Entrepreneurs for Impact (EFI) Podcast: Transcripts
#79:
Leading Complex Legal Transactions in Clean Energy Infrastructure — Mona Dajani Head of Renewable Energy at Pillsbury
Chris Wedding:
Mona Dajani, where do I start with your titles? Okay, you're at Pillsbury Law. I'm going to do my best here. So, you're Co-head of Energy and Infrastructure I think, Head of ESG, all things sustainable finance, let's say, and you all are global. How are we doing so far?
Mona Dajani:
Doing great. Doing all good, Chris.
Chris Wedding:
Okay. Before we pressed record, we were of course chatting, but I'll just clarify for the audience, usually listeners to this podcast expect a climate investor, a climate founder, CEO. You're not exactly either of those. However, as a leader at a major law firm, you're shaping the direction of a company like a CEO would, and many of your clients are investors. So, you're representing that mentality as well and you were quick to clarify, “Hey, I'm not a typical lawyer, just to be clear,” right?
Mona Dajani:
Yeah.
Chris Wedding:
I think if folks check your thoughts out on LinkedIn or they see your bio, I think you're an engineer as well as a lawyer, not a super common combination. So, with all those things said, Mona, I'm glad you're here.
Mona Dajani:
Thanks, Chris. I'm really happy to be here. Thank you for inviting me to be on your show. I'm really excited.
Chris Wedding:
We try to start off with obviously a short, short summary of what our guest does and then we kind of back up and we talk about mistakes that we see CEOs making because we're all a CEO in some flavor and we're all making mistakes. All right, you lead a bunch of things at Pillsbury Law. What's the short version? Then we'll go back into the weeds after these initial questions.
Mona Dajani:
My short version of just how I got here was, I had, like you, a very diverse background. I was an engineer, I was a chef, I was a sommelier and today I put together and I advise investors and I advise companies. I take them public, I help them raise capital, I help them with forming strategic partnerships, represent companies which is really exciting while they're starting out. Then all the way to taking them public and then representing them as an operating company, but still a public company. And so, that's super exciting to do.
Chris Wedding:
All right. So, there is so much to unpack as they say, which we will. Before we get into some common mistakes that you see, I won't even say your clients because clearly your clients are all perfect, but in general, I think you would see CEOs making in this space. I think if folks look at Pillsbury Law and they look at some of the transactions that are public that you're working on, you mentioned IPOs, I think many listeners would think, “Well, if I've got a gigantic $100 million or billion-dollar deal, then I'll come chat with Mona.” But as a seed, Series A, Series whatever, stage company, that's too far along.
04:38
I know part of our early chat was, hey, look, getting the right counsel early on can be expensive, but can also save you fatal or expensive mistakes down the road. I was just talking to one of our Climate CEO Mastermind members in Entrepreneurs for Impact. They were like, “Man, our lawyer overlooked this one thing and it could cost us like tens of thousands of dollars in tax implications.”
Mona Dajani:
Right or the company.
Chris Wedding:
Yeah, exactly.
Mona Dajani:
Or the company, too. Yeah.
Chris Wedding:
In that context, from the earliest stage to IPO. All right, so let's back up. You have worked with, advised lots of CEOs in, I'll say, our space.
Mona Dajani:
Yes.
Chris Wedding:
What's a common mistake or two that you see, whether it's the go-to-market, it's the execution that you would want to warn us all against. Hey, look at that. We're going to keep this in the show, by the way. This is my 2:45, go meet your daughter at the bus stop alarm, which I’m now going to turn off. My wife has that today.
Mona Dajani:
Okay.
Chris Wedding:
Okay. Keeping it real. Back to you.
Mona Dajani:
Okay. Look, some of the mistakes, I don't know where to start. I am just surprised at how many C level people that I've advised or that I've even seen that have made some of these mistakes, and we're all human, we all make mistakes. So, some of the big-ticket items that I see are that the CEO does not appear authentic and is not authentic to both the shareholders as well as internally to their employees. I think it's really important to build that trust, both with the investors in the company, as well as the employees, and to be real and to be authentic and just to tell the truth. “We're not doing good. Here's why,” instead of all the sugarcoating. That's one thing.
