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Episode 35: Rob Day

This week, Thomas Byrne is joined by Rob Day, Founder and Partner at Spring Lane Capital. Spring Lane Capital partners with strong management teams who are selling or using distributed assets with compelling consumer economics in the energy, water, food and waste sectors. This discussion features lessons from Rob’s 15 years of experience in clean energy investing, the growth he has witnessed and the challenges of the clean energy space.

Rob has been a sustainable resources private equity investor since 2004, and acts or has served as a Director, Observer and advisory board member to multiple companies in the energy technology sector. He also serves on the board at the New England Clean Energy Council. Rob recieved his MBA from Northwestern University and his BA at Swarthmore College.

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Jon Powers: Welcome to Experts Only Podcast, sponsored by Clean Capital. You can learn more cleancapital.com. I’m your host, Jon Powers. Each week, we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us.

Thomas Byrne: Welcome to the Experts Only Podcast sponsored by Clean Capital. My name is Thom Byrne and I am again filling in for Jon Powers. You can learn more about the innovative approach Clean Capital is taking to clean energy investing at cleancapital.com. Today we’re very excited to welcome Rob Day, founder and partner at Spring Lane Capital. Rob has been investing in clean energy for 15 years, different types of assets, and different types of investments. He has witnessed the growth and challenges of the clean energy space, and has a wealth of experience to share with you. Enjoy.

Rob Day, founding partner of Spring Lane Capital, welcome to Experts Only podcast.

Rob Day: Thanks Thom. Thanks for having me on.

Thomas Byrne: You have been in the clean energy investing space for quite some time. For our listeners, let’s give them a sense of how you got started in the space.

Rob Day: Sure. I actually started back around 2004. I had always been interested in somehow getting involved into clean energy. Along the way it had started out thinking I was going to be involved in policy work. Grew up in D.C. and got surrounded by a lot of people thinking really smart things about environmental and economic policies. Thought I was going to get involved in that. Actually did my undergrad degree in poli sci and economics, and did my senior thesis in nonpoint source water emissions trading programs.

I was a really, really cool kid back then. It turns out after I was able to, after college, join an environmental economics think tank, the World Resources Institute, it turned out I’m not a very good economist. Instead my job ended up with [inaudible 00:00:02:11]. I was going out and meeting with big companies and helping them try to view the world through a sustainability lens and figure out how they could make more money by doing so.

That was a tremendous experience. It was a real grounding in how the actual business world works, how that contrasts with economics, for instance. So, I was able to get a lot of perspective, not only in what was going on in that regard in the business world, but also, being surrounded by actual smart economists and people tracking major natural resource trends. It became very clear to me that there was going to be a huge role for the business community in leading the charge when addressing things like climate change, and there was also going to be a big business opportunity in doing so. Yet there I was at a not for profit, trying to get Fortune 500 companies to make a little bit of a change in time.

Instead I decided I wanted to be an entrepreneur, and so I went into business school and came out of business school at a spectacularly bad time to be an entrepreneur, and so then did a couple of years of management consulting, and then sort of graduated out of management consulting and went out to figure out what clean energy startup I was going to join, and stumbled instead like I said, in 2004, into a role in a fledgling growth stage, cleantech venture capital firm, really before there were a lot of growth stage cleantech startups. It was really at the very beginning of that big upswing in the 2004 to 2007 timeframe of the whole sector. Since then, I ended up working later with a different venture firm and then eventually ended up joining my current team within a single family office that we all came together around.

Thomas Byrne: You’ve never actually had the opportunity to be that entrepreneur in the early stages that you envisioned, and you kind of leap frogged it right into the investor role?

Rob Day: That’s exactly right. I frankly was working with that fledgling venture firm on a very part time basis, because I thought it might help me figure out what startups I wanted to go interview with. Instead, I guess it ended up being a good fit. One of the things which I found is, and I’ve just seen this again and again through the years, and you see this yourself with you and your team, and we see this now ourselves with our team. Being an entrepreneur is really, really hard and it’s got to be your singular focus. I am, I find, not particularly genius at any one thing, so the ability to take a step back and really be more of a generalist who tries to be smart on a bunch of different things ends up being a better fit for me. That ends up being something that lends itself sometimes well into investing.

