Alfred Johnson, co-founder and CEO of Crux, joins us to share his fascinating journey from the corridors of the U.S. Treasury Department to the dynamic world of clean energy finance. Promising a new perspective, Alfred walks us through his experiences in government service during the Obama administration, and his pivotal roles at BlackRock and Mobilize, which he founded and later sold. Throughout his career, Alfred's commitment to public service has remained unwavering, even as he transitions into revolutionizing the clean energy space with Crux, a platform pioneering the use of transferable tax credits.
Explore the significant impact of the Inflation Reduction Act and how it has birthed a burgeoning market for transferable tax credits, a groundbreaking resource in clean energy finance. Alfred explains the intricacies of how Crux is capitalizing on this asset class by enabling developers and manufacturers to transact billions of dollars in credits directly with investors, transforming how clean energy projects are funded. As clean energy financing evolves, platforms like Crux are not just meeting market demand but driving it, making them indispensable players in this rapidly changing landscape.
In our conversation, we also navigate the future of clean energy legislation and what it means for companies like Crux. With the IRA's long-term provisions fostering bipartisan support, Alfred offers insights into how evolving policies, including Vice President Kamala Harris's proposals, could shape the industry's trajectory. Drawing from his experiences as a second-time founder, he reflects on the challenges and opportunities in building mission-driven companies, while sharing valuable lessons learned along the way. Join us as we uncover how Crux is positioned to thrive in the ever-expanding clean energy finance market.
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Episode Transcript
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Speaker 1 (00:00):
President Biden was the president who signed the
Inflation Reduction Act.
Kamala Harris obviously hisvice president over that period
has been a huge proponent of thelaw.
It's interesting actuallyrecently, in her latest economic
proposals, she introduced anotion of another $100 billion
of tax credits for advancedindustries of various kinds
(00:21):
related to AI, biotech, thingslike that and I think what that
reflects is not only are theDemocrats quite convinced that
this has been a successful lawthat is driving capital where it
needs to go for clean energy.
I think we have also observedthat the market has been
successful and that themechanism of transferable tax
(00:41):
credits may work in othercategories beyond clean energy.
Speaker 2 (00:47):
Hi everyone.
Thanks for tuning in to Seed toExit.
Today.
I'm welcoming Alfred Johnson.
Alfred is the co-founder andCEO of Crux, the sustainable
finance technology companythat's changing the way that
clean energy and manufacturingproducts are financed in the
United States.
The company's first offering isthe platform for buyers,
sellers and intermediaries totransact and manage transferable
tax credits.
(01:09):
Before founding Crux, alfredserved as the Deputy Chief of
Staff to the United StatesDepartment of the Treasury and,
prior to the Treasury, alfredwas the co-founder and CEO of
Mobilize, the events managementplatform and network acquired by
EveryAction in 2020.
Earlier in his career, alfredwas a vice president in
financial markets advisory atBlackRock, senior advisor for
financial markets at the USTreasury and special assistant
(01:31):
to the White House chief ofstaff.
Now this is a special episode.
We're going to talk about theelection and we are releasing
this episode on election day,and we're going to talk a little
bit about what theramifications of what the
election might look like,depending on who ultimately ends
up as the victor.
So I hope you enjoy and don'tforget to vote.
Speaker 3 (01:52):
You're listening to the seed to exit podcast with
your host, reese Keck.
Here you'll learn from startupexecutives, founders, investors
and industry experts.
You'll learn from the bestabout building amazing products,
scaling companies, raisingcapital, hiring the right people
and more.
Subscribe and listen in for newepisodes and enjoy the show.
Speaker 2 (02:15):
Alfred, welcome on to the show Excited to have you.
Thanks for having me, rhys.
So there's a lot I want to diveinto with you today.
You have a really uniquecompany at Crux that you're
running, and then also you'vehad a fairly unique background
in terms of your founder journey.
So, for those who maybe haven'thad the chance to check out
(02:36):
your LinkedIn yet, would youmind giving a quick overview of
your background?
Speaker 1 (02:40):
Sure, yeah, Rhys.
I grew up here in DC, where welive now, and then started my
career working in the governmentwas at the Treasury Department,
working on the Financial CrisisResponse and Recovery Act in
the very early days of the Obamaadministration, getting exposed
(03:00):
to these tax credits that wehave now built our business
around clean energy tax creditsthat help support energy
infrastructure.
I got the chance to work onearlier versions of those
programs at Treasury.
I worked in the White Housebriefly where I was special
assistant to the White Housechief of staff it was Bill Daley
at the time and then went backto business school.
(03:20):
After that went to BlackRock.
They had a structured financeadvisory practice working with
banks and official institutionsmeaning government.
So we worked with the CentralBank of Greece on their banking
crisis, on other foreign centralbanks on US banking issues in
the wake of Dodd-Frank, and thengot into tech Really had
(03:43):
enjoyed building smaller teamsearlier in my career, Wanted to
do that in that space, Went to afintech company originally
before starting my last business, Mobilize, which we then sold 4
years later.
It was an event managementbusiness and mission-driven
category.
Sold it to a portfolio companyof inside partners.
(04:04):
Mission-driven category sold itto a portfolio company of
inside partners and I went backto Treasury, started on the
first minute of the first day ofthe Janet Yellen Treasury as
the Secretary's Deputy Chief ofStaff was working on the COVID
response initially so how do weget a trillion dollars out the
door as rapidly as possible inalignment with the law?
And then also did a lot of workon technology and financial
(04:27):
markets, which is really thesubstance of my background,
before leaving the department inthe summer of 22 and starting
Crux pretty shortly thereafter.
Speaker 2 (04:37):
And your family comes from a fairly deep rooted
background in public service,don't you?
Was that something that youwere always sort of planned on
going into in your earlier years?
Speaker 1 (04:47):
Yeah, it's funny, I'm named for my grandfather on my
father's side, who was namedAlfred I Johnson.
He was born on the prairie inWestern Minnesota in 1898 and
ultimately rose to be thespeaker of the Minnesota House
of Representatives.
Only had an eighth gradeeducation, half of which was in
(05:10):
Norwegian, and then my parentsmet on a presidential campaign,
first in Walter Mondale's Senateoffice right before he ran for
president.
My mom was his press secretary,my dad ran the campaign, so
there was always a thread in thehouse growing up about politics
(05:31):
, government, government serviceand, of course, living in DC.
You're just surrounded by thatstuff, and so when I went to
college, I studied politicalscience, but I was also always
interested in business andfinance and, of course, chose to
do it in California, where techis so central, and my career
since then has really been a mixof software, financial markets
(05:55):
and the government.
Speaker 2 (05:56):
You've obviously done incredibly well for yourself on
the business side, but justgiven the family background and
history, was there any sort oflike oh no, alfred, what are you
doing?
You're supposed to be in thegovernment?
Or any sort of familialexpectations like that?
