Wisdoms & Responses Flashcards
Why do you have such a large, diverse team? (3 reasons)
- The best decisions are made by diverse teams.
- The challenges posed by what we are trying to accomplish span an array of discrete areas of expertise (energy, clean energy, utilities, entrepreneurship, VC investing, hardware & software development, etc.).
- While we are focused on a single sector, there area at least a half-dozen discrete approaches being deployed and more on the way, so we need access to individuals with diverse types of nuclear expertise and plant operating skills to work with us.
How can you invest in advanced nuclear companies when you are not a physicist or nuclear engineer?
It’s true. But the outside investors in Tesla weren’t automotive engineers either.
But they were good at recognizing brilliant engineering and a great vision. They could also bring in automotive consultants to help with technical due diligence.
I am a convener, a synthesizer of disparate threads. As an investor, my job is to conduct an evaluation of the investment opportunities within AN companies and this involves many different types of assessments, including understanding the team and their dynamics, the timing and market opportunity for their product, the likelihood that their features will appeal to future customers, the technological, costing and manufacturability, etc. Having a nuclear engineering degree would only help me with one or two out of these many requirements, and such training would not necessarily have enabled me to have this vision and convene the right group to build a pooled fund and capitalize on this amazing.
What is your technical due diligence strategy?
We have a very robust technical due diligence strategy and will be relying on a broad range of technical experts, some of which are represented on our team, to help us conduct the deepest possible due diligence into the technological feasibility of designs.
- We use our own team experts to conduct a high level review of the technical choices made by our portfolio company. Making sure that the team is credible and has made smart choices. We then circle back to do more of a team review, assessing the strength of the management and technical teams by inspecting the qualifications, credentials and experience of their technical team.
- We then gather up evidence of the team’s success in passing through other early-stage technical reviews, including those of the DOE’s Office of Nuclear Energy, GAIN, ARPA-e and other competitive granting and funding reviews conducted by experts. We see who is supporting this technology by participation on their team, advisory board and scientific experts and we will speak to them.
- Assuming that the company meets our other non-technical business and strategic-level criteria and assessments, we will then proceed to assess what specific nuclear experts we need to evaluate the opportunity and we utilize our broader team and advisory board expertise and networks to find the best-of-the-best to help us with our due diligence. We may select one or more options, so that we can pick the one that provides the best options for preserving competitive stance of the company.
- It is important to note that, even when there is a smart, experienced nuclear engineer investing, there are often unexpected reasons why some companies don’t succeed. In fact, this speaks to the core of our strategy: this is a numbers game and the more groups we can invest in, the more likely we will participate in the winning teams. We could never have each and every type of specialist on our team, so we have designed our process with the expectation that we will be drawing on the vast resources available through our networks.
What is your investment mantra?
“Do well by doing good” (quoted from Ben Franklin)
Modern financial economics assumes that people behave rationally. Yet, people are not behaving rationally about nuclear energy, particularly in light of its safety track record and the threat of climate change. How is what you are doing a response to that?
According to Brad M. Barber and Terry Odean, there are observable, systematic and very human departures from rationality in the financial markets. Two common mistakes investors make: 1) Disproportionately holding on to losing investments and 2) Selling winners. These systematic human biases have their origins in human psychology. The first: the tendency to be overconfident about decisions (even when shown they are wrong). The second: the human desire to avoid regret prompts the second. (See: “The courage of misguided convictions” in Financial Analysts Journal.)
Nuclear energy, fossil fuels and climate change are perhaps three of the biggest and most gnarly problems there are. Why are you working in that space?
Because the bigger the problem, the better the opportunity.
What are the SDGs and how does this relate to Einstein?
The Sustainable Development Goals are a set of 17 goals established by the UN Global Compact that unite global stakeholders around a mutual vision for the future. Businesses that are seeking to act responsibly, do so largely because they see that these goals seek to achieve transformational changes that actually strengthen the enabling environment for doing business.
Which SDGs specifically align with your mission? (4)
Numbers 7, 13, 14, and 15 but quite a few of them pertain actually!
7 Affordable and Clean Energy
13 Climate Action
14 Life Below Water
15 Life On Land
Isn’t what you are doing impossible? (Army Corps . . . )
As the Army Corps of Engineers says:: “The difficult we do immediately. The impossible takes a little longer.”
Won’t it take decade or more for Advanced Nuclear to come to fruition and won’t it be too late? (Chinese proverb . . . )
As the Chinese proverb explains: “The best time to plant a tree was 20 years ago. The second best time is now.”
Many believe that we will never be able to get off of fossil fuels, what’s your answer? (Buckminster Fuller . . . )
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Buckminster Fuller.
How did you know what to do to build this highly unique fund? (Einstein . . .)
We created it by imagining what was needed. As Einstein has said: “Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.”
Describe the range of types of expertise that are needed? (12)
1) Nuclear Power & its Regulations
2) Advanced Nuclear Power & Pathways for Approvals
3) Energy Industry and its functioning.
4) Energy Policies and Regulation
5) Climate Policies and Legislation
6) Entrepreneurship and start-up management for companies building sophisticated R&D-based technology businesses
7) Venture capital investing and all that involves, including assessing of portfolio companies, negotiating deals, providing support for growing teams.
8) International Energy Policies & Regulations
9) Materials Sciences
10) Advanced Fuels
11) Advanced Manufacturing
12) Fuel & Waste Reprocessing
Which other SDGs apply, if not directly? (8)
1 No Poverty: cheap energy will certainly help with that;
3 Good Health and Well-Being: when we are no longer polluting the air, global health will improve considerably;
6 Clean Water and Sanitation: Nuclear power can help provide cost-effective water purification and desalination;
8 Decent work and Economic Growth: 21st century with AN will provide better jobs and economic opportunities than renewables or fossil fuels
9 Industry, Innovation and Infrastructure: nuclear expertise improves all of these.
10 Reduced Inequalities: only nuclear will power energy equality around the world;
11 Sustainable Cities and Communities:
12 Responsible Consumption and Production
How do you make the jump to VC?
“The moment in between what you once were, and who you are now becoming, is where the dance of life really takes place.”
