Taking a Crack at the Split Incentive Problem in Multi-Tenant Buildings

Posted on by Bhanu Nuthakki

Rethinking buildings as power plants is an essential part of reducing the emissions footprint of buildings. Despite the economic viability of deploying solar at a majority of commercial buildings in the U.S., less than 1% of commercial buildings have onsite solar deployments. The problem is particularly acute at non-owner occupied buildings due to the split incentive problem.

This is exactly the problem that King Energy is trying to solve. I found the company when I was seeking companies enabling a future where buildings act as distributed power plants. I was fortunate to learn that they were hiring on the finance team, and recently joined the firm to take a crack at solving the split incentive problem and accelerate the deployment of solar.

How I Approached the Decision

When considering my next career move, I knew that I wanted to work on a climate postive mission. In addition, I narrowed in on the intersection of early stage startups, fintech, and software as the best opportunity for growth while also adding value right from the start. King Energy fit perfectly within these search criteria.

Yes, King Energy manages solar development and the complexity of permitting and interconnection, tenant management, EPC, and procurement relationships. However, the company’s competitive advantage will be built on repeatable processes to 1/ underwrite and finance new projects at an attractive & viable cost of capital and 2/ systematically identify buildings with the highest ROI, acquire properties and tenants efficiently, and manage the complexity of billing at multi-tenant properties.

In addition, the long term opportunity here is to couple solar deployments with storage, EV chargers, other efficiency upgrades. In doing so, potentially developing enough capacity & density to operate virtual power plants that can participate in demand response and grid optimization.

What Got Me Excited

I loved everyone I met through the interview process. I feel energized and fortunate to have the chance to build King with John, Brian, Mike, and the rest of the team!

Deploying climate solutions will require tapping into capital sources along the funding continuum including project finance. Venture capital alone won’t get the job done. The project finance markets across most of solar are mature, but not so much in the rent-a-roof business model that King is pursuing. In my role at King, it’ll be fun to try to unlock project finance and leverage incentives in the IRA for multi-tenant commercial solar deployments. I’m excited to build expertise in renewable energy capital markets and in financing mechanisms that will be critical to deploying climate solutions for many decades to come.

I expect the path ahead for King to be really hard. There are more ways this could go wrong than it could go right. But, it’s a problem worth solving and I’m grateful to have the chance to take a stab at it. If you’re considering a career transition into climate and think I could be helpful, I’d love to chat!

Why Strategic Finance?

Posted on by Bhanu Nuthakki

I recently switched jobs to join the strategic finance team at Plaid! I’ve since received the question – Why did I make the switch? Here’s why I did, and why Plaid was THE place for my next professional adventure:

Investment banking analysts have common exit paths that are well documented. In determining my next move, I chatted with folks in investing, corporate finance, corporate development, and strategic finance. Investing encompasses numerous asset classes across both public and private markets. Plus, a word of caution: roles at corporations can vary significantly despite having similar job titles. So what was my takeaway?

It was that value creation predominantly happens at the operating level. There are certainly fantastic investors that add significant value. Similarly, there are several corporate development teams that execute highly accretive and “synergistic” M&A strategies. However, both functions, particularly at the junior level are far too focused on deal execution for my liking. That’s where strategic finance roles stood out. They offered the ability to assist with high-impact decisions across various functions across the organization. That was by far the biggest selling point, to truly dive deep with an analytical lens on operational decisions. So, once I determined this fit, a pressing question remained: Who do I work for?

I asked myself the following questions when assessing opportunities (h/t to Naeem Ishaq for the core of the framework):

  1. Are they selling into a large end market that’s being disrupted? (bigger market = bigger problems to solve)
  2. Are they a market leader?
  3. Do I like the people? Will I be challenged by them? (very subjective, but trust your gut!)
  4. Do I think the company’s products will add value to the world?

So, Plaid?

I was extremely fortunate to receive a few offers and meet terrific people through my recruiting process. I was also incredibly fortunate that one of those offers was my first preference, Plaid!

So, why Plaid? How does it stack up against the questions I outlined above?

  1. COVID significantly accelerated the transition to Fintech and significantly expanded the already huge market opportunity in front of Plaid, IMO.
  2. Undisputedly the market leader as evidenced by the customer roster, brand recognition, and market research to name just a few indicators.
  3. Absolutely loved everyone I “met”. The level of intellect, friendliness, and professionalism was terrific! Sidenote: the answer to this question should have veto power over everything else on the list.
  4. Without a doubt! Finances are consistently one of the biggest stressors to folks. Plaid has enabled significant innovation by Fintechs that offer consumer-friendly products and help people improve consumers’ financial lives. As an immigrant, I know from personal experience the areas where the traditional financial system fails and the need for innovation in the space.

All that to say, I couldn’t be more thrilled and energized to join Plaid! I’m thoroughly excited for an increasingly friendly world of financial products for consumers (including myself!) and a rapidly approaching world of embedded finance.

I hope this post was informative in providing some context into my recent job switch. There certainly will be assumptions and conclusions in here that may not hold up in a few years, but this is my best guess! I’m happy to be a resource to anyone who might be pondering a similar transition in their career, so don’t hesitate to give me a shout!