Speaker 1 (06:09):
Sure, always, but I did it a couple of times.
It was the first thing I everdid was first a campaign and
then the Treasury Department,and then had the privilege of
going back again privilege ofgoing back again starting in
2021.
So that has been a reallyjoyful way of serving and
(06:38):
certainly I have learned a tonfrom both of those experiences.
And whatever ways I am able tocontribute going forward, I
would love to do it, and one ofthe things I love about Crux is
we're really integrating theprivate market with a government
program in a really elegant way.
That is driving many moredollars billions, hopefully
hundreds of billions of dollarsinto clean energy of all
(06:58):
different shapes and sizes.
Speaker 2 (07:00):
Before we get to Crux , which I'm really interested in
diving into, I am reallycurious.
You mentioned that you were inthe Treasury Department during
COVID and you had to get atrillion dollars out the door.
I can only imagine howmonumental of a task that that
was.
What was that like?
What was that like being inthat environment?
What was the process?
Speaker 1 (07:19):
Yeah, so I have served at Treasury twice, both
during forms of financial andeconomic crisis.
When I was there the first timewas very early in my
professional life, but it was inthe immediate wake of TARP
having been passed by thegovernment.
Tarp required quite a lot ofdollars to be deployed into
(07:41):
banks and other kinds of placesto support the economy, and that
also required the department tobuild infrastructure.
So I saw and participated inthe standup of the TARP
organization at the time.
It grew to a couple hundredpeople and so I had had the
experience of buildingoperational infrastructure to
(08:03):
deploy a large program in thedepartment before.
That was experience that Ibrought into my most recent job
as Deputy Chief of Staff toSecretary Yellen and drew on it
quite a bit.
Right after the president,president Biden, took office,
the Congress passed the AmericanRescue Plan, the ARP, which
(08:25):
included about a trilliondollars of subsidy of various
kinds that needed to be deployedby the US Treasury Department
to states and other forms oflocalities and tribes and cities
and nonprofits and companies,and the Treasury was really the
(08:46):
center of a lot of that activityand the statute mandated that
some of those funds be dispersedvery rapidly, so, similar to
TARP, we had to stand up.
Operational infrastructurebecame known as the Office of
Recovery Programs in theTreasury Department and it had
to grow really quickly to beable to meet the needs of the
(09:09):
country at the time and what thelaw required.
And building that sort of thingunder with a lot of economic
impact to the work was somethingthat was really rewarding and
I'm really proud of the workthat the department did during
that period.
Speaker 2 (09:26):
What was the inspiration to start Crux so?
Speaker 1 (09:28):
my so dad passed away pretty shortly before we sold
the last company, happened ataround exactly the same time.
Sold, the company immediatelymade the decision to go back
into the Treasury Department,moved my family.
We were living in New York atthe time.
(09:49):
It was the pandemic and wemoved down to DC.
I went into the department andaround that same time, a few
months after I got there, we gotpregnant with our second son,
who was born about 18 monthsafter I started at the
department, and that ended upbeing a good time to step away
(10:13):
and think about what I reallywanted to do.
It was obviously a privilege tobe able to serve, particularly
with Secretary Yellen, who is soinspiring on so many different
levels, but I had really lovedbuilding another small company
that had gotten to a successfulexit in a mission-driven space,
and with the two boys at thatpoint I was thinking a lot about
(10:37):
what are the forms of impactthat I can have that would be
most durable for them and helpthem live the healthiest,
happiest lives.
And I remember a particularconversation with my wife where
we went out and she was like Ireally think the next thing that
you should do, that we shoulddo together.
Like I really think the nextthing that you should do, that
(10:59):
we should do together, shouldrelate to the climate, and that
really stuck with me andparticularly with the two sons
and personally enjoying theoutdoors so much.
I love being outside it's thething that makes me the happiest
and being in beautiful places Iwas quite motivated to find a
way of making a difference.
Speaker 2 (11:18):
I love that and I will also say on the side now
kudos to you for being a startupfounder with two young ones.
That is not for the faint ofheart.
Speaker 1 (11:26):
Yeah, I was starting up the family too.
Speaker 2 (11:27):
Yep.
So for the unfamiliar, couldyou explain and break down what
transferable tax credits are andhow they benefit clean energy
and manufacturing products,because I feel like, in order to
explain what Crux does, we needto have a baseline
understanding of what that is.
Speaker 1 (11:43):
Yeah.
So governments generallyeverywhere subsidize energy in
some way, and they have sincethe beginning of time right, and
with the United States inparticular, we make significant
use of the tax code to encouragepeople to build the kind of
(12:06):
energy projects that we want inthe US, and we started doing
that with oil and gas in 1916,around the time that World War I
was starting, and we wanted toencourage domestic production of
oil because of more demandcoming from the war.
So we used the tax code to dothat.
We have used the tax code inthe form of tax credits for
(12:30):
renewable energy for decades,and as long as we have been
using tax credits, there's afundamental dynamic that needs
to be dealt with, which is thatcredits are very useful and
directly applicable if you are acompany that pays more tax than
the credit that you havereceived.
(12:51):
If you are not in thatsituation which most project
development companies,particularly in renewables, are
not they pay less tax than thecredits that they receive.
They need to find somebody thatcan be their partner to
monetize the credits directly,sell them.
(13:12):
Project developers used to berequired to have an external
investor invest in the asset,invest in the solar project,
invest in the wind facility inorder for that investor to
receive the tax benefitsassociated with that facility.
That market is called thetraditional tax equity market.
(13:33):
It's existed for decades.
What Congress did with the IRAis pass the largest climate law
that has ever been passed by anygovernment ever, about two
thirds of which is tax credits.
With the increase in the volumeof tax credits that were in the
law, congress needed to alsodeal with the monetization of
(13:54):
those credits and looked at theexisting tax equity market and
did not believe that it wouldhave the capacity to be able to
support the level of investmentthat was foreseen.
And to solve that problem theycreated transferability, which
allows the developers, themanufacturers, the benefit from
the credits to be able to sellthem directly to a third-party
(14:15):
investor that pays tax, that cantake the credits, to be able to
sell them directly to a thirdparty investor that pays tax,
that can take the credits andapply on their taxes.
And so, in the process of doingthat, congress created a multi
hundred billion dollar assetclass and transferable credits,
and that market has taken off ata much faster rate than anybody
anticipated.
Speaker 2 (14:33):
And so Crux then is the platform where, if you're
saying I need to and I'mprobably going to butcher this,
but if I have this tax creditthat I would like to transfer I
can go on and find someone whois willing to purchase it from
me.
Is that more or less the model?
Speaker 1 (14:48):
That's exactly right.
So you are a developer of solarwind, battery storage,
bioenergy, you're a manufacturerof solar panels here in the
United States?
Whatever you are categorically,you can list the credits On
Crux.
The credits are seenanonymously by buyers that are
(15:08):
in our system as well as buyeradvisors that are looking for
credits and finding liquidity.
