Even though solar still has some mountains to climb in winning saturation, it is clear that it is one of the fastest growing sectors today and one of the most impactful. Solar energy could be considered a luxury in the United States, aside from communities where it has been mandated for new buildings. In emerging markets, however, solar is often the best–and perhaps only–option for energy access.
Ned Tozun has been leading the charge around the globe to create an incredible impact through solar products. Ned’s startup, d.light, might even be one of the best case studies on how social enterprises can improve the world. I had the pleasure of interviewing Ned Tozun on a recent episode of the DealMakers Podcast. Here’s a glimpse of his behind-the-scenes story, his tips for raising millions of dollars, his recommendations for how to make a difference in the world, and more.
Originally from Silicon Valley, Ned attended Stanford University as an undergraduate. After switching majors eight times, he graduated with dual majors in Earth Systems and Computer Science. Then, to the shock of his wife (and perhaps his younger self), he went back to Stanford to get his MBA. Prior to d.light, he had started a couple of companies in the Bay Area. While he loved entrepreneurship and its daily range of challenges, he wanted to learn more.
He wanted to know how to scale a business and how to leverage tech and entrepreneurship for meaningful impact. The networks he established at Stanford also became pivotal for raising large amounts of funding to grow this social impact business.
Ned was drawn to a course called Entrepreneurial Design for Extreme Affordability at the Stanford design school. He applied for the class and didn’t get in. But, after he kept showing up for six weeks, the professors finally relented and let him in. During the class, he began getting passionate about addressing the fact that about a fifth of the world did not have access to power–something the markets weren’t addressing. He decided to do something about it.
Solving Big Problems Requires Big Funding
With such a huge market size, this was a multi-billion-dollar opportunity. But, in the beginning, not many investors were interested in what they saw as a high-risk, unproven proposal.
Ned and his co-founders initially received some harsh rejections from venture capitalists. “You guys will fail. Please don’t waste your life on this,” one investor told them. “I was someone who doesn’t like public speaking. I’m more of an introverted person; I was like a coder and stuff,” Ned says. “So, going out and pitching to venture capitalists, I was so nervous the first times. But, as with anything, if you do it enough, and if you really believe in the business that you’re doing, you’ll get better and better.”
The turning point came when d.light won the Draper Fisher Jurvetson Venture Challenge and earned a $250,000 check from the well-known VC firm. After winning the DFJ competition, Guy Kawasaki’s Garage Technology Ventures matched their $250k winnings. Shortly afterward, Ned moved with his wife to China to figure out how to build solar-powered solutions that were affordable, high quality, and at scale. His co-founder, Sam Goldman, moved to India to figure out how to sell and distribute the products.
To date, more than a decade since starting d.light, they’ve raised a little over $100 million in equity and debt financing. Roughly a 50/50 mix of both. Having the brand name of Stanford really helped. So did meeting VCs lecturing at school, and cold emailing investors.
Of course, once those initial investments came in, fundraising became a lot easier for Ned and his team. I always say that, as a founder, you’re swimming in an ocean full of sharks, the sharks being investors. Eventually, one of them is going to bite, and then everyone else will want to bite. You just need to stay afloat until then. You need to topple that first domino, and then the rest will come.