Imara did not make it across the chasm of death.

The battery company, which grew out of a project at SRI started almost a decade ago, has ceased operations. The company had experienced a delay in ramping up operations and could not line up investors to build a factory. Imara had started to make prototype and sample quantities of batteries in its Menlo Park, Calif. facility, but it wanted to scale up with a 200,000-square-foot manufacturing facility.

"It certainly did not help that hundred of millions in DOE stimulus funds went to two Korean companies and one French company, Saft," wrote Neal Maguire, vice president of business development. "We are all still far better off with EVs and HEVs but unless something radically changes, the battery business is for big players that want to create billion dollar business units not VC-backed startups."

Imara employed 38 scientists and engineers. It will try to sell its assets and intellectual property but right now the company is shut down.

The demise of the company could portend bad news for other green startups. The battery business is generally dominated by large, Asian manufacturers and many of the grants from the Department of Energy did go to joint ventures partly owned by foreign companies. Two joint ventures with South Korean partners – Dow Kokam and Compact Power – received $312.4 million earlier this year from the DOE. Only a few U.S.-based lithium-ion battery makers such as A123 Systems and EnerDel have received stimulus funds. Interestingly, the DOE has given grants to a variety of flow battery startups. Flow batteries, however, represent a brand new market with virtually no entrenched players.

Existing companies in need of funds may find that they must shift their business model away from manufacturing and toward intellectual property licensing or other asset-lite approaches. It's a trend that's already going through other segments of greentech. Nanostellar, Innovalight, eSolar, Ausra and 1366 Technologies are some of the companies that have shifted their business plans – sometimes slightly, sometimes radically – to get around the factory problem in the past year or so.

Imara's secret sauce revolved around a cathode that can effectively allow a battery to store more lithium ions than standard lithium-ion batteries. More ions, more stored power. The idea emerged from experiments conducted at SRI in 2000 funded by a program to develop electric cars sponsored by the Department of Energy.

Imara planned to make batteries for power tools and handheld equipment. The qualification cycle is shorter and the 18650 cells Imara makes are suited for this market. The battery was designed in such a way that the company could swap the basic chemistry of the cathode

"We're chemistry agnostic," said Jeffrey Depew, CEO, during a visit to their labs in February.

The porous structure of the company's cathode – a three-foot strip of materials covered with chemicals that gets coiled tightly inside a battery – also allowed it to insert a high number of lithium ions into its cells.