Research

Given the small size of our firm, and the wide scope of the sustainability space, a critical part of our work is the pro-active development of filters that promote efficient allocation of firm resources:

• We avoid hype and excessive risk – We try to identify areas of investment that are unattractive to us and do not warrant significant use of firm resources.  Reasons for staying away from a sub-sector include excessive venture capital activity and correspondingly high valuations; excessive technical claims associated with an unproven emerging technology; need for massive amounts of capital to achieve success; and/or significant unmanageable risks associated with market development.

• We seek “target-rich” areas – We try to identify areas of investment that we think will offer significant opportunities, and which the broader market has not yet fully perceived.  We do not spend significant time on a sector unless we think it is ready for investment, but we do seek to identify investment theses early.  That is to say, just as we avoid hype, we also seek out unappreciated value.

• We seek to know ourselves well – We work to develop a refined sense of what an Aquillian opportunity looks like.  We work to acknowledge our strengths and limitations, and only spend significant time on things we can accomplish on our own or in collaboration with existing partners.  We couple this with constant effort to improve our capabilities and expand our opportunity set.

The process of identifying areas to pursue, and refining our sense of an Aquillian opportunity, is as follows:

• We study sustainability related problems to identify key areas of opportunity that lend themselves to market-based solutions.  In some cases we prepare landscape analyses on a general topic in order to document our perspective and catalogue areas of interest; at other times we incorporate such analysis into our normal due diligence documentation process on specific opportunities.

• We study the challenges to implementation of a market solution, in order to develop a refined sense for business models or other important elements that will determine success in a given area.  The foundation for this process is our past experiences and the pattern recognition developed through exposure to a large number of opportunities.  However, it is greatly enhanced by regular ongoing interaction with and lessons gleaned from experts, entrepreneurs, and other investors in the space.

• We follow market activity closely, and discuss within our team what makes an approach by an investor or company successful.  We especially keep an eye out for approaches which seem unique in their strategic or systemic nature, or which achieve success in a space judged by conventional wisdom as “difficult”.  We are continually searching for lessons which might be applicable to our own work, seeking to identify unexploited niches which have promise, and looking for intelligent potential partners.