Seed financing needs disruptive innovation

You can’t discover new oceans unless you lose

sight of the shore

Source: Clean Economy Living Planet, Roland Berger Strategy Consultants

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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

Investment market (I)Cleantech market

Source: Cleantech Market Insights Database

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.

Industry sale

Investment market (II)Transaction market

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Source: Cleantech Market Insights Database

Private Equity

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 Database4

Start Grants / “soft loans’

Banks

Finish?

Seed funds

5

Startup financing cycle

2006 Year

Value

2010

Contribution to economic activity

Contribution to economic activity

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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

Start Green Venture CapitalEconomic development

• 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

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• 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

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Technology Commercialization Funnel

SuccessfulExit(1)

SuccessfulExit(1)

Independently commercialized

(founders, angels, seed, grant) (500- 1000)

Independently commercialized

(founders, angels, seed, grant) (500- 1000)

VC candidates

(100)

VC candidates

(100)VC invested

(3)

VC invested (3)

Research(government, university,

corporate, other)(X000s)

Research(government, university,

corporate, other)(X000s)

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• 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

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• 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

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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

Contact

Consumer products

Energy- Generation

- Storage

- Distribution

- Trading

Bridges & support structures

Logistics

Home

Energy

Generation

IT

Consumer electronics

Sustainable technologies

Start Green Investment portfolio

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