Green Options

Editor’s note: On Monday, Ecopreneurist’s lead writer Leah Edwards published this post on approaching venture capital firms with a cleantech business concept (with guidance from a member of one of the most influential VC firms in the world, Khosla Ventures). We figured a few of you out there are bouncing around business ideas, and might find this information useful, so we wanted to bring it to your attention.

First of all, don’t worry about the business plan.

I realize that sounds like crazy advice coming from a business consultant. However, I have seen too many entrepreneurs stalled or stressed when trying to write up a business plan when the plan really is not the critical issue. Many green business ventures that would be of interest to VC firms are in the cleantech, new materials, information technology, and life science spaces. If you are an ecopreneur with an idea in areas like these, your most important task is to explain the technology or science behind your idea and whether you have, or can get, the rights to the intellectual property.

Don’t spend your valuable time wordsmithing a long document. Just be able to say:

• why your idea works
• how it is different from an existing technology or product, or what is being developed by others
• how it will change the world, e.g., by dramatically changing a market or supply chain or by creating a new market or standards for how a market operates, etc.

This is not just my humble opinion. I spoke with Khosla Ventures’ newest operating partner Ford Tamer who explained that the firm is looking for leapfrog innovation—new technologies or new business models that can increase the size of a market by five-times or can drive costs down so significantly that entire new markets become available. He says, “We’re interested in ideas that can significantly affect the earth and can build big companies… We have no problem taking the risk if the risk is worth taking—for a huge benefit to society and the ability to be a major player.”

First of all, don’t worry about the business plan.

I realize that sounds like crazy advice coming from a business consultant. However, I have seen too many entrepreneurs stalled or stressed when trying to write up a business plan when the plan really is not the critical issue. Many green business ventures that would be of interest to VC firms are in the cleantech, new materials, information technology, and life science spaces. If you are an ecopreneur with an idea in areas like these, your most important task is to explain the technology or science behind your idea and whether you have, or can get, the rights to the intellectual property.

Don’t spend your valuable time wordsmithing a long document. Just be able to say:

• why your idea works
• how it is different from an existing technology or product, or what is being developed by others
• how it will change the world, e.g., by dramatically changing a market or supply chain or by creating a new market or standards for how a market operates, etc.

This is not just my humble opinion. I spoke with Khosla Ventures’ newest operating partner Ford Tamer who explained that the firm is looking for leapfrog innovation—new technologies or new business models that can increase the size of a market by five-times or can drive costs down so significantly that entire new markets become available. He says, “We’re interested in ideas that can significantly affect the earth and can build big companies… We have no problem taking the risk if the risk is worth taking—for a huge benefit to society and the ability to be a major player.”