This blog is part of a continuing series of interviews with the semifinalists of the…
Q: Who is behind the Accelerator in the USA?
A: In 2006, a group of Silicon Valley entrepreneurs and business leaders saw a need to accelerate the creation of cleantech companies in California. As a result the group formed the California Cleantech Open competition, and a 501(c)(3) not-for-profit organization to run it. The group quickly realized that this organization should be taken to the national level – 2009 marked the beginning of the National Cleantech Open competition, which included 3 regions: California, Rocky Mountain, and the Pacific Northwest.
Fast forward to 2014 and the Cleantech Open Accelerator you meet today. There’s still a competition element, and there are major prizes to be won – but our main purpose is to accelerate your cleantech ideas into successful businesses across the country in 8 regions.
Q: What is the mission of the Cleantech Open?
A: The mission of the Cleantech Open is to find, fund and foster entrepreneurs with big ideas that address today’s most urgent energy, environmental and economic challenges. Our accelerator program constitute much more than a competition; we’re a non-profit organization devoted to helping cleantech companies succeed. The competition itself is only a small part of what you will experience if you are selected as a accelerator participant. Our focus is on entrepreneurs and on great ideas that provide environmental benefits in the areas of renewable energy, energy efficiency, pollution reduction and resource protection and conservation. We also use our events to educate our program participants and the general public about the challenges we face and to demonstrate clean technologies that can provide solutions to those challenges.
Q: How does the Accelerator work?
A: The Accelerator consists of a number of programs; a competition, mentoring, training, showcasing of your clean technology or service, and access to the investment community. The first step is to apply for the Accelerator.
Q: Who can apply for the Accelerator?
A: The Accelerator is open to early-stage entrepreneurs who meet the criteria. Your company must have less than $1 million in external private funding (from angel investors, venture capitals or other third party sources of equity funding), less than $5 million in all other sources of funding (grants, friends and family and your own investments in your company) and at least one team member must be a US citizen or resident alien.
Q: Can I participate with more than one team?
A: Yes – if you have more than one technology. Applicants may enter multiple technologies, each with the same team members, as long as each team has a different Team Leader. However, judges reserve the right to consider whether the commitment level of the team to a particular submission is affected by the multiple entries.
Q: Can I enter my technology into more than one technology category?
A: No. A given technology may be entered in only one category. However, as explained above, the same team members may form a different team with a different technology and enter to compete in a different category, as long as the Team Leader is different for each team.
Q: How do I apply for the Accelerator?
A: Click here for complete details.
Q: What does it cost to enter the Accelerator?
A: Go here for the current application and participation fees. No refunds are provided. Student teams must have a full-time student as the Team Leader and at least half the team must be students. The fee is for one team to enter one technology category. Each individual team entered into the Accelerator must pay the full application fee.
Q: How do I pay my application fee?
A: You can pay your application fee by credit card through our secure online payment system.
Once you have completed and submitted your final online application you will need to pay your application fee in order for your application to be accepted. To do this – login to your team profile and, select the “Please Pay Entry Fee” option, and follow the instructions.
Q: What happens to my application fee?
A: Your fees go toward supporting all benefits you are provided during the Accelerator.
Q: How do I submit my application?
A: Applications are submitted online once you have created your team. You must first register on our website and create your team. Once this is done, log in, select “Complete your Application”, and follow the instructions. Do not send us your application by e-mail or the postal service.
Q: Can I change my application after it is already submitted?
A: Yes, you can change your application online as many times as you like before the application deadline. (link to “Key dates & Fees” page)
Q: Will I receive feedback on my application?
A: Yes, you will receive limited feedback on the sections of the application that needs improvement. In addition, events organized by the Cleantech Open are good opportunities to receive informal feedback from experts in the field.
Q: Assuming my entry is competitive, what are my chances of being selected as a participant and then winning a prize?
A: It is important to understand that you should not apply for the Cleantech Open focused mainly on the prize money. That undervalues your business and its potential. Participants from previous years repeatedly tell us that the major value came from all the training and mentoring and the opportunity to plug into a major cleantech network. To give you a sense from previous years, about one third of applications have been accepted as participants. This is not a hard percentage – it varies based on the quality of applications we receive each year. About one fifth of all participants have then gone on to be chosen as finalists; all finalists automatically receive a prize. The minimum prize this year is $10,000 in cash and services.
Q: I can’t log into my Cleantech Open account.
A: Make sure you are currently logged out by clicking the “Logout” link next to the banner at the top. If it says “Log In”, you are already logged out, so you can ignore this step. Close all of your browser windows. Open your browser again and try to log in on our site. If this does not work, clear your cache, delete the cookies in your browser and log in again.
