Ecologia, Medio Ambiente y Energias Renovables en la Naturaleza

Recent developments in state policies are not making it any easier for green startups either. One of the United States Department of Energy's loan guarantee programs just ended last month with no replacement in sight any time soon.

Add something like the Solyndra affair and things become more volatile. Solyndra was the loan program's first recipient. Failing on its $535 million loan, it filed for bankruptcy last September.

With all these, many might opine that now is a bad time to start a business in the low-carbon sector. But Mitch Lowe, chief executive of Greenstart Inc, may think otherwise.

"It's always looks darkest before sunrise. The transition to a clean energy economy is the next industrial revolution, and the biggest financial opportunity we will ever see," Mr. Lowe says.

Last month, Mr. Lowe and his co-founders at the venture picked four clean technology companies out of 129 applicants that make products ranging from smart plugs and windows to fuel additives.

Those picked are now on the road to developing their ideas with the help of mentors and peers in Greenstart, a "startup accelerator" based in San Francisco.

'Accelerators'

From Silicon Valley in California to Silicon Alley in New York, business accelerators, also called incubators, are drawing attention from investors and attracting startups striving to be the next Google. Though both terms can be used interchangeably, Mr. Lowe said "accelerator" describes Greenstart best.

There were about 7,000 business incubators worldwide, 1,400 of which were found in North America, according to the National Business Incubation Association's 2006 figures. In 1980, there were only 12. But while their numbers indeed have grown, Mr. Lowe said Greenstart is the first and only one of its kind focused on fast clean tech.

"Fast cleantech" startups are defined as those that are capital efficient and capable of generating revenue in 12 months or less. Under Greenstart, Mr. Lowe said he could double their chance of success.

Unlike traditional business incubators, in which companies practically just share office space, accelerators are structured like intensive training boot camps, helping entrepreneurs through the earliest steps of building a solid business plan and a prototype or product ready for the market.

"Incubators tend to be a real estate business, whereas with an accelerator interests are fully aligned and the startups are there for a finite time period," he told EcoSeed.

"We like to think of it as giving a young company a burst of speed and strength, which will considerably increase their chances of success."

Greenstart accelerator programs combine small amounts of funding with large amounts of help and talent. It holds three business camps each year, beginning each January, May and September, with one event period lasting for three months. In this setup, between $25,000 and $100,000 is invested into companies for the prospect of a small ownership stake in them in the future.

The programs conclude with a pitch day during which teams show off their products to potential angel or venture investors, possibly leading to Series A. Greenstart kicked off its startup accelerator program last September 20 with its first four investments in energy efficiency, biofuels and smart grids.

Business guidance

But here's the better part. At Greenstart, selected startup teams work with a pool of more than 30 entrepreneurs and experts in the clean technology industry to pick up business skills such as marketing and managing cash flow.

"Unlike industries such as mobile, cloud and software," according to Mr. Lowe, "there is no established angel network to support cleantech startups at the phase just before they are ready for venture capital."

"Angels write checks, but most importantly they provide mentoring and connections. Most first-time entrepreneurs try to go it alone. This makes growing their ideas much harder than it needs to be because they don't have strong advisors or a network to tap into for customers, partners or suppliers.

"Accelerators can help. We at Greenstart want to provide both mentoring and help build networks," Mr. Lowe said.

It makes sense. Mr. Lowe said that although some companies they reviewed over the past months were organized to the point they were already earning revenue - disproving the idea that promising clean technology companies are a rare find - other companies were little more than ideas on a napkin.

Sop some of the mentors in Greenstart's list include Graham Hill, founder of Treehugger.com; Jim Matheson, a partner at Flagship Ventures; Susan Preston, partner at the CalCEF Clean Energy Angel Fund; Marc Tarpenning, founder of NuvoMedia and Tesla Motors; and Steve Wilhite, who has held executive roles at Volkswagen, Apple, Nissan, Hyundai and Jumpstart. This way, accelerators also bestow prestige that can help startups get buzz, clients or funding.

Some investors question how the model will hold up in the long term. The challenges of supporting a nascent industry now experiencing growing pains and raising suspicion among investors at the same time are great.

But Mr. Lowe said valuable investments won't wait for people who don't want to take risks. "By the time everyone things the situation is perfect, the best investment opportunities will have passed you by."

EcoSeed