#Solar 100’s Nancy Pfund: The Queen Midas of cleantech


In Greek mythology, King Midas was known for his “golden touch”—things he touched would turn to gold.

In the cleantech industry, Nancy Pfund has the singular best claim to that title, with early investments in Tesla, SolarCity, NEXTracker, and Powerlight. Nancy is arguably cleantech’s most successful investor.

Equally impressive, her venture capital firm is not only known for its financial successes—‘DBL’ stands for ‘double bottom line.’ Bucking conventional wisdom, especially in 2008 when DBL was founded, Nancy’s firm advocates a second bottom line of social, environmental and economic improvement.

In the theme of moving against the status quo, she is also a strong advocate for gender equity in the VC world. According to a survey conducted by the National Venture Capital Association in 2016, women represent only 11 percent of investment partners or equivalent on venture investment teams. Not only does Nancy lead a successful VC career, but she recognizes the support she’s received along the way and “feels it’s a matter of responsibility” to work to help others and increase access to opportunity.

Nancy has established herself as an advocate for gender equity, a #Solar100 thought leader, and we think she’s the Queen Midas of Cleantech.

The Second Bottom Line

Richard Matsui: I wanted to start off by talking about DBL’s second bottom line. I recently listened to an episode on Charlie Rose, in which investor Jeremy Grantham said something like, “When managing money for others, we have no right to impose our personal values on them. They should make up their own mind where the lines are that they would draw in the sand. It’s not for us to do that. It’s for us to listen to what they want and then make as much money as we possibly can for that.”

That line stuck out to me because Grantham’s opinion does seem to represent the status quo—that there’s only one bottom line (to make money), and that it would almost be wrong to acknowledge any other. My questions for you: What did you experience as the status quo when you first started out as an investor? And what has shaped and solidified your commitment to make DBL have a second bottom line?

Nancy Pfund: About 15 years ago, the status quo was to separate the two goals of financial return and social return. There were biases, but that’s what they were—they were biases.

Those conventional beliefs weren’t based on specific portfolios that had been designed to accomplish a double bottom-line impact. That’s what had been missing from the dialogue: actual results.

We started DBL with the premise that we don’t have to sacrifice financial returns in order to have positive social impact—Tesla, SolarCity, NEXTracker, PowerLight, and other grand slams in our portfolio prove that. DBL really started out to prove that it’s pretty old-fashioned to believe that you can’t do good and do well at the same time.

Today, none of the people that come and want to invest with us have those reservations, because this is a growing worldwide field and proof-points are being established.

RM: Is it accurate to say that DBL was the first to be able to demonstrate that there’s not necessarily that trade off that many others assume?

NP: I don’t know of all the funds out there, but I can say it was certainly one of the first, and one of the largest, to have demonstrated that.

After Paris: The Role of Climate Innovation

RM: In your Forbes interview last year, you talked about the role of innovation taking center stage at the Paris talks. Now that Trump has withdrawn the U.S. from the Paris climate accord, what do you see as the role of innovation—and of startups in particular—given this current political context?

NP: To start, the fact that the Trump administration has bowed out of Paris does not negate the value of Paris. There are plenty of other countries that are doubling down, many Americans support the Paris goals, and, as you know, most solar, cleantech, and electric car companies are global in nature. It does not cramp anyone’s style in terms of bringing more innovation to bear to address climate change.

That said, I think that the role of innovation is more important than ever as we break down some of these hard barriers, like storage costs, solar panel costs, and electric vehicle costs. Cost are all coming down at very attractive rates, allowing for a whole new generation of innovative business approaches like yours at kWh Analytics.

Innovation continues to play a critical role in transforming many 19th and 20th century business models in energy, agriculture, transportation, and other sectors. The world requires new business models that address 21st century challenges and opportunities—not 20th and 19th century ones.

Advice for Solar Entrepreneurs

RM: As arguably the most successful cleantech investor—I mean, you can count Tesla, SolarCity, NEXTracker, and PowerLight among your cleantech investments—what advice do you have for solar entrepreneurs?

NP: There is an enormous opportunity for solar entrepreneurs to jump in and ride the growth wave of cost reductions, storage innovations, international opportunity, and so forth. While the market is growing quickly, we are still at very low levels of solar penetration globally. Both locally and internationally, there are incredible opportunities ranging from novel financing approaches to next-generation software and hardware. I also think that there’s an opportunity for a “next generation” of SolarCity or Sunrun.

RM: That’s interesting. What will differentiate a “challenger” SolarCity from SolarCity itself?  Will it be a product company, rather than a service company?

NP: I think it will look very similar in many respects—the challenger will have to take care of both the product and the service elements, including financing, customer acquisition, and everything else. It will need to go beyond just selling solar or storage hardware and be a “full-stack” company. I think the challengers will need to differentiate by offering holistic solutions, and reimagining the home as a virtual power plant, along the lines of the innovation we are currently seeing from companies like DBL’s Advanced Microgrid Solutions at the commercial and utility levels. Focusing on this vertical – which is huge – will be an advantage as other market participants have many more legacy markets and customers that may take priority.

For this reason, emerging world markets like Africa and India are also ripe for entrepreneurial clean energy approaches like Off-Grid Electric (a DBL portfolio company) and M-Kopa. Much of the world’s population growth over the next few decades will occur on these continents, and it’s an open clean energy territory that has the potential to bring climate, economic, and job creation benefits to a whole new level.

