This week’s Green Scene column in Crain’s Chicago Business: Clean Energy Trust aims to make Illinois a clean-tech contender

Imagine Chicago and Illinois as the Midwest’s center of clean-technology innovation and investment and you can begin to understand why the Clean Energy Trust was created.

The idea for the non-profit was hatched by a powerhouse group of Chicago business leaders engaged in the green economy (think Nick Pritzker, Michael Polsky) and Jerry Roper, president of the Chicagoland Chamber of Commerce. The organization was launched last spring and aims to identify promising young companies and scientists working on ideas with commercial potential in a variety of clean-tech industries. The sector includes renewable energy, next generation transportation, smart grid, and energy efficiency.

The trust will help some of these contenders get financing to propel them into the marketplace. In addition, the group will provide entrepreneurs with mentoring and access to free consulting services from advisers with clean-tech expertise.

It didn’t take long for the trust to attract attention — and funding. The U.S. Department of Energy last month awarded it a $1-million grant to be used, in part, as seed money for startups and university-based projects that need a boost. The state of Illinois kicked in $25,000 from the Department of Commerce and Economic Opportunity, and an additional $1.5 million worth of in-kind services and cash was contributed by partner organizations and the board.

For starters, the trust will put that federal grant to use by launching a business competition this week that will award $100,000 to an entrepreneur. Entry details are available on the trust’s website. Finalists chosen will present their business ideas to a panel of judges and a small audience on March 2 at the Midwest Alternative Energy Venture Forum conference in Chicago. The winner will be announced that day.

Another portion of the federal grant dollars is earmarked for a boot-camp program next summer to get entrepreneurs in shape for the challenges of starting new companies in the clean-tech sector.

Amy Francetic, executive director, is at the helm of the organization. A self-described serial entrepreneur and science junkie, Ms. Francetic, 43, honed her business start-up skills in Silicon Valley with information-technology companies. The Midwest native returned to Illinois in 2005 and is now putting her entrepreneurial and mentoring talents to good use in the emerging clean tech sector.

Amy Francetic

Crain’s recently spoke with Ms. Francetic to learn more about the trust’s goals and how larger corporations in the region can help nurture the right kind of clean energy innovation.

Crain’s: How did the Clean Energy Trust’s founders define a need for this organization, and why was it structured as a non-profit?

Ms. Francetic: There’s a lot of activity in clean energy but no one organization focused on innovation in this sector, so we’re trying to stimulate increased activity at that end of the spectrum. We applied for a 501c3 (not-for-profit) status with the IRS because part of our mission has an economic development component to it. We’re trying to create new businesses and jobs, and foster wealth creation in clean tech initially in Illinois and then in the greater Midwest region.

We also knew that in order to be successful in clean energy we had to bring together public and private sources of funding. When we studied similar organizations around the country — such as NextEnergy in Michigan and the New England Clean Energy Council in Boston — we could see there was a clear role for the federal and state governments to play in development of this sector. We want to marry that and leverage that with private capital.

Crain’s: What types of companies and scientists is the trust looking to assist, and what kinds of financing and services will be available to them through your staff, board members and outside advisers?

Ms. Francetic: We’ll work with an entrepreneur or scientist with a good idea right up to a start-up company that’s trying to grow. We did not put a hard stop on the upper end of the spectrum, so we’d consider a young high-growth company that’s been around for a few years with no revenue yet or a company that has under $10-to-$20 million that wants to grow more aggressively.

They might need cash, larger customer introductions, or they might need federal funding. A company that has a heavy manufacturing component may be eligible for some of the federal loan guarantees and other big chunks of money. But knowing how to navigate that system and win that money is really hard to do. We’re here to give them that guidance.

If they’re at a pre-customer stage, we’ll help them refine their customer pitches and business model. They might need management leadership or specific facilities support. We can help them get into the right lab or facility to develop and grow their business. Companies have a variety of needs, so we’ll try to fill in as many holes as we can.

Crain’s: What’s your opinion of the startups and university research projects already under way locally?

Ms. Francetic: We’ve seen so many cool companies, and we haven’t even really marketed ourselves yet. We see activity in smart grid, energy efficiency, solar technologies, IT companies focused on supply chain in renewables and next generation battery technology.

We also have all this amazing scientific leadership at universities in this region. Supporting these scientists and bringing their ideas to market is a long and difficult process and requires really specific kinds of support. That’s partly why this organization is needed.

Crain’s: Is there a role for larger corporations to play in guiding these young entrepreneurs that your organization identifies as potential success stories?

Ms. Francetic: We have some incredible Fortune 500 companies right here, and we’d love for them to become partners with us to help us make sure we’re looking for technologies and innovation that supports business needs they have. We’re really seeking corporate leadership that can tell entrepreneurs what large energy companies and manufacturers want and need from clean tech startups. Researchers in the labs also want to be relevant, and the federal funding has a requirement that you have a commercialization plan.

Crain’s: How will you determine whether the Clean Energy Trust is a success? 

Ms. Francetic: We’re going to try to measure our success on outcome-driven metrics. We’ll look at how many companies and jobs we helped create. We’ll look at how much capital has been attracted to the region by those companies. That could be investment capital or revenues they’re generating.

The federal grant we won runs for three years. Our hope is to leverage that $1-million grant into additional sponsorship of the trust. It’ll be a good validation of what we’re doing.


In other local green news:

Biowish Technologies gets cash infusion: Biowish Technologies has received $11.5 million in venture-capital funding to buy the manufacturing assets and customer base in Thailand owned by one of the biotech company’s three founding partners, according to Rod Vautier, president and a founding shareholder. The cash infusion came from two private investment firms that already have ownership stakes in Biowish, which recently moved its global headquarters to Naperville from Australia.

One investor is a specialty environmental and medical investment firm based in Boston, and the other is an Australian firm. Mr. Vautier declined to name them, but added that Biowish will have access to an additional $2.5 million from the combined firms in the near future.

The privately held biotech company manufactures a line of about 20 consumer, animal agricultural and industrial waste-water products derived from a novel biodegradable technology. The products are manufactured in Thailand and are sold in the U.S., the United Kingdom, Australia, Turkey, Malaysia, Thailand, Colombia, Ecuador and Mexico. The cash payment was made to Wisuit Chantawichayasuit, a scientist from Thailand and the partner who developed the technology.

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