Published on May 2nd, 2011 | by Zachary Shahan3
Jobs and the Cleantech VC Boom
May 2nd, 2011 by Zachary Shahan
This is a special guest post by Jim Poe, a Partner at Polachi, the leading provider of Access Executive Search™ services to technology, clean tech, venture capital and private equity clients. Enjoy.
The recently released data reporting a substantial increase in overall Venture Capital Investment and, in particular, a near record increase for the cleantech sector, should come as encouraging news on the employment front. What is more significant than overall invested capital ($2.57 billion for Cleantech, up 52% from the previous quarter) is that the number of deals remained nearly flat, which means of course that the deal-size is up significantly. A closer look reveals that the majority of the dollars committed went to later-stage deals, many to fund scale up and commercialization phase activities, therefore driving job creation across a number of functions.
Demand at the executive level can be expected in the form of growth-stage CEO requirements to help take these businesses to the next level now that they are moving from the startup and technology validation stage. With the possible exception of the solar segment, many of the other major sectors of Clean Energy will grow through licensing, JVs, and strategic alliance models. This translates into search requirements for senior executives in Business Development, Commercial Development, and Corporate Development roles as well as for CFOs with significant transaction experience. For those companies in the process of building out their operations component, searches should spike for senior talent with global supply chain backgrounds, especially in Asia.
Beyond the executive level, growth in the cleantech industry is widely expected to make a significant contribution to employment as we continue to pull out of recession. In Massachusetts, for example, a 20-fold increase in solar energy systems installed since 2007 has more than doubled jobs in that category during the same period, according to a recent article in Mass High Tech. There are more than 11,000 people employed in clean energy in the state as of the end of 2010, up an impressive 65% since 2007. While the New England region is recognized as the 2nd largest concentration of Cleantech companies in the US, if anything resembling this rate of job growth can be expected in other regions (most likely already far surpassed in California), the sector should not disappoint from a jobs perspective.
As the Cleantech sector is still largely comprised of innovative small businesses, many of which are now moving to the next phase of their trajectory, such an impressive infusion of fresh capital as seen in Q1 can only mean greater opportunities in the near term. While some pundits of the VC business overall may question whether this could be another “bubble”, and only time will really tell, a look back at the pre-recession levels of investment indicates that we are now back to that level, at least on a quarterly basis. Assuming the economy as a whole has gained enough strength to continue expanding as government supports are withdrawn, we should expect to see the cleantech engine shift into a higher gear and continue to claim an increasing share of the available VC and Private Equity pie. It is a capital- and people-intensive model, after all.
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