Secrets of Marin, Sonoma, Napa fast-growing companies

The CleanFund team on the rooftop of the Sausalito headquarters in 2017. (CLEANFUND)

JEFF QUACKENBUSH,

NORTH BAY BUSINESS JOURNAL

Sixteen North Bay companies made Inc. magazine’s annual list of 5,000 fast-growing U.S. companies. And of them, seven were newcomers, with one debuting in the top 500.

All together, the North Bay enterprises that made the cut from tens of thousands of applicants had $794.9 million in revenues last year and employed 7,194, according to the Inc. 5000 company profiles, released Aug. 16. The rankings are based on revenue growth, starting with at least $100,000 in fiscal 2013 and taking in more than $2 million a year last year.

New to the Inc. 5000 list from Sonoma, Solano, Marin and Napa counties this year were Sausalito’s CleanFund (No. 331), Novato’s The ExecRanks (591), San Rafael’s Email Aptitude (1,037), Novato’s Patra (1,622), Santa Rosa’s The Engine Is Red (3,118), Petaluma’s Solairus Aviation (3,294) and Santa Rosa’s M.A. Silva USA (4,605).

1,344%: CleanFund, Sausalito

While shade has been thrown recently at the state and federal level on property-assessed clean-energy, or PACE, financing for upgrading homes with solar systems or better insulation amid concerns over consumer protection, regulatory clouds haven’t gathered over PACE loans for commercial properties. And that’s where CleanFund shines, surging in the past three years to account for roughly a quarter of C-PACE financing completed nationwide.

CleanFund is a nonbank financier of C-PACE loans, originating, holding and securitizing them. PACE loans are secured through property-level special-assessment districts and paid back with property taxes. The company has grown from $130,000 in revenue in 2013 to $2.3 million last year, and the staff has grown to 25 across several states from five just three years ago. That revenue growth placed the company high on the Inc. fast-growth list at No. 331.

Completed C-PACE lending since the first programs launched nationwide in 2010 totals $469 million on 1,063 projects, compared with $3.67 billion in R-PACE financing so far on about 158,000 projects, according to PACENation. It’s an association whose leadership council includes CleanFund, R-PACE-focused Ygrene Energy Fund of Petaluma and PACE pioneer Sonoma County Energy Independence Program.

CleanFund has closed $125 million in C-PACE financing so far, according to CEO Greg Saunders. Based on the volume of deals increasing by three-quarters or doubling in the past three years and still more states and locales yet to adopt such programs, the company expects C-PACE volume to approach $5 billion annually in the early 2020s.

“We have transaction flow in 15 states and have closed transactions in five states,” Saunders said.

Currently, 33 states and the District of Columbia have adopted legislation allowing PACE loans, and 22 have local or statewide programs started or in development, according to PACENation. Most of the programs are only for commercial projects, while California, Florida, Georgia and Missouri have programs that also allow for R-PACE lending.

CleanFund is working with an investment bank and rating agencies on a potential securitization of C-PACE bonds, in what could be the first all-commercial PACE packaging, Saunders said. The target is $50 million to $100 million brought to the secondary market late this year or early in 2018. By comparison, about $2.7 billion in R-PACE loans have been securitized by Renovate America and Renew Financial, plus $655 million by Ygrene, whose offering also include some C-PACE financing, according to PACENation.

John Kinney started CleanFund in 2009, and Saunders became connected with the company in 2010 while chief financial officer for Rohnert Park-based Codding Enterprises. Co-owner of Santa Rosa’s Coddingtown Mall and a major housing and commercial developer in Sonoma County over decades, Codding was buying a second 1-megawatt solar power system for what’s now called SOMO Village — the former Hewlett-Packard plant. CleanFund set up the nation’s first privately financed C-PACE transaction.