Q: What services and benefits will finalists receive?
A: Click here (link to “Key Benefits” page) for all the benefits and services teams receive.
Q: Assuming my entry is competitive, what are my chances of being a finalist and then winning a prize?
A: Each region is looking to recruit a different number of applicants. There may be other differences between the regions, though the ratio of participants to original applicants is intended to be roughly equivalent, using common criteria, to maintain consistency and fairness.
Q: How many prizes are there, and what is included?
A: Each regional finalist will receive a prize package worth $20,000 in cash and services. Each region will also select a sustainability winner who will receive a further $10,000 in cash and services. One national winner will receive a grand prize package worth up to $200,000 in investment and additional services. *The grand prize investment is subject to change.
Q: What if the in-kind service provides are not located in the same city as I am. How do I benefit from winning these prizes if I am not located near these companies?
A: All service providers are willing to provide their services via telephone and e-mail. In-kind prizes are almost always sourced from service providers in the region in which you participate.
Q: What kind of legal entity do I need in order to accept a prize?
A: A startup can be a group of people who have formed a team to apply for the Accelerator. However, a legal entity (corporation, LLC, or similar) must be created prior to receiving any prizes, and any such legal entity must have an ownership structure typical of an independent startup.
Our prizes are not intended to subsidize corporate or university projects. The amount and source of any secured capital arrangements should be clearly identified in the team’s application.
Q: Are winnings taxable?
A: Yes, all winnings are taxable and the winners must complete a form W-9 prior to payment.
Q: Is my company eligible for the Accelerator?
A: Click here for complete details.
Q: What are the regions of the Accelerator & Competition?
A: Click here for a list of regions in the United States.
Q: Can I apply in any region?
A: No. If you have team members who live or work in a given region, you must apply in that region. If you have team members who live and work in more than one region then you must apply in the region in which the majority of team members live or work. If your team is equally spread between two or more regions then you may choose from the regions in which you are eligible to apply.
Q: Do I have to give anything back to Cleantech Open, such as equity?
A: The Cleantech Open is instituting a new equity contribution program for the first time this year. In order to support the sustainability of the organization and in recognition of the value it provides, the Cleantech Open is requiring that all companies accepted into the Cleantech Open contribute one percent (1%) of the equity of their Cleantech Open entered or created company, on a fully diluted basis, to the Cleantech Open, with the ability to opt-out of this requirement on or before October 1 of the year of acceptance with no effect on the participating company’s further participation in the Cleantech Open.
The equity interest would take the form of common stock or equivalent interests in other entities (LLCs, partnerships and the like). The Cleantech Open is not only dedicated to supporting its participants, but its alumni as well, and we believe having an ongoing interest in the companies that graduate from the accelerator is a mutual benefit.
Additionally, prizes may be awarded as unrestricted cash or as a convertible note investment with terms highly favorable to the winner, or both. Terms offered for the note in the past have included deferred interest, no warrants and no obligation to repay the note, only a conversion to stock in a future round of investment on very favorable terms to the winner.
Q: Our team has a breakthrough idea/technology, but we do not have a working prototype. Do we have a fair chance to win?
A: In the Competition portion of Accelerator, your team must demonstrate that your technology and/or idea are feasible and that they can be made commercially available in the short-term regardless of whether or not a prototype currently exists. Proven feasibility is a requirement to have a high chance to win the competition. From the pool of teams that demonstrated a convincing case of feasibility, our judges will choose the team with the most innovative and with the highest economic and environmental/social impact as the winner for each category. If your team feels that your technology/idea is ripe for commercial application but you are experiencing trouble demonstrating feasibility, please consult with our organizers at one of our briefings, or contact us.
Q: How are applicants and participants assured that their technologies, concepts, and inventions will not be stolen during the Accelerator?
A: This concern is one that many entrepreneurs share, and we are keenly aware of the need to treat this topic with sensitivity. Our judges handle the applications and other materials we receive with caution. An individual volunteer working closely with your company may choose to sign an non-disclosure agreement on his/her own behalf (but never on behalf of the Cleantech Open); if you plan to disclose confidential information you should ask your mentor or other volunteer assisting you if he/she will agree to sign a non-disclosure, noting that both the language and the execution of the agreement are your responsibility – the Cleantech Open does not provide or enter into such agreements. If you have valuable intellectual property, please seek legal advice prior to submitting your application. By entering the Accelerator, each applicant will acknowledge that information provided by such entrant is at risk of disclosure. The disclosure of any information regarding your intellectual property may constitute a “public disclosure” that adversely impacts your potential rights. Practically, we expect that most applicants and participants will be able to present a compelling business case without divulging unprotected proprietary information.
