Huron River Ventures: Locked, Loaded, and Ready to Invest In Cleantech

4/14/11Follow @xconomy

The boys are back in town.

Fresh from the high finance worlds of Chicago and New York, University of Michigan grads Tim Streit and Ryan Waddington have returned to the state to launch Huron River Ventures (HRV), a $15 million fund aimed squarely at cleantech startups.

HRV has so far raised half of the money it needs to complete the fund.

Retaining homegrown talent has been a top worry for Michigan’s entrepreneurial community. Yet, Streit and Waddington are just two of several young, ambitious U-M alum who have returned to Michigan to start venture funds. That group also includes Marc Weiser and Tony Grover at RPM Ventures and Michael Godwin and Jason Townsend at Resonant Venture Partners.

A native of Farmington, MI who studied mechanical engineering at the U-M, Streit spent most of his career in Chicago. He worked in investment banking with JP Morgan and helped start the corporate venture unit at HSBC.

But both jobs ultimately left him dissatisfied.

“I wasn’t thrilled with what I was doing,” says Streit, referring to JP Morgan job. “How did it give back to the community?”

Interest in venture funds also tends to ebb and flow inside big corporations, he says. In four years at HSBC, the unit completed only two deals.

Waddington had a similar experience at DTE Energy Ventures, where he worked after receiving a degree in aerospace engineering from the U-M and a master’s in civil environmental engineering from the University of Wisconsin.

“I wanted to apply myself to our biggest problems,” Waddington says.

DTE looked at everything from fuel cells and energy storage to power electronics and waste energy. “But they just didn’t want to do anything,” he says.

Waddington later worked at NextEnergy in Detroit, helping to make seed investments in cleantech firms. He later ended up at Ziff Brothers Investments in New York, who recruited him to run a $250 million cleantech fund. However, Ziff ultimately became more interested in oil and gas investments, whose prices were skyrocketing at the time.

Streit says the time is right for a pure cleantech fund in Michigan.

“It became evident to me that the future of Michigan is cleantech,” Streit says. “There are a lot of people looking for that next evolution.”

HRV says it has more than 100 potential deals in its pipeline. So far, the firm has only invested in semiconductor startup Ambiq Micro but HRV will probably complete a couple of deals this quarter, Streit says.

“The biggest positive surprise has been the quality and volume of cleantech deal flow,” Waddington says, a stark contrast to his time at NextEnergy, where he was running out of companies to finance.

“At NextEnergy, I wasn’t sure I could do it anymore” deals, he says. “Today, the picture is different.”

Michigan has attracted the attention of coastal cleantech funds, Waddington says. They won’t cut checks on their own but would partner with local funds like HRV. For one thing, the competition is so intense for deals on the coast, a bit of a price bubble is starting to emerge, he says.

What’s missing in Michigan are serial, successful entrepreneurs in cleantech, Waddington says.

That’s where HRV wants to step in.

“We want to help the next generation of entrepreneurs in our state,” Streit says. “That’s part of our job. We can be part of the solution.”

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