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Looking Back on 2011 Cleantech Investing Predictions

Rob Day: December 27, 2011, 2:30 PM

It's been a tumultuous year for a whole lot of folks, and the cleantech market has been no exception. As we near the end of 2011, I thought it would be good to look back on how our predictions from a year ago turned out.  

Here's what I predicted last December:

1. The cleantech venture capital shakeout will become more obvious.

I'd say this has been true. At least to entrepreneurs seeking financing, especially early stage. A few of us in Boston were recently trying to figure out who's still actively investing in the sector in this region -- and it was a shockingly short list. I suspect the same is true in other regions as well.  Score: +1.

2. 2011 will be the Year of Energy...

Quick Hits: Boston’s Super-Angels, Nordan’s Smart Thoughts, and More

Rob Day: December 15, 2011, 9:06 AM

Been caught up in a number of year-end projects and thus am way behind on topics I've wanted to write about, so here's a quick set of thoughts on a few unrelated topics, Peter King "Monday Morning Quarterback" style:

***

Had dinner last night with several of Boston's most active cleantech angel investors (thanks to Bic Stevens for the invite).  No, none of this went on -- just some thought-provoking conversation over a great Italian meal. One thing that struck me, though, was hearing that Boston-area cleantech VCs are now doing only around three or four Series A rounds per year, and yet at that table were angels who had done eight and six deals over the past year themselves.  

...

Reinvent the Utility

Rob Day: November 18, 2011, 9:12 PM

In the last decade, cleantech venture capital was about reinventing the electric generator.

It's time to reinvent the utility.

Utilities, as currently structured, exist for one reason: wires.  Wires connecting consumers to generators are a natural monopoly, so rather than expecting a competitive market, the market is heavily regulated and overseen by PUCs representing the public's interest. It's true in electricity, just as it's true in wireline communications. Yes, that skews the market, but there's no good alternative in the face of a natural monopoly.

But wires are less important, as distributed generation (so far primarily in the form of rooftop solar, but in the future...

What Is “Cleantech 2.0”?

Rob Day: November 14, 2011, 1:27 PM

Here's a not-atypical venture capital story:

An early-revenue (or sometimes even pre-revenue) stage venture-backed startup with promising early results wants to make a big splash and run really quickly, so they look to raise a large-ish "growth round".  

To identify a significant new lead investor for the round, they turn to investment bankers with their deeper rolodexes.  The i-bankers only take the assignment because the round will be big enough to provide large enough placement fees to justify their doing the work, versus some other larger transactions they could be working on instead.  For this reason, very few sub-$10 million venture capital rounds get big-named investment...

Get Involved

Rob Day: November 7, 2011, 11:10 AM

Today, the Clean Economy Network announced a merger into the Advanced Energy Economy, a network of cleantech business leaders and regional organizations. It's been a fun ride to get to this important transition point.

Four years ago, Andrew Friendly and I launched a "Renewable Energy Business Network" chapter in Boston, borrowing from a successful model we'd both seen work on the West Coast, for informal and event-based networking-with-a-purpose among cleantech entrepreneurs and innovators. It caught on very quickly, and we found strong demand for similar efforts across the U.S., so we officially co-founded REBN as a nonprofit, and built up an eventual network of 15 regional...

How I’ve Failed

Rob Day: October 28, 2011, 9:17 PM

I've heard it said that venture capital is an apprenticeship business, that it takes about seven years for a VC to become a proficient investor.  As I now get close to my eighth year investing in the cleantech sector, that aphorism resonates with me -- especially as I look back at the many ways I've failed so far as a cleantech venture investor.

I've been taking the opportunity to take a retroactive personal look at my investment patterns, at what I think has worked, and at how I've failed. I'm not talking about failed investments per se. I've had my share of those, but I'm really talking about failures in the sense of "Wow, that didn't work out according to plan."  In some cases,...

Q3: One Last Bloom Before the Winter?

Rob Day: October 11, 2011, 10:39 AM

The Cleantech Group released their Q3 preliminary tally recently, and there appears to be some positive news in there.

In their global count, they saw not only an uptick in the dollars going into the sector ($2.23B in Q3 2011, up from $1.81B in Q3 2010), but also an increase in the number of financing rounds (189, up from 179 in Q2 2011).  Even more encouragingly, the number of Seed / Series A deals went up, so this wasn't just a quarter of insider follow-ons like we've seen at times in the past. The total of 128 deals they counted in North America was a new high for the region, they report, and represented a second straight quarter of deal-count growth. While they point to energy...