Via Crux.
You'll receive bids, in mostcases within the first week of
listing your credit.
Often you're receiving multiplebids.
With multiple bids, you're ableto accept, reject, counter
directly within the system.
(15:29):
You're able to ask questions ofthe buyer and then, as you
proceed through the deal stages,you sign an NDA, you're
prompted to join a data room.
The data room is builtspecifically for these purposes.
You can use standard cruxtransaction documents and we're
really supporting the processfrom the bid all the way to the
(15:52):
close through software, whichotherwise would take hundreds of
emails and spreadsheets anddocuments and all of those sorts
of things across dozens ofcounterparties, and so, in that
sense, we're really trying tomake this market much more
standardized, much moreefficient, in order to be able
to accommodate hundreds ofbillions of dollars of annual
supply.
Speaker 2 (16:13):
And then, from a monetization perspective, I'd
imagine you'd take a percentageof each transaction that
successfully goes through on theplatform.
Speaker 1 (16:20):
That's right.
The developer can list on Cruxwithout paying us a fee and then
, if we're successful, wemonetize based on the
transaction.
We're increasingly finding,because the software is getting
more and more powerful, thatthere will be other
opportunities for us to monetize.
The software is getting moreand more powerful.
There will be otheropportunities for us to monetize
the software directly, butcurrently the way that we do it
(16:42):
is via the transaction.
Speaker 2 (16:43):
How did you grow about growing user growth on the
platform from 0 to 1?
There was huge market need.
Speaker 1 (16:50):
So this market formed basically overnight.
The market formed basicallyovernight.
The treasury had to put outsome guidance and buyers and
sellers needed to find a way toconnect with each other and so
pretty organically from thestart we saw inbound interest
from all sides of intermediaries, so buyer advisors, who could
(17:16):
be tax advisors, or otherrenewable energy or ESG
consulting kind of firms orspecialty syndicators in the
space.
Those kinds of intermediariescan also use Crux as a mechanism
of sourcing supply or demandand by being a value-added
partner to other participants inthe market, we've also been
(17:37):
able to allow them to bringtheir supply and demand to the
marketplace, and all of that hasreally borne out.
We've now seen more than $20billion of credits listed on the
platform.
We've seen $17 billion worth ofbids on the platform.
We see significant overcoverageof demand versus supply,
(17:58):
particularly in larger creditcategories, and we've been able
to do deals in wind, solar,battery storage, bioenergy,
electrochromatic windows, 45x,advanced manufacturing of
multiple different kinds, fromvery small deals to very large
ones.
That's incredible.
Speaker 2 (18:16):
You obviously have a very good far better than the
vast majority of startupfounders insider's view on
Washington and how the policycreation works.
How have you navigated thepotential changes in government
policy when it comes to yourstrategy for Crux?
Speaker 1 (18:36):
So you always, when you're building in a space,
changes in government policywhen it comes to your strategy
for Crux.
So you always, when you'rebuilding in a space that is so
directly related to policy, it'simportant to understand the
underlying dynamics of the law,and in this case, the IRA
responds to a very real problem,which is that people were
(18:57):
increasingly aware of the needto transition our energy
infrastructure.
That awareness was acute in thesummer of 2022, right after
Putin had launched the war withUkraine and energy prices were
higher, and energy prices werehigher, and it was coinciding
(19:20):
with a lot more interest bycitizens in climate change, and
that was the context for the IRA.
It was put in place for 10years, or until we get to 25% of
2022 greenhouse gas emissionslevels, so this is current law
for a very long time.
Often, when tax policy changes,it changes because Congress
(19:40):
allows it to lapse or expire,but these credits are in place
until we're well into the 2030s.
And then I've obviously, likeeverybody in the industry, been
closely watching what people inCongress have been saying about
the law, what the differentparties and presidential
candidates have been sayingabout the law, what the
different parties andpresidential candidates have
been saying about it, and inCongress you've seen a broad
(20:03):
acceptance that the law isgenerating real value across
America.
There were 18 members of theHouse Republican caucus who
wrote a letter recently toSpeaker Johnson saying that the
credits were very valuablewithin their communities and the
money is flowing quite broadlyinto rural areas and red states,
and so that is reflected inthat position.
(20:26):
Also, you saw Speaker Johnsonrespond very directly to the
question of the IRA.
He said that if it were to bechanged, that Republicans would
use a scalpel as opposed to asledgehammer.
And then former President Trumphas been quite intentional
about the use of and theadvocacy for things like growing
(20:49):
domestic manufacturing, being alarge energy producer here in
the United States, a largeenergy producer here in the
United States has spoken withparticular reference to nuclear
as an example of a clean energytechnology that they're quite
supportive of, and so, eventhough there is some rhetoric
that comes out, particularlyfrom the Republican side, about
(21:11):
taking the IRA away, I think thelikelihood of that is
diminishingly likely as timegoes on.
Speaker 2 (21:19):
Has Kamala spoken much on the clean energy
component?
Speaker 1 (21:24):
Yes, so President Biden was the president who
signed the Inflation ReductionAct.
Kamala Harris obviously hisvice president over that period
has been a huge proponent of thelaw.
It's interesting actuallyrecently, in her latest economic
proposals, she introduced anotion of another $100 billion
of tax credits for advancedindustries of various kinds
(21:46):
related to AI, biotech, thingslike that and I think what that
reflects is not only are theDemocrats quite convinced that
this has been a successful lawthat is driving capital where it
needs to go for clean energy.
I think we have also observedthat the market has been
successful and that themechanism of transferable tax
(22:07):
credits may work in othercategories beyond clean energy.
So do we?
Speaker 2 (22:11):
feel fairly comfortable, then, since it
sounds like both sides areproponents that the future of
cleantech, at least as itrelates to legislation, is going
to be in good hands, regardlessof who wins the election.
Speaker 1 (22:25):
Political views aside , so I would say Democrats are
unqualified proponents and havebeen quite pleased with the
progress of the IRA.
I would say that Republicans,increasingly, are observing the
benefits that the law providesand how widely distributed they
(22:46):
are, both geographically and intechnology, and the IRA is quite
broad in the way that it isconstructed.
There are 12 different kinds oftechnologies that benefit from
the IRA in this particularsection of transferable credits,
and those are technologies likewind, solar and battery storage
(23:07):
that are well understood in theclean energy space.
There are also categories likecarbon capture and storage,
nuclear bioenergy lots ofdifferent categories that have
different levels of supportacross the country.
So different states havedifferent energy infrastructure
and that means that the electedrepresentatives of those states
(23:30):
tend to be advocates ofdifferent things.
So Republicans, I think, areincreasingly aware that taking
the law away, particularly asdemand growth starts to increase
, would not be a good idea forAmerican domestic manufacturing
and energy security.
Speaker 2 (23:46):
Interesting.
