Recent Posts:

A tale of two communities

Rob Day: November 6, 2010, 9:14 PM

I was asked to moderate a panel at the Future Forward executive retreat, a long-running event in the IT community in Boston.  Pretty impressive group of around 150 C-level IT execs in attendance, good smart speakers.  Made sense that the cleantech panel to be held as one of the breakout sessions would be about smart grid and customer energy information, since that is a sector that has strong overlap with IT.

Nevertheless, whereas the panel on cloud computing had something like 80 people, the panel on smart grid / energy data had 8.  The IT execs at the event clearly had very little interest.

Frankly, I can understand why.  These IT execs don't know any peers who've made it rich...

Q3: Behind the ugly numbers

Rob Day: November 1, 2010, 1:52 PM

The kind folks at Ernst & Young sent over their Q3 cleantech venture deal data this morning.  You've probably already seen the headlines, but suffice to say they've confirmed what many have been saying, that Q3 was a pretty big pullback quarter.  They tallied a 55% decline in deal dollars versus Q3 2009, and not only were deals getting smaller on average, but the total number of deals was also down 22%.

Can't say this was a surprise.  As we've been talking about for a while, it's seemed that the deal and dollar totals this year and last have been somewhat propped up by insider rounds.  And also, VCs are themselves running out of money, and it's a brutal time to be fundraising from...

Are subsidies for EVs a dumb idea?

Rob Day: October 30, 2010, 8:29 AM

I'm already getting pretty frustrated with the unnecessarily politicization and partisanship of clean technologies, particularly by outsiders.

In case you missed it, JD Power came out with a report (note: pdf) concluding that the market for electric vehicles and plug-in hybrid electric vehicles will underperform versus all the hype around the sector, through 2020.  It's well worth reading.

They base their conclusions on some critical assumptions, existing market data, and survey data.  It's a credible effort to forecast the market.  And it's getting talked about among those who opine on political issues:  This morning's WaPo editorial by Charles Lane is particularly breathless...

Much easier said than done

Rob Day: October 26, 2010, 4:20 PM

It's well understood that one of the most critical skills a venture capitalist must have is knowing when to walk away from a portfolio company.

I've heard this aspect of the job described in terms ranging from coldly mercenary to grudging acceptance and regret.  But regardless, no one bats 1.000, so at a certain point you need to cut your losses.  Sometimes the decision is easy, it's effectively made for you.  But in many cases VCs are faced with tough decisions about portfolio companies that went sideways but still have a chance and "just need another round of financing to turn the corner".  The problem is, very few companies do ever turn that corner, so the VC has to decide if...

Unicorn hunting season

Rob Day: October 20, 2010, 10:45 AM

Kind readers, by popular demand (and out of personal necessity), I'm going to start writing these columns a bit more infrequently and certainly with more brevity going forward.  Or at least that's the plan...  What's making me (and other investors) so busy right now?  Turns out right now is a pretty interesting time in our market.

I'm realizing that I've never been more overwhelmed with interesting dealflow.  When I look at the log we keep at my firm of incoming deals, the aggregate number of deals is only slightly up versus what I've historically seen.  But the deals that are coming in are harder to say "no" to at a cursory glance, on average.

For the six years I've been a...

How to approach investors with a component idea (components part 3)

Rob Day: October 7, 2010, 4:26 PM


In the last post I walked through questions entrepreneurs need to think through, research, and thoughtfully answer before attempting to turn a component-level cleantech innovation into a business.  And a natural next question is, "but who will fund this?"

It's perfectly okay if the answer is "hey, we're going to make a component and then sell that component or license it to OEMs."  But if so, you need to choose your potential investors wisely (in this case, probably angels and smaller venture firms focused on such business models, rather than the NEAs and Kleiners of the world).  And regardless of where you do believe you need to draw the boundaries for your future business,...

Drawing boundaries (components part two)

Rob Day: October 7, 2010, 4:12 PM


In the last post I lamented seeing so many entrepreneurs pitching components in cleantech, not fully fleshed out companies.  Then I helpfully mentioned that building a fully fleshed out company is really hard and expensive and often not the right choice.

So what is the entrepreneur to do?  

It's difficult to know exactly where to draw the line between what should be "owned", and what should be left to the rest of the value chain.  But it starts with listening to the customer, and everyone else involved in that industry.  

A. Talk to end users and the people selling to them, and figure out if there's a real pain point here.  Do this more than 3 times, do it 20 times.  And...