4 Minutes With…John M. May, Managing Director, Stern Brothers & Co, industry financier

Innovative finance? We think that’s John May’s middle name; it’s certainly his trademark. Stern Bothers rolled up a tremendous clientele in the Advanced Bioeconomy — primarily on its innovative bond financing approach to first commercial projects backed by USDA (and DOE) loan guarantees. For his clients, he’s been a steady counselor in getting new companies to understand what is financeable, and what is not, when it comes to the structure of companies and the advancement of new technology.

Tell us about your organization and it’s role in the Advanced Bioeconomy.

Stern Brothers is a national investment bank headquartered in St. Louis, MO. We provide project financing and corporate level equity to the capital markets for a variety of Biofuels, Biochemicals, and Biorefinery companies for projects both in the US and abroad.

Tell us about your role and what you are focused on in the next 12 months.

We are focused on raising corporate level equity for both early stage companies and prospects and clients in the Biofuels Digest top 50. In addition, we are focused on raising project debt in the capital markets using various de-risking methods including the USDA and DOE loan guarantee programs, multi-lateral finance agencies for projects off-shore, and technology risk insurance. Finally, we are focused on corporate development and the negotiation and structuring of strategic partnerships for bio-companies to enable them to broadly deploy their technology platforms and advance to a liquidity event, without relying solely on a build-own-operate strategy.

What do you feel are the most important milestones the industry must achieve in the next 5 years?

The most important milestone the industry must achieve is commercialization of several biorefinery technologies in the US. 1. Deploy the technology at commercial scale in a way that the company has said it will work. 2. Raise the necessary debt and equity financing 3. No longer rely on RFS2 as a form of synthetic off-take agreement.

If you could snap your fingers and change one thing about the Advanced Bioeconomy, what would you change?

There is a great line in the movie No Country for Old Men. The killer says, “ÏIf the road you followed led you to me, what does that say about the road you took?” The industry must pursue a pathway which is informed by advisers, such as investment banks like Stern Brothers, who can take them down the right road.

Of all the reasons that influenced you to join the Advanced Bioeconomy industry, what single reason stands out for you as still being compelling and important to you?

If the technology offered by the industry can actually work at commercial scale, the industry offers nothing less than the reinvention of the petrochemicals industry. Our firm can provide financing that is accretive to equity returns during this commercialization process and beyond.

You’ll be speaking at the next ABLCNext conference in San Francisco this November. What’s special about that week for you?

What is special about ABLCNext is the ability to identify and explore with authenticity the issues that are holding the industry back on a project by project basis.

What was your undergraduate major in college, and where did you attend? Why did you choose that school and that pathway? 

I attended Brown University and majored in English and minored in Economics. I went to Brown because my mother wanted me to go to an Ivy League school and I always did what my mother told me.

Who do you consider your mentors?

I have had the tremendous fortune in having great mentors in the industry. People who made my career. Those mentors are and continue to be in no particular order: Mark Riedy, Steve Gatto, John Kirkwood, Jim Lane, Dennis McGinn, Tom Vilsack and others senior at the USDA, Peter Davidson at DOE, Roger Feldman, Chris Groobey, Jeff Passmore, all the CEO’s from Top 50 Biofuels Digest companies who put their confidence in me, Dick Corrigan, Bill Holmberg, Mike Eckhart, Martha Schlicher, Tod McGreevy, Eric Hakmiller, Bret Turner, Les Krone, Chris Baker, Herb Kosstrin, Mike Slaney, David Black, Jim Stewart, Joe Vaillancourt, Gary Luce, Harvey Gershman, Jeff Manternach, Ralph Cho, Mike Pantelogianis, and Atul Thakrar.

What’s the biggest lesson you ever learned during a period of adversity?

No financing outcome can be guaranteed. There are too many variables beyond our control. Financing is about perception of investors. Perception is subjective. Subjectivity changes. You can do everything humanly possible to get a deal to close, and it still won‰Ûªt close. You have to admit that at some point, before you go crazy, and move on.

What hobbies do you pursue, away from your work in the industry? 

Running

What are 3 books you’d want to have with you, if you were stranded on a desert island?

Unbroken by Hillenbrand
The Odyssey by Homer
The Sun Also Rises by Hemingway

What books or articles are on your reading list right now, or you just completed and really enjoyed?

Cadillac Desert: The American West and Its Disappearing Water by Reisner

What’s your favorite city or place to visit, for a holiday?

I haven’t had a vacation in 5 years!