Thomas Byrne: Yeah. I have to say, being a founder of a startup myself, you find yourself resorting to being a generalist as well. All these skills that you built up in a particular trade over the years are useless if you can’t adapt new skill sets as you’re running the company. You were involved in investing in clean energy in the early stages, almost before even the boom, ’04, ’05. What was that landscape like? What kind of investments were you looking at, were out there, was there was a lot of hype in the VC market coming? Give us a snapshot of that.

Rob Day: Yeah, I’ll give you a couple of snapshots. One, at the very beginning of that period, before it was growing popular among the venture capital set. In fact, we kind of referred to it as the clean tech club. I don’t know how many of us referred to it as that, but I did. It was a very small handful of VCs. Some specialists who were just slugging along trying to figure out how they could make strong investments out of, at that point, out of favor sector, but with a lot of promise and then we really celebrated a few really smart generalists who were like Raj Atluru and the like, who were starting to get into the space and IRA Aaron Price, the people who are willing to take that flyer from a more of a well known generalist firm and start to stick their toes into the cleantech water.

Then those particular cases, and in other cases, really take a leadership role. It was fun because we can actually get just about everybody who is an investor in the sector together in one room at that point. The conferences were good chances to catch up with everybody. Everybody was looking for opportunities to go invest with each other. It was very collegial and it was born out of the fact that everybody knew, Hey this is going to be hard, but we’re finding good solid businesses with compelling economics. It’s really what people were looking for at that stage. It was a lot of hard tech stuff, meaning, hardware related businesses and the like. Really, what we were looking for were compelling unit economics. Right?

Thomas Byrne: Yup.

Rob Day: There wasn’t this sense of, Hey, the next unicorn that, did that phrase even existed at that time? The next unicorn is going to come out of this sector. Instead it was, Hey, we’re going to find good industrial would be technology solutions. Maybe, we were at the right place at the right time when some of these market breakthroughs happened. The anticipated solar revolution starts to happen, et cetera. It looked very much like it. It looked, I would say, at the tail end of the nineties when I wasn’t actively an investor in it, but I got some exposure to it and it was very much around, Okay, what’s the next sort of chemical breakthrough or mechanical breakthrough or engineering breakthrough that’s going to lead to some step change in the economics of how we produce a commodity or otherwise a hardware related business.

Thomas Byrne: Were the investors at that stage motivated by clean energy and environmental goals at the expense of economics or how were they looking at these investments?

Rob Day: No, the opposite. The opposite. It was, it was a hearty crew of investors who had convinced themselves and myself included that, Hey, this is the direction the future is going to move is towards more efficient use of natural resources. That likely still hasn’t changed for the most part, now we do have the emergence of more sort of impact oriented investing in a major way. Especially at that time, you had groups like, he had group like Rockport Capital, all focusing on, how do we find good, compelling, just unit economics, under the theory that if you just build a better mousetrap, the world will beat a path to your door. Right. So, we can get into whether that’s proven to be true over the years, but at the same time, that’s really what people were looking for, were better mousetraps.

Thomas Byrne: What kind of investments, you said it was mostly hardware. Are you talking equipment, solar panels, lighting fixtures, what kind of investments was, were coming in the door?

Rob Day: Exactly. All the components thereof. What’s a better way to do inspections of solar panels, much less, what’s a better way to make a solar panel? You had the emergence of all of these thin film, solar technologies and all these concentrator solar technologies. I remember at that point in time, you would talk with people out of the research community, especially at places like the BOE where they were trying to get a good perspective on what was going on. There was this vision at the time, that the world was going to be taken over eventually by solar, but it wasn’t going to be polysilicon crips, it wasn’t going to be one consistent winner take all, because every rooftop is different. Fresnel lenses were going to be an important technology and all of these other different types of solutions were all going to have their spot in the universe.

