a love affair for travel and experience, becoming an entrepreneur and sort of evolving into an investor over the years.

Yeah, man, you're making my job easy because there's so many things we can talk about here, Mike. So where were you a chef?

Oh man, all over the place because I used that as my main cash flow while I was backpacking. So I was a chef in Australia at this place called Il Bacquero Cucina I Bar, which is in downtown Melbourne. Great food city. I was a chef for Daniel Boulud in Manhattan for Garmin J Chef, sort of a lower ranking chef there.

I think I've been to Barbalud. I'm trying to think if we've been to one of his other restaurants.

Yeah, I was a chef at Bistro Moderne, which is one of his smaller shops. His flagship is Daniel. I also work at a number of different restaurants, from high end to low end, from sushi to Italian to fusion, all sorts of different stuff. And it always paid the bills and it put me in a great social setting because restaurants are a fun place to work. And I just thrived off of the intensity of the work effort that's required in the back of a kitchen. Just the tremendous hours in camaraderie and teammate team building. So I learned a lot about the way I manage businesses. Now. Most of that derives from lessons learned in the back of a kitchen.

You can't almost get two polar opposites than line chef to investor in the putting these deals together. But man, I love to cook, I love food. So no, I think that's phenomenal. So let's talk a little bit about the business side of solar because I've had solar panels on our house. I've had hybrids, we have a plug in hybrid. Now. I've looked at different solar investments. I think anybody that's listening knows about solar energy. But you were talking about putting these projects together for big companies, Mike. So talk a little bit about that. How does that work versus just going and buying some solar panels and putting them on our roof and plugging them into the grid, for instance.

Yeah. Instead of our customers owning the solar panels like it sounds like you do, and that's really cool. Instead we would own the solar panels and then I would sell the electricity at fixed and agreed upon rate to my customer for a long period of time, like 15 or 20 years. So Walmart, for example, would come to us and say, look, we want to go solar. And we'd say, all right, that's what we can help you do that. Let's try to figure out which state how much you're paying for electricity in different markets. And then in markets where the sun is bright and the electricity is valuable and there's incentives coming from the state in those days where the economics made sense, we'll buy the solar plant that'll sit on top of your roof and you'll agree to buy the power produced from that plant for that extended period of time. And I make a return on my investment by harvesting that monthly cash flow. They pay their now solar electric bill to my company instead of paying the incumbent utility company for their power.

Make the initial capital investment like with Walmart.

No. So they didn't touch their wallet. All they did was buy the electricity, and electricity was materially cheaper than their alternative choices of conventional electricity.

Win win for them. And they also raise their hand and say, hey, look how environmentally responsible we are.

Right, exactly. And well, Walmart knows how to save money. They're the best at it. And they were a fabulous customer, to be honest with you. I thought that. I think the world is still due of that organization. And they were the first movers and they allowed companies like Green Skies to scale and figure out new ways of systematically approaching this industry. In those times, a big solar plant, you would have like this massive picture, like a rooftop the size of like a Walmart, and they would only have tiny little solar project on there because maybe there was a grant and you can only put up that much solar to get the grant. That made no sense. And then all of a sudden, fast forward a couple years. This is 2014, 2015, and we were just blanketing those routes with solar panels because we were able to get the cost lower because Walmart gave us scale. And I think was a big part of the maturation of this industry that people are talking about so much today. A lot of that comes from the early adopters, like the big American corporates who took a chance on guys like me to deliver them abundant, clean, cheap electricity.

That's fantastic. And I love your term on your title page here, enviro capitalist. And I think it's great when you can find something where you can do both. I mean, I spent so much time outdoors. We live in a beautiful area for that. I remember John Mackey, who founded Whole Foods, talking about this idea of being conscious capitalist. And one of the stories was about Stonyfield yogurt. You're familiar with Stonyfield it's everywhere now. And the founder was talking about how his friends were like, you sold out. You're selling to Walmart. He's like, you sold out. This is the devil. And he said, he looked at his friend, he said, walmart sells more yogurt than anyone else in the country. We are achieving our mission faster because of them.

Exactly.

It was like, oh, yeah, you can actually make this work. So to hear you say the same thing about the same company, it's pretty amazing. And hey, they save money. It made sense economically for them. And look, it's a win win.

