Man on a Cleantech Mission: A VC Visits the U.K. (Days Three and Four)

6/12/08Follow @jmatheson

London, Cambridge, and Manchester: Tuesday and Wednesday, June 10-11 *

I am a day behind, so two days in one entry. We spent Tuesday morning at Imperial College London, then took an hour train ride to Cambridge for an evening event at St. Catherine’s College (one of 39 colleges at Cambridge). Wednesday, we were in Cambridge for the day before heading up to Manchester late in the day. It does not take more than a few hours traveling around England to figure out where nearly every town name in Massachusetts originates—the founders were either very homesick or not very creative. And we have taken to calling Cambridge, MA, “New Cambridge”…

Tuesday morning was focused on the U.S. contingent presenting a series of perspectives to a crowd of more than 100 folks gathered in a lecture hall at Imperial College London. Imperial is lesser known in the U.S. than Cambridge or Oxford, I would suspect, but it is very strong in engineering and science and has a strong cleantech orientation. It felt a bit like MIT in terms of the breadth of research and the commercial nature of the place. The Imperial tech licensing office actually “floated” (went public) on AIM, the Alternative Investment Market, a few years ago to provide capital to seed its more interesting projects, and it has done more than 70 such financings already. I found this very intriguing, but have not explored it enough yet to decide if it makes sense to replicate elsewhere.

Mid-afternoon Tuesday, we hopped the train up to Cambridge and I got to spend an hour or so talking with Tom Burton from Mintz Levin, who started and is leading their cleantech practice globally. I found it quite interesting to learn how he has thought about doing this and how that fits into the overall strategy of their firm. Mintz has a London office along with East and West Coast offices in the U.S., so is well-positioned for the global nature of cleantech. It reminded me how fortunate we are in the U.S. to have so much depth and dimension to our entrepreneurial clusters. This is a frequent observation from our U.K. hosts.

Tom and Patrick Kealy of Mintz were integral in setting up this trip and have done a great job of providing our U.K. hosts with perspectives on the U.S. regulatory and market dynamics. I have been talking about the capital flows and the New England innovation community (e.g., the New England Clean Energy Council) and Greg Watson & Karl Jessen have been laying out Massachusetts’s policies and initiatives to make it a world-class center of excellence in cleantech. Noel Brown, newly minted executive director of the MIT/Fraunhoffer Center was also with us until today when he headed over to Germany.

The day finished with a very special dinner at St. Catherine’s College dining hall with a large contingent of Cambridge University’s professors, tech transfer folks, and other U.K.-based cleantech leaders and government officials. The food was pretty good, but the setting and service were the highlights. We had an army of tuxedo-clad servers taking care of us in an obviously ancient dining room, and I found myself wishing I had worn a tie…

We then did some pub crawling with our hosts in Cambridge. There is a pub called The Eagle that dates back to c. 1200. In relatively modern times, it was where the Royal Air Force pilots in World War II would hang out after surviving their missions. There are lots of memories on display, including pilots’ names burned into the ceiling with candles and cigarette lighters. It was fitting that our discussion here focused on the notion that the U.K. seems to have seriously embraced climate change as a national call to arms in a way that we have yet to do in the U.S. I hope it will be like other times in history in that once the U.S. gets mobilized, we will make a meaningful contribution by bringing the immense resources and skills of America to bear on this increasingly critical issue.

After a too-short night, on Wednesday we replayed a similar agenda in Cambridge as we did at Imperial College in an awesome conference facility. There was a large, diverse crowd with a very good level of engagement and questions. Cambridge feels very entrepreneurial, and I spent the afternoon in small mini-meetings with a variety of companies at a table overlooking the University cricket pitch (and tried unsuccessfully to have someone, anyone, explain to me how the game is played).

I continue to meet a large number of academics and entrepreneurs and am struck by both the similarities and differences from U.S.-based entrepreneurs. The areas of innovation are mostly similar with an all-too familiar solar craze (in the grey skies of the U.K. of all places). Wave, tidal, and off-shore wind are much more front-and-center here, which is a function of the policy context but is also due to the ratio of coastline-to-land and the strong wind and tidal patterns prevalent here. They are also much more “carbon aware” here around the topics of measuring, monetizing, and capturing carbon. In fact, Stephen Killeen of The Carbon Neutral Company (a U.K. company that Stephen is growing into the U.S. market) was with us yesterday at Imperial and highlighted this very topic.

Overall there are some good projects, and there is a strong awareness around the importance of IP. That said, I do note that U.K. entrepreneurs don’t seem to think “as big” as in the U.S., and their fundraising aspirations are subsequently also smaller. I cannot tell which is cause and which is effect. That is, if VCs pushed harder to deploy more funds, would entrepreneurs get conditioned to believe they could raise more money and go for bigger prizes, or vice versa? In any case, there is a definite dearth of early stage venture capital here. I need to explore this dynamic more fully…

Tonight we are in Manchester after a short flight from Stansted, and have a series of meetings tomorrow before heading off to Newcastle tomorrow evening. Flying into Manchester, it was apparent that this is a more manufacturing-oriented region, and so it will be interesting to see how they are leveraging these resources in the cleantech arena.

* Jim Matheson is a general partner with Flagship Ventures in Cambridge, MA. He is part of a small Boston contingent visiting Britain this week on a clean energy fact-finding and information sharing trip organized by UK Trade & Investment. He plans to file regular updates throughout the week.

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