ENERGY 203 Energy Startup Funding Landscape Instructors David

ENERGY 203: Energy Startup Funding Landscape Instructors: David Danielson, Stuart Macmillan, Joel Moxley TA: Dan Sambor

Energy Startup Funding Landscape Non-Dilutive Funding (Gov’t, Non-Profit) US DOE Tom. Kat Incubators/ Accelerators/ Biz Plan Competitions Total Energy Ventures, GE Ventures PRIME Coalition Concessionary Capital (Dilutive, nonfiduciary, company friendly Mission-Oriented Capital (Dilutive, fiduciary, some not purely financial) BEV, TPG RISE Corporate/Corp Venture (Dilutive, strategic, not purely financial) Sequoia, TPG Growth Purely Financial Capital (Dilutive, purely fiduciary) 1

“Non-Dilutive Funding: Grants”

A Strong Startup with a Strong Gov’t Funding Strategy can result in…. ~$10 -20 M in RD&D grants ($100 M+ if get large pilot/demo grants) 3

Key Gov’t Support Resources for Energy Startups: R&D • SBIR – Small Business Innovation Research Program • DOE, NSF, NASA, etc (Phase 1: ~$150 -$250 K, Phase 2: $750 K) • U. S. Department of Energy • ARPA-E ($500 K-$5 M) • DOE Applied Energy RD&D Offices • ”EERE” – Office of Energy Efficiency & Renewable Energy • “OE” – Office of Electricity Delivery & Energy Reliability • “NE” – Office of Nuclear Energy • “FE” – Office of Fossil Energy • DOE National Labs • Funding “CRADA’s”, Energy Materials Network, Small Business Vouchers • Department of Defense • DARPA, Office of Naval Research, Etc 4

Key Gov’t Funding Sources for Energy Startups: Scaling • U. S. Department of Energy • DOE Applied Energy RD&D Offices (Pilots/Demos) • DOE Loan Guarantee Program (? ? ) • ESCTP (Army DOD) – deployment on military installations • California Energy Commission (Pilots/Demos) • Overseas Demo Funding Opportunities (i. e. UK…) • State Manufacturing Incentive Packages (Mfg) 5

Best Practices for Getting Gov’t Grants • Map out relevant areas/people (junior to senior) • Don’t use lobbyists • Relationships, Frequent Communication; NOT Transactional • • Build strong relationships with all key people Focus on “line-level” staff first/most Spend 2 days in Washington DC/year (at least) Get to know them, build trust, tell them your story, get their advice • Get Involved, Be Helpful • Attend workshops/conferences/events, find ways to help DOE staff to their job (esp. Annual Merit Reviews) • Get to know key partners, especially National Labs 6

Target Strategize Relationships Hustle Apply 7

“Non-Dilutive Funding: Other Sources”

Other Sources of Non-Dilutive Funding • National Lab “Embedded Accelerators” • e. g. “Cyclotron Road” • Business Plan Competitions • Stanford/Bay Area Resources • e. g. Tom. Kat ($20 K 0, Cal. CEF Cal. SEED ($600 K) • Some Incubators • e. g. NREL IN 2 (Wells Fargo Foundation) • Corporates: • e. g. Shell Game. Changers, Chevron Catalyst 9

DOE Lab Embedded Accelerators ~$500 K/2 years; +stipend 1 -2 people supports Need a Ph. D anchor Access to Lab equipment/expertise & mentorship 10

Business Plan Competitions (esp university focused) Cleantech University Prize – cleantechup. org • Berkeley Cleantech UP (UC Berkeley) • Rice Biz Plan Competition (Rice) • First Look West (FLo. W) (Caltech) • MIT Clean Energy Prize (MIT) • Midwest Cleantech Up (Clean Energy Trust, Chicago) • Allegheny Cleantech UP (CMU) • Launch. R (Rutgers) • Mega. Watt Ventures (Univ of Central Florida) 11

“Incubators/Accelerators”

Incubators/Accelerators Incubate Energy – incubatenergy. org • Elemental Excelerator (Hawaii + Palo Alto) • • • Greentown Labs (Cambridge, MA) • • • 18 -22 months stay LA Cleantech Incubator (LA, CA) Austin Technology Incubator (Austin, TX) • • • Hawaii emphasis Up to $1 M funding, 1% equity 9 month ”go-to-market” track: $75 K 12 months “demo” track: $1 M 50/50 cost share required UT Austin $10 K/year, 2% equity Next Energy (Detroit, MI) • Strong in transport/grid • $10 K/year fee 13

Incubators/Accelerators Incubate Energy – incubatenergy. org • Innosphere (Fort Collins, CO) • • • Oregon BEST (Portland, OR) Powerhouse (Oakland, CA) • • • 6 month, solar focus, funding provided Prospect Silicon Valley (San Jose, CA) ACRE (Brooklyn, NY) • • • $5 K/year fee, 2 year residence $450/month, no equity, up to 2 years Urban Future Lab (NYU) CLT Joules (Charlotte, NC) • UNC Charlotte 14

“Concessionary Capital”

Concessionary Capital • • Foundations, Philanthropists, High Net Worth Individuals Some Incubators $1 -2 M seed/Series A $500 K seed 16

“Mission-Oriented/ Sector-Focused Capital”

Early Stage Investors – High Net Worth/Families • Gates (Cascade) • Pritzkers • Waltons • Horizons • Branson • Simons 18

