Erik Straser, a partner at Mohr Davidow Ventures, has led his firm’s cleantech investments in companies such as Energy Innovations, Jadoo Power Sytems, Recurrent Energy, ZeaChem, and Nanosolar. He obtained his PhD in engineering at Stanford, went on to work at Inteval Research Corp., a technology incubator funded by Paul Allen, and then at Los Alamos National Laboratory before joining the venture firm.
So he knows a thing or two about clean tech. We recently chatted with Straser about his latest views on investment and why the U.S. isn’t leading certain cleantech sectors:
Q: What areas of cleantech do you think have the most growth potential, and which would you avoid?
A: We don’t disclose interest areas. But I will tell you that most people think of cleantech as solar and biofuels, but there are huge opportunities across fossil fuels, as well as things to address global warming, and energy efficiency. People are realizing that this cleantech area isn’t about one single value chain. What’s happening in water isn’t related to what happens in solar or biofuels. It’s not a single industry, it’s a big, huge chunk of many industries.
Q: How does investing in cleantech compare to investing in IT?
A: It’s very different from IT. IT in the Valley has been fundamentally about following the innovation up the chain — there’s the transistor, the chip, the computer, the workstation, then LAN, then the LAN server, then the Internet, then media collaboration, then Web 2.0 — that’s a linear thing.
Q: What do you think it takes for a cleantech company to have a successful exit to the public markets?
A: It’s a little early to tell. A lot of people are watching the IPOs in the pipeline. They’re going to portend a lot. What is the bar to get some of these companies public? Can they go public in the concept stage? What are the metrics of valuation? There are a lot of questions still in the market about how that will happen.
Q: Looking at the energy bills making their way through Congress right now, do you think such government dollars are necessary to support early-stage cleantech companies?
A: We’re really focused on companies that can leverage, but don’t require those dollars to succeed. The United States is not the only market for many of these companies. We have many companies in our portfolio that won’t have a dollar from the United States. We shouldn’t conclude that the U.S. is a leader in all of these (cleantech) areas. It’s not clear yet. We’ve made huge inroads in wind, but if you look at our electric grid, we’re in trouble. Look at biofuels — Europe is ahead of us. Solar — we’re doing really good there, but there’s a lot of manufacturing in Asia.