Eric McAfee is an entrepreneur, venture capitalist, and philanthropist, founding and funding companies in renewable energy, oil and gas, agriculture, networking devices and enterprise software. Given that level of success, I tried to absorb every word of his talk at last week’s Renewable Energy Finance Forum.
Among Eric’s key messages was that start-ups need big brothers. Just as people of my (unimposing) stature are rightfully afraid to walk through bad parts of town, we feel safer when accompanied by a six-foot-nine-inch, 275-pound friend.
This, of course, is one of the nice things about bringing on board a venture capitalist. In addition to providing the required funding to get the business moving, these people are fantastically well connected. The downside, however, is that this comes at the expense of losing control of your company — something many entrepreneurs simply cannot accept.
Another tack is taking on a strategic partner. Here’s where I see success coming for a number of the companies whose concepts I promote as cleantech investment opportunities. Instead of a passive investor who may be a high net-worth individual who wants to make a difference (though there’s nothing wrong with that), I often seek to create an alignment with a large, well-established player in a targeted industry who has the capital – both financial and human, the sales channels, etc. required to speed the product to market.