NEXUS-NY Blog


Leveraging Upstate NY funding sources to spur next generation clean energy companies

The NEXUS-NY Clean Energy Accelerator has worked with dozens of emerging clean technologies – ranging from renewables and energy storage, to wind turbines – all of which have great potential. But with the continued decline of cleantech angel investments and venture capital, clean energy company founders frequently stress difficulty locating funding sources to commercialize their inventions.

 

VC investment in cleantech companies on the decline

 

Hear from some of our founders on Overcoming Hurdles on the Track of a Clean Energy Future

NEXUS-NY aims to assist clean energy companies with their proof-of-concept and go-to-market strategies. These fresh commercialization tactics include ensuring the availability of capital to help bring breakthrough cleantech to market. Whether in the form of solar panels, new kinds of batteries, or even environmentally-sustainable dog treats, providing new and more diverse approaches to finding funding sources for New York’s great cleantech companies is a NEXUS-NY priority.

“For the past four years, NEXUS-NY has been focused on providing the resources and know-how to catalyze commercialization of clean energy innovations discovered by New York researchers,” said Doug Buerkle, Executive Director of NEXUS-NY. “In that time, our clean energy seed accelerator has helped form 20 companies; half of which have gone on to raise roughly $20 million in additional funding. This is a testament to our program and the strong partnerships we have developed with equity investors such as Excell Partners.”  

Upstate NY VC firm believes in partnerships to help commercialize innovative clean technologies

Excell Partners, Inc. is a seed stage venture fund that invests in emerging technology spinning out of Upstate NY universities and our regional communities. With a portfolio of nearly 50 companies and counting, Excell is playing an important role in accelerating the commercialization of game-changing new technologies, including cleantech.

“Rami (Katz) and I have known each other for years,” said Theresa Mazzullo, CEO of Excell Partners.“ He was working for High Tech Rochester and our paths would cross regularly. Our organizations have been strong collaborators from the start.”

High Tech Rochester (HTR) is a nonprofit with a mission to be a catalyst for entrepreneurship and innovation-based economic development. HTR provides a suite of services including technology commercialization for very early-stage opportunities, business incubation for high-growth startups and growth services for existing manufacturing companies seeking to improve their top and bottom-line performance. The NEXUS-NY clean energy proof-of-concept center (POCC) is one of the programs under the HTR umbrella.

“When NYSERDA came out with the POCC program, we knew it was something HTR wanted to pursue,” said Jim Senall, President of High Tech Rochester. “We were excited about the prospect of leveraging our previous lean startup experience, and applying that to very early stage opportunities, that were mostly physical sciences based, and not even actual companies yet. With partners like Excell Partners, we knew we could build a world class program, and we couldn’t be happier with the results so far!”

Excell Partners, Inc is a statewide brand. Whether the fund is interested in investing in companies out of Rochester, Buffalo and Syracuse, Excell’s leadership team first looks for venture development agencies like High Tech Rochester, and resource programs such as NEXUS-NY that are wrapped around the technology.

“Everything is about relationships. Life is about relationships. It’s that simple. We’ve known HTR for a long time. There’s a comfort level and mutual trust with all the people in the organization,” said Theresa. “Upstate and the Finger Lakes region have been operating on fumes for so long. I feel we’ve made great strides with very little resources, and this is because we try to see how we can help each other regularly. You don’t typically see this kind of relationship in other places. We’re proud of it,” added Theresa.

“We realize there are limited funding sources to go around, so we’re very thoughtful in how we approach each investment,” said Rami Katz, COO of Excell Partners. “It’s about partnering instead of going it alone.”

The collaboration between NEXUS-NY and Excell starts early with due diligence

Standing on the policy of how Excell and NEXUS-NY work together, Rami says the proof-of-concept center does a great job at sourcing and vetting early-stage clean energy technology from across the state.