Early Stage Investors – Family Offices • • • True North Venture Partners (Chicago, IL) (Ahearn, family) Breakthrough Energy Ventures (Gates, family $) Prelude Ventures (Simons) Capricorn Investment Group (Skoll) Congruent Ventures (seed – Simons/Univ of Calif. ) Cascade Investments (Bill Gates) J. B. Straubel Family Office (Tesla CTO) Emerson Elemental (Laurene Jobs) S 2 G (Seed to Growth) – Ag focused (Walton) Energy Innovations (SF-based, single high net worth) Radicl Impact Fund (Tom Steyer) 19

Later Stage Investors - “Growth” • TPG RISE ($1 B+ impact fund) • G 2 Fund (industrial-meets-exponential tech)– Kleiner spin out) • Warburg • Apollo • US-China Green Fund ($1 B+) • Sovereign Wealth Funds (e. g. Temasek – Singapore) • Emerson Elemental (Laurene Jobs) • Generate Capital (Jigar Shah) - distributed tech projects 20

Brief Aside on Angel Investors… (first dollars in) • Get investors who add a TON of value and also serve as a signal for future investors • • Successful entrepreneurs in your space Former senior execs in your space 21

“Corporate Strategics”

Corporate Strategics • • • • Shell Technology Ventures • • Total Energy Ventures • Enel • GE Energy Ventures • Saudi Aramco Ventures • Siemens Venture Capital DSM Ventures Oil & Gas Climate Initiative Energy Impact Partners EDF Enel In-Q-Tel Chevron Technology Ventures Schlumberger Ventures GM Ventures E. On Venture Partners EDF Robert Bosch Venture Capital Applied Ventures (Applied Mats) 23

“Pure Financial Investors”

Early Stage Investors • • Khosla Ventures Baruch Future Ventures (Tom Baruch) 1955 Capital (US tech scaled in China focus) Moxley Holdings (IT and data-enabled hard tech disruption) • If you’re going to pitch your company as “non-energy” in a “hot space”, then the list of investors opens up to all relevant VC’s investing in that hot space… • Sequoia Capital • Kleiner Perkins • Etc Etc 25

Energy Startup Funding Landscape Non-Dilutive Funding (Gov’t, Non-Profit) US DOE Incubators/ Accelerators/ Biz Plan Competitions Total Energy Ventures, GE Ventures PRIME Coalition Concessionary Capital (Dilutive, nonfiduciary, company friendly Mission-Oriented Capital (Dilutive, fiduciary, but not purely financial) BEV, TPG RISE Corporate Venture (Dilutive, strategic, not purely financial) Sequoia, TPG Growth Purely Financial Capital (Dilutive, purely fiduciary) 26

Supporting Slides - Back Up Material -

ARPA-E: ~$300 M/year • ARPA-E: high-risk, high-reward R&D • Seedlings of $100’s. K to $5 M, 1 -3 year awards • Bring in high-talent private sector Program Directors for 3 year terms • Funding programs determined by Program Directors • Looking for “game-changers” • Very hands-on project management, Go-No Go Milestones • Concept Paper (6 -8 pages), then Full Application (involved) 28

ARPA-E – Strategic Guidance • Get in early & often with relevant new Program Directors • You may be able to guide their program focus • Focus on both Program Directors & Fellows and “SETA’s” • Think BIG, Go BIG ($) • Invest in good graphics/formatting • Differentiate from state of the art, articulate value proposition • Build the “Dream Team” of partners • Show real data • ARPA-E – fast way in: IDEAS Program (small starter grants, non-competitive) 29

EERE Structure Assistant Secretary Deputy Assistant Sec for Transportation Deputy Assistant Sec for Energy Efficiency Deputy Assistant Sec for Renewable Power/Grid Vehicles Buildings Solar Biofuels Advanced Mfg Fuel Cells/H 2 Wind Hydro Geothermal Ocean 30

EERE: ~$2 B/year • EERE: Roadmap-based RD&D focus, clear long-term goals • Sustainable Transportation (vehicles, fuels) • Renewable Power (solar, wind, geo, water) • Energy Efficiency & Advanced Mfg (buildings, advanced mfg) • Higher-Risk R&D • Incremental R&D • Pilots and Demonstrations • 50% of money invested into National Labs 31

EERE: Strategic Guidance • Relationships REALLY matter. • To plant seeds for BIG NEW DIRECTIONS, start at the top • Assistant Secretary • Deputy Assistant Secretary (e. g. “Renewable Power) • For PROJECT SUPPORT, focus on line-level • Office Director (e. g. Solar) • Program Manager (e. g. PV) • Other Staff • • Build strong relationships with National Lab researchers Workshops, Workshops… Annual Merit Reviews Read public EERE Budget Documents for future directions EERE Backdoor = National Labs (i. e. direct funded CRADA’s) 32

OE: ~$200/year • OE: Roadmap-based RD&D focus, long-term goals • Incremental Innovation, Demos • Grid Hardware, Software, Tools, Cyber • Energy Storage: $20 M/year… • Staff and National Lab relationships ESPECIALLY IMPORTANT 33

To contact people: • DOE emails are: first. last@hq. doe. gov 34

National Lab Resources & Partnership Mechanisms • Processing, characterization, testing equipment • Expertise • Modeling/simulation tools; cost modeling • Partnerships for competitive funding (FOA’s) • ”CRADA’s”: DOE funds Lab to work with you • e. g. Energy Materials Network (EMN) • NREL – IN 2 Program • Small Business Voucher Program (sbv. org) • Embedded Incubators: • Cyclotron Road (Lawrence Berkeley) • Innovation Cross Roads (Oak Ridge) • Chain Reaction (Argonne) 35