Another milestone for the company was the 2010 closing of the first PACE loan secured by a ground lease — actually, over San Francisco Bay — covering work on the Prologis headquarters on Pier 1. Then there was the first large-scale PACE deal for seismic-retrofitting, a $40 million deal with Seton Medical Center in Daly City, with CleanFund financing half and placing the other half with another funder.

While started as a way to fund clean-energy retrofits, PACE lending has expanded to cover water-efficiency upgrades and then to seismic-strengthening in California and storm-proofing in Florida.

In 2014 Saunders joined CleanFund to scale up the company, and its number of channel partners expanded that tap financing has expanded from a handful to more than 100. The company closed a $5 million series A round of venture capital to increase staffing.

In May 2013, CleanFund made the first private purchase of nonrated C-PACE bonds, buying $30 million from Connecticut Green Bank. The following month, the company secured a $100 million warehouse funding facility to fuel its direct lending.

A next frontier for CleanFund will be financing larger-scale and ground-up projects, an industry shift that will call for new expertise at the company to work with projects that span longer than the typical six-month C-PACE retrofit, Saunders said.

765%: The ExecRanks, Novato

Entrepreneur Jonathan Aspatore, 42, has been starting companies since age 23. Now his 5-year-old membership-based executive-search business, The ExecRanks, has grown to 130 employees. On Aug. 25, it moved into a 46,000-square-foot new Novato office hangar once briefly occupied by a Disney video-game subsidiary. That staff count is up from 113 last year and 30 three years ago, and another 20 are expected to come on board by year-end.

Started to connect top executives with businesses that sought advisers and board members, The ExecRanks has expanded into networking for elite professionals and career advancement.

“We hear all the time that there are too many things going on on LinkedIn,” Aspatore said about the Sunnyvale-based online business-networking company. “Too many junior members are trying to connect with them. … We’re the LinkedIn for the top 10 percent of professionals.”

The ExecRanks has about 8,000 executive members and 10,000 company members, covering 12 countries. By comparison, LinkedIn says it has more than 500 million members in 200-plus countries, and about 40 million of them are students or recent graduates.

A key differentiator, Aspatore said, is in his company’s balance of tech that automatically matches professionals with opportunities — three patents are pending on that — and “low-touch” staff help. With one service, a team checks in bi-monthly to update member preferences and make recommendations. Another service, Advisor Day, takes the top six company matches and lines up back-to-back interviews over three hours on one day, to maximize time-efficiency.

“When you’re a certain caliber of professional, you expect people to do things for you,” he said. “On LinkedIn, you have to do much of it yourself.”

A big correction in the The ExecRanks model came in the first year. It started with a membership retainer of $5,000 a year, but it quickly became clear that wouldn’t work, Aspatore said. So memberships shifted to $195 a month, a level high enough to select for those with upper incomes. LinkedIn’s premium business account costs $48 monthly.

“It was a year of losing a ton of money, but it was worth it in the long run,” Aspatore said.

Revenues were $11.6 million last year and are expected to reach $20 million this year. With an estimated 24 million executives at the vice president level and above globally, capturing 1 percent to 10 percent of that would push revenue into nine figures annually, he said. A move globally into career education is seen as a next growth injector for the company.

Two of Aspatore’s previous successful startups were Aspatore Books, sold to Thompson Reuters in 2007, and ExecSense, bought by the Financial Times four years ago. A current project of his Verb Ventures incubator, which aims to start three to five companies annually, is WonderDads, started in 2015 as a membership program fathers to get ideas for experiences with their children up to age 12. It has about 25,000 members.

412%: Email Aptitude, San Rafael

Though email is the No. 1 revenue-generating channel for e-commerce, it’s one that a number of brands don’t do well, according to Forest Bronzan, founder of Email Aptitude, touted as the largest email-marketing agency. Despite predictions since 2008 that instant messaging, social media and apps would slam the coffin lid on email, it continues to evolve.

“Email is not going anywhere,” Bronzan said. “It’s getting more sophisticated, and brands are getting more sophisticated in how they interact with customers.”

