Recent blog posts

Way back in 2006, Bill Aulet, now Managing Director at the Trust Center for MIT Entrepreneurship, invited me to be part of a panel discussion on corporate venture capital (CVC) as part of the 9th Annual MIT VC Conference. Bill gave a wonderful and detailed presentation, showing how CVC worked, adding the financial returns to strategic value. His model suggested that the financial returns might be insignificant compared to the strategic impact for the greater corporation. In the spirit of his pre-panel suggestion to be contentious and confrontational, I spoke up: "Bill, that's a good model if you want your CVC to fail."

Examining The Drop-In Replacement

Posted by on in Sustainability

Entrepreneurs often like to promote their solutions as "drop-in replacements" for existing technologies. This makes a lot of sense. No established company wants to hear about a different way of doing something that incurs significant switching costs or other associated manufacturing hardships even if the novel solution, material, or product provides additional compelling cost and/or performance benefit(s). In my experience, these claims of drop-in replacements usually have to be taken with a serious grain of salt.

The Onset of Renewable Chemicals

Posted by on in Sustainability

Global concerns about the environmental impact from use of petroleum-based feedstock to produce chemicals have fuelled the rise of “green” chemistry. Typically, this includes the deployment of more environmentally friendly production technologies and use of biobased feedstocks to manufacture renewable chemicals, fuels and bioenergy. Use of these green chemicals is already underway with various products already in the markets. In 2011, the U.S. Department of Agriculture (USDA) estimated that there are 20,000 biobased products currently being manufactured in North America. Recent forecasts project the renewable chemicals market to reach $100 billion by 2020. The economic benefits from this sustainable approach is also significant, with potential savings of over $65 billion in the chemical industry that is expected to grow beyond $5 trillion value by 2020. Additionally, the growth of renewable chemicals provides a major opportunity for the chemical industry to reduce its carbon footprint.

From Innovation to Commercialization

Posted by on in Venture Capital

Innovation – a new or better way of doing things - is a powerful force in the economy. It is directly, and indirectly, a key driver of jobs growth and competitiveness locally and globally. In Canada, small businesses and start-ups provide 48% of all jobs and contribute 30% to the country’s GDP. In the United States, small businesses and start-ups play an even larger role contributing 46% of the private nonfarm GDP. Never before have the innovation and commercialization cycles been shorter. With researchers seeming to produce more published work every year, why have some countries been more successful at commercializing technology than others? Is the challenge providing researchers with adequate support to move their work out of the lab are the early stage companies and entrepreneurs requiring an extra boost?

Green Buildings Are Energy Savers

Posted by on in Energy

Last week, my partner Andrew posted a blog about the LED market and discussed some emerging technologies that will revolutionize the lighting market. I want to expand on that topic and provide some insight into energy efficient green buildings.

Buildings are huge consumers of energy. The US Department of Energy estimates that, in the US alone, buildings use nearly 40 quadrillion Btu of energy for space heating and cooling, lighting and appliances. This represents approximately 39% of the total energy consumed in the US and 38% of a building’s energy is consumed for heating and cooling. The Building Technology & Urban Systems Department at Berkeley Labs states that buildings consume 71% of US electricity, 53% of US natural gas and emit 40% of US greenhouse gases. There is clearly room for improvement.

Over the past two or three years, a consensus view has developed that the capital inefficiency of clean tech startups makes them incompatible with the venture capital funding model. Many investors with their feet half in are delegated to invest only in business model innovation, efficiency software, controls technology, grid optimization and so forth. It’s hard to disagree with these folks when reflecting on the colossal quantities of risk capital that has been deployed to support innovation such CIGS solar - without commensurate returns. Unfortunately, this ignores the fact that the change-the-world type innovation occurring in labs around the world is exactly the type of technology that has scared many investors away.

Biopesticides: The next crop of cleantech home runs

Posted by on in Health

Can you name a cleantech subsector that has generated five or more grand slam VC exits (>10x, >100% IRR) in the past 2 years? Tough, isn't it? But there is an answer: Biopesticides. Biopesticides are pesticides derived from natural organisms, although the EPA definition also allows for substances derived from natural minerals.