What do you think the next fewyears looks like, both in terms
of what the overall market lookslike and then how Crux fits
into that?
Speaker 1 (23:55):
So we released a third quarter market update this
week that shows that the marketin the first half of the year
was about 9 to 11 to $11 billionin terms of total size.
We think another $7 billion orso transacted in the third
quarter on route to $22 billionto $25 billion this year.
So the market is increasingquite rapidly in size in
(24:18):
diversity of credits that aretransacting both small credits
and large credits, but also manydifferent kinds of technology
that are finding the both smallcredits and large credits, but
also many different kinds oftechnology that are finding the
market and at good pricing.
I think that trend is likely tocontinue as the market continues
to grow and more facilitiescome online with more credits
associated and more buyerscontinue to see the benefits of
(24:39):
participating in the market.
So I think five years from now,this will remain a really
critical way in which cleanenergy is financed.
And then, importantly, we'realso seeing that it is changing
the way that the rest of thecapital forms around these
projects.
So with the transferable creditcome other kinds of loans that
may be collateralized by ortaken out by the sale of the
(25:02):
credit, and we're seeing a lotof innovation around that sort
of thing right now andparticipating in it, which I
think is quite constructive tothe cost of capital and our
ability as a country to buildout the level of infrastructure
that we need to over this period.
Speaker 2 (25:15):
I want to start to talk a little bit more about
Crux itself and the developmentof the company, rather than the
market, probably more my, whereI'm a little bit more qualified
to speak anyway.
So this is your second time nowas a founder.
So you mentioned that you'dfounded Sold Mobilize and that
it was a little bit more of amission-driven company.
(25:36):
First of all, I'm just curiouswhat does a mission-driven
company mean in the context ofevents management?
Speaker 1 (25:40):
Yeah, so we helped mission-driven organizations,
campaigns, nonprofits, cities,states, school districts and
mission-driven companies, socompanies that had some sort of
mission focus, organized events.
Those events were distributed,existed in the context of a
(26:00):
network context of a network, soorganizations could send their
members to other organizations,events and the broadest set of
people could discover eventsthat were on the system and then
Mobilize, really focused onpulling people that signed up
for an event into an action onbehalf of the organizing group,
(26:22):
no matter what form they came in.
And that became quite apowerful principle, quite a
powerful product construction,basically workflow and
management software that pullspeople into events at higher
rates, and a network that drivesmore people into the top of the
funnel.
And so we were really happy tobe able to sell that company to
(26:45):
EveryAction, which was owned byInsight Partners at the time,
and it's still a very importantpiece of infrastructure for
movement groups and alsocampaigns to be able to pull
people into the events thatthey're organizing for.
Speaker 2 (27:01):
What was that like when you went through the exit I
know you mentioned your fatherpassed away around the same time
.
I can imagine that must havebeen a strange feeling having
like the highest high of an exitand kind of the lowest low at
the same time.
What was that period like?
Speaker 1 (27:15):
Yeah, I mean these companies become such an
important part of your life,right, you know you have the
opportunity're, you have theyeah, you have the opportunity
to build a thing completely fromscratch and then other people
decide that your idea is a goodidea and they give you money and
they are willing to come workfor it, and you know, all of
(27:38):
that helps to bring somethinginto the world that you know has
real value, both impact valueand enterprise value.
And whenever you're luckyenough to be able to sell a
company, there's some part ofthat that is affirmative and
beautiful and like a reallygreat transition that allows for
(28:03):
the perpetuation of thatproduct for a much longer period
of time.
And all of that was true withthe Mobilize acquisition.
It was also, as you mentioned, atough personal time for me and
there was a lot of change thatwas happening at the same time.
So I'm very lucky to have thefamily that I have.
My wife, emily, is apsychiatrist and is just a
(28:28):
wonderful person and empatheticmother and spouse, so I'm really
lucky to have her support andthe support of my kids through
that period of time.
And four years later, it wasactually four years since my dad
passed this week.
I think about him a lot and Imiss him.
But life moves on and I'm quitehappy our son is named after
(28:56):
him, so I get to remember himthrough my younger son.
Speaker 2 (29:00):
I love that.
What lessons did you bring as asecond time founder to founding
Crux that you're grateful for,or that really have come in
handy, that you learned fromMobilize?
Speaker 1 (29:12):
Well, first of all, I should say that I am doing Crux
with the same co-founder asMobilize, Alan Kramer.
Speaker 3 (29:19):
I noticed that.
Speaker 1 (29:20):
Yeah.
So the lessons that we havelearned and I have learned I
learned together with Alan andthere's a real benefit to doing
this again with the same partnerwho is as talented as he is.
I'd say I can't believe thatanybody is successful the first
(29:40):
time starting a company.
You just make so many mistakes.
You make mistakes in the waythat you set it up and the
people that you hire and the wayyou think about goals and
success and fundraising andeverything.
So I couldn't possiblyenumerate all of the lessons.
It informs that previousexperience informs everything
(30:02):
about how we thought aboutsetting up this company and I
feel very grateful that we gotto have an experience that
culminated the last time in asuccessful outcome.
So we know how to do that too.
Speaker 2 (30:14):
So it sounds like you had a great starting point,
both in terms of your foundingexperience and then also coming
into a really strong andin-demand market for this, like
you mentioned, market that gotcreated overnight.
Have there been any road bumpsor you know times when you felt
uncertainty about the future ofthe company?
Speaker 1 (30:34):
Always right.
If any startup founder tellsyou that there haven't been
bumps in the road, then theyhaven't been driving, so you
know.
It's just part of the ride.
And there are so many ways inwhich our thinking has evolved
in the market.
There are so many ways in ourpositioning and the product that
(30:56):
we offer has changed, and Ithink for better or worse.
I'm sort of a glass half fullkind of person and I mostly
think about the bumps in theroad as data that we're able to
implement and figure out how tofind the actual market, and so I
(31:18):
could point to a bunch ofexamples on the way that we
position the product very early,on, the way that we thought
about the role of intermediariesand what the software we need
to do for them.
But everything that hashappened along the way we've
learned from, and I think thecompany is much better for it.
Speaker 2 (31:36):
Yeah, I think so too.
I mean, there's no such thingas losses, there's wins and
learning lessons, right?
Yeah, so in five years, if wewere to fast forward a bit, what
do you think and I know wementioned what we think the
market will look like?
But what do you think Cruxlooks like over the course of
the next couple?
Speaker 1 (31:50):
of years.
We are very rapidly buildingwhat I think is going to be a
diversified clean energy financeplatform.
It is first, we are firstbuilding the market in
transferable tax credits, needthat market to be vibrant and
efficient and liquid, and as webuild that market, we are
(32:13):
observing that there are lots ofother opportunities for us to
support the sellers who aredevelopers, manufacturers and
buyers of the credits, and thereare many other ways in which
people who are trading their taxcredits on Crux may want to
source other forms of capital.
