Attractive Deals Need At Least One Competitive Business Advantage

I thought I’d publish this email I wrote to a colleague whose team I’m trying to connect with one of my clean energy investment opportunities, as I’d like people to know that I do whatever I can to weed out flawed deals. My contact wanted to hurry me along on a waste-to-energy (plastics to fuels) project that invokes pyrolysis, a technology that’s been around for almost a century, but I wrote:

I’ve spoken with the CEO, and I have a pdf of their Powerpoint presentation, but I don’t understand what makes this worth looking into.  Is there some aspect of the technology that offers some unique advantage or benefit?  Maybe a unique business model, access to preferred feedstock, or an extremely attractive take-off agreement?  I was introduced to these guys by someone I know and respect, but at this point, I’m very suspicious that there isn’t, and that we should simply pass.  I’m signing an NDA so I can speak with their CTO; the CEO is completely ignorant about the technology–which makes me even more suspicious.  Sure, CEOs are business folks and normally not the top tech people, but I’m sure you can’t name a CEO of any company who has no idea what makes his company special.

I’ll get to the bottom of this Monday, or Tuesday at the latest; I’ll keep you posted.