Thomas Byrne: A lot of those technologies and a lot of those investments didn’t pan out. A lot of venture capital firms found that the investments were not what they expected. Is that accurate? How does that couple with the unit economics that you were seeing at the time?

Rob Day: I think that’s accurate. I think that some of the folks who were actually investing at the time, at that time, at that early point before it became sort of a clean tech wave, those folks actually were able to generate some nice returns at times, but basically since then, once the upswing started happening, if you look at the available research, like what Cambridge Associates has published on cleantech venture capital returns, it hasn’t been a barren wasteland, but at the same time it just simply hasn’t produced the kinds of returns, at least as an overall sector that venture capitalists are looking for and that they’ve promised their limited partner backers. It ended up not being a very successful, and there’s a whole host of reasons as to why, but first and foremost, you have to understand that everything changed when CalPERS and CalSTRS started their GreenWave program. A lot of generalists, we see, start getting into the sector, everything changed at that point. That was just a couple of years in from when I got started.

Thomas Byrne: What changed?

Rob Day: Well, basically when everybody started jumping in and out of the big mainstream, heavily capitalized venture capital firms, they were looking for something different. What I was describing before the cleantech crew, it’s not like people had low aspirations for the investments they were doing, but at the same time there was a sense of, Hey, our fund is only $125 million and we’re probably going to have to do a lot of the backing of this company by ourselves, so let’s keep it rather lean, right? Let’s build a good company off of a relatively small amount of venture capital when suddenly you have some major LPs like, CalPERS and CalSTRS, jumping in and saying, we’re now going to put millions and millions of dollars into this, and that triggered the wave of other limited partners saying, okay, great, other pension plans, other endowments saying, great, we’re going to put a lot of money into this as well.

Then all of a sudden, it became the place for a lot of generalists folks to jump in. One of the things that really marked that period for me was I was only two years into a venture capital career, still very inexperienced and yet I was getting invited constantly to coffees by people at well known venture firms, who had been suddenly tasked with transitioning from being on the telecom team to being on the cleantech team and Hey, let’s talk about what you’re seeing in the market and Hey, where should we be looking to invest? I literally had a senior partner. There, I was a pretty junior investor and I had a senior partner at one of the best well-known venture firms call me up and he said, in the course of that conversation, he literally said verbatim, Rob, when you find stuff that is more capital intensive than you guys can do, call us because that’s what we’re looking for.

What people started to think, because of just the general zeitgeist of policy conversations at that time and where the economy needs to be and where the breakthroughs are starting to become more visible. Therefore, where’s the big name VCs started to look at it. People just really felt like we were on the cusp of a real market revolution. That was true by the way, but they also correspondingly thought, therefore this is the way we’re going to find the next unicorns. We’re going to find the solutions that are going to be the breakthrough costs for changing innovations in solar panels and fuel cells and batteries and you name it. This is what’s going to be the way that we unlock tremendous venture returns. By the way, not necessarily a bad things from their perspective that it also is going to soak up a lot of capital along the way because Hey, we’ve got the funds to put the work.

Thomas Byrne: Yeah.

Rob Day: We’d like to put them to work quickly. The whole thing became this virtuous cycle as it were, but virtuous sort of in quotation marks, but this virtuous cycle around, Hey, here’s an area that took up a lot of capital, we could put a lot of capital to work and it will generate a lot of returns for us. Then that drove the entrepreneurs to seek more capital intensive, tactics and strategies and models and that sort of thinking really came to dominate the industry by around 2006-2007.

Thomas Byrne: The type of capital that was necessary in the clean energy space wasn’t necessarily venture capital, right?

Rob Day: That’s what we know in retrospect. At the time, all of these, I remember being in a room in Boston where, transitioning to a firm here in the Boston area, by about two and a half years into being a VP. I remember, at one point, we got basically all of the venture investors in town into one room together to strategize how we were going to go to, as venture capitalists, we were going to go to Washington, D.C. and basically orchestrate a whole big government policy program in support of these kinds of technologies. The whole presupposition there was, Hey, okay, we’re going to do most of the heavylift in the early going as the theme and then there’s going to be government dollars or some kind of government support or corporate dollars or a little little bit of a business plan sort of step one VCs, step two question mark, step three profits. Right, unfortunately.

