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Why Businesses Are Stronger Together: Paying it Forward

Paying it Forward with Long-Term Business Partnerships

As the old business adage goes, it’s all about who you know. That saying isn’t necessarily wrong, but it’s also not completely right.

Yes, it’s about who you know. It’s also about how you grow those connections into long-term relationships. Only by paying it forward with partnerships can you fully leverage cooperation and collaboration to help achieve your business’s mission. Here’s why.

The Value of a Business Partnership

Long-term business partnerships provide multi-faceted benefits that stretch across every area of your operations, and that’s something we place a high importance on at RE Royalties.

Consider the following data:

Sales | According to projections by McKinsey & Company, by 2025, nearly one third of total global sales is expected to result from business ecosystems (that is, industry and cross-industry players working together to create value).

When we acquired a portfolio of royalties from Scotian Windfields, RE Royalties' was able to be part of Nova Scotia’s ongoing efforts to move away from carbon-based electricity to help them achieve their goal of having 40 percent renewable energy sources by 2020. We invited Deetken Impact, a Canadian impact investing firm, to invest in the project, and we believe that this transaction demonstrates the strength of RE Royalties’ financing model in creating a win-win solution for our clients, shareholders and the environment.

Marketing | Word-of-mouth referrals are responsible for 20 to 50 percent of all purchasing decisions, highlighting the importance of maintaining goodwill across a business network. When we announced our inaugural Green Bond offering, word of mouth spread quickly, and we were able to raise $10.2 million to invest into renewable and sustainable energy projects.

Values | Partnering with other organizations – especially impact organizations, sustainable businesses, or charities – allows your company to reinforce its values. We believe this is something other organizations should consider as customers want businesses to take a stand on issues they’re passionate about.

On the surface, we’re an innovative finance company that focuses on renewable energy. However, if you dig a bit deeper, you'll see the layers of purpose within our work. For example, RE Royalties volunteered at Union Gospel Mission. We worked as a team in the kitchen to prepare and serve 150 meals. It costs $3.29 for one meal and we are pleased that part of our donation went directly towards the meals we helped to prepare. Our CEO gives 50% of his salary to charity, and that deep care reverberates through the company culture.

These are only a small sample of the potential advantages of partnering with other business leaders.

Principles of Building Partnerships

As with any other relationship, a successful business partnership requires time, effort, and patience – plenty of literature out there today expounds upon this idea. From RE Royalties’ own experience as a renewable energy finance company, building successful partnerships relies on paying it forward.

A few principles of paying it forward include:

Maintaining the Connection – Partnerships should be mutually beneficial, but consider how you can help your partner without requiring anything in return. Doing so can move the relationship beyond one that’s strictly transactional and build deeper trust.

One developer we worked with who had started the development of several solar projects in Ontario under the Feed-In Tariff (FIT) program was able to sell his projects to a larger IPP who ultimately constructed and now operates the projects. As part of his compensation for selling the projects, he retained a gross revenue royalty on them.

In the years following the sale of the projects, he became involved in several venture capital endeavors but ultimately ended up forming a new company focused on solar energy. However, instead of focusing on solar in Ontario, this new company, Solar Panda, provides small home energy systems to residents in Kenya that include a solar panel, battery, lights, radio, and a cell phone charger.

Foster Partner Successes – RE Royalties is a purpose-driven organization that seeks to help clients in the renewable energy industry get their projects off the ground faster. Fostering and celebrating their successes, even beyond what is expected, has always reinforced our own sense of mission, and prompted clients to work with us again down the road.

Our recent CAD $4.3 Million equipment procurement loan agreement with Switch Power is RE Royalties’ third transaction with the developer and Independent Power Producer, following the previously announced $2.3 million Acquisition Loan and $0.8 million Development Acquisition Loan, which were used by Switch Power to acquire the portfolio of 4 operating and 10 development energy storage projects located in Ontario and will be used to fund the first 5 development projects.

Stewardship – So long as it doesn’t conflict with your own, you should always act as a faithful steward to your partner’s vision. Respecting this will allow you to demonstrate your commitment to their overall values and goals.

It Takes a Leader

Partnerships don’t happen spontaneously. Rather, they require thoughtful and diligent leadership to develop and strengthen. As such, it’s up to business leaders to forge successful partnerships.

Doing so will not only prove necessary in the coming years, but also highly rewarding for the effort. We placed No. 147 on the 2021 Globe and Mail Report on Business ranking of Canada’s Top Growing Companies, but we were very pleased that our past client, who started Solar Panda, placed No. 3 out of 448 businesses on the list!

We’re always looking for others that share our core values and sense of purpose. The best way we have found to bring people into our world is through investors and clients that are aligned with our values, goals, and worldview.

If this describes you, reach out and get in touch with us. Our community is the heart of our work, and the ones that truly enable our amazing team to change the world in our own unique and powerful way.


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