SD Forum’s Green and Clean Dinner Meeting

The Image via Wikipedia

I attended the SDForum Green and Clean Dinner tonight. The topic was “Where’s the Money?” Five panelists, representing a VC firm, a bank, an angel funding group, a bridge-financing firm, and an entrepreneur who has raised his money independently, discussed the various sources of funding for clean tech companies. i took extensive notes, and will provide more details later, but for now some of the highlights were:

  • Liquidity may be different for clean tech companies than we got used to for high tech companies during the Internet boom
  • Because of the technical risks involved in clean tech, the old venture capital adage of “market first, team second, and product third” often needs to be turned around
  • Especially for power, this is a global market – Europe is at least 15 years ahead of the U.S. in terms of regulations supporting alternative energy and other clean tech
  • There are a lot of entrepreneurs seeking funding – the VC read over 2,400 business plans and funded only 21. The angel investor says one of his biggest problems is “perpetual motion machine” proposals – they have to do a lot of scientific due diligence on the proposals

SDForum’s next Green and Clean event is a breakfast meeting in San Francisco on September 30, focusing on Innovation in Transportation.

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Leading VC talks about investing in energy efficiency

Public Domain. Credit information: Hinode JAXA/NASA
Public Domain. Credit information: Hinode JAXA/NASA

Every day I get emails about “clean tech financing this” and “clean tech financing that” – last year there was over $7 billion in investments in clean technologies in the U.S. In this interview in the San Jose Merc, Paul Holland of Foundation Capital describes some of his philosophy on clean tech investment, including a strong focus on technologies that will reduce energy demand:

“The first lesson is there’s nothing wrong with a capital-efficient investment, even in clean tech. The second lesson is, look what happens when you don’t pay attention to the first lesson.”

Foundation has just closed a new $750 million fund, $250 million of which will be focused on clean tech, primarily on the demand side, although they are making some investments in supply as well – solar and biofuels.

Holland is also building a new, extremely energy efficient home in Portola Valley, CA. One of his goals for the building is to make much of the design reusable for other new homes.

“Once you get over the custom elements, it can be reproduced if you want to go down that road.”

You can hear more about Holland’s green energy investing in this Weather Channel interview on Forecast Earth: “Green Venture Capital In Depth”.