The Oregon Entrepreneurs Network (OEN) has announced its lineup of 12 presenting companies for the Venture Northwest 2009 investment forum, to be held on Oct. 29 at The Nine’s Hotel in Portland, OR. The Seattle-area companies are Calidora Skin Systems, Doxo, Lucid Commerce, and MicroGreen Polymers, while the Portland-area companies are Advanced Inquiry Systems, Cularis, DesignMedix, Elemental Technologies, Giftango, Prolifiq, Second Porch, and Wicked Quick.

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“What are you trying to tell me? That I can dodge bullets?”
“No, Neo. I’m trying to tell you that when you’re ready, you won’t have to.”

It’s one of the many memorable exchanges from “The Matrix.” But next time, Keanu Reeves should just talk to Christina Lomasney about getting some Modumetal armor—so he truly won’t have to worry about dodging anything.

Lomasney is the co-founder and CEO of Seattle-based nanotech startup Modumetal, which has grand plans to reinvent the metals industry, not just body armor. Three months ago, Modumetal announced it had raised more than $1.5 million from the Alliance of Angels, Second Avenue Partners, and WRF Capital, to advance its development of nanolaminated structures—fundamentally new kinds of metals that are stronger and lighter than steel and can be used to make better armor, structural components, and corrosion- and heat-resistant coatings. The 17-person company has also raised just under $1 million in government contracts and grants.

But first, let’s flash back to 2007. In a formative meeting, Lomasney and her fellow co-founder (and former University of Washington physics labmate) John Whitaker were talking with Dan Rosen, chair of the Alliance of Angels, about the idea behind their company. “They looked like the cat that ate the canary,” Rosen recalls. “My comment was, ‘Do you guys really understand what you have there?’”

In what can be a telling exercise for any entrepreneur, Rosen asked them to write the Wall Street Journal article that would appear the day Modumetal was successful. They wrote two. The first said that all U.S. auto manufacturers had adopted Modumetal to make their cars, increasing their fuel efficiency by 50 percent. The second said the military had announced that new vehicles using Modumetal technology have saved 10,000 lives. “Both were very interesting glimpses of the future,” Rosen notes.

Fast forward to last week when I sat down with Lomasney (see photo, left), a Boeing alum, to discuss where things are going with Modumetal, hear more about its strategy, and get a tour of the facilities. Those ambitious Wall Street Journal milestones haven’t been met yet, but if anything, the vision for the company has grown.

Lomasney is not one to make speculative or unfounded claims. Her one-word summary of Modumetal’s culture is “competent.” Last summer, she said the company was transitioning from military to transportation applications. So when she now says, “We’re the next ArcelorMittal”—the world’s largest steel maker—you sit up and take notice. As she explains, the metals industry has not changed that …Next Page »

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You can tell a lot about a company from its chief executive. They set the tone, the direction, the pace of operations. For a startup, it all starts with the CEO.

A startup’s culture is what sets it apart from its peers. It is the essence of the operation. It directly affects the company’s strategy, hiring practices, and the personality of its products.

Corporate culture is notoriously hard to define and measure, but critically important to whether a business will succeed. So I recently took a small (and highly unscientific) sample of Northwest startups, spanning the fields of business software, Internet, mobile, gaming, video, and materials—and asked the CEOs to talk about their company’s culture. Furthermore, I asked them to boil their culture and philosophy down to one word.

I’ll spare you any psychoanalysis of their answers, but it’s interesting to see how their descriptions reflect both their own personality and the market they’re in:
.

Apptio (Bellevue, WA)
CEO: Sunny Gupta
Culture: “Paranoid”
Comments: Gupta says the Apptio mantra is “glass half-empty.” But he doesn’t mean it in a negative way. He means the company is relentlessly focused on pushing its advantage, improving its weaknesses, and crushing its competition all around—a necessary mindset in the crowded and cutthroat environment of IT cost management and optimization.

