nuance intelligence

My latest column just ran at Colorado Biz magazine.  It investigates alt.energy investments at any level, from the WalMart shopper to President Obama.   Here’s an excerpt:

Angel-level investing
If you are a bona-fide angel investor, looking to cash in on clean-tech, there are two places where an investment of a couple hundred thousand dollars will actually create a reasonable return in a reasonable amount of time. Service companies are focused in two areas, distributed generation and energy efficiency or conservation.
Average cost: Investments in smaller companies are generally made in no less than $25,000 increments.
Expected return: In a recent study by the Kauffman Foundation, angel capital investments returned 2.6 times the initial investment over 3.5 years, for a 27 percent internal rate of return. Of course, performance here varies heavily, and 52 percent of investors in the survey received less than 100 percent of their money back.

VC-level investing
If you are a venture capitalist with a $100 million fund, you can start to look into the actual technology of the energy revolution. Thin-film solar, new battery technology, improved wind turbines and many other technologies are not quite ready for prime-time, but offer a huge upside if they hit.
Average cost: Expensive, with investment rounds averaging 10 times greater than parallel IT investments. An investment round may be $25 million to $100 million
Expected return: Very few clean-tech investment exits have happened thus far, and the investment horizon could be 10 years or longer. But the long-term potential is incredible.

More opportunities identified over at Colorado Biz.

It has been an exciting few weeks, with many high-end networking events in Boulder around sustainability, investing and clean tech.  While the financial crisis remains in full swing, many investors, entrepreneurs and thought leaders are looking to the future and charting the course for the next phase in the Boulder / Colorado / U.S. economy.

Trustworthy sources are telling us about multiple 8- and 9-figure funds being raised for clean tech and sustainability investing, as well as rumors of keen interest in that space from private equity.  The rumor of Kleiner Perkins posting a one-man team at NREL to help spin out investable clean tech companies is confirmed as well — we met him this week.  Vague inquiries are coming from as far away as Tel Aviv and Sau Paolo.

Or, as my partner Kevin Johansen is saying these days, “recession my ass!”

Leading Boulder Web2.0 companies are even hosting a job fair to bring more technical talent into town, although there are also rumors of layoffs at weaker firms.  It’s going to be a mixed bag in that space, and the wheat will quickly be separated from the chaff.

If you want to escape the doom and gloom for a day, and join a more prosperous and optimistic future, look no further than the Angel Capital Summit, November 21, in Denver. Highlights include:

• Anita Burke’s presentation on how to run a business in a world of Peak Everything (including capital, it seems).
• 40 of Colorado’s strongest entrepreneurial growth-oriented businesses presenting investment opportunities.
• A TOWN HALL discussion called Disrupting the Recession, where a diverse group of thought leaders will talk directly with conference attendees about how we can all come together to build an Entrepreneurial Renaissance in Colorado.
• Surprise visit from one of Colorado’s favorite political leaders.

I’d love to know what you think about all this.  The TOWN HALL is still evolving, and your input will help make it better.

Please join us on November 21st in downtown Denver for this community gathering during a unique moment in history.

I wrote last week about transcending (and including) the current financial crisis.  The inspiration for that piece was partially grounded in a column I had written for Colorado Biz magaine, which runs today.  Assuming (as I did in the blog post) that the world continues to operate after the bailout and election, some US economic sectors will be stronger than others.  And all signs indicate — and even the New York Times, in a relative comparison of city-by-city economies (pw req’d) corroborate — that a strong entrepreneurial trend is sweeping Colorado.

The trend is based on what many entreprenurial thought leaders — from investors to serial entrepreneurs to the lawyers and PR pros who live through the cycles — recognize as sectors that will thrive, even during a predictably rough national economic period.  These sectors are technology (and in Colorado, especially IT and web 2.0), energy and other CleanTech / GreenTech / Sustainability companies.

In the CoBiz column, I propose a few potential results of the current Wall St. banking crisis:

Many investing “truths” have forever changed. The question is: which ones? We suspect — and a quick query of investors this week has quasi-confirmed — that core investing principles are intact, but the situational realities as to who will be an interesting funding candidate are likely to be quite different.

Intuition suggests that fewer wealthy people will be making investments, but with the investment banking sector suddenly and irreversibly (lets’ check that assumption in a few months) extinct, more money and talent could focus on growth sectors like green tech.

It’s also possible that money will re-localize. Investors will want their money to be a bit more tied to tangible nearby investments as a backlash to the ideological bankruptcy of radical derivatives. Further, as investors take a deep stock of their values, the evolution toward a more holistic investing approach will amplify.