So, as time goes on, we will bemore of a one-stop shop for
(32:38):
other kinds of capital In thecontext, again, of a network.
We work quite closely withbanks, with tax advisors, with
law firms, with privateinvestors, and we're really
trying to build a mechanism offinancing clean energy that is
much more efficient, with lotsof partners that need to be
(32:59):
configured around the table inorder to drive the capital that
we need to into developers andmanufacturers at scale.
Speaker 2 (33:06):
Awesome.
Well, it sounds like you have asolid plan.
I will be cheering you alongfrom the sidelines and really
appreciate the conversation.
Thanks for coming on today.
Thanks for having me, Rhys.
Speaker 3 (33:16):
Thanks for listening to C2Exit.
If you enjoyed the episode,don't forget to subscribe and
we'll see you next time.
President Biden was the president who signed the
Inflation Reduction Act.
Kamala Harris obviously hisvice president over that period
has been a huge proponent of thelaw.
It's interesting actuallyrecently, in her latest economic
proposals, she introduced anotion of another $100 billion
of tax credits for advancedindustries of various kinds
(00:21):
related to AI, biotech, thingslike that and I think what that
reflects is not only are theDemocrats quite convinced that
this has been a successful lawthat is driving capital where it
needs to go for clean energy.
I think we have also observedthat the market has been
successful and that themechanism of transferable tax
(00:41):
credits may work in othercategories beyond clean energy.
Speaker 2 (00:47):
Hi everyone.
Thanks for tuning in to Seed toExit.
Today.
I'm welcoming Alfred Johnson.
Alfred is the co-founder andCEO of Crux, the sustainable
finance technology companythat's changing the way that
clean energy and manufacturingproducts are financed in the
United States.
The company's first offering isthe platform for buyers,
sellers and intermediaries totransact and manage transferable
tax credits.
(01:09):
Before founding Crux, alfredserved as the Deputy Chief of
Staff to the United StatesDepartment of the Treasury and,
prior to the Treasury, alfredwas the co-founder and CEO of
Mobilize, the events managementplatform and network acquired by
EveryAction in 2020.
Earlier in his career, alfredwas a vice president in
financial markets advisory atBlackRock, senior advisor for
financial markets at the USTreasury and special assistant
(01:31):
to the White House chief ofstaff.
Now this is a special episode.
We're going to talk about theelection and we are releasing
this episode on election day,and we're going to talk a little
bit about what theramifications of what the
election might look like,depending on who ultimately ends
up as the victor.
So I hope you enjoy and don'tforget to vote.
Speaker 3 (01:52):
You're listening to the seed to exit podcast with
your host, reese Keck.
Here you'll learn from startupexecutives, founders, investors
and industry experts.
You'll learn from the bestabout building amazing products,
scaling companies, raisingcapital, hiring the right people
and more.
Subscribe and listen in for newepisodes and enjoy the show.
Speaker 2 (02:15):
Alfred, welcome on to the show Excited to have you.
Thanks for having me, rhys.
So there's a lot I want to diveinto with you today.
You have a really uniquecompany at Crux that you're
running, and then also you'vehad a fairly unique background
in terms of your founder journey.
So, for those who maybe haven'thad the chance to check out
(02:36):
your LinkedIn yet, would youmind giving a quick overview of
your background?
Speaker 1 (02:40):
Sure, yeah, Rhys.
I grew up here in DC, where welive now, and then started my
career working in the governmentwas at the Treasury Department,
working on the Financial CrisisResponse and Recovery Act in
the very early days of the Obamaadministration, getting exposed
(03:00):
to these tax credits that wehave now built our business
around clean energy tax creditsthat help support energy
infrastructure.
I got the chance to work onearlier versions of those
programs at Treasury.
I worked in the White Housebriefly where I was special
assistant to the White Housechief of staff it was Bill Daley
at the time and then went backto business school.
(03:20):
After that went to BlackRock.
They had a structured financeadvisory practice working with
banks and official institutionsmeaning government.
So we worked with the CentralBank of Greece on their banking
crisis, on other foreign centralbanks on US banking issues in
the wake of Dodd-Frank, and thengot into tech Really had
(03:43):
enjoyed building smaller teamsearlier in my career, Wanted to
do that in that space, Went to afintech company originally
before starting my last business, Mobilize, which we then sold 4
years later.
It was an event managementbusiness and mission-driven
category.
Sold it to a portfolio companyof inside partners.
(04:04):
Mission-driven category sold itto a portfolio company of
inside partners and I went backto Treasury, started on the
first minute of the first day ofthe Janet Yellen Treasury as
the Secretary's Deputy Chief ofStaff was working on the COVID
response initially so how do weget a trillion dollars out the
door as rapidly as possible inalignment with the law?
And then also did a lot of workon technology and financial
(04:27):
markets, which is really thesubstance of my background,
before leaving the department inthe summer of 22 and starting
Crux pretty shortly thereafter.
Speaker 2 (04:37):
And your family comes from a fairly deep rooted
background in public service,don't you?
Was that something that youwere always sort of planned on
going into in your earlier years?
Speaker 1 (04:47):
Yeah, it's funny, I'm named for my grandfather on my
father's side, who was namedAlfred I Johnson.
He was born on the prairie inWestern Minnesota in 1898 and
ultimately rose to be thespeaker of the Minnesota House
of Representatives.
Only had an eighth gradeeducation, half of which was in
(05:10):
Norwegian, and then my parentsmet on a presidential campaign,
first in Walter Mondale's Senateoffice right before he ran for
president.
My mom was his press secretary,my dad ran the campaign, so
there was always a thread in thehouse growing up about politics
(05:31):
, government, government serviceand, of course, living in DC.
You're just surrounded by thatstuff, and so when I went to
college, I studied politicalscience, but I was also always
interested in business andfinance and, of course, chose to
do it in California, where techis so central, and my career
since then has really been a mixof software, financial markets
(05:55):
and the government.
Speaker 2 (05:56):
You've obviously done incredibly well for yourself on
the business side, but justgiven the family background and
history, was there any sort oflike oh no, alfred, what are you
doing?
You're supposed to be in thegovernment?
Or any sort of familialexpectations like that?
Speaker 1 (06:09):
Sure, always, but I did it a couple of times.
It was the first thing I everdid was first a campaign and
then the Treasury Department,and then had the privilege of
going back again privilege ofgoing back again starting in
2021.
So that has been a reallyjoyful way of serving and
(06:38):
certainly I have learned a tonfrom both of those experiences.
And whatever ways I am able tocontribute going forward, I
would love to do it, and one ofthe things I love about Crux is
we're really integrating theprivate market with a government
program in a really elegant way.
That is driving many moredollars billions, hopefully
hundreds of billions of dollarsinto clean energy of all
(06:58):
different shapes and sizes.
Speaker 2 (07:00):
Before we get to Crux , which I'm really interested in
diving into, I am reallycurious.
