in the country, the University of Utah.
On summer camping trips in the Rockies, the two kept talking about this idea of starting a biotech company. The spark wasn’t really there for Wolfson and Dillon in the therapeutic possibilities of biotech, but they shared a love of the outdoors and the environment. Then, one point in about 1995 or 1996, Dillon gave his friend a call.
“He called and said ‘algae for fuels,'” Wolfson recalled. “It sounded completely ridiculous and extraordinarily fascinating. I thought it was the most creative idea in the world.”
Algae has long captivated the imagination of scientists looking for a cheap source of renewable fuel, because the fast-dividing microorganisms don’t depend on a growing season like soybeans, or corn, and can pump out far higher yields of biofuel per acre.
That feeling of discovery didn’t really last long. “I realized very shortly thereafter that we weren’t the first geniuses to think about this,” Wolfson says.
Japanese and Russian scientists had spent decades trying to harness the potential of algae to pump out fast, efficient quantities of oil. The U.S. Department of Energy’s National Renewable Energy Laboratory had been working on it for years, too.
So the idea sat on the shelf for a while. Wolfson got some experience in investment banking at Morgan Stanley, and tried his hand at entrepreneurship as the co-founder and president of InvestorTree, a financial services firm. Dillon decided to get a law degree on top of his genetics training, became a patent attorney, and got a taste of the business world at the University of Utah’s technology transfer office. The delusional dreams of their teens started to seem more outlandish as they got older. “We learned a little more about how things really work,” Wolfson says.
But by the early 2000s, they saw the possibility for reviving their algae biofuel idea. The Human Genome Project had just wrapped up, and suddenly a lot of high-powered gene sequencing centers had excess instruments that needed to be put to work. These centers around the country sequenced genomes of all sorts of species for the first time, like fruit flies, mice, rats, bacteria, and the first algae strains.
“When that happened, we kind of looked at each other and said this is an interesting time,” Wolfson says.
By 2001, they started working on the business plan, and writing what Wolfson calls “prophetic patents” basically around ideas. By 2003, about 14 years after their original bull sessions, they figured it was time to finally start the company they dreamed of. They moved out to the Bay Area because it’s the leading cluster of money, science, and entrepreneurship in the country.
By this time, Wolfson and Dillon were in their early 30s, and still “fairly delusional.” They didn’t know much about raising money or starting a company. The Bay Area economy was starting to recover from the dotcom implosion. One other company, Cambridge, MA-based GreenFuel Technologies, existed at the time (although it is now defunct). Almost nobody they met had ever heard of algae for biofuels or thought much about it.
When Wolfson and Dillon went around to raise money, they found nobody knew what to make of them. Biotech venture capitalists understood the molecular biology, but not the fuel business. Cleantech VCs, to the extent any of them existed, understood energy markets but not the molecular biology challenge with algae. “There was no real cleantech investment community. All these venture capital firms that now backswear they were investing in cleantech in the early 2000s, there were really only a handful,” Wolfson says.
A big break happened for Wolfson and Dillon when they met Jerry Fiddler. He was