Elemental Technologies (Portland, OR)
CEO: Sam Blackman
Culture: “Execution”
Comments: Blackman says he and his co-founders came from a previous company that started out executing well, but then took its eye off the ball and got distracted by things like …Next Page »

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According to an announcement expected this Wednesday, Kirkland, WA-based OVP Venture Partners is the lead funder in a $14 million Series B venture round for Boston-based Novomer, which is developing ways to manufacture “green” polymers from renewable materials such as carbon dioxide. The startup, which we profiled in November 2007, was founded in Ithaca, NY, and moved to Boston last fall. Joining the Series B round, which brings the company’s total funding to $21 million, are existing investors Physic Venture Partners, Flagship Venture Partners, and DSM Venturing. OVP managing director Carl Weissman will join Novomer’s board.

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One of MIT’s leading business professors, Richard Locke, came to Seattle yesterday to talk about the “S” word. Yes, we’ve been hearing a lot about sustainability lately, in the context of technology and business. Big companies like Microsoft, Amazon, and Boeing are talking seriously about the issue. Smaller Seattle-area companies like Verdiem, Powerit Solutions, and R.W. Beck have been making progress in important areas like energy efficiency and water management. To Locke, and many others, sustainability is much more than a corporate buzzword.

Locke is deputy dean of the MIT Sloan School of Management, and a professor of entrepreneurship and political science at MIT, based in Cambridge, MA. His research specialties include labor standards and practices, global entrepreneurship, and sustainable businesses. I sat down with him at the Westin Hotel downtown to get his perspective on Northwest companies’ green initiatives, and their possible partnerships with MIT. Locke was coming from meetings with Intel in the Portland area the previous day (the Santa Clara, CA-based chipmaker has manufacturing and development facilities in Hillsboro, OR). His other meetings in Seattle included a stop at Amazon to speak to Sloan School alums about the changing face of MBA education, and about sustainability in the corporate realm.

Locke defines sustainability broadly as “using resources today in a way that permits future generations to use them as well.” By this he means not just natural resources—energy, materials, water—but also social resources like people, jobs, and standards. “Let’s redefine sustainability in such a way that we can show the opportunities available, not just the constraints,” he says. “Once you broaden the definition, you expand the scope for individuals and organizations to try to do something about it.” (As I understand it, this definition of sustainability could include managing employees so they don’t burn out, creating jobs that last, and establishing fair labor standards that endure.)

Take Intel, for instance. Locke says the company is pursuing a series of initiatives to reduce its carbon footprint, improve its supply chain efficiency, and reshape the way it uses energy, water, and people. “Are there ways they can make, for example, new chips that might require less energy? They’re having a very interesting internal discussion about chip speed versus energy consumption. I find it fascinating that a large company in an extremely competitive sector, that still does manufacturing in …Next Page »

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Seattle-based EnerG2, an advanced materials startup focused on energy storage, has scored a $21.3 million grant from the U.S. Department of Energy to build a new manufacturing plant in Albany, OR. The funds are part of a total of $2.4 billion in federal stimulus grants announced today to speed up the manufacturing and development of next-generation batteries, energy storage technologies, and electric vehicle components. (Check out the map of all 48 awardees here.)

EnerG2, a University of Washington spinout, is developing novel nano-scale materials to make better ultracapacitors. These are devices that can store and release large amounts of energy much faster than conventional batteries, and with longer lifetimes. Ultracapacitors are typically used in electric and hybrid vehicles, forklifts, and cranes. Their performance depends on the materials used to make their electrodes—and that is where EnerG2 comes in with its unique concoction of synthetic carbon nanomaterials.

The U.S. Department of Energy has great interest in companies like EnerG2 that seek to improve energy storage and efficiency more broadly. That’s partly because as more alternative energy sources come online, they will require technologies that can deal with the natural peaks and valleys of that kind of power generation.

“This is obviously an exciting turn of events for EnerG2,” says Chris Wheaton, the company’s co-founder and chief operating and financial officer. “It’s a great confirmation of the role ultracapacitors can play in the automotive industry, as well as the role that materials science can play in helping the country achieve our energy efficiency goals for the future.”