But that’s all speculation.  What’s real is that on November 21st, forty of the strongest Colorado start-up businesses will present to hundreds of venture capitalists and angel investors at the annual Angel Capital Summit.  And at the end of that day, we will present a once-in-a-generation opportunity to “not only learn about but participate in the co-creation the future of our regional business ecology.”

With Anita Burke telling us all how to measure sustainable business practices at lunch, and the as-yet-uncomfirmed special appearance by one of Colorado’s favorite political leaders open the day, it promises to be an exciting “first day of the rest of your career” type of experience.

Hope to see you there.

Over at the Business Catapult blog, we just wrote about the detailed and confusing report from the Small Business Administration (SBA) on angel investing.

One conclusion is that there are at least two major categories of angels — professional, accredited angels who number roughly 5,000 nationally and made just shy of 1,000 investments in 2006; and casual, unaccredited angels, who may number as many as 600,000 nationally, and could account for $20 billion injected into the US entrepreneurial economy.

In short, nobody does a good job tracking this data, because the activity is so distributed.  And while contradictions continue, we have yet to see any more comprehensive report.

Care to learn more?

Well, it took me a while.  I came off my game for almost two weeks.

But on a drive home from an inspiring meeting with Kevin (Johansen, my Business Catapult business partner and long time co-consipirator), I fully and completely transcended (and included, as the integral school teaches) the financial crisis.  That is to say, the crisis is a moment in time, and will be over sometime soon.  The future will have to include the history and (future) present of the impact of the crisis, but we will move beyond it.  So I am THERE.

If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss …

Yours is the Earth and everything that’s in it,
And–which is more–you’ll be a Man, my son!

What am I talking about?

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As part of our work in building a unique community that focuses on intelligent matching of entrepreneurs and investors, we have launched the Business Catapult blog.

Focused on the education of angel investors, and to a lesser extent, the provocation of venture capitalists, we break the blog down into three channels:

• 101: Investing Basics, including valuations, investment criteria and news and reports about investing trends.
• 201: Advanced Strategies, including managing an investment portfolio, advanced risk assessment and related issues.
• 301: Notes From The Cutting Edge, including investing in sustainability, clean-tech and emerging energy companies, venture philanthropy, disruptive technology and new investing memetics.

Thanks for taking a look, lots of smart stuff coming down the line over there.

As we laid out last month, entrepreneurial activity in Colorado is in the middle of a renaissance. While the national corporate recession hits the headlines and gas and food prices reach for the sky, our local startup scene is rocking.

David Cohen, one of Boulder’s celebrity VCs, announces two new fundings today at his blog, ColoradoStartups.com:

Symplified recently raised $6M from Granite Ventures and Allegis Capital.

Rally Software just raised $16.8M from Mohr Davidow Ventures (MDV) and existing investors Vista Ventures, Boulder Ventures, and Mobius Venture Capital.

I was at Rally today, talking with their CTO, Ryan Martens, about how smaller companies (the core of the Colorado economy) measure (and ultimately improve) their operations to become more sustainable. He talks in software terms, about ‘expanding the scope’ of business operations to include externalities and bring more costs and benefits on the balance sheet.Our discussion crossed a wide range of topics, and landed on an interesting observation. Ryan pointed out, “most sustainability consultants can’t help us. Unless you know how computer hardware is built, how firmware works, and how software is developed, you can’t help me reduce my emissions any better than a junior at CU (Jack, who happened to be sitting in the room).”

What’s the nuance?

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I feel really lucky. Since February, when I started Chapter 17 of what my good friend calls a ‘curious lifestyle’, I have attracted a unique group of people into the nuance orbit. This has been a rewarding and interesting path, one I have chronicled here with a modicum of success.

The most recent group on the radar is our newest client, Innovation Network for Communities (INC). Founded by partners John Cleveland and Pete Plastrik, INC has been designing and implmenting social systems for more than 20 years, in partnership with the leading industrial foundations of the midwest, including Ford, Carnegie, Kellogg, and many others, I’m sure. Their work has touched schools, urban transportation design, climate change, entrepreneurism and much more.

Their practice is rooted in the study of the emerging patters being unveiled in disciplines like complex systems theory, which begin to give us better models for social systems.

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Please take a second to review our revised clients page.  We’ve reorganized it, added some exciting new projects, and updated the descriptions of some of our partnerships, which have evolved in recent months.

Let us know how we can help you connect to these interesting opportunities.

We went live today.  It’s an exciting milestone.

Today we whisper.  Tomorrow we shout.