June 13th, 2013 Future Energy Ultra Light Startups
On Thursday, June 13, 2013, OLC attended Future Energy Ultra Light held at Microsoft. There were four distinguished panelists: Thomas Blum of NY Angels, Andrew Garman of New Venture Partners, Willem Rensink of Shell GameChanger, and Mark Wight of GE Ventures. Opposite them were eight energy-related startups and their representatives: Elon Rubin of Fulcrum Solar, Eric First of Cost-Effective Carbon Capture, Blue Crump of Uvest Solar, David Mahfouda of Bandwagon, Iwao Teraoka of Surfactants for Oil Recovery, Ronald Anderson of Anderal Technologies, Scott Banta of ElectricBio Technologies, and David Sutton of Phosolar.
Elon Rubin presented Fulcrum Solar first. Fulcrum Solar was developed as an easyto-install solar panel. Its 1.8kW plug-and-play solar panel power-generating unit is easily deployable using a simple touch of a button. It is set up with no hassle and is available with a battery backup model and a tracking option. Fulcrum Solar’s business model revolves around their assertion that it is the cheapest model off-grid. Its revenue is generated through direct sales and leases. It has deployed three systems so far and is currently developing a second site with five units coming up.
Thomas Blum: How much market research did you do?
Elon Rubin: Our product addresses inefficient solar design, high fuel costs, remote energy reliability, which addresses the needs of the market today.
Willem Rensink: What’s your battery technology?
ER: They supply chain is still flexible, but we’re using dry cell technology. It’s included in the cost model.
Mark Wight: Do you have IP on this?
ER: We’re in late-stage patent pending. It’s been a long and intimate process.
TB: Getting patents will be important. Since you’re just assembling it, focus on design.
Andrew Garman: A huge amount of solar panels do plug into the grid. I’d reconsider if pure off-grid model is the solution or not.
WR: The solution sounds very efficient for Africa, where people live off the grid. If you get enough demos for NGOs, you might find that that’s the way to go.
MW: You might want a manufacturing partner. Find a way to finance it.
Eric First presented next, with Cost-Effective Carbon Capture. Cost-Effective Carbon Capture is carbon dioxide capture optimized for power plants. “It is 25 percent cheaper than any other technologies out there,” First said. It can reportedly save power plants up to $30 million annually. It boasts 90 percent reduction in carbon dioxide emissions and its unique computation screening method using a technology called adsorption—zeolites—can be synthetically created for distribution. Zeolites are molecular sieves and they are used for the first time with this technology. Cost-Effective Carbon Capture already has provisional patents for its technology. It plans to license its technology to power plants for revenue and additional revenue can be raised from material manufacturing for other uses.
MW: How big is the carbon capturing market size?
Eric First: In terms of the market, the most likely sector to use this technology would be refined oil. Elsewhere around the world, there are carbon taxes, which make this very appealing.
AG: Have you planned a business model?
EF: The zeolite synthesis is a $2 billion industry. It gives us an opportunity to find new spaces to use them.
TT: Have you settled on a single zeolite or have other filters in place?
EF: We have both—we have a method that’s pretty general and we can put the zeolites to other uses as well.
MW: I’d recommend that you get a pilot as soon as possible and partner with a large oil distribution company. You can get involved early.
AG: I wouldn’t invest serious money into carbon dioxide capturing market now because it’s too soon.
TT: Carbon capture won’t attract money because it’s not visible enough, but cleaning natural gas—that’s attractive.
Uvest Solar was presented by Blue Crump as a crowdfunding platform for energy. Uvest works with accredited investors through the purchase of Solar Power Notes. “Crowdfund investors earn 5 to 7 percent on notes,” Crump said. “Uvest earns 33 to 37 percent on IRR over 20 year revenue streams.” Uvest will own and operate their own solar projects while providing financing for middle markets. It also offers impact investments for crowds. Uvest has two principle streams: Projects that Uvest sources and projects that are brought to Uvest by energy developers. “Uvest is a micro-utility for clean energy,” Crump said.
TT: What’s the next best thing for funding—if crowdsourcing were to collapse?
Blue Crump: We’d go for bank lending.
AG: How do you explain 5 percent returns to investors while you get 33 percent?
BC: Buying notes isn’t uncommon—we retain 50 to 60 percent of the equity. The rest is crowdfunded. We provide a service to the host.
WR: How many projects do you have lined up?
BC: We’re trying to launch our portal with three or four projects.
MW: You have access to enough equity to proceed?
BC: Yes, that was our final phase. We have enough tax feedback.
TT: Crowdfunding, while a great idea, is young and unproven. I think you have to reexamine your numbers.
David Mahfouda presented Bandwagon, the “future of urban transportation.” Bandwagon saves passengers up to 60 percent on shared taxis. It allows services to and from airports and other transportation hubs. Bandwagon is a ride-sharing software that saves users time and money. “Bandwagon deviates at most 20 percent from your original route and has been used 300 times already at LaGuardia Airport. Using Bandwagon, two tons of carbon dioxide were saved and we have a full patent filed on batch-based queuing,” Mahfouda said. Their business model is selling empty seats on transportation and capturing 10 percent of their revenue. Bandwagon is 1/3 of the price of Uber and three times more convenient than the Supershuttle. “$19 is the average price of the fare and the driver earns 15 to 20 percent. We’re going to be profitable in six to nine months,” he said.
