"Suppress your inner lemming," is the advice given to would-be energy investors and entrepreneurs by Maurice Gunderson, the cofounder of Nth Power who joined CMEA Ventures as a venture partner late last year. In the San Francisco firm's collective opinion, "the days of successful energy sector investments based upon execution plays...are now over, and venture capitalists who cling to old ways, or jump on popular bandwagons, are in for a surprise."

Future energy developments will be science-driven and require knowledge from unrelated disciplines. "For example, breakthroughs in bio-diesel as an alternative fuel might require a deep understanding of biochemistry, chemical engineering, sensor-based automated process control, agriculture, and biotechnology, as well as an understanding of fuel properties and internal combustion engines." Focusing on science is not enough, says the firm, citing additional complexities such as the governmental and regulatory issues surrounding energy. Not surprisingly, CMEA believes it is one of the few investment teams poised to understand all the complexities.

CMEA has been focused on energy and materials for some time--with six investments to date that include Superprotonic, and Visyx Technologies--and has been beefing up its energy expertise. James Kim, former vice president with the technology venture team at GE Commercial Finance, joined CMEA as a partner earlier this month. The firm sees the greatest opportunities in transportation fuels, premium power, alternative generation, and energy intelligence.
—Mary Kathleen Flynn

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