Venture Capitalist Planning Is Irrelevant to Successful Entrepreneurship in Chemicals, Materials & Cleantech
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2014 American Chemical Society. In 2010, Dr. Hongcai 'Joe' Zhou and cleantech commercialization firm J.M.Ornstein explored the possibility of licensing Metal Organic Framework materials funded by ARPA-E through Texas A&M University as the foundation for a new startup. The founders felt that the underlying technology was ripe for early commercialization and in support of US Federal funding goals, thought that the time was right to stimulate future jobs growth through entrepreneurism. But there are specific qualities of the chemicals, materials and cleantech (CMC) sectors that limit their appeal to venture capital by pressuring their J-Curve; these include high upfront research and development costs and the long-term nature of time to a liquidity event. To counter these challenges, the founders established a low cash burn plan for the framergy by leveraging university assets and making costs a priority. framergy was able to execute a market valuable license with Texas A&M University and strategic plan leading to seed funding of $250,000 in 2011 and Series A funding of approximately $1,600,000 in 2013. Many great frontier chemical and material sciences can reach the market through entrepreneurism if they match market realities with cost management.