EnerG2 will work together with Oregon Freeze Dry, one of its manufacturing partners, to build the new plant, which Wheaton says will be the first in the world dedicated to commercial-scale production of high-performance synthetic carbon materials. Wheaton adds that construction is expected to take about 18 months, and the new plant should create 25 to 50 new jobs in Linn County, OR. As for why EnerG2 wants to build the plant in Oregon, he says, “[Oregon Freeze Dry] have both the skills and the land that make it an ideal place to situate this facility. They’re already our partner.”

Better ultracapacitors could potentially have a big impact on electric and hybrid vehicles. EnerG2 co-founder and CEO, Rick Luebbe, told me last fall that ultracapacitors could be used to get 150,000 miles out of a plug-in hybrid car battery. Wheaton says vehicles will use a combination of a battery and an ultracapacitor. The latter is used to accelerate the car and store braking energy, while the battery gives you longer driving range. “The ultracapacitor makes the whole system more efficient,” Wheaton says. “It makes the battery last longer and not need to be as big and expensive.”

EnerG2 is backed by OVP Venture Partners, Firelake Capital, Yaletown Venture Partners, WRF Capital, University of Washington, Washington Technology Center, the Sustainability Investment Fund, Northwest Energy Angels, and the Frontier Angel Fund. Back in October, the company raised $8.5 million led by OVP and Firelake. That funding round was augmented by an additional $2.5 million investment in June, which brought in Vancouver, BC-based Yaletown as a new investor.

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[This post originally appeared on OVP Venture Partners' blog---Eds.]

Many observers, myself included, consider the 1990s the decade of the computer scientist. Work in digital bits and bytes not only generated significant wealth, it raised the standard of living for hundreds of millions of people around the world. However, as we close out the first decade of this century, I believe that materials and molecules have already supplanted bits and bytes as the powerful agents for the next round of prosperity and growth. This is the decade of the materials scientist.

Stanford University economist Paul Romer stated, “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable.” In the 1990s and into the first years of the 21st century, this resource rearrangement was frenetically—and highly successfully—executed in the arena of information technology. Today, that resource rearrangement has slowed in IT and has accelerated in materials science. To put it another way, materials science is the new information technology and it is spurring advancement in the new energy economy of this and the coming decades. This shift promises some of the same economic momentum and standard-of-living improvements created by information technology in the 1990s.

Indeed, materials science and chemistry are today the nearly perfect embodiments of Paul Romer’s premise of technology and discovery as a key economic driver. These “hard” sciences create and combine chemicals, polymers, and solutions in an infinite and infinitely promising number of variations. The possibilities created by materials science open up countless innovative opportunities in the new energy economy—and elsewhere.

Several examples illustrate this idea:

—In a branch of physical chemistry known as exploratory synthesis, chemists mix selected elements at different temperatures and pressures with the only objective being: to see what happens. Recently, a mixture of copper, yttrium, barium, and oxygen was found to be a superconductor at temperatures far higher than anyone had previously thought possible, which will ultimately have a host of far-reaching implications for electricity transmission.

—My company, Seattle-based EnerG2, uses materials science to assemble breakthrough products at the molecular level. Right now, we’re focused on customizing electrode materials to enhance energy and power density in ultracapacitors, which store and release energy faster than conventional batteries. Controlling the molecular structure and assembly process of our engineered materials at the earliest stage possible provides flexibility, lowers costs, and maximizes performance. We effectively gave up on …Next Page »

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It was a fairly quiet week for deals in the Northwest, with some activity in biotech, software, materials, and devices.

—Seattle-based Arzeda, a developer of artificial enzymes, formed a partnership with DuPont to create new crop seeds that incorporate Arzeda’s technology, which should increase the productivity of the plants for food, as Eric reported. Financial terms were not released.

—Arlington, WA-based MicroGreen Polymers raised $1.6 million from WRF Capital and angel investors including Northwest Energy Angels, Alliance of Angels, and Atlas Accelerator, as Luke reported in an exclusive. The company has developed technology to recycle plastics into cheaper and more environmentally friendly coffee cups, food packaging, and other items. The money is part of an ongoing round that MicroGreen expects will net $3 million to $4 million this month.

