44 Sapphire interview
“It’s not the investors’ job to protect your interests, it’s their job to make money for their funds, so it’s key that you have a strong business presence yourselves”
commercial scale to the next level? “I know the only one way it has been done before is by government investment. We’re not looking for a handout, that’s just a reality. You need the initial risky investment, and only government has the resources to do that, especially today. “Sure, private capital is essential, but what the
government can do is take the risk out of that private investment by guaranteeing the debt so investors are more comfortable making those investments. “It has been government’s role throughout time, particularly in energy, and I can’t see it being any diff erent today.” Zenk is well aware of the diffi culties in developing products within the clean energy sector, and has sound advice for scientists and researchers embarking on the perilous road to commercialization. He says: “Energy is very tough, there are all kinds of great ideas that never see
Continental jet fi lling up on Sapphire’s algae fuel
the light of day. You have to persevere, you have to sell your story, you have to convince not just investors, but also policy-makers and regulators. “So it’s a tough job, but you have to deal with all aspects of the problem. You can’t just have a good technology – you’ve got to have hardcore business people in your company, both on the strategy side but also people who can do deals and protect your
interests. “It’s not the investors’ job to protect your interests – it’s their
job to make money for their funds, so it’s key that you have a strong business presence yourselves.” Ensuring you have suffi cient funds in place every step of the way is also key. Zenk says: “To undercapitalize yourself is a big mistake with a new technology, you see that a lot in software. In particular with energy you can’t undercapitalize. There’s very extensive science to be carried out, so $2m here, $2m there won’t get you very far.
The full basket “It also seems to me you need to seek out that cardinal partner – the platinum partner who can bring credibility to your idea. The second thing you can do is really lead in the policy/regulatory discussion as to why your technology should be part of the energy mix. If you don’t, you’re missing a big piece of the puzzle. If you don’t come to the table with a clear understanding of how your product will come to market in a highly policy-driven, tightly regulated business, that’s a key indicator that you don’t have your act together. “And lastly, you have to create a national interest in moving from one source of energy to another.” In this regard Sapphire has been
A CGI visual of the planned New Mexico manufacturing plant
lucky, with a clear signal from the current US administration that it must reduce reliance on the Middle East’s fossil reserves, particularly as unrest continues. But good luck is peripheral to strong business planning. Zenk concludes: “Alongside the technology there’s a full basket of things you need to bring to the table in order to be a successful new company.” ||||
CREATING CLIMATE WEALTH
BUYING INTO BIOFUELS
The technology for algae-based biofuels may still be at an early stage but its potential for revolutionizing the fossil-fuel- powered transportation sector is huge, with the big energy internationals already exploring the opportunities. Shell has been the biggest investor in biofuels with a $12bn tie-up with Brazilian sugar giant Cosan. Other big hitters investing in biofuels include Bill Gates, the Rockefeller family and Exxon Mobil.
“You need to shoot for the moon and raise as much capital as you can, and you have to really think over a decade of development about how you’re going to do it and have a plan to raise dollars throughout.
“In software it’s three or four years of development and out, but energy is a completely diff erent model that requires patient investment and a diff erent kind of partner than you would fi nd in other spheres of technology development.
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