The Department of Energy and venture capital firms have something in common — they’re both looking for entrepreneurs to help commercialize early stage clean technology. And last month Assistant Secretary for Energy Efficiency and Renewable Energy Alexander Karsner named three venture capital firms that were selected to participate in a new Entrepreneur in Residence (EIR) program in association with the Department of Energy.
We got a chance to chat with one of those firms’ new EIRs: Foundation Capital’s Michael Bauer, who will soon be headed off to the Oak Ridge National Laboratory in Tennesee, where he will try to help move clean technologies out of the lab and onto the market. He’s looking forward to it and thinks, “Being in all these labs will be like being a kid in a candy store.”
E2T: What in your background will help you in the EIR program?
MB: I did my masters degree in theoretical physics before doing an MBA. At BPL Global I’ve been really focused on the smart grid and demand response applications.
E2T: What do you expect your daily life to be like at Oak Ridge?
MB: I’m actually expecting a lot of travel. What I want to do is connect with the scientists and understand the technologies that are eligible for licensing and commercialization in the renewable energy space and understand in detail how they work. At the same time I think it’s really important to connect potential customers with these technologies.
E2T: What sorts of technologies are you looking for?
MB: We’re really going into this with a pretty open mind. We’re going into the largest lab in the national lab system, and they have lots of work going on. They have lots of efficiency and renewable energy work going on but they also have great materials science research going on too.
In terms of specific technologies, Foundation has lots of energy efficiency investments so we’ll be looking for anything that could help that portfolio. On the renewables front we really need to see what’s there and complete a discovery mission at the lab before focusing on a specific area.
E2T: How long do you think it will take you to find a technology you want to build a business around?
MB: The program runs for 12 months. In the best-case scenario I will identify a technology in 6 months or maybe less. The counter to that is I want to give myself time to identify the most promising technology. It may take longer. If I finish early, Foundation would be able to send another entrepreneur to finish Foundation’s term at the lab.
E2T:Once you find a technology at Oak Ridge, what will be your next step?
MB: Writing a skeleton business plan around it and talking with customers and analyzing the competitive elements around it to understand how to build the company. Then I’ll have to know what sorts of human resources I need to build the company. All of these steps are necessary to convince me that what I have is something that can be turned into a company. Once I have all this in place, it should be fundable and then I can hire those people and build the company.
E2T: What exactly are the financial commitments of the DOE and Foundation Capital?
MB: The DOE will fund each EIR for $100,000 each year. I’ll be in constant contact with Foundation’s cleantech team and use them as a sounding board. There’s no commitment in either direction but given Foundation’s track record I’d be extremely happy if Foundation did invest in the company I want to spin out of this and I think there’s a strong feeling from Foundation that they want to invest as well.
E2T: What do you see as the biggest advantage of the EIR program?
MB: One of the great advantages of this approach is I come in and I have a portfolio of candidate technologies based on years of science. VCs want technologies with an unfair advantage. Here these technologies have a moat around them and I’m on the inside.
Photo courtesy of OutCast Communications.