St. Louis Post-Dispatch Article (2/22/2008) by David Nicklaus
Local entrepreneurs make their pitches at Invest Midwest
If alternative energy is this year's Next Big Thing, then 13 Midwestern companies should have no trouble raising the $76.7 million they came here to find.
The baker's dozen were participants in Wednesday's Invest Midwest venture capital conference, an annual gathering of entrepreneurs with ideas and investors willing to take risks.
In recent years, the conference has divided the entrepreneurs into two groups, one for life sciences and one for information technology. This year, it added an alternative energy track that featured breakthroughs in everything from batteries to biofuel crops, and from electric vehicles to electricity conservation.
Mark Heesen, president of the National Venture Capital Association, told 300-plus attendees that "clean tech," the industry jargon for alt-energy plays, is indeed a good place to be seeking money. The amount of money going into the sector has tripled in the last couple of years, he said, but still represents just 7.5 percent of all venture capital investments.
That leaves plenty of room to grow. "I absolutely think this is an area that is ripe for venture capital investments," Heesen said. "This is an extremely expensive area, it is extremely long-term and it is extremely government-oriented. If you are not willing to commit a lot of money over a lot of years, and deal with a very complex regulatory process, then you shouldn't be in this space."
Some entrepreneurs have honed their sales pitches to fit this new investment theme. Gridlogix, based in Crestwood, appeared at Invest Midwest two years ago as an information technology company. This year, it was an alternative energy play. In reality, it is both: It sells software that lets companies better manage their heating, air-conditioning and lighting systems, saving on energy costs.
"You have to shape your message to the market," President Carter Williams said after his presentation, in which he explained how Gridlogix's technology is saving $15 million a year for its first big client, the state of Missouri.
Gridlogix is trying to raise $8 million in venture capital, and Williams said he expects to have the financing in place by spring.
Mark Green, chief executive of TeraVista Systems in Kirkwood, said he got "really positive feedback" from his audience at Invest Midwest. "We probably had 10 potential investors stop by afterward, and three or four of them were really interested," he said.
TeraVista is a software developer that's targeting the market for creating and trading carbon credits. Fifty million credits were traded last year, Green said, and the market will really take off if Congress ever adopts a mandatory cap-and-trade system for limiting carbon dioxide emissions.
TeraVista is trying to raise $500,000 in the next few weeks, and an additional $1.5 million by year's end. Being in St. Louis puts it close to a lot of farmers, who are the target market for its software, but not to a lot of venture capitalists. "There's not a lot of early stage money in St. Louis; it's really challenging," Green said.
Still, to update the aphorism, if you build a better biofuel — or a better battery or a better carbon-credit validation system — the world will beat a path to your door.
If Green and his fellow alt-energy entrepreneurs need help raising money, they're getting it from world energy markets. While they were making their pitches on Wednesday, crude oil hit a record price of $101 a barrel.
Click here to read the article on the St. Louis Post Dispatch website.
