Greetings and welcome to Flanigan's Ecologic. I am your host Ted Flanigan, and today I'm very pleased to have Jigar Shah back on the podcast. He is the first guest that I have interviewed three times, and that says something. We talked back in March of 2021 about financing sustainable infrastructure. We talked again in 2022 about using federal funds to advance clean energy projects. Jigar's had an amazing career. I want to talk — we'll talk about his current position at Multiplier. We'll talk about what he accomplished at the US DOE for four years under the Biden administration. He's had an amazing career. Very happy to have you back on the podcast. Thanks so much.
Thanks, Ted. I think that, you know, the reason you bring people on multiple times is because, you know, they're not articulate enough to actually answer your questions the first time.
You're being way humble. You're being way humble. But, you know, 30 minutes goes awfully fast, too.
But tell me about Multiplier now. You've been — you've got a new position in life.
Yeah, you know, when I left the administration, I went on a listening tour and called up a hundred of my favorite CEOs and sort of said, "Hey, what's going on? I've been in this other game for four years and so I haven't talked to you in a while." And you know, I think it's very clear in this moment that the clean tech sector has never been more relevant. The solutions that our entrepreneurs are creating are, you know, meeting the need for load growth and meeting the need for the electrostate and all of those things, but they're not having consistently good exits, right? And when you look at the venture capital community, they're saying, you know, it's clean tech's fault, right? You know, like the sector is flawed in some way. And, you know, I don't know that that's true. We certainly have different dynamics than the tech sector. But I think that there's a lot of CEOs that are finding that getting to an exit is a lot harder than they thought.
And I think that what Jonathan Silver and I determined was that they were following a playbook that was written by tech, and that that playbook doesn't really work with clean tech. Like we don't get 100x exits very regularly in our sector. We get 3 to 10x exits, right? We have lots of characteristics of our sector which I'm proud of but are not necessarily, you know, echoing the tech sector.
Let me follow up with sort of a naive question because I'm not used to this term exits. But I take it this is a venture capitalist invests in a company in a technology and basically wants to get his or her money back, wants to be able to exit with a profit after a reasonable amount of time.
Yeah. I mean, and I'm talking more from the entrepreneur's side, but yeah, I mean, most of the entrepreneurs I know set out on this journey to do well by doing good, right? And they got the doing good part, but they didn't get the doing well part. But they just want to catalyze projects and then they want to get out — they got to sell their shares and make money, right? And what you're finding is that they're putting a lot of projects out the door and they're decarbonizing our energy system, but they're not selling their company for a profit to a strategic or, you know, taking it public or whatever it is that they would do.
And that's what Multiplier is. That's what —
So we're focused on helping management teams get better exits.
How interesting. How interesting. Now, how does that tie in with the current administration? Is the current administration a barrier to a better exit?
No. I mean, like when you look at the returns in the stock market, right? I mean, you know, the returns in the stock market under the first Trump administration were, you know, off the charts, and the return in the stock market for the clean energy sector in the last seven months have also been off the charts. So, you know, like Trump talking badly about the clean energy sector seems to do well for our stock prices. So I think that part I think is good. But I think the mechanics of teaching entrepreneurs what they should be doing differently to optimize for an exit versus optimizing for doing more good in the world, it might be a little bit different, right? Because the person who wants to buy your company needs a certain set of milestones to be completed, and those milestones might be different than what you're optimizing for just to sell more services, right? And I think a lot of people conflate the two. They just think, well, if I sell more and I'm more profitable and I'm bigger, then people want to buy me. And I was like, maybe. Or you might become so big that the company who's your natural acquirer says you're too big for them to buy, right? That, you know, they wish you were half the size because they can't afford to buy you at the current valuation you're at. Now you priced yourself out of the market.
Really? Now you must be a very, very busy guy. Did I read correctly that you have 250 clients for Multiplier?
No. No, I definitely don't have 250 clients. I have 250 CEOs that I've talked to about Multiplier. But I certainly haven't signed all those folks up.
Okay. Great, great, great. So that's taking up all your time. I thought you might have gone back to Generate Capital, but I'm wrong about that, I take it.
No, I mean, I was forced to sell all of my stock in Generate Capital when I joined the administration, and so going back there didn't seem like the right move. But I think, you know, I'm glad to see those folks continuing to do good work in the space. And so I'm happy for them. And then I certainly do podcasting with, you know, yourself, and I also do some LinkedIn posts and, you know, work on some nonprofit efforts as well.
