A Deep Dive with Black Coral Capital

7/8/09Follow @wroush

On Monday we learned that Rob Day, a former principal at @Ventures in Wilmington, MA, and one of the dynamic young leaders of the energy investing scene in New England, has taken on a new assignment. He’s become a partner at Black Coral Capital, a Boston-based private equity fund formed in 2008 to build a cleantech investment portfolio for an unnamed high-net-worth family.

I’ve known Day ever since mid-2007, when I wrote about the nearly simultaneous decisions that he and Advanced Technology Ventures principal Andrew Friendly made to leave energy-related jobs in California and take jobs in New England cleantech investing. Both Day and Friendly have helped bring new vitality to the Boston-area energy innovation community, setting up an East Coast branch of the California-based Renewable Energy Business Network and participating in numerous local events. Most recently, Day was part of a panel on bringing energy innovations to market at Xconomy’s XSITE summit on June 24.

I caught up with Day by phone Tuesday morning, and asked him to tell me about Black Coral, which had been more or less in stealth mode until Day circulated a note about his job switch. Here’s the transcript:

Xconomy: What’s Black Coral all about?

Rob Day:
It’s a new family office, with a broad mandate to invest in private equity in clean energy and related technologies.

X: What family is behind it?

RD: We have to maintain privacy about that.

X: But they’ve decided to put some of their money specifically into clean technology—why?

RD: They’ve got good strategic assets in related areas of energy, and they’re looking to put some money into the clean energy side of it. So we know we have some good assets we can bring to bear in our investments, but we also have a pretty broad mandate to develop an investment strategy with new things that make sense. We are going to be investing directly, and also indirectly, as limited partners in venture funds. We are looking across all sorts of private equity classes—capital projects, buyouts, early stage companies, growth stage, later stage. We’re really starting from a blank slate, which we think makes sense in this interesting time, economically.

X: When you talk about bringing strategic assets to bear, does that mean you’re going to be leaning away from new energy-generation technologies toward things that fit with the existing energy infrastructure?

RD: As much as anything else that reflects that the folks around the table are pretty pragmatic. We are investing to find good investments, we’re not making investments just in the latest cool technology.

X: Do you think too much venture capital in the cleantech industry has gone into blue-sky ideas?

RD: To be clear, at the places I’ve worked in the past, there has always been a shared pragmatic approach around the table. That’s why I’ve always invested in things like energy efficiency myself, in addition to other things. But if you look at where the money has gone in the cleantech venture structure, a lot of it has yet to come to market in terms of commercialized products. That, by itself, should tell you that there has been a lot of emphasis on funding breakthroughs, what some people have called the “black swan” technologies, where as the folks around the table at Black Coral are going to be really focused on … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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