Surge Accelerator


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  • EXCELERATE LABS – CLASS 170 jobs$7.5M in seed money raisedExitreturnshalf of Fund I ($6.5M exitprice)
  • "If Thomas Edison looked at our power system, he would recognize it," he said. "Whereas, Alexander Graham Bell, if he looked at the communication services, he wouldn't recognize it at all. That's how archaic the infrastructure is.”Take advantage of Technology, Policy and Expertise Shift in Traditional Energy
  • "If Thomas Edison looked at our power system, he would recognize it," he said. "Whereas, Alexander Graham Bell, if he looked at the communication services, he wouldn't recognize it at all. That's how archaic the infrastructure is."
  • Building the necessary transmission infrastructure and utilizing modern information and communications technologies—that is, “smart grid” technologies—will facilitate the integration of renewable sources of electricity into the grid, accommodate the growing number of electric vehicles, help avoid blackouts and restore power quicker when outages occur, and reduce the need for new power plants. Smart grid technologies also provide a foundation for innovation by entrepreneurs and others who can develop tools to empower consumers and help them make informed decisions. A first generation of innovative consumer products and services—such as thermostats that can be controlled from a smart phone, or websites that show how much energy a house is using—can continue to help Americans save money on their electricity bills, and there is great potential to do even more.” – THE WHITE HOUSE
  • Energy Trading and Risk Management (ETRM) solutions provide a transparent view of complex portfolios consisting of physical, financial, and natural positions across all commodities, including crude oil, fuels, natural gas, coal, refined products, and power.  Complete ETRM systems also optimize business processes around the physical movement and delivery of commodities and the risks associated with those activities.  They also enhance the effectiveness of settlement, accounting, and reconciliation processes.Comprehensive ETRM solutions deliver a single platform with the ability to view all exposures and risk analytics, capture transactions, execute logistics, manage positions, perform settlement and accounting functions, and meet compliance requirements.  By fully integrating all data and processes into one platform, companies realize improved business process efficiency and transparency across the front, middle and back office. The volatility, complexity and pace of change in the wholesale energy markets present significant opportunities – and equally significant risks. In this environment, energy companies need to build sophisticated, functionally rich capabilities to address price, credit, operational and regulatory risks. At the same time, they need to remain flexible enough to respond to new opportunities and competitive pressures. This requires a combination of deep industry knowledge, robust business processes and integrated, scalable IT systems.We are looking for entrepreneurs that understand and can develop software solutions that offer commodity exposed companies the ability to manage all aspects of the front, mid and back-office processes. Key Application Areas:• Market Data acquisition • Real-time data, connectivity and analysis• Regulatory compliance• Analyzing and managing transaction and portfolio risk• Clearing and reconciling transactions, as well as transaction invoicing and accounting• Carbon trading• Weather Integration• Demand-Response integration
  • Surge Accelerator

    1. 1. Houston’s Mentor-driven Seed Accelerator<br />SPRING 2012<br />
    2. 2. Seed Accelerator Overview<br />Provide Entrepreneurs with Capital, Mentorship & Connections, in Return for Equity<br />Structured 12 week curriculum culminating in “Pitch Day” to Angels, VCs and Industry Execs<br />Similar programs have achieved strong returns in other IT verticals<br />
    3. 3. Why SURGE?Growth/Success of US Seed Accelerators<br />There is NO accelerator focused on ENERGY IT vertical<br />
