As the number of venture capital sources for clean technology shrinks, Garage Technology is seeking to collaborate with large global technology companies to fund early-stage cleantech firms, signaling a shift in the way venture firms do business, says Bloomberg. The new fund will deviate from the traditional fund structure, with Garage becoming a co-investor and being paid a management fee.
Corporations are better suited to seed startups than institutional investors because they are able to pursue early-stage ventures for strategic reasons, rather than purely financial ones. There’s about $2 trillion in cash that’s “stranded” on corporate balance sheets and could be steered toward funding startups, estimates Garage Technology’s Managing Director Bill Reichert. The corporate funding will be off-balance-sheet, with Garage becoming an extension of the corporation’s venture group and their corporate R&D group.
Through this strategy, the firm is seeking to pursue as much as $40 million in annual investment to commercialize technologies in renewable energy, storage and industrial efficiency.
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