This post comes from Kosta Stavreas one of our industry insiders that is getting Green Light Distrikt New York City going.

NEW YORK CITY – Yesterday, Chris and I attended the Green Entrepreneur Summit in New York.  It was a completely sold out event, and rightfully so.  The panelists and audience were high-quality business leaders who are the lifeblood of the cleantech scene in New York.

I went back through my notes and there was some great insight shared by the Funding Strategies Panel on how to raise capital for a cleantech or sustainability venture.  The panelists were heavy-hitters with long track records of successfully raising substantial amounts of capital (in the 10’s and 100’s of millions) and commercializing technologies in the ‘green’ space.

• David Kistner — CEO, Green Apple Cleaners
• Ron Bergamini — CEO, Action Carting Environmental Services
• Franklin Madison — Technology Program Director, ITAC
• Martin Saponsnic – Mentor, Hudson Valley Innovation Center

Here are some of my favorite quotes:

• “The financing environment has completely changed.  A few years ago, finding a senior lender was easy and the hard part was equity or VC.  These days, the VC money exists but lenders don’t want in.  If you’re dealing with a syndicate, you have to sell to each participant to get them involved”.

• “Make sure you can communicate your plan.  How will you commercialize, and how will the investor get their money back. You have to prove you know what to do with the money when you get it.”

• “Know where you fit in the funding value chain.”

• “Find an ally.  Use your networks.  Tap into networking events like Green Drinks and the Social Venture Network, there are a lot of great people there than can help”.

• “Tell your story well.  You need a lot of financial data.  Have a good PowerPoint.  Don’t read it.  Tell your story with passion.”

• “If your house isn’t in order, the investors will eek out more and more equity.  The more they do upfront, the more equity they will take.”

• “I want to see a technology that has become a business.  I like to see customers and I like to see revenue.  If you’ve got a list of 1,000 customers waiting to buy your product, who wouldn’t want to invest into that.”

• [Is there a difference between ‘good’ money and ‘bad money’?]  “Hell yeah!  You need to bring in money with contacts that can help you accelerate.  Anyone can get cash, but does it come with the contacts that can lead into new customers and partnerships.  It helps a lot if you and your investor have similar value systems.”

• “As an angel investor, the approach I’m always going to take is ‘find a good idea, then buy the jockey’. I’m looking to invest in a team that can execute. I will take an A team with a B idea every time”.

These are simple yet profoundly important bits of advice for anyone trying to raise money to grow a leading company for tomorrow.

What do you think?

This posts from Brian Hayden, on of our Boston industry insiders.

BOSTON – South Mountain Company is a thirty-year-old, employee-owned design and building company on Martha’s Vineyard.  One of the company founders, John Abrams, published a book in 2005 that changed the way I define success  – and he represents an important demographic for GLD readers.

‘The Company We Keep’ is part business book, part manifesto, part love story.  John sent me the book a couple weeks before I was to drive out to Martha’s Vineyard for an interview with South Mountain Company.  I was graduating from the MBA program at Babson College, knew I wanted to be part of the sustainability movement, and sensed there was some magic in this small building company.  I didn’t put the book down for the next week.  John is a talented writer, and in the book he challenges the ‘gospel of growth’, outlines the benefits of employee ownership, celebrates craftsmanship, and articulates the importance of place.  He made me want to be a better person and a more thoughtful professional.

Ultimately I decided to start a business rather than take a job so I didn’t go to work for South Mountain Company, but that brief interaction with the company changed the course of my professional life.  Have you ever had a brief experience like that, or an influential teacher, or an internship during a formative time that you’ll never forget?  I’d love to hear comments with those stories.

I’m also writing this post because John is part of a group of established professionals that have 30 years of experience from which to teach the younger, Green Light Distrikt crowd.  These are active guys in the Northeast Sustainable Energy Association (NESEA) with an unbelievable wealth of knowledge and perspective that might be helpful to some of us starting out.  Here’s John’s blog, which might be another useful source of information as we all triangulate toward the truth.

