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Cleantech IPO? M&A? The Third Exit for Cleantech & Green Start Ups

I need to preface this post with the fact that SharesPost is a Schwartz PR client, but what they’re doing is very interesting and extremely applicable to the Cleantech industry and its investors. So while I am being and will always be transparent, I am not claiming to be free of bias.

It has been well covered that VCs have poured billions into cleantech and green the last few years with markets like solar, wind, biofuels, smart grid and batteries receiving a good chunk of those investments. In fact, thin-film solar alone received several hundred millions of dollars in 2008, creating the potential for several big winners or losers among cleantech investments. Very respected firms like Draper Fisher Jurvetson, New Enterprise Associates (NEA), Khosla, Kleiner Perkins and Good Energies led the way, and many VC firms followed.

And while cleantech and green PR firms, the media and venture capitalists all did a great job publicizing the investments, there was an undertone of concern with regards to how the companies would deliver a return to their shareholders (VCs, entpreneurs and employees) and how well served the limited partner (LP) community would be by such investments.

With the credit crunch and struggles of the broader economy, many predicted a cleantech M&A shakeout that would last into 2010 before the market started a recovery. While there has been some M&A, the stimulus package, government adoption, follow-on rounds from existing investors and other measures have helped many cleantech companies weather the storm. So while private companies are not selling themsleves for dimes on the dollar (good news for investors), the market is still not strong enough to support a rash of cleantech IPOs. Or IPOs in Twitter, LinkedIn or Facebook.

So what is the best exit for some private cleantech company shareholders? Enter SharesPost and the hassle-free secondary market exit. The company brings together buyers (private equity firms, VC firms, high net-worth investors and the companies themselves) and sellers (angel investors, VC firms, entrepreneurs and employees) of shares in private companies to provide a third exit for private company sharesholders. SharesPost already has had one Tesla Motors transaction go to contract and escrow, and just released a third-party report on SolarCity which may help facilitate more trades. Multiple buy and sell posts exist for both companies.

Private company data has been a major missing component in facilitating secondary market trades in the past and SharesPost is looking to solve that. This will be a good thing for the market, as it will help keep executive talent working at emerging growth companies, versus seeing everyone head to larger cleantech companies like First Solar, GE and Applied Materials.

Expect to see more Cleantech companies on SharesPost in the near future as some of the market darlings realize they are in it for the long haul and founders, employees and early-stage investors decide they need liquidity.

 

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Jason Morris

Jason Morris

Executive Vice President at MSLGROUP

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