BL: Hi Frank, thank you for agreeing to the interview for SGEntrepreneurs. Prior to the Small World Group, what is your background?
Frank Levinson: I have a PhD in Astronomy from the University of Virginia. Following that I worked in the field of optical communications for more than 25 years. I started out at Bell Labs and in 1988 started Finisar Corporation which today is the largest fiber optic transceiver supplier in the world. We started Finisar without VC help. Today, while not active with the company, I am still a large private shareholder.

One way to measure Finisar’s success is by Internet bandwidth shipped. Today Finisar ships 10 Mb/s of bandwidth per month per person on earth. This figure has been growing by 10x every 5 years for the past 20 years.

BL: How do you start the Small World Group?
Frank Levinson: When I left Finisar, I wanted again to make a measurable difference in the world. And it was clear to me that clean tech was a coming wave as well that Asia was a key place in this century. So I started SWG to be the overall structure surrounding those efforts. SWG participates in philanthropic efforts to help monitor the earth’s inventory of biodiversity through Small World Group Institute, my foundation in the USA. But that same foundation has already supported one project here in Singapore in support of the Raffles Museum of Biodiversity as well. Next, there is Small World Group Capital which is the Venture Capital fund that has helped me invest in Vixar, myCaption, Daylight Solutions, Dewey Homes and Fabrinet. And now there is Small World Group Incubator which is the work I am doing here in Singapore that is in partnership with Singapore NRF and the technology incubation scheme (TIS).

I took some of the proceeds from the sale of Finisar stock and have put that money to work under the Small World Group brand.

BL: As one of the seven NRF TIS incubators in Singapore, we read from your brochure that your focus is on clean tech, optics and materials. Why do you pick start-ups in this space to incubate?
Frank Levinson: Basically, I chose optical systems because of the Finisar experience, clean tech from the heavy focus I have had over the past 5 years in that area and materials because I am a Venture Partner in a new VC firm – Phoenix Venture Partners (www.phoenix-vp.com) which will focus on materials and so with that partnership Incubator level investments we start here would have access to Series A/B level funding as they are successful.

BL: What are the three features you will look for in an entrepreneur who is interested to incubate under Small World Group?
Frank Levinson: First they have to be smart and nice. Ventures are small teams and in that environment, you must have a leader with their ego in check. They need to be able to listen and lead not command and demand. We want our ventures to be lean but “mean” has no place in our work.

Next they must have a real dedication to their early customers. We are not funding science projects. We will only fund startups that have identified their early customers down to their names and cell phone numbers. We want all of the team members to know who they work for … the customer! And ultimately we want more than 1 early customer, and at least one customer must be outside of Singapore.

Finally, we want our entrepreneur’s to be able to work with “too little money”. This will put a premium on innovation over spending their way to success. Ideally, they will be people who start out by accepting modest salaries and who have much to learn but that grow with their business and become world class leaders through the experience.

BL: Can you share with us the funding range that you will invest in a new company? Or does it follow another model?
Frank Levinson: We can fund up to $588K inside the NRF TIS. We may do less than this and we are able to invest in 2 tranches inside the NRF scheme. We feel that with discipline that this figure can go far. We have very good working relationships with NUS, NTU, SMU, SIMTech, IME, and many of the other Singapore Institutes. Our plan is to help our startups partner with these groups in ways that further leverages our initial investment.

BL: Any interesting companies that Small World Group has incubated before entering Singapore? Can you share a story or two for our readers?
Frank Levinson: I am a major VC for Daylight Solutions, myCaption, CloudBreak Software and Vixar. In all cases, I hold a board seat, have been a major financial contributor, helped set the Series A terms.

Daylight Solutions works to build tunable laser light sources in the 3-12 um wavelengths of light using Quantum Cascade lasers. Their systems are useful in Defense, in chemical detection, in free space optical communications. In early funding the lead investor ran into legal problems and the partners ended up fighting and so I was asked to step in. I did and then less that a year later based on key milestones being met we were able to bring European VCs to the investment mix as well as development partners from a lab in Switzerland.

In the case of Cloudbreak, I was the major investor there. The company had software that optimized work flow in financial offices. They had amazing customer loyalty and provided very quantifiable efficiency and profitability improvements for their customers. But their main product was in the mortgage business and when the bubble burst in 2008 they lost 1000s of customers in a single day because their customers just died/bankrupt. In the end that company closed. But I was so impressed by the team and how they worked with customers, that their CEO – Dean Haritos – is now my partner in the Small World Group Incubator. In the USA we don’t punish failure we assess it and remember that such painful experiences are full of hard learned lessons that make the right person all the more valuable.

BL: What are your future plans for Small World Group within the next few months?
Frank Levinson: We hope to start some companies inside the NRF TIS program in the next 2-3 months and then build our pipeline so that we start 1 company per month over time. That is probably optimistic but for now it is our target.

BL: How is the experience as a foreign company setting up in Singapore? Any tips for anyone who might consider doing the same setup here.
Frank Levinson: Singapore has been my most visited place outside the USA now for more than 10 years. This is a young country that aggressively grapples with its future and takes bold steps when required. come over and find that out for yourself.