“Before we decide to invest, Excell enacts a thorough due diligence process that includes five strategic steps. By design, and throughout our partnership, we have originated these steps into  the NEXUS-NY application process. This helps us provide feedback on the promise of the young companies very early in the process, much earlier than most VCs.”

This collaboration allows for the team of coaches at NEXUS-NY to work closely with the companies and founders, while Excell provides an outside perspective. Each NEXUS-NY participant meets with Excell at least twice throughout the accelerator. These meetings, and Excell’s feedback, are structured to identify specific gaps that must be addressed in order for a specific company to improve its chances of obtaining venture funding.

“This process is what truly differentiates Excell Partners from other venture funds. The first meeting is what we consider a ‘friends and family session.’ We tell them to stand up straight, get rid of a slide from their pitch deck and slow down their presentation,” explained Theresa. “The second round includes pairing the teams with domain experts. These professionals help challenge the tech at a deeper level.”

To date, Excell Partners has invested in four NEXUS-NY portfolio companies

Excell Partners reviews approximately 1000 deals a year. This gives them an overall picture of what is available in New York State. About 150 of those applications are reviewed in depth, and roughly 50 are considered for investments.

“Our experience gives us a good feel for what makes a good opportunity. We make sure the market is large enough, there are resources in the founder’s community to help the company grow faster, and check if they have the right management team in place,” said Rami. “If we feel confident in these areas we look for elements in which we can help close the gap, and ultimately push the venture forward.”

Participants of the NEXUS-NY program receive up to $75,000 of equity-free direct financial support, which is largely supported by the New York State Energy Research and Development Authority (NYSERDA).

NEXUS-NY portfolio companies Excell Partners has invested in include:

American Fuel Cell (Rochester) – Premier supplier of individually tailored Membrane Electrode Assemblies (MEA) for multiple Fuel Cell applications;

Conamix (Ithaca) – Commercializing new Cornell technology that has the potential to dramatically increase the performance of lithium ion batteries;

Full Circle Feed (Syracuse) – Healthy, environmentally-sustainable dog treats made from meats, vegetables, fruits and breads from restaurants that make more that can be served; and

Molecular Glasses (Rochester) – Develops organic semiconductors for OLED and organic electronic applications, which can be used to manufacture lower-cost and high-performance TVs, smartphones, tablets and lighting devices.

“We realize the amount of money we put in alone isn’t always sufficient. The company may need additional capital in 18-25 months. So we address this up front by leading the deal and committing to helping the company seek other funding sources or capital matches,” explained Rami. “This is why building strategic partnerships is so important to us, as seen in several successful co-investments with HTR, as well as other funds and venture development organizations across New York State.”

Recently Excell was selected by Empire State Development as the only fund manager for a pilot minority grant. Through this appointment, Excell was able to assist in getting Molecular Glasses certified as a M/WBE business, and eligible for matching funds from the state. “With Excell’s assistance, we were able to complete this process successfully,” said Mike Molaire, Founder and CEO of Molecular Glasses.  Molecular Glasses was selected as one of five companies in the state to receive funding to spur M/WBE innovation, entrepreneurship and job creation.

“Our mission is to assist clean energy companies commercialize. Continuing to partner with local investors like Excell Partners, and connect our founders to more novel sources of funding such as Shell’s GameChanger program, is a strategy we stand by at NEXUS-NY,” added Buerkle.

Ready to commercialize your clean energy innovation? Apply online to pitch Excell Partners or contact NEXUS-NY to learn more about our proof-of-concept accelerator.

Two NEXUS-NY Companies Make 76West Clean Energy Competition Finals

Biological Energy (Cohort 2016) and MicroEra Power (Cohort 2017) have been selected as finalists for the $2.5 million 76West Clean Energy Competition.

