Foundation Capital is a disciplined greentech venture investor. The VC firm has attempted to stay away from billion-dollar solar factory investments like Solyndra and Nanosolar or the materials research and fuel cell manufacturing done at Bloom Energy.
However, Foundation has invested in some of the more capital-efficient solar firms such as SunRun and Azure Power, as well as a number of smart grid investments such as eMeter, EnerNoc (now public) and Silver Spring Networks (although Silver Spring might be hard to categorize as capital-efficient with more than $250 million invested so far).
I interviewed investor, General Partner, and orienteer Paul Holland of Foundation Capital about the firm's portfolio and investment strategy.
"We've never been big believers in the whole supply-side," according to Holland. Instead, Foundation has focused on "the demand-side problem."
In fact, Foundation's Steve Vassallo authored a "Smart Grid Manifesto" to "help drive a single point of view across our four Smart Grid portfolio companies." According to the author, "Smart Grid and smart pricing together answer the riddle of how you get market forces to make a difference in a monopoly environment."
Here's a video of Foundation Partner Warren Weiss discussing the smart grid.
Holland spoke about the coming evolution of the smart grid. He said "We've invested in the platform [of the smart grid]. The second wave is going to be even more interesting. The platform pieces are starting to coalesce and form, and soon we're going to see energy usage applications."
Holland commented about Foundation's other investments and views:
- SunRun: Solar as a Service -- offered by SunRun -- will drive adoption. Installing solar has to be as easy as ordering a take-out meal.
- Serious Materials: Their Ecorock product is being demonstrated at Holland's LEED-certified home, although sales of the product have been hindered by the lack of new home builds. Retrofits, however, like that at New York's Empire State Building, are a great opportunity for Serious' window product. Holland likened the window's thermal profile to that of a "visible wall."
- If a startup presents a business case that hinges on a particular carbon price, "we automatically reject it."
- Twelve out of twelve of their cleantech portfolio firms are run by by former IT guys.
Here's a video of Paul Holland introducing President Barack Obama at a nationally televised White House Cleantech event.
And here is Foundation's take on the smart grid:
Green Kingpins Part 1: KR Sridhar of Bloom Energy
Green Kingpins Part 2: Craig Venter of Synthetic Genomics
Green Kingpins Part 3: John Doerr of KPCB
Green Kingpins Part 4: Vinod Khosla
Green Kingpins Part 5: Paul Holland and the VCs at Foundation Capital