How Verano Energy Raised $247M for LatAm Solar Projects

Your Spreadsheet Is Not the Business

How do you fund a startup that requires hundreds of millions, or even billions, of dollars in capital? Not with a conventional venture capital playbook. For physical infrastructure—factories, power plants, hardware—the logic of blitzscaling a SaaS app doesn’t apply.

The story of how Dylan Rudney built Verano Energy into a leading Latin American renewable energy platform, raising $247 million and executing $750 million in projects, is a masterclass in capitalizing and scaling hard-asset businesses. The core lesson: In the world of infrastructure, your financial model is a fantasy. Reality is the only thing that gets assets built and financed.

Before launching Verano, Rudney worked in private equity, watching deals from the investor side. His firm, staffed by successful finance and tech professionals, had no experience in energy or infrastructure. They were experts at building spreadsheets, but not at pouring concrete.

Rudney saw firsthand how projects that looked perfect on paper would consistently fail in the real world. This became his foundational insight: Execution doesn’t validate projections; execution creates projections.

The Common Founder Mistake: Falling in Love with the Model

Most founders in capital-intensive sectors believe their job is to create an airtight financial model to attract capital. They obsess over perfecting their IRR (Internal Rate of Return) calculations and CapEx assumptions. This is a trap.

Investors in this space know that no project survives first contact with reality. Your real business isn’t the asset itself; it’s your repeatable process for navigating the chaos of execution. The value is in your ability to de-risk projects on the ground.

Phase 1: The Capital-Light "Developer" Playbook

Verano Energy didn’t start by trying to raise hundreds of millions. It started with just $100,000 from friends and family and a strategy borrowed from real estate development. To get off the ground with minimal capital, you don’t build and own the asset yourself. You act as a "developer" who packages and de-risks it for a larger investor to acquire.

The $100K "Friends & Family" Round on Preferred Equity

Raising your first capital from friends and family is common. But the structure Rudney chose was not. Instead of selling common stock, which would permanently dilute his ownership and control, he raised the $100K as preferred equity.

Preserve 100% Control: Preferred stock typically comes with no voting rights. You get the cash you need without giving up board seats or control over your company’s direction. · Protect Your Common Stock: You aren’t setting a low valuation on your common stock that will hamstring you in future rounds. The preferred shares give investors a claim on proceeds in a sale (usually their money back, plus a dividend), but the upside of the common stock remains yours.

This structure allowed Rudney to maintain 100% ownership of Verano from day one, giving him the freedom to execute his vision without early investor pressure.

The Developer Model: A Tactical Guide

The developer model is a high-risk, high-reward strategy focused on creating value by eliminating uncertainty. Your goal is to deliver a "shovel-ready" project to an institutional investor (like an infrastructure fund or large utility) who will pay a premium to avoid the messy early stages. The potential margin on your initial capital can be 5x to 20x.

Secure Land Rights: You don’t need to buy the land. You secure it with a long-term lease (e.g., 30 years) or, even better, a low-cost option agreement. This gives you site control without a massive capital outlay. · Obtain Key Permits: This is the bureaucratic core of the work. Your job is to navigate the complex web of local, regional, and national approvals. This includes environmental impact assessments, municipal construction permits, and zoning variances. · Secure Grid Interconnection: A solar project is worthless if it can’t connect to the grid. You file for and secure an interconnection agreement from the grid operator, which defines the technical requirements and costs for plugging your project into the power system. · Sign an Offtake Agreement (PPA): This is arguably the most critical step. An offtake agreement, or Power Purchase Agreement (PPA), is a long-term contract with a creditworthy customer (like a utility or large corporation) to buy the power your project will generate at a fixed price. A signed PPA is the ultimate form of de-risking; it guarantees future revenue.

Phase 2: The Pivot to Owner-Operator with Project Finance

Flipping de-risked projects is a great way to start, but the real enterprise value lies in owning and operating the assets to generate long-term, recurring revenue. This is how Verano grew to a $100M annual revenue business. But holding assets requires exponentially more capital.

Project finance is a non-dilutive way to fund construction. Instead of selling equity in your company, you secure massive loans (senior debt) against the future revenue of a single project. The signed PPA acts as the collateral.

How Project Finance Works: The Capital Stack

A typical project finance deal is structured like this for a, say, $100M solar farm:

Senior Debt (60-80%): ~$60-80M is borrowed from banks. This is "non-recourse" debt, meaning if the project fails, the lenders can only seize the project’s assets, not your parent company. The interest rate is low because the PPA makes the revenue stream highly predictable. · Equity (20-40%): ~$20-40M is the cash you (the "sponsor") or your corporate equity partners must contribute. You use the money raised at the corporate level (like some of the $247M Verano raised) to fund this equity portion.

By using this structure, you can build a massive portfolio of assets with far less dilution than if you funded everything with venture capital.

The Next Horizon: Powering the AI Revolution with BESS

Rudney didn’t just spot the transition from complex hydro to simpler solar; he is now focused on the next tectonic shift. The biggest opportunity ahead may not be generating energy, but storing and delivering it reliably.

The AI boom is creating an unprecedented demand for energy. Data centers are power-hungry, and they need it 24/7/365. Solar and wind are intermittent—they don’t work when the sun isn’t shining or the wind isn’t blowing.

This is where Battery Energy Storage Systems (BESS) become critical. By pairing solar farms with large-scale batteries, Verano can store energy generated during the day and discharge it at night, effectively turning an intermittent renewable source into a reliable, baseload power plant.

This solves the core problem for AI data centers and other industrial users, making renewable energy a viable primary power source. For founders in the energy space, the insight is clear: the money isn't just in making electrons, but in guaranteeing their delivery.

How To Apply This This Week

You don’t need to be building a solar farm in Chile to apply these lessons. They are relevant for any founder in a capital-intensive business.

Map Your Execution Risks: Forget your financial model for a day. List every single bureaucratic, operational, and logistical hurdle you must clear to deliver your first product. Who do you need to call? What permits do you need? This map, not your spreadsheet, is your real business plan. · Draft a Preferred Equity Term Sheet: If you’re considering a friends & family or angel round, model out a scenario using non-voting preferred stock instead of common. Understand how it protects your control and your cap table. · Identify Your Industry’s "Developer Model": Is there a capital-light way to de-risk the first 10% of your business? Can you get a letter of intent (LOI) from a major customer before building anything? Can you secure a key supplier or regulatory approval? This is how you make your startup fundable. · Look for the Cost-Curve Collision: Rudney saw that solar costs were dropping while complexity for hydro was rising. What is the equivalent trend in your industry? Where is an old, complex model about to be disrupted by a new, simpler, and cheaper one? That intersection is where generational companies are built.