Services include audits of how well existing email marketing is getting through to consumers and generating sales then planning how to turn the situation around. Clients include MVMT Watches, mattress-maker Casper, FICO, Eddie Bauer and Frederick’s of Hollywood.

Even without an outbound sales effort of its own, Email Aptitude’s revenue is on track to double again, reaching $8 million this year, after doubling to $4 million last year. The company employs 60 full time, up from 27 a year ago and six in 2014. About 20 are in the 4,000-square-foot San Rafael office, some work from a small Sacramento satellite office, but most work remotely.

Three years after opening in 2010, Email Aptitude ventured into software as a service, launching Skymostity to analyze how weather effects brand shopping and trigger email and website messaging tailored to a recipient’s or visitor’s local conditions. Though that product continues and is growing, Bronzan said he realized it is better to focus on be a marketing agency, rather than a tech firm.

Bronzan started the agency after managing an email division of a large marketing agency in San Diego. Bootstrapping and eschewing outside loans, he took the company into the black by its second quarter in existence.

The company also has an office in Chattanooga, Tennessee.

243%: Patra Corp., Novato

Hindi for “leaf,” “paper” and “document,” Patra has grown from taking on the workload of certificate-of-insurance production for Heffernan Insurance Brokers in 2005 to take on more support tasks for agencies, brokerages, wholesalers and carriers on property-and-casualty, personal and employee-benefits lines. The company works with hundreds of customers, including tasks for certain offices at more than one-third of the top agencies.

Part of what’s driving the growth is a widening generation gap in the insurance business, said founder and CEO John Simpson.

“There will be so many leaving the industry in next five to 10 and not replenishing with same number of people,” he said. “Technology is not keeping up with staff reduction.”

So Patra has been working toward improving technology and consulting to help make insurance businesses more efficient, such as keeping agents more involved with sales than administrative tasks. It’s been a three-pronged strategy, setting up staff overseas offices, dialing in the tech to keep workers connected to customers, creating the Select service in 2012 to efficiently handle small accounts, and three years ago creating training centers around the country to train U.S. workers to serve customers from home.

As with financial technology that has revolutionized banking and investments for consumers, Patra is looking to the future of insurance technology, Simpson said. He foresees more policies being sold online than the automobile and personal lines of today. Claims servicing will change, with more use of chat and automation to make up for fewer people being able to be reached by phone.

Patra was profitable within three years and today has 2,300 employees, including 30 at its official headquarters in Novato, where one of two printing and mailing plants is located. The other is in El Dorado Hills, where corporate offices are now, as Simpson and other top officials have moved to the area. The total headcount is set to swell to 2,500 by year-end.

Before co-founding Patra, Simpson co-founded CyberBills, a Silicon Valley e-payment tech firm, in 1998, and it was acquired in 2001.

106%: The Engine Is Red, Santa Rosa

Started in 2008, advertising and marketing agency The Engine Is Red, named from an inside joke among the founders, has been getting a spurt of growth in the past three years from expansion of clients outside the North Bay, according to founder Chris Denny. The firm currently has a staff of 20, with 12 inhouse and the rest as contractors.

“We want to create a creative hub in Sonoma County that does not just serve Sonoma County,” he told the Business Journal. “We are drawing attention from traditional creative centers in New York City and San Francisco.”

Currently, half the agency’s clients are based outside the North Bay. The firm expanded from financial and nonprofit clients to biotechnology and life sciences as well as wine.

Notable clients include Rombauer Vineyards, Guide Dogs for the Blind, Medtronic and First Cal Mortgage.

97%: Solairus Aviation, Petaluma

Though new to the Inc. fast-growth list, The full-service private-aircraft management and charter company has been on a steep ascent for eight years.

From 60 employees at its official inception in 2009, Solairus Aviation has grown to employ about 600. The company manages and operates about 100 aircraft in more than 40 locations around the country, most of which are small offices in private hangars. It has a local base of operations at Napa County Airport with administrative offices in Petaluma.