You mentioned that you were inthe Treasury Department during
COVID and you had to get atrillion dollars out the door.
I can only imagine howmonumental of a task that that
was.
What was that like?
What was that like being inthat environment?
What was the process?
Speaker 1 (07:19):
Yeah, so I have served at Treasury twice, both
during forms of financial andeconomic crisis.
When I was there the first timewas very early in my
professional life, but it was inthe immediate wake of TARP
having been passed by thegovernment.
Tarp required quite a lot ofdollars to be deployed into
(07:41):
banks and other kinds of placesto support the economy, and that
also required the department tobuild infrastructure.
So I saw and participated inthe standup of the TARP
organization at the time.
It grew to a couple hundredpeople and so I had had the
experience of buildingoperational infrastructure to
(08:03):
deploy a large program in thedepartment before.
That was experience that Ibrought into my most recent job
as Deputy Chief of Staff toSecretary Yellen and drew on it
quite a bit.
Right after the president,president Biden, took office,
the Congress passed the AmericanRescue Plan, the ARP, which
(08:25):
included about a trilliondollars of subsidy of various
kinds that needed to be deployedby the US Treasury Department
to states and other forms oflocalities and tribes and cities
and nonprofits and companies,and the Treasury was really the
(08:46):
center of a lot of that activityand the statute mandated that
some of those funds be dispersedvery rapidly, so, similar to
TARP, we had to stand up.
Operational infrastructurebecame known as the Office of
Recovery Programs in theTreasury Department and it had
to grow really quickly to beable to meet the needs of the
(09:09):
country at the time and what thelaw required.
And building that sort of thingunder with a lot of economic
impact to the work was somethingthat was really rewarding and
I'm really proud of the workthat the department did during
that period.
Speaker 2 (09:26):
What was the inspiration to start Crux so?
Speaker 1 (09:28):
my so dad passed away pretty shortly before we sold
the last company, happened ataround exactly the same time.
Sold, the company immediatelymade the decision to go back
into the Treasury Department,moved my family.
We were living in New York atthe time.
(09:49):
It was the pandemic and wemoved down to DC.
I went into the department andaround that same time, a few
months after I got there, we gotpregnant with our second son,
who was born about 18 monthsafter I started at the
department, and that ended upbeing a good time to step away
(10:13):
and think about what I reallywanted to do.
It was obviously a privilege tobe able to serve, particularly
with Secretary Yellen, who is soinspiring on so many different
levels, but I had really lovedbuilding another small company
that had gotten to a successfulexit in a mission-driven space,
and with the two boys at thatpoint I was thinking a lot about
(10:37):
what are the forms of impactthat I can have that would be
most durable for them and helpthem live the healthiest,
happiest lives.
And I remember a particularconversation with my wife where
we went out and she was like Ireally think the next thing that
you should do, that we shoulddo together.
Like I really think the nextthing that you should do, that
(10:59):
we should do together, shouldrelate to the climate, and that
really stuck with me andparticularly with the two sons
and personally enjoying theoutdoors so much.
I love being outside it's thething that makes me the happiest
and being in beautiful places Iwas quite motivated to find a
way of making a difference.
Speaker 2 (11:18):
I love that and I will also say on the side now
kudos to you for being a startupfounder with two young ones.
That is not for the faint ofheart.
Speaker 1 (11:26):
Yeah, I was starting up the family too.
Speaker 2 (11:27):
Yep.
So for the unfamiliar, couldyou explain and break down what
transferable tax credits are andhow they benefit clean energy
and manufacturing products,because I feel like, in order to
explain what Crux does, we needto have a baseline
understanding of what that is.
Speaker 1 (11:43):
Yeah.
So governments generallyeverywhere subsidize energy in
some way, and they have sincethe beginning of time right, and
with the United States inparticular, we make significant
use of the tax code to encouragepeople to build the kind of
(12:06):
energy projects that we want inthe US, and we started doing
that with oil and gas in 1916,around the time that World War I
was starting, and we wanted toencourage domestic production of
oil because of more demandcoming from the war.
So we used the tax code to dothat.
We have used the tax code inthe form of tax credits for
(12:30):
renewable energy for decades,and as long as we have been
using tax credits, there's afundamental dynamic that needs
to be dealt with, which is thatcredits are very useful and
directly applicable if you are acompany that pays more tax than
the credit that you havereceived.
(12:51):
If you are not in thatsituation which most project
development companies,particularly in renewables, are
not they pay less tax than thecredits that they receive.
They need to find somebody thatcan be their partner to
monetize the credits directly,sell them.
(13:12):
Project developers used to berequired to have an external
investor invest in the asset,invest in the solar project,
invest in the wind facility inorder for that investor to
receive the tax benefitsassociated with that facility.
That market is called thetraditional tax equity market.
(13:33):
It's existed for decades.
What Congress did with the IRAis pass the largest climate law
that has ever been passed by anygovernment ever, about two
thirds of which is tax credits.
With the increase in the volumeof tax credits that were in the
law, congress needed to alsodeal with the monetization of
(13:54):
those credits and looked at theexisting tax equity market and
did not believe that it wouldhave the capacity to be able to
support the level of investmentthat was foreseen.
And to solve that problem theycreated transferability, which
allows the developers, themanufacturers, the benefit from
the credits to be able to sellthem directly to a third-party
(14:15):
investor that pays tax, that cantake the credits, to be able to
sell them directly to a thirdparty investor that pays tax,
that can take the credits andapply on their taxes.
And so, in the process of doingthat, congress created a multi
hundred billion dollar assetclass and transferable credits,
and that market has taken off ata much faster rate than anybody
anticipated.
Speaker 2 (14:33):
And so Crux then is the platform where, if you're
saying I need to and I'mprobably going to butcher this,
but if I have this tax creditthat I would like to transfer I
can go on and find someone whois willing to purchase it from
me.
Is that more or less the model?
Speaker 1 (14:48):
That's exactly right.
So you are a developer of solarwind, battery storage,
bioenergy, you're a manufacturerof solar panels here in the
United States?
Whatever you are categorically,you can list the credits On
Crux.
The credits are seenanonymously by buyers that are
(15:08):
in our system as well as buyeradvisors that are looking for
credits and finding liquidity.
Via Crux.
You'll receive bids, in mostcases within the first week of
listing your credit.
Often you're receiving multiplebids.
With multiple bids, you're ableto accept, reject, counter
directly within the system.
(15:29):
You're able to ask questions ofthe buyer and then, as you
proceed through the deal stages,you sign an NDA, you're
prompted to join a data room.
The data room is builtspecifically for these purposes.
You can use standard cruxtransaction documents and we're
really supporting the processfrom the bid all the way to the
(15:52):
close through software, whichotherwise would take hundreds of
emails and spreadsheets anddocuments and all of those sorts
of things across dozens ofcounterparties, and so, in that
sense, we're really trying tomake this market much more
standardized, much moreefficient, in order to be able
to accommodate hundreds ofbillions of dollars of annual
supply.
