Ultra Light Startups took its successful model of running technology startup pitch events and adapted it for energy when Shell’s GameChanger program came knocking at the door just over a year ago.
“We’re interested in revolutionary, rather than evolutionary, technologies,” said Richard Smith with Shell GameChanger, which invests globally in disruptive ideas, such as wind turbines connected to kites. “It’s exciting because it’s a little crazy.”
It’s not every day that the words "wacky" and "crazy" are used as gushing terms of endearment by an old-school oil company, even if those words are coming from its venture arm. Of course, the investments made by Shell are not even a drop in the bucket compared to its traditional oil and gas business.
But it wasn’t just Shell evaluating the eight startups, picked from more than 200, which presented on Monday night at the ARPA-E Energy Summit. Representatives of Clean Energy Venture Group, New Enterprise Associates and Kleiner Perkins Caufield & Byers were also on hand to ask questions and provide feedback to the eight companies, all of which are early stage. Participants included:
1. BDL Water: Frack water treatment
2. HEVO: Wireless charging for electric vehicles
3. OtherLab: Natural gas vehicle tanks
4. Thin Sheet Zeolite: Membranes for building efficiency and industrial applications
5. Altenera: Oscillating reed wind harvester
6. Gravaton Energy Resources: Ambient air thermal generation
7. Transatomic Power: Uranium molten salt nuclear reactor
8. Pacific Air Conditioning: Solar compressor pump
Although the technologies were vastly different, much of the advice was the same after presenters gave three-minute pitches. Unlike tech startups, energy means having to navigate heavily regulated markets with enormous barriers to entry.
“Innovation is a little different in energy than how it works elsewhere,” Graham Lawlor, founder of Ultra Light Startups, told Greentech Media. “The challenge is, how do you get of the lab and into the real world? That’s different than internet startups, where there’s a new software startup every ten minutes.” Any startup that has plugged away in the slower-than-molasses world of utilities knows exactly what Lawlor is talking about.
All of the venture capitalists on the panel echoed some of the same recommendations to just about all of the startups:
- Partnerships. The idea that you’re going to build it, own it and operate it is often unrealistic in the energy sector. Know the ecosystem of partners, including in the manufacturing process and partners that can put you in front of early customers.
- Numbers. It’s important to have quantitative analysis to back up claims, but it's also important that the numbers are the key metrics that are used by the industry you’re trying to break into.
- Killer app. Even if the technology has multiple applications, pick one that is realistic in the relatively short term and might provide the capital to support the more ambitious project. Your first market might not be the same as your ultimate market.
- Customer-focused. Is the customer a utility that’s heavily regulated? Is it a homeowner that loves your technology but thinks it’s too ugly to put on his property?
Most Ultra Light Startup events are standalone, rather than wrapped into a larger conference, like it was at ARPA-E. The program is always the same with four VCs and eight startups. The first four Future Energy events were held in Boston and New York, but the program will be expanding to Silicon Valley with an event on April 24.