Friday, May 21, 2010

The Company you Keep: "Bloom, Fisker and Serious Materials Raising Cash from Advanced Equities"

These are politically connected companies and are worth keeping tabs on for that reason alone if for no other.

For example, Serious Materials' VP of projects and policy is married to Assistant Secretary of Energy Cathy Zoi who is overseeing the 16.8 Bil. weatherization program under the stimulus bill. Bloom's largest investor is Kleiner Perkins whose John Doerr is on President Obama's Economic Advisory Board. Kleiner is also an investor in Fisker. At the time of their $529 Mil. loan from the federales the Wall Street Journal headlined the story "Gore-Backed Car Firm Gets Large U.S. Loan"

It looks as if Advanced is making a deliberate attempt to crash the highest circles of political capitalism.

From Greentech:

Greentech startups and investors need cash, lots of it, and can’t be too picky about where it comes from.

Taking a privately held automobile company, building materials company, or fuel cell company from lab to mass-market takes enormous amounts of capital. Hundreds of millions of dollars. Venture firms are the traditional source of this capital. Of course, these days, federal and state governments play an increasingly important role.

Advanced Equities (AE), sometimes referred to derogatorily as a "bucket shop," is a source of funding that venture firms use to fill in the gaps in later-stage financing. AE acts as follow-on money and has little actual domain experience and so rarely plays an operational role at the firm. They call themselves a "Venture Capital Investment Bank."

AE's pitch is that they allow high-net-worth individuals (i.e., wealthy people) to participate in the high-risk, glamorous world of venture capital investing. Despite a sometimes-shaky reputation, AE is aligned with a number of top-tier VC firms, such as:

  • Apex Venture Partners
  • Benchmark Capital,
  • ComVentures
  • Khosla Ventures
  • Kleiner Perkins Caufield & Byers
  • New Enterprise Associates

Collectively, that stellar list of names manages billions of dollars.

AE just established a fund -- 2010 CleanTech LLC -- to provide their clients the chance to invest in Bloom Energy, Fisker Automotive and Serious Materials....MORE