Seed financing needs disruptive innovation You cant discover
- Slides: 13
Seed financing needs disruptive innovation You can’t discover new oceans unless you lose sight of the shore
Investment market (I) Cleantech market Clean Energy Technology (CET) is a growth market that is expected to reach EUR 1. 6 trillion by 2020 and thus is an attractive business opportunity Source: Clean Economy Living Planet, Roland Berger Strategy Consultants 2
Investment market (II) Transaction market Industry sale Private Equity There were 154 cleantech M&A deals in 3 Q 10 totaling $4. 5 billion. While the volume of deals in 3 Q 10 declined, there is reason to believe that the buoyancy being seen in the wider M&A market may begin to show through during upcoming quarters. Cleantech predicts a full-year total for 2010 of about $7. 3 billion, which would be the second largest annual total ever. The deal number does however look set to exceed 650, a new annual record. Source: Cleantech Market Insights Database 3
Regional Focus European and Israeli companies raised $381 million in 66 VC rounds, down 22% from 2 Q 10 in terms of amount invested but up 12% in terms of deals done. This underlines the capital-efficient nature of European cleantech venture investing Source: Cleantech Market Insights Database 4
Startup financing cycle Finish? Seed funds Banks Start Grants / “soft loans’ 5
Start Green Venture Capital Economic development Contribution to economic activity Value Realized a turnover of EUR 16 million in 2009; Employment for 92 employees, a growth of 80% since the start; Development of 35 new, innovative products; 13 new patents & 6 unique IPR positions on IT development; Additional € 7 million bank loan / financing facilities achieved 2006 2010 Year 6
Lessons of eco-innovation From a Venture Capital perspective • • The technology roadmap: think big, start small and upscale quickly IPR policy based on PMC’s (product market combinations) Strong guidance & monitoring on finance, business focus and team development New management after 2 -4 years Realize economics of scale (gross margin improvement) Start directly with strategic alliances with strong partners Built companies; IPR exits are second bests 7
Barriers (I) For cleantech startups • • • The entrepreneurs (United States versus European Union) Strong market resistance (institutionalized, overregulated, 110% reliability) Level playing field necessary Growth equity gap (€ 2 -5 million) Corporations don’t innovate, they consume innovation Universities seldom develop commercial IPR, but we need lots of research…. 8
Technology Commercialization Funnel Independently commercialized (founders, angels, seed, grant) (500 - 1000) VC candidates (100) Research (government, university, corporate, other) (X 000 s) 9 VC invested (3) Successful Exit (1)
Barriers (II) For Venture Capital Funds • • Overall scarcity of liquidity: fundraising takes 2 -3 years Regular finance engine’s for Venture Capital / Private Equity are hesitating: Bank/ insurers and pension funds VC- Incentive programs are structured nationally: with non or small options for investments abroad (SEED facility NL, Arcimedes BE, ……GE, e. g. ) Trend to harmonize EU finance regulation for PE to VC sector 10
Institutional changes EU opportunities • • • EU regulation (almost comparable): harmonize certification Create entrepreneurs-hub, entrepreneurs for entrepreneurs (in EU) knowledge center/Exchange Feed-in (or ‘omslagstelsel’) Create cleantech consumer market (low VAT) Level playing field, account environmental costs (pollution) into products! 11
Contact Start Green Venture Capital Flevolaan 41 1411 KC Naarden The Netherlands Telephone: +31 (0)35 6958 110 Fax: +31 (0)35 6958 120 Email: info@startgreen. nl Website: www. startgreen. nl
Start Green Investment portfolio Sustainable technologies Consumer products Energy Home - Generation Energy - Storage Generation - Distribution - Trading IT Bridges & support structures Consumer electronics Logistics 13
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