Charge It! Think tech was the end-all of booms? Ever heard of something called energy?
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When Jeff Colborn first sought financing for his energy start-up, he studied a thousand VC firms, contacted 70 candidates and met with five. "We did a couple of epic road trips where we took our prototype and showed it to VCs," Colborn recalls. "It was pretty hard."
The odyssey occupied much of 1998 and produced $2 million total from two institutional backers. Last year, Colborn's company, Metallic Power Inc. of Carlsbad, California, went for a second round. The developer of fuel cell power systems raised $6.6 million from four firms, including its original financiers and the venture capital arms of two of North America's largest public utilities, Hydro-Quebec and Allete Inc., formerly Minnesota Power. When two additional backers showed interest at the last minute, Colborn promised a third round later in the year.
Then the floodgates opened. Just seven months after its second round, Metallic Power accepted $18 million from eight firms. "Enthusiasm skyrocketed, and we got considerably oversubscribed," says the 75-person company's chairman and CEO. "A lot of other new people showed up and wanted to invest. We picked the best of them and had them invest considerably less than they wanted to."