Then, there was this picture that eventually all we do is we just hand it off to mainstream projects finance and they’re the ones that provide the billions of dollars to carry it through. I don’t think any of us realized, certainly I didn’t realize just what a wide goal there was in pragmatic reality between the role of the VC and the role of the project finance. Certainly a lot of the anticipated support at the federal level vaporized over time.

Thomas Byrne: In hindsight, do you think that we had, it was necessary nonetheless for that, a more aggressive venture capital to come in to allow some of these technologies to mature before the handoff of project finance? Was there, I guess was there an alternative in 2007-2008 to venture capital in this space?

Rob Day: There really wasn’t, there were some of the things that I mentioned, you could use at various points, the loan guarantee program to get your manufacturing plant built. You could get a strategic partner who would finance your first large scale plan. One of the things that really marked that period was a lot of the innovations were very focused on centralized type solutions or big manufacturing plants or something that involved a singular piece of large infrastructure, either on the manufacturing side or the where the actual asset side, and that would lend itself to, okay yes, we need to put hundreds of millions of dollars capital somehow, and I guess VCs are the ones that are going to have to do it, in order to get it to the point where project vignettes can take the baton from us at that point.

One of the things that in retro, there’s a lot in retrospect that at least for me, I can’t speak to anybody else smarter than me, but for me, since then I look back and I’m like, wow, okay. A lot of the really compelling innovation, though, were much smaller scale, sort of distributed asset innovation. A lot of this solution in terms of the capital side that were needed just weren’t there yet, but now we’re starting to see them. I mean, you go back to that period, it’s exactly what you’re saying. At least in my memory, there was a lot of, unknown that we eventually had to struggle with.

Thomas Byrne: Fast forward to, I don’t know, 2010 to 2012, the VC market has pulled back a little bit from the space. How did you adapt as an investor in the space?

Rob Day: By then, I’d gotten pulled into a really fascinating situation. My now partner, Christian, had been tasked with building out a carve out within a single family office. For anybody who doesn’t know, that basically means we’re investing on behalf of a wealthy individual. We had been tasked with, here’s a blank sheet of paper, small amount of capital, maybe pull a small team together and go out there and figure out how to actually make compelling returns off of the clear, natural resources mega trends. We did have that pullback, right? I mean the 2008-2009 timeframe was the beginning of what ended up being a very slow, but pretty catastrophic train wreck. Across the industry where people had built business models where their startups that were predicated on the availability of large amounts of capital. Of course then, a lot of that capital dried up. Capital dried up across all sectors, but it just didn’t come back into these sectors.

Thomas Byrne: Yup.

Rob Day: Over time, a lot of companies ended up limping either across finish lines or just going away altogether. Meanwhile, there we were as a team and we’ve eventually pulled in by now, other partner Nikhil as well, who had a background and structured and project financing. What we were able to do with our broad experiences mixed together was start to think, create the creative. What are new models that we can find? One of the things that we did is we started networking in with other family offices, because we thought, well we’ve got the ability to think creatively, we’ve got the ability to be flexible with our investment model, we don’t have to do the venture capital thing just because that’s the way it’s been done in the sector today.

When we started connecting in with other family offices, we started hearing a lot of common limits, a lot of folks saying, yeah, we, we’d like to think creatively, but it’s hard for us, because family offices typically aren’t comfortable playing a lead role around an investment, especially creating an entirely new investment model. Therefore, we’re mostly seeing that gets passed to us either because of VC already invested in it and structured it that way or we’re just at the tail end of some investment bankers call lists.

