I've met a lot of entrepreneurs in the energy and clean tech venture space in Texas--particularly in Dallas and Houston. A lot of them have firmly established themselves. Their companies have done a number of financings and exits. They've already achieved a lot.
There are also some who are just starting out; and that's fine, everyone's got to start somewhere. They are definitely excited and pumped up. They want to get started. They want to create and operate a company that's going to do some huge things in the industry.
So I want to talk about what they need to do first. But before that, a little bit of background is needed to understand where these oil & gas industry individuals are coming from.
Therefore, I've broken this blog post down into two parts:
First, characteristics of these individuals and second, what this means as far as what they need to do when initially creating a startup.
1. Characteristics of Energy Entrepreneurs
a. Energy entrepreneur skills are highly related to the industry that they are currently working in
These energy individuals often have a masters or doctorate degree in a field related to energy and clean tech.
Tech/IT guys are also highly skilled but their skills are often tangentially related to the underlying industry. (Of course this is not true 100% of the time, but it's definitely extremely common.)
[Side note here about education level: though many of the IT individuals are formally educated, some of the most brilliant founders, investors I've worked with have very little to no formal education (i.e. no bachelor's degree or even high school diploma). These are of course outliers and their paths should not necessarily be replicated for the vast majority of the people. But that is a different discussion all together.]
Any way, the point is that many energy entrepreneur skills are highly intertwined and related to the energy industry.
b. Energy entrepreneurs often start their company in the same energy industry
Because the vast majority of the founders of these energy startups are highly skilled and highly knowledgeable in their respective fields, they are often working specifically in the field in which they will create their startup. This is different from what I've noticed with IT/computer science based founders. Founders of IT startups tend to have a strong background and knowledge base in some area, but may frequently choose to create a company in a slightly different industry. For example, an IT entrepreneur might be extremely strong in banking IT, but then start their company in gaming IT. This is not the case with oil and gas entrepreneurs.
Essentially, energy entrepreneurs are highly skilled in their field AND tend to start their company in the same area they are already working in.
2. So What Energy Entrepreneurs Should Do First
They should pay very close attention to the limitations on the ability to create a company imposed by current or prior employers.
Current or prior employers, particularly in fields that are highly technical and with workers that are highly skilled, will tend to have certain agreements in place to restrict these employees. So if you're one of these employees and looking to become a founder of a startup, here's what you need to do first when starting your enterprise:
a. Protect your IP from employers
Employers will often have claims to certain types of IP that you are creating for your startup or company-to-be. Make sure you're covered here.
b. Look at the contracts you have in place with employers
Your employment contracts will often contain no-moonlighting clauses or clauses that restrict certain types of competition for a set number of years.
c. Look at your role
I've had private chats with the CEOs and Presidents of major public energy companies in Texas, China, and elsewhere. Even though a contract might not spell that these top level individuals are restricted from doing x, y, or z, simply because of their role in the company they may be restricted from certain types of entrepreneurial activities. So be careful about this one. Keep whatever you're working on for your future company separate from the going-ons of your current employment situation. Don't interfere with what your current employer is doing and their operations.
Those are the key points to remember when you are first starting off. A startup attorney can help you deal with these legal issues. You do not want to get this wrong as it will doom your startup. For a more comprehensive read about what exactly you need to do, read this article for more information if you need help: https://www.startuplegalstuff.com/protect-startup-from-employers/