Tips for every algae startup

What are angel investors searching for in the cleantech sector? I listened to three unique answers to that question during a panel titled, "Angel Investors and Energy," at the Cleantech Workshop and Action Summit.
By | June 21, 2011

What are angel investors searching for in the cleantech sector? I listened to three unique answers to that question during a panel titled “Angel Investors and Energy,” at the Cleantech Workshop and Action Summit in Grand Forks, N.D. The answer to the question of what angel investors are looking for in a clean technology project, or a startup company working to commercialize an algae cultivation system or a wind turbine group developing a transmission system is simple: a lot. But there are several areas where capital seekers can focus their efforts and help their chances of making a project not only happen, but become a viable business.

The following is a list of tips, need-to-knows, must-haves or whatever else one wants to call what algae project developers should consider when trying to move out of the lab and into the marketplace.

To start, consider what Will Kusler, acting CFO of Ntractive (a software company specializing in the world of iPhones and Mac books), and a member of the Dakota Renewable Energy Fund has to say about angel investors. “Angel’s fund ventures for different reasons than we might think,” Kusler says, and those angels “can bear the scars of previous investments.” What does that mean? For Kusler, it means that when seeking out investment money, remember that knowing the story of the angels who you might be working with, is just as important as knowing your own story.

Next, “Think big, but define your path,” as Kusler says. “I see a lot of ventures that come into my office and say, “we have this energy opportunity and here are the hundred paths we can go with this.”” To be honest, Kusler told the crowd of would-be-entrepreneurs and cleantech investors, “I don’t really care about all of those.” The idea is to define a path and show investors (and this usually doesn’t happen and investors understand) that you can at least focus on a path. A path has an end, hopefully a viable business type conclusion. But in contrast, the alternative, an all-things to all-people type of technology can instead continually attract funding without ever arriving at an outcome or creating any real ROI.

Following that, remember this. No’s are necessary. “Every venture has more than enough reasons to say no,” Kusler points out. But, the goal of any project developer should be to minimize those no’s, while also highlighting the reasons to say yes. The more compelling the reasons are to say yes, the greater likelihood of getting your venture funded, Kusler says, and funded again in the future.

And that’s not all. A startup entrepreneur needs to know how to communicate with an angel. It’s an “art,” Kusler says. And if done right, communication can bring more than most entrepreneurs ever thought possible to their project. Return to “The Algalsphere” for more on the key aspects of angel investor communication, “perfecting the art” and why those no’s are actually a good thing. 

Correction: In the original posting of this blog Will Kusler was incorrectly identified as the CEO of Ntractive. Will Kusler never served in that capacity. The active CEO of Ntractive is Justin Bartak.