I’m at my favorite vacation spot in the Caribbean and it’s raining - a lot. Which isn’t all bad - it’s allowing Renee and I to get caught up on stuff and just be with each other.
It is also a good time for me to reflect on the past several months. Since September 2009 I’ve been with Zettasun - a solar panel startup that has some very special optical technology that allows a fixed panel to track and concentrate the sun as it moves across the sky.
My job as CEO (Cash Extraction Officer) is to raise money to build our panel - we did a few rounds of angel money to develop 4 prototype panels and we now need a real Series A. So for the last 8 months I’ve been out telling our story. Here is a list of who we talked to in order of what felt most logical:
- VCs who should invest (they’ve done other supporting type deals, they have enough money to support multiple rounds, they understand our sub-sector of the solar market, and they invest in early stage companies)
- VCs that could invest but their fund size might not be a perfect fit
- VCs that have competitive companies in their portfolio, new to cleantech/solar or are non-believers in the technology
- Strategic companies that want to support the cleantech space like contract manufacturers and material suppliers
- Foreign investors in Saudi Arabia, UAE, China, Jordan, Israel, Singapore, Taiwan and Canada
- Private equity/hedge fund guys
- Family funds / Indian tribal funds - but not really hard
- Armenian mob (not really - but close, we looked to go public on the pink sheets)
Well over 30 face-to-face meetings and over 100 in total.
I’ve always believed that if you have a great team and great technology you’d be able to raise money regardless of the market conditions. I now have a different opinion. The solar market has been soured by several high profile deals that after billions invested are still not showing a profit. On top of that, the price points that everyone thought they had to hit in terms of manufacturing costs continue to drop as a flood of cheap silicon panels from China hit the market. It has become the ole “catch a falling knife story.” When we met with potential investors - they all showed genuine interest - but they were preoccupied with their previous deals - much of the new money going into solar in 2009 and 2010 are either inside rounds or for much later stage companies.
Perhaps it is the team or the technology or the stage of our development, whatever the reason the cash did not come in when we needed it. So we made a very deliberate choice - we chose to stop engineering efforts and preserve the intellectual property of the company. We spent the entire month of April documenting everything we could to allow a restart and buttoning up our patent applications. We also left enough money in the bank to see the patents through issuance and allow some business development to continue.
In the end I never got to actually run or build anything - I spent 85% of my time fundraising and redoing presentations. I actually think we were late for fundraising and a bit early with our technology. If we were raising money in 2007 - I suspect we would be funded. Our technology, however, is most likely early for the market - the entire supply chain for our type of panel is still very immature. In a few years, it will either develop and our technology will be even more compelling or it will go away and the notion of concentrating PV will become the HD DVD of the solar sector.
So now I transition from CEO to investor/board member and the founders are keeping the patents alive while looking for a new investor or partner to restart the business when the time is right.
I really wish it all came together - but sometimes the market headwinds are working against you - great team, great technology - bad market. In this case, the right decision seems to just wait for the world to change.
