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Travis and I attended the 2009 Greenbuild Conference held last week at the Phoenix Convention Center. In a word, it was “impressive” – offering a little something to all constituents in the green building sector including our firm Navitas Capital, which is a sector-based cleantech venture capital firm focused on green building technologies. It’s estimated that the conference hosted over 27,000 attendees, including: leading architects, contractors, developers, engineers, consultants, urban planners, investors and other professionals in the building industry and members of the USGBC - who hosted the event. If you weren’t able to attend, you may be able to catch a few archived videos from 2009 GreenBuild Speakers.

Observation(s) #1: GreenBuild has really come into its own as a leading tradeshow in any sector, let alone green building. There were over 1,800 booths on two convention floors, up an estimated 25% from last year. This was a surprisingly strong turnout in our opinion, given the current economy. Despite the current soft trends in new construction, LEED construction in 2009 is now estimated by Rob Watson to be up over 40% vs. 2008, for a cumulative total of over 7 billion+ square feet. With this in mind, there are new jobs to be had from America’s “green” building boom, the USGBC confirms, and lots of them. In a new report conducted with consulting firm Booz Allen Hamilton, the USGBC says green construction is on track to support nearly 8 million new jobs by 2013 — a 400 percent leap over the previous five years. Booz Allen determined that efforts to make buildings more energy efficient already supports more than 2 million jobs and generates more than $100 billion in gross domestic product and U.S. wages. A full copy of the report can be downloaded at the following link.

In the same vein, John Doerr of Kleiner Perkins is talking about a plan called “Cash for Caulkers,” a follow on to the successful “Cash for Clunkers” program that will put people to work and save money through nationwide weatherization. The NY Times covered this story this morning.

Observation(s) #2: In perception and reality…”green building” has moved from a niche to a sector. Between 2009 and 2013, the same USGBC / Booz Allen report estimates that “green construction” will inject $500+ billion into the U.S. economy – despite a challenging economic outlook. From our perspective, these statistics are more evidence that green building sector is one of the most relevant sectors in cleantech (energy efficiency) and the U.S. economy.

Observation(s) #3: By all accounts, the convention floor at Greenbuild has become increasingly “corporate,” with big-name logos like: BASF, Honeywell, Johnson Controls, Webcor (Navitas Strategic Partner), Herman Miller, Steelcase, Autodesk (a “Best in Show” Booth), Sloan, Gensler (Navitas Strategic Partner), HOK, Turner, and DPR Construction. While perhaps more true, I would submit that this “convention-floor reality” if you will, is a major milestone in terms of GreenBuild becoming a world-class tradeshow and driving future innovation from all players in the green building sector. In short, Green building is no longer just marketing hype…it’s become an integral part of the future fabric of mainstream construction. In support of this thesis, Rick Fedrizzi, President and CEO of USGBC, said at the opening gala that the greatest hurdle to getting the building industry to get more efficient is to expose the myth that doing so is too expensive and too hard. Again, Navitas Capital is in complete agreement with Rick on this thesis.

Observation(s) #4: Advancing innovation in the built environment goes well beyond the emergence of a new technology, process innovation or green building practice.  Equally important, it’s about changing the behavior of key influencers in the implementation decision process: (1) Specifiers: Architects, Engineering Consultants and Mechanical or Electrical Contractors (i.e., individuals who influence or make the decision); and (2) End Users: Facility Managers (i.e., individuals who manage or operate commercial buildings) and Owners.

Observation(s) #5: If you’re not measuring & benchmarking (e.g. energy, carbon footprint) at the facilities management / CFO level(s), you’re not getting it. There is a large and growing need for software tools that measure, evaluate, monitor and control energy use & carbon. Beyond standard ROI, there is an increasing need to measure more esoteric variables like workforce productivity, health and comfort.