MW: Do you reduce market for taxis?
David Mahfouda: No, we’re targeting single ride taxis—we’re taking parts from all transportation markets.
WR: Do you lose money on trips?
DM: Sometimes. We work with third-party sellers to sell seats that we’ve already sold. We make 80 percent revenue on seats we’ve filled with three people.
AG: Are your only markets in airports or transportation hubs?
DM: Initially yes, but we’re going to target entertainment venues and more.
TT: How did you get past the TSA with this?
DM: The system at the airport is a real-time system. Also, the idea had already been proposed to the Port Authority and so it was easy for us to start.
TT: As a business, can you really make enough?
AG: I got the sense that your No. 1 value proposition was saving money, but it’s instead, jumping to the front of the line.
MW: I would think about the initial people who love your product and get their feedback. Mine them; get them on your team.
Iwao Teraoka presented Surfactants for Oil Recovery. Surfactants for Oil Recovery is a special soap that captures carbon dioxide. The soap enters the oil well to form droplets, which displaces oil from the pores of rocks. The soap releases carbon dioxide in to oil deposits, unlike other sequestration agents. Teraoka also added that the soap is environmentally friendly, as it is made from plant-based materials. The value in design of the soap and processing of the soap create revenue for Surfactants for Oil Recovery by licensing them. They currently need a research grant and they estimate that their time to market is one year.
TT: Is this an improved way to capture oil recovery?
Iwao Teraoka: There are molecules that can do that and carbon capture—we are dual focused.
WR: What exactly does the soap do?
IT: We use the soap to displace carbon dioxide.
MW: The cost?
IT: We don’t have an idea yet.
TT: This could be really big. Get dozens of patents. If what you have is better than everything out there—patent everything.
AG: Do this business in a reasonable time period. Get experienced oil engineers to help you understand what the requirements are to plug your technology in.
MW: I’d try to focus on downstream applications. There isn’t a huge attraction to the carbon capturing side.
Ronald Anderson presented Anderal Technologies. “Electronically assisted manufacturing is a patent process of applying DC currents in an engineered, pulsed format to all metals,” Anderson said. The process works by realigning the electrons of the material during the deformation process. “EAM is a disruptive technology that could revolutionize metal forming. It allows fast prototyping, extends flexibility limits. This is a new process,” he said. EAM’s revenue model consists of engineering the application, manufacturing the equipment and licensing the technology.
MW: Have you done testing on all metals?
Ronald Anderson: We’ve done it on a lot, but we found out that EAM’s sweet spots are in titanium and stainless steel.
WR: How big are these machines?
RA: The prototype we built was about seven feet high. We’re trying to focus on medial equipment primarily.
AG: What are the medical manufacturer’s objections?
RA: That it’s new technology. They don’t want to replace all of their manufacturing equipment, that’s how they think.
TT: Do people understand how it works?
RA: This has been under research since the 1980s—Ford and Penn State have been working on it. It’s been an ongoing process.
MW: It sounds like a huge opportunity. You might think about going after the most profitable sector first, scaling and then focusing on other verticals next.
WR: Focus on electricity and how you can make it green. Also find out what is possible. Highlight the green aspect of your technology.
AG: It’s a great strategy to find someone who is “bleeding from their neck” and solving their problem perfectly from there.
Scott Banta presented ElectricBio Technologies. Their technology converts carbon dioxide and electricity into chemicals. It is made of non-crop derived feedstock and their GM bacterium fixes carbon dioxide. Their key differentiators revolve around their novel bacterium and growth media. They also boast a minimum land and water usage and their ability to operate with intermittent technologies. For revenue, Banta plans to utilize SBIRs, JDA and licensing while targeting chemical and energy companies.
TT: Why are you trying to reinvent electricity?
Scott Banta: This is an opportunity to store electricity to chemical bonds, we’re not reinventing electrcity.
AG: Why is this is best out of the electric groups?
SB: We’re using cells that naturally fix carbon dioxide and iron. Our technology is naturally evolved.
TT: It seems like you got the attention or big groups and big money—you’re doing something right.
AG: There’s a lot of venture-backed companies that went into biofuel and ended up depending on government subsidies—if your fuel was competitively priced, you’d be in a good position.
WR: Think about where your electricity will come from. Get it right on scale—that’s the key.
MW: If you can figure out a way to utilize existing infrastructure, you’ll be in a good position.
David Sutton presented Phosolar, which combines phosphorescent and solar energy techniques. “Phosolar blankets absorb light during the day and transfers light,” Sutton said. “It transfers that light to solar panels at night for electricity.” Phosolar blankets would supposedly increase electricity output to 24 hours while keeping solar panels cooler, cleaner and preventing damage to them. Sutton hopes to push Phosolar out to market by 2015.
TT: What’s the efficiency of light radiating on the blankets?
David Sutton: The advantage is that we can put more than one pigment on it. It allows us to use larger crystals for persistence. We’re taking it from 12 hours of electricity to 30 hours.
AG: Are these materials ready and cheap to make?
DS: The Chinese are building it right now.
MW: If your cost lower than the cost of one solar panel?
DS: We’re looking at $3 per square feet per panel.
TT: Think about the commercial viability and address the skepticism that would be associated with the product.
AG: Sell blankets to already existing solar panels and enter the space that way.
WR: You might need to think about the engineering in practice.
MW: Your customers are going to be people who have solar energy. Talk about why they’ll want it.