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Cleantech and renewable Energy Newsletter

MAY 2011

U.S. Renewable Energy Market Finance: Recent Trends in Inbound M&A Investment

Mark Weitzel and Mitch Zuklie Named Top Clean Tech Lawyers

Energy and Infrastructure Projects Recognized with Six "Deal of the Year" Awards

Upcoming Events:
Chinese Investment in U.S. Renewable Energy
June 1

8th REFF-Wall Street
June 21 - 22

4th Annual Utility Scale Solar Summit
September 13 - 15


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In this edition of our Cleantech & Renewable Energy newsletter we bring you our first "60 Seconds" segment, which will be a Q&A session with industry leaders. Our first "60 Seconds" is with Ullas Naik, Managing Director at Globespan Capital Partners, in which Ullas shares his thoughts on the latest trends and opportunities in the cleantech sector. In addition, we continue to bring you the latest legal, market and financing trends effecting the cleantech and renewable energy industry. We hope you enjoy our newsletter.


Legal Alerts and Government Initiatives

DOE's 2011 Strategic Plan Aims at Doubling Renewables by 2012
Press Release

AB 32: California 'Cap And Trade' Program Suspended By Judge
Huffington Post

FERC Update:  Demand Response, Rejoice! Negawatts Put on Equal Footing With Generation
Press Release

Energy Funding Remains Strong in FY2011 Federal Budget
McBee Energy Insight

ARPA-E Launches Five New Programs With $130 Million In Funding
Advanced Research Projects Agency - Energy


Orrick's Featured Deal

Orrick Recognized By PFI for California Solar Project


Market Headlines

Most Nuclear Plans on Track Outside Japan, Germany
The Nuclear N-Former

Beijing Sets Plan for Massive EV Adoption
Renewable Energy World

U.K. Wagers on Wave Energy

First Solar Collaborates in China
Global Solar Technology

China Solar Market Expected to Grow
NZ Exporter


60 Seconds With...

Ullas Naik

Ullas has been a Managing Director with Globespan Capital Partners since the firm's inception. He is based in Globespan's Palo Alto office where he leads Globespan's Cleantech investment practice.  He also focuses on investing in Enterprise Computing and Internet/Mobile companies.


Orrick: What subsectors of the cleantech market are you looking at most closely now?

Ullas: We are continuing to look for new breakthrough technologies in solar, biofuels and bio chemicals.  We are also looking for innovative companies in lighting, business intelligence in the energy markets and in energy efficiency applied to the grid and to the built environment.

Orrick: Do you focus on a couple of subsectors and technologies of the cleantech market at a time?  Are there subsectors that you look forward to focusing on 12 months from now?

Ullas: We look at all the markets listed above.  We will continue to look at those spaces over the next few years.  An area that's also of interest to me over the next few years is affordable consumer-oriented energy generation technologies such as fuel cells.

Orrick: What advice do you have for companies seeking Globespan capital?

Ullas: My guidance would be this - if you have a breakthrough idea in the markets listed above and have a passion for building significant companies that contribute towards changing the energy mix of the world towards sustainable sources, then please come talk to us.  We will work with you to strategize on how to build a very meaningful company in a capital-efficient manner.

Orrick: Are you starting to see repeat entrepreneurs in cleantech?  Are we starting to see the beginning of a community of successful cleantech entrepreneurs who can provide industry-specific advice and contacts to the next generation, like we do in IT, or are we not quite there yet? 

Ullas: I do not believe we are yet at the point that we have a flow of serial cleantech entrepreneurs.  That said, I am confident that in the next 2-3 years, as some of the leading cleantech startups begin to go public, they will graduate many entrepreneurs and managers who will have gone through the experience of having built the first generation of successful cleantech startups.  They will have the benefit of going through the experience of building these companies through some very difficult times in the last couple of years when the financial markets became very challenged.  Access to this set of experiences will be invaluable for the current and next crop of cleantech startups.

Orrick: You made your first cleantech investment in Calisolar about 5 years ago.  That was back when the investment community was formulating its first hypotheses about the nascent cleantech industry.  What lessons do you think we've learned about cleantech companies since that time?

Ullas: The most important lesson has been around the challenges of finding capital to help our companies through the scale-up of their manufacturing plants.  When the venture industry had begun investing in cleantech in 2005/2006, there was an abundance of capital for manufacturing operations.  However, once the financial crisis occurred, all available capital was sucked out of the system.  As a result, the venture capital industry had to invest significantly more than it is accustomed to (or had anticipated) in those companies.  This has resulted in a subsequent search for more capital efficient business models in which to invest.  Another good lesson we have learned is the power possessed by the incumbents in the cleantech space.  In Silicon Valley, we are accustomed to the idea that start-ups can take on an industry and disrupt the incumbents.  In cleantech, the incumbents have to be viewed as partners.  Given the capital intensity of the cleantech startups' manufacturing operations, they often need access to the significant balance sheets of the incumbents to help them scale-up their manufacturing.  In addition, the incumbents can often be the off-takers (customers) of the startups' products.

Orrick: What are your views on the argument that venture opportunities in solar are more limited now due to the large scale manufacturing and low production costs achieved by Chinese solar makers?  Is it better now to be a solar developer than a solar panel innovator these days?

Ullas: I agree that the number of solar investment opportunities that require significant capital expenditures for manufacturing (or project development) are more limited today.  There isn't much appetite among the venture capitalists for those types of models.  That said, we have recently invested in two highly innovative solar companies that are predicated on significant intellectual property development and an outsourced (and thus capital efficient) business model for manufacturing.  We will see more of these types of investment opportunities in solar, fuels, chemicals, etc. in the future.  By the way, I am not sure about being a solar developer in today's environment either.  The development business can be a reasonable business, however it also requires a meaningful amount of capital to be invested into it.  If you're an entrepreneur who wants to change the energy landscape in the world, the opportunity still lies in developing breakthrough innovation.


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