Among the products and companies that caught our eye were:

Serious Materials (A Navitas Capital Portfolio Company) had a very active booth, as always. Over the last several years, Serious Materials has really emerged as a category leader in sustainable building materials and is on track to expand its leadership position. In practice, Serious Materials is changing the game in several huge sectors within the built environment: Super-insulating full-frame R-value SeriousWindows™ reduce heating and cooling energy costs by up to 50%. SeriousGlass™ industry-leading insulating commercial glass have been installed in over 10,000 projects and offer the highest energy savings in the industry. QuietRock® soundproof drywall reduce material use, enhance livability, and support dense urban construction. EcoRock™, the only true green alternative to gypsum drywall and five times more environmentally friendly, uses 80% less energy in its core production and has the potential to save billions of pounds of CO2 annually. The company was commended by both President Obama and Vice President Biden for its advanced energy-saving materials and the work it is doing to re-create American green manufacturing jobs. The company was recently ranked one of the “2009 Global Cleantech 100” in the Energy Efficiency/Building category. In addition, it just won yesterday a 2009 Green Product Award by Building Products Magazine.

Lunera Lighting (a Navitas Capital Portfolio Company) is an exciting new LED player. GreenBuild served as a “coming out party” for the Company – showcasing its’ ultra-thin, energy-efficient LED fixtures for general commercial lighting. It’s application of digital lighting technology replaces common fluorescent fixtures and improves the quality of light for commercial building occupants, lowers the operating cost for building owners, enhances worker productivity and reduces the carbon footprint. All bias aside as an investor in Company, Lunera created a significant buzz at the booth and around the entire conference. Stay tuned to hear more about Lunera Lighting.

Lucid Design Group is a privately held cleantech software company, founded in 2004, and a pioneer in providing real-time information feedback to teach, inspire change and save resources. Over the past five years, Lucid has endeavored to make resource use visible, accessible and engaging so that building occupants have the tools to reduce and manage their consumption. Today, tens of thousands of people live and work in schools, companies, community and commercial centers and homes enhanced by Lucid’s web-based Building Dashboard® technology. Now in its third generation, the intuitive Building Dashboard® user interface allows a user to connect personal electricity, water and natural gas consumption with the actions and events that take place within buildings. Very cool tools. In particular, Travis and I were very impressed with Lucid’s U/I, which was as engaging as any we have seen.

Among the many key participants that Travis and I enjoyed talking to and/or seeing at this year’s conference:

Kevin Surace, President & CEO of Serious Materials; Phil Williams VP Sustainability & Systems Engineering of Webcor Builders; Brandon Tinianov, CTO Serious Materials; Gary Dillabough & Mike Dorsey of The Westly Group; John Picard, Founder and CEO of John Picard & Associates / Founding Member of USGBC; Michael Lesyna, CEO of Lunera Lighting (welcome aboard Mike!); Clark Manus, CEO of Heller, Manus Architects and future President of AIA; Tom Quinn, VP Worldwide Sales & Marketing of Lunera; Mark Mitchell, Chief Operating Officer of Serious Materials; Joel Makower, Chairman / Executive Editor at Greener World Media, Inc.; Megan White, Sustainability Coordinator of Webcor Builders; Mark Walsh, Founder of Lunera Lighting; Rick Fedrizzi President, CEO & Founding Chairman USGBC & Lunera Lighting Board Member; Ted Van Der Linden, Director of Sustainability, DPR Construction; Donald Peifer, founder of Lunera Lighting; Marc Porat, Pegaus Capital Advisors; Valarie Jenkins of Serious Materials; Todd Lukesh, Manager of Sustainability at Webcor Builders; Henri-Claude (H.C.) Bailly of CG Ventures LLC; Andrew Deitz, VP & Co-Founder Climate Earth; Gerard McCaughey, Founder of Infineco; Leslie Gueverra, Associate Editor, Greener World Media; Zachary Gentry, Chief Strategy Officer & Co-founder of Adura Technologies; Jack Bolick, President and Chief Executive Officer of Adura Technologies; Alexander Gallo of Lunera Lighting; Ray Anderson, Founder of Interface and Al Gore.

