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Alternative Energy Shines in Polsky Spotlight

Jan. 22, 2008

On Thursday, November 29, the University of Chicago Graduate School of Business (GSB) Polsky Center for Entrepreneurship, Argonne National Laboratory, the Association for Corporate Growth, the Illinois Department of Commerce and Economic Opportunity (Illinois DCEO), and Reed Smith LLP, hosted the first Midwest Alternative Energy Venture Forum (MAEVF) before a sell-out crowd at Chicago’s GSB’s Gleacher Center. The purpose of the conference was to highlight innovative, alternative-energy technologies being developed in the Midwest.

The conference was the brainchild of Jim Greenberger, a partner in the law firm of Reed Smith LLP and program chair of the MAEVF. Having participated in the growing number of alternative-energy shows taking place on the West Coast, Greenberger felt that the time was right for the Midwest to host a show of its own. “The conference was an effort to educate Midwest investors about the incredible resources and opportunities available to them in their own back yards in alternative-energy technology,” said Greenberger.

Close to two years in the making, the MAEVF drew hundreds of entrepreneurs, venture capitalists, consultants, and other professionals from the U.S. and across the globe who came to learn about new technologies, hear from respected scientists and investors, and discover the growing alternative-energy sector in the Midwest.

Welcoming remarks were made by Invenergy founder Michael Polsky, Argonne director Robert Rosner, and Illinois DCEO director Jack Lavin. Over lunch, John Denniston, partner at Kleiner, Perkins, Caufield, & Byers, highlighted the many environmental challenges facing the planet over the next century. Denniston proposed that the U.S. take the lead in developing the alternative-energy technology, calling greentech “our generation’s moon shot.”

The day’s first panel discussions featured scientists from Argonne who discussed the next breakthroughs in alternative-energy technology, including bio-based fuels and chemicals, fuel cell technology, batteries, and solar.

“Biofuels is largely going to be a Midwest phenomenon in the U.S.,” said Seth Snyder, Section Leader, Chemical and Biological Technology, after the conference. “We’re the breadbasket where the materials will be grown and it’s a logical place where you’re going to develop the companies that will make use of it.

“We have a number of projects at Argonne for making ethanol, other biofuels and other things traditionally made from petroleum, so the Midwest is the right place and this is the right time to do the work,” said Snyder.

Argonne also has the potential to be a big player when it comes to fuel cell and battery technology, said Snyder. “The traditional home of vehicle technologies in the U.S. is the Midwest,” he said. “We think of Detroit, but the manufacturing capabilities are spread across the Midwest. They’re in Illinois, Ohio— they’re across the Midwest, and Argonne is one of the leaders in supporting vehicle technologies.”

Government funding has increased for alternative-energy research. According to Snyder, the Department of Energy’s Office of the Biomass Program (one of his group’s major sponsors) almost tripled their budget in the last two years.

Fourteen Midwestern companies covering alternative-energy technologies as varied as solar panels, composite materials for turbine blades, and electric cars made presentations. The companies were selected by an expert panel of investors from more than 50 companies who had responded to a request for proposals issued by the MAEVF steering committee prior to the conference.

“Presenting at the forum forced us to get a much clearer picture of our business plan and opportunities,” said Dan Hutcheson, president of WebCore Technologies, Inc., and a presenter at the show. “As a company that’s transitioning from validation stage into market entry, we are evaluating and quantifying our growth capital needs. The feedback we received was very astute and helpful.”

The day concluded with a networking reception where attendees had the opportunity to meet presenters and speakers to trade ideas and business information.

“The conference demonstrated that we do have a venture capital community here and that there is market demand for these technologies,” said Robert Rosenberg, associate vice president for public affairs communication, The University of Chicago. “Our problem in the Midwest right now is that we leak IT. Talented people with good ideas – as well as patents- are attracted by venture money and lured to other places.

“Helping people anchor their technologies here through venture capital investment and, increasingly, state support will transform the landscape,” said Rosenberg. “It’s essential to our ability to recruit and retain talented faculty as well as entrepreneurs.”

One scientist-turned-entrepreneur who presented at the conference is a pioneer in this the new landscape. Daphne Preuss, Chief Executive Officer and co-founder of Chromatin, Inc., considered a number of locations around the country before settling her agri-bio company on Chicago’s south side.

“We’re extremely excited here,” said Preuss. “What I’m hearing now from investors who are looking at clean tech or biofuels is that they are finding a lot of opportunities in the Midwest. I have a friend in the Bay Area who said he’s made more flights to Chicago this year than he can remember.”

Preuss believes the new Energy Bill signed by President Bush on December 18, 2007 which sets a mandatory Renewable Fuel Standard (RFS) requirement that fuel producers use at least 36 billion gallons of biofuel in 2022— a nearly five-fold increase over current levels— is the major reason why investors are increasingly drawn to the Midwest. The law, she explains, is literally creating an industry of turning cellulose [the stuff that makes plant stems] into fuel.

“This is the place where the seed stocks are grown. This is the place where people know how to handle crops,” said Preuss. “So when it comes to growing fuel as well as locating facilities, the Heartland is really the place people are looking at.”

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Last modified at 10:40 AM CST on Wednesday, January 23, 2008

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