    4. 4. Case Studies: IT Successes <br />Another Y-Combinator Win: WuFoo Exits for $35M, After Raising Only $118,000 <br />$35M<br /> has just announced that it is acquiring Heroku for $212M in cash<br />$212M<br />AOL acquired SocialThing with $550k in fund raising post TechStars <br />$10M<br />Limbo merges with Brightkite and announces $9M funding round<br />$9M<br />Localytics Raises $2.5M for Mobile Analytics Platform<br />$3M<br />Dallas’ TechWildcatters ImageVisionLabs raises $2M from Walden Venture Capital<br />$2M<br />
    5. 5. SURGE<br />Houston’s For-Profit, Mentor-Driven Seed Accelerator <br />12-week Bootcamp launching in Spring 2012<br />1st & Only Accelerator Focused on ENERGY + IT<br />Progress<br /><ul><li>50+ Mentors: Leading VC’s, Energy Execs, Entrepreneurs
    6. 6. Raised over $500K (DFJ Mercury, HAN, Energy Co’s)
    7. 7. Launched Website and Attracted PR
    8. 8. Paying Sponsors including Energy Focused Service Providers
    9. 9. Joined TechStars Network for global Accelerators best practices</li></li></ul><li>Core Purpose<br />To be the pre-eminent mentor driven seed accelerator focused solely on enabling entrepreneurs to create the efficient energy software technologies of the future, thus reducing the country's reliance on fossil fuels and improving overall energy efficiency. <br />
    10. 10. SMART GRID<br />IT applications used to increase grid efficiency, measure demand, and reduce wasteIncludes Smart Grid, Smart Meter, and EV Grid<br />TRADING & RISK MGMT(ETRM)<br />Capital Markets + IT = Increased visibility and flexible response to supply or demand shocks<br />DIGITAL OILFIELD<br />Data + IT used to maximize production, safety, and efficiency at the wellhead<br />Efficient Energy Software Technologies<br />
    11. 11. Portfolio Strategy<br />FOCUS: Entrepreneurs developing innovative applications at the intersection of Energy + IT<br />GOAL: Take startups from theory & prototype to pilot, next round of funding and commercialization<br />INVESTMENT:<br />10 teams<br />$30k per team<br />6% common equity<br />
    12. 12. CAPITAL<br />CUSTOMERS<br />COMMUNITY<br />SERVICE PROVIDERS<br />ACCOLADES<br />World Class Ecosystem<br />
    13. 13. Leadership: Steering Committee<br />Kirk Coburn – Managing Director<br />3-time Entrepreneur: PGA TOUR Network, Chief Outsiders. Dell Exec<br />Blair Garrou – Board Member<br />Co-founder DFJ Mercury. Incubator Expert. Entrepreneur. Rice Faculty.<br />Brian Landrum – Board Member<br />Former COO Reliant Energy. Compaq GM. McKinsey & Co. <br />Andrew Clark – Board Member<br />Former Chairman of HAN. HTC EIR. DFJ Mercury Venture Advisor. Compaq Exec.<br />Brett Perlman – Smart Grid Lead<br />Former Public Utilities Commissioner. McKinsey & Co. Smart Grid Expert.<br />
    14. 14. Why HOUSTON<br /><ul><li>The Energy Capital of the World
    15. 15. Home to more than 5,000 Energy Companies
    16. 16. #1 IT Services Economy
    17. 17. Fully Deregulated Utility Market (Gen to Cust)
    18. 18. Largest Population of Deployed Smart Meters
    19. 19. Largest Purchaser of Green Power in Nation
    20. 20. #1 Wind Generation</li></li></ul><li>Keys to Program: Mentors<br />
    21. 21. Business Plan and Financial Model Development<br />Product Development and Market Validation<br />Connect Lead Mentors to Teams<br />Connections to Capital, Customers, Entrepreneurs, Expertise, Talent <br />Mentor Workshops (Marketing, Sales, Ops, IT, Legal, etc.)<br />Term Sheet Prep<br />Customer Discovery<br />Customer Creation<br />Company Building<br />Customer Validation<br />STAGE 2: <br />Product Readiness<br />STAGE 1: Connections<br />STAGE 3: <br />Pilot Landing<br />SURGE: Custom Curriculum<br />Week 1<br />Week 4<br />Week 2<br />Week 3<br />Week 5<br />Week 6<br />Week 7<br />Week 8<br />Week 9<br />Week 12<br />SURGE DAY<br />Pivot<br />
    22. 22. Program Next Steps<br />PILOT<br />INCUBATION & FUNDING<br />IDEA<br />Global Entrepreneurs<br />Incubators<br />Texas Universities<br />Pilots<br />Industry<br />Funding<br />40+ VC’s from SURGE DAY<br />
    23. 23. Timeline<br />
    24. 24. Next Steps to SURGE <br /><ul><li>STEP 1: Become a Mentor
    25. 25. STEP 2: Identify Other World-Class Mentors
    26. 26. STEP 3: Identify Key Problems to Solve
    27. 27. STEP 4: Participate in SURGE Day
    28. 28. STEP 5: Agree to Pilot/Connect
    29. 29. STEP 6: Invest </li></li></ul><li>Mentoring at SURGE <br /><ul><li>Giving Back and Building an EcoSystem
    30. 30. Lead Mentoring vs. Ad Hoc Input
    31. 31. Exclusive and World-Class