About Navitas Capital

Navitas Capital is a venture capital firm investing in green technology solutions for the built environment. Navitas Capital’s investment focus is unique among VCs — dedicated to working with entrepreneurs who are developing innovative building materials and technologies for a sustainable built environment. Navitas invests in the areas of sustainable building materials, building automation, building systems, advanced lighting, water management and distributed renewable energy. Founded in 2008, Navitas has been one of the early and driving forces behind several of today’s leading green building technology companies. Navitas Capital is based in Berkeley, California. Please visit www.navitascap.com for more information.

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Newly-Formed Board of Advisors Helps Venture Capital Firm Lead in Investing in Sustainable Building Materials and Technologies

Berkeley, CA, July 13, 2009 — Navitas Capital, an early-stage venture capital firm investing in green technology solutions for the built environment, announced today the creation of a nine-member Advisory Board composed of leading experts in materials science, building engineering, green design practices, real estate development, and private equity and venture capital. The board will help guide Navitas’ investments and strategic growth.

The members of the Advisory Board include:

 Andy Cohen, Executive Director and Architect, Gensler. Mr. Cohen oversees initiatives related to design, client development and strategic growth for Gensler, which has become the Number 1 Ranked US commercial design firm and the leading architecture and interior design firm. Mr. Cohen is also the Regional Managing Principal for the Southwest and has collaborated on major projects such as LAX Airport and MGM MIRAGE CityCenter in Las Vegas, the largest sustainable design and privately-funded project in the United States. He is a Fellow of the American Institute of Architects.
 Peter Cushman, Vice President, Development, Bancroft Capital. Mr. Cushman is a leading advocate for green building on policy, construction and technology. He oversees all of Bancroft Capital’s development efforts, including the development of The Peloton, a $160 million mixed-use community in Boulder, Co., He helped develop the Four Seasons Resort Jackson Hole and Four Seasons Resort Silicon Valley, among others, as Project Manager, LDW Resort & Hotel Development. Mr. Cushman is an active member of the Urban Land Institute. He is also a member of the Board of Directors of American Sunrise Communities, Boulder East, Eta Gamma Housing Corporation and Zaca Mesa Winery.
 Goodwin Gaw, Founder and Managing Principal, Gaw Capital. Under Mr. Gaw’s leadership, Hong-based Gaw Capital has become a leading real estate investment company strategically focused on China and the Asia Pacific Region. Mr. Gaw brings over 15 years of real estate and management experience across multiple asset classes in the United States and Asia. He is Vice Chairman of Pioneer Global Group, Founder and President of Downtown Properties, and former Chairman of Global Gateway.
 Dr. Malcolm Lewis, P.E. President and Founder, CTG Energetics. Under Dr. Lewis’ stewardship, CTG Energetics has become the recognized leader in energy efficiency and sustainability for the built environment. Dr. Lewis has been active in the design of leading-edge buildings for over 30 years as a consulting engineer specializing in Mechanical, Electrical, and Energy Systems. His projects have won numerous awards for energy efficiency, sustainability, and design. Dr. Lewis served on the Board of Directors of the U.S. Green Building Council (USGBC), is a member of the USGBC’s LEED Steering Committee, and Chair of the LEED Technical Committee.