I'm kind of obsessed with this concept where capitalism is the most powerful engine to mobilize the ingenuity of mankind. It's profoundly effective stuff when used correctly. And how do we take that engine and strap it to these new desired outcomes? For me, being an environmentalist, I'm deeply concerned about the ecology of the Earth, the quality of our air, and the things that we've done to our planet, whether it's fish stocks or forest cover or climate change. I mean, these are real concerns that we need to be aware of. And I don't think that we have a snowball's chance in hell of preventing the negative aspects of our own behaviors unless we figure out how to align capitalism with the solutions to these problems. In a lot of ways, those are the types of products that we build at Energia and at Greenskies. And I'm working on a new one now, trying to figure out ways to use the real estate infrastructure that this REITs and use some of the tooling that we have for real estate to protect precious ecological land. Is it possible that that land, as it becomes more and more scarce land of tremendous ecological value, Stuff like imagine an African safari typ type of land, as that stuff gets more and more rare, its value should increase. And we have to figure out how to monetize that value so that we can use the capitalistic drivers to protect it.

Yeah, there's some mechanisms in the United States that work for that, that incentivize land conservation and those sorts of things, and they get a bad name. I know the IRS targets a lot of these things, but I have a good friend that puts these together. He's a hunter, and he loves to hunt, and he loves to provide environments where people can enjoy it. He also likes to preserve the environments for these wild animals so that he and his family can hunt on those. And he has a nonprofit that's associated for kids that do this. So it is, I Think to your point, Mike. You know, if we can bring these things together and make it happen, it makes everything a lot easier. And yeah, and here's the thing. So I know climate change has gotten polarized, but I really wish that if we took a step back and said, hey, can we all just agree that the world would be a better place if we didn't pollute as much and we don't have to say, oh, we're talking about this tax or this month or you're bad, you don't want fossil fuels. I think Everybody, well, probably 90 plus percent of people can agree we want less pollution. And it's like, come on. Okay, so we talked about Green Skies, your current projects. I mean, Mike, you look on your website, it's so cool. Some of the places around the world that you're doing these projects. Share a little bit with us about some of your current projects, where they are, what you're excited about today with these.

Well, I mean, again, I put my investor hat on here and I think about how to build an ideal portfolio of renewable energy assets. As I explained, I already like the asset class because you're collecting this long term contracted revenue, this pretty fat dividend yield, and it's cash flowing and it's a real asset. It's uncorrelated to stocks and bonds. It's inflation proof because most of the contracts have escalators in them that escalate with the consumer price index. So I really like some of the characteristics of the asset class. But to think about it as an investment product, we have to take a next step and think about how to diversify within this asset class. And for me, being somebody who loves traveling and has been in many countries, the natural diversification strategy was to look at other markets. The United States is a great place to do business. It's the best place in the world to do business. But you're going to get a lower return on investment because competition is very sophisticated. There's lots of players in the market, there's lots of capital in the market and there's lots of cheap capital in the market and that's great. But six and sevens and 8% returns, it's going to be really hard for people to retire on a 6 or 7 or an 8. You have to have millions of dollars stowed away and working for you and flowing dividends for you to pay your mortgage every day after you retire.

Bitcoins for. That's what we got. Bitfund.

Right. Well, mix it up. Maybe that's your thing. Maybe Whatever. I think nobody should be as heavily weighted in renewable energy as I am. I wouldn't recommend that for anybody. I'm like 90% renewable energy over here because I just love the asset class and I know it. And I control my own destiny because I'm an asset manager in this profession. But when I look at this, I saw opportunities like Brazil, which everybody. You say the word Brazil, people run in the opposite direction. The news about Brazil is never good news. They have a crazy whack job president, they like to smash their environment. There's no good news. The currency is weak. You pretty much name it a problem and Brazil's got it. And underneath all that is a huge return opportunity. Because I think Warren Buffett said, when everybody's running in one direction, you run in the opposite. And we've taken that approach to some of our assets in the family of assets that we manage at Energia. And we've done really well for our investors and ourselves in Brazil by taking that chance, taking that risk. And this is a massive country and I go there all the time. And now I've gotten really familiar with the place and I understand the culture and I understand that it's actually just a really exciting economy waiting to explode. And we've seen so many great companies in the private sector starting to wake up in Brazil. And it's really exciting to see for Brazilians. I'm happy for them to finally have more free market opportunities than they've had in the past under more socialist political regimes in the past. And while that's starting to heat up, we're going there and taking positions in their energy sector, which has been primarily hydro based. And now they're having more droughts than ever all around the world. That's a pretty common thing. Climate weirding. So most of those contracts are also denominated in dollars. So as the currency weakens and as the droughts increase, it's creating this gold rush for anything but hydro in Brazil. And solar is the cheapest option. So we're doing hardcore infrastructure deals with a rated customers like telecommunications companies, the biggest pharmacies and retail customers in the 20% unlevered IRR range. You don't really see real assets in that type of range very frequently and at scale. So we're doing hundreds of millions of dollars of business down there and expect that market to continue to grow. We have a project in Zimbabwe, we have projects in South Africa, we have projects in the US and like all things, balance is essential. So we mix it up. Chris. And try to portfolio architecture. And the way I look at it is like we're serving our customers who are investors a solar cocktail. And the ice in the drink is the US stuff. It's not a lot of flavor, but you can't have a cocktail without it. And then we punctuate that stuff with the spicier concoctions of Brazil and Africa, where we can find attractive yield and hedge our bet a little bit.