We started banding together, first very informally and not publicly, with several of those family offices with the idea of, Hey, let’s just compare notes and look to co-invest with each other, look to think about how we could share new ideas. That ended up becoming a formalized group. Then that ended up being a group that we talked about publicly, with very unfortunate timing because, first of all, since we’d never thought about talking about it publicly, we called it something inane, like the Cleantech Syndicate.

Then, of course we had the great timing of announcing the Cleantech Syndicate, the very same week that Whitey Bulger got arrested. There were a lot of jokes, properly so, at our expense that week, but that eventually became, it’s something that we were able to combine with another network of such groups that we’d been involved in. It’s now actually a really big deal that this woman Régine who is phenomenal, has been running and grown terrifically, it’s a group called the CREO, and to get now because we continue to be very bad at naming things.

That’s how we kind of went at that problem. It was a terrific opportunity for us to take that step back to trying a different, a bunch of different roles. We acted as limited partners ourselves, putting money into other venture firms. We did some early stage ventures and growth stage stuff. We looked at a bunch of stuff in centralized infrastructure. Although the returns even then were pretty uninspiring. They’re even worse now. We looked at a whole bunch of models that don’t even have names and it was a tremendous opportunity to try that a bunch of perfect.

Thomas Byrne: It was, there was no clear mandate necessarily, other than finding attractive risk adjusted returns. Where during that experience where you sort of had the opportunity to put money in different spots, where did you find yourself putting the money or being lured into, what was the most interesting opportunity in that period of time?

Rob Day: Yeah, and there’s actually a totally different answers to various parts of that question, because one of the things we found is that the venture capital structure has so dominated the entrepreneurship ends of these markets, that even when we didn’t intend to invest into a venture capital opportunity, it quite often ended up getting tied into a venture capital structure. If you want to talk about the pros and cons of that, but basically, even though as we tried to shift away from venture capital, we found that a lot of what we did ended up looking like venture capital. Then, the other thing though that we found more positively, it gave us such a tremendous opportunity to hang around with a bunch of really smart, creative people out of the family office community, the strategic community, the institutional investor community, all these different groups. To discover that there was another major trend that I’ve already alluded to that was going on and that was around smaller scale distributed solutions.

It turns out, that over the past 30 or so years, there’s been a lot of innovation that often times, isn’t some kind of really whizzbang space age innovation, but around the development of smaller scale solutions for providing energy or energy services or wastewater treatments or even indoor food production and certainly ways to some other form of value kinds of treatments. They’re relatively smaller scale, they’re more sort of industrial scale as opposed to utility scale. That’s been tremendously enabled now, by the fact that thanks to advancements in IT and telecommunications and automation, that you don’t have to have a four person crew so that you have 24/7 coverage to be able to turn dials and monitor gages on site for one of the smaller scale systems. You can basically run it for the most part from headquarters. That dramatically changes the economic value proposition of a lot of stuff because the trade off of centralized hub and spoke infrastructure has always been, Hey we get economies of scale at the spoke at the big utility scale plants of whatever size, whatever type.

Then we have to pay a lot for the distribution infrastructure. Whether that’s, in the case of what food or water actually physically transporting heavy objects or whether that’s in the case of electricity having to manage a bunch of wires, keep them constantly in balance with the lights. It turns out that you can get a lot of economic trade off, a lot of economic benefit, by locating these kinds of systems, that are smaller scale closer to where they’re actually needed.

Thomas Byrne: Yeah.

Rob Day: If you can take the labor efficiency equation, now that I’m getting back into my economics dorkiness here, but you can see the way that I kind of think about things at a macro level, favoring the smaller scale systems. We saw, as we looked across this landscape of all of these really smart investors we knew, that they had collectively invested in and helped bring to market a bunch of these kinds of solutions, but that were being held back for the most part, with the exception of soler, where a bunch of smarter people than us and we got to do some of it in ourselves, learn how to actually capitalize the deployment.

With that, we sort of said, okay, great. Here’s a recipe and a mega trends and what do we do about that? That’s one of the things that we saw that we did like.