This post comes from Matt Marino, founder of Clean Pursuits a GLD Boston insider. Find him @cleanpursuits

BOSTON – I once heard that the blades of modern wind turbines are modeled after the fins of humpback whales.  I’m not sure its true, but there is a striking resemblance, and such a practice has a name in design and engineering: biomimicry.

There is a less specific, more systemic feature of natural systems that I am interested in: the role of diversity.  It seems that diversity has a protective effect on some of the most critical natural systems, which directly or indirectly impact social well-being and human health; for example, its role in natural carbon sequestration, water purification, curing disease, and – oh yeah – evolution.

So diversity is a good thing for nature, design, finance and energy – so what? Well, as a self-proclaimed innovation economist, I’m always looking for the traits and characteristics of nurturing innovative projects, teams, solutions, ventures and geographic “clusters” (See Chris’ new survey to elect your city), and research I conducted while in b-school led me to believe that diversity is a key component for driving innovation.  The hypothesis that I  didn’t, but would like to, research further: the passive investments in nurturing diversity to drive innovation are just as important as hard spending on R&D.

Of course, diversity isn’t just cultural – it can derive from the cross-pollination of and collaboration between public-private partnerships, intra-industry ventures, and institutional “mash-ups.”  The latter is the focus of projects like Upstate Venture Connect, a project seeking to accelerate the linkage between academia, private and institutional capital, and workforce and industrial capacity in upstate New York.

It’s my belief that the diversity in the U.S. is a prime factor for our nation’s innovation leadership.  Arizona S.B. 1070 notwithstanding, a long tradition of favorable immigration policies have led to what Tom Friedman calls “the world’s biggest and most diverse pool of high-I.Q. risk-takers.”  In my view, the U.S. is still uniquely positioned for “innovation incubation,” an important consideration for those who believe we can innovate our way out of global meltdown (pun not intended, but appropriate I suppose).

Humpback photo credit: Nancy Black.

This comes from our industry insider Matt Marino, founder of Clean Pursuits and Switchback Life.

In Boston, Technology and Innovation are personified like Greek gods, but its mere mortals that bring these forces to life.

Readers of The Green Light Distrikt are likely also technology and innovation enthusiasts.  We have to be – many of us are counting on new energy technologies to meet growing energy demand, while reducing environmental impacts and generating new traction for the economy.

But technology development and technology deployment are two separate endeavors, each with requisite incubation characteristics and catalysts.  Deployment often depends on the scalability and price parity of new technologies, which can take many innovations and years beyond when the initial innovation actually occurs.

This discrepancy is the subject of a great piece by David Owens about MIT alum (PhDs are alums too, no?), MacArthur “genius,” and eco-inventor, Saul Griffith, which appeared in a recent issue of the New Yorker titles: “The Inventor’s Dilemma”.  In describing the market challenges of an early invention for making corrective lenses in impoverished communities, Saul says, “It turned out we were solving the wrong problem.”  David Owen connects the dots: “The real problem with eyeglasses in the developing world isn’t making lenses...its testing eyes and writing accurate prescriptions for people with little or no access to medical care.“  Without hands on and committed deployment, Griffith’s device was just another gadget.  (Note: this is no knock on Griffith; he is, to say the least, an incredible eco-entrepreneur churning through inventions that have the potential to disrupt the Carbon Quo in a major way).

Organizing great people is the value that an organization like Somos Amigos provides.  Somos Amigos is a California-based 501C3 service organization with operations in the Dominican Republic, where volunteer doctors, dentists, nurses and other medical staff – most of them from the U.S. – have served thousands of local patients since 1997. Of course, Somos Amigos makes use of modern equipment and technologies to accomplish its mission.  But without the work and consistent hands-on human effort – 50-strong volunteer teams traveling to work at the clinic for weeks at a time, multiple times per year – the equipment would be collecting dust in the dark.  New technologies have the potential to continue improving the world; but without a plan for and commitment to its application – indeed, a different skill set than the work of innovation itself – we’ll be relegated to the status quo.