Women : Venture Capital :: Renewable Energy : U.S. Energy Supply

RM: I thought your 2012 Forbes opinion piece was incredibly insightful—the one in which you drew a comparison between women in venture capital and renewable energy relative to the U.S. energy supply. You made a compelling case, listing that both were the exception to the rule, and both were subjected to double standards and an unlevel playing field. Five years later, what is still the same and what is different about the double standards?

NP: There’s good news and bad news for renewable energy.

Unfortunately, there is a federal push to develop fossil fuels on public lands. There was also an attempt to remove methane regulations, which was ultimately unsuccessful. We face a political climate where there is clearly more interest in furthering the progress of some of the past century’s fossil industries. That’s the bad news.

The good news is that because renewables score so high on economics and in public opinion, renewables are making progress despite this shift in sentiment from the federal administration. As usual, the economics weigh in very heavily even in a climate where yesterday morning included a New York Times story on ‘Under Trump, Coal Mining Gets New Life on U.S. Lands.’ That may be a good sound bite for the Trump base, but when you unpack that, even setting aside all the environmental and climate issues, that is still very hard to justify because the cost trajectory of the 20th century fossil approach is just not sustainable.

And meanwhile, renewables and electric vehicles are only becoming more and more attractive from an investment point of view. I think that the reality is not as bad as one might assume from hearing only the sound bites.

As for double standards that women face, I would say that since I wrote that opinion piece five years ago, I have been heartened by how much more public dialogue there has been about the need for increased diversity in industry and politics, and that includes the solar industry and policy circles.

There are also more opportunities now, including women in solar groups, C3E that works to close the gender gap in cleantech, and The Hawthorn Club for professional women in energy. There is a lot more collective activity, measurement, and celebration of progress while still recognizing that we still have a ways to go.

But, you know, I always say, if you look at the solar industry’s numbers, yes, we could have more women. Yes, we could have minorities. But for context, we in solar have a lot more women and minorities than a lot of the industries we are replacing, and even more than the tech industry.

As we continually work to improve—because we can always improve—I do think that shining a light on the issue, building awareness, and organizing networking activities, all of that is making a big difference.

RM: I hadn’t heard that point before on comparing solar to the industries that we are replacing or to the other intersecting industries. At first glance, it doesn’t take a statistician to look around SPI and realize, “Oh wow, there are a lot of men at this conference.” But solar also overlaps with finance and construction, which are both male-dominated industries.

NP: Yes, we have written about that, and the Solar Foundation has as well.

RM: On this topic, female friends have commented on how difficult it can be for women to get into VC. Where did your commitment to pushing for more women in leadership roles, particularly on the VC side, come from?

NP: Having been in venture capital for over two decades, I’ve been very fortunate to have the support of men and women throughout my career, and I know firsthand how important it is to have that senior advisor and mentorship. So, when I think about what I was able to achieve with the help of others, I just feel that it’s a matter of responsibility to make sure that I help others do the same. And it’s also fun! I mean, it’s great for me to meet all these accomplished women, and it’s a wonderful recruiting opportunity as I’m constantly looking for people on behalf of my companies. The more I can tap into women in solar and women in cleantech networks, the easier my job is.

Call to Action

RM: Several leading solar companies have declared bankruptcy this year, and my perception is that people in the industry are feeling quite down right now, even though our numbers on solar deployment and cost have never looked better. What would be your call to action for people in the solar industry?

NP: Sure. This is an industry that is no stranger to ups and downs. Every time we had to go through the ITC renewal or another net metering dialogue state by state, you know, it can feel like we’re always on call for fighting the good fight, and that does get tiring.

But rather than get frustrated by that, we need to remember that this is what happens when innovation comes to disrupt centuries-old models. That’s very difficult, and it does not happen overnight. We all need to work together and understand that there are going to be times when things don’t go right, but then there is also a lot of good progress to report. For example, I think people were disappointed with the outcome regarding Nevada a few years ago, and now, that has largely turned around. I think we have proven to ourselves that when we work together, when we build bonds with a variety of stakeholders, that “Americans heart solar,” and increasingly, the world does as well.

This is more than a traditional corporate challenge. This is a challenge for our generation.

And we have an answer that is broadly appealing. It’s not just the archetypal California tree-huggers who are invested in solar. It’s people of all political persuasions—red, blue, purple. It’s people of all income levels. It’s people of all ethnic diversities. And it’s people from all over the country, and all over the world. So, I think we must do a better job of getting outside of our own comfort zone. I live in California, so that’s my world, but I and others have been looking at Florida for years. Florida is very interesting. In those moments when you feel that you are constantly battling this or that, and there’s the role of utilities, the role of regulators, the role of the public, the role of the feds, just remember that a state like Florida that is the third-largest state in the country where solar was not happening at any significant level, is now beginning to be open to solar.

And so, when you start to build momentum in these states—Nevada is incredibly important because of the high level of solar penetration—but when you also have momentum with these large states like California, Texas, and Florida, you know, suddenly you’re talking about a very significant percentage of Americans. When you add the international opportunity as whole new continents largely skip the centralized fossil grid and go straight to solar, it is clear that much of solar’s history has yet to be written.


Interview conducted by Richard Matsui, KWh Analytics

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