New venture channels Westly’s boundless energy

Steve Westly witnessed his first big moment in cleantech history during the oil embargo of the late 1970s: President Carter installed solar panels on the roof of the White House.

But just a few years later—with long lines at the pump a fading memory—President Reagan pried the panels off. With that gesture, says Westly, a former Carter Administration energy department staffer, “We went back to 20 years of dependence on foreign oil.”

In the interim, Westly went on to other things, including a post as vice president of marketing on eBay’s founding executive team, a four-year term as California’s controller, and a run for the state’s Democratic gubernatorial nomination. He also squeezed in a stint with the California Public Utilities Commission, during which time he authored two books on alternative energy.

Today, with public office behind him and a substantial portion of his eBay fortune intact, the 50-year-old San Francisco Bay Area native is circling back to clean technology. In January, he formed The Westly Group, an investment fund focused on later stage companies developing renewable energy technologies. After winding down his term as controller in Sacramento this year, the energetic Westly relocated almost immediately to the Sand Hill Road complex of Kleiner Perkins Caufield & Byers.

“There’s clearly good karma here” he says of the leafy, sun-basked corner office that now serves as his firm’s headquarters. Fittingly, its previous occupant was former Kleiner Perkins General Partner Vinod Khosla, who’s currently his own fund with a heavy emphasis on cleantech.

There are no partner meetings [at The Westly Group]. And we can turn a deal around sometimes in less than a week.”

Steve Westly, Founder, The Westly Group

Location aside, The Westly Group operates as a wholly separate entity from Kleiner Perkins. Entirely self-financed, the investment operation is about the size of a small venture capital fund, Westly says, with reserves measured in the tens of millions of dollars. He employs just one staffer, Michael Kaufman, who used to work for him in the controller’s office. Westly has no immediate plans to enlarge the fund by taking on limited partners, preferring the flexibility of working solo.

“There are no partner meetings,” he says. “And we can turn a deal around sometimes in less than a week.”

So far, the pace of deal making has been, in Westly’s words “stunningly fast.” The fund already has made four investments. The most recent was a private investment in public equity (PIPE) for Akeena Solar (OTCBB: AKNS.OB), which installs solar power systems for residential and commercial customers. Before that, Westly invested in Energy Innovations, a solar system installer for large commercial customers.

Rounding out the mix are stakes in Altra BioFuels, an ethanol producer, and Tesla Motors, which plans to debut its hyped electric sports car later this year.

New prospects keep pouring in, too, says Westly, glancing at his email inbox. In the last hour, 40 new messages have arrived. Filtering through the messages, Westly says he looks for companies with the two standard qualities sought after by late stage investors: established technology and fast-growing revenue. He’s also keen on applying his substantial government experience in helping companies navigate the Byzantine networks of regulatory agencies and subsidy programs for solar and other renewable energy systems.

We’re just in the beginning chapters of the cleantech revolution.”

Steve Westly, Founder, The Westly Group

Running an investment fund with a support staff of one is enough to keep a normal person busy, but the preternaturally productive Westly juggles a profusion of other projects, including a board seat at Tesla and a founder’s role at The Westly Foundation, a philanthropy for education, health and global security causes. He and his wife, Anita Yu, also recently finished overseeing the installation of a solar system for their Menlo Park home.

Westly also remains active in politics, though he’s not currently running for office. Instead, he’s co-chair of the California campaign of Barack Obama, the telegenic Illinois senator whose multicultural background and short political resume Westly sees holding appeal for voters weary of government-as-usual.

Asked what position he’d most desire in a future Obama administration, however, Westly insists he’s not interested. Regardless of who occupies the White House, he says, he’ll stay in Silicon Valley and continue to invest in renewable energy companies.

“We’re just in the beginning chapters of the cleantech revolution,” he says, comparing the current enthusiasm around green technologies to the Internet investment boom a decade earlier. He’s confident that greentech boosters will avoid the mistakes of their dot-com predecessors and sort out companies with a clear path to profitability.

Westly’s also convinced we won’t see a repeat of the scuttled Carter-era dream of energy independence, as today’s consumers are demanding renewable power solutions that are also economically practical.

“Back then, people would buy solar or these other things only if they were truly committed to the environment, because from the cost-effectiveness standpoint they didn’t all pencil out,” he says. Today, renewable energy technologies compete with fossil fuels on cost as well as environmental friendliness.

STEVE WESTLY

Founder and CEO

The Westly Group

AGE: 50

EDUCATION: BA in history and MBA from Stanford University

WORK HISTORY: Most recently was Controller for the state of California. Prior to that, he was VP of marketing, business development, M&A and international at eBay. Also held senior-level posts at Sprint, Bridgemere Capital, WhoWhere and Codd & Date, a relational database consulting firm.

FOCUS: Clean technology companies, both private and publicly held, with established and growing revenue sources.

INVESTMENTS: Akeena Solar, Altra Biofuels, Energy Innovations, Tesla Motors

DID YOU KNOW? Westly, a board member at Tesla motors, is slated to be one of the first people in Silicon Valley to drive home with one of the electric sports cars when they come out later this year.

Source: VCJ reporting