All About Stimulus Funding

My most recent Globe column was about how cleantech companies are chasing stimulus funding that's just starting to flow from DC. From that piece:

"Emerging technology companies in the energy space are landing in Washington like locusts," says Mitch Tyson, chief executive of Advanced Electron Beams, a Wilmington start-up that is just now hiring Holland & Knight LLP to handle its lobbying.

Hemant Taneja, a venture capitalist at Cambridge-based General Catalyst Partners, says that all of the energy-related companies in his portfolio are hiring government relations specialists and lobbyists: "This is a $10,000-a-month expense that could yield significant capital for our businesses, which are really capital-intensive."

Mass High Tech did a similar story recently, which was part of a much bigger package on stimulus funding. Lots of great advice and resources there...

Clean Energy Council (Quietly) Announces New Class of Fellows

The New England Clean Energy Council has just named its new group of 25 fellows -- experienced execs and investors interested in repositioning themselves for careers in cleantech. (There has been no official press release, though.) The program starts Tuesday at MIT, and runs through July.

This new bunch includes Ahmet Ozalp, formerly an IT investor at Atlas Venture... Paul Sereiko, founder of SensiCast, a sensor networking start-up... Doug Levin, founding CEO of Black Duck Software... and Tan Rao, whose wireless home theater start-up, Radiospire Networks, was funded by Highland Capital but folded last month.

CleanTech Field Trip

The New England Clean Energy Council is organizing its first major jaunt down to D.C., on April 1st and 2nd. Expected to attend, according to president Nick d'Arbeloff, are about thirty local CEOS.

d'Arbeloff says that Sen. John Kerry and Rep. Ed Markey will likely carve out time to meet with the execs, and that Carol Browner, Assistant to the President for Energy and Climate Change, will join the group for a cocktail party. They're also hoping to connect with Energy Secretary Steven Chu and the new head for the Department of Energy's Energy Efficiency and Renewable Energy department while they're in our nation's capital.

Next week at the Four Seasons: GoingGreen Boston

AlwaysOn is holding their first GoingGreen conference in Boston next week, after putting on one of the energy/environment-focused events in San Francisco last fall.

Looks like everyone in New England cleantech will be there, from Secretary of Energy/Environment Ian Bowles to the CEOs of 1366 Technologies, Ze-Gen, Mascoma, Oasys Water, and GreatPoint Energy. (Even tech prognosticator George Gilder will be there. Has he turned into a cleantech guru?)

Yes, it's a bit pricey: $1675. But the price goes up the longer you wait...

Career Opps in Cleantech, and the Most Significant Cleantech VC Firms in Boston

Today's Globe column deals with people moving into cleantech from other fields. From the opening:

In the late 1990s, everyone wanted to be part of the Internet revolution. Now, there's a similar level of enthusiasm building around companies tackling the world's energy challenges. And many people from the biotech, software, and hardware fields are seeking out - and finding - opportunities to make a career switch.

In the video, Peter Rothstein and Jim Matheson of Flagship Ventures talk about how to navigate that switch:



While working on the piece, I asked everyone I spoke with who the most significant cleantech VC firms in the Boston area are. Here's the list (in alphabetical order, not in order of significance), and who the point person is where there's one primary energy-oriented partner.

- @Ventures
- Atlas Venture (notably, Jeff Andrews)
- Advanced Technology Ventures (notably, Bill Wiberg)
- Braemar Energy Ventures
- Flagship Ventures (notably, Jim Matheson)
- General Catalyst Partners (notably, Hemant Tanjea)
- Highland Capital Partners (notably, Paul Maeder...HCP has made one energy investment -- and had one exit -- and is now renewing its focus on that area)
- North Bridge Venture Partners
- Polaris Venture Partners (notably, Bob Metcalfe)
- Rockport Capital Partners

Delivered: A123's IPO Papers Arrive at the SEC

InnoEco told you back in April that an IPO for A123 Systems was on the way... and I actually assumed that since three months had elapsed with no news, the company had put it on ice, waiting for market conditions to improve.

But they just filed this morning, likely hoping to take advantage of the public interest in cleantech, and anything (like the company's plug-in hybrid car conversion business) that can combat high gas prices. A graphic included in the company's S-1 filing says, "Our world is warming up... to a new generation of energy storage solutions enabled by nanotechnology."

(I just checked... no, Al Gore is not on their board of directors, despite that "Inconvenient Truth"-style messaging.)

