The Next Generation of VC: Interview with Alexandra Harbour, Associate at Powerhouse Ventures
Alexandra Harbour is an Associate at Powerhouse Ventures, a seed-stage venture capital fund that backs entrepreneurs building the future of energy and mobility. Based in Oakland, she has helped to conceive the fund and make some of its earliest investments. This year, Alexandra was selected as one of Forbes’ 30 Under 30 in Energy.
I had the pleasure of hearing from Alexandra on what makes the best investors in cleantech, the biggest blindspots in venture, and her vision for the next generation of young investors.
When did you start to consider the career path of VC?
Alexandra Harbour: It sort of happened by accident. I’ve been in an investing role for three years now, but it was only in the past year or so that I began to consider a long-term path in VC. Since I joined Powerhouse in 2016, it has evolved into both a venture fund and an innovation firm. I’ve supported our founder Emily Kirsch to create Powerhouse’s inaugural venture fund, Powerhouse Ventures.
It has been a whirlwind. In my first three years as an investor, I’ve had the opportunity to help establish a fund thesis, lead investments, and support companies post-investment. Now as I consider continuing a career in venture, I’ve started to think more about what areas of expertise I want to focus on, the kind of skills I want to build, and the type of investor I want to be.
What is the best part of your job?
Alexandra: The moments when I’m able to get on board with a founder’s vision. Regardless of the industry, every founder’s mission is to present a vision for a better future. As investors, our job is to decide whether or not we find that vision compelling. I am energized by the challenge of being presented with an assumption about how the world could be. Then, I do the research and diligence to figure out if that’s the case. Even if the business model and market are promising, our team also has to believe that the founder is the right person to bring the vision to life. If an investment happens, it’s because we were able to find alignment. Making an investment and supporting a team financially and strategically feels really tangible and impactful. When later-stage investors in our network get excited about the vision too, it feels like we’re really onto something meaningful.
Energy is one of the few industries that you commit your entire career to and still feel like you know less than you did when you came in. There’s always something new to learn.
What led you to have an interest or focus in the cleantech space?
Alexandra: For most of my time as a student, I struggled with the why. I studied Economics, but felt like there was something missing between my academic work and what I cared about. I wasn’t sure what it was. It wasn’t until I took additional courses in energy and the environment through a sustainability minor that something sparked for me.
After graduation, I moved out to the Bay Area, which in my mind was one of the best places for private sector innovation. I’ve found a deep energy community here with a lot of expertise in and passion for the sector. Early on I joined CELI, a professional development organization for young professionals in clean energy, which has given me access to a multitude of different insights and experiences. Energy is one of the few industries that you can commit your entire career to and still feel like you know less than you did when you came in. There’s always something new to learn about from others.
What sets apart a good investor from a great investor in cleantech?
Alexandra: The best cleantech investors are also relationship and coalition builders. It’s difficult to be a cleantech investor if you don’t have strong relationships with folks in the industry and experts to lean on for insight and perspective. Energy is not just about the physics of the grid. It’s not just about policy, and it’s not just about economics within a specific market. It’s all of those areas in addition to technology R&D, creative financing, and business model innovation.
It’s important to understand not only what a solution can do, but also what it needs to do for customers. Informing our diligence process through sector experts helps our team to understand how certain customer segments and markets behave, and how they are incentivized. Given the breadth of the cleantech industry, it’s crucial to connect early-stage startups with the right advisors, mentors, potential customers and other investors. It is a communal effort, and I think it manifests in the collaborative culture that I’ve come to recognize within the sector.
Cleantech will be embedded in how companies and industries operate. It won’t be considered a niche industry or categorized as an independent focus. It will be fundamental to how we do business.
What is your strongest conviction or take on the future of cleantech?
Alexandra: I’ve been in the industry for four years. Even in that short time, what cleantech means has expanded, and it will continue to expand. Today, it goes beyond energy. The industry reaches into everything from carbon to water, agriculture to forestry, transportation to supply chain and beyond. It has even influenced direct-to-consumer marketing and engagement.
Someday, I think cleantech will be embedded in how companies and industries operate. It won’t be considered a niche industry, or categorized as an independent focus. It will be fundamental to how we do business.
What is the hardest challenge for founders and startups to overcome?
Alexandra: The timing of the markets. There have and continue to be many desperately needed solutions for both the present and future of cleantech. In my experience, for early-stage teams the biggest and most insurmountable challenge is when a great idea comes too early, and the markets aren’t mature enough. In those cases, the founder must be truly creative, determined, and patient. They have to figure out how to pivot the business into an area that has growth potential, where the business can thrive, until the larger market opportunity appears. It takes a really special team to navigate this kind of challenge.
Electric vehicles and charging infrastructure, and commercial and industrial (C&I) distributed energy resources (DER) are two great examples of high potential sectors with uncertain market growth timelines, especially in the age of COVID. Over the past year, we’ve seen a lot of brilliant teams operating creatively in these spaces.
What was the first deal you sourced and led, and what did you learn from it?
Alexandra: One of the first really impactful lessons that I learned from an early investment was the importance of the founding team. In 2017, we invested in a startup called Station A. Station A is a clean energy marketplace that uses AI to evaluate and facilitate the development of clean energy projects from origination to operation. At the time, we were considering an investment in Station A alongside four other similar and early deals. Each had the same end goal, but different initial approaches. While we were on board with the ultimate vision, we had to decide which company had determined the most effective strategy to get there. We chose Station A for a number of different reasons, but the primary one was the team.