—In another Xconomy exclusive, we talked with the founder of Santa Clara, CA-based Data Domain (NASDAQ: DDUP), Kai Li, a Princeton University computer science professor who has been visiting the University of Washington for about a year. Data Domain just got bought by Hopkinton, MA-based EMC (NYSE: EMC) for $2.1 billion in cash. Li spoke in depth about the ideas behind Data Domain, its growth and acquisition, and the future of data storage.

—Luke reported that Seattle-based Kineta, a biotech firm with an unusual business model, acquired the licenses to an array of compounds from Redwood City, CA-based Airmid with the goal of reaching clinical trials for drugs to tamp down autoimmune diseases like rheumatoid arthritis and multiple sclerosis. Kineta is looking to run promising drug candidates through early-stage clinical trials and then form partnerships with bigger drugmakers to run bigger trials, collecting upfront payments, milestones, and royalties on any product sales.

—EndoGastric Solutions, a medical device company based in Redmond, WA, and Redwood City, CA, raised $7.5 million from undisclosed investors. The firm, which was originally incubated in Kirkland, WA, at Scout Medical Technologies, makes devices that treat heartburn and obesity. It previously raised $79 million in venture capital from MPM Capital, Advanced Technology Ventures, and other investors.

—Seattle-based Cozi, a startup that makes family organizing and activity planning software, formed a partnership with Nestle to launch its service on the food company’s website, as Eric reported. Cozi’s software will be rebranded on the site with both companies’ names. Financial terms of the deal were not announced.

—Earth Class Mail, a Seattle company that delivers physical mail to businesses digitally, is providing key technology for Kansas City, MO-based Perfect Output’s document management service, as Eric reported. Financial details of the partnership were not given.

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Xconomy has learned that MicroGreen Polymers, an Arlington, WA-based developer of technology to recycle plastics into cheaper, environmentally friendly coffee cups among other things, has raised $1.6 million for expansion from WRF Capital and local angel investors (Northwest Energy Angels, Alliance of Angels, and Atlas Accelerator), out of an ongoing round the company expects will net $3 to $4 million later this month.

The money will be used to build up MicroGreen’s commercial manufacturing capacity, and boost its payroll from 9 people to as many as 30 over the next year, says CEO Tom Malone. The company is also scouting new locations, likely to be in Everett, WA, he says.

MicroGreen got started in 2002, when it spun out of the University of Washington. The basic idea from founders Greg Branch and Krishna Nadella, a pair of graduate students, was to see if they could develop a technique to squeeze high-pressure liquid carbon dioxide into plastics, to heat them up and expand them while in a solid state. This process creates billions of tiny microbubbles that allow manufacturers to maintain most of the properties of regular plastic, while using a lot less of the regular plastic that is made from oil. The MicroGreen technique also creates a handy insulating layer of air inside the plastic, which can protect your hand from getting burned while holding that hot morning coffee. But plastics are everywhere in the modern world, and MicroGreen Polymers sees plenty of opportunities to stick its recycled product into markets that are worth billions.

“We can use less plastic to do the same work,” Malone says. “It’s a less-is-more story.”

The technology, which MicroGreen calls “Ad-air” does just that—it adds air bubbles into recycled PET plastics (like the stuff from water and soda bottles), which makes the subsequent product lighter, uses less material, and makes it cheaper, Malone says. It retains many, but not all of the same properties as the original plastic, so it can’t be used for everything, he says.

The initial applications of the MicroGreen technology have been for a reflector plate that a Japanese manufacturer used to make liquid crystal display TVs appear brighter, and for a contract with Northrup Grumman to help make some electronics equipment lighter, Malone says. These aren’t huge clients, generating revenue of about $1 million last year, and almost $2 million this year, Malone says.

Bigger opportunities lie ahead in disposable coffee cups, food packaging such as …Next Page »

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Five researchers from the University of Washington and Washington State University, Vancouver, working together with Washington companies, received a total of $376,454 in state funding through Washington Technology Center, according to an announcement today.  The university researchers are working with property data solutions company Data Data in Vancouver; biomaterials firm Healionics in Redmond; pressure instrumentation manufacturer Paine Electronics in East Wenatchee; nanostructure material builder Modumetal in Seattle; and medical simulator developer Simulab, also in Seattle.

