Originally published in Crain’s Chicago Business
July 1, 2014
Can Clean Energy Trust raise $2.3 million in matching funds for a new Illinois clean tech investment fund announced last week? No problem, says Nicholas Pritzker, co-founder of the nonprofit group and a member of its board.
The four-year-old Chicago organization, which mentors early stage companies in the renewable energy sector across nine Midwestern states, will manage a new $2.3 million revolving equity fund established by the Illinois Department of Commerce and Economic Opportunity. One condition of the funding is the trust’s agreement to match the government support, for a combined total of $4.6 million.
“There’s been a sea change in awareness of the necessity of these (renewable energy) technologies, and that’s why I’m confident we’ll raise the matching funds we need,” asserts Mr. Pritzker. “People understand this is about national security, climate change, pollution and health issues.”
Mr. Pritzker won’t name expected donors, except to say that he plans to give to the fund, as do family members through the Pritzker Foundation.
In addition, Clean Energy Trust raises money throughout the year and already has earmarked some of those dollars to the new fund, says Amy Francetic, the trust’s executive director.
The new fund will support an Illinois-only business challenge on Oct. 28, Ms. Francetic says. An independent panel of judges will decide which of the finalists will walk away with convertible notes ranging from $100,000 to $500,000. The entire $4.6 million fund will be distributed to startups by the end of 2015, she says.
The organization has boosted its visibility primarily with the Clean Energy Challenge it hosts every spring showcasing early stage clean tech startups and student-led finalists. The trust, which grooms these teams for the showdown with the help of outside advisers, intends to run the upcoming challenge in a similar fashion for the Illinois-designated fund.
What’s different about this upcoming challenge is the criteria for applicants.The state requires that startups be located in Illinois and be further along in their business formation than the typical early stage firms that compose the lineup of the trust’s annual spring challenge. These participants must have a demonstrated revenue stream or established funding source and products or services already commercially available, Ms. Francetic explains.
Clean Energy Challenge winners have received $1.2 million over the years, and some 60 companies the organization is tracking have so far raised a combined total of $42 million, she says.
For example, NuMat Technologies Inc., a 2012 winner, has raised over $2 million and now has an office in Skokie with a handful of employees.
“We’re patient, too,” Ms. Francetic says. “Part of the reason we’re structured as a nonprofit is that these aren’t tech companies that grow quickly. This is a sector that includes deep science and strong engineering. We’re hopeful that in the next two to five years we’ll see some good exits.”
Mr. Pritzker concedes that it took a couple of years to understand what direction Clean Energy Trust should take. “Now it has crystallized and we have a good strategy” with the challenges and ongoing mentoring and financing advice and connections.
– Judith Nemes
