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Seed financing needs disruptive innovation

Seed financing needs disruptive innovation. You can’t discover new oceans unless you lose sight of the shore. Investment market (I) Cleantech market.

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Seed financing needs disruptive innovation

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  1. Seed financing needs disruptive innovation You can’t discover new oceans unless you lose sight of the shore

  2. 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

  3. Investment market (II)Transaction market Industry sale Private Equity There were 154 cleantech M&A deals in 3Q10 totaling $4.5 billion. While the volume of deals in 3Q10 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 Source: Cleantech Market Insights Database 3

  4. Regional Focus European and Israeli companies raised $381 million in 66 VC rounds, down 22% from 2Q10 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

  5. Finish? Grants / “soft loans’ Start Startup financing cycle Seed funds Banks 5

  6. Start Green Venture CapitalEconomic 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

  7. 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 Lessons of eco-innovationFrom a Venture Capital perspective 7

  8. The entrepreneurs (United States versus European Union) Strong market resistance (institutionalized, overregulated, 110% reliability) Clean Tech innovation is capital intensive prove new end products not a application (e.g ICT) 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…. Barriers (I)For cleantech startups 8

  9. Technology Commercialization Funnel Independently commercialized (founders, angels, seed, grant) (500- 1000) VC candidates (100) VC invested (3) Successful Exit (1) Research (government, university, corporate, other) (X000s) 9

  10. 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 And If interested: only big tickets (> 50 mio EUR) 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 Barriers (II)For Venture Capital Funds 10

  11. 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! Institutional changesEU opportunities 11

  12. 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.nlWebsite:www.startgreen.nl

  13. Consumer products Consumer electronics Start Green Investment portfolio Sustainable technologies • Energy • Generation • Storage • Distribution • Trading Home Energy Generation IT Bridges & support structures Logistics 13

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