It’s not every corporate finance chief who authors an article in Scientific American opining on Iran’s nuclear weapons program. But David Schwarzbach didn’t take an ordinary route to the CFO seat.
The 40-year-old finance chief of ICE Energy studied physics and ecology – not finance – as an undergrad at the Davis campus of the University of California, a haven for scientific research. And he started his career at the high-profile environmental activist group, the Natural Resources Defense Counsel, not a public accounting firm. He also attended Princeton University to earn an advanced degree, but not an MBA. Instead, it was a master’s in public administration from the university’s Woodrow Wilson School of Public and International Affairs.
Yet, it was while working for the NRDC that Schwarzbach first took notice of the role corporate finance played in the economy. “It was during the Clinton/Gore administration, and we had a lot of optimism about what could be achieved on the environmental front. But I have to say that we really didn’t achieve as much as we hoped for. It struck me that if we wanted to make a real difference and scale [green] technology, we had to be able to bring finance to bear. And that’s really been what’s driven my career over the past 15 years, acquiring those [finance] skills so that the technology could be widely deployed.”
So he went to work on Wall Street. With a new Ivy League graduate degree in hand, Schwarzbach headed to GE Capital, where he cut his investment-banking teeth on project finance. He eventually made the jump to Lehman Brothers and then Morgan Stanley, where he placed an aggregate $20 billion in capital for a broad range of companies, including many in the electric power sector.
His first stint as a CFO came in March 2008, when he joined ICE Energy, a small technology company based in Windsor, Colorado. The company has updated a century-old air-conditioning trick: using ice to cool off the air pumped into buildings. The company uses a storage unit that is retrofitted onto existing industrial and commercial air-conditioning systems. The unit freezes water, storing it as ice during the night when electricity demand and kilowatt prices are low.
During peak demand hours, the ice is used to supplement the energy-hungry air-conditioning units, and cut the electricity demand from utility companies. “What’s interesting is that some utility companies started out as ice-delivery companies. Then electricity came along, and they made the transition. There is a certain elegance to the fact that here we are, a 19th Century technology in a 21st Century box,” noted Schwarzbach during a recent interview with CFO.com.
What follows is an edited version of a recent conversation with Schwarzbach, who discussed what it’s like taking the finance reins at a start-up company when the economy is tepid, at best.
“The customer contracts – with a high-credit quality counterparty like a utility – means we can use the contracts as an asset for raising debt.” — ICE Energy CFO David Schwarzbach