Commentary: Rising investment, talent, resources bode well for region’s green companies

Monday, September 6, 2010, 12:20 pm

By Paul Bozzo

Paul Bozzo

If you’re an entrepreneur thinking of starting a green company north of the Golden Gate, now’s the perfect time.

The combination of recent record levels of investment by venture capitalists into clean-tech, an ideal local business climate for green companies and the availability of marquee regional resources and talent are making the dream of a scalable green business headquartered in the North Bay a reality.

Venture capital firms are beginning to embrace green business models in a big way. According to a recent MoneyTree Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), investment by venture capitalists in the clean-technology sector more than doubled in the second quarter as compared to Q1 2010.

The PwC/NVCA MoneyTree Report states that the clean-technology sector (alternative energy, pollution and recycling, power supplies and conservation) saw a 107 percent increase in funding dollars over the first quarter of 2010 to $1.5 billion. This marks a record-breaking quarter of funding in the clean-technology sector by venture capitalists.

And with venture capitalists increasingly flocking to fund green technologies, can angels be far behind?

Another piece of good news for green start-ups is that venture capitalists are now placing their bets on companies earlier in their lifecycle.

According to the PwC/NVCA MoneyTree Report, total funding dollars for seed and early-stage companies rose by 54 percent from Q1 2010 while the number of deals increased by 32 percent over the same quarter. Additionally, companies receiving first-time venture capital financing increased by 7 percent as compared to Q1 2010.

This is a clear signal that VC firms have stabilized or liquidated cash-strapped portfolio companies bogged down by the recession and are ready to add new companies to their mix.

The North Bay has a long tradition of being forward-thinking in regards to sustainable living and technology. That history can now be leveraged by companies seeking to start business models that blend profit with a social conscience.

“Green and clean-technology companies have caught on to the growing welcome to better environmental practices and are now seeing Sonoma County as an attractive location,” said the Sonoma County Economic Development Board 2009 Technology and Innovation Report. The EDB report further states, “Rising energy costs worldwide create upside potential for Sonoma County industries that have a substantial footprint in solar energy or other alternative-energy sources.”

Local entrepreneurs can also access top-tier green business infrastructure and intellectual talent right here in the North Bay.

The Sonoma Mountain Business Cluster (www.somobc.org), located in Rohnert Park, is a nonprofit business incubator specializing in helping entrepreneurs start and grow companies in the sustainability and socially relevant technology sectors.

The state’s Business, Transportation and Housing Agency recently named the incubator as one of six Innovation Hubs (iHub) in California as part of a new program to stimulate job creation and encourage tech innovation.

Dominican University’s Green MBA program (www.greenmba.com), based in San Rafael and the only green MBA program in the North Bay, joins the Presidio, Stanford and U.C. Berkeley as having a curriculum emphasizing the triple bottom line of people, planet and profit.

According to John Stayton, co-founder of Dominican University’s Green MBA program, the stated focus is on “students gaining business skills that will prepare them to lead ecologically and socially sustainable ventures.”

These graduates represent a valuable pool of passionate and intelligent employees for North Bay green ventures.

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Paul Bozzo is the founding principal of the 10X Consulting Group in Santa Rosa (www.the10Xgroup.com). The 10X Consulting Group specializes in working with start-up and fast-growth companies to provide business planning, funding, Web marketing and visual media solutions. Paul can be contacted at paul@the10Xgroup.com or 707-536-1097.