“Cleantech CEO Attrition Tied to Market Struggles”… Huh?

Really didn’t understand the Clean Technology Investor article cited in the title of this post.  Unfortunately, I can’t provide the full text of the article, since it’s on CTI’s paid service, but the gist of the article (from this past Monday) was:

1.  “Running a clean technology company holds out the prospect of leading technological change in an industry, but also the possibility of product delays and a struggle to gain market acceptance.”

2.  “That may explain the rapid turnover of CEOs among clean technology companies,  along with the limited pool of talent in a nascent industry, which heightens the chances of a mismatch between company and leader.”

3.  “Merrit Baker, president and chief operating officer of Kopos & Baker, which operates Pennsylvania recruitment firm 21st Century Staffing, estimates that a new clean-tech CEO will leave 25% to 30% of the time over a 24-month period. On the other hand, Martin LaGod, co-founder and managing director of clean-tech investment firm Firelake Capital Management LLC, said he hasn’t observed much difference between the career longevities of clean-tech CEOs and those in other industries. No one appears to track actual figures.”

So… there’s an implied message of high turnover among cleantech startup CEOs, but no one really tracks the numbers to know for sure, nor does anyone compare such turnover versus other venture-backed sectors.

It would be a challenge for anyone to argue that cleantech CEOs are being driven out of their startups any faster than startup CEOs turn over in other sectors.  The simple fact is that it takes very different skillsets to be an effective CEO at the various stages of an early company:  The innovation stage, the product and organizational development stage, the early commercialization stage, and the late commercialization (possibly including going public) stage.  Most startup CEOs I speak with readily acknowledge this fact, and the implication that it’s going to be rare for any CEO to have the complete skillset to be the right fit across all these stages.  That means changes at the top, although often the CEOs that step aside maintain a strong role with the company in a non-CEO position.  Or they go off and start up something else new, and become “serial entrepreneurs”.  It’s the nature of the beast for startups, and it’s true across all sectors, not just cleantech.  And given how hot the sector is right now, it’s also tough to argue that long time to market is making cleantech CEOs in particular impatient to leave their startups.

What is a more important point to note here, however (one that we’ve mentioned before), is that the rapid growth of the cleantech sector is in fact being enabled by the emergence of a strong class of entrepreneurial management talent in the space.  Even just a few years ago, cleantech was a small sector with a shallow pool of entrepreneurial talent, as evidenced by a real lack of serial cleantech entrepreneurs.  As the sector grows, more proven entrepreneurs are coming in and carving out their new “next big thing” in this space.  And as the startups mature and early CEOs step aside with successes under their belts, we are starting to see an encouraging cadre of serial cleantech entrepreneurs ready to continue the sectoral momentum.  The CTI article was confusing, but the real management trends we’re seeing in cleantech are actually very encouraging.

Deals from the past week:

• LS9 announced a $15mm Series B, led by Lightspeed Venture Partners, and including existing investors Flagship Ventures and Khosla Ventures.  This follows on the biofuel developer’s Series A from back in March.

• Rhode Island-based TPI Composites closed a $22mm Series A, led by NGP Energy Technology Partners, and including Angeleno Group and Landmark Growth Capital Partners.  TPI makes large-scale composite structures for the wind energy, transportation and military vehicle markets.

• News came out this week (courtesy of PEWW) that coal-bed methane bug startup Luca Technologies’ Series B from BASF last September was actually a $20mm tranched investment with participation by Kleiner and Oxford Bioscience Partners.

• Thin-film silicon solar startup Innovalight announced a $28mm Series C, led by Convexa Capital, and including Scatec AS and existing investors Apax Partners, ARCH Venture Partners, Harris & Harris Group, Sevin Rosen and Triton Ventures.  Jennifer Kho wrote up the deal here.

• Nysa Membrane Technologies announced a Series B, co-led by Jove Investment Management and BDC Venture Capital.  Deal size wasn’t mentioned, nor was there mention of participation by existing investors.

• Vibration energy harvesting startup Perpetuum announced a GBP 5mm Series B, from Environmental Technologies Fund, and including existing investors Quester, and Top Technology.

• Solar inverter startup SmartSpark announced a Series A round of financing from Battery Ventures.  Round size was undisclosed.  Jennifer Kho wrote up the deal here.

• VentureWire reported that carbon offset provider NativeEnergy has raised an undisclosed amount of Series A financing, from FreshTracks Capital and Village Ventures.

Other news and notes:  Gore’s Nobel just makes it that much clearer that current policy trends are providing a tailwind for cleantech (see write-ups here and here)—other big illustrations of this from the past week include California’s green law push and Obama’s government-sponsored cleantech VC proposal...  Here’s an update on the Sacramento cleantech VC scene...  And finally: Oh well, it was a fun idea, aside from all the radiation poisoning.