Some key info from the filing:

We design, develop, manufacture and sell advanced, rechargeable lithium-ion batteries and battery systems. Our batteries and battery systems provide a combination of power, safety and life that we believe no other commercially available battery provides. We believe that lithium-ion batteries will play an increasingly important role in facilitating a shift toward cleaner forms of energy. Using our innovative approach to materials science and battery engineering and our systems integration and manufacturing capabilities, we have developed a broad family of high-power, lithium-ion batteries and battery systems. This family of products, combined with our strategic partner relationships in the transportation, electric grid services and portable power markets, position us well to address these markets for next-generation energy storage solutions.

In our largest target market, the transportation industry, we are currently working with major North American and European automotive manufacturers and major automotive, or tier 1, suppliers to develop batteries and battery systems for hybrid electric vehicles, or HEVs, plug-in hybrid electric vehicles, or PHEVs, and electric vehicles, or EVs. For example, we are engaged in design and development efforts with several passenger vehicle manufacturers and tier 1 suppliers, including General Motors Corporation, or General Motors, and Think Global AS, or Think Global, relating to the design and development of batteries and battery systems for eleven passenger vehicle power train programs that can be applied to 19 vehicle models. We estimate that the number of HEV, PHEV and EV models with an annual production run of at least 20,000 vehicles will grow from ten models in 2008 to over 100 models in 2012. The advanced battery market for HEVs, PHEVs and EVs is currently a $700 million market. We estimate this market could grow to at least $5 billion by 2012.

...We began selling our first products commercially in the first quarter of 2006. We have over 1,100 employees worldwide. Since our inception through March 31, 2008, we have generated $87.1 million in revenue, consisting of $72.6 million from battery and battery system sales and $14.5 million from research and development services. Our revenue has grown from $34.3 million for the year ended December 31, 2006 to $41.3 million for the year ended December 31, 2007, and from $8.1 million for the three months ended March 31, 2007 to $10.3 million for the three months ended March 31, 2008.

Like a lot of start-ups, they're still losing money: $31 million in 2007, up from $15.8 million in 2006. Revenues were $41.3 million last year, up from $34.3 in 2006.

[ Update: Dan Primack has a post noting that A123 also disclosed in the filing that they raised an additional $102 million this year, bringing their total funding to $230 million. ]

As I'd reported earlier, the biggest A123 shareholders to this point are North Bridge Venture Partners (13.6 percent), Desh Deshpande (12.7 percent), GE (10.4 percent), and Qualcomm and Motorola, both with about eight percent. CEO David Vieau holds 2.4 percent of the stock. No word on how much founders Yet-Ming Chiang and Ric Fulop hold. Another beneficiary of a successful IPO will be MIT, which licensed some of the original IP developed there to A123.

In June, I wrote a column about A123's early history -- and produced a video about the company.

How excited are people about this IPO? I've gotten about a dozen e-mails over the last three months asking me whether I knew when A123 would file...

Highland Capital: We Do Cleantech Now, Too

Paul Maeder, co-founder of Highland Capital Partners, was a guest on NPR's 'Talk of the Nation' yesterday, analyzing the state of the economy. Maeder used the radio spot, essentially, to announce that Highland's now interested in doing energy and cleantech investments. In talking about innovation in the post-war period, Maeder suggested that there have been three major cycles:

1. The personal computer in the 1980s
2. The biotech boom of the 1990s
3. The Internet bubble of the late 1990s

"The next wave of innovation is going to be around energy and the environment," Maeder said, suggesting that there are big opportunities in "energy production, and making energy consumption more efficient."

I e-mailed Maeder this morning to ask him whether Highland is planning to actually dedicate money and partner time to the cleantech/energy space, as Polaris and General Catalyst have. He said they are, and that he's "on it full-time now."

Highland's only real cleantech investment so far was a Utah company called Amp Resources, which developed geothermal power generation facilities; Amp was sold last year for $90 million to an Italian company, Enel. (An earlier deal to sell Amp didn't go so well.) Maeder and Dan Nova from Highland had served on Amp's board.

As a side note, I spotted Highland's other founder, Bob Higgins, having breakfast this week with ex-Presidential advisor and Harvard prof David Gergen. As for whether Gergen will be joining Highland as a venture partner, Maeder would only say, "I can neither confirm or deny." But I think that's a long, long-shot.

