The famously private investor David Gelbaum, founder of The Quercus Trust, and who by his own estimates has between 40 and 50 cleantech investments, as a rule hasn’t done interviews for years. According to the last comprehensive story on him, published in the LA Times in 2004, the former math whiz, hedge fund manager and philanthropist, is so anonymous he’s sometimes mistaken for his gardener. But this afternoon, on the heels of Gelbaum accepting the role of CEO of one of his portfolio companies Entech Solar (the first time he’s taken over as CEO), Gelbaum got on the phone with us to chat about the potential of solar, how he’s lost money in greentech so far, and his focus on making some returns.
1). Why did you take the job as CEO of Entech Solar?
David Gelbaum: I have always been active with our portfolio companies, but this is the first time I’ve been CEO. But I’m passionate about the company, I’ve got an understanding of it and it turned out the board agreed with me. This is a company which I’ve been the most closely involved with — I’ve been working with the team and I know a lot of the people and I’ve been functioning basically as an executive already.
2). Can you tell me a bit more about the process of starting the Quercus Trust? What inspired you?
DG: The Quercus Trust is just an estate planning fund, and I picked the name Quercus Trust because I like oak trees (quercus stands for oak). In 2006 I decided to get into cleanech investing. I was looking around to start making some money and I had some understanding of solar, so I looked at that. It looked really promising, particularly when I realized we were close to solar being at economic parity with fossils.
3). So your cleantech investing through Quercus Trust is meant to make money, in contrast the your philanthropy work?
DG: Yes, I don’t need to make money on this in order to live, but yes, the goal is to make money off the investments.
4). Have the returns in greentech been what you expected — do you have exits yet and if so what?
DG: I havent had any exits and I’ve lost money in this business. It’s just part of the general shortage of credit.
5). Kleiner Perkins’ John Doerr said a couple months ago that if he’d foreseen the credit crunch and the recession, he’s not sure if his firm would have gotten into cleantech back when it did. Have you had similar thoughts?
DG: No, I’m glad I’m in this. I’m very optimistic.
6). What are the sectors you’re most bullish on?
DG: I think most of my investments have huge promise, and many of them are intertwined. Solar can’t go forward without the smart grid, because of the intermittency measures of solar. They all have huge upsides.
7). Are there any areas that you’ll be making more investments in going forward in 2010?
DG: Mainly follow-on investments and focus on getting the current ones to make money.
8). How many cleantech investments have you made to date?
DG: Somewhere between 40 to 50.
9). How have the stimulus funds affected the industry and your investments?
DG: Well, for the companies that got government funding, it’s been good. But for the ones that haven’t it’s been negative. I’m glad that they’ve continued to extend the tax credits for years.
10). You’re just starting to open up and do interviews now that you’ve take on the CEO role. What was the reason for being so quiet and do you expect you’ll be talking to the media more going forward?
DG: It’s just been about being a private person. I expect I’ll be doing more interviews — I’ve done more interviews today than I have done over the past five years.