Clean tech investing is often thought of as big money, big scale, speculative returns. But not all green start-ups require venture capitalists to write large checks.
The misconception is that every clean-energy project requires the hundreds of millions of dollars that have gone to Solyndra or Bloom Energy to construct manufacturing plants or take on complex technical problems.
Clean tech investor John Doerr says he crawls through university labs looking for early stage start-ups
Kleiner Perkins Caufield & Byers partner John Doerr says he has two templates for clean-tech investments. The big-scale businesses do get the big money, he says. But others firms wrestle with scientific breakthroughs and products that are still as many as 10 years out – and don’t require as much cash.
“We crawl through labs trying to find them,” says Doerr.
Other start-ups more closely resemble the young software companies of 10 years ago, which might have been working on enterprise products and needed just a couple million dollars.
These companies might be developing energy conservation software or products to spark new grid efficiencies. They require money “the same way the software companies were funded back in the 1990s,” says Scott Wornow, a partner at the law firm of Baker Botts.
One such company is Reality Mobile, whose software helps field workers and office staff communicate more effectively. The better communications helps avoids unnecessary repair trips.
Another is Consolidated Green Services, with offerings as varied as waste collection and carbon tracking.
It is not a capital-intensive business, says Wornow, and in that way is like many other green startups.
LEDs already are a fast growing segment, says Birnbaum. The bright pictures and micro-thin designs are a powerful draws.