I've received a ton of helpful feedback after putting out the Cleantech Venture Capital in 2015 presentation; thanks much to everyone for the thoughts and reactions. Glad to see it sparking some thinking and conversation out there, which is why I did it. I'll post a follow-up here in a while.
In the meantime, I'm finding myself spending a not-insignificant amount of time on two "extracurricular" projects lately, the Clean Economy Network (where I'm co-chair of the board of the CEN Education Fund) and the Cleantech Open (where I'm serving as the chair of the Northeast regional competition/organization, Ignite Clean Energy). It's not like I don't have a ton of direct investor activities occupying my time. Since I joined Black Coral Capital in mid-2009, we've made five direct investments (and I work with the boards of 4 of those firms) and four LP commitments, and we are evaluating new investment opportunities and working to support our existing portfolio on an ongoing basis. So clearly, I've decided these nonprofits are priorities for me. While working on these extracurriculars is a significant strain on my schedule, it's something that I believe is important for doing my job well as a cleantech investor.
Many other cleantech investors and entrepreneurs will ask, Why? Why get involved, an investor might ask, in anything time-consuming that's not directly involved in dealflow, diligence, and supporting the portfolio?
I completely sympathize with this perspective from investors and entrepreneurs from outside this sector. But I firmly believe that in the cleantech sector, things are different because of the nascent stage of our community. Things aren't "plug and play" yet.
In the fragmented, emerging cleantech community, we need people to step up and help glue together all the diverse voices and networks so that entrepreneurs can find investors and vice-versa, so that entrepreneurs can better find new hires and new customers, so that there's more effective policy advocacy in support of the overall community, and so that entrepreneurs, investors and other stakeholders can all gain collective context to help us all make better strategic decisions.
Maybe in 10 years there will be enough established and interwoven cleantech business networking organizations so that someone like me can just become a member and find all of the above, without having to do anything significant. But for now, it doesn't exist unless someone works to make it happen. And who is better positioned to have an impact on this than investors and entrepreneurs?
Furthermore, getting involved has significantly helped my firm's dealflow and relationship-building, certainly more so than just attending conferences. So while time spent on these activities may seem like time spent away from finding and making deals, I find that's most often not the case.
My firm is far from alone -- we're just one example of a broader trend in the sector. While some investors and entrepreneurs take the perspective that they have one single job and everything else is a distraction, in the cleantech sector I more often find investors and entrepreneurs making the time to get involved in these community-building initiatives somehow. But then the challenge becomes: Which initiatives? Because while the overall sectoral community is still emerging, there are already a wide range of worthy community-building efforts underway. Which ones are most worthwhile to get involved in? Choose well and you get the benefits described above, but choose the wrong extracurricular activity and it's a significant time investment for little return. So making the commitment to get involved in something like this has to be done very thoughtfully.
For me, the two criteria I look for are impactfulness and helping to create the broadest possible networks. Forgive the blatant plugs for these two efforts I obviously support, but I do want to use them as examples of what I'm talking about.
The Cleantech Open, for instance, attracts well over 100 early-stage startups as applicants each year. By using a business competition as the motivating factor to bring out and inspire these startups, the organization not only provides prizes and visibility to regional and national winners (some of which by now include some of the more high-profile cleantech startups out there), but mentoring, access to investors, and access to other resources. Even before taking on this regional chair role, I've found value in previous years' competitions in terms of finding potential investments, as well as networking with investor peers and other members of the ecosystem. It's no coincidence that the idea had been copied by many organizations and groups in different sectors, but with the Northeast's ICE competition merging with the national Cleantech Open competition, it's great to have that deep access locally matched with the exposure to the national community of cleantech entrepreneurs.
I also appreciate the Clean Economy Network's approach to building two critical layers of the community, both at the local level with 17 local chapters focused on helping cleantech businesspeople connect with each other, as well as at the national level by being a nonpartisan voice on policy issues for the entire sector, not just one technology or industry. At a time when people involved in solar often don't talk to people involved in wind or nuclear power or energy efficiency, etc., the "big tent" nature of the organization provides a pretty useful one-stop-shop to those like me who want access to as many subsector networks as possible. And we particularly strive to use CEN's member network to provide leverage for other regional community-building efforts as well; we have dull elbows and a collaborative goals-oriented approach. We're building a tool for the entire community to use.
And as energy policy has become increasingly politicized, CEN's role as direct voice of the pragmatic business community seems even more important. Advocacy remains critical for this sector, since there are still major policy questions being hashed out that will directly impact all of us. Many investors and entrepreneurs want nothing to do with anything policy-related, but I applaud those willing to speak out in support of the industry. There's a hunger among policymakers on both sides of the aisle for pragmatic voices from the business and investor community. Particularly important are those willing to say with clarity: "This clean energy policy has been effective, but this other clean energy policy has been ineffective, and here's how to fix it." Policymakers are inundated with white papers arguing completely opposing and partisan viewpoints, but nothing makes an impression like a nonpartisan first-hand account. Entrepreneurs and investors, particularly those from regions outside of Silicon Valley, with real-world, on-the-ground stories to tell are definitely in a position to be influential and heard. CEN is the most effective platform I've found for bringing this together, as an overall industry, in a purposefully nonpartisan way.
That's why impactfulness and broad networks are my chief decision-making criteria when it comes to choosing which organizations I want to get involved with. Other investors and entrepreneurs will have different criteria and will therefore support plenty of the other worthy efforts out there. The point isn't to elevate these two organizations above any others, but to illustrate why I've chosen these for myself, and why I've prioritized the time to get involved with them. But regardless of which efforts investors and entrepreneurs choose to support, many are indeed getting involved. As long as the various efforts are committed to collaborating with and supporting each other, the more the merrier.
For many cleantech investors and entrepreneurs, there are important direct benefits to getting involved in efforts like these: networking, dealflow, potential funding opportunities, and general context and knowledge. In addition, there is also the need to help the overall cleantech community continue to become more interconnected and robust, which helps all of us. All of this emphasizes why it's important and valuable to spend the time on extracurricular activities like this, even if it can sometimes feel like a distraction from "real work."