Recent Posts:

This Quarter in Cleantech Venture Capital investing

Rob Day: July 13, 2012, 12:00 PM

The various deal-tracking groups continue to step up their game, doing a better and better job each year. Looking forward to seeing additional takes from CB Insights, Ernst & Young and others, but just reviewed the Cleantech Group's Q2 media presentation (as reported on by GTM here) and had a few additional thoughts and reactions to lob in:

1. It really feels like 2012 is a shakeout year.

Remember that the way these numbers get reported, and given the paucity of exits in the sector, there's a fundamental momentum to see deal counts always go up over time. Every quarter's new deals will require multiple follow-on rounds, so as new companies are added to VC firms' portfolios (and...

Lessons From the Past Ten Years, Part Four: Gaps

Rob Day: July 3, 2012, 10:28 AM

I had the opportunity to address a group of foundation managers, investors, entrepreneurs, and DOE staff at a roundtable at MIT last week, discussing the subject of capital gaps in cleantech.

That there are capital gaps -- parts of the cleantech innovation, commercialization and adoption cycle where more capital is needed than is available -- isn't a surprise to any readers of this column. But I continue to see lots of conflicting takes on where exactly the gaps are and what causes them.

As I described to the group, we've spotted not just one or two, but five different capital gaps affecting the cleantech market. Some are more obvious than others. For a couple of these gaps,...

Why We Will Win: Enthusiasm

Rob Day: June 20, 2012, 11:17 AM

The headlines can be depressing right now, I know. Because so much journalist attention is being paid to venture capitalists and politicians, when VCs are running scared away from the cleantech sector, and politicians are treating our industry like a punching bag, it can feel like things aren't going well.

That ignores the fact that I see a lot of cleantech companies (outside of a couple of sectors like upstream solar) doing very well operationally right now, growing revenues, achieving profitability, etc. And just as important is seeing how many large corporations are also more and more engaged in the sector, as customers, partners, and acquirers. If the economy can just hold off...

Lessons From the Past Ten Years, Part Three: Team

Rob Day: June 5, 2012, 1:01 PM

It doesn't matter what kind of business model your startup is pursuing: tech development, service models, financial models, operational projects, etc. Unless you just get really lucky (which does happen, but can't be planned upon), you will need a team that executes at a very high level in order to succeed.

And yet, high-execution management teams are, from what I've found, the single rarest resource for the cleantech entrepreneurial sector. Much more rare than good business ideas. Don't read this as me saying that there are a lot of sub-par individuals out there -- but a lot of folks whose past experiences haven't (yet) prepared them for the unique challenges of their current...

Lessons From the Past Ten Years, Part Two: Urgency

Rob Day: June 3, 2012, 8:15 PM

I've seen it happen way too many times: cleantech startups that miss their revenue forecasts, but not because they're losing sales opportunities to other vendors. Instead, it's just because it takes longer to get opportunities in the pipeline to a "yes."

It's understandable how this happens. The cleantech startup will have an offering that's an economic no-brainer for the potential customer from a payback period standpoint, and the potential customer makes all the right noise about being interested. But day to day, energy spending simply isn't a priority for most of these potential customers, so their decision-making slips. And then it's compounded by the fact that the customer...

Experience Curves: Why Doesn’t Your Senator Understand Them?

Rob Day: May 29, 2012, 9:43 PM

Do you know what an experience curve is? Does your representative in Congress know what it is?

It's a well-established and oft-proven truth of manufacturing costs that as you make more of something over time, costs come down. This is separate from manufacturing scale effects, which can also drive costs down, but, simply put: the more we make of something over time, the more we figure out how to drive the costs out. 'Incremental innovations' add up to significant cost savings over time.

BCG summarized this way back in the mid-1960s this way: Costs fall about 20 percent to 30 percent every time cumulative installations double.

This is not rocket science. It's well understood,...

Lessons From the Past Ten Years (Part One): Trust

Rob Day: May 21, 2012, 7:40 PM

Over the past ten years of cleantech venture capital, there have been a lot of hard-earned lessons learned. I'm going to start a periodic series of recapping some of what I think we cleantech investors and entrepreneurs have learned, and discussing ways to address those lessons.

To start off, today's topic is the importance of building trust in these markets.

With a few exceptions, cleantech markets (energy, water, etc.) are very reticent to adopt new technologies. They are risk-averse customers by design (you don't want your lights going off, do you?) and by tradition, and also just because often the buyers of these technologies have a million other things going on and so they...