“Many are surprised that a global player in a big industry is here in little Petaluma,” founder and CEO Dan Drohan told the Business Journal in an interview a year ago.

Solairus advises clients in acquiring and operating a wide range of private aircraft. In 2015, Solairus expanded its Petaluma headquarters by 20 percent, along with opening a new office in Purchase, N.Y.

Solairus’s flight plan actually began in 1992. That’s when Drohan started Sunset Aviation. He sold it to Jet Direct in mid-2007, which expanded it outside of this region, making it into nationally recognized brand. Drohan had left Jet Direct just before it filed for bankruptcy in early 2009. Drohan started a new company, hired most of the furloughed workers, and the new chapter that’s Solairus began.

52%: M.A. Silva USA, Santa Rosa

Revenues for the distributor of cork wine-bottle closures have doubled in the past six years, since M.A. Silva USA added bottles to its product list, expanded its facilities and started offering individually tested stoppers, according to Neil Foster, owner and CEO.

Sales grew to $42.1 million last year, and he is expecting to reap bigger receipts this year. Staffing has grown about 40 percent in six years to about 50.

“With a good harvest, which is what we’re seeing, we anticipate healthy growth numbers,” Foster said.

The company started in 2000 with a partnership between Foster and Manuel Alves Silva, founder of M.A. Silva Corticas, a 45-year-old major global natural cork supplier based in Portugal. That allowed vertical integration from purchase of raw cork bark from forest owners to delivery to vintners.

In 2010, the independent company in Santa Rosa started offering glass containers. In 2015, a 70,000-square-foot new warehouse and processing facility opened in Santa Rosa, bringing the total facility footprint to 105,000 square feet.

At the beginning of last year, a program for automatically testing each stopper launched with the installation of gas phase spectroscopy equipment at production facilities in Portugal. The goal was to offer it for corks bound for high-end wines because of the added cost, but demand for such assurance on stoppers for lower price tiers has been bigger than expected, Foster said. Currently, seven testing machines are operational, and that is expected to grow to 13 by year-end.

This follows investments in Portugal for raw-materials handling, production of technical corks (solid cork pieces plus cork pieces) and molded agglomerated sparkling wine corks (made from cork pieces).

“It gives us more capacity for increased demand for Champagne and technical corks,” Foster said.

RETURNING TO THE INC. 5000

429%: Moore Solar / Heating / Cooling, Santa Rosa

The 8-year-old installation and service company returned to the list for a fourth straight year, coming in at No. 1,011 with $16.4 million in revenue last year.

Curtis Moore started Moore Solar / Heating / Cooling in 2009 and hired his best friend as the first employee in late 2010. Co-owner Jon Diamond joined as a half-owner in February 2011.

The company employs about 90.

213%: Free Flow Wines, Napa

The kegging, tap installation and logistics services company returned to the list for a third time. Free Flow Wines has allowed the wine and hospitality industries to move away from bottles to a more environmentally friendly way of serving wine, at a time when more consumers are preferring to order by the glass, according to Jordan Kivelstadt, CEO and co-founder.

Revenue last year was $4.9 million.

208%: OneHope, Rutherford

OneHope was begun in 2007 by eight friends who, according to its website, produce wine, coffee and other items and with a pursuit of helping causes they believed in.

They report more than $2 million in donations, providing over 11,000 clinical trials for breast cancer patients, 33,000 forever homes for shelter animals, 1.6 million meals for children, 33,000 life-saving vaccines and much more.

Revenue last year was $11.2 million.

138%: ProTransport-1, Cotati

Ambulance and medical transport company ProTransport-1 returned to the list for a seventh time, at No. 2,557 with $107.5 million in revenue and more than 1,900 employees.