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Heading into the summer months, deals in the Northwest show no signs of slowing down. Neither does Xconomy, which debuted the reporting of our Seattle intern, Eric Hal Schwartz, last Tuesday. In the past week, Eric, Luke, and I have had our hands full with deals in biotech, materials, software, and energy.

—Microsoft (NASDAQ: MSFT) is acquiring the Seattle-based assets of Rosetta Biosoftware from Merck, the drug giant based in Whitehouse Station, NJ, as Luke reported. Financial terms were not given, but Merck has agreed to become a customer of Microsoft’s new Amalga Life Sciences platform, which is designed to help researchers analyze vast pools of genomic data. Merck will also help the Redmond, WA-based software powerhouse better understand the life sciences market. The deal is expected to close by the end of June, and Rosetta is supposed to be integrated into Amalga Life Sciences by early next year.

—Luke reported that Bothell, WA-based Seattle Genetics, a maker of targeted antibody drugs, raised $11.5 million in a stock sale. The company received approval from existing shareholders to sell more shares to Baker Brothers Life Sciences, an investment firm led by Felix Baker. The sale comes on the heels of a $55 million offering the company pulled together in January.

—Seattle-based Modumetal, a nanotech and advanced materials startup, is closing a new round of equity funding worth between $1.5 million and $2 million. The round’s investors include Seattle-based Alliance of Angels and Second Avenue Partners, who co-led a previous seed round, as well as new investor WRF Capital. The money will be used to help the company’s anti-corrosion and heat-resistant material products reach the market. Modumetal is led by co-founder and CEO Christina Lomasney, a former Boeing employee.

—Eric reported that Mediquest Therapeutics, a Bothell, WA-based developer of topical treatments for inflammatory diseases, sold $2.3 million out of a $15 million equity offering. Mediquest was founded in 1994 and is working on a treatment for Raynaud’s disease, a condition that causes numbness in the fingers and toes when they are exposed to the cold.

—Response Biomedical, a Vancouver, BC-based maker of fast diagnostic tools …Next Page »

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Seattle-based Modumetal, an advanced materials startup, is closing a new round of equity funding worth between $1.5 million and $2 million, according to co-founder and CEO Christina Lomasney. The round includes existing Seattle-area investors Alliance of Angels and Second Avenue Partners, as well as new investor WRF Capital.

Modumetal “grows” what are called nanolaminated structures in vats using a patented process. These nanomaterials are essentially new kinds of metals that are stronger and lighter than steel. The original idea behind the company was to make better armor and structural components for the military and other applications, and the company has been supported in part by U.S. government grants. But Modumetal is now seizing some new opportunities, both short-term and long-term.

“Our vision has really expanded quite a lot,” Lomasney says. “This is turning out to be a much bigger market opportunity than we realized. This idea of creating a new dial for controlling material properties is really important to overcoming performance limitations in materials design.”

In particular, the new funding will be used to expand Modumetal’s effort in creating new kinds of coatings that resist corrosion in manufacturing lines, and withstand high temperatures in engines and turbines so they’ll run more efficiently. All while replacing toxic metals like chromium and cadmium, which are used in most anti-corrosion materials. It’s not the sexiest sounding application, but Lomasney says anti-corrosion and thermal barriers add up to a staggering $500 billion market. She says Modumetal’s first large-scale products will hit the market this year, targeted at aerospace manufacturers and the maritime industry, as well as transportation, military, and oil and gas sectors.

“This is a company that creates a brand new industry,” says Dan Rosen, chair of Alliance of Angels. “One of my co-investors said, ‘Am I wrong, or is this the biggest invention in metallurgy since the Bronze Age?’ You’re going to be able to create metals that have never existed before.”

Modumetal has grown (in a vat?) to 15 employees. I first reported on the company last summer, and will have more on its technology and strategy soon.

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From an initial field of 90 teams last month, down to 33 presenters, and the sweet 16 and finals yesterday, the business plan competition at the University of Washington has captivated us with the spirit and determination of these student innovators and their veteran advisors. Some 30 judges from the Seattle-area innovation community participated in the final rounds as well, including Rebecca Lovell of the Northwest Entrepreneur Network, Bill McAleer and Geoff Entress of Voyager Capital, and Adrian Smith of Ignition Partners.