Most recent Globe column: The A123 Systems Back-Story

My most recent Globe column delves into the back-story of A123 Systems, the Watertown battery company that is smack in the middle of the plug-in hybrid frenzy, and apparently preparing to go public (though one might ask what's taking them so long with the S-1?)

Here's the opening:

The third time that Ric Fulop asked Howard Anderson to invest in one of his start-ups, there was no good reason for Anderson to say yes. Fulop was forming a company that would reinvent the battery, but Anderson, founder of the Boston forecasting firm the Yankee Group, had already lost millions by investing in Fulop's previous ventures.
more stories like this

Fulop had come to the United States from Venezuela, where he'd started two companies while still in his teens, and then dropped out of Babson College to dive head-first into the entrepreneurial mosh pit of the late 1990s.

He started a company to stream software to PCs. He started a company to make equipment that would increase the bandwidth of high-speed Internet connections. A third start-up, Broadband2Wireless, aimed to use a network of antennas on rooftops to bring a zippier Internet access alternative to big cities.

The three companies, which together sucked up more than $100 million in funding, all failed. Broadband2Wireless, which filed for Chapter 11 protection about a year after its founding, acquired the nickname "Broadband2Cashless."

I wrote about Broadband2Wireless here, in 2001. And I wrote about Anderson's exit from the VC world here, in 2005. (Can't seem to find the column that chronicled the death of B2W, but this one mentions the CEO's resignation.)

The weekly video for the column is here:

How Can We Attract An Additional $1 Billion in CleanTech Funding?

The New England Clean Energy Council has just put out its first major report, which makes the case that building a strong clean energy cluster in New England can bring as much as $1 billion in incremental investments to our region between now and 2012.

The study, produced by Topline Strategy and NECEC, makes the case that Silicon Valley is the only obvious concentration of clean energy companies so far, with about 26 percent of all venture-backed companies located there. New England is now #2, but only by a hair. We've got 9.7 percent of all the VC-funded clean energy companies, and the LA area has 8.9 percent.

One way to support the creation of more companies here, the study suggests, is to do a better job pairing up scientists and researchers with the entrepreneurs and managers that can help build big companies (possibly by pulling in leaders from other sectors of the economy.)

I'd also suggest that marketing, conferences, and networking events are also going to be key to letting folks know that this part of the world is conducive to building cleantech companies.

You can read the study here.

Mascoma: Lone Massachusetts Company in First Quarter's Top Ten Venture Deals

The PriceWaterhouseCoopers/NVCA MoneyTree Report covering Q1 activity just came out.

Part of the news is that there was a worrisome drop in the amount of capital poured into New England companies during the first quarter.

But the other interesting tidbit comes from the list of the top ten money-raisers in the quarter: companies like Slide (developer of Facebook apps), Asthmatx (medical devices for asthma sufferers), and Infinia Corp. (Stirling engines and generators), each of which raised $50 million.

Company #10 on the list is a mysterious Brighton, MA biotech company that raised $44.99 million from firms like Atlas Venture, General Catalyst, Kleiner Perkins, and Khosla Ventures. It's the only Massachusetts company to make the list.

Though the MoneyTree survey labels the company and its business as "undisclosed," all signs point to Mascoma Corp., a company turning cellulosic materials (plant-based schtuff like wood, straw, and switchgrass) into biofuels. (This was earlier reported as a $50 million combo of equity and debt, but there's no press release on Mascoma's site.)

Interestingly, the #1 money-raiser in the quarter was another cellulosic ethanol company, Colorado-based Range Fuels, which took in an eye-popping $130 million. Range and Mascoma have one investor in common: Vinod Khosla's Khosla Ventures.

(Both Range and Mascoma are classified by MoneyTree as "biotech" firms, but it seems to me they'd fit better in the "industrial/energy" category, though they do rely on living organisms and biotech processes to make their fuel.)

A Sunny Day in Massachusetts

This expansion of Evergreen Solar's manufacturing facility in Harvard, Mass., doubling its size and adding 350 jobs, is really good news. From Sacha Pfeiffer's story:

For Evergreen, a public company founded in 1994, the state's commitment to solar power played a key role in its decision to expand in Massachusetts, Feldt said.

Before [Gov. Deval] Patrick took office, Evergreen was considering building its first US manufacturing facility in a state such as Oregon or New Mexico that offers hefty incentives to clean energy companies, Feldt said. But during his gubernatorial campaign, Patrick visited Evergreen's Marlborough headquarters to try to persuade it to construct its plant in Massachusetts, according to Feldt.