Boston has a great tradition of people organizing to channel innovations into communities in need, where new technologies often have the potential to provide huge breakthroughs in standards of living.  I’ve been particularly interested in and impressed by:

• MIT’s Fab Lab – The product of MIT prof Neil Gershenfeld, Fab Labs by themselves aren’t terribly special – a seemingly odd, $50k collection of hardware and (of course, open source) software.  But paired with an evangelical desire to promote the DIY gospel, self-sustainability and distributed manufacturing, dozens of Fab Labs have been deployed to (at least) 16 countries, enabling local partners to develop custom technology solutions to regional problems (for example: wi-max systems for internet connectivity in rural parts of Afghanistan).
• EarthSpark – Based in Cambridge, EarthSpark works “with communities to provide access to clean energy technologies that make sense for their needs.”  Currently, EarthSpark is focused on the reduction of energy poverty in Haiti, through the development and deployment of clean energy products, supply chains, educational resources and training.  By effectively connecting with partners in Haiti, EarthSpark was able to distribute 3000 solar powered lamps in support of the earthquake relief effort.
• Anza – Lest we forget the true definition and purpose of technology, innovative products need not incorporate electronics or space age materials to provide value.  Anza is keen on re-purposing trash to create high utility technology solutions for communities in need.  Currently, Anza products like utility carts and solar cookers are making every-day tasks healthier and easier for thousands of villagers in Mozambique.  A recent post by GLD Insider, Adam Standley, documents a recent Anza deployment trip to Africa.

And I’m happy to introduce (read: shamelessly promote) Clean Pursuits into the mix.  Clean Pursuits aims to support the deployment of innovative technology solutions to communities in need through the promotional activities of a network of athletes and adventurers who participate in inspired, human-powered (i.e. “clean”) endurance events and expeditions.  Currently, Clean Pursuits is working with Somos Amigos to develop a sustainable energy solution (likely solar) for clinic operations in the Dominican Republic (if you’re still reading, a vote for Clean Pursuits in the Network Solutions venture contest would go a long way. You can vote here –> http://pitch.co/entry/44227).

There are countless other example of people putting boots on the ground to share innovation and new technologies in a meaningful way – please let us know examples you’re aware of or participate in…

From Brian Hayden, on our industry insiders.

There’s going to be a Green Jobs backlash.  There…I said it. The manufacturing plant that closed up the road can’t be re-tooled over the course of eighteen months to magically employ the same number of people doing mythical ‘green’ things.  Promising this to a community or a person that has been laid off is a recipe for disappointment and resentment and I expect some of those unrealistic promises will come back to bite people who made big promises.  That’s the bad news – take some time to mourn the loss if you need it.

Once we get over that fact, we can move on to the good news: companies are hiring and there are more opportunities in renewables and energy efficiency than ever.  The Great Recession that we’re either emerging from or still buried in has caused an subtle paradigm shift in employment in the construction industry that is not that complicated to understand once you see it.  Consumer preferences are changing but companies are risk adverse, so there’s more contract work, lots of temporary positions, and entrepreneurship is a necessary option sometimes.  The opportunities are there, they just aren’t packaged with a corner office and a pension.

I know many people who have gotten green jobs and there will be many, many more in the months and years ahead.  So lets not let the inevitable Green Jobs backlash distract us from the exciting changes that are slowly but surely taking place.

This comes from one of our new industry insiders, Adam Standley. A very important note: Adam is a fellow Mainer and thus is naturally awesome.

I was working with Anza Technologies in the remote village Matala, Tanzania last month.  We deployed “appropriate technologies” to help rural farmers carry water more efficiently.  I noticed that each of these “dollar-a-day” farmers had a cell phone but no electricity in their homes.  How they charge their phone batteries may be the beginnings of an energy infrastructure unlike any we have seen.