Thomas Byrne: I’m glad you brought up distributed generation. I think it’s one of the more interesting opportunities for capital to come in right now in part because it still is not attracting the same level of capital that larger projects are attracting. It’s one that we view at Clean Capital, is one of the challenges to ultimately have it distributed generation and reaches potential. I know you’re looking at a lot of this stuff as well. Why is it a space that has struggled historically to attract the pension funds, the insurance companies, folks like that?

Rob Day: Yeah, and that’s it. The fact that, any question, I don’t think there’s any one answer. I think you’re spot on and diagnosing that it is an issue, but I still am figuring out frankly, why it’s been held back. I’ll give you a couple of illustrative anecdotes around that. First of all, a year and a half ago, I got invited to sit in a room, invite only, with a bunch of pension plans from around the world. Not to dig into the details of why, I’ll just state it was not a clean energy focus conversation. It was really a conversation around how they could collaborate with each other towards finding innovative new investment approaches and really just figuring out how to work together as institutions.

The thing that was really fascinating is one thing kept coming up in that meeting. Again, it was not a clean energy meeting, but one the opportunity that they kept saying we have to figure out how to invest into, was distributed generation and so it’s not for lack of interest. It’s not even for lack of the recognition of the opportunity. These are very smart 30 year investors, for the most part, at that level. They can see the long term trends as well as anybody and you don’t even need to believe in the need for impact or the need for addressing climate change or anything to just understand that a basic level, the world’s going to need more of everything and more efficient use of everything and distributed generation is the fastest growing portion of the market with a lot of tailwinds, so to speak, behind it.

Thomas Byrne: Yeah. If the thesis is that distributed generation is going to be a crucial part of the energy future, then it’s inherently necessary for us to figure out ways to get pension capital, insurance capital into it.

Rob Day: Exactly. What holds it back, though, right? What seems to be holding it back is that it is not traditional project finance. It’s simply not traditional infrastructure. To be able to figure out how to scale the capital appropriately and take smaller scale projects really is a different kind of recipe. It’s very [inaudible 00:27:33], obviously. That’s where you guys and your team, other folks in the LS, are working on trying to figure out how to bring more of that mainstream capital in. The mainstream capital and the recipes their already used to don’t quite fit without some help. Part of that has to do with the fact that if you’re building a large centralized wastewater treatment facility, a big municipal sewer treatment plant, you pretty much know that that’s going to be a one off thing.

You are hiring the engineer to do the specs for that particular project. You’re financing it through that particular project. Everything is done on a bespoke basis for that project. In order to bring it to more of the distributed generation side, you’ve got to get much more into figuring out how to standardize, how the validate the developer and the project on a much more easily replicable basis. That’s pretty particularly difficult in an inherently messy world that just resists such standardization and the like.

Obviously, we’ve seen that there are ways to do it. I think what you guys have seen and what others have seen historically, is that when you can step in and provide the right kind of recipe, you can get some really attractive returns for playing that role. We’ve also seen that when you do start to show, Hey, this recipe works, then they’re very interested, larger, more mainstream capital providers at the tail end of that who are very excited to jump in and do the 30th of something. It’s that, how do you unlock the early stages of these distributed asset models that are really hard to come by.

Thomas Byrne: Yeah. We think that you have to make it as easy as possible for the investors to understand, to navigate, and to invest in, in order for them to actually do it.

Rob Day: They have trillions of dollars of potential places around the world that they could be investing. They need to be shown, not okay, here is a place where you could theoretically put money to work and they can make all the sense in the world, but if it’s not, Hey, here you go, here’s the box we made. It’s got a crank on the side when you turn the crank and makes money, right? That’s got to be made that simple and that easy.

Meanwhile, the other thing about distributed generation and all the other distributed stuff that we now operate in, as well in the water and the food and the waste side of it. You’ve also got a set of developers and project developers who often times, don’t even think of themselves as project developers. Who, it needs to be made easy for them as well. That’s a world of, sort of smaller project development, we’re trying to provide your wastewater treatment system has an onsite service, where stuff is still being figured out in terms of making that independence scalable as well, and I know that’s one of the things that you and your team work on.