Ultimately, the $44 million financing package dangled by Massachusetts - including $23 million in grants and $17.5 million in low-interest loans - was not the most generous Evergreen was offered. But "what really tipped the scales was the Patrick administration's focus on alternative energy," Feldt said.

"Deval said he was going to create an environment that is solar-friendly, and that was really important to us, and he's really done that," Feldt added. "So while the financial incentive was attractive but not the best, it was the genuine interest - and then the follow-through - in making solar important in Massachusetts that had us stay here."

This is a solid step in making Massachusetts a magnet for cleantech innovation.

Sunday's Globe column: 'Green solutions start at grass roots'

Sunday's column offers an overview of some of the grassroots and entrepreneurial efforts around New England to make power generation more environmentally sensitive.

Here's the video, which includes an interview with David Marcus of General Compression and Rick Hess of Konarka Technologies.

You Heard It Here First: $300K in Prizes for MIT Entrepreneurs

As this blog suggested back in September, the prize money at MIT's entrepreneurship competitions has leapt from $100,000 to $300,000, with the addition of a $200,000 prize for "Clean Energy Entrepreneurship".

Money comes from NStar and the US Dept. of Energy. Prize, according to Robert Gavin of the Globe, "will go to the team that develops and presents the best plan for commercializing alternative energy products and services."

Coming Up: Cool Events Around Boston

Some events that look good in the next week or so...

- PopTech starts Wednesday in Camden, Maine -- one of our region's great gatherings of brainiacs. There's a free, live Webcast, too.

- At Boston Start-Up Weekend, a group of people will try to build a Web business between Friday and Sunday (that's this Friday). It's free.

- On Sunday in Lexington (October 21st), Steve Strong, the guy who put solar panels on the White House and is now doing the same with the San Francisco Giants' baseball stadium, is giving a talk titled 'Sunlight is Life! The Path Toward a Sustainable Future: A visual presentation on solar- and wind-powered buildings.' Admission is free.

- There's one (maybe two) seats left at next Tuesday's free Tech Blogs event at Cambridge Innovation Center.

- PodCamp Boston happens October 26 - 28, and it's free.

Today's Globe Column: The Amazing Story Behind EnerNOC

If you're running a start-up and you need some motivation, today's column is especially for you. It's the story of EnerNOC, a company founded in the midst of the dot-com aftermath, in which the main lessons are about persistence and unshakable belief in one's ideas.

Here's the opening:

The first time I met Tim Healy, at a cocktail party in 1999, he was an associate at Commonwealth Capital, a Waltham venture capital firm.

The next time I bumped into Healy, at a cocktail party last month, the 38-year-old entrepreneur had taken his company, EnerNOC Inc., public on Nasdaq, and he was on his way to Manhattan to ring the stock market's closing bell.

What happened in the intervening eight years is an entrepreneurial fairy tale.

(That makes it sound like all I do as a reporter is go to cocktail parties. Close to the truth..)

The video is below, in which Healy talks about the challenges he faced raising VC money, and how he tried to tilt the odds in his favor. There's also an e-mail message from Healy, when I asked him about a rumor that he funded the company, pre-VC, with credit cards.



During the process of working on today's column, I asked Healy how much credit card debt he accumulated. He responded via e-mail:

For a variety of reasons, I don't give out how much debt we accumulated but I can tell you that at the time EnerNOC raised its Series A, I had approximately 17 different credit cards open by that point and I am pretty sure almost all of them had a balance. I can only imagine what David's personal situation looked like [David Brewster, Healy's co-founder] but we tried not to talk about the debt since talking about personal debt wasn't a whole lot of fun and we always believed it would be worth it in the long run. For a little while after we first got funded I couldn't really afford a place to live in Boston so I actually slept in my car and in my office for a month before a friend's place opened up and he graciously let me stay there for a while. I remember that I also bunked at another friend's place -- John Pepper's. The only reason I mention it is that John is the CEO and founder of the Boloco chain of restaurants in town (formerly The Wrap) and also a Tuck and Dartmouth grad so we shared a lot of early startup stories back then, keeping each other motivated and convincing one another we weren't crazy. After I allocated some friend and family stock to him in May, I feel as though I finally repaid him for those free nights and the great dinners his wife made me....needless to say, he's very happy now, since our stock is up and we just finished telling Wall Street about the great growth we see ahead. [EnerNOC's first quarterly conference call was this past week.]