One Year After Solyndra Collapse, Where Are They Now?
The bankruptcy of Solyndra LLC, announced Aug. 31, 2011, was a major blow to investors, top executives, and employees of the once-promising solar company, as well as to government officials that provided major support.
Now, at the one-year anniversary of its stunning collapse, the Solyndra effect continues to be felt by those who got burned. Some of the financial backers have backed away from clean-tech investing, while key employees–including the two men who served as chief executives of the company and have laid low since its downfall–are still looking for the “next big thing.”
The irony, according to Dawn Dzurilla, founder and managing partner of executive search firm Gaia Human Capital Consultants, is that Solyndra managed to attract some of the most experienced people in their fields, because of its high-profile status.
“What they saw in Solyndra was tremendous promise,” said Dzurilla, who has encountered former Solyndra executives in job searches. “They saw money. They saw a firm that was close to commercialization and capitalization. They were very excited about making a big difference in the world.”
For former employees who didn’t find new employment, Solyndra doesn’t have to be a taint or a stigma, according to Linda Locke, principal at Reputare Consulting, which helps organizations leverage and maintain a good reputation. “If you learned from your mistake, there’s great forgiveness in American society. We are a country that is open to second chances and reinvention,” she added.
That may help former top executives at Solyndra.
Chris Gronet, who was the founding CEO, is working on a new start-up, not in the area of solar, according to a person familiar with his plans. He hasn’t pitched the start-up to investors yet, the person said. Efforts to reach Gronet weren’t successful.
Gronet doesn’t mention Solyndra on his LinkedIn page. But Brian Harrison, the turnaround CEO who was hired by the board of directors in 2010 to try to revive the struggling company, does. Efforts to reach Harrison, who was previously a high-level executive at Intel, weren’t successful.
Harrison’s LinkedIn page says that he’s “waiting for the ‘next big thing.’”
He “probably will have to create his own next big thing,” said Dzurilla.
Many engineers and managers came to Solyndra from the semiconductor and hard-disk drive sectors, and after the company failed they returned. Among the companies now employing ex-Solyndra workers, according to LinkedIn, are Lam Research, JDS Uniphase and Applied Materials. Some employees stuck to the clean-tech space, with electric car company Tesla Motors and solar-panel maker Nanosolar hiring several former Solyndrans.
As for investors, Solyndra likewise represented a big bet, up until a massive devaluation in the solar sector, caused in large part by the rise of Chinese solar-panel makers backed by government support.
The Fremont, Calif.-based company raised the highest amount of venture capital ever at that time for a start-up, more than $1.2 billion in equity, and it drew on a $535 million federal loan from a flagship Obama administration stimulus program. The government’s loss on the loan caused a political storm, as well as an investigation by the Federal Bureau of Investigation about possible improprieties. No one has been charged.
“Solyndra was a good company with a great technology, but very few companies can withstand a 75% drop in their average selling price over an 18-month period,” wrote a former Solyndra investor in an email to Dow Jones VentureWire. “This is an unnatural act that typically requires massive dumping.” The U.S Commerce Department has since imposed countervailing duties on some Chinese solar panel manufacturers. Over the past 12 months some 30 solar companies in the U.S. and Europe declared bankruptcies, according to analysis by investment bank Raymond James.
Almost every investor in Solyndra remains in his previous position, except for Tom Baruch, who was formerly with CMEA Capital and has moved on to a new firm, Formation 8, that seeks to invest in both clean-tech and high-tech companies. Another investor, Alex O’Cinneide, has also left his position with Masdar Capital, according to reports.
All traces of Solyndra have been erased in their public profiles, whether on their firm’s websites or on LinkedIn, a professional social network.
“The investors are big boys and through their lives they make good investments and bad,” another former investor told VentureWire.
Redpoint Ventures, a Solyndra backer, stepped away from the clean-tech sector in the wake of the debacle, as VentureWire previously reported. John Walecka of Redpoint Ventures didn’t respond to a request for comment.
Solyndra hasn’t necessarily soured everyone’s view of clean tech. Some former Solyndra backers continue making investments in clean tech, including Madrone Capital, which invests on behalf of the Walton family and has recently invested in solar financing company SunRun.
Still others are trying to raise new funds. Virgin Green Fund, for example, which counts Richard Branson as an investor, is trying to raise a second fund, although it doesn’t appear that it has closed. Anup Jacob, of Virgin Green, didn’t respond to a request for comment.
“They thought it was going to be big, and they hit their fund maximums,” said the former investor about the funds that backed the company. “So the negative is that it was a big investment for a lot of these funds and for clean tech, in general, there hasn’t been a lot of real liquidity.”
The investor took away a big lesson from the Solyndra story.
“We are never going to partner with the government again,” he said. “That’s what all the investors in Solyndra missed. If things are great, [that’s] good, but if things are challenging, then get ready for all hell to break loose. You don’t know who’s making the decision and what they’re motivated by. Is it political, is it someone’s career they’re trying to advance?”