Stopped by the Cleantech Investor Summit out in Palm Springs this week -- meant to stay through for the entire event, but Nemo forced me to scurry back to Boston on an earlier flight.
Ira and his team always do a terrific job of running that event, it's always a good networking opportunity and they get big names to come speak. And Tesla test drives, of course.
But it seemed to me like yet another missed opportunity. With so many cleantech investors and their ecosystem partners under one roof, it would have been great to see more exploration of the emerging "next wave" of cleantech investing strategies. Instead, most of what was presented was what I call "old Cleantech VC": capital-intensive upstream technology bets.
Until recently, such investments really defined "cleantech venture capital," in the eyes of GPs, LPs, the media, and entrepreneurs. But over the past couple of years we've seen the emergence of a few different takes on the sector, and it's time we had a major industry event really explore these kinds of strategies.
I would love to see a full-day event where a few innovative investors were given the platform to present their strategies and analyses in short plenary talks. Matthew Nordan to present some of his quantitative research into cleantech venture returns and key success factors. Sunil Paul to present his Cleanweb thesis. Whitney and Scott at McRock Capital to present their intelligent infrastructure focus. Sarah Wood to discuss her efforts working with family foundations to promote program-related investments (PRIs). US Renewables Group to present their more project-finance oriented approaches. And yes, one of my colleagues at Black Coral Capital to present our market-innovation (vs. tech-innovation) approach and our collaborations with other family offices. As just some examples among others.
In between these presentations, there could be presentations by some of the startups and established companies that are touchstones and early examples of these approaches. From bigger companies like Tesla and EnerNOC and SolarCity to earlier stage companies like Noesis and Sidecar and Propel. They could present their businesses, but especially their capital strategies and how they look to interact with cleantech investors in the new era.
We're all working hard to reinvent cleantech venture capital, with an eye toward returns-producing investment strategies. And there won't be one right answer, there will be several, it seems to me. But at just about every industry conference I go to these days, most of what's discussed is the old paradigm, with companies that were funded that way but couldn't get funded that way today.
That's not looking forward, that's looking backward. And I think our industry would be well-served at this point to have a real forward-looking event, so we can kick-start more of the necessary conversations about what's next. Those conversations, plus some good results starting this year from these new approaches, would be what would unlock LP interest in the sector. And that's necessary, because it's the LP community's utter disinterest in cleantech right now that's the limiting factor.
I've never seen better entrepreneurial teams in cleantech. I've never seen more interesting, pragmatic business plans. The underlying markets are growing strongly and seem poised to continue to do so. The large corporates seem more serious than ever about getting into cleantech with strategic intent. The one missing, and yet vital piece is the venture capital dollars, and if the LPs aren't giving any capital to the VCs, the VCs can't put any money into this next wave of startups.
We're not going to fix that by fixating on the old paradigms of cleantech investing. So it would be great to see one day that gets a lot of attention focused on potential next paradigms for cleantech investing.