Watching American automakers' bungled attempts at getting bailout money from Congress provided good lessons on what not do when seeking investments.
Getting rid of private jets aside, some of the lessons are what private equity investors talk about again and again at tech conferences. The big one: showing investors how you will wisely spend their money and bring them profits.
That is the demand from Democratic leaders, who realized last week that mustering enough votes to rescue the Detroit Big Three would be a lot tougher than expected.
If the automakers want the $25 billion in loans, then each of them will have to submit a plan detailing how they plan to spend the money and what they will do to restructure their operations toward profitability, reported the Detroit Free Press. Deadline for the plan: Dec. 2.
Lawmakers also intend to attach many strings to the loans to hopefully hold the borrowers accountable. The conditions will be the same or similar to the ones already proposed by Rep. Barney Frank, D-Mass., last week (see Congress Comes to Automakers' Rescue –Again).
Carmakers are not alone in finding investors. A number of greentech companies have made it known that they are looking for money. Campbell, Calif.-based Coulomb Technologies, which plans to begin commercial installations of electric-car charging stations in California next year, is raising money to expand manufacturing (see Coulomb to Install 40 Stations, Seeks $5M to $8M).
Aquaflow Bionomic Corp., hopes to raise NZ$20 million ($10.64 million) to commercialize its technology, which turns algae into biofuel. The New Zealand company will share its shares, which will be available only to residents of New Zealand and Australia.
Here is a roundup of recent funding news:
- Solariredirect raised €20 million ($25 million) for financing solar energy power plants. The French company received the money from Demeter Parners, Schneider Electric Ventures, TechFund and Ofivalmo Partners. Solairedirect has sold about 1,500 solar energy systems to homeowners, and has plans to develop 300 megawatts worth of solar power plants.
- Azure Power raised an undisclosed Series A round from Foundation Capital and Helion Venture Partners. India-based Azure said it has solar power plants under developing in its home country.
- EnerG2 Inc. raised $8.5 million for its first round to develop an ultracapacitor for storing energy in electric cars and electronic devices. The Seattle company, founded in 2003, raised the money from OVP Venture Partners, Firelake Capital Management, WRF Capital, and Northwest Energy Angels.
- ISE Corp., based in San Diego, Calif., raised $17.5 million to developing electric and hydrogen power train systems for buses and other fleet vehicles. The funding came from Siemens Venture Capital, Macquarie Clean Technology Fund, DTE Energy Ventures, RockPort Capital Partners and NGP Energy Technology Partners. Most of ISE's customers are government agencies.
- Composite Technology Corp. expects to close between $50 million and $100 million in early 2009, reported VentureWire. The company, based in Boone, Iowa, has developed a connector that holds two layers of concrete together for insulating buildings. The company said its insulation technology can reduce heating and cooling costs.
- Synergy Walls expects to close $22 million to build its first "green" concrete manufacturing plant, reported VentureWire. The company, based in Coralville, Iowa, has developed a foam for increasing concrete's energy efficiency, the company said.
- Project FROG (Flexible Response to Ongoing Growth), based in San Francisco, raised $8 million for designing and building prefabricated, energy efficient buildings for schools and commercial spaces. RockPort Capital led the Series B round.
- Qteros, formerly SunEthanol, raised $25 million from Venrock, Battery Ventures, BP, Soros Fund Management, Long River Venturees and Camros Capital. The Hadley, Mass.-based Qteros is developing ways for a naturally occurring microbe to turn non-food feedstock into ethanol. A new CEO, William Frey, took over the company in June after spending decades at DuPont (see Q&A: SunEthanol CEO William Frey).
- ReGen Power Systems raised $5 million for developing an engine that can convert waste heat and steam at industrial plants to electricity. The New Salem, Mass.-based company plans to use the money to design and make 10-kilowatt and a 500-kilowatt prototype engines. The funding came from 21Ventures and the Quercus Trust.
- CMEA Ventures, based in San Francisco, plans to raise a $400 million fund next year to invest in cleantech companies, reported Red Herring. CMEA, which has previously invested in cleantech companies, including A123Systems and Solyndra, plans to use the new fund to back companies that need hefty capital for building factories, refineries or power plants.
- Foresight Group raised a €50 million ($63 million) solar fund for financing projects in Italy and Greece, reported New Energy Finance (via Cleanedge). Foresight, based in the United Kingdom, already is developing 250 megawatts worth of projects. The firm hopes to raise an additional €50 million ($63 million), and plans to pitch to investors in the Middle East.