The sweet 16 were whittled down to five finalists in the morning (and nary a software or Internet play among them):

—Energizing Solutions, a UW team working on making motors more efficient to reduce unplanned downtime in industrial facilities

—Hydrosense, a UW team developing a low-cost, sensing system for tracking water use in the home

—Nanocel, a UW and Seattle University team making a liquid cooling system for electronics

—Shockmetrics, a UW team with novel medical technology to detect shock in patients before it’s too late

—Soluxra, a UW team commercializing cheap organic solar cell technology for residential solar panels, electricity-producing windows, and other applications

At the evening awards ceremony at the Bell Harbor conference center, all of the teams in the competition were honored. The $25,000 grand prize went to Nanocel (see co-founder Daniel Rossi’s post going into the finals here), with Energizing Solutions as the runner-up. It’s interesting that both companies are fundamentally about making physical equipment more efficient.

But there were many other prize winners as well. Here’s a quick rundown (including some teams that didn’t make the final five in the grand prize competition):

$25,000 Grand Prize: Nanocel

$10,000 Second Place: Energizing Solutions

$5,000 Finalist Prize: Shockmetrics

$5,000 Finalist Prize: HydroSense

Best Tech Idea: Nanocel

Best Consumer Product: Big Canvas (UW team developing rich media and art for mobile communications)

Best Innovation Idea: Shockmetrics

Best Service/Retail Idea: Ecowell (Washington State University team developing litter-free vending machines that let you customize your drink)

Best Sustainable Advantage: Sisalwood (UW team with a sustainable alternative to hardwood for interior design)

Best Clean Tech Idea: HydroSense

(Congratulations to all the teams, and see you again next year.)

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Today is the Sweet 16 and final round of the University of Washington’s annual business plan competition. Yesterday, I was asked to write an article about my experiences thus far. The fact that I’m writing this article during time that I should be practicing my pitch or, if I were really smart, trying to sleep, should give you a brief insight into the scrappy nature of an entrepreneur-to-be. I love this technology and the company my partner Dustin and I are forming—Nanocel—so I would rather tell you about it than count sheep.

The process of writing a competition-worthy business plan has been long and arduous. In our case, it has required hundreds of hours of research, meetings that started early and went late, and sacrificing things like sleep and dinner dates. So it helps if you’re starting with a good idea. Dustin Miller, my partner in crime and inventor extraordinaire/PhD student in mechanical engineering at the University of Washington, came up with a good one. He figured out a way to use plastic as a heat sink for electronics applications, and it actually works. Really well.

We took this idea and started the process of researching and validating the market. I wasn’t sure at first if this “million dollar” idea had any legs at all. If it didn’t, we’d know soon enough and do something else. It didn’t take too long to learn that not only did it have legs, but this technology had applications all over the place. Everywhere we turned, from Frost & Sullivan and BCC Research reports to conversations with industry representatives, we learned of an intense need for cooling that exists in the electronics market. This isn’t a million dollar idea. It’s a billion dollar idea. Market validation, check.

This meant that we really had something worth pursuing. So, we started talking to folks that know a lot about startups. Namely, we went and begged for information from Janis Machala and Emer Dooley at the University of Washington. Both had taught classes in my MBA program and both seemed to know all about what to do and what not to do when getting things started. These learned ladies didn’t let us down. We came away with a long laundry list of questions to answer and information to gather. That meeting spawned another, and then another. It didn’t take long before Dustin and I had met with scores of entrepreneurial-minded people from academia to venture capitalists.

Between meetings, Dustin and I spent hours at the library and in coffee shops fleshing out a business plan that would stand up to the questions we’d been getting. Every meeting uncovered a weak spot or an area we hadn’t yet explored. With our research, I would write the plan. Then Dustin would disappear into his lab and work on the prototype. We both found that as time marched on, our lack of sleep was due as much to the excitement we felt about this opportunity as to the work we put into the research and writing of our plan.

