Michael Bauer, former vice president of product management for smart-grid company BPL Global, soon will be cruising the vaunted halls of the Oak Ridge National Laboratory, scouting out energy technologies for Foundation Capital.
The venture-capital firm announced Tuesday it has selected Bauer as its representative for the U.S. Department of Energy’s Entrepreneur-in-Residence program. Bauer previously worked for a Foundation Capital portfolio company.
The DOE launched the program in October, when assistant secretary Alexander Karsner said the department would open its labs to venture capitalists in an attempt to bring clean-energy technology to the market more quickly (see Giving VCs Unfettered Access to Government Innovation).
Last month, the department announced it had selected three venture-capital firms, Kleiner Perkins Caufield & Byers, ARCH Venture Partners and Foundation Capital, to mine ideas from the National Renewable Energy Laboratory, Sandia National Laboratory and Oak Ridge, respectively (see VC Firms to Roam National Lab Halls).
Bauer was one of the first employees at BPL, a Sewickley, Penn.-based company, founded in 2004, that provides software to help utilities manage their power distribution and also sells broadband over power lines.
Before his three-year stint at BPL, Bauer was the director of product marketing and management for BigBand Networks, which makes video and broadband networking equipment and went public last year.
Aside from his professional experience, Bauer said his master’s degree in theoretical physics as well as an MBA has helped prepare him for this program.
“[I’ve] got all these science backgrounds to dive into all these various science[s] … that are being made at the Oak Ridge lab for commercialization," he said. "What I bring, in addition, is over a decade of experience in various startups to look at these technologies from a new angle -- from an entrepreneurial angle -- to figure out which ... technologies are qualified for commercialization from a startup venture."
Bauer said Foundation Capital will have the first right of refusal on technologies that he and the company identify for potential licensing. While Foundation Capital gets a year’s pass to Oak Ridge, Bauer said he hopes to find something that he can help spin out into a company in six months or less, giving a second Foundation Capital Entrepreneur-in-Residence a chance.
Bauer chatted with Greentech Media about the technology treasures he hopes to find in Oak Ridge’s halls of science.
Q: What types of technologies are you planning to pursue at Oak Ridge?
A: We are going into this with a pretty open mind. [As] the largest lab in the U.S. lab system, [Oak Ridge has] a lot of research on the renewable-energy front and the energy-efficiency front ... also in the advanced-material area. Foundation Capital has invested with more emphasis recently in the energy-efficiency front, so we will certainly look at any technologies that are available in that area. But generally, we are also on a discovery mission here. There is a lot of technology available in these labs, and we want to identify the most promising ones.
Q: Have you previously worked with a government lab to license technology and spin off a company?
A: Not so far. [Tech transfer from government labs] hasn’t really been a strong route traditionally for venture-capital firms. There is some experience in terms of supporting entrepreneurs coming out of universities and licensing technologies out of universities. But in terms of working with a national lab office, it’s a completely new program. This is really pioneering work we are doing here.
Q: Why has it been so difficult to commercialize government research?
A: The traditional approach of licensing [intellectual property] from the labs has been to work through the technology offices at these labs. Now, these offices were typically staffed with people who are looking for a big corporation to [which to] license a specific technology that fits into that operations portfolio … [not to] license technology to a startup.
Q: What are some of the challenges you expect to face?
A: Some of these techs will have been invented by scientists who want to be scientists first and foremost, and would not like to be part of an entrepreneurial venture. The critical item has got to be to find those technologies that can be supported in an [entrepreneurial] venture by other people with a science background who are willing to take the risks of being part of a startup. The researchers who invented those technologies may just want to be scientists, and not entrepreneurs.
Q: Are you mainly interested in getting scientists to start companies based on their research, or are you also considering simply licensing the technology away?
A: That really depends on the individual scientist. There are certainly folks at Oak Ridge labs who have entrepreneurial experience and would love to take their discovery and turn it into a real commercial venture and have real impact on the real world, and … we would gladly find ways to bring these people on board of the startup. There are others who might not have that mindset. For those technologies where the inventor wants to stay in the lab and continue to be a scientist, we would find some other technologist to support the technology within the startup.
Q: How many companies are you hoping to get out of this?
A: As many as possible. But given it’s a one year program, I would guess if we manage to start two or three companies out of this, we are very successful within one year.
Q: What’s the model revenue sharing going to look like?
A: The program is such that we wouldn’t share revenue with the lab. The lab will have [an] equity stake.