At the Cleantech Forum XVI in San Francisco on February 27, 2008, Assistant Secretary for Energy Efficiency and Renewable Energy Andy Karsner announced the three venture capital firms chosen to partner with the Department of Energy to place an Entrepreneur in Residence in national research labs. Each venture capital firm will select an entrepreneur to work very closely with a particular lab to speed commercialization of research in renewable energy technology.
I spoke with Steve Vassallo, Principal at one of the chosen firms, Foundation Capital, who explained that the different labs that are part of the DOE own the intellectual capital for the research done in the labs. Although the labs can generate revenue to support further research by licensing the intellectual property to businesses, they are not always eager to do this. For one thing is it complicated. Negotiating a licensing deal can be time-consuming and it is not necessarily the key skill of a group led by top research scientists. Whereas, commercializing new ideas is the expertise of venture capital firms.
With the Entrepreneur In Residence program, the DOE is adopting a model that has worked well for venture capital firms in the past, that is to pay an entrepreneurial person to find a business opportunity instead of just waiting for proposals to come to them. Of the origin of this public-private partnership, Vassallo says, “Secretary Karser is a private-sector guy in a public position.”
Foundation Capital will work with Oak Ridge National Laboratory in Tennessee, and they have chosen Michael Bauer, who was vice president of product management for BPL Global, a smart grid technology company as the first entrepreneur to work with the Lab.
Bauer will work side-by-side with researchers in the Lab to identify the most promising (and, presumably, most readily commercialized) of the Lab’s energy technologies, while also working closely with Foundation Capital staff. The cost of the Entrepreneur in Residence Program is split between the Department of Energy and the VC firms.
The other two VC firms chosen are Arch Venture Parnters of Chicago, working with Sandia National Laboratory in New Mexico, and Kleiner, Perkins, Caufield & Byers based in Silicon Valley, working with the National Renewable Energy Laboratory in Colorado.
This is the third in a series about funding green businesses. We welcome your questions or advice for other entrepreneurs.
Photos: Foundation Capital’s company photos