the financial framework for clean tech startups
TRANSCRIPT
The Financial Framework for
Clean Tech Startups
Paolo ANSELMOIBAN Association (IT)
What is a Startup?
•
Is it defined by:–
Time? – the number of years into existence
–
Valuation? – post billion dollars you’re not a startup?
–
Staff size? – the number of employees–
Profitability?
–
Traffic? (e.g. number of views per month)
Source: bhopu.com
Startup Finance Ecosystem
•
Friends and Family•
Crowd funding
•
Angel Investors •
Incubators
•
Micro‐funds and “Super”
Angels•
Traditional Venture Capital Funds
•
Strategic Investors•
Government Grants/Loans
•
Venture Lending (e.g. mezzanine Fund)
Features of the Financial Framework•
Startup investing is generally limited to “accredited
investors”–
Reduced regulatory/disclosure costs
•
Geographic concentration–
Italy, UK, France, Germany, Spain, Netherlands
•
Industry Specialization and Concentration–
IT, Software, Internet, Life Sciences, Clean Tech
•
Investors and entrepreneurs are highly networked and reputation driven
–
Reduces investment risk–
Possible consequences: insularity, nepotism
IBAN Association profile (1)
•
It is an Italian non‐profit making Association – born in 1999, through
a project promoted by European Commission (DG Industry)•
In Italy, IBAN institutionally represents and promotes investment
initiatives in the venture capital market coming from informal
investors, usually called Business Angels (BA)•
IBAN’s
President is board member of EBAN, the European
Association that represents BA Networks and Seed Fund in Europe•
Through its birth, and a close co‐operation with AIFI (the Association
representing the formal venture capital in Italy), IBAN has felt
up a
remarkable gap in the Italian venture capital chain•
Today, IBAN represents a more than 500 informal investors
community across all Italy
IBAN Association profile (2) Our network
to sustain Informal Venture Capital Market
During last years, IBAN has
created a strong “relationship
network”
that links
Institutions and Economic
Operators, Know–How and
Expertise,covering all value
chain
in the
early stage phase.In this way, IBAN can really
support “start–up”
enterprises
in their growing process.
FINANCING FINANCING INSTITUTIONSINSTITUTIONS
NATIONAL AND NATIONAL AND INTERNATIONAL INTERNATIONAL
PARTNERSPARTNERS
BUSINESS BUSINESS ANGELSANGELS
SERVICES TO SERVICES TO FIRMSFIRMS
TECNOLOGY TECNOLOGY CENTRESCENTRES
IBANIBAN
IBAN Association profile (3) Our publications
to sustain Informal Venture Capital Market
•
“Legal and Fiscal handbook for BA”
‐
2010, in partnership with Studio
Legale
Gianni, Origoni, Grippo
& Partners•
“Formal Documents for Early Stage Phase”
(NDA, Term Sheet, Investment
Agreement) ‐
2010, with Studio Legale
Rossotto & Partners•
“Business Angels and Informal Venture Capital in Italy”
‐
2009, in
collaboration with SDA Bocconi
University – Finance Department•
“Implementation of European MiFiD
Directive and IBAN circuit activity”,
2008 – in collaboration with Studio Simmons & Simmons•
“Guide to setting up a business with Business Angel”
‐
2008, in
collaboration with KPMG Italia•
“Business Angel in Italy”
‐
2003, in cooperation with Professors coming
from II°
University of Naples•
“Standard Behavior Handbook for BAN” in partnership with ISTUD
Foundation, 2001
The Italian Angel Investing Market (1) Which are the data in 2010 ?
A. INSTITUTIONAL SEGMENTVenture Capital (VC) and Private Equity firms have invested 2,5 billions €
with a
+
3%
compared
with
2009.
Especially,
for
the
Early
Stage
sector,
they
have
closed 106 deals for a total amount of 89 ML €.
TYPE OF STAGE AMOUNT ML € N. DEALSTurnaround 51 14Early Stage 89 106Expansion 583 109Replacement ‐ ‐Buy Out 1.647 56
Source: AIFI, 2010
The Italian Angel Investing Market (2) Which are the data in 2010 ?
