Capital flowing into green
June 18, 2009, 12:49pm PDT | Length: 00:03:00
At Greentech Media's Green Building Summit in Menlo Park, Calif., Cascadia Capital CEO Michael Butler discusses three subsectors of the green-building industry that recently began receiving the most capital from the stimulus plan and private sectors.
>> I was going to ask Michael to maybe give an overview of his perspective about, you know, just a few minutes about what you are seeing in the green building industry in general and then how you are talking to your company or companies that are you working with.
>> Michael: Sure. We are definitely starting to see a pick-up in activity in the green building subsector. I can break it down into different subsectors under green buildings. One is efficiency using software, using software and I key technology to automate buildings, get information to the right people who can make smart decisions. That's one subsector we are starting to see capital flow into. The second subsector is materials, products. I think that's slowed down a little bit. The companies that have capital now clearly have an advantage. Starting a new company is very very difficult given the state of the new construction industry. In addition, there's a challenge of getting to market. It's very very difficult to break into the construction market from a distribution standpoint. So the companies that have capital and are developing new products clearly have a strong strategic advantage. The third subsector we are starting to see more and more activity in is services, managing buildings, buildings for example, McKinstry, the 350 400 million dollars a year revenue company that's growing very very fast. We are starting to see a lot of McKinstry look alikes, big service sector, starting to emerge under the green building umbrella. So those are the three sectors we are seeing a lot of activity. Clearly taking IT to automate buildings is high and I think the service sector has also seen quite a bit of growth.
>> Great. Are you talking to your companies about this stimulus and how's that playing out?
>> Michael: Yeah, we are. I think every company that doesn't have money is betting their business plan on getting stimulus money. And I think that's a bit dangerous right now. I think that there's too many entrepreneurs that are looking and seeing that stimulus money as potentially manna from heaven. What we are telling companies is, look, make sure that you get private sector capital as the capital basis of your company. If you think there's an opportunity in DC, look to partner with somebody. So I'll use McKinstry again, McKinstry is a channel to market for many many many new companies with emerging products and new technologies. And they are actually partnering with these companies to then go to DC and try to get a piece of the action. So I think you have to be very careful. If you are a small company, very easy to get distracted by the lure of this money or this opportunity, burn a lot of resources without a lot of visibility in the process or the actual likelihood of being successful.
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