This Entrepreneur Sold A $500 Million Renewable Energy Company And Now Built A Platform To Enable The Purchase Of Solar And Storage Equipment

In the world of entrepreneurship, there are tales of triumph, moments of despair, and lessons learned along the way. One such remarkable journey is that of Mike Hall, a visionary leader who transformed a garage start-up into an industry leader.

In this blog post, we’ll delve into Mike’s inspiring story, from his humble beginnings to his groundbreaking achievements in the renewable energy sector. He talks at length about the fundraising challenges he faced in 2008, restructuring the business and the transaction with a private equity firm for over half a billion.

Listen to the full podcast episode and review the transcript here.

A Humble Beginning

Mike was born in New Jersey and grew up in the suburbs of San Diego, where he spent his childhood enjoying the sunny weather and laid-back lifestyle.

Despite not initially envisioning himself as an engineer, Mike’s path took a turn when he discovered his passion for problem-solving during his university years at the University of California, Santa Barbara.

Mike’s initial plan was to take a journalism major course since he wanted to study English to learn how to be a writer. However, his father, an optometrist, convinced him to take math and science but keep his options open.

Accordingly, Mike took first-year Chemistry, doing really well and enjoying it. Inspired by a good friend who was a chemical engineer, Mike chose to follow him into the field and started taking engineering classes.

Finding Mentorship and Purpose

During his college days, Mike found a mentor who saw his potential and encouraged him to explore engineering. Through internships in New Jersey at Bell Labs and academic pursuits, Mike fell in love with the world of technology and innovation.

He signed up for a Ph.D. program at Stanford, thinking of being a professor. However, a pivotal moment during his corporate stint at Applied Materials propelled him towards entrepreneurship.

The Birth of Borrego Solar

After experiencing the corporate grind, Mike found himself at a crossroads when he was laid off during the dot-com financial crisis in the late 1990s. With newfound time and a desire for change, Mike joined forces with his brother Aaron to explore the emerging residential solar energy field.

Thus, Borrego Solar was born—a garage start-up with a mission to harness renewable energy to combat climate change. Back in the day, the field was nascent, and Mike recalls how you could drive around California for days without seeing any solar panels on rooftops.

At the time, entrepreneurs who had an idea could just go ahead and do it without going through extensive approval processes. Mike recalls how he got hooked on building a business and team, never looking back, and spending the last 25 years on the project.

The business model was pretty straightforward. The duo only needed to convince homeowners to buy and put solar panels on the roof.

Every day, Mike would pitch about five homeowners and then come back two weeks later with their truck and a tool belt and actually put the solar panels on the roof.

Scaling Borrego

The duo was managing the end-to-end aspects of the business in the downstream part of the solar and energy storage market. And that included design, construction, operation, and maintenance.

As they continued running the business, they transitioned into renewable energy development, which was similar to real estate development except for renewable energy power plants.

Soon, Mike and his brother were going out to find real estate they could use to locate the plants. They would negotiate the rights to interconnect with the utility, get the land and local permits, and put together the financial models for a power plant project.

Next, the duo packaged the whole project, including the land, interconnection rights, engineering designs, and permits, and sold those assets to specialized private equity firms. The success of the business generated the most returns for their investors.

Navigating the Challenges of Fundraising

The early years of Borrego were marked by resilience and perseverance as Mike and his team navigated the turbulent waters of fundraising during the financial crisis. In retrospect, Mike advises founders not to wait too long to raise capital.

Mike and his brother started building Borrego with bootstrapped funds from friends and family until 2007. Their initial decision to delay fundraising in 2008 was driven by the desire to avoid dilution. However, radical changes in the macro environment resulted in innumerable challenges.

Mike reveals how, early in 2008, they had a term sheet to acquire the business for $100M, which was phenomenal since his family owned almost 100% of it.

However, the deal fell through. Mike and his brother continued looking for more offers. However, since the market was eroding, their ability to get any deal done became more difficult.

Lessons were learned the hard way, with near-misses and shattered deals. However, Borrego weathered the storm through sheer determination and strategic restructuring and emerged stronger than ever.

Mike recalls how they had to sign a deal with a strategic at a fraction of the initial valuation, which resulted in a massive dilution.

They ended up having to sell a lot of the company for not much money because they were stuck in the worst possible fundraising environment. However, perseverance and assertiveness got them through the turbulence.

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Restructuring Borrego

Borrego raised around 1M in a friends and family round and another $14M in 2009. However, the company went through a low point in 2008-2009 when Mike and Aaron had to restructure the company.