Source: IBAN, Survey 2010
Investment amount registered by IBAN 33.3 Mln
€Deals 229Exit declared 31Average amount for deal 145.000 €Number of examinee projects 1.362
EARLY STAGE SECTOR:Seed 38%Start up 26%Early expansion 25%Other operations 12%
B. INFORMAL VENTURE CAPITAL SEGMENT
The Italian Angel Investing Market (3) Industry had a strong growth in the last years
Sources: Institutional (AIFI ‐
PWC); Informal (IBAN)
Sources: Institutional (AIFI – PWC); Informal (IBAN)
The Italian Angel Investing Market (4)Deals in the industry follow the investments
The Italian Angel Investing Market (5) 2010, % Investments by sector
Source: IBAN, Survey 2010
The Italian BA ProfileBA's personal profile from a recent Survey
• Man, 49 years old, top manager or entrepreneur, strong academic
background (master’s degree, post-lauream)
• Place of residence in the North of Italy (83%)
• Range of 150-200 km to focus its investments to stress BA commitment
with entrepreneur
• Personal assets available around 1.000.000 €
~
IBAN Member
• He generally allocates nearly 10% of own assets for Angel Investing
• Average investment for deal is around 145.000 €
• Interesting in High Tech sectors
Source: IBAN, Survey 2010
Startup Funding Prerequisites•
Capable, trustworthy management team
•
Defensible IP•
Large potential market size
•
Rapidly scalable business model•
Clearly identifiable development milestones→ exit !
•
Fundable legal structure•
Entrepreneurial culture with a close proximity of
entrepreneurs, investors, universities, service providers, suppliers, customers, etc.
What is Cleantech?Former Energy sector ……
“The US Cleantech
Group”
provides a comprehensive definition:
A “new, innovative technology to create products and services that compete favorably on price and
performance while reducing humankind's impact on the environment”
&“offering a cleaner or less wasteful alternative to
traditional products and services”
The huge scope for cleantech
investmentsSource: “The Cleantech
Group”
• Energy Generation: wind, solar, hydro/marine, biofuels, geothermal, other•
Energy Storage: fuel cells, advanced batteries, hybrid systems•
Energy Infrastructure: management, transmission•
Energy Efficiency: lighting, buildings, glass, other•
Transportation: vehicles, logistics, structures, fuels•
Water & Wastewater: water treatment, water conservation, wastewater treatment•
Air & Environment: cleanup/safety, emissions control, monitoring/compliance, trading & offsets
•
Materials: bio, chemical, other•
Manufacturing/Industrial: advanced packaging, monitoring & control, smart production
•
Agriculture: natural pesticides, land management, aquaculture•
Recycling & Waste: recycling, waste treatment.
Trends in cleantech
investmentsSource: “The Cleantech
Group”
Trends in cleantech
investmentsSource: “PwC/NVCA MoneyTree
report”
An investment opportunityfor seed‐stage investors ?
In order to be sustainable in the long‐term and avoid dotcom‐likebubbles cleantech
investments have to be capital‐efficient
• Cleantech
is not only about renewable energies (i.e.: PV, wind,
biomasses, etc.)→
there is a great deal of less capital‐intensive investment
opportunities in cleantech→
suitable for BA and less risk‐averse investors
• Cleantech
is also about seed and early‐stage investments:• less capital intensive, better valuations, greater value‐adding
potential• BUT higher risk and fixing the big IRR issue of traditional
venture capital investing
What is EUROPEEUROPE
doing?The Coalition for ENERGY SAVINGS
The Coalition for Energy Savings brings together business, professional and civil
society associations.The
Coalition’s
purpose
is
to
make
the
case
for
a
European
energy
policy
that
places
a
much
greater,
more
meaningful
emphasis
on
energy
efficiency
and
savings. In particular it is arguing for the current 20% energy efficiency target to
be binding.
The
Coalition
portfolio
proposes
a
range
of
measures
to
align
both
public
and
private
financial
instruments
with
the
goal
of
realizing
a
step
change
in
financing energy efficiency in Europe.They
focus
on
improving
the
availability
of
public
as
well
as
private
capital
needed to capture the deep reservoir of cost‐effective efficiency improvements
in homes and businesses
The portfolio was introduced at a roundtable on financing energy
efficiency on 7
April 2011.
How is EBANEBAN
going to address these challenges/opportunities?
The NAREC CAPITAL partnershipNAREC Capital
is the result of a joint partnership between NAREC and Ashberg,
a
multi‐family
office
with
an
international
focus
on
servicing
high
growth
companies within the impact investment sector.
NAREC
is
the
national
centre
for
the
UK
dedicated
to
advancing
the
development,
demonstration,
deployment
and
grid
integration
of
renewable
energy
and low carbon generation technologies.NAREC
assists
the
renewable
energy
and
power
industries
in
evolving
technology
systems
and
electrical
networks
to
accommodate
the
changing
characteristics of energy resources and usage.
Sectors:• Wind Energy• Marine Renewable• Electrical Networks
How is IBANIBAN
going to address these challenges/opportunities?
The forthcoming “Italian Cleantech
Club”
• An investment club, operating through syndication, focused on cleantech
investment opportunities backed by an