BL:: Thank you for the interview and we wish both success for the Small World Group and her incubatees.

EDBI was established in 1991 as the independent equity investment arm of the Singapore Economic Development Board (EDB) and Vertex is the venture subsidiary of Temasek Holdings, a Singapore Sovereign Wealth Fund (SWF).

Innovalight is in the clean technology space, and sells silicon ink-based high efficiency solar cell materials and technology. Its proprietary nanotechnology-based silicon ink and processing technologies allow crystalline silicon solar cell manufacturers to dramatically boost output capacity, solar cell performance as well as reduce costs with a simplified additional step to already installed manufacturing lines.

Apart from venture funding, Innovalight also received additional development funds from the US Dept. of Energy.

Asia’s energy consumption represents one third of the world’s, yet this demand has not been met. This has been a problem as energy consumption has generally been on the rise in Asia over the last 40 years. But with the increasing urbanization of Asia, and especially that of China and India, this consumption is expected to rise further. This is no new news.

There is a need to meet this increasing energy demand and we have always looked to oil in fulfilling this demand. But oil consumption is unsustainable. There has been no new major oilfield discovery in the last couple of years. Even though there have been small finds in Brazil fairly recently, these finds would not solve the world’s energy consumption problem. However, there might be ways to produce more oil, but these methods would lead to oil costing $200-$300 a barrel. This price tag for energy just does not represent financially viable solutions as of now. Thus, there is obviously a great urgent need to find better ways of trying to meet the huge energy demand of Asia.

Asia’s increasing urbanization also means increasing urban transportation. As transportation is a significant source of CO2, transport-related CO2 is expected to increase steadily because of China and India. The negative impact on the environment is ever-increasing.

Oil is cheap now. (Click picture to enlarge.)

But change is happening. More and more electric vehicles are on the roads. However, this change is not as fast as one might have hoped for. For example, it takes up to 12 hours to charge a car before you can take it out on the roads; whereas the time needed to charge scooters can take only an hour. This inconvenience does not make it viable for many people to switch to electric cars even if they are interested to do so. This means a greater challenge for clean energy entrepreneurs as it is often not the case that the technology is not ready and commercially viable, but that they are not consumer-friendly yet.

Investment opportunity. (Click picture to enlarge.)

Another interesting question posed from the floor was whether the airline industry is following suit with the move towards clean energy. Airliners are more complicated than scooters and cars because they need much more energy to move a lot more mass through the sky. Fuel needed thus needs to strike a balance between the ability to provide this energy as well as weight. Oil, being a very dense fuel and being relatively light, is a good choice for airlines. However, because of the airline industry’s special fuel needs, it is harder for airlines to adopt clean tech right away. The example of the first commercial test flight by Virgin Atlantic Airways using jet fuel made with coconut oil and and Brazilian babassu nuts was a successful one. Perhaps in time to come, we’ll be able to fly without leaving a carbon footprint!

Speaker is Ron Mahabir from Asia Cleantech Capital.

This initiative called “Asia Forum for Clean Energy Financing” seeks to nurture individuals/teams/startup companies with environmentally beneficial business proposals with the eventual hope of transforming them into reality.

Eligibility
Any persons or company resident or actively operating and/or registered in any ASEAN country may participate in the Asia Forum for Clean Energy Financing. While there is no restriction on the size of the company / sponsor the award is designed to reflect excellence in new ventures.

Focus of Business that will be considered
The business must promote clean energy technologies, products or services that would in general include:
- Biomass
- Biogas
- Solar
- Wind
- Geothermal
- Hydropower
- Tidal / Ocean
- Energy efficiency
- Distributed generation
- Waste-to-energy
- Emission reduction

Competition Categories
Only business opportunities that require total (initial) capital in excess of US$1 million will be considered.

Acceptable Business Plans
Plans eligible for the Forum, may include, but are not limited to:

- New venture/new business
- Merger or acquisitions, including leveraged buyouts, which will lead to a turnaround, roll-up, or some other significant change that adds value to the current business
- Joint venture, alliance or network-based business (e.g., create new entity from current enterprises)

View more guidelines.

Submit your application and executive summary by 22 December 2008. See www.cleanenergy-financing.com for further instructions.

Short-listed candidates will be offered one-on-one coaching to create financially, socially, and environmentally viable business proposals.
Finalists will be invited to the Forum on 4 March 2009 in

Singapore in order to make presentations on their business proposals in front of potential investors and financiers.

Awards will be presented to proposals with high business potential, as chosen by a panel of judges at the conclusion of the Forum.

The Forum is organized by the Climate Technology Initiative (CTI), CTI’s Private Financing Advisory Network (CTI’s PFAN), the International Center for Environmental Technology Transfer (ICETT), ReEx Capital Asia, the Sustainable Energy Association of Singapore (SEAS), and the USAID ECO-Asia Clean Development & Climate Program (ECO-Asia).