Q: Although my team has not received any VC funding and do not plan to fundraise heavily before October 2013, we have been approached by some investors already and we believe that there is high likelihood of us having access to large investments in the near future. Do we have to prove that we “need” the competition prize to increase our likelihood of winning?
A: Our judges evaluate entries based on their merit. We want your team to tell us how you plan to take advantage of our prizes, but our decision will be affected mainly by your performance in judging.
Q: Our startup will have tremendous environmental impact but our projected financial results are not too strong. Are we at disadvantage in comparison to other teams that have higher returns in the short-term?
A: Ideally, our winners will have the highest overall potential in terms of combined environmental and financial impact. In order to win the competition, your team needs to demonstrate financial sustainability. At this time, we discourage nonprofits from applying, but we hope in the future to have a category to address those types of startups. Please note that a number of teams that participated in the Accelerator in the past have underestimated the potential market for their business. We encourage teams to give some thought to all of the potential applications of their business and to address their market in an expansive way. Please attend our workshops to learn how you might improve your financials to increase your chances to win the competition.
Q: We incorporated our startup a few years ago. Although we are still in startup mode, we have existed for a while. Is the fact that we are an old startup and/or that we have participated in/won business plan competitions going to hurt our chances to win the Cleantech Open Accelerator & Competition?
A: Our judges will want to understand why your company has not been able to make substantial progress since you started. You will need to prove that you understand what the problems were, and that you have a convincing plan and the ability to fix these issues in the near future. If appropriate, you may state how the competition will help you address any obstacles. Based on this information, our judges will evaluate your entry relative to other submissions. Whether your team has or has not won any prior Accelerator & Competition is irrelevant to the judging panels. The most innovative team with the highest combined environmental and financial potential will win.
Q: Our team is addressing an environmental problem that requires more than five years to scale up and to become financially attractive. Do we have a chance to win the competition?
A: We’re looking at startups that have solid financial and technical scale-up plans within a five year horizon. If your current solution does not meet this time frame, we encourage your team to focus on an aspect of the problem that will render a commercially viable product or service in less than five years for our competition.
Q: How will applicants be assured that their technologies, concepts, and inventions will not be stolen during the contest?
A: We appreciate concern regarding this very sensitive matter. Our judges will handle the executive summaries and business plans that we receive with caution. However, the judges, sponsors, partners and Cleantech Open organizers will not enter into a non-disclosure agreement with any participating entrepreneur or team, and by entering the Accelerator each participant will acknowledge that information provided by such individual or company is at risk of disclosure. The disclosure of any information regarding your intellectual property may constitute a “public disclosure” that adversely impacts your potential rights. If you have valuable intellectual property, please seek legal advice prior to submitting your application. Practically, we expect that most entrants will be able to present a compelling business case without divulging unprotected proprietary information.
Q: How can I learn more about becoming a sponsor?
A: Click here to learn more about sponsor opportunities.
Q: I already registered last year. Do I need to register again?
A: You do not need to register again, but please login to your account to update your profile and let us know if you intend to participate in this year’s Accelerator. If you did not create a password last year, you can still use the password reset function to obtain a password.
Q: I did not receive a confirmation email after registration.
A: Check your spam/junk folder. If the email is not there, please contact us
In addition, please be sure to add notifications@cleantechopen.com to your address book to ensure that you continue to receive email communications from the Cleantech Open.
Q: What if I have other problems?
A: Contact us. Please be specific in your message, and describe any error messages you see.
Q: What is Cleantech Open’s Liability?
A: Entrants acknowledge that the judges, sponsors, partners and Cleantech Open organizers intend to carry out a fair and open competition, but are volunteering their services for the benefit of the Accelerator with no expectation of incurring liability by virtue of such participation. As such, each entrant, by entering the Accelerator, will agree and acknowledge that the activities of the competition and all decisions made in the accelerator and competition are within the sole discretion and determination of the judges, sponsors, partners and other Cleantech Open organizers and the entrant will release and hold harmless all judges, sponsors, partners and other Cleantech Open organizers from any claims, liabilities, damages, demands or actions, of any kind or nature, by any entrant arising out of any of the activities of the accelerator and competition, including, without limitation, decisions on competition winners and disqualifications, regardless of whether such actions are willful or negligent.
Q: Can I be disqualified?