The rural Matala region had largely leapfrogged land-based telecommunications infrastructure—pretty standard in the third world, but the cell phones hit some of the villages before electricity had, which raised some questions for me.  I wondered how they charged them.

I found out that they charged up at one or two houses in a given village with electricity, or they’d give them to a friend to bring into town.  In fact, it seemed they treat electricity like they do water—walk to a source, fill up, bring it home.

The farmers earn close to $1/day, so hooking into the grid is cost-prohibitive—nearly 4 years income.  Getting a gas generator is an option that would cost nearly 1 year’s income.  Alternatives like solar and wind?  1-2 years income.   It is clear there is no solution other than scavenging for what electricity they can to power the few, small electronics they need.  There is very little incentive to make these types of investments even if they could save the cash.  Their investments take other forms.

Driving through the valleys of Kilimanjaro I noticed acres of crops where some corn was about 3-4’ higher than the rest.  I asked our guide, Ibrahim, why.  He said that the first rains came early this year, so farmers had to bet on whether to plant their seed or not. “If it’s a false start to the season, their seed is ruined. But if they wait too long, they miss an extra harvest.”  So the farmers hedge by planting a portion of their crops during the early rain and saving most of their seed for later.  When you’re making a dollar a day, crops are the only currency you have the volume to risk.  Crops are their primary investment.

Accordingly, most farmers typically invest any spare cash into low-risk, low-return items like tools for work—things that bring an element of security and predictability to their business in the fields.  They will not take a leap of faith in a technology which may only marginally improve yield, break, or be too expensive to maintain (take it from Paul Pollack if you don’t believe me). They need real, immediate cashflows from what they invest in—or small investments with short payback periods that hold inherently low risk.

I asked a bit more about alternative ways to get affordable power to the region.  I learned about a company called Egg Energy. They were setting up portable battery charging stations in remote villages of Tanzania where consumers can access electricity at a price they can budget. I didn’t encounter any of the stations, but the idea made a lot of sense to me. It got me thinking about the evolution of the country’s “grid”.

With this “distributed power redemption” model (I dub thee), there is promise that the need for DC power electronics (mainly battery charging & lighting) will pull-through alternatives in remote locations where grid-connected AC is cost prohibitive. It could take the form of distributed DC charging stations.  The model could be a good stepping stone to rural electrictrification by alternatives.  It may even introduce further standardization in global DC infrastructure, as increasing DC power supply & demand cut-out the AC/DC inverter-middle-man (imagine a standard DC wall plug that’s not a jerry-rigged cigarette lighter?!).  It will be interesting to see how elements from this embryonic business model will affect the 1^st world’s AC/DC power infrastructure in the coming years.

This post comes from one of our 11 industry insiders, that will all start writing in May. Brian Hayden is the founder of HeatSpring Learning Institute.

Most of my friends have never heard of Mass SAVE, but my good friend Tom signed up for a Mass SAVE energy audit.  The auditor spent half an hour in his place, promised big rebates, and Tom agreed to have weatherization and insulation work done.  Four weeks later (two days before the scheduled work), Tom got a call from a customer service representative informing him that he no longer qualified for the rebate and would have to spend an extra $1700 out-of-pocket.  “Never mind.”  Said Tom.

Let’s assume the end goal is an enormous wave of energy efficiency retrofits.  Looking at that end goal from an entrepreneur’s perspective, regardless of your political views, isn’t the current setup in Massachusetts almost comically bad?  And MA has one of the best programs in the country.

I think there’s a fear of spending the money too fast and administering a huge program like that is clumsy.  There’s always a balance between wanting to spend the money and fear of spending it badly.  I think fear is winning.  We need to find alternate routes around these programs and not rely on them to fix everything.