 John Picard, Founder and CEO, John Picard Associates. Mr. Picard is one of the preeminent environmental consultants in North America. He has pioneered the philosophy of natural systems and sustainable design in his work as a green building engineer, corporate strategist, and executive advisor. He is a founding member of the U. S. Green Building Council (USGBC), a long-standing member of Interface’s Dream Team, and an environmental advisor to EarthPark, EcoTown, and a number of corporations around the world.
 Nellie Reid, Director of Sustainable Design, Gensler. Over the decade Ms. Reid has been at Gensler, she has served as a sustainable design consultant on multiple projects from the San José Airport to the Port of Long Beach Headquarters. She has spent much of the last four years providing a Sustainable Design and LEED oversight role on hospitality projects, including MGM MIRAGE CityCenter, Marriot/Ritz, Kimpton, Mondrian and Warner Brothers. She is a founding member of the U.S. Green Building Council’s (USGBC) Los Angeles Chapter, where she served as Vice-Chair and now serves as an Emeritus board member. She was named one of the “25 Environmental Champions for 2004” by Interior and Sources Magazine and been recognized on “40 Under 40” lists by both Real Estate Southern California and Building Design + Construction.
 Danny Rimer, Managing Partner, Index Ventures. Mr. Rimer established the London office for Index Ventures, the preeminent IT venture capital firm in Europe. He is Ranked Number 16 on Forbes’ “The Midas List.” His investment interests include Internet infrastructure software and services. He currently serves on the board of Astley Clarke, FON, Oanda, Rightscale, Sky (BSY), Spot Runner, Stardoll, Trialpay, Viagogo and Woome.
 Brandon Tinianov, CTO, Serious Materials. Dr.Tinianov is a recognized expert in building science and in the creation and patenting of novel construction materials to support global sustainability initiatives. Through his influential participation in the Green Building Initiative (GBI) and Sustainable Silicon Valley (SSV), Dr. Tinianov has been recognized as a leading voice in the green construction innovation realm and was recently elected Founding Chairman of the Silicon Valley Branch of the U.S. Green Building Council (USGBC).
 Phil Williams, VP of Sustainability and Systems Engineering, Webcor Builders. Webcor is the Number 2 ranked US green contractor. Mr. Williams is a licensed Professional Mechanical Engineer in California, a LEED Accredited professional and an active member of the U.S. Green Building Council (USGBC), San Francisco Mayor’s Green Building Task Force, Center for the Built Environment (CBE), Sustainable Silicon Valley, Business Council on Climate Change (BC-3) and Center for Integrated Facilities Engineering (CIFE).

“Navitas’ dedication to the built environment and track record of investing early in the industry’s emerging leaders is unique among the venture capital community,” said advisor Picard. “The industry needs a firm that understands technology and the unique challenges of the building industry, and I’m excited to be part of Navitas’ success.”

“We are honored that such a prestigious group of influential leaders has joined us at Navitas Capital,” said Jim Pettit, Co-Founder and Managing Partner of Navitas Capital. “I am confident that their advice and guidance will be invaluable as we evaluate prospective growth sectors, investment opportunities and expand our venture capital footprint within the green building sector. Assembling an advisory board of this caliber is a key strategic differentiator in the ongoing development of Navitas Capital.”

“The $1.8 trillion built environment is going through a profound ‘green’ transformation,” said Travis Putnam, LEED AP, Co-Founder and Managing Partner of Navitas Capital. “Buildings consume 40 percent of the energy in the United States and have necessarily become an important part of our nation’s new energy policy. Compelling economics and increasing mandates are driving developers, builders and designers to focus on sustainability.”

Putnam added: “With the help of our Advisory Board, Navitas is identifying and funding those companies it believes will help lead the sustainable building revolution by dramatically reducing the energy consumption and environmental impact of the built environment.”

About Navitas Capital
Navitas Capital is an early-stage venture capital firm investing in green technology solutions for the built environment. Navitas Capital’s investment focus is unique among VCs — dedicated to working with entrepreneurs who are developing innovative building materials and technologies for a sustainable built environment. Navitas invests in the areas of sustainable building materials, building automation, building systems, advanced lighting, water management and distributed renewable energy. Founded in 2008, Navitas has been one of the early and driving forces behind several of today’s leading green building technology companies. Navitas Capital is based in Berkeley, California. Please visit www.navitascap.com for more information.

