In the required reading category for all humans, the 5th IPCC (Intergovenmental Panel on Climate Change) report, Climate Change 2013 – The Physical Science Basis, now uses the unambiguous term “unequivocal” when describing global warming. I don’t think there is a more robust “canary in the coal mine” warning for us to take action upon (forgive the tortured pun).
One healthy bipartisan effort in Congress relates to enabling Master Limited Partnerships (MLP’s) to finance renewable energy projects. Long used in traditional energy, MLPs are a proven instrument and can help overcome the high upfront costs of renewable energy hardware and installation which produces a stream of low cost energy over its life. This is done by having a public market for investors to efficiently price and trade MLP interests.
Here’s a good article by Jordan Collins and Bryan Stockton explaining the progress in Congress toward enabling legislation to include renewable energy projects. While not a done deal, it is encouraging to see this important instrument be debated.
According to Gigaom today, Coulomb closed a Series D financing of $47.5M bringing in heavyweight investors such as Kleiner Perkins and Toyota Tsusdo (Toyota’s trading corporation). The drive to build out electric vehicle charging infrastructure is important to give consumers confidence that they will be able to easily recharge their EV’ so they will buy them. Our view is that while this infrastructure is being deployed, the auto industry will be releasing new plug-in EV’s (e.g., Fisker’s Karma is shipping now) to mitigate the sparse charging infrastructure and range anxiety issue in addition to more battery-only EV’s (e.g., Nissan Leaf is shipping now). We are at an important turning point in this market where we’ll see more consumer choices for EV’s. Choice will help drive adoption which will drive volume which will drive cost reduction which will drive broader adoption. It can’t happen soon enough for the auto industry to compete on the world stage.
The ACA voiced support for pending legislation in the House and Senate to make it easier for entrepreneurs to raise early stage capital. They put their position in a good context with angel financing which is the ACA’s focus as the national association of angel capital groups. The ACA also mentioned the need for coordinated legislation with crowdfunding for angel capital (re: S. 256). See the ACA’s public statement below:
Public Statement on Crowdfunding Legislation
December 5, 2011
The Angel Capital Association (ACA) wishes to provide our support for the concept of crowdfunding, currently addressed in H.R.2930 and S.1791. ACA is the North American trade association of angel groups and private investors that invest in high growth, early‐stage ventures. ACA membership includes more than 160 angel groups and 20 affiliate organizations across North America. ACA member angel groups represent more than 7,000 accredited investors. Our focus is on professional development for accredited investors active in supporting some of the nation’s highest growth startups.
ACA’s leadership has reviewed the legislation and supports the general concept of crowdfunding because it is important support growth in current economic times and ensure laws and regulations that are in step with modern social networking. The legislation has greatly improved since it was first introduced, reducing initial concerns about fraud and interference with sophisticated angel investing.
ACA’s Board adopted the following statement on December 2nd:
- Crowdfunding legislation is needed. Given the fall in net worth from decreased home values, entrepreneurs are much less able to self‐finance the earliest development of their companies. Likewise, obtaining financing from friends and family has become more difficult.
- “Friends and Family” financing is often critical in getting startup companies off the ground. Crowdfunding helps fill this “Friends and Family” gap. If crowdfunding helps get more companies started, that is a good thing and a welcome change.
- Angel groups (and individual angels) are the next stage of financing and it is important to ensure that entrepreneurs have access to robust angel capital. These types of accredited investors are also important to entrepreneurs for their mentoring and advice, as well as to structuring investments for better opportunities for long‐term growth.
- We strongly support the efforts of Sen. Mark Pryor and Sen. Scott Brown to enact an Angel Tax Credit (S.256) that will complement the crowdfunding legislation so that the most promising companies can grow beyond the crowdfunding stage. This is good and sensible policy.
- We remain concerned about the potential for fraud in this kind of financing and believe it is important to protect unaccredited investors from unscrupulous issuers. It will be important to have a mechanism for due diligence on the investment opportunities, as it is clear that due diligence is important to mitigating investment risk. Academic studies of angel investing found that 52 percent of all the investment deals went out of business. Crowdfunding is likely to have even more associated risk.
Angel groups and serious angel investors are important to high growth entrepreneurial ventures to Congress and the startup community. Crowdfunding may help many small startups, but active accredited angels are needed to get to the kind of growth that Washington intends.
Dan Rosen, Chair of Public Policy, ACA
Marianne Hudson, Executive Director, ACA
Angel Capital Association www.angelcapitalassociation.org 913‐894‐4700
Brammo announced today that it had secured another $28 million in private funding for its Series B round AND a strategic deal with Polaris Industries who is also investing. With innovative design brains, technology,, market savvy, cash, good investors, and great strategics like Polaris and Flextronics, keep watching what Craig Bramscher (CEO) and his passionate team create out of the lovely Ashland, Oregon area.