Thomas Byrne: Awesome. So let’s, as we wind down this interview, let’s look to the future a little bit. As you reflect on the last 15 years of your career in clean energy, how far have we come?

Rob Day: From a market perspective, we’ve come a long way. I mean, we’ve got a heck of a long way to go obviously. When you think about it from when I was first starting to be an investor and we thought, Hey, maybe someday solar will become cost competitive, to looking at what has happened in terms of the price of solar power today. When you look at the fact that going back to what is it, the early days of when people were really excited about the thing called a Tesla Roadster, the fact that George Clooney was able to get a hold of one of them. Right. Like those kinds of things we look back upon now and we realize, wow, over the past 10 plus years, the world has dramatically changed in these markets. The thing that’s also frustrating though is the capital hasn’t come back.

Thomas Byrne: Yeah.

Rob Day: Right? You’ve got this weird cognitive dissonance of the fact that we’ve got some of the world’s fastest growing markets with a very clear mega trend supporting their continued growth in the future. Yet, this thing, investment models haven’t figured out how to make money off of that yet. The great news, sort of looking forward and where we are now, is that I think we’re on the cusp of seeing the emergence of a much more robust capital ecosystem. That’s exactly what we, I had the opportunity a few months back to sit in the back of the room at a mainstream, private equity industry conference specifically around energy, but not at all around clean energy. They had one token panel around clean energy. They invited me to speak and that was my opportunity to sit in the room and listen to the rest of these, essentially oil and gas guys, and somebody asked a really smart investor out of one of the big name PE shops, Hey, with oil prices that blah blah blah, you know, where should we be looking to invest?

I thought his answer was brilliant and really insightful and applicable to our industry. He said, look, I can give you a snapshot answer of where are you should have bet at this point in time. The more important thing is, I get the opportunity to invest into all sorts of different models and all sorts of different opportunities you’ve got all the different basins. We’ve got upstream, we’ve got midstream, we’ve got downstream, you’ve got end users, we’ve got all sorts of different investment models with risks and the levels and return levels, even within each of those little buckets. His point was at any given moment, at any given part of the cycle, there’s somewhere I’m supposed to be invested. I was sitting back there thinking, man that’s exactly what we haven’t had.

It goes back to what I was saying earlier, we had venture capital and then we had, sort of traditional infrastructure and, a huge gulf in between it and that’s one of the reasons, one of the biggest reasons why, this industry has been riding such a rollercoaster as it has over the past decade. The capital solutions that has been too sparse and at different points in economic and securial cycles, the appropriate type of capital hasn’t been there. The good news is I just feel a lot of really smart investors started to come out with interesting models now. It starts to feel like we’re now going to start to have a much more diverse set of capital solutions to support the market.

Thomas Byrne: Yeah, I think that there was an eagerness of capitals coming to the space and we’re just now getting to the critical mass of business models and opportunities and ways to invest in this so that capital can flow in.

Rob Day: I can tell you the pension plans, like I said, are even more focused on it now. All of the endowments, all the pension plans, they all have somebody who is being tasked with figuring out when and how they can put that, what work into these markets. Our family office, Syndicate, that I described was always engaged with very, very large institutional investors who would always come, trying to figure out how they could learn from the types of financial innovations being done around that Syndicate. There’s just a sense that what needs to happen is now to demonstrate some real replicable returns and then a lot of capital’s waiting to come into the market.

Thomas Byrne: On that optimistic note, I’d like to thank you, Rob, for joining Experts Only podcast.

Rob Day: Thanks so much for the invitation. Sorry for talking your ear off.

Thomas Byrne: No, it was wonderful. Thanks very much.

Thomas Byrne: That was a great conversation with Rob day who took us through the short history, clean energy investing. I want to thank our producers, Lauren Glickman and Emily Connor. More episodes are available at cleancapital.com. We invite you to keep tabs on iTunes as we roll out new weekly episodes.

Jon Powers: Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes, or wherever you get your podcasts. If you like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation, and finance with you.