Bill Reichert, the Managing Director of Garage Technology Ventures, has a good elevator pitch for his new corporate fund for cleantech. In a nutshell:
Cleantech VCs, and particularly their LPs, are frustrated by lousy returns in the sector but cleantech isn’t dead! Embrace Corporate Investors. Help them find emerging clean technologies in Silicon Valley’s innovation ecosystem. This is not a typical venture fund, with LPs and GPs. Garage will co-manage the fund with the corporate partner, who can expect to be actively involved. The likely exit: the corporate partner licenses or acquires the technology.
“Nobody has more experience starting up start-ups than Garage,” said Reichert in an interview.
The new fund is admittedly small.
“Our charter is to put to work $20 to $40 million a year across four to six companies a year. We want to build a pipeline of early stage innovation that, over time, corporate partners could turn into product lines or business units.”
Garage Technology Ventures has been around since 1998, during the height of the Valley’s dot-com bubble. Most people know that Garage has invested in companies like Pandora, Tripwire, Hoku Scientific, WhiteHat Security and Simply Hired.
But Garage was also an early investor in Miasole, the thin-film solar manufacturer that was recently sold, at fire sale prices, to a Chinese firm.
“For most venture guys Miasole was a sad story,” said Reichert. (The list of sad solar stories is quite long at this point.) “But we sold a big chunk of our position in the third round. The third round was oversubscribed, and we saw the opportunity to get out. We sold half our position to guys getting squeezed out, and it proved to be a good move.”
The new fund is not focusing on energy generation, but material science, next generation lighting, converting biomass.
More recently, Garage invested in dlightdesign, which aims to replace kerosene lanterns with solar lanterns for people around the world.
Reichert will tell more Tuesday morning at the SV Forum at SAP’s offices in Palo Alto. He’s speaking on a panel called “Cleantech 2.0: A New Shade of Green,” moderated by Eric Wesoff of Greentech Media.
“It’s not about whether you are optimistic or pessimistic about cleantech as a sector,” said Reichert. “It’s about being savvy about investing in technology that is required to make progress in the future. If you peel back the cleantech umbrella, there’s an incredible array of innovations going on. There are big opportunities. There is a future.”