Another one that I see a lot is, and I myself have gotten involved in some issues personally with this, with the press. What I mean by this is that there's some story or some angle that the press has on a company or a person that's going to directly affect the business. It's really important to try to get ahead of that before it happens and then if it does happen, to immediately try to address it and hopefully with professionals that know what they're doing, both lawyers, of course, and PR. Many times, I've seen a simple lie in the press just snowball into something really big and could really affect the company.
07:39
So, I encourage early on, if you know something's going to come out bad about the company, even if you're not a public company, but especially if you're public, make sure that you have effective assistance of counsel that's advising you, and that you also have a marketing PR firm that can help guide that message.
A lot of my clients listen to me, but there are some that don't and it's frustrating to see. Like today, Tesla, for example, they had news, they didn't have press, their internal PR agency to help deal with some of the negative stories that were coming out and it's unfortunate. It affects business. It affects perceptions. You see outflows.
In our community, in clean energy, it’s a small community and we all know each other. A lot of us have known each other. Myself, I've been doing this for more than 20 years, long time. I started in this space when it was fringe and now I'm happy to say that it's finally getting traction. The reason why I became a lawyer in the first place is to save the planet. Hopefully, this will help save the planet.
Chris Wedding:
Well, clearly, I agree with that. You talk about these mistakes with media and public relations. This is not as relevant to private companies as it is to public, probably still harder to measure, but still relevant. A lot of these ESG rating and score providers, they've begun incorporating this kind of reputation component to their scoring. It’s really interesting to see how the prevalence of incorporating public opinion has factored into these ESG scores. You hate to bank the whole logic of ESG on public perception versus like authentic risk mitigation, et cetera. But anyway, just to validate that what you're saying does show up in how companies literally rank and get scored in terms of ESG providers.
Mona Dajani:
Yeah, I mean, look, this is old saying, perception is reality. Perception is reality, just remember that and there has been recently some backlash on ESG. As you know, Tesla got kicked out yesterday of the S&P Global Fund Index for ESG and the reasoning that was publicly stated was it’s not just one thing. We're looking at a blend of components that are important here. It's E, S and G and it means that if you have some poor track record on like racial inequality and sexual harassment and other items and safety issues, that's going to affect the whole ESG rating.
So, I think it is really important. I think part of the problem with ESG right now is that we have to be more precise and what are those elements of ESG universally and how do we measure it going forward? The problem today is there's a lot of confusion as to what those exact components are and how they should be ranked. Of course, it's divided by political lines too, as well.
It's really, from my perspective, watching some of my deals play out in the press and it's interesting. I'm telling you that our community, again, is very small and reputation is everything and it's really important to be authentic and honest and truthful and transparent with everyone.
Chris Wedding:
Plus, it's a lot of damn work to maintain so many partial truths. You get all tangled up.
11:50
Mona Dajani:
Right, absolutely, yes.
Chris Wedding:
Let’s go to you-all’s specific practice areas. Maybe just tell us some stories about the kinds of projects, opportunities, challenges that you all get to work on, specifically as it relates to companies working on climate solutions. Maybe we could pick like different size companies, even like some earlier stage, some mid stage, some public and maybe extract an example from each of those. What do you think?
Mona Dajani:
Sure, what specific do you want to know?
Chris Wedding:
I think the folks listening are, yes, it's the visionary, it's the idea, but how do you get it done?
Mona Dajani:
Oh, okay. Let’s talk about that. Yeah.
Chris Wedding:
Operational stuff. Yeah.
Mona Dajani:
Okay, let's talk operational. Let's talk aspirational too. You need to have a great idea, clearly and then you need to have money to back it up. The way you get the capital to back up your idea is you need to have a really good business plan and you need to convince a lot of people, at least one with a lot of money to back you up.
The reason you need the money is because you'll need to protect your idea and that means you may have to get some patents and licenses, you have to protect it. You have to also surround yourself with some advisors that can help, whether they are bankers or they're like me, lawyer, or there's PR people, et cetera. So, you need to have some smart people. That's the second step.
