need renewable portfolio standards and the use of government procurement to start the ball rolling.”

In addition, she said, there are still barriers in demonstrating and scaling these technologies and in supporting early production. She agreed with Dr. Wessner that there are “many valleys of death, in this sense.” A major one is encountered between the point when a technology is proven and the point when financing is available for the first commercial plants. “Commercial capital does not know how to go after that problem,” she said. “Loan guarantees from the government are needed.”

Dr. Neuhoff asked Mr. Davidson about his challenges in investing in manufacturing capacity, and whether he had enough capital. Dr. Davidson said his firm did have sufficient capital. VCs are short-term investors, he said, “which means we invest long enough to bring the company to the next level when it can raise money from external, much larger investors or hand over the company even before it’s profitable. We can initiate this with relatively small amounts, especially in Germany, because public funds are readily available. It is more difficult to find the right people to deploy. Many of the best technologies we see stay within the R&D groups of Fraunhofer, Max Planck, and universities. Rarely do we find people who are ready to take risk, move out of their comfort zone, and start a new company. Our biggest constraint is the lack of entrepreneurs to start companies.”

He suggested that entrepreneurism should be promoted more strongly by government policy, beginning early during education. “To become an entrepreneur and to dare to fail is fine, and should be part of the culture, which it’s not at the moment,” he said. “I see it in the Hasso Plattner Institute, which is near Hasso Plattner Ventures, in Potsdam. The most talented students in Germany, such as IT students, would rather start working when they’re 22 or 23 years old at Deutsch Telekom or Daimler Chrysler or Microsoft rather than start their own company. In the United States, it’s exactly the opposite. Here they are very old when they are very young because they don’t have the right education.”



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