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Clean-tech firms can compete for funding

Contest helps companies find investors, hone ideas

By Libby Clark
Published: April 10, 2010, 12:00am

Venture funding is still hard to come by for clean technology startups in the Northwest. But new funding opportunities do exist if companies know where to find them, said John Martin, operations chair of Cleantech Open Northwest.

Cleantech Open Northwest is one organization that aims to help clean-tech companies find funding and hone their ideas in the process by holding competitions. The nonprofit organization, which started the competition in California five years ago and has since expanded to the Northwest, this year will hold its second competition for startups in Washington, Oregon and Idaho.

After the application deadline in mid-May, 12 semifinalists are chosen to compete for four cash prizes and in-kind services worth a total of $100,000. Four finalists will then move on to the national competition for the chance to win $250,000 in cash.

For more information on Cleantech Open Northwest visit here.

For more information on Cleantech Open Northwest visit here.

The Columbian caught up with Martin at the Washington Innovation Summit in Tacoma on Friday to talk about the opportunities for clean-tech startups in Southwest Washington.

What is the Cleantech Open?

It’s like an X Prize. It’s a cash competition for businesses to compete on how good of a business they’re going to be. It’s about clean technology, but they’re competing on their merits.

You have one coming up?

It runs annually during the third quarter of the year so our second annual for the Northwest is coming up this summer.

And it’s available for anyone in the state?

Yes. The key thing is you have to have raised less than $500,000 in private capital by the time you apply. We’re also looking for relatively early-stage companies. We also want them to be incorporated and have a physical prototype or be very, very close to that. They’re supposed to be real businesses, not just an idea.

What are some other sources of capital available to small companies right now?

A number of groups have started to look at green investments, literally in the last two years. For example there’s a very well organized angel investor group called Zino that started and is based in Seattle. They have started to have specialized showcase meetings with six or eight companies open to the public for a small fee with specific focuses, one is life sciences and the other is green. This year for the first time they ran a separate one in Portland. A number of the companies we’re looking at have already competed in Zino green. There’s also the Northwest Energy Angels and there are other places you can go. Clean Tech Open isn’t competing with these, or gap filling, it’s complementary. It’s like a golf tournament. If there’s one, that’s cool, but when there’s a whole season it’s better for the athletes.

What makes the Cleantech Open different?

Unlike simply appearing before money, this is coaching and developing the companies. It’s not incubation because we’re not giving them money. There’s other money around but this offers the opportunity for mentorship and publicity and if they’re one of the winners they get up to $30,000 in value, including up to $15,000 in actual cash. And if you go up the nationals you get a quarter-million in cash.

One of the things I’ve heard a lot at the summit today is that clean tech is a different industry in that it’s really hard as a small company to get your product out in the market without partnering with a larger company.

There is that aspect. But I argue clean tech is not a sector. It’s a feature or an orientation in an existing sector. It’s an issue that all small startups face. They have to partner because there are going to be very few opportunities to be the next Microsoft or the next Intel. It’s more likely you’ll be bought by Microsoft or Intel or Nike or Sharp.

Do you see a unique role for Southwest Washington in clean tech either based on its geographic position or because of the companies located there?

Anything can be clean tech, it’s not just a downtown Seattle or a Bellevue story. There’s a clean-tech story in every one of the 39 counties in the state of Washington. It could be pulp and paper or biomass. One of the things we’re seeing nationally is things like solar and wind are long term, capital intensive (companies) and they’re periodically little bubbles. But in reality the companies now that are getting traction and winning our contest are green building companies. That’s where potentially this green play is, is in construction.

Do you have advice for startups that are seeking funding or just trying to figure out how to grow?

Typically if you have an idea for a product it can be used in many different ways and it’s very exciting. Pick one. It’s hard to pick one, you want to pick three, but pick one. When you get it down to two, sleep on it and then pick one … and focus on it for two or three years. You burn up too much energy trying to be everything to everyone.

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