Then when you do that, you start building the company, you have a really great idea, you have a product. Many times, in our field, in clean energy, a lot of times because we are very project driven, you'll have a pilot project, a small pilot project, just to prove that it can work. Once you have that pilot project, this is where you have like angel investors and venture investors, when you have that, then what happens is that will open the door for more investors and also more sometimes government support too, whether that's in the form of tax credits or grants or loans. Some loan guarantee programs too and there's on the federal level and on the state level.
So, the name of the game at the beginning is to raise capital and to scale and try to get bigger. You can do that quickly, or you can do that organically. If you do it organically, what you're doing is the traditional slow route, starting the company, have a great idea, surround yourself with good advisors, and building the product, doing a pilot project, having that do well. Then get more capital and be able to expand and grow bigger and do bigger projects, that's the organic way.
Chris Wedding:
You mentioned one piece early on, which is the IP, the patents and such, so creating a moat around your unique technology. Can you give the audience a sense of what those costs look like, whether it's in the US, whether you have to protect your patents in other countries? Not like your hourly rate. I think many entrepreneurs don't appreciate the magnitude of the investment required, which is usually beyond what's in your couch cushions, right?
15:29
Mona Dajani:
Right. Look, I can tell you stories of people calling me up and crying on the phone because some big company ripped off their idea. Then I'm like, “Well, I'm not a litigator. I don't fight. I protect. I want to prevent this from happening, but now that it's happened, here's how we can manage this going forward.” There are not as many options after someone has ripped you off.
So, it's really important from a legal perspective, if you have a great idea, to not share it with a million people. Don't publish it. You want to target who you're sharing your idea with and before you share anything, I would recommend that you get an NDA and have a very robust NDA, non-disclosure agreement, to protect against trade secrets, protect against confidential information.
Even if you still get screwed over, someone blows the NDA because you have to sue on it to enforce it. So, the stronger it is, the more likely you are to have some teeth and some leverage to try to get this company, the larger company to stop doing like cease and desist, but not always. So, it's really important to protect your ideas.
In terms of the patents themselves, I'm not a patent lawyer, but just generally, every country is different and they have different patent laws. There are the different patent regimes. So, there's one here in the States, there's another one in Europe, there's nothing in China.
I’m an engineer. I work with a lot of guys that have really cool products in the clean energy space, artificial intelligence, stuff on hydrogen software, lots of cool stuff. So, I'm very cognizant of that and it varies by jurisdiction. It would behoove you not to invest some money in a good patent lawyer, which of course we have the most than any other law firm in the country to help protect that idea so you have something to enforce.
Chris, the cost for that really depends on how complicated it is, but the more you have, the better. I mean, it's more than just cushion money. You need to have a minimum. These stories that we hear in Silicon Valley all the time, people starting in the garage with nothing and then really blowing up to becoming Apple and a huge success story, very few and far between. Very, very hard for that to happen today, in this day and age. So, today, if you're smart, you want to protect whatever idea you have, so that's one thing that I could say. I'm happy, Chris, for your audience members, if they want, they can reach out and I could give an NDA form that they can use.
Chris Wedding:
Cool, yeah.
Mona Dajani:
If you'd like for your listeners, I'm happy to do that, but that's super important to protect your idea. People think that while you are talking to someone about your idea, especially a big company, or a company that has a lot more money than you and that could be private equity, or it could be a public company, yes, they're listening to your story, and you also have to have a very good story. Then they're also thinking, “How can I copy this? How can I tweak something I already have and copy this?” So, depending on how original your idea is, it's super important to protect.
19:39
Chris Wedding:
Yeah, and I think some listeners will know that many investors will not sign an NDA, or at least they won't sign it until they're ready to get in the data room. So, there's this dance of, how much can I show them pre-NDA to get them hooked, such that they're ready to sign it and actually get in the data room?
Mona Dajani:
Not a lot.
Chris Wedding:
Yeah, exactly.
