Breakfast at Orrick’s

There are a million cleantech events in Silicon Valley – and I'm live blogging one of them.

Interesting battery news about A123, Saft, and good comments from a VC at Rockport

Entitled: Innovation and the Fundraising and Investment Landscape this is a breakfast event at the law offices of Orrick in Menlo Park.

This was expertly moderated by Mitch Zuklie, Partner at Orrick (he heads up Orrick's cleantech practice).

Here are some interesting comments from some of the panelists:

Victor Westerlind, General Partner at venture capital firm Rockport Capital

• "Fundamentally VCs are risk adverse – they want no risk in the deal, if we could handle risk we'd be entrepreneurs."
• "It's both good times and bad times in cleantech investing."
• "This is a good time to start companies if you have a breakthrough investment."
• "Deal flow in the last six months has been great but valuations are absolutely down."
• "In 2009 it looks there is a tendency towards early rounds as you hope the world will be a lot better in two years as well as late stage rounds – the problem area is B and C rounds."
• "I'm an engineer and I've fallen into the trap of being wowed by cool technology – I've learned to take team over killer technology every time – I'll take a killer team every time."
• "The best ideas occur when the pressure is greatest. I've seen a lot interesting things get born out of that financial pressure."

Regarding lobbyists, Westerlind gave us a war story: One of Rockport's portfolio company, Solyndra, received $535 million in loan guarantees because it spent two years and an alleged $6 million on lobbying. It was an effort that started a long time ago. Victor would not verify the $6 million dollar figure.

Jeff Depew, CEO and Co-Founder of lithium-ion battery firm Imara

Jeff founded the firm in 2004, took VC in May 2006 and is now slugging through that awkward stage of doing a Round C.  His comments:

• "There are liars, damn liars and battery guys. Although fuel cells are a different class altogether."
• "We're looking at short cycle stuff like power tools."
• "The sexy stuff is transportation and grid – but it's not how you get across the gap and get the business built."
• "We have the best product entering the market place."
• "We have 20 percent more power and 60 percent more energy density and range."
• "A123's lead customer has approached us about replacing them."
• "SAFT had a team of McKinsey guys spending $175,000 per week on filing grant and loan requests."

The peripatetic Melody Jones McDowell, currently a director at investment bank Robert W. Baird & Co.:

• "We're seeing an uptick in M&A interest (as opposed to activity)."
• "If you're not hitting $5 million – a large industrial firm won't know what to do with you – the large industrials know how to kill technology."
• "Early stage is not where we're seeing M&A activity."

Joseph Muscat of Ernst & Young was also on the panel and gave some encouraging news on the state of VC and project financing in the second quarter as compared to the first quarter of 2009. "Innovation is very much continuing. I really do believe that corporate America can't do innovation like this community."