Kind readers, by popular demand (and out of personal necessity), I'm going to start writing these columns a bit more infrequently and certainly with more brevity going forward.  Or at least that's the plan...  What's making me (and other investors) so busy right now?  Turns out right now is a pretty interesting time in our market.

I'm realizing that I've never been more overwhelmed with interesting dealflow.  When I look at the log we keep at my firm of incoming deals, the aggregate number of deals is only slightly up versus what I've historically seen.  But the deals that are coming in are harder to say "no" to at a cursory glance, on average.

For the six years I've been a cleantech investor, I've had in mind a mythical creature type of deal I would be most interested in.  A unicorn of sorts -- not to be confused with black swans, which are always in season for some (although I suspect some are bagging regular old swans painted black... but I digress).

This "unicorn" deal would be a compelling business offering with:

1. A top-notch team

2. Said team holding a very pragmatic approach to how to bring a technology/ product to market and get early sales traction

3. Said team having a strong focus on keeping cash burn relatively low (see point #2 above)

4. No-brainer customer economics

5. Attractive markets

6. Existing sales and/or key market partnerships already in place

7. Reasonable valuation expectations

8. Good exit prospects within a reasonable timeframe

9. An exciting "big picture" story with lots of upside

In the past I've been guilty of stretching on some of the above points in selecting deals, because of falling in love with an investment thesis, or a team, or a deal opportunity. Live and learn. But basically, the above list (plus other criteria that would be more subsector-specific) has always knocked quite a few deals off the table right away.  And after all, the odds are an investor will say "no" to at least 99 deals for every one they say yes to, so it's all about managing limited time resources.

But right now the unicorns are stampeding right at us.

The influx of strong entrepreneurs into the sector is starting to bear fruit.  I meet with many more companies on their second CEO already, or where the founder is an experienced CEO, versus in the past.  And these entrepreneurs are bringing a less over-optimistic, much more sober approach to the massive grinding-it-out exercise that is bringing a successful startup to market.

The economic collapse appears to have "scared straight" a lot of entrepreneurs as well.  Much more of a focus on managing cash burn. We're seeing $10M follow-on rounds that would have been a $50M follow-on ask 3 years ago.  And practical approaches to finding early entry market niches and grabbing early revenue, rather than attempting to build the entire macro-vision of a massively reinvented market, etc. etc., all pre-revenue.  Not that folks are giving up on the big dreams.  Just that folks are realizing how important it is to succeed one step at a time.

Much more active corporates that are now more seriously partnering with startups in a variety of ways, but with some substance to the interaction.

And of course, valuations are still a mixed bag, but flat rounds remain the new up round.  Lots of down rounds, recaps, and generally reasonable valuation expectations.

It's not universally true, of course, but all of the above is more often true of the deals I'm seeing these days.  Which makes it a lot tougher to turn them down quickly.  Which keeps me and my colleagues pretty busy.  Which is great.  Except for blogging.