Monday, February 25, 2008
Interview with Dave Ryan, Greenspark Ventures
Greenspark Ventures (www.greensparkventures.net) is a new, clean technology focused venture capital firm based in Denver. The firm recently made its first investment in Albeo Technologies, and we thought it would be interesting to get more information about the firm and what kind of investments it is targeting. We spoke with Dave Ryan, Managing Director of the firm, about the fund.
What's the idea behind the venture firm, and how did it start?
Dave Ryan: Green Spark Ventures is a venture fund out of a local family office, the family office of a wealthy family here in the U.S. They were excited about some of the business going on in alternative energy and clean technology, and decided to get involved in some way. They are looking to invest money in companies that make a difference. We started back in November, and we're pleased with our first investment, in Albeo.
What kind of companies are you looking at investing in?
Dave Ryan: We are looking at early stage companies. We'd love for them to be post-revenue, and also companies that have a product and a couple of customers and are looking for investment. Typically they'd be pre-venture capital, but post friends and family or early stage angel funded. Our typical investment is in the $250,000 to $2 million range. We feel like we fit pretty neatly in between the early angel round and institutional venture capital rounds. We're looking for companies that are aideally in Colorado, which contribute in some way to the infrastructure of clean technology, either on the supply or demand side. Albeo is obviously an LED company and an efficiency play. Other things we've looked at are enabling building of wind farms, to building geothermal, and we've also looked at a couple of solar things. We're casting our net pretty wide now for those kinds of companies.
What's your background and how did you get involved with Green Spark?
Dave Ryan: My background is in high tech. I was an early stage entrepreneur for several years, involved in early stage software companies. I had a personal relationship with the family, and when they decided to go and form the fund they knew I had been on the other side of the venture capital business, as an entrepreneur. They asked me to help. It's an exciting opportunity for me to be on the investor side, and see things from a different perspective. Colorado is a fantastic state for clean technology. I had lunch today with Marty Murphy, the technology transfer guy from NREL (editor's note: the National Renewable Energy Laboratory), and there is the Colorado Renewable Energy Collboratory with NREL, Colorado State University, the University of Colorado, and the Colorado School of Mines. It all comes into play to create a great climate for clean technology here in Colorado. We're getting in at the right time to grow this sector in Colorado.
How many investments do you think you'll make over a year?
Dave Ryan: We'd like to do five investments over two years. We're a fairly small office -- it's just me and one of the family members--and I think that's as much as you can handle in two years.
Are you making solo deals or are you also going to syndicate?
Dave Ryan: That depends on the size of the round that the company is looking for. We had quite a few Series A investors participate in the Series B for Albeo, and we had a number of other venture capital investors invest personally with us in that round. Ideally, we'd like to bring other people to the table, bring other experts, and collaborate as much as possible. We don't have a penchant for being a solo investor, and are happy to invest along side others. There are lots of very smart people and investors in the Front Range.
Having been looking at clean tech companies and talking with entrepreneurs, what advice would you give them?
Dave Ryan: Obviously, we prefer looking at ideas where there is a clearly defined market for that idea. We've looked at a few deals where it was technology searching for a market. I think it's far more interesting when there's a real market problem that's being solved. Secondly, if it's just an engineer trying to develop their idea, I'd tell them there are tons and tons of resources on the Front Range to help non-business savvy entrepreneurs get expertise quickly, in terms of business. There's the Deming Center for entrepeneurship at UC Colorado, the Bard Center in Denver, and there are loads of resources for them to become more sophisticated and network with others, help refine their business plan, and practice their pitch. I'd recommend they take advantage of the wealth of resources available for entrepreneurs, and focus on the market.