Cleantech May Not Be As Sexy As Facebook — But It’s Hot

I’ve recently noticed a disconnect between news commentary on clean tech and my own experiences with the market sector.

Investing in cleantech is not easy nor is it “cool” either. Some lament “if only clean tech were more like facebook.” Certainly, Hollywood stars aren’t yet being cast to portray the go-go cleantech startup experience. And, try as he might, the President appearing on a Discovery Channel science program won’t likely captivate most young people in the same way as The Social Network movie does. Energy is just not as cool as social networking. After all, for most people energy is just a utility they’re accustomed to having cheaply and reliably in order to provide basic living standards and enjoyable things in life – like social networking.

Cleantech is not sexy, but cleantech entrepreneurship is important and worthwhile. And I am encountering enormous opportunities in the sector.

A few examples? My visit Tuesday to the new microlab at UC Berkeley which is teaming with students working on energy problems, including one I met who just returned from working at ARPA-E in Washington. Last week at NREL’s conference in Denver I met an impressive array of seed stage energy startups and there was a strong showing of investors in attendance. And its not just engineers getting involved. I spent Thursday evening at a UC Berkeley event celebrating the fifth anniversary of that impressive, student-led multidisciplinary program. Just recently, I’ve spoken with at least a dozen alums from my alma mater, Duke, which recently launched an MBA concentration in energy, who are launching companies or joining energy tech startups. Our portfolio companies are also finding terrific candidates moving into cleantech from other areas.

Talented students and entrepreneurs are seeking opportunities in clean technology. I see building enthusiasm. The magnitude of the opportunities are attracting brilliant minds who want big challenges and worthy problems to tackle. But missing from this nascent entrepreneurial ecosystem are funding models and participants at the seed and early stages. Particularly at the stage of taking an idea through initial commercial prototype or alpha stage. It’s something we’ve been actively discussing at Claremont Creek Ventures.

We think there is a role for venture capital and seed investing. Exactly what funding approaches and which areas will be most successful we can’t yet prove. But we have some ideas that characterize our approach: investing early, ensuring key technical or business assumptions can be validated with Series A funding, not relying on utility adoption to drive early revenues, planning that building a business in energy technology may take longer. Success won’t be measured in news cycles, quarterly fundraising reports, or the box office life of a movie.

We’re busy working with other early-stage funding partners, universities, and national labs. All will be critical in filling the early stage funding gap. It’s an ecosystem just beginning to take shape and we plan to play a large part. We’ve already made two seed investments in the past several months. In addition to capital, part of the work is bringing together as many good ideas and people as possible. I’m always interested in speaking with energy tech entrepreneurs – our door is open.

2 comments to Cleantech May Not Be As Sexy As Facebook — But It’s Hot

  • Kirstin Elaine Myers

    Hi Paul,

    I have an alternative energy client based in Brazil but founded by a Canadian-American and Italian-American, and which will do an IPO on Nasdaq later this year. They need bridge financing and are offering convertible debt at a 20% discount. I would like to send you the presentation, bridge term sheet and investor return analysis for your review if you could kindly send me your email address to kirstin@sparx3.com. Thank you in advance!

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