Q&A With Amy Francetic, Managing Director of Energize Ventures
We recently sat down with Amy Francetic, the Managing Director of Energize Ventures which closed a $165 million fund last year to invest in digital solutions for the energy industry. Prior to raising this fund, Amy was the founding CEO of Clean Energy Trust. Our conversation covered fundraising, venture investing outside silicon valley, trends in the sector, and beyond.
(Ian Adams) Congratulations on the final close of your fund! $165 million for a first-time fund is very impressive. Why do you think you were so successful?
(Amy Francetic) We had an ambitious target that was supported by our anchor funder, Invenergy, who helped convince first close Limited Partners, GE and Wisconsin Energy. It really helps to have momentum. Then we set about talking to as many potential investors as possible about our thesis of digitizing energy and industry, and it resonated with potential investors as they also saw these sectors ripe for innovation. We have a terrific, diverse group of LPs — corporate strategics, impact investors, families, institutionals. We have a saying around Energize that “Diversity Drives Alpha” and that extends from our investors to our team.
What surprised you most during the fundraising process?
When we were finished with fundraising we looked back at our database and we had made thousands of contacts to convince the final number of investors with an ultimate 5% success ratio. The sheer volume of contacts, conversations, meetings kind of blew us away. You have to get comfortable hearing a lot of “no’s”. It’s important to not stop there but to figure out how to turn a no into a yes, or to accept the no and shake it off and move onto the next potential YES!
What is your thesis at Energize Ventures?
We invest in digital technologies — hardware and software — that make energy and industry more affordable, reliable and secure. In other words, technologies that optimize equipment and infrastructure. We like to invest in Series B but also have invested in a couple of A rounds and C rounds.
Much of the venture capital industry is clustered in silicon valley and the bay area. Do you think being located outside of silicon valley helps or hurts Energize Ventures, and why?
We travel to Silicon Valley regularly and have 5 portfolio companies there, so you cannot ignore that cluster of innovation. However, we are intentionally looking outside the Bay Area for our next few investments in order to diversify our portfolio. We think being outside of Silicon Valley allows us to think differently and not get caught up in the local groupthink. Also, the prices are generally better for companies outside of the Bay Area. So yes, I think it is an advantage not to be headquartered there.
What is something you believe about the energy sector that most industry professionals probably disagree with you about?
Probably most would disagree with me that nuclear energy is NOT clean energy. You cannot measure pollution on a single dimension — air emissions. You have to consider the broader environmental impacts, and the health risks to the surrounding communities of nuclear energy plus the radioactive waste makes it a very expensive and overly risky option for a clean energy future.
Is there a trend you’re particularly excited about over the next 2–3 years in the energy industry?
We are seeing a resurgence in energy venture capital. Over $3 billion in new venture funds have closed in the past couple of years, and the quality of companies seeking capital have gotten much higher. That coupled with the economic competitiveness of wind, solar, batteries and electric vehicles makes me very hopeful that we will have some good returns in the sector and more limited partners will allocate funding in the future. We’re back, Baby!
Bill Gates has famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” With that in mind, what major changes do you expect we’ll see in the next ten years in the energy sector?
Hands down, the rapid adoption of electric vehicles — fleet and passenger. Last year was a turning point, and we’re not going back. Electric vehicles are cheaper to own and operate. Once we can hit a critical mass of charging infrastructure it will become a very easy economic decision for consumers and fleet operators to purchase EVs.
Anything else you’d like to share?
I’m grateful that Clean Energy Trust is helping to create viable companies for investors and also stimulating the ecosystem in the Midwest. The Time is Now to invest in clean energy innovation.
