Getting venture capital funding is difficult.*

VC investors look at hundreds of deals for every one they actually fund.  Have you ever wondered about the "science" of how they pick their deals and the thought processes that go into deal flow and deal selection? 

VC Taskforce offers an opportunity for entrepreneurs seeking VC funding to pitch in front of a panel of investors with a greentech focus.  It's free and on a first-come basis at the law offices of Wilson Sonsini in Palo Alto, Califorina.  It's a regular event -- the one I attended was held a few weeks ago.

The process is simple -- an entrepreneur, desperate for funding, signs up, stands up, and pitches his or her idea for a strictly enforced time limit of two minutes.  The investor panel asks a few follow-up questions, offers a critique and then, to make the whole process as demeaning as possible, flashes a number from one to five on a card to rate the pitch.  Think judging at the Olympic diving competition.  Or maybe the Dating Game.  In any case, the investors do provide some feedback on the entrepreneur's pitch and business plan.

Panelists:
Tony Chao, Principal, Applied Ventures
Ramy Adeeb, Khosla Ventures
Andrew Chung, Principal, Lightspeed Venture Partners
Todd Kimmel, Partner, Mayfield Fund
Thomas Marchok, Director, Intel Capital

Here's a list of some of the startup hopefuls at bat this session.  I'm not going to include the VCs' scoring of the startups.

Zajac Motors    (Improved internal combustion engines)

Mr. John Zajac, founder and CTO

We've reported on Zajac in the past.  They're still looking for funding.

Zajac Motors is developing an efficient and innovative twist on the diesel engine and is using a new insulating material as part of the design.

Instead of intake, combustion and exhaust taking place in one location, Zajac performs these separate functions in separate places.  The distinct combustion chamber leads to better efficiency and much better emissions performance. The design of this engine allows Zajac to jettison timing chains, mufflers, plugs and catalytic converters.  The new design actually adds eight new components but removes 29 other parts.

The constant temperature of 1425 degrees C and constant pressure of 600 psi make this an engine which is "self-cleaning"  and one in which the valves "can't get dirty."  According to the firm, the new technology also promises a dramatic increase in fuel efficiency (up to 50 percent more than conventional gas engines) and the ability to change fuels on the fly, without any alterations to the engine or its power rating.  Modifications to the engine are entirely above the cylinder head.

The team claims that their invention can "establish U.S. leadership in clean ICE technology."  Other startups working on internal combustion engines are Achates Power and Transonic Combustion.

According to a recent email from the company, they have established "serious interest" with the U.S. government, the government of Israel and Cummins USA.


BrightGrid Solar   (Solar leasing)

Michael Ruehlman, Co-founder, Business Development

BrightGrid is a financial services company that provides homeowners with solar leasing solutions that allows them to switch to clean energy; the firm is currently active in California.  Competitors for BrightGrid would be solar leasing outfits like SolarCity or SunRun or Sungevity.

The firm raised its first round in late 2009, has its "senior management in place" and looks to differentiate itself as a "high-value player."  That means they're using "proprietary software from Point of Sale to the end of the deal" and are "working with the highest quality installers and equipment."

UbiQon    (A different architecture for charging electric vehicles)

Avi Rapaport, Founder

UbiQon is a networking platform for the “smart” and cost-effective charging of plug-in hybrid electric vehicles and battery-based electric vehicles.  Instead of expensive charging stations from the likes of Coulomb or swapping stations from Better Place, Ubiqon envisions the charging intelligence distributed as an edge device in the car itself.  According to Rapaport, "We think this opens up the market" by installing a little device between the battery and the charger creating a dynamic networking layer for dumb chargers.

The investors were interested in the sales-channel challenge of getting this edge device in every EV.


Maxwell Solar  (Next generation of solar inverters?)

Bruce Niven, founder

Maxwell solar, another entry on the microinverter scene, promises the benefits of Enphase's microinverters at 30 percent lower cost.  Niven spoke of a microinverter shared by four PV panels.  He called it a "thin front-end with an 800-watt inverter behind it."  Niven said the inverter market was growing to $12 billion by 2013 and moving towards a more distributed architecture.  The startup has a working prototype and is looking for $3.5 million.

The feedback from the VC panel was that Maxwell was late to market and Enphase would be difficult to leapfrog.

 

Fifth Fuel      (Using energy more efficiently)

Paul Friedman, founder

Fifth fuel envisions a large battery integrated with a little computer in house.  Energy is pulled from the grid and stored in the battery when economical and pulled from the battery when needed.  The firm needs $2 million to get to a working model, $5 million to develop a prototype, and $10 million to get to production.

 

Personnel from a number of leading VC firms have told me that they have not sourced a single deal that didn't come from some type of reference.  In other words, Kleiner Perkins isn't spending a lot of time at startup fairs or at cleantech venture fairs.  It's just not how they foster deal-flow.  Nevertheless, maybe these funding hopefuls can get some tips on how to make their business plan and pitch more attractive to the VCs who do source their deals from this type of get-together.

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* Allow me to share one of my VC-fund raising experiences.  In the late 1990s, during a telecom and optical networking bubble, a small team -- including myself -- raised $6.3 million in VC funding from two reputable VC investment firms for our optical networking startup.  Investor due diligence, as far as I could tell, consisted of making sure that there were no outstanding arrest warrants for the CEO.  


VC-Funding