Successful capital raising for new unique solar reflective coating

In a time that could only be described as extremely difficult for the private equity and venture capital industry it is good to hear that Angel Investors are still active. 

Pacific Capital, through its online CAPstart Private Equity Market has raised $500,000 from a NSW Central Coast Angel Investor registered on the CAPstart Market database. 

The capital raising is for Lehmann Pacific Solar Pty Ltd, which has an innovative and patented energy saving roof coating product Skycool. 

The Angel Investor has extensive experience in the building industry especially with insulation systems and so is in a good position to help with the development of the business. 

The unique coating is applied to metal roofed industrial and commercial buildings such as warehouses, shopping centres, factories, school and hospitals etc., and cools these buildings giving big savings on air-conditioning energy costs. The coating can also save around 40% of the capital cost of new plant due to smaller air-conditioning units being required. It does this by eliminating the solar heat load on the building, which causes about 80% of the over-heating of metal roofed buildings thereby creating a cool and pleasant interior. 

The product, SkyCool, has been tested by the University of Technology Sydney in conjunction with the Queensland University of Technology.  Successful trials have been conducted by the NSW Department of School Education.

The coating was also being tested in Queensland on the roof of a major supermarket group. To test the effectivness of the coating, separate air conditioning power meters and temperature probes were installed in this building as well as in an adjoining supermarket without the SkyCool roof coating. From mid Spring 2002 onwards, the store with the SkyCool coating had cut its air-conditioning power consumption by 50%. 

Both supermarkets in this trial were closely matched for size, configuration and location.  Indications from this trial are that the coating will have been paid for in power savings in less than four years.

To raise the new capital Lehman Pacific Solar completed the CAPstart Market SME template and underwent the extensive CAPstart review process, which ensured all the important issues to Investors, were addressed and explained clearly and succinctly.  

The CAPstart Market template gave the Investor sufficient information to understand the principles of the opportunity and he requested an initial meeting with the entrepreneurs to gain an understanding of their management capability. The investment evaluation process flowed smoothly with the Angel Investor using his external accountants and lawyers to help with the details. 

The Angel Investor, Jim Simpson when asked for background on the investment said "I have been a long term investor in the share & property market but about 4 years ago I decided to look for a venture capital investment to supplement my more conservative investments. As a result I became an investor/subscriber to the ASX enterprise market. After this closed down I stayed in touch with Pacific Capital who set up CAPstart Private Equity Market as a web based profiling system for venture capital and angel investments. Over a period of a couple of years I looked at several proposals but was finally attracted to the new Lehman Pacific Solar roof coating business because of my previous experience having owned businesses in the insulation & construction industries.

While agreement in principle was achieved fairly quickly, the time & legal costs incurred to achieve completion exceeded my expectations. I found the process quite involved but it was made easier by Pacific Capital driving and coordinating the process."

 The Chief Executive of Lehman Pacific Solar, Rex Lehman when asked to comment on the capital raising process added the following: “ We found Pacific Capital early in April 2002 through industry contacts and registered on CAPstart Private Equity Market with their helpful expertise.  After a number of enquiries, Lehman Pacific Solar was introduced to Jim Simpson in June.  Prior to this meeting we developed a comprehensive corporate plan as the basis for the subsequent discussion and documentation.  

Although the process was longer than expected, it was very thorough reflecting the general caution of the venture capital market.  Nevertheless, throughout the whole process the enthusiasm and professionalism of Pacific Capital Corporation was a significant contribution to the eventual success.  Agreements were signed several days before Christmas.”

Lehman Pacific Solar has commenced marketing Skycool and in early March 2003 received an order for the first stage of a 30,000 square metre warehouse roof in Victoria.