Recent Posts:

How Big Cleantech VCs Can Suffer From Negative Selection Bias

Rob Day: April 13, 2011, 10:01 PM

One of the challenges for cleantech VCs, and for VCs in general right now, is the potential negative selection bias that comes from being a large fund. This particularly applies to the large, big-name firms that adopt a "go big or go home" perspective when it comes to their investments.

Many such large funds have minimum ownership targets -- they want to own at least 20% of the company they invest in, so that if it's a big success, they end up with a big return, which makes sense, right?  This is rarely a hard-and-fast rule, although it's often presented as such.  But whether it's a hard floor or not, big firms don't want to own only a small piece of the companies they invest in,...

What You Need to Know About the Q1 Cleantech Venture Numbers

Rob Day: April 5, 2011, 6:15 PM

Hardly surprising to see that the major headlines coming out of the release today of the Cleantech Group's Q1 numbers focused on the top-line dollar count -- $2.57B!

But here's what you need to read in that:

1. Yes, deal dollars were up, but deal counts were way down.

As we've talked about for a while now, cleantech VCs are continuing to shift to later-stage companies. In fact, 93% of dollars in the quarter went into follow-on rounds. That bears repeating: Only 7% of cleantech venture dollars tracked in the first quarter were for first rounds.

This is not a sign of health for the sector. It's not a sign that VCs are actively putting money into the sector. Rather, it's a sign...

The Cleantech Revolution Will Not Be Televised

Rob Day: April 2, 2011, 3:06 PM

Among VCs (and their LP backers), cleantech is on the outs right now.  So says this pretty good article from the past week, anyway. It reflects what we've been saying here in this column for a while -- there's a shakeout underway in the cleantech venture sector, with many generalists abandoning deal-making in cleantech to head for "easier" returns in social media, and many sectoral specialists having a hard time raising new funds.

But there's a revolution underway in cleantech, and it's being led by the entrepreneurs.  

In my recent "Cleantech Venture Capital in 2015" presentation, I talked about the need for a new truly capital-light style of company-building in the sector...


Rob Day: March 25, 2011, 2:28 PM

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...

Cleantech Venture Capital in 2015

Rob Day: March 13, 2011, 11:49 AM

We've been talking about the need for new investment models in cleantech venture capital for some time now.  A couple of years ago, I put out a presentation calling out some of the more unsustainable trends in cleantech VC in evidence at that time. By now, many of those trends and practices are even more upfront in the minds of many investors and LPs. In the meantime, the cleantech venture industry has entered a period of significant stress. . . and potential reinvention.

Over the past few weeks, based upon lots of conversations with fellow cleantech investors, LPs, and entrepreneurs, I've been working on an effort to look forward to what's next for the sector. It's been an...

Thoughts On ARPA-E and Powerit Solutions

Rob Day: March 5, 2011, 12:29 AM

Forgive a combined post on two different topics today, but between the ARPA-E conference in D.C., the MIT Energy Conference in Boston, and a general flood of activity in the office, it's been a crowded week. Plus, at least in my mind, they're connected.

First, on the ARPA-E conference: one thing that struck me at the conference was how the exhibit hall seemingly was dominated by bugs and carbon-capture techs. Now, I'm glad that ARPA-E funds are going to tackle such difficult technical challenges, and I hope that someday there will be breakthroughs in these areas as a result.  

But it did drive home for me just how much I'm bothered by the disconnect between the strong efforts by...

Competitive Advantage: Not Just About Tech

Rob Day: February 26, 2011, 9:18 AM

There's been too much blind faith within the cleantech venture sector on proprietary technology as the primary way for startups to create a competitive advantage.

Certainly, holding a defensible patent can help a startup with a cost or performance advantage to maintain that advantage over time.  Proprietary IP has been part of the success story of early cleantech "winners" such as First Solar, for example.

But the pursuit of such proprietary technology can be very expensive -- in both direct and indirect ways.

First of all, it can be expensive to develop and commercialize products based upon truly differentiated core technology.  Thin-film solar is again another example of...