Energy Angels Provide Key Support for Cleantech Innovation in NW and Beyond

12/18/13Follow @bromano

Washington Gov. Jay Inslee heaped praise on Seattle energy storage materials maker EnerG2 as he celebrated the University of Washington’s Clean Energy Institute last week.

As we’ve reported, the company is a fine example of innovation from a university lab translating to a cleantech job creator. It’s a model Inslee, university leaders, and area investors would love to see more of.

EnerG2 got an important early assist from the Northwest Energy Angels (NWEA), an investing group positioned as a key ingredient in the formula for commercializing energy and cleantech innovations from the UW and beyond—as well as Washington State University and Western Washington University, which have significant cleantech programs of their own.

Aaron Feaver, EnerG2 co-founder and chief technology officer, recounted how the NWEA bet on the company during the crucial period of its transition from UW laboratories to stand-alone startup. The angel group’s investment in 2008 allowed the purchase of a key piece of R&D equipment, still in use today, and a few drums of raw material to produce an initial batch of its high-surface-area activated carbon used in batteries and other energy storage applications.

“That enabled us to go out and raise venture capital and with a straight face tell everyone this was a scaled material, out of the lab, and really worked,” Feaver told NWEA members at their year-end meeting last week.

Now, the raw material comes into the company’s Albany, OR, factory by the truckload. And EnerG2 is rolling out a new product, tuned for use in natural gas tanks.

The company says its specially engineered carbon allows natural gas to be stored at significantly lower pressures, enabling more efficient tank design, cheaper home refueling options, and improved safety—all factors that could help accelerate the market for natural gas-fueled vehicles.

The NWEA, meanwhile, is wrapping up another good year, though its investments don’t look likely to surpass the record of nearly $4.7 million it set in 2012, says Lars Johansson, the group’s co-chairman.

The longest-tenured cleantech angel investing group in the country has continued to expand its geographic footprint, bucking the traditional angel investing mantra of “if you can’t drive to it, don’t invest in it.” The approach makes sense in cleantech, however. As venture capitalist Rick LeFaivre told me last year about OVP Venture Partners’ experience betting on the sector: “It is difficult to be both regional and focused on an area such as cleantech.”

The NWEA received 48 applications for funding this year including 11 from California-based companies, seven from Canada, seven from Washington, six from Oregon, four from Massachusetts, and two each from Montana and New York.

Johansson says the NWEA’s ability to attract companies from around the country reflects the growing cleantech domain expertise of the investing group.

The quality of companies and entrepreneurs coming before the NWEA remains high, he says, despite the sense in some quarters that the area has fallen out of favor.

Johansson also sees some brightening in the broader cleantech investment picture. The marked downturn in cleantech venture investment is starting to ease, he says.

We heard similar notes of optimism from investors and entrepreneurs gathered at the National Renewable Energy Laboratory earlier this month for the government lab’s industry growth forum. Ira Ehrenpreis of cleantech venture capital firm Technology Partners said “a lot of the tourists have left” cleantech investing, leaving a “great opportunity” to committed investors.

Here’s how Johansson puts it: “The reason I do it and a lot of other people here do it is … Next Page »

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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  • Catherine

    Because we can about the energy technology and a savvy workforce EnerG2′s leadership and these kinds of cross sector partnerships make so much sense.