The 17-year-old company has expanded nationwide, last year acquiring three companies — PRN Ambulance in Los Angeles, ATS Medical Services in Chicago and Century Ambulance Service in Jacksonville, Fla. — and launching a new brand, Covalent Health.

136%: EO Products, San Rafael

Another list seven-timer, EO Products slipped to No. 2,587, with $33.0 million in revenue, from No. 2,257 last year.

From a garage business in San Francisco 21 years ago, the body care company makes bath and body care products with botanical extracts and essential oils in a certified organic facility.

110%: Star Staffing, Petaluma

The employment-services company returned to the list for a third straight year, ranking No. 3,028 with $25.5 million in 2016 revenue. Star Staffing itself employs nearly 50.

86%: Before the Movie, Fairfield

The Solano County company provides highly produced content to movie-theater owners to keep viewers’ attention as advertisements, short features and other entertaining bits flicker on the silver screen. Before the Movie returned to the list for a fourth consecutive year, at No. 3,583 with $5.5 million in revenue.

Keyo Tocchini, wife of founder Corey Tocchini, was promoted to president this year.

Revenue is expected to top $6 million this year, and the company employs 25.

Locally, content can be seen at all Brenden Theatre locations (Concord and Vacaville), Santa Rosa Entertainment Group locations (Santa Rosa, Healdsburg and Lodi) and Cinema West locations (Petaluma, Sonoma, Martinez, and Woodland). Its content is now on 1,149 screens in 32 states with more than 170 theatre circuits, seen by 32 million-plus viewers annually.

79%: Bolt Staffing Service, Sonoma

Sonoma-based Bolt Staffing Service returned to the list this year at No. 3,745 with 79.4 percent growth to $9.5 million last year. It previously ranked in 2003 at No. 364.

55%: Nelson, Sonoma

Nelson returned to the Inc. 5000 for a second straight year.

It was founded in 1970 by Gary D. Nelson, later forming Nelson & Associates in 1988 and a year later, moved its corporate offices to Sonoma. According to its website, the staffing company has 19 locations in the U.S.

Revenue in 2016 was $245.1 million.

North Bay companies on the Inc. 5000 list in 2017

Rank Company City 2016 revenue 3-year revenue growth Founded Employees Times on the list 2016 rank
331 CleanFund Sausalito $2.3m 1,344.28% 2009 25 1x
591 The ExecRanks Novato $11.6m 765.49% 2012 113 1x
1,011 Moore Solar / Heating / Cooling Santa Rosa $16.4m 428.59% 2007 87 4x 467
1,037 Email Aptitude San Rafael $4.0m 411.66% 2010 39 1x
1,622 Patra Novato $28.3m 243.38% 2009 1,821 1x
1,815 Free Flow Wines Napa $4.9m 212.72% 2009 47 3x 1,064
1,845 OneHope Rutherford, Napa $11.2m 208.17% 2007 41 5x 2,354
2,557 ProTransport-1 Cotati $107.5m 137.79% 2000 1,939 7x 2,894
2,587 EO Products San Rafael $33.0m 135.80% 1995 103 7x 2,257
3,028 Star Staffing Petaluma $25.5m 109.63% 1998 41 3x 2,127
3,118 The Engine Is Red Santa Rosa $2.0m 105.52% 2008 15 1x
3,294 Solairus Aviation Petaluma $246.0m 97.01% 2009 600 1x
3,583 Before The Movie Fairfield $5.5m 85.61% 2008 15 4x 2,943
3,745 BOLT Staffing Service Sonoma $9.5m 79.39% 1994 1,769 2x
4,487 Nelson Sonoma $245.1m 55.26% 1977 490 2x
4,605 M.A. Silva USA Santa Rosa $42.1m 51.76% 2000 49 1x
Source: Inc.com/inc5000

Correction, Aug. 29, 2017: The name of Forest Bronzan was misspelled. The company also has an office in Chattanooga, Tennessee. The ExecRanks' service for back-to-back meetings is called Advisor Day, not AdviserDeck.