To your comment that many of these companies are less than five years old, I should note the report focused primarily on young startups. It seems fair to say there’s some degree of “wait and see” for any startup in this sector. In this report from Lux, the companies marked as “wait and see” also fell into other categories on a grid based on a set of weighted criteria. Clearly I wouldn’t disregard the report altogether — it serves at the very least as a starting point for discussing what really makes for a strong biofuel startup.

How can revenue per employee be measured for pre-revenue start-ups? Did these companies volunteer this information? Most of these companies are less than 5 years old, but it takes a little over 3 years for a patent to be published. How can they know for sure how the real IP that such a young company has established? Exactly what “other data” was obtained? Was it willingly or legally obtained? Most start-ups don’t volunteer any of the really juicy details.

How can “wait and see” be a category by itself? That seems to infer that they just don’t know what they’re talking about so they’ll group them as such. That along intimates that the rest of the report is equally uninformed.

Further, each of those companies (Ze-gen, ZeaChem, Coskata, Solix) is less than 5 years old and have scaled pilot facilities in operation. They all have quality investors behind them. Why is Mascoma singled out?

Further, quality investors is not a proxy for success. There are many determining factors for getting investment involvement, valuation not the least of them. It should be noted that even though Iogen was backed by Goldman and Shell, Shell and Goldman have both divested direct ownership of it (Shell’s share in Iogen was included in the recently announced JV with Cosan). So even though they had quality investors, they have, in the last six years (including years with available financing capital), failed to develop a commercial scale facility. That doesn’t speak well of the overall scalability and inherent economics of their technology (doesn’t make it a failure either). So why do they garner a ‘strong’ rating when their longer track record doesn’t include commercial success?

This report doesn’t present any particular insights and probably should be disregarded altogether.