Ethanol start-up Mascoma sheds staffers
To "get ahead of" future challenges brought by capital market turmoil, second-generation ethanol company lays off president and other executives in an effort to preserve cash.
Biofuel start-up Mascoma has laid off a handful of employees, including President Colin South and other executives.
The total number of eliminated positions was between 5 and 10, CEO Bruce Jamerson said Friday.
Mascoma is one of few well-funded companies that have developed technology to make cellulosic ethanol from nonfood feedstocks. General Motors and refiner Marathon Oil are.
Jamerson said Mascoma continues to hit its technology and business milestones. But he and the board felt that it was prudent to cut costs, including personnel.
Because of the upheaval in the capital markets, Mascoma cannot go public to raise additional funds, and institutional investors are being more cautious now. So the company is positioning itself to hold on to cash as long as possible.
"I'm trying to get ahead of this," Jamerson said. "I don't want to find out that in six months, things are more challenging. Then when you make cost reductions, it's even harder."
The company raised $61 million in equity earlier this year. It has also gotten Department of Energy grants, and money from New York and Michigan, to build its first pilot facilities.
The state grants are not in jeopardy, Jamerson said. "I met with the governor of Michigan the other day. It's a priority for them. It will create a lot of jobs in northern Michigan," he said.
The clean-tech sector overall isof the financial-market turmoil. Public companies, such as solar providers, have seen their stock prices drop. Firms looking to raise late-stage financing or project financing to commercialize their technology are also facing difficulty, according to investors and entrepreneurs.
Ethanol producers that use corn as a feedstock are suffering from a significant drop in corn prices since earlier this year. VeraSun third-quarter loss earlier this week., and Pacific Ethanol reported a significant