They sold off an underperforming division and shrank the business to focus on a small niche market, cutting out a lot of the complexities.

After the setbacks of 2009, Borrego had thirteen consecutive years of profitable growth. From 2020 through 2021, it demonstrated a significant success track circuit. Around this time, Mike and his brother started looking for other investors besides private equity or venture investors.

As they saw it, these investors came with their positives and negatives and typically wanted to stay vested for a fixed time frame. The next option was to take the company public with an IPO. Around 2021, the stock markets were booming, so an IPO seemed like the appropriate strategy.

Although Mike and his brother came close to entering into a SPAC deal, they pulled out before the actual execution. They also realized that investors were more focused on the development part of their business.

This meant that the value of one part of the business was about the same as the value of the business’s entirety.

The duo decided to sell that part of the business and retain the remaining divisions. They hired JP Morgan and went through the investment banking process.

After talking to private equity investors and strategic investors, they eventually made a deal with an infrastructure fund called Energy Capital Partners.

From Service to Technology: Evolution of Leadership

As Borrego evolved, so did Mike’s role from a service-oriented CEO to a technology-driven visionary.

With an eye for innovation, Mike spearheaded the development of a data and procurement platform—Anza Renewables—that revolutionized the way large-scale buyers sourced solar panels and batteries.

As Mike points out, the renewable energy space is a passion and the industry they know. When building and scaling Borrego, they realized they were better than everybody else at optimizing the process for procuring solar modules or solar panels and batteries–a secret sauce they had developed.

When Mike and Aaron looked around, they had tools and approaches in a philosophy that the industry could use. There were tens of millions of dollars left on the table, and they were wasting massive amounts of time.

Building Anza Renewables

Mike and Aaron saw that opportunity and decided to invest in it by supercharging this capability they had.

So, the duo put it up into the cloud and served it up for the entire world to use, and that’s what they built–a data and procurement platform to help large-scale buyers or companies that are buying hundreds of millions of dollars worth of solar panels a year.

The platform helps them move from the really low-tech, inefficient methodology they’re using, like calling one vendor at a time and getting quotes about the product, pricing, and technology to use.

The buyers can now leverage structured data to look at all of the options that they have available to them very rapidly.

Instead of calling one vendor at a time, they can log into the platform and see basically every product available on the market and rapidly compare them more holistically.

Anza Renewables aggregates all the data from the industry around who has what product available and what the pricing is on that product.

The platform also gives the technical specifications of those products, the commercial terms associated with them, who their counterparties are, and the various risks that they have. Then, it serves all that data up to customers so they can make a better-informed decision much faster.

Anza enables buyers and project developers who need solar modules and storage to make the right decisions before engaging in a conversation. Anza gives them the lay of the land.

Users can put in their information about their project and get information about the products they should focus on and why they should focus on them.

Buyers can access the relative value of these products across every dynamic, including price, lifetime value, and risk, making Anza the industry standard for evaluating procurement options. Sellers can also evaluate their product options.

The Power of Adaptability and Blue Ocean Strategy

Throughout his journey, Mike learned the importance of adaptability and the value of pursuing a “blue ocean” strategy. By identifying untapped market opportunities and staying ahead of the curve, Mike and his team transformed challenges into opportunities for growth and innovation.

An Inspiring Legacy and Future Endeavors

Today, Mike’s legacy continues to inspire aspiring entrepreneurs and industry leaders alike.

With the success of Borrego Solar and the groundbreaking work of Anza Renewables, Mike remains at the forefront of renewable energy innovation, shaping a more sustainable future for generations to come.

In conclusion, Mike Hall’s journey is a testament to the power of perseverance, innovation, and unwavering determination.

From humble beginnings to industry leadership, his story serves as a beacon of hope for dreamers and doers around the world, reminding us that with passion and purpose, anything is possible.

Listen to the full podcast episode to know more, including:

• Mike’s journey underscores the impact of having mentors who recognize and nurture potential.
• From layoffs to near-miss deals, perseverance proved essential in overcoming challenges.
• Mike’s transition from service-oriented to technology-driven leadership highlights the importance of adapting to industry trends.
• Identifying untapped market opportunities and pursuing innovative approaches can lead to sustained success.
• Mike’s experience during the 2008 financial crisis emphasizes the importance of timing and foresight in capital raising.
• The evolution of Anza Renewables showcases the power of innovation in revolutionizing industry practices.
• Mike’s legacy serves as a source of inspiration for aspiring entrepreneurs, emphasizing the potential to create positive change.

 

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