Well, you had the Energy Gang, didn't you, for years.
I did, and now we started Open Circuit, right, with the same two co-hosts, right? So with Steven Lacy and Katherine Hamilton. And so that's been wonderful to join my two good friends and get back on the air.
Oh, that's fantastic. So life is good. You moved your family to the DC area to be part of the Biden administration, and I take it you're rooted there at this point. No longer San Fran.
We've been in and around DC since 1996. And so my wife and I have a lot of great friends in DC.
Yeah. Let's talk about your service to the country. I'm always impressed. You know, I just had Gene Rodriguez on the podcast. Susan Gladwin, who worked for you in the LPO, was on the podcast. And I'm always impressed by my friends and colleagues and those I admire that have gone into, you know, basically served our country in DC. Was that a terrifically rewarding experience for you?
It was for me, right? I mean, I had a very clear set of objectives when I agreed to join the administration, right? And that is basically that I think that what is true is that in our sector — the clean energy, clean tech sector, sustainability sectors — that there needs to be a functioning partnership between the public sector and the private sector.
And I think that that partnership did not really exist under the Obama administration. Right. So there was a, you know, there's a history of doing research and grants and, you know, all sorts of things like that, but at the time at which a company actually wanted to scale up their technology so that it could be fully commercialized, that often happened in other countries, right? I mean, oftentimes, you know, we were subtly or not so subtly telling companies to go to China or India or Malaysia or Singapore or other places. We were not actively encouraging companies to scale up their technologies in Texas or Tennessee or Kentucky or Georgia.
And that changed under the Biden administration, that we, you know, created a more muscular Loan Programs Office which I ran, but also we had a lot of great people who ran the Office of Clean Energy Demonstrations or the, you know, Manufacturing and Electricity Supply Chain Office or the Grid Deployment Office or other places, who provided more grants, right? And I think at scale. And so I think that one of the things that, you know, today we have a legacy of now is a lot of innovators and entrepreneurs who are dreaming of doing very big things here in the United States, which I think was most certainly not true pre-2021.
That's a great legacy, and it was fueled in part by a lot of stimulus money, right? I mean, I know you were talking about other departments or divisions within the DOE, but through the Loan Programs Office, you went from having a $40 billion to a $400 billion war chest, take one of your terms.
Yeah. And, you know, the interesting thing is most of it's still there, right? So we committed $108 billion worth of resources while, you know, I was in office. And when you look at the OBBB that passed under the Trump administration, I mean, that was the second largest climate bill ever that had ever been passed in the history of our country. And so while they prematurely phased out the solar and wind credits, and, you know, the EV credits and some of the other home appliance credits, they kept in place like a lot of the rest of the credits, right? So production credits in the United States, which were like 45X, or some of the hydrogen credits within 45V, or some of the carbon capture credits with 45Q, or the geothermal, nuclear and battery credits, right, were extended through 2034, right? So I think when you look at how many programs were left in place, and then the Loan Programs Office was left with several hundred billion dollars worth of loan authority, so it's just sitting there.
Well, I mean, they hope to put it into, you know, advanced transmission projects, which they closed a big deal on recently. They, I think, hope to put it into new nuclear projects or geothermal projects. So, you know, I think that, so I think for all of the hand-wringing, which is real, right? I mean, clearly there's a lot of people whose grants were killed and whose dreams have, you know, therefore also been knocked around. I think there's still the potential for the US government to be a partner with the private sector to help us compete with China on these electrostate technologies.
That's very encouraging. I'm really glad, really glad to hear that. I thought the sky was falling. Has there —
Those are just Starlink satellites that are, you know, coming in.
I know a lot of them. Like you said, you committed $108 billion. I think you closed deals on $61 billion worth.
And it sounds like there was a huge rush to the finish, which must have been a little bit too exciting.
Well, I think, look, I think that the private sector does not really know how to work with the public sector, right? And the Loan Programs Office. So it took us the better part of the first two years just to convince people that it was safe to use the Loan Programs Office and that they, you know, should plan to partner with the US government to, you know, realize their billion-dollar projects, right?
So then the applications started coming in hot and heavy in 2023.
