Although it obviously pained some of the panelists at Monday’s Clean Energy
Venture Summit to admit it, a group of investors representing firms like
New
Enterprise Associates and
Austin
Ventures acknowledged that clean energy startups experience a decided
“uplift” in valuation simply by virtue of their green focus.
“The liquidity event for an enterprise software company sucks,” said Jimmy
Terybig, a venture partner with NEA. “But the multiple on energy can be huge.”
Those investing in early stage clean energy startups typically have few
problems luring new investors in later rounds at a increased valuations.
“There are a lot of VCs who are looking to put clean technology in their
portfolio,” said Krishna Srinivasan, a partner with Austin Ventures.
These kinds of generalizations don't exactly dispel the notion of a
potential clean tech bubble. However, the panelists pointed to several
specific areas that warrant investment not just because they are green, but
because of a perceived demand for their underlying technologies.
Energy storage was cited by panel members as an especially promising
investment area. Charley Dean, a principal with Silverton Partners,
called it the “holy grail” of clean tech. He and Paul Thurk, a principal
with Arch
Venture Partners, also pointed to water purification
technologies as an area ripe for investment.
Terybig conveyed the message that NEA was interested in big ideas with big
market opportunities. Nothing new there, but he added that the management team
wasn’t as important as the idea and even customer validation could be set
aside if the idea was big enough. NEA does have $2.5 billion to invest,
so the firm can put in a lot of capital and is willing to work with
entrepreneurs with big idea, Treybig said. Many of the entrepreneurs at
the Austin summit were eager to hear such a message from NEA. That said, they
mobbed each of the panelists with equal fervor after the panel concluded.
–Stacey Higginbotham
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