A: The Cleantech Open reserves the right in its sole discretion to disqualify any entry that in its judgment violates the letter or the spirit of the accelerator guidelines, processes and rules of the Cleantech Open, and its decisions are final and binding.
Q: Are there other rules?
A: Situations which are not covered by the above rules will be resolved by the judging team of the Cleantech Open and their decision will be final. The staff and judging team reserve the right to amend the rules without notice, including in the event situations occur that are not covered by the above rules or to further interpret or clarify the existing rules when necessary.
Introduction
If you are accepted into the Accelerator, we will ask you to commit to making a donation of 1% of your company’s equity into a shared equity pool, to be aggregated with all other donations and shared as follows:
• 30% of the distributions from the equity pool to Cleantech Open National
• 30% of the distributions from the equity pool to the Cleantech Open region in which you participated
• 30% of the distributions from the equity pool to teams participating in the equity pool in the accelerator year (the class of …)
• 10% discretionary distribution to volunteer mentors
Q: What does it mean to contribute 1% of my company’s equity?
A: If you are accepted into the Cleantech Open we will ask you to sign a commitment to the pool for 1% of your company’s equity as existing at the time of entry or when established in the future. Please note that such equity shall be common and non-voting so the Cleantech Open plays no role in governance and shall not have any preferred rights.
Q: Why should I participate?
A: There are many reasons why we recommend you do this. We consider these some of the most important:
(1) Self-interest. Among other things, participation in the equity pool means that you will participate in the success of other startups in your year. For example, if any one of the startups participating in the equity pool is acquired or goes public, you share in the proceeds.
(2) ‘Pay it forward’. Non-profit organizations like ours tend to operate on slim finances. We don’t ask for contributions that would tax your cash flow in the early days. Instead, we ask for a small share in your upside. Your equity donation might allow us to enhance and expand our programs, bringing more help to more early-stage entrepreneurs who in turn could help us solve this planet’s major challenges. Helping us doesn’t just help entrepreneurs build companies, it helps us to make a contribution to our collective future.
Q: Do other accelerators ask for an equity contribution?
A: Yes. Many accelerators will ask for a significantly greater proportion of your equity than 1% – 3%, 5%, even 10% aren’t uncommon. Some provide investments in return. Few offer the opportunity for you to participate in the upside of the entire class, or the remarkable rate of success from such a large pool of participating startups.
However, there’s no way to know how valuable this all is without actually participating, which is why we allow you to opt out of your equity donation, but the results are outstanding: Even though we accept a large number of startups, over 50% of all active Cleantech Open alumni in the U.S. have now raised third-party capital.
Q: How would I opt out?
A: Opting out is simple and painless.
First of all, we ask you to reach out to your mentor chair or Division Director. Make sure you reach out in advance of the optout deadline: October 1 of this year.
If, after discussion, you don’t wish to continue participating, just send an email to your Division Director and to equitypool AT cleantechopen.org letting us know if you’d like to opt out of all or part of your equity donation. It’s key that you email the equitypool email address and that you look for and verify receipt of a response from us that we have received your email. Please contact us immediately if you do not see that response email.
Q: Is there any downside if I opt out?
A: Opting out has absolutely no impact on any team’s chances in the Cleantech Open, and is not shared publicly or with the judges.
Please note, however, that opting out of the equity pool means you opt out completely: you make no contribution to the equity pool and have no future opportunity to participate in the success of others in your class.
Q: Once opted out, can I opt back in?
A: Yes, as long as you opt back in no later than October 1 in the year of your participation in the Accelerator. Once again, opting back in must be in writing; you must email equitypool AT cleantechopen.org and you must verify a response from us acknowledging we have your email.
Q: Can I donate more than 1% of my shares?
A: Yes, of course – we have a huge amount to do and we’re extremely grateful for all help in doing it; we’re more than delighted if you choose to increase the level of your contribution. Please note, however, that an increased donation is a selfless act – there’s no improved chance of winning an award and no increased participation in the equity pool, which is capped at 1%.
Q: I haven’t incorporated yet. How do I donate 1% of my shares?
A: When you sign the commitment, you’re making a pledge for a future contribution in which you’ll name your company or team. If you receive an award from the Cleantech Open or an investment you will need to incorporate; at that stage you should recognize the donation on your list of shareholders (your cap table).
Q: Will future investments reduce (dilute) the 1% donation?
A: Absolutely. If and when you receive investments, the percentage of your company in the equity pool will reduce accordingly. For example, if you issue new shares to investors that double the value of the shareholding in your company, the equity pool’s share would then reduce to a half percent.
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