Biological Energy is located in Spencer, NY. The company has developed a breakthrough, patent-pending technology for wastewater treatment that reduces energy use, increases water treatment capacity, and eliminates greater than 95 percent of environmentally harmful nutrients, which leads to significant reductions in residual bio-solids such as landfill waste. This is their second year competing in the 76West Clean Energy Competition.
MicroEra Power is a Rochester-based company commercializing novel. ultra-efficient stationary power generation solutions for commercial customers that help produce monthly energy savings and reduces generator footprint.
76West Clean Energy Competition finalists were selected from 15 semifinalists and dozens of applicants from across the U.S. A special ceremony announcing the winners will be held on August 16 in Binghamton, NY.
Follow NEXUS-NY on Twitter starting at 11 a.m. on Wednesday, August 16 for REAL-TIME TWEETS throughout the competition to see who wins -> twitter.com/nexusny 
Last year’s 76West Clean Energy Competition winners included two NEXUS-NY companies. Micatu, Inc. won the $1 million grand price. ChromoNanoTech received $250,000 in funding.
In the News:

Shell GameChanger – Impacting the Future of Clean Energy

Shell GameChanger has funded numerous game-changing ideas over the last few years,  through ‘proof of concept’ to rapid worldwide deployment.

Established over 20 years ago as an opportunity to “bring Silicon Valley inside,” GameChanger is one of four innovation vehicles at Shell. The program, now global, focuses on the proof-of-concept phase by providing businesses with a quick and cost-efficient way to show the technical and commercial viability of their idea or business plan.

In an exclusive interview with GameChanger James Unterreiner, we learn more about how Shell GameChanger is actively seeking, supporting and investing in novel ideas that have the potential to disrupt the future of energy, why NEXUS-NY makes a great innovation partner, and how clean energy entrepreneurs can get on James’ radar.

“I help startup companies de-risk and commercialize technology that will drastically impact the future of energy, said James. “We aim to cross the innovation “Valley of Death” by engaging industry experts for guidance, identifying and engaging partners early, then looking at implementation and deployment of technologies globally, both within existing and new businesses.”

How can Shell GameChanger help clean energy inventors?

Shell GameChanger has a team of seven passionate individuals split between Houston, USA and Amsterdam, the Netherlands. These representatives focus on the most relevant technologies, and how they can drastically impact our future.

“We provide pre-seed and seed funding, working with early-stage tech companies to de-risk their technology or business plan,” explained James.

Each project is divided into phases, where founders receive assistance and funding. Assistance includes connecting participants to industry experts, mentors, and potential partners. Funding for the first phase is typically around $200,000, and can extend up to $1 million through a company’s lifecycle in the Shell GameChanger program.

Some of the disruptive ideas brought to life through GameChanger include Kite Power Systems, Brent Sonar Sphere and Swellflex.

Why did Shell create the GameChanger program?

Established 20 years ago in an effort to “bring Silicon Valley inside,” James said the original process was focused internally.

“Shell developed the GameChanger program to give people an opportunity, and provide them assistance to develop their ideas. There are a bunch of smart people that have ideas, but maybe those ideas are too radical to promote through their traditional job roles.”

GameChanger evolved when the program started recognizing other solid ecosystems outside of Shell. The scope was broadened to “go where the relevant technology is,” and now aims to identify ideas around the world to be commercialized.

“We’re always looking at the tech through the lens of where Shell can provide assistance, which includes more than funding. We also pair each business with an industry expert to best achieve commercialization success, said James. “Of course with a small team, it’s important to plug in where we will see good results. Right now, there are a lot of clean energy ideas coming out of New York.”

What innovation areas does Shell GameChanger target?

Shell GameChanger focuses on two main areas: Oil & Gas and New Energy. James leads the New Energy focus, which includes Solar Fuel Innovations, Grids of the Future and Digitization Machine Learning and New Routes to Oxygenated Intermediates.

“I want to see how companies are using renewable resources to generate hydrogen, or creating new tech in electrical vehicles and grid generation to transform the space,” said James. “And with an abundance of data that needs to be processed, extracted and understood, I’m always keeping an eye out for how machine learning can be applied to traditional oil and gas, or new energy technologies.”

