In last week’s column, I discussed the upcoming, August 13th Clean Business Investment Summit, to be held at the Corwin Pavilion, at UCSB. This is a free (parking is $6 for the entire day), all-day investment summit that will host many interesting clean business companies, each of which will be making live presentations. For local area investors, the Summit offers some interest and valuable insights into the local clean business environment, and the state of the angel and venture capital investing landscape at present.
In this week’s column, I will highlight some of the individual companies that will present at the Summit, providing a snapshot of each and some information about the entrepreneurs behind the business models.
Before I dig into the company information, I would like to mention that I had the privilege of working with each of these companies to hone their presentations, materials, and critique them, this past Wednesday at the Santa Barbara Tech Center (402 E. Gutierrez). We also had a very successful workshop Wednesday night on SEO (Search Engine Optimization) and other Internet marketing techniques. Almost 40 individuals came to the workshop, which was a great turnout considering it was the first day of Fiesta! I will be hosting a free workshop on September 1st, along with Pablo Bonjour, CEO of SMG Business Plans, during which I will discuss the essential elements of a good business plan, and Pablo will discuss the next steps in the funding process, once the business plan has been completed. This workshop will also be at the SB Tech Center, and will start at 6 P.M. Contact Alan Tratner of Green2Gold (www.green2gold.org) for more information.
Revolutionary Motors will be a featured presenter at the Summit. CEO Dan Werner, along with other members of his management team, will be presenting their business model for the development of Dagne-X, which is a three-wheeled, highly efficient and high-performance vehicle with all-wheel drive. The Dagne-X will have a 0 to 60 acceleration time of just 5 seconds, and will eventually be offered in several models, including one that is priced at just $25,000 and can operate in electric mode, getting 100 miles to a charge, or hybrid model, with a 600-mile range.
Revolutionary Motors is well along in their development, with a prototype vehicle already in the testing phase, several key strategic partnerships established, and a wealth direct industry experience. With the recent successful IPO (Initial Public Offering) of Tesla Motors, investors may want to take a serious look at this exciting company.
GoTek Energy, started by serial entrepreneur Steve Herbruck, has developed an amazing rotary engine that can be built for applications from 200cc’s to more than 9 liters, to power anything and everything from a lawnmower to heavy machinery. Rotary engines are much more efficient than traditional gasoline or diesel-powered piston engines, because traditional engines have so much reciprocating mass (a bunch of heavy moving parts that are forced up and down, creating friction, and requiring a lot of wasted energy in the process. Even more impressive is the fact that GoTek’s Dynakinetic engine design allows the operator to choose between gasoline and compressed natural gas, or diesel and compressed natural gas. These engines will even run on hydrogen! The GoTek offers economy, power, and environmentally clean operation in one efficient package. Traditional engines typically are only able to offer one of these three attributes. GoTek’s engine only have 13 total parts, and only a few moving parts, making them very cost-effective and reducing potential maintenance costs dramatically.
GoTek has partnered with a street sweeping company that is beta testing their engines already, and also with a company with sizable capacity that is ready to ramp-up engine production already. They have one patent already, and have several more pending. The market for clean engines to replace existing, high emission engines is substantial. There are federal mandates for emissions that are forcing conversions of existing, gasoline and diesel engines to run on compressed natural gas, but this process is not cost-effective, and ultimately does not address the issues of inefficiency due to excessive reciprocating mass, weight, etc. The applications for these engines are numerous, and this company appears poised to hit the ground running.
Green Real Estate Investment Trust, with real estate entrepreneur Robert Doust, seeks to raise capital to purchase, retrofit, and lease environmentally friendly commercial properties. Doust will likely start with private investor capital, growing the portfolio over time, eventually converting it into a real estate investment trust (REIT). There are literally thousands of building across the country that are in serious need of retrofit to make them more energy efficient and hospitable to occupants. The total value of these buildings is a mind-blowing $1.2 trillion. Only about one-third of these, according to Doust, or about $400 billion are expected to be retrofitted, with the rest simply too far gone, or too costly to address.
There are a multitude of things that can be done to these buildings—some inexpensive, and some hugely expensive—to improve their energy-efficiency. Doust relates that simple and inexpensive things like installing working timers on boilers and air conditioners so that they don’t run 24/7 can cost a few hundred dollars and can literally save hundreds of thousands on large commercial buildings each year. Other things, such as replacing single-pane windows (just like we would do with a residential home) can not only save lots of money on energy bills, but can also make the work environment much more pleasant for the occupants. Proper insulation, new energy-efficient roofs, solar panels, and many other options can offer sizable energy savings.
From an investment standpoint, what could make these buildings really attractive is that occupants will pay higher rents for energy-efficient buildings over non-energy-efficient ones, because they can typically save 30% to 60% on their annual operating cost. As a result of these higher rents, Doust believes he can generate above-benchmark returns from his portfolio. He also believes he can achieve sustained, high occupancy rates, both due to the lower operating costs the tenants will enjoy, as well as the positive corporate image that tenant companies will be able to develop as a result of officing in green buildings.
While I have only provided a short summary of three of the companies that will be presenting on August 13th, hopefully I have given you some idea of what you can expect, should you attend the Summit. In a bigger picture sense, it is very exciting and encouraging to see so many new businesses growing from our local area, especially in the clean business space. From the investor’s point of view, the Clean Business Investment Summit offers a unique opportunity to get up close and personal with some of the most talented entrepreneurs on the Central Coast, and hopefully to identify some potentially lucrative investment opportunities as well.
There is no doubt that the real estate debacle and the recession have slowed economic activity, entrepreneurship and the rate of new business startups. Investor capital is certainly not as plentiful as it was only a few years ago, and those investors with capital are being very selective. But, with exciting new companies growing from our local area, and with the economy appearing to be past the worst of the effects of the recession, there is some hope that we will see sustained improvement in the pace of new business development. Events like the Clean Business Investment Summit support this growth, and bring together key players that can really make a difference. I hope you will attend!