Elevator Pitch: Josh Green of Mohr Davidow Ventures

Welcome back to Elevator Pitch, a weekly Q&A feature that puts top Silicon Valley tech investors under the spotlight and gets them chatting about what kinds of deals they’re looking for — and the common pitfalls that can trap entrepreneurs.

This week’s victim guest is Josh Green, a cleantech investor at Mohr Davidow Ventures who just became chairman of the National Venture Capital Association.

Q: HOW’D YOU GET INTO THIS RACKET?

A:  I was a lawyer in Silicon Valley for 20 years and helped build two law firms [Venture Law Group and Brobeck, Phleger & Harrison] to about 150 lawyers each.  I then became a high school basketball coach for eight years, which I like to call the startup that brought me the greatest “internal rate of return.”

In 2006, Mohr Davidow Ventures asked me to join them and focus on clean technology investing.  I liked a sector that was just trying to get itself off the ground.  It reminded me a lot of Silicon Valley back in the 1980s.

Q: WHAT DO YOU LIKE ABOUT VENTURE CAPITAL?

A: The same things I liked about being a lawyer: I get to be involved with incredible entrepreneurs who are changing the world. Startups are like orchestras, with the entrepreneurs acting as the conductor.  As a lawyer, I played one instrument, and as a venture capitalist, I play another.

I have now been involved with over 250 startup companies, and they are all unique and different.  My role calls on different skills and different advice each and every time.  I really enjoy that challenge.

Q: WHAT KINDS OF PITCHES ARE YOU LOOKING FOR RIGHT NOW?

A: These days, I’m most interested in cleantech IT, or cleanweb, deals.  These are companies that make extensive use of IT technology — specifically the Internet — to deal with resource constraints and inefficiencies in energy generation, transmission and use.

Q: WHAT’S THE BIGGEST MISTAKE ENTREPRENEURS MAKE?

A: They often think that they need to do everything themselves.  It’s completely understandable; they’ve employed a DIY approach to get their company started, and done it against the odds. While there are over 50,000 companies funded with angel money each year in the U.S., only about 1,200 are funded by venture capitalists.

That’s often why, once the VC becomes the boss on the board of directors, the entrepreneurs don’t want to show weakness by asking for help.  However, it truly takes all stakeholders to make a startup successful, so I would encourage them to be more inclusive in calling upon others.

Q: WHAT’S THE NEXT BIG THING GOING TO BE?

A: From where I sit, I think it will be cleantech IT.  It’s capital light, more closely resembles classic IT and can produce exits within the time frames that our limited partners expect of us.

Q: CLEANTECH SEEMS LIKE A PRETTY BRUTAL SECTOR, GIVEN THE DEARTH OF IPOS AND THE WAY COMPANIES LIKE FISKER HAVE BECOME POLITICAL FOOTBALLS. WILL IT BE A LONG SLOG UNTIL CLEANTECH HITS ENOUGH DEMAND TO REALLY SCALE?

A: Yes, the sector’s obstacles seem daunting.  However, there are also incredible success stories — some of which we all know, and others that are not yet in the public’s eye.  Tesla is a great example and one that has received a lot of press. I sincerely believe we are in the very beginning where cleantech success stories are concerned.

There are other companies, such as those producing chemicals from biomass rather than oil, that are producing millions of pounds without much fanfare or notoriety.  The best part is that it’s all at a lower cost than oil-produced chemicals. These companies will change our lives and hopefully get the credit that they deserve.

Q: ARE CLEANTECH’S REGULATORY ISSUES SURMOUNTABLE?

A: We’ve all seen how a few misguided or careless government regulations can have an unintended, negative impact on the fragile startup community.  I expect that this will continue, probably in ways that we least suspect.  So, I am particularly focused on companies offering great value propositions to enterprise customers that are as far away as possible from the vortex of regulation.

Q: YOU JUST BECAME CHAIRMAN OF THE NVCA. WHAT BIG POLICY ISSUES DO YOU THINK THE ASSOCIATION WILL BE TACKLING IN THE NEXT TWO YEARS?

A: Well, right now, I am focused on just the next two months.  Immigration reform is definitely a here-and-now issue that will impact every portfolio company of every VC.  It is incredibly important to get this right and get it passed now.  It’s already long overdue.

Next, we see tax reform being debated sooner rather than later.  We have many issues at stake here, including maintaining capital gains treatment for both VCs and entrepreneurs.

Q: THE NVCA DID A LOT OF WORK LAST YEAR TO HELP GET THE JOBS ACT PASSED.

A: With the JOBS Act, we have built a beautiful on ramp to an IPO.  I am very proud of it. Next, we need to repair the IPO highway in order to stimulate a vibrant and active small-cap trading market.

There are many other issues coming up, including cybersecurity, privacy, implementation of healthcare reform, and energy policy.  I don’t expect there to be any dull moments.

 

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