Speaker 2 (16:13):
And then, from a monetization perspective, I'd
imagine you'd take a percentageof each transaction that
successfully goes through on theplatform.
Speaker 1 (16:20):
That's right.
The developer can list on Cruxwithout paying us a fee and then
, if we're successful, wemonetize based on the
transaction.
We're increasingly finding,because the software is getting
more and more powerful, thatthere will be other
opportunities for us to monetize.
The software is getting moreand more powerful.
There will be otheropportunities for us to monetize
the software directly, butcurrently the way that we do it
(16:42):
is via the transaction.
Speaker 2 (16:43):
How did you grow about growing user growth on the
platform from 0 to 1?
There was huge market need.
Speaker 1 (16:50):
So this market formed basically overnight.
The market formed basicallyovernight.
The treasury had to put outsome guidance and buyers and
sellers needed to find a way toconnect with each other and so
pretty organically from thestart we saw inbound interest
from all sides of intermediaries, so buyer advisors, who could
(17:16):
be tax advisors, or otherrenewable energy or ESG
consulting kind of firms orspecialty syndicators in the
space.
Those kinds of intermediariescan also use Crux as a mechanism
of sourcing supply or demandand by being a value-added
partner to other participants inthe market, we've also been
(17:37):
able to allow them to bringtheir supply and demand to the
marketplace, and all of that hasreally borne out.
We've now seen more than $20billion of credits listed on the
platform.
We've seen $17 billion worth ofbids on the platform.
We see significant overcoverageof demand versus supply,
(17:58):
particularly in larger creditcategories, and we've been able
to do deals in wind, solar,battery storage, bioenergy,
electrochromatic windows, 45x,advanced manufacturing of
multiple different kinds, fromvery small deals to very large
ones.
That's incredible.
Speaker 2 (18:16):
You obviously have a very good far better than the
vast majority of startupfounders insider's view on
Washington and how the policycreation works.
How have you navigated thepotential changes in government
policy when it comes to yourstrategy for Crux?
Speaker 1 (18:36):
So you always, when you're building in a space,
changes in government policywhen it comes to your strategy
for Crux.
So you always, when you'rebuilding in a space that is so
directly related to policy, it'simportant to understand the
underlying dynamics of the law,and in this case, the IRA
responds to a very real problem,which is that people were
(18:57):
increasingly aware of the needto transition our energy
infrastructure.
That awareness was acute in thesummer of 2022, right after
Putin had launched the war withUkraine and energy prices were
higher, and energy prices werehigher, and it was coinciding
(19:20):
with a lot more interest bycitizens in climate change, and
that was the context for the IRA.
It was put in place for 10years, or until we get to 25% of
2022 greenhouse gas emissionslevels, so this is current law
for a very long time.
Often, when tax policy changes,it changes because Congress
(19:40):
allows it to lapse or expire,but these credits are in place
until we're well into the 2030s.
And then I've obviously, likeeverybody in the industry, been
closely watching what people inCongress have been saying about
the law, what the differentparties and presidential
candidates have been sayingabout the law, what the
different parties andpresidential candidates have
been saying about it, and inCongress you've seen a broad
(20:03):
acceptance that the law isgenerating real value across
America.
There were 18 members of theHouse Republican caucus who
wrote a letter recently toSpeaker Johnson saying that the
credits were very valuablewithin their communities and the
money is flowing quite broadlyinto rural areas and red states,
and so that is reflected inthat position.
(20:26):
Also, you saw Speaker Johnsonrespond very directly to the
question of the IRA.
He said that if it were to bechanged, that Republicans would
use a scalpel as opposed to asledgehammer.
And then former President Trumphas been quite intentional
about the use of and theadvocacy for things like growing
(20:49):
domestic manufacturing, being alarge energy producer here in
the United States, a largeenergy producer here in the
United States has spoken withparticular reference to nuclear
as an example of a clean energytechnology that they're quite
supportive of, and so, eventhough there is some rhetoric
that comes out, particularlyfrom the Republican side, about
(21:11):
taking the IRA away, I think thelikelihood of that is
diminishingly likely as timegoes on.
Speaker 2 (21:19):
Has Kamala spoken much on the clean energy
component?
Speaker 1 (21:24):
Yes, so President Biden was the president who
signed the Inflation ReductionAct.
Kamala Harris obviously hisvice president over that period
has been a huge proponent of thelaw.
It's interesting actuallyrecently, in her latest economic
proposals, she introduced anotion of another $100 billion
of tax credits for advancedindustries of various kinds
(21:46):
related to AI, biotech, thingslike that and I think what that
reflects is not only are theDemocrats quite convinced that
this has been a successful lawthat is driving capital where it
needs to go for clean energy.
I think we have also observedthat the market has been
successful and that themechanism of transferable tax
(22:07):
credits may work in othercategories beyond clean energy.
So do we?
Speaker 2 (22:11):
feel fairly comfortable, then, since it
sounds like both sides areproponents that the future of
cleantech, at least as itrelates to legislation, is going
to be in good hands, regardlessof who wins the election.
Speaker 1 (22:25):
Political views aside , so I would say Democrats are
unqualified proponents and havebeen quite pleased with the
progress of the IRA.
I would say that Republicans,increasingly, are observing the
benefits that the law providesand how widely distributed they
(22:46):
are, both geographically and intechnology, and the IRA is quite
broad in the way that it isconstructed.
There are 12 different kinds oftechnologies that benefit from
the IRA in this particularsection of transferable credits,
and those are technologies likewind, solar and battery storage
(23:07):
that are well understood in theclean energy space.
There are also categories likecarbon capture and storage,
nuclear bioenergy lots ofdifferent categories that have
different levels of supportacross the country.
So different states havedifferent energy infrastructure
and that means that the electedrepresentatives of those states
(23:30):
tend to be advocates ofdifferent things.
So Republicans, I think, areincreasingly aware that taking
the law away, particularly asdemand growth starts to increase
, would not be a good idea forAmerican domestic manufacturing
and energy security.
Speaker 2 (23:46):
Interesting.
What do you think the next fewyears looks like, both in terms
of what the overall market lookslike and then how Crux fits
into that?
Speaker 1 (23:55):
So we released a third quarter market update this
week that shows that the marketin the first half of the year
was about 9 to 11 to $11 billionin terms of total size.
We think another $7 billion orso transacted in the third
quarter on route to $22 billionto $25 billion this year.
So the market is increasingquite rapidly in size in
(24:18):
diversity of credits that aretransacting both small credits
and large credits, but also manydifferent kinds of technology
that are finding the both smallcredits and large credits, but
also many different kinds oftechnology that are finding the
market and at good pricing.
I think that trend is likely tocontinue as the market continues
to grow and more facilitiescome online with more credits
associated and more buyerscontinue to see the benefits of
(24:39):
participating in the market.