    32. 32. Timing Commitment: 2-3 hours per week
    33. 33. Focus: business model, go to market strategy, branding, pricing, the investor pitch, connecting to customers
    34. 34. Long-term: Board, Invest, Connect, Give-Back</li></li></ul><li>SURGE Day<br /><ul><li>What: Class 1 Presents Plan and Demo
    35. 35. When: June 2012
    36. 36. Who: 300 – 400 venture capitalists, angel investors, energy companies and corporate development teams, media, entrepreneurs
    37. 37. Where: House of Blues
    38. 38. Goal: 50%+ to land follow-on funding (>$500k) and land critical pilots in next 6 mos.</li></li></ul><li>Investing in SURGE<br />Why Invest: Cat Bird Seat, Second Order Effects, HAN Energy Ecosystem<br />Investment Structure: LLC Model used by Leading Accelerators<br /><ul><li>Raising $900,000 ($500k already funded)
    39. 39. DFJ Mercury
    40. 40. HAN Members (Kirk Coburn, Andrew Clark, David Steakley, Scott Southall, Hayden Hill and Brad Wilson)
    41. 41. Kemal Farid
    42. 42. Investors buy membership interests in LLC
    43. 43. Carried interest in lieu of salary, No Mgt Fee, Standard Practice</li></ul>Expected Returns<br /><ul><li>TechStarssees 2-3x return in 5-7 years, potential for larger upside. </li></li></ul><li>BACKUP<br />
    44. 44. Target Entrepreneurs<br /><ul><li>LOCATION: Willing to locate in Houston for 3 month bootcamp
    45. 45. FOUNDERS: Coachable Intelligence, Integrity and Energy
    46. 46. Strong value proposition
    47. 47. Strong competitive advantage
    48. 48. Target a large market
    49. 49. CAPITAL: Will bootstrap with seed funding
    50. 50. COMPANY FOCUS:
    51. 51. Information Technology that Improves Energy Efficiency
    52. 52. Existing Prototype/Product
    53. 53. Capital Efficient
    54. 54. Leverage Texas Ecosystem</li></li></ul><li><ul><li>Global: Partnerships Leading Industry Networks including Energy, CleanTech, and Entrepreneur
    55. 55. Regional: Alliance with TechStars Network, Start-up America, Kaufmann Foundation
    56. 56. Local: ~30 Efficient Energy Companies in HTC, Rice, UH Systems, & Local Startup Groups
    57. 57. Local: Connect with existing Energy ecoSystem to promote Entrepreneurship </li></ul>Attracting Entrepreneurs<br />
    58. 58. Budgeting & Funding<br /><ul><li>Start-up Costs: $50k (Legal, Website, Recruitment)
    59. 59. 2012 Program & Operational Costs: $250k
    60. 60. 2012 Company Investments: $300k
    61. 61. Sponsorships & Donations: $40k
    62. 62. Equity Investment Y1: ~$600k - $900k
    63. 63. Equity Investments Secured (Aug 2011): $300k
    64. 64. Investor Commitment Range: $25k to $150k</li></li></ul><li>Financial Projections<br /><ul><li>Original Investment = $648,710
    65. 65. Total Return = $2,200,000
    66. 66. Return Multiple: 3.4
    67. 67. IRR (10 year): 13%</li></li></ul><li>Comparative Track Record<br /><ul><li>TechStars >15% acquired over $2M with investment of $20k
    68. 68. 7 out of 10 companies are raising outside funding
    69. 69. Y-Combinator > 5x Return
    70. 70. Omnisio sold > $15M to Google
    71. 71. Heroku sold > $220M to</li></li></ul><li>Key Application Areas:<br />Distribution Automation<br />Data Analytics<br />Demand Response<br />Cyber Security<br />Carbon Management<br />Home Energy Management<br />Electric Vehicle<br />Customers:<br />Utilities<br />Residential Consumers<br />Commercial Buildings<br />Cities<br />Smart Grid: $138B market<br />
    72. 72. Key Application Areas:<br />Market data acquisition<br />Real-time position tracking<br />Predictive analytics & reporting<br />Carbon trading<br />Weather Integration<br />Demand-Response integration<br />Customers:<br />Energy Companies<br />Utilities<br />Commodity Traders<br />Companies that hedge energy use (i.e. airlines, freight logistics)<br />Energy Trading & <br />Risk Management: $500M market<br />
    73. 73. Key Application Areas:<br />Real time data acquisition<br />Reservoir management<br />Well modeling <br />4D Seismic <br />Wireless remote operations<br />Customers:<br />E&P companies<br />Oil field service companies<br />Technology vendors<br />Digital Oilfield<br />
    74. 74. Smart Grid defined...<br />
    75. 75. Smart Grid defined...<br />
    76. 76. Energy Trading & Risk Management Management<br />
    77. 77. Digital Oilfield: defined<br />
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