“We are excited to advance our electric vehicle capability by establishing Polaris as a business partner and part owner of Brammo, one of the most innovative and aggressive companies I have found in the electric motorcycle space,” said Scott Wine, Polaris CEO. “Our companies share a passion for performance, and I look forward to exploiting the numerous opportunities created by pairing Brammo’s industry-leading electric powertrain technology with Polaris’s vast array of market-leading powersports products. This is a small but important investment for Polaris in an electric vehicle market that we feel is poised for significant growth.”
Also, see the MarketWatch announcement in this link:
The event will spotlight the region’s most promising clean technology innovators of the year and includes a stellar venture capital, angel, and entrepreneur panel on the clean tech investing outlook.
Three Finalists will receive awards to help them grow their ventures, and they will go on to compete for the National Cleantech Open Championship in November.
To register, follow this link:
Registration Link to Cleantech Open NW Awards Exp
Wednesday, October 5, 2011
3:30pm to 7:30pm
Bell Harbor Conference Center
Pier 66, 2203 Alaskan Way
3:45pm – 5:45pm – Two hours on the exhibition floor
5:45pm – 6:45pm – Keynote Panel on Cleantech Investment Outlook
6:45pm – 7:15pm – Announcing the Finalists who proceed to the Nationals and their awards
We hope to see you there to cheer on these innovative entrepreneurs and listen to the clean tech investing panel.
Venture capital backed Silver Spring Networks filed on July 7th to go public. Kleiner Perkins and Foundation Capital are among the leading investors. The tech IPO trend has been picking up after an extended drought. And, Silver Spring needs to pick up needed capital to expand its business while the financing window is open. We are looking forward to more clean tech IPO’s to propel more liquidity in this critical sector.
(Following from One Racing Source) “Brammo filed the appropriate forms with the SEC yesterday stating that it has raised $ 12.4 million in Series B funds, in what is still an open round of financing. Brammo hopes to raise a total of $ 30 million in the Series B offering, with the use of funds likely going towards expanding Brammo’s reach into the Asian and European markets, as well as building out the company’s product line into other target segments.
Also in the Form D filing with the SEC we get a glimpse of the people behind the company’s management, which includes a presence from Brammo’s initial investors Best Buy & the clean-tech venture capital group Chrysalix, as well as Brammo’s CFO Bruce Gilpin. New to the ranks is David Kurtz from Alpine Inc., an oil and gas exploration and development firm that is leading the Series B round with another firm that is so far unknown.
It says something about the state of electric vehicles when oil companies start investing in them, so it doesn’t surprise us to learn that most of the remaining $ 17.5 million in the Series B round has already been committed, and could close in the new year. Brammo’s ability to raise this much capital is a good sign for EV fans and other EV companies alike. Despite tight coffers, venture capitalists and private equity funds are still investing in electrics, especially electric motorcycles.
Brammo joins the ranks of Zero Motorcycles and Mission Motors, both of whom have had to also file similar paperwork with the SEC, meeting threshold point in fundraising where they needed to disclose private offerings of stock. Yesterday’s filing has been the largest collection of capital so far in this space, with Brammo’s $ 12.4 million dwarfing the $ 7.3 million that Zero raised earlier in the year (here & here). To-date Brammo has raised $ 23 million ($ 41 million when this round is closed), with its $ 11 million Series A round taking place in August 2008.
The use of the funds according to CEO Craig Bramscher will go towards Brammo’s global expansion, product development, and day-to-day business. Coming on the heels of its announced partnership with Flextronics, the cash infusion puts Brammo as the first-mover into foreign markets in the electric motorcycle space. “It allows us to leverage our guerilla market tactics across the globe,” Bramscher said of the new funds.
Brammo’s coffers may be larger than what they were before, but few companies would consider anything under $ 100 million adequate funding for a global expansion. “The comparison with Tesla keeps coming up in the conversation,” says Bramscher. “We like that, but we’re trying to achieve the same goals with a lot less.” Being efficient with funds is critical in this market to woo investors, which Brammo says is one of the things that’s helped them bring in the dealflow.
Bramscher hopes one day to take Brammo public, taking a cue from Tesla’s recent IPO, but that stop on the Brammo roadmap is still farther down the road, and right now the company is focusing on this investment. “Our hope is that this gets us to black ink, that this gets us global expansion, and gets us marketing,” explained Bramscher. “We’re trying to find the right investors that really do bring the right kind of value to the company. So far, everybody adds value beyond just the money they’ve invested.”
For consumers, expect new Brammo-clad products to be announced. While we already know that the Brammo Empulse will make its production debut next year, other models are likely to come from the Ashland-based company. “With the better drivetrain and longer range, we’re able to go into other segments,” hinted Bramscher. “We’re looking at anything with volume.”
With volume being the key word, Brammo is very close to having its Asian market headquarters in China picked out, while the company is still looking for a location for its brick and mortar presence in Europe.”
At the Zino Zillionaire angel panel on September 15, 2010, Byron McCann, Managing Partner, of Ascent Partners Group, offered a way to look at and filter potential angel investments using a mnemonic he calls “TORQUE”. There has to be a balance in an emerging venture across capabilities. Only technology and not enough product could be a critical imbalance. “When you torque a nut on a bolt, you have to have the right amount of torque – not enough, it will come loose and fail to do its job, and too much, it will strip the threads and become useless entirely,” said McCann. “A venture needs a good balance of many factors and TORQUE is one easy way to begin looking at it from both the entrepreneur’s and investor’s points of view.
TRACTION – Do potential customers really want the specific value proposition the venture is offering? How’s that validated?
OPPORTUNITY – Is this a big enough and interesting enough market to make worthwhile all the effort to build the venture?
RELATIONSHIP – Is this a group of entrepreneurs you want to work with over the life of the investment? Is there trust? Will you be able to collaborate and have open communication?
QUALITY – Do the entrepreneurs focus on doing the right things the right way? Do they have a quality mindset? Will they do a process or task well or just be expedient?
UNIQUE – Is this unique enough to be differentiated in the market, solve the problem well, and defend against competition? Is there solid intellectual property?
EXECUTION – Can the team focus and operate the business with intensity and excellence to help customers and build value?
While there are many other considerations to employ in evaluating an emerging venture, this is a good start to filter down the ones worth spending time investigating further. Angel investing and emerging ventures are exciting and have the chance to make a worthy impact for many. Focusing on the right ones is a key step in this invigorating but often challenging process. Good luck!
Fisker Automotive hits a major milestone on the road to delivering advanced vehicles we can drive and enjoy eco-performance with the official closing of its sizable DOE loan package. The loan along with additional private equity will fund both the launch of the Karma later this year and the development of the next model called “Project NINA”. As oil prices start to creep up again, more attention will be paid to these innovative driving solutions that reduce our dependence on oil and are much more enviro-friendly, without compromising a superb driving experience.
The Department of Energy announced today the closing of a $528.7 million loan with Fisker Automotive for the development and production of two lines of plug-in hybrid electric vehicles (PHEV). The loan will support the Karma, a full-size, four-door sports sedan, and a line of family oriented models being developed under the company’s Project NINA program.
“The story of Fisker is a story of ingenuity of an American company, a commitment to innovation by the U.S. government and the perseverance of the American auto industry,” said Vice President Joe Biden. “The Boxwood Plant is opening again, employing workers in Delaware, and is serving as a roadmap for all we can accomplish if everyone works together. Thanks to real dedication by this Administration, loans from the Department of Energy, the creativity of U.S. companies and the tenacity of great state partners like Delaware – we’re on our way to helping America’s auto industry reclaim its top position in the global market.”
Fisker, a startup based in southern California, expects to manufacture the Karma and Project NINA lines at a recently shuttered General Motors factory in Wilmington, Delaware. Fisker anticipates that it will employ 2,000 American assembly workers. Industry experts expect that domestic parts suppliers and service providers also will increase employment substantially.
“Not only will the Fisker projects contribute to cleaner air and reduced carbon emissions, these plug-in hybrid cars will help put American ingenuity at the forefront of automotive design and production,” said Secretary Chu. “And they will bring innovative cars to the market place while putting American workers back on the job,” Secretary Chu added.
Fisker’s plug-in hybrid products will be among the first to market and will help to accelerate the introduction of fuel-saving electrified vehicles in the U.S. When full production is reached in 2015, Fisker estimates annual sales at up to 115,000 vehicles. Combining Fisker projected sales volume with the expected sales volume of the Nissan Leaf and the Tesla Model S, sales of electric and PHEVs funded with DOE ATVM loans could exceed 300,000 annually.
Initially, Fisker Automotive will use the proceeds of the loan for qualifying engineering integration costs as it works with primarily U.S. suppliers to incorporate components into the Karma’s design. The engineering integration work will be conducted in Irvine, California, where engineers will design tools and equipment and develop manufacturing processes. The Karma is scheduled to appear in showrooms in late 2010. The second stage will involve the purchase and retooling of the former GM plant to manufacture the Project NINA line of PHEVs, which is expected to begin rolling off the assembly line in late 2012.
Fisker automobiles are driven by electric motors that get their power from a rechargeable Lithium-ion battery, or, when that is depleted, by a generator driven by an efficient gas-powered engine. The Karma and Project NINA models will have an all-electric, tailpipe-emission-free range of 40 to 50 miles on a full charge, more than most Americans drive each day. The battery can be charged at home overnight. Using gas and electric power, Fisker plug-in hybrids are expected to have a cruising range of up to 300 miles.
The Department of Energy’s Advanced Technology Vehicle Manufacturing Program supports the development of advanced technology vehicles with improved fuel efficiency that help reduce the nation’s dependence on oil. This is the fourth loan arrangement signed by DOE with an advanced technology vehicle manufacturer.