Mona Dajani:
Not a lot, just enough, but not a lot. Even if it's like, “Oh, don't worry about it,” no. It's just the idea and if you are strong about it, if you are forceful about getting the NDA signed, they'll sign it, trust me.
Chris Wedding:
Just back on the cost, I'm going to say a number and I'll just watch your face here, how about that? For each patent, I mean, 10 to $20,000 to create and maintain a year. What do you think?
Mona Dajani:
No, way higher, Chris.
Chris Wedding:
Way higher. All right. This must be the cheap south. There we go.
Mona Dajani:
Yeah. I mean, you have to create it and then the filing fees are one thing, but then depending on the type of patent that you're getting, you have to pay for a lawyer to actually go through it and then replicate it to be able to get the patent on it. So, it's going to be a lot more than that.
Chris Wedding:
[Crosstalk – 00:20:51] almost the number.
Mona Dajani:
Well, I would say minimum probably about $100,000.
Chris Wedding:
Per patent?
Mona Dajani:
No, it doesn't have to be per patent. It depends on, maybe there's one or two or three that are very closely related.
Chris Wedding:
Got it. Takes investment dollars for sure.
Mona Dajani:
Yeah.
Chris Wedding:
Let's go into the field that you're an expert in, another one, shall we say. You're pretty vocal about the growing green hydrogen sector. You're getting listed or maybe winning awards. It's like this top 100, top woman, I forget all the lists out there. So, tell us about why you're excited about the green hydrogen space.
21:38
Mona Dajani:
I am very excited about the green hydrogen space for a number of reasons, because I really think it's the catalyst too for accelerating into a net zero or a low carbon world, which is what we have to do if we're going to leave our world to our kids and our grandkids in any kind of shape. The reason I love it so much is that, you probably don't know this, Chris, but I started my career in Houston, in Texas, working for Enron, oil gas companies.
Chris Wedding:
Blasphemy.
Mona Dajani:
Yeah. I was a baby at that point and then I became very passionate about clean energy, wind energy, solar, our earth. I love the nature. I really wanted to marry my professional passion with really my purpose, which is, besides having two beautiful kids and a great family is to really save the planet. That really is, that's my purpose in my way. And hydrogen is the one element that will have all these different diverse companies and interests coming together and agreeing on something.
So, I started oil and gas and then gravitated towards clean tech, clean energy for the last 20 plus years. Now, hydrogen is the uniting fuel that is combining utilities, combining nuclear, combining renewable energy developers, combining oil and gas companies together. I'm working with all of them on clean hydrogen transactions and putting those together.
What I was able to do was, I started out with doing most of the hydrogen transactions in Europe. I’m dual qualified in the UK. I was representing companies because Europe is ahead of the US, as you know. I was representing utilities and shipping companies and transportation companies and oil and gas companies in Europe doing hydrogen deals and now it's expanded to the Middle East and Asia.
People think that hydrogen is new and it's been around for over 80 years, but maybe since last few years that it's really gaining some traction here in the United States, which is great to see because I think it's the unifying fuel to help transition us into a more net zero low carbon economy.
Also, I believe that it helps us be energy independent. So, we're seeing now with the war going on in Russia and Ukraine, and unfortunately, what's happening in Europe with the energy prices. Of course, the pointless war could have all been avoided if we had been more focused on this energy transition earlier. We are where we are now and we're moving forward. I'm very bullish about green hydrogen, clean hydrogen.
I'm representing so many different companies, large companies in the space, and they're investing so much money in the space without being a hundred percent that they know they have a definite return. But based on the technology that I've been seeing and the deals that I'm putting together, it’s very bullish. Those that are not starting now or have started, it's almost too late. So, it's very similar to what I saw 20 years ago with solar. It's the same thing.
Chris Wedding:
Yeah. I think a lot of folks that are interested in green hydrogen think, “Yeah, I see it coming, but it's 10 years out and so it's hard to make an investment now if it's really going to hit 10 or 15 years out.” How do you or your clients think through the timing of this obvious theory of everything for the energy transition?
