Eco Innovator November 2011

Equity Capital

Australian Clean Energy VCs Recognized in US

Two US based Australian venture capitalists have been named among the Top Five Clean Energy Venture Capitalists And Principals by AOL Energy.

The two are Paul Fox of the California Clean Energy Fund (CalCEF) and Cathy Zoi of Silver Lake Kraftwerk. They join John Doerr of Kleiner Perkins, Alan Salzman of Vantage Point Capital, and Nat Goldhaber and Paul Straub of Claremont Creek in the top five.

Founded in 2004, the US$30 million California Clean Energy Fund is a non-profit evergreen fund of funds, and was one of the clean energy industry's first venture capital fund-of-funds.

Dan Adler, who is CalCEF's president and was named in the top five along with Mr Fox, says its mission to blaze a trail and create a culture of clean energy investment in California has been successful. The AOL Energy citation says "Although its fund is relatively modest, CalCEF was influential in that it started investing in clean tech when other VCs were yet to catch on."

CalCEF also established the CalCEF Clean Energy Angel Fund, the US's first seed stage investment vehicle for clean energy.

Mr Fox is an expatriate Australian now living in Silicon Valley. He joined CalCEF's Angel Fund in 2009 and is a general partner. AOL Energy described him as an engineer and "Australian entrepreneur turned investor".

Australian venture capitalist in Silicon Valley, Paul Fox.

Mr Fox said CalCEF helped kickstart the clean energy investment trend in Silicon Valley. "There were few VCs doing cleantech back in 2003 or even 2005. CalCEF's early investments in Element, Nth Power and Vantage Point in 2005 were designed to catalyze investment. Then in 2006, surplus capital from other investment sectors, high gas prices, and "An Inconvenient Truth" brought a flood of cash.

"But there was still a gap at the seed and early stage, which is why CalCEF created our Angel Fund in 2008. CalCEF's role is still very much directed at closing the most serious gaps at all stages of clean energy financing."

"Naturally I am sympathetic to Aussie companies," said Mr Fox. "At CalCEF Angel Fund we have looked at a dozen or more Australian clean energy companies over the past couple of years. One of them made it all the way to the investment committee, but we deferred the investment decision.

"The challenge for Australian companies is that US early stage investors like to invest close to home. Later stage investors, i.e. post revenue stage, may be willing to put cash on a foreign entity, but 99 per cent of early stage investors won't. Most of the global clean energy venture capital is in the US. We have to think about that when we develop a strategy for syndication and the risks for securing follow-on investments.

"The implication is that the Australian company usually needs to set up an office in the US and hire a local team. We can help them, but establishing that beachhead takes cash and commitment on the part of the company. Bridging the Pacific is the additional "financing gap" that Australian tech companies face on top of all the other hurdles they face," said Mr Fox

The Angel Fund's portfolio comprises REEL Solar, a developer of thin film solar technology; Alphabet Energy which is commercializing an inexpensive waste heat recovery technology using thermoelectric materials; Allopartis Biotechnologies which provides technologies for improving the efficiency and decreasing the cost of converting sustainable biomass products into clean fuels; and Lumetric, a provider of intelligent, controllable and efficient high output lighting for large areas.

Cathy Zoi
AOL Energy said Silver Lake Kraftwerk "managed to secure $1 billion in funding from George Soros to provide growth capital to business innovators in the energy and resource sectors. Silver Lake Kraftwerk (SLKW) is led by Adam Grosser from Foundation Capital, which has made substantial investments in the Smart Grid sector such as Silver Springs Network, EnerNOC, Sentient Energy and eMeter.

"But SLKW made a star signing with the appointment of Cathy Zoi, former assistant secretary for energy efficiency and renewable energy at the US Department of Energy. Grosser made no secret of the fact that Zoi will be a huge asset in interpreting the market opportunities – and limitations – that arise from government policy," said AOL Energy.

Originally from the US and now living there again, Ms Zoi is also an Australian and lived here for about 12 years. While here she was executive director of the Sustainable Energy Development Authority for the NSW Government. Her husband still believed to still have a recycling business in Australia.






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