Travis and I recently co-sponsored with Webcor Builders “THE EXECUTIVE FORUM ON THE BUILT ENVIRONMENT: Driving Sustainability Through Innovation,” which was held on March 3rd in San Francisco, CA.  Importantly, this event was not just a “me too” cleantech conference with the usual suspects (e.g. solar, wind, biofuel companies) and 300+ in attendance.  I can’t emphasize this enough. The event, the first of its kind, represented a unique high-level executive forum, limited to 60 thought leaders who are all at the forefront of driving innovation in green building.

Key presenters at the executive forum included:

Andy Ball, President & CEO of Webcor Builders, Travis Putnam, Managing Partner of Navitas Capital, John Cushman, Chairman of Cushman & Wakefield & Co-Chairman of iCrete, Bill Witte, President of Related of California , Susie See, Managing Director of WSP Flack + Kurtz , Clark Manus, CEO of Heller, Manus Architects, and Kevin Surace, President & CEO of Serious Materials.

In addition, I got a few words in up at the podium too.

One of the highlights of the afternoon for me was the Keynote address given by Tom Siebel– founder of Siebel Systems and Chairman of First Virtual Group.  Tom shared with an attentive audience many of his current high-level views — looking ahead from 2010 to 2030, which he expects will be significantly impacted by (among other things): (1) increased government regulation, (2) exponential population growth, and (3) energy scarcity. One of his mantras is that “ET (Energy Technology) is the next IT.” So… why is Tom Siebel interested in participating at a forum co-hosted by Navitas Capital on green building? Answer: Tom is in the process of launching (with the support of the Siebel foundation) a very interesting $20 million “Energy Free Home Challenge,” leveraging innovation and resources from university teams, corporations, scientists, entrepreneurs, builders and developers worldwide. The goal of the contest is to find more innovative ways to build comfortable houses (in scale) that consume net zero energy at a comparable price / sq ft. Many of the attendees at the forum are looking for the same innovation — at both the residential and the commercial level.

Key observation: On one level, the diversity of the speakers on the agenda speaks to what is clearly a new era in the building industry. That is, who would have thought three years ago that Tom Siebel (IT titan), Andy Ball (next-generation green builder), John Cushman (old school real estate icon) and Travis Putnam (emerging venture capitalist) would be intersecting together at a forum on green building innovation. Answer: certainly not me!

The interactive portion of the event (a casual round table discussion) was deftly moderated by Phil Williams – VP of Sustainability at Webcor Builders and an advisor to Navitas Capital. What struck me about this portion of the event is that everybody in the room seem very engaged – with limited B&B breaks (bathroom & blackberry).

It was my pleasure representing Navitas Capital in the discussion, around so many brands and thought leaders in the building sector. Along this line, leading developers, owners, architects, engineers and advanced building materials companies were in attendance and shared their experiences and insights about evaluating, planning and implementing new green building practices in this difficult economic climate.

Navitas Capital Investment Thesis: As an investor dedicated to this emerging sector, we believe that it’s at this point in the economic and real estate cycle where there is the greatest opportunity to invest in green building technology…with an eye towards the future. Looking out 2, 3, 4 years from now – we believe that many of these Green Building start-ups are poised to be the “category killers” of the future.

An evening cocktail reception, conveniently located within the Intercontinental Hotel (note: built by Webcor early last year), provided a networking opportunity for everyone in attendance. It also gave attendees a chance to visit with several exciting green building start ups and discuss their products without having to dash off to the “next” session(s), characterized by a typical cleantech conference. Featured companies during the technology showcase included:

• Serious Materials: a pioneer in advanced green building — develops sustainable green building materials, including: EcoRock™ (an eco-friendly alternative to conventional drywall), Serious Windows (high-performance insulated windows & glass) and QuietRock™ (soundproof drywall).

• Integrity Block: a manufacturer of sustainable building materials — develops an innovative green replacement for standard concrete (CMU) block. Integrity Block, which incorporates “modernized” earthen construction, requires 40% less energy to manufacture, resulting in a reduced carbon footprint.

• Lumiette: a next generation lighting story – develops & manufactures high performance flat panel lighting (FPL) technology for the $88 billion general lighting market. Lumiette’s technology provides a low profile, energy efficient, and readily dimmable lighting solution for a variety of applications.