I like it. You didn't spend all your time in the kitchen. You were behind the bar a little.

Bit once in a while.

I love it. Yeah, just like whole portfolio, right? You got your cocktail, you got your main course, you got that. I love that. You're overweight. You got to invest in what you believe in. You know, same thing, totally estate. So just to clarify, you're still doing basically solar farms in most of these, is that correct?

Yeah, it's mostly solar. We have a bunch of solar and battery projects. I'm down in the Caribbean here chasing a fantastic wind project in Jamaica that I hope I get to bring to my customers. And we'll see what we have a couple hydro projects. But solar is really the main event in renewables right now.

Again, I'm a big fan from like, we were talking about enviro capitalism. So you mentioned something earlier. You said you were utilizing Regulation A real quick. So a lot of our stuff, we go through reg D. We have 506B, 506C. So investors that are listening, they're like, they kind of understand those sorts of things. A lot of listeners may not be as familiar with Regulation A as you and I are. Can you share a little bit more about that and how that's really the impact it's made on your business as well?

Absolutely. So Regulation A and Regulation D are both technically exemptions. So instead of going through a full IPO process, we can go through a shorter process that allows us to sell securities in a company. So we create. Every solar project is a separate company, just like real estate, a single purpose entity. And then we will aggregate a group of solar projects with common characteristics characteristics into a holding company. So you have a holding company and that's based in Delaware. Even if the projects are in Brazil, the holding company's in Delaware. So we have this holding company in Delaware that owns these solar projects. How do we share that with more investors? We could use Regulation D. And Regulation D is very useful if you know your investor group, if you're working with people that you know, you are also dealing with mostly accredited investors. And you don't need to broadly market the security, then Regulation D is going to work for you. And we've done Regulation D projects before with friends and family. It's really what the purpose of Reg D is. But we wanted to go beyond that and we opened up the can of worms for Regulation A, which is essentially one step short of an ipo. I mean, you're auditing your financial statements, you're going through a review process with the sec. There's questions and answers going back and forth. You're lawyered up. It's a more sophisticated process than just filing a Reg D, which is more or less putting the paperwork in Reg A does require an SEC process and you create an offering circular. And when you're successful on the other side of authorization from the SEC to sell Reg A securities, I take that Delaware holding company and issue shares of itself and sell those shares through our online platform to both accredited and non accredited investors. Which is huge because over 90% of our country is not accredited investors and they can't participate in this stuff unless we do Reg A's or go through the full public enterprise. So we did Reg A, because not only can we include much more broader participation, which is what I think is needed to combat climate change, is we're going to need to have broader participation in this asset class, like what you've seen with Bitcoin and Coinbase and the success stories over there. The trillion dollars come this way. And then as importantly, we can market the securities broadly so we can hand out flyers at the local grocery store if we want. There's no limitations, really. Whereas with Reg D, you have to have a relationship with somebody before you make the offering. So we found that Regulation A is the flexibility that we needed to market our securities and to sell them more broadly to both accredited and non accredited investors. It's been a great product for our online platform.

Yeah. And I mean, you guys, I've seen how much you've grown. It's really tremendous.

It's been crazy.

It's terrific. I mean, that's part of the reason we started Next Level Income was to provide people the information and these opportunities that used to be reserved for, quote, unquote, the rich. And there are better ways to do it. So I think it's fantastic. Mike, if people want to learn more, if they want to see more about your offerings, we got your website, energia.com what's the best way for them to check that out?

Yeah, I mean, certainly Energia.com, if we've done A good job. We've put up a lot of information on the assets for you to review. It's a great user experience. Thanks very much. But if not, please let us know. And we're always looking to get feedback from customers or potential customers or people who hate the product. Tell us that and tell us why. And then on the website, you can also communicate directly with our investment advisors and folks who can help you understand the asset class and how the platform works. And we're educators, we're not broker dealers. We don't recommend investment strategies for people. That's up for you. All we do is show our wares. And in this case, they are portfolio of renewable energy assets that kick off dividends on a monthly basis. And so far, we've done very little marketing of the product. And people who have come and gotten involved have really loved it. And we're having a lot of fun over here at Energy, and we're excited to see where this goes. And a lot of people complain about climate change and they're right to do so, but complaining only takes us so far. And we want to create a product that allows people to put their money where their mouth is. And if that's a concern of yours, then maybe you might want to include some renewable energy as a portion of your portfolio when you look at your allocations. And we've made that easier than ever, I think, for people to participate more directly with the assets and include renewable energy in their investment strategy.

Do good and make money. Doesn't get better than that. Right?

I'm in.

Yeah. Speaking of doing good, tell me more about Big Life before we wrap up here, Mike. And what you guys have going on with that.

Big Life is a really cool organization. It was started by a group of OGs. One of them, a true master of the African bush. His father was the last game warden under the British Empire. His name is Richard Bonham, and he's such a fascinating guy. He's a pilot. These guys are all bush pilots, and they know all the Maasai because it's in a Maasai territory, southern Kenya and northern Tanzania, and basically the Amboseli ecosystem, which is a spring. So in the dry season, all the wildlife makes its way to the Amboseli Springs, and then when it rains, they disperse. So there's this massive territory around Kilimanjaro and Tsavo national park in the Chulu Hills is this Ambali ecosystem. And there was 400 poached elephants a year in this ecosystem. It was nasty. And a lot of this was Al Shabaab, dude. It's coming down from Somalia and just killing the world's last wildlife. So these guys said enough's enough. And they started big life. And I got involved a couple years into it and we started figuring out how to train Maasai warriors, essentially warrior age Maasai, into becoming rangers and training them more professionally and arming them correctly with the tools that they need to make arrests and to stop poaching. And we took poaching from 400 a year to zero a year. People don't poach in our area of operation, which is over 2 million acres. And it's a lot goes into it. And turns out that stopping poaching was not as hard as we anticipated it to be. You just have to show force. And what most likely happens is poachers go elsewhere. So we're continuing to expand and trade knowledge with other defenders of ecology. But the problems continue to grow. Now it's becoming more of a real estate issue. As Maasai tribal land starts to get subdivided and they want to develop the real estate, we have to figure out ways to make sure that real estate remains undisturbed so that the last remaining elephants and lions and cheetahs and leopards of the world have a place to live. And we think that that's extremely valuable. And so we basically have a service nonprofit entity whose job it is to be stewards of the ecosystem that links four national parks so that when animals traverse from one place to another, they can walk freely and in safety.

Yeah, because they don't know where the lines are. Mike, that's amazing. And from talking about being a chef to your solar projects, and this may be the most interesting thing here as we talk about this, but if you go back and give your 25 year old self a piece of advice, what would it be?

I think I was a little bit too trusting my 25 year old self. When you're young and you assume that everything's always great and everything's going to continue to always be great, and then as you get older, you hit rough patches in deals, especially in business, not everything goes perfect all the time, and especially when there's money involved. And sometimes you learn the hard way that who your friends are and who they're not, it doesn't mean you have to be a curmudgeon, but you might want to just be a little bit more patient than I was at 25 with the relationships that you build and make sure that you structure things fairly and transparently and that everybody understands what the deal is. That's what I would tell my 25 year old self.

That's great advice Mike and really appreciate you sharing your story today. If you want to check out energia, go to energia.com, we got the link in the show notes. You can check out the products that Mike and his company are working on and see how, as Mike said, you can put your money where your mouth is, do good for the environment and make money at the same time. Mike, thanks so much for being on the show today.

Awesome show Chris. Really appreciate it. Good luck to you.

Thank you buddy. Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also please like share and take just 90 seconds to give us a rating on Apple Podcasts SA.