U.S. Department of Energy & Recovery Act Funding: Bridging the 'Valley of Death'

Abstract

The case focuses on the US Dept. of Energy and the $38 billion dollars of stimulus funding the DOE received to encourage clean tech. They focus on "bridging the valley of death" i.e., helping young, innovative companies finance technically risky and very capital intensive development and commercialization programs. The case focuses on two DOE programs in particular, the Loan Guarantee Program and ARPA-E. The case raises the question of why these valleys of death exist, what can be done to deal with them, and how these DOE programs are designed and implemented.

Learning Objective: Help students understand the underlying factors that enable - and prevent - the financing of young, innovative companies and how these play out, with difficult consequences, in the uncertain and capital intensive world of clean tech.

Subjects Covered: Business & government relations, Climate change, Energy, Entrepreneurship, Finance, Financing, Government policy, Innovation