Here’s a thought exercise: How might Walmart make energy efficiency easy and affordable for homeowners?  I know Walmart is evil, but what might they get right that we’re currently getting wrong?

The Vegawatt was invented by James Peret in Boylston Massachusetts. The system turns waste vegetable oil in restaurants into electricity and hot water. The value proposition is simple, they can lease a unit for $435 a month and save over $800 in electricity and fuel you need to buy. Or, you can buy it and get all your money back within 2 years. Simple. Profitable. Green.

The VegaWatt was a runner up in our Boston’s Top 10 Clean Tech Companies competition so I decided to interview the inventor, founder, and CEO James Peret as I organize profiling the winning companies (stay tuned for this, we’re going to be gathering some amazing video interviews and content of their offices and clean tech installations)

The interview is in five parts (so stayed tuned for the rest of the parts!) and the first part I wanted to share with you is where we talked about the Vegawatt’s customers, why they might not buy it, and why the system doesn’t really have any competition.

We talked about a relatively few number of items in this section but James goes into depth and provides great insights into the questions I asked and the competitive landscape in the waste-to-power industry. Listen to it here:

Vegawatt’s Perfect Customers and Industry Landscape

In this section we discussed:

-Why restaurants would NOT want to purchase a Vegawatt

-What their perfect customers look like

-What determines how big of a Vegawatt system a restaurant gets

-Why the Vegawatt has NO competition

-The reason that the system is never a primary heating source and is always supplementing a primary system

On January 8th I attended a Breakfast Meeting at Foley Hoag with Phil Giudice, Commissioner of the Massachusset’s Department of Energy Resources (DOER).  It was a dynamite presentation that touched on smart grid, solar, biomass, and a variety of other interesting topics -  but the thing that dominated the conversation was this: there’s a tsunami of state and federal funds coming available for building efficiency in 2010.  As Phil said, “the money is there and the team is in place – it’s time to have our WOW moment.”  $650 million will be spent by the state to promote energy efficiency in each of the next three years (solar photovoltaic incentives through the Massachusetts Clean Energy Center will be about $12M this year and that will create 30% growth for the solar industry in Massachusetts).  That’s compared to $150 million in 2008, and doesn’t include incentives offered by the utilities.  These numbers could get bigger as the federal ‘Cash For Caulkers’ program details come into focus.

So What?

Policy conversations about climate change, energy independence, and job creation are all converging on this single initiative.  The pieces are in place for a huge amount of money to flow through the building efficiency value chain and there are still plenty of holes to be filled.  Somebody has to execute and make all of this happen.  If you have an interest in building efficiency there may never be a better time to get actively involved.

This posts comes from our second industry insider, Brian Hayden. Brian adds a unique perspective to the clean tech industry by providing high quality, industry certified renewable energy training to building professionals. I’m looking forward his future posts.

2009 was another banner year for geothermal and solar companies. There’s good reason for optimism in 2010, but several key trends are already beginning to reshape the industry. Here are the top three things you should keep in mind as you put together your business plan for next year:

1. You’ll need credentials to access incentives. States need to show they are spending taxpayer dollars responsibly and requiring credentials to access rebate programs is an easy way to do that. IGSHPA (Geothermal Industry) and NABCEP and IREC (Solar Industry) are emerging as the de facto credentials. More states will follow early adopters like Connecticut to do this in 2010.

2. Building efficiency will be a part of the sales conversation. As consumers get wise about energy consumption, they’re starting to ask more questions about building efficiency and load reduction. Growth of geothermal and solar will grow as a compliment to building efficiency and you’ll be hearing more of these types of questions if you’re talking to customers.

3. Good business people will rise to the top. Companies that have good customer service, quality products, and happy customers have survived the recession and are best positioned to succeed in this growing market. It’s not good enough to be a first-mover anymore – big or small, great businesses that can execute will be most successful in 2010.

Change creates opportunity. These trends can be the things that drive the growth of your business in 2010 if you recognize the need to get out ahead of them.