Beyond Webcor, Navitas Capital and the three companies represented at the technology showcase, the event also included high-level executives from many of the premier “West Coast” brands in the building sector, including: The Related Companies, Tishman Speyer Properties, Boston Properties, Sares-Regis Group, Cushman & Wakefield, Pacific Capital Group, Simon Equity Partners, Gensler, Skidmore, Owings & Merrill LLP, Heller, Manus Architects, Hart / Howerton, John Picard & Associates, WSP Flack + Kurtz, Allen Matkins and iCrete (Adam Winnick, Managing Director of Pacific Capital Group).

Conference Takeaways / Observations: Following are several of the key takeaways that I picked up over the day from the attendees at the forum (note: a few during the interactive sessions and a few over dinner & a glass of wine):

1. Assessing the behavioral adoption risk of the channel (e.g. does a new product feel the same as an existing solution? Install the same? Does the product weigh the same?) is as important as price and performance, when considering a new building material or innovation.

2. Process efficiency is as important as technology innovation when discussing green building practices. “Good processes are essential” was a point made repeatedly by Webcor and many of the attendees.

3. If you’re not measuring & benchmarking (e.g. energy, carbon footprint) at the facilities management / CFO level(s), you’re not getting it. There is a large and growing need for software tools that measure, evaluate and monitor energy use, water use and building efficiency.

4. All key stakeholders count…at all levels of an effective (and integrated) design build process.

5. It doesn’t have to cost more to be green/efficient.

6. Public policy is beginning to reflect the importance of efficiency in the built environment and will continue to drive building practices in this direction. More research and statistics are emerging about the positive ROIs and immediate paybacks of investing in green building technologies (McKenzie & Co study).

7. “For every new building to construct, there are 100 buildings to retrofit.” Accordingly, most compelling new innovations should include a retrofitting theme.

8. Exciting opportunities exist to both import and export best practices in green building (e.g. Middle East, Asia, Europe).

9. Even small changes in behavior can have a big impact. One of the most rudimentary examples of this was the example of organizations utilizing their janitorial services more efficiently during the day vs. the evening.

10. Education is a key requirement of acceptance & success for all stakeholders in the building industry, as well as the general public.

11. We have to challenge conventional wisdom today before we see innovation tomorrow. Along this line, collaboration between owner, architect, builder, operator and technology start ups will help balance the risk and mitigate the liability of new building innovation.

Concluding thoughts: On behalf of Navitas Capital, I want to thank Andy Ball, Phil Williams, Megan White and the entire team at Webcor for helping put together a great event. In addition, Navitas Capital would like to thank Peter Cushman, VP of Development for Bancroft Capital and an advisor to Navitas Capital, for his significant contributions in organizing the agenda. We look forward to the next green building forum and based on the feedback, it should represent a very hot ticket – ha!

Travis and I have been fortunate enough to work with Webcor as a strategic partner for close to a year now. For my money, Webcor is unique among other GCs in terms of their dedication to building innovation. With that in mind, Navitas Capital is very committed to building a platform of partners to help source, evaluate and advance new innovative tools and technologies. Our strategic partnership with Webcor Builders is a good example of how we differentiate our approach from other VCs.

In addition, we just signed a MOU this week with a top design firm, represented at the executive forum. We are very excited by these strategic partnerships. Our objective going forward is to create the preeminent industry network for underwriting investments in the green building sector, leveraging the input and experience of leading builders, designers, developers and scientists.

About Navitas Capital
Navitas Capital is an early-stage venture capital firm within the cleantech sector. Navitas Capital’s investment focus is unique among VCs — dedicated to working with companies that are developing sustainable green building materials and innovative technologies for the built environment. Founded in 2008, Navitas has been one of the early and driving forces behind several of the leading green building companies. Navitas Capital is based in Berkeley, California. For more information, visit www.navitascap.com.