How did you learn about NEXUS-NY and what made you want to partner?

The Shell GameChanger program is actively exploring ideas to commercialize from within the NEXUS-NY portfolio of companies. After being introduced to NEXUS-NY through an article that came across his desk, James reached out to Executive Director Doug Buerkle to discuss Shell’s areas of interest.

“Doug assisted by presenting the portfolio companies that may be relevant to GameChanger,” said James.

So far, three NEXUS-NY companies have applied for the GameChanger program. Each of these companies are in the very early stages of the screening process, but James said all are relevant to Shell. The general time for the application process takes a minimum of three months.

The goal of the Shell GameChanger program is for companies to succeed. James said this process takes multiple players, and that’s one of the reasons why GameChanger takes an open innovation approach and seeks to work with clean energy incubators and accelerators like NEXUS-NY.

“While Shell can provide funding and subject matter experts (knowledge about the industry and how the tech may be relevant), NEXUS-NY specializes in providing business advice and legal counsel. These resources are a great complement to our services,” added James.

What is the criteria for companies to get involved?

Shell GameChanger is open to companies that are focused on energy. Criteria to participate includes the value of the opportunity, novelty of the idea, if Shell provides the necessary resources will the company progress forward and strategically, why Shell?

“First off, we’re looking for the next billion dollar companies and for this to happen we need to focus on revolutionary ideas. That said, it’s important to us that we can bring the right resources to the partnership to assist the company,” said James. “And from a strategic standpoint, we need to consider how the technology can pair with a Shell opportunity.”

How can inventors and entrepreneurs take advantage of this opportunity?

“GameChanger is always looking for technologies that could transform the energy industry. If you want to get on our radar, explore our areas of focus and submit a proposal,” encouraged James.

Proposals are open for innovations in New Energies, Oil & Gas and other ideas. View call for proposals here.

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NEXUS-NY helps research-derived innovations find commercial success

NEXUS-NY works with scientists who want to actively explore the commercial potential of their research-derived, energy innovations.

We improve the likelihood of commercial success through our financial & business support and by providing a structured commercialization process. Since its inception, NEXUS-NY has worked with 39 business discovery teams (mostly university-based pre-ventures and the occasional pre-seed company). To date, we’ve helped launch 19 startup companies, 12 have raised more than $18.1M in follow-on funding. 5 of our alumni have achieved the most important early milestone – the sale of products to paying customers!

Scientific innovation has the potential to significantly improve the human condition. Unfortunately, most research-derived innovations languish due to inadequate resources and insufficient commercialization expertise. What if there was a better way to rigorously test the commercial potential of scientific innovations and to accelerate the most promising ones? At NEXUS-NY, we work with Sciencepreneurs to do just that.

NEXUS-NY Sciencepreneurs share or aspire towards several common traits:

–        They recognize commercialization is a full contact sport. They are willing to get out of their labs to actively engage, and learn from potential customers and industry participants.

–        They enjoy learning about problems just as much as they like developing solutions.

–        They recognize that commercial solutions require more than just “better technology.” Customers are seeking solutions which directly address significant business drivers without adding disproportionate business risk and without unduly affecting upstream or downstream processes.

–        They invent cool things which promise a step function improvement as compared to existing and other emerging solutions. They endeavor to understand the technology and IP landscapes and can easily cite their unique and compelling advantage(s).

–        They recognize the inherent biases which accompany scientific discovery (see confirmation bias). They actively look for and listen for reasons why their innovation might not achieve commercial success.

–        They know we all have personal limitations and blind spots. They actively and enthusiastically engage those with complementary skills.

–        They are good story-tellers. They enjoy talking about their technology and can explain their science and its benefits to technical and non-technical audiences alike.

Over the past few years we’ve learned a lot about how, and how not, to accelerate the commercialization of research-derived innovations. In this series of blog posts, I will highlight our key findings so as to help scientists determine whether to join us; and in hope that other organizations might benefit from our successes and mistakes.