By the time the business plan competition season finally rolled around, Dustin and I had become fluent in the electronics cooling market and adept at pitching our product. As a quick aside, I have to say that it’s a delight to work with an engineer who speaks in multisyllabic sentences! We’ve made it to the finals of two competitions thus far and have heard that our product is indeed fundable.

I feel good about our chances of making it to the final round this year. However, the competition is steeper than last year, and several of my classmates are on competing teams, including my teammate from last year. We’ve been good-naturedly taunting each other for weeks. I hope my classmates do well. And I hope I beat the pants off of them too.

This competition has been top-notch from the resource nights before it began to the investment round of 32 teams. Dustin and I have turned in our final business plan (version 15) and put our notes to bed. As I write this article, I think back on the work of the past several months, grateful for the opportunity to learn so much and fearful that it hasn’t been enough to win. We’ll know soon enough.

I’m glad we chose to compete. Win or lose, we’ll move forward with this idea. Someday when you’re reading something on your laptop and you stop to notice that your thighs are not being scalded by the heat emanating from its base, you may well have Dustin and me to thank. I hope so.

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Seattle-based Modumetal, a nanomaterials startup, and the University of Washington have received a $5,000 grant from Washington Technology Center to develop an anti-corrosion polymer coating for sulfuric acid pipelines. Leslie Warren, project manager at Modumetal, and Rajendra Bordia, UW professor of materials science and engineering, are leading the effort. Modumetal was founded in 2006 and has developed a method for “growing” advanced metal materials for defense, transportation, and other applications.

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San Jose, CA-based WRS Materials announced it has acquired Isonics Semiconductor Group, based in Vancouver, WA. Terms of the deal were not disclosed. The semiconductor group, which includes silicon wafer manufacturing facilities, was a division of New York-based Isonics.

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If you want to make venture capitalists laugh, ask them about the stupidest (or so-crazy-they-might-just-work) ideas they’ve been pitched lately. Earlier this week, Luke and I visited OVP Venture Partners in Kirkland, WA, and besides being a group of investors with very broad and deep expertise—everything from software and life sciences to materials and cleantech—they’ve also got a particularly nice sense of humor about them. Not to mention the coolest VC digs in town.

When it comes to people pitching wacky ideas to OVP, managing director Rick LeFaivre seems to be the firm’s lightning rod. We didn’t get a chance to delve into any details—and certainly no names or identifying information were given—but here are some of the, uh, least promising startup ideas OVP has been hearing about:

—Water micro-generators. This was a proposal, made to LeFaivre, for powering wineries and other remote operations using small electricity-generating turbines placed in streams or canals. It sounds like there are a lot of ideas out there for taking businesses off the energy grid, making them self-sufficient. It’s not clear whether the problems with this one had to do with the economics or the technology (I suspect both).

—Sky power. This pitch, mentioned by managing director Gerry Langeler, involved using some type of rotor craft to harness wind power at 30,000 feet in central Oregon. Which raises some obvious questions, beyond the power needed to keep the device up there. “There is a small issue with other aircraft,” Langeler pointed out, adding that the FAA would need to set up a no-fly zone. Maybe they could try it in extreme southern Oregon (less traffic), suggested managing director Chad Waite.

—In-store pawn shops. Managing director Lucinda Stewart brought up this idea, citing a report that a surprisingly low percentage of people actually know how to use eBay and other Internet resellers. So this was a plan to start a chain of used-equipment stores inside other retail stores, where people could drop off their used stuff. Not sure where the technology or innovation comes in—I guess that was part of the problem.

—Personal blimp. Managing director Mark Ashida saw this one, which never quite got to the meeting stage. The idea was to build an efficient personal transportation system, apparently using small airships. “You can get anywhere you want, but really slowly,” said Stewart.

We bet there are a lot of other good ones out there. Let us know if you’ve heard of any; this list is just scratching the surface, I’m sure.

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Maybe it’s because everyone is trying to get their deals announced before the holidays, but it was a busy week in the Northwest, with plenty of activity in mobile software, online media, and medical devices.

—Bellevue, WA-based BlueKai, an Internet marketing firm, raised $10.5 million in Series B funding, led by Waltham, MA-based Battery Ventures. Existing investor Redpoint Ventures also contributed to the round. BlueKai is creating a marketplace for online consumer data.

—Luke reported that Seattle-based Uptake Medical, a maker of medical devices, raised $3 million to carry out a pair of clinical trials for a technique to treat emphysema and other deadly lung-obstructing diseases. The capital was raised from all of Uptake’s previous investors, including Prism VentureWorks, Onset Ventures, and WRF Capital.

—Seattle-based mobile startup Zumobi teamed up with outdoor retailer REI to release a free software application, called the REI Snow Report, for getting instant …Next Page »

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I pinged energy expert Jesse Berst, the managing director of Redmond, WA-based GlobalSmartEnergy, to get his take on EnerG2, the venture-backed energy-storage startup we profiled earlier today. EnerG2 has developed a nanotech approach to building better batteries and “ultracapacitors” for storing electricity. Berst, an Xconomist, replied with some insights into the startup’s prospects for becoming a major player in the electricity economy (you can read more about this here and here), and the main challenge it faces.

Berst first emphasized the importance of EnerG2’s core market. “Energy storage is the choke point of the electricity economy,” he writes. “Whether you want electric vehicles, a smarter, more reliable grid, or simply a laptop that lasts all day on a single charge, it is the lack of cost-efficient storage that stands in your way.”

He then gave a bit of context to the problem EnerG2 is solving. “Although we’re making progress, it is largely incremental—squeezing out more efficiency from approaches that have been known for decades. If EnerG2 has found a new way to store energy, and a way that can achieve industrial scale, the world will beat a path to its door.”

“That said, it should be prepared for skepticism,” Berst writes. “Every few years a new startup appears claiming radical improvements in storage. So far none of them have been able to move to real-world applications in quantity.”

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Two weeks ago, Xconomy broke the news of the Seattle startup EnerG2’s $8.5 million first-round venture deal with Kirkland, WA-based OVP Venture Partners and Palo Alto, CA-based Firelake Capital Management. Today, the energy storage and advanced materials company is officially announcing its approach and giving the story behind its financing. I had a chance to speak in-depth with EnerG2 chief executive Rick Luebbe and OVP venture partner Rick LeFaivre about the company, its strategy, and what it could mean for the future of cleantech ventures, particularly in the Northwest.

As we reported before, EnerG2’s technology originally comes from the University of Washington. It revolves around synthetic carbon powder and “nanocomposite” materials that have novel properties on the molecular scale, such that they are extremely efficient at storing various kinds of energy—electricity, natural gas, and hydrogen, to name a few. I wanted to find out more about how the technology works and how it will be commercialized (think better batteries for tools, vehicles, and mobile devices), but I also wanted to hear the deeper story about the ideas and motivations of the key players and how the deal came about.

The story goes back to 2003, when Luebbe and his business partner Chris Wheaton first got into the energy game. Luebbe had been the co-founder and CEO of the Seattle software firm Hubspan, while Wheaton had been vice president of North American operations at Silicon Valley-based Loudcloud (now part of Hewlett-Packard). “We got interested in energy storage because we recognized no matter which direction the energy economy went, storage would be a critical, critical component,” says Luebbe. And whether it was electrical storage or gas storage, local or mobile applications, the future was in energy. “I really enjoyed my previous career from a business perspective, but I didn’t have same passion I have for clean energy,” Luebbe adds.

Luebbe and Wheaton began looking for renewable energy technologies at the University of Washington that were practical and could be readily commercialized. “We weren’t interested in science projects,” says Luebbe. At the same time, they thought “the most practical way to enter the space was to find a technology that was a market changer,” he says. In other words, they had to swing for the fences. So they met with various department heads at the UW, and were introduced to Guozhong Cao, a professor in the materials science and engineering department, and his graduate student, Aaron Feaver. Cao and Feaver were focused on developing novel materials to generate and store energy. It was a good match.

The status quo in energy-storage technology, roughly speaking, is that you try different natural materials and see if they work. What Cao and Feaver did was use advanced nanotechnology and …Next Page »

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