Haberman: algae faces credibility issues, do your due diligence

By Erin Voegele | March 29, 2011

The algae industry has taken significant strides in recent years, and is attracting a great deal of investor attention. However, the industry as a whole still faces some challenges with regard to credibility. According to David Haberman, president of IF LLC, this is due, in part, to high expectations established by some companies in their quest to attract investment. Haberman’s consulting firm specializes in due diligence activities, and can help potential investors vet potential investment opportunities.

“[IF LLC] is primarily a service provider for companies that need help examining prospective investments,” Haberman said. “We conduct due diligence. We conduct risk assessments. We do a lot of work in the area of project planning for folks that want to adapt renewable energy systems.” The company has experience vetting a wide range of entities, including those involved in algae, biomass, hydrogen, solar and waste-to-energy technologies.

Haberman has a long history of working in the energy industry. “My experience is based on several years of working for industry and the government in this technology,” he said. “My basis of experience comes from both the funding side and the practice side. It’s important to have both those perspectives when you are trying to methodically review all of the attributes of a project or an enterprise.”

According to Haberman, there are several tiers of activity going on in the algae industry today, from government sponsored activities, to private development, and university sponsored research and development. “There is a spectrum of technologies across the value chain of algae,” he continued, noting that it’s import to understand the technologies in this spectrum in terms of their potential and their possible risks.

“We look very carefully at not just the business plan [of a company], or the enabling technology, but also the team, and the team’s understanding of where it fits into the value chain,” Haberman said. “Oftentimes many of these companies overreach by trying to do everything. That’s a large challenge to many of these undertakings. We are very much focused on trying to conduct what we call ‘constructive due diligence’…to guide the investor and the prospective investment into common frames of reference. Oftentimes it’s important to separate the enabling technology from its potential impact, and to understand those links and the amount of connectivity with the context of those deployments…We apply experience that is hard earned from actual deployments and actual designs.”

Haberman will be giving a presentation titled “Algae’s Readiness: An Independent Review of the Industry,” at the International Biomass Conference & Expo May 2-5 in St. Louis. Haberman’s presentation will be given as part of the Perspective on Plausible Algal Outcomes panel.

“Algae is a wonderful enabling technology to achieve sustainability objectives,” Haberman said, “and I view myself as a pragmatic optimist for the future of algae—not just for the United States, but on a worldwide basis.”

The panel will also feature presentations by John Pierce of Wilson, Sonsini, Goodrich & Rosati; Mark Warner of the Harris Group Inc.; and Wenguang Zhou of the University of Minnesota. 


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