Why A Major Cleantech Accelerator Program Is Shutting Its Doors

It’s not because cleantech isn’t worth the investment, it’s because they want to invest more heavily in companies, not just accelerate them.

Why A Major Cleantech Accelerator Program Is Shutting Its Doors
A redesigned app from one of Greenstart’s new startups

In the post-Solyndra era, cleantech startups need all the help they can get. That’s why it was exciting when a new accelerator called Greenstart popped up in 2011. This week, Greenstart announced that it’s shutting down its three-month accelerator program–and morphing into a combination early-stage venture capital firm and design studio. What happened?


“It was simply because entrepreneurs were saying loud and clear that 90 days is nice but we want a partner for the life of our company,” says Mitch Lowe, managing partner at Greenstart. “You just get to the good stuff at 90 days. You’re starting to add real value.” At the same time, he says, the startup world has begun to realize the importance of good design–and how difficult it can be to find good designers. Hence, the new version of Greenstart.

Greenstart has actually been inching towards its current state for a while. Last year, David Merkoski, former executive creative director at frog, came onboard to launch an in-house design practice. Today, there are 10 people on the design studio team. By the end of the year, that number will increase to 15.

The revamped Greenstart plans on investing about $250,000 to $500,000 per company, with flexibility in how much and how frequently it gives out cash. This year, Greenstart is looking at about 400 companies and will invest in 10 to 12–similar to the number of companies it took on for each term in the accelerator program. All the companies who participated in the accelerator will simply become portfolio companies.

“Once we’ve made the investment, we will go through the immersive process of getting to know the business–interviewing customers, bringing them in, getting feedback on the market–and at the end of that, we’ll define a set of milestones we want to achieve from a design perspective,” explains Lowe.

Lowe admits that accelerators make sense for companies that are still at the “napkin” stage–in other words, startups that have an idea and not much of a product. Access to mentors, office space, legal assistance, and investors can be priceless. But Greenstart has always focused on startups that are a little further along. “There are a lot of discussions about how hard it is to raise money, but it’s supposed to be,” says Lowe. “For the really promising [startups], it’s not all that hard. Increasingly, capital is a commodity, and every investor says ‘Hey, we want to be a value-added partner.'”

Cleantech may have just lost its most prominent accelerator program, but it just gained a new venture capital firm and design studio. And as Lowe points out, Greenstart may now become the biggest investor (in terms of number of companies) in the cleantech space.

About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more.