26:08
Mona Dajani:
Yeah, we're not thinking it's 10 years out. We're thinking it's shorter than that and you got to get involved. You got to have projects now. So, they're doing projects now and a lot of them have not been announced. We call it, everyone knows this merchant, but there are customers, there's products, there are developers, there's lots of different areas here for clean hydrogen, and they're involved now. They're working on the market share and because it's not going to be 10 years, probably shorter than that, much shorter, I would say maximum five, if not sooner. So, you got to start.
They’re doing it, they're making an investment. I'm representing large utilities, large oil and gas companies too that have the money to invest now, so that to bring down the cost because that's a big problem right now with hydrogen is the high cost, so that we can scale it. And more importantly, that it can really proliferate and go exponential.
Chris Wedding:
One of the things that you all do in this space, I believe you still maintain a hydrogen project map globally, is that right?
Mona Dajani:
Yeah, so I'm also the Co-head of the Hydrogen Practice Group and it is the clean energy folks, my side, and the nuclear, and we're together. We put together a hydrogen map, we update it daily, and it shows all the projects globally that are going on in hydrogen. So, we did it for ourselves internally and we thought it would be helpful for everyone else to see so you can see the growth of what's happening. It's really great.
Chris Wedding:
It's a super resource. I'm glad you all made the decision to open-source part of it to show your intel there. You mentioned cost, obviously. I think a lot of us have heard comparisons of gray versus green. There’s also discussion around how silly the color nomenclature is sometimes as well. Really, it's like pounds per whatever, normalizing metric. How are you seeing your clients get the cost down to be more competitive? What’s the trigger to get customers to say yes to buy this lower carbon hydrogen today versus 10 years out?
Mona Dajani:
Well, first of all, to answer your question about the color scheme, I agree with you, Chris. I think we should stay away from it and that's why I've been saying clean hydrogen.
Chris Wedding:
I noticed that. You must be friends with Mo Vargas over at BayoTech. He's a big proponent of, “These colors are ridiculous.”
Mona Dajani:
Yeah, Mo is hilarious and I am friends with him, yes. This is my area of specialization, which is, because I've been doing this for so long, I know a lot of people and I know a lot of companies, like Mo, for example. What I do is I help put parties together to form strategic partnerships. When I form these strategic partnerships, what we're doing is we're trying to combine everyone's advantages together so that we can lower the cost.
29:50
So, for example, we have a company that has pipelines. We have another company that has trucks, hydrogen trucks. This is true by the way. These are my deals. Put them together and you have a very educated workforce and you retrofit them for the hydrogen world. Then you also combine it with the local infrastructure of where we want to try to rinse and repeat as much as we can. We want to use existing infrastructure and just retrofit it as much as we can.
If someone has their rocket science engineering firm that has certain patents that we could use in the project we let them be part of the partnership too, let them get something out of it. So, they're all putting something in. Then we are forming these strategic partnerships, formally doing it in a legal sense and then from there, we're able to drive a lot of the costs down. You're seeing competitors come together because all for the sake of money and lowering the costs. So, that's what's super exciting in hydrogen.
Chris Wedding:
A little, what do they call it? Co-petition, collaboration meets competition to form this new model.
Mona Dajani:
Yes. Absolutely.
Chris Wedding:
You're very deep in hydrogen, cleaner hydrogen. Are there other sectors within climate tech, cleantech, renewables that you're -- I mean, there's the obvious solar, wind, lithium-ion batteries and maybe EVs. Are there some other growth areas you're watching or you're seeing more client growth or whatnot, client solutions beyond that?
Mona Dajani:
Yeah, a couple of things I'm seeing. In addition to hydrogen, another big trend that I'm seeing, which is really exciting, is to see artificial intelligence be introduced to the clean energy sector. Whether it's robotics, whether it's electric vehicles, or hydrogen fuel cell powered vehicles, trucks too as well, that's really exciting, drones, things like that.
What I'm also seeing, which is really cool, is hybrid projects where we're combining offshore wind with hydrogen, or we're combining solar plus storage plus wind. It was interesting, 20 years ago, wind and solar were very distinct and now they're not. Now it's the same people, a lot of the same companies. There are some strictly solar and strictly wind, but you're seeing much more blending now and so that's really exciting to see too as well.