Every investor will tell you that team is everything, and I think that watching Station A grow under the leadership of the founding team made that very real for me. Since our investment, Station A has brought on customers like Enel, Engie, Shell, Sunpower, and JLL. We recently followed on in their Series A led by Renewal Funds, with participation from Schneider Electric Ventures, and Southern Company.
You may think there is an ideal path that VCs look for when they hire, but that path is not the only path to build the skills you need to be a successful investor. Use the tools at your disposal now to build those skills for the future.
What’s your advice to folks who want to break into the venture capital industry?
Alexandra: Finding impact-based work that pays well, especially in the Bay Area, is a privilege. Cleantech has some of the most competitive jobs for people our age. My first piece of advice is to remove the pressure on yourself to find the ‘perfect job’ in cleantech or venture. Every early-career role or transition role has aspects that you love and those that you don’t. Second, if you’re planning to learn on the job and feel as though you’re missing some key skills to landing positions, find other ways to build and potentially demonstrate the skills that you need in the absence of learning them within your current role. Keeping an open mind and expanding your toolbox will help you seize opportunities that might provide another path to your goal.
Many people are aware of the ‘traditional’ path that some VCs look for when they hire, but that path isn’t the only way to build the skills you need to be a successful investor. I read once that luck occurs at the intersection of preparedness and opportunity. My transition into venture worked because I used whatever tools were at my disposal to learn as much as I could, and build as many skills as possible. I would encourage folks looking to break into venture to first think about what you want to invest in, and how you can develop and demonstrate literacy, expertise, and experience in that field right now.
What’s one thing that you want to see change in the next generation of VCs?
Alexandra: Venture is an opportunistic sector. It has the potential to be visionary, but the tailwinds have to be there. One of the biggest blindspots in VC is that we struggle to back solutions that target communities with a low ability to pay. These communities are often left out of venture-backed enterprises because the revenue opportunity for exponential growth that investors look for and start-ups must return isn’t immediately there. Over the past few years, I’ve been trying to understand how to better incorporate low-income communities into venture-backable business models in clean energy, and if venture capital is capable of being a vehicle. It’s a big blind spot in the industry and an ongoing question for me.
I’d also like to see more opportunities for non-traditional candidates. Early-career VC roles are essentially an apprenticeship-based structure. You have to find someone who sees something in you; and in the same way you will invest in and support startups in your role, fund leadership invests in and supports you as a young professional. I think that this kind of structure tends to emphasize ‘culture-fit’ as opposed to ‘culture add,’ and is one of the many reasons for the lack of diversity in the industry. I’m so grateful to the people throughout my career who have seen something in me, and helped to guide my growth as a professional; but those relationships are rare. In the future, I’d like to see more transparency and more avenues for people who are interested in the industry, but may not have the resources or the personal network to break in.
One of the biggest blindspots in VC is that we struggle to back solutions that target communities with a low ability to pay… How do we better incorporate low-income communities into venture-backable business models in clean energy; is venture capital capable of being a vehicle?
What’s one book you’ve enjoyed recently?
Alexandra: I’ve been reading a lot of philosophy recently. One of the initial books that helped me get my bearings was A History of Western Philosophy by Bertrand Russell. It’s a good introduction and overview to Western philosophy, and it helped me form an understanding of how Western philosophy, ideology, and religion have evolved over time. I tend to read a bunch of different books at the same time (and buy new ones based on what I’m reading), which means it takes me forever to finish one. Out of all of the books that I’ve read, this one has spawned the largest number of subsequent purchases. There are some aspects of the book that haven’t aged well since 1945, but I have really enjoyed learning from it.
What is one part of your personal self-care?
Alexandra: I’ve worked on building rituals. I’ve started to meditate each morning, and it’s helped me stay grounded. There is so much going on in the news and around the world, and it’s increasingly hard to take what you see at face value. How do you process change and uncertainty? I love reminding myself that many of the questions and challenges that we face today have existed in different forms for thousands of years, and that these philosophers grappled with the same existential questions.
Where do you see yourself in five to ten years?
Alexandra: I have friends with five to ten year plans. That’s not who I am at all. I only know that I’ll be fulfilled and learning exponentially. I’ve recognized that in the future I will know myself much better than I do now, and I’ll have to trust myself to make decisions that fulfill me. I couldn’t possibly know what those future decisions are now. Five years ago, I didn’t know I would be in VC. If I had the opportunity to go back, I wouldn’t change anything. I continue to be open and to learn and to grow and to seize opportunities as they come my way.
What is one call-to-action that you would like to leave our readers at All Raise?
Alexandra: Take any sort of goal, dream, or chore that you have. Then, ask yourself: “How can I make this happen in a small and simple way today?” I’ve felt paralyzed in the past by thinking about everything that I should do instead of what I can do right now. Find an action that is tangible and real but not a huge commitment, and just get it done! It’s been helpful challenging myself to do that as well.
Take any sort of goal, dream, or chore that you have. Then, ask yourself: “How can I make this happen in a small and simple way today?”
Follow Alexandra Harbour on Twitter and LinkedIn.
This article has been edited and condensed for clarity.