So I think five years from now,this will remain a really
critical way in which cleanenergy is financed.
And then, importantly, we'realso seeing that it is changing
the way that the rest of thecapital forms around these
projects.
So with the transferable creditcome other kinds of loans that
may be collateralized by ortaken out by the sale of the
(25:02):
credit, and we're seeing a lotof innovation around that sort
of thing right now andparticipating in it, which I
think is quite constructive tothe cost of capital and our
ability as a country to buildout the level of infrastructure
that we need to over this period.
Speaker 2 (25:15):
I want to start to talk a little bit more about
Crux itself and the developmentof the company, rather than the
market, probably more my, whereI'm a little bit more qualified
to speak anyway.
So this is your second time nowas a founder.
So you mentioned that you'dfounded Sold Mobilize and that
it was a little bit more of amission-driven company.
(25:36):
First of all, I'm just curiouswhat does a mission-driven
company mean in the context ofevents management?
Speaker 1 (25:40):
Yeah, so we helped mission-driven organizations,
campaigns, nonprofits, cities,states, school districts and
mission-driven companies, socompanies that had some sort of
mission focus, organized events.
Those events were distributed,existed in the context of a
(26:00):
network context of a network, soorganizations could send their
members to other organizations,events and the broadest set of
people could discover eventsthat were on the system and then
Mobilize, really focused onpulling people that signed up
for an event into an action onbehalf of the organizing group,
(26:22):
no matter what form they came in.
And that became quite apowerful principle, quite a
powerful product construction,basically workflow and
management software that pullspeople into events at higher
rates, and a network that drivesmore people into the top of the
funnel.
And so we were really happy tobe able to sell that company to
(26:45):
EveryAction, which was owned byInsight Partners at the time,
and it's still a very importantpiece of infrastructure for
movement groups and alsocampaigns to be able to pull
people into the events thatthey're organizing for.
Speaker 2 (27:01):
What was that like when you went through the exit I
know you mentioned your fatherpassed away around the same time
.
I can imagine that must havebeen a strange feeling having
like the highest high of an exitand kind of the lowest low at
the same time.
What was that period like?
Speaker 1 (27:15):
Yeah, I mean these companies become such an
important part of your life,right, you know you have the
opportunity're, you have theyeah, you have the opportunity
to build a thing completely fromscratch and then other people
decide that your idea is a goodidea and they give you money and
they are willing to come workfor it, and you know, all of
(27:38):
that helps to bring somethinginto the world that you know has
real value, both impact valueand enterprise value.
And whenever you're luckyenough to be able to sell a
company, there's some part ofthat that is affirmative and
beautiful and like a reallygreat transition that allows for
(28:03):
the perpetuation of thatproduct for a much longer period
of time.
And all of that was true withthe Mobilize acquisition.
It was also, as you mentioned, atough personal time for me and
there was a lot of change thatwas happening at the same time.
So I'm very lucky to have thefamily that I have.
My wife, emily, is apsychiatrist and is just a
(28:28):
wonderful person and empatheticmother and spouse, so I'm really
lucky to have her support andthe support of my kids through
that period of time.
And four years later, it wasactually four years since my dad
passed this week.
I think about him a lot and Imiss him.
But life moves on and I'm quitehappy our son is named after
(28:56):
him, so I get to remember himthrough my younger son.
Speaker 2 (29:00):
I love that.
What lessons did you bring as asecond time founder to founding
Crux that you're grateful for,or that really have come in
handy, that you learned fromMobilize?
Speaker 1 (29:12):
Well, first of all, I should say that I am doing Crux
with the same co-founder asMobilize, Alan Kramer.
Speaker 3 (29:19):
I noticed that.
Speaker 1 (29:20):
Yeah.
So the lessons that we havelearned and I have learned I
learned together with Alan andthere's a real benefit to doing
this again with the same partnerwho is as talented as he is.
I'd say I can't believe thatanybody is successful the first
(29:40):
time starting a company.
You just make so many mistakes.
You make mistakes in the waythat you set it up and the
people that you hire and the wayyou think about goals and
success and fundraising andeverything.
So I couldn't possiblyenumerate all of the lessons.
It informs that previousexperience informs everything
(30:02):
about how we thought aboutsetting up this company and I
feel very grateful that we gotto have an experience that
culminated the last time in asuccessful outcome.
So we know how to do that too.
Speaker 2 (30:14):
So it sounds like you had a great starting point,
both in terms of your foundingexperience and then also coming
into a really strong andin-demand market for this, like
you mentioned, market that gotcreated overnight.
Have there been any road bumpsor you know times when you felt
uncertainty about the future ofthe company?
Speaker 1 (30:34):
Always right.
If any startup founder tellsyou that there haven't been
bumps in the road, then theyhaven't been driving, so you
know.
It's just part of the ride.
And there are so many ways inwhich our thinking has evolved
in the market.
There are so many ways in ourpositioning and the product that
(30:56):
we offer has changed, and Ithink for better or worse.
I'm sort of a glass half fullkind of person and I mostly
think about the bumps in theroad as data that we're able to
implement and figure out how tofind the actual market, and so I
(31:18):
could point to a bunch ofexamples on the way that we
position the product very early,on, the way that we thought
about the role of intermediariesand what the software we need
to do for them.
But everything that hashappened along the way we've
learned from, and I think thecompany is much better for it.
Speaker 2 (31:36):
Yeah, I think so too.
I mean, there's no such thingas losses, there's wins and
learning lessons, right?
Yeah, so in five years, if wewere to fast forward a bit, what
do you think and I know wementioned what we think the
market will look like?
But what do you think Cruxlooks like over the course of
the next couple?
Speaker 1 (31:50):
of years.
We are very rapidly buildingwhat I think is going to be a
diversified clean energy financeplatform.
It is first, we are firstbuilding the market in
transferable tax credits, needthat market to be vibrant and
efficient and liquid, and as webuild that market, we are
(32:13):
observing that there are lots ofother opportunities for us to
support the sellers who aredevelopers, manufacturers and
buyers of the credits, and thereare many other ways in which
people who are trading their taxcredits on Crux may want to
source other forms of capital.
So, as time goes on, we will bemore of a one-stop shop for
(32:38):
other kinds of capital In thecontext, again, of a network.
We work quite closely withbanks, with tax advisors, with
law firms, with privateinvestors, and we're really
trying to build a mechanism offinancing clean energy that is
much more efficient, with lotsof partners that need to be
(32:59):
configured around the table inorder to drive the capital that
we need to into developers andmanufacturers at scale.
Speaker 2 (33:06):
Awesome.
Well, it sounds like you have asolid plan.
I will be cheering you alongfrom the sidelines and really
appreciate the conversation.
Thanks for coming on today.
Thanks for having me, Rhys.
Speaker 3 (33:16):
Thanks for listening to C2Exit.
If you enjoyed the episode,don't forget to subscribe and
we'll see you next time.
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