What is California Clean Energy Fund and what is its interest in early stage investing?
The California Clean Energy Fund (CalCEF) is a nonprofit corporation formed in 2004 to accelerate investment in California’s clean energy ecosystem. Established as a result of the Pacific Gas & Electric (PG&E) bankruptcy, CalCEF seeks to promote the growth of companies developing a wide range of clean energy technologies that will bring economic and environmental benefits to California. CalCEF has a number of programs in place to provide financial and intellectual capital to promising clean energy companies at various stages of the investment life cycle. Of particular note, CalCEF is currently building a later-stage evergreen clean energy investment portfolio that combines thought leadership and investment capital to produce market-based returns and support California’s world-leading policy objectives. A core element of CalCEF’s mission is to identify and address gaps in the clean energy funding cycle. Given the wide and ever increasing gap in investment funding for seed and start up clean energy companies, the launch of an angel fund is a natural extension of CalCEF’s approach to the clean energy market. CalCEF’s domain expertise, its experience in building a clean energy investment portfolio and its relationships with investment managers and clean energy stakeholders position CalCEF to bring critical resources to the Angel Fund.
What is the relationship between the CalCEF Angel Fund and CalCEF?
The Angel Fund and CalCEF are two separate and distinct organizations. CalCEF is a non-profit mutual benefit corporation and the Angel Fund is a for-profit limited partnership. CalCEF is the founding limited partner of the Angel Fund and will contribute investment capital and domain expertise to assist the Angel Fund in sourcing, evaluating, selecting and mentoring portfolio companies. CalCEF will also have one permanent seat on the Investment Committee and one additional seat for the first two years of the Fund’s investment cycle. CalCEF has also lent its brand name and equity to the Angel Fund.
The primary objective of the Fund is to produce a return on investment for its limited partners. A second and equally important objective is to create a successful financing vehicle providing investment capital to promising seed stage clean energy companies.
What is the investment focus of the Fund?The Angel Fund will invest exclusively in the clean energy industry, utilizing its unique value proposition for access to robust deal flow, technology analysis and post-investment growth support. The Angel Fund limited partners understand the unique concerns and opportunities facing companies in this market from regulatory requirements to end-user needs.
The stage of investment will be seed or start-up businesses. The Fund expects to develop a portfolio of 12 – 15 companies. The optimal size of investment will likely range from $300 – 500,000 to ensure both a diversified portfolio and an appropriate reserve.
Will the Angel Fund be California focused?No. The Angel Fund will consider investments throughout the United States. It is noteworthy, however, that as the largest clean energy market in the world, California represents a strong opportunity for the Angel Fund.