What I want to see is, just have our planet shift more to a low carbon economy and I think with COVID and the war and inflation and the food crisis now too, I have faith in humanity that we are going in the right direction. We're not going as fast as we need to. We need to pick up the pace. So, that's also one of my messages that I'd like to leave with your audience.
Chris Wedding:
Yeah, for sure. Well, let's ask maybe a couple more questions and we'll finish on this positive uplifting note on a Friday afternoon. This is on the Mona level, not the Pillsbury Law level. What other habits or routines keep you healthy, sane, and focused as a busy go-getter out there changing the world?
33:45
Mona Dajani:
I think there's several. First of all, for me, I schedule everything. I prioritize everything. I don't take myself too seriously all the time. I don't. I focus, exercise, get enough sleep, keep a very positive attitude. I think probably the most important thing at least for me is to be grateful.
Being successful means that you connect to others and successful people boost their self-esteem and self-worth by appreciating the people around them. So, I think it's really important to say thank you and show appreciation for anything good that they have received. Then this also helps boost confidence and activates their brains to enjoy and make the best use of the environment.
Chris Wedding:
Yeah, we don't do it alone, do we? Lots of folks supporting each other. How about a recommendation or two on a book, podcast, tool, et cetera, that the listeners in the climate space could find helpful?
Mona Dajani:
Well, I read a book years and years ago by Keith Ferrazzi and it was called Never Eat Lunch Alone, changed my life. Basically, it's about getting out of your comfort zone and meeting people, whether you're an extrovert or an introvert or whatever, but just meeting people and helping people, paying it forward, and also asking for help. It’s amazing to see how many connections can be made in business and work that can be done just by meeting someone face to face.
Chris Wedding:
That book sounds even more important right now.
Mona Dajani:
Yeah, even more now, yes. Just on a personal level, Chris, I'm a chef and a sommelier. So, if someone ever says to me, “Let's go grab a cup of coffee,” I'm so turned off by that because to me, it's like, I'd rather just do a phone call. If you want to get to know me and you want to sell me something or you want to convince me of something, then we have to have a meal. Look, take an hour and a half, hour of your day, meet the person. Yes.
Chris Wedding:
Okay. So, if anyone's listening and wants to not eat alone and ask Mona to lunch or dinner, you got like restaurant recommendations -- Tough crowd. Chef and sommelier.
Mona Dajani:
Absolutely, yes.
Chris Wedding:
All right, cool. Well, let's call it here. Any other message or advice for climate entrepreneurs you want to leave the audience with?
Mona Dajani:
Sure. My advice is never give up and to be resilient. Those of us that are successful have had many setbacks. Also, because of everyone having setbacks, be kind to people too because you never know. You never know how their day was, you don't know what's going on with their lives, their health, et cetera. So, those are the two pieces of advice that I would give.
Chris Wedding:
Yeah. It's funny how the advice to be kind sounds like so revolutionary. Wait a second, that should be pretty basic stuff, like 101. I'm like, “Oh, she said be kind. Okay, yeah. Oh, wait a second.” It is good advice, but it's easy to forget as well.
37:31
Mona Dajani:
Yes, it is. I think it takes you far and the other thing that I do is, because my job as a dealmaker is to have a deal and to do that, I can't be a jerk to one side. I have to explain, “This is why this doesn't work and this does work. Here's why.” Do it very nicely because at the end of the day, everyone wants the same end goal. There’s very similar universal truths out there, what people want.
Again, just to be resilient, don't get knocked down, get back up. All of us have been there, including me, many times and be kind because you just never know. It'll take you very far and again, very grateful to be here, Chris. Thank you.
Chris Wedding:
Hear, hear. Well, keep on fighting the good fight. We need more engineering, entrepreneurial lawyers that are chefs and wine experts and speak French and Arabic and all the rest. There we go. Boom. Mona Dajani, Pillsbury Law. Hey, thanks. Keep on fighting the good fight. Rooting for your success.
Mona Dajani:
Thanks, Chris.
Chris Wedding:
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