Participants in a panel discussion during the final day of the Cleantech 2011 Workshop and Action Summit today in the Alerus Center stressed the importance of remaining focused on bringing a product to market.
The panelists offered advice on how to close the gap between research and commercialization of green energy-related technologies and processes.
“What you’re trying to do in this gap period is find ways of de-risking your idea,” said Susan Preston, managing director of the San Francisco-based CalCEF Clean Energy Angel Fund. “At the other end of the gap as you crawl across and you finally get there is a point where you have adequately de-risked your idea so you can actually say, ‘I am ready for my first customer and my first revenues.’ That’s the gap we’re trying to understand and help you get through.”
The first-year workshop and action summit, which focused on promoting clean energy-related research centers, included speeches, breakout sessions, panel and roundtable discussions and networking opportunities during parts of three days in the Alerus Center.
Preston said during today’s panel discussion on tackling the “golden gap” that it is important to make sure every step that is taken gets the product closer to commercialization.
She said angel investors want to know what will be accomplished with their funding and that the project is moving closer to the market.
Paul Batcheller, a principal with PrairieGold Venture Partners, a Sioux Falls-based early-stage venture capital firm, said not to lose sight of the intended audience when pitching ideas to venture capitalists and potential investors.
“The investor to some extent is your customer,” he said. “Really do your homework and really understand what your customer wants, what they want to hear. You are going to have to work through these different audiences to ultimately get your product to market.”
Gene McGowan, founder and CEO of the Sioux Falls-based McGowan Capital Group, a small private equity firm, said often the key stages of technology development, market development and funding are approached separately “almost in silos.” But McGowan said he favors the approach taken by South Dakota Innovation Partners, an early-stage venture capital firm that McGowan Capital was in the lead investor for, which included putting “all those people on the same team in the same place working for the same goals.”
“It really does take a village because all of those different people have to be involved at different stages to help get something from the idea stage to fruition,” McGowan said.
Participants need to be honest with themselves throughout the process, Preston said, realizing their strengths and limitations and considering partnerships. She said in some cases the person or group with the idea might carry it as far as they can before deciding the best course of action is to license it to a large corporation that stands a better chance of commercializing the technology and bringing it to market.
Preston and the other panelists said in addition to proving and commercializing an idea, the end goal is to create a viable and financially profitable business venture.
“The long-term goal of course it to be profitable and in some way return the risk that your investors took in you in the forms of liquidity, whether that’s cash or stock in a publicly-traded company,” she said.
Schuster reports on business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107, or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Follow Schuster on Twitter at @RyanSchuster.
