U.S. Department of Energy (DOE) announced the selection of three venture capital firms to participate in its newly established Entrepreneur in Residence (EIR) program, which aims to accelerate commercialization of advanced clean energy technologies from three DOE National Laboratories.
DOE has selected Kleiner, Perkins, Caufield & Byers (Menlo Park, CA) to work with DOE’s National Renewable Energy Laboratory; ARCH Venture Partners (Chicago, IL) to work with DOE’s Sandia National Laboratory; and Foundation Capital (Menlo Park, CA) to work with DOE’s Oak Ridge National Laboratory. Selections are subject to negotiation of final terms and execution of a Cooperative Agreement with each selected recipient.
"The Entrepreneur in Residence pilot program provides venture capital-sponsored entrepreneurs with access into three Energy Department’s world-class national labs to accelerate adoption of advanced renewable energy and energy efficient technologies to fundamentally transform how we power this nation," DOE Assistant Secretary Karsner said. "The Department is leveraging private-sector expertise in new ways to capitalize on cutting-edge technologies that are ripe for commercialization."
The Funding Opportunity Announcement (FOA) announced last October proposed that each laboratory would host one entrepreneur in residence at a given time, and DOE would support this work by providing up to $100,000 for each entrepreneur to help defray salary and other expenses. Each firm will match DOE funding and may contribute additional funds to support its entrepreneur’s work.
Using their vast business expertise, the selected firms will be permitted to give proven start-up entrepreneurs the opportunity to work directly with laboratory staff for a hands-on look at various, commercially viable technologies. Entrepreneurs will conduct technology assessments, evaluate market opportunities, formulate preliminary business cases, and propose business structures in an effort to bring cutting-edge technologies to market.
Upon selecting a technology for commercialization, entrepreneurs in residence and their venture capital sponsors would negotiate a license to use the laboratory-developed technology. Working with their respective entrepreneur, the venture capital sponsors will form and finance a start-up business based on the licensed technology. The foundation of each start-up’s business plan would be the commercialization of licensed clean energy technologies.
To further accelerate the commercialization process, the EIR pilot program seeks to utilize a Standard License Agreement, tailored for entrepreneurs and small businesses. The Standard License Agreement includes a provision that would permit the EIR to offer partial ownership of the start-up company as full or partial payment for the license. This provides the opportunity for a start-up company to use its initial resources to grow the company rather than to make substantial up-front cash royalty payments.
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