CleanEnergy Venture Summit 2009: A View from the Judge’s Seat

I served as a judge for the 3rd annual cleantech venture summit (CEVS) yesterday, produced by the Austin Technology Incubator’s clean energy incubator (CEI). Between the morning and afternoon sessions, there were a little over 20 different deals that were pitched by company founders.

Since the overall theme of the event was the smart grid, the range of deals was a bit narrowed in that it lacked the more edge kinds of power generation or fuel pitches I’ve seen, like bio-mass or other organics like algae, and there were none of the more edge vehicle technologies I’ve seen, from unusual car designs to alternate transmissions. Instead, the deals primarily stuck to infrastructure plays, from building cooling to traffic lighting to new forms of and techniques for power storage.

Based on all that I saw, there are two fresh tech “shout outs” I’ll give related to the pitches and a third “shout at” I’ll give to the mentors/advisors and company founders who presented, overall.

In terms of shout outs, I’ll first direct you to Scott Kirkwood of Kirkwood Labs, for a couple of reasons. First, thankfully, he was among the few presenters in the morning session that had a sense of humor, appeared to have rehearsed and/or timed his presentation, was comfortable giving it, and spoke with what I felt to be a high degree of knowledge and authenticity about his space.

If you go to his website, it won’t do justice to his pitch, which is really a consumer home energy and sustainability monitoring play that has some nice touchpoints to it, such as a very easy-to-use browser-based UI for the software. There are a number of issues for Scott and his team to overcome, not the least of which is that he has to find a way drive the velocity of his deal about a million times faster in my opinion for it to really have a chance for a venture-level impact. But, he’s one of the CEI’s newest members and, after speaking with Scott afterwards, my sense is that he has the DNA to make a good run at it, with the help from Mitch, Isaac, and the rest of the CEI/ATI advisors.

My second shout out, I’ll direct you to the EcoFit lighting team and, by name, Joel Wiggins, long-time former director of the Austin Technology Incubator, who is now the President and CEO of the Enterprise Center of Johnson City (ECJC). EcoFit is an ECJC deal – one of the several non-Austin-based companies to present at the Summit – and I credit Joel and his team’s contribution for knowing a good deal when they see it. The presentation was clearly among the most polished, fully formed, and compelling from a demonstrable value proposition of the day.

In fact, EcoFit was the competition winner (and one of the 4 that I chose for my highest rating of the day) and was almost too good for this competition. I say “too good” because the raise being sought was $2 million which the CEO, Cason Coplin, positioned strictly as “scale up” money – meaning that he didn’t really need it to be successful (that’s my words, not his), but that it would help the company get more product to market faster. If you’ve ever read Geoff Moore’s “Inside the Tornado” (the often overlooked follow-up to his essential “Crossing the Chasm”), of course, you know that such “optional” money is not optional if you want to win big.

But, his “scale up” positioning might have been Cason’s way of expectation setting with the investors in the room, to make it clear that valuations would be strongly negotiated. At one point, in fact, a couple of my judge colleagues and I wondered out loud why the company was even seeking venture money (which comes at a higher cost, by definition), when there were bankers like Silicon Valley Bank and others that would appear to be valid alternatives. But, when the question was asked, the reason given was that there were insufficient assets in the company to collateralize to meet bank requirements at this point in the company’s life, because they have outsourced essentially all of the “big ticket” manufacturing, but they are pre-revenue (even though they have purchase orders in hand and a growing pipeline of qualified prospects).

Now, for my “shout at,” I’ll have to admit that I was surprised at how unprepared many of the presenters were for the format and intent of the event. What I mean by “format” is that the presenters had a time limit for formal remarks and then Q&A, with a large live audience as well as the 20-some odd judges listening, not counting media and other potential partners and influencers in the room. Yet, my bet is that perhaps half of the presenters completed their comments in the time allotted, at best, and there were maybe only 4 or 5 of them that delivered their comments in a practiced, professional, confident, well-paced manner.

And what I mean by “intent” is that this was a venture summit, meaning venture capital is the investment theme of the money people present. Now, clearly there has been a lot of diversity introduced in the venture investing world in the past 15-20 years, with a broader range of investment size and advisor involvement than before. But, at the end of the day, there are some reasonably good guidelines that any experienced investment advisor can offer for company principals to follow, regarding size of investment, market and revenue potential, valuation, etc.

I was frankly stunned at how few of the presenters seemed to understand these guidelines, when they presented their deals. Because, my personal sense was that close to a third of the pitches, at least, were truly more angel round, early stage deals. And those that had the feel of later stage pitches didn’t seem to have a very good handle on the valuation/ROI expectations that a VC would have or, if they did, they did a sub-par job of providing persuasive arguments.

In fairness, I’d attribute at least part of this lack of fit or prep to the fact that it’s hard to find 20-plus truly quality, venture-ready deals, with so much money still available for good cleantech investments. But, I also have to give a “kick in the butt” to the advisors, business partners and, frankly the presenters themselves, for doing such an amateur job on such a big stage. Guys and gals: perceptions matter. Get your game face on. Practice, practice and practice some more your pitch.

That being said, as a die-hard start-up person myself, I have the greatest respect for anyone that makes the personal sacrifices and takes the risks to lay themselves out for all to see, when they commit to an entrepreneurial route and have to raise money. I applaud all of the companies and presenters at the Summit for their tenacity and courage; I’m always energized after such an event.

And congratulations to the ATI team for putting on a strong, well-attended event. It was an important one for continuing to demonstrate Austin’s place as a top competitor for cleantech innovation and entrepreneurship. See you next time!

CleanEnergy Venture Summit 2009: A View from the Judge’s Seat

3 thoughts on “CleanEnergy Venture Summit 2009: A View from the Judge’s Seat

  1. View from an ex-sider. Right-on Steve. It was great for me to come back to Austin and see the energy (pardon the pun) at the CEVS yesterday. It is something we could only imagine 9 years ago when the Clean Energy Incubator started. Great job to the ATI team. And it was lots of fun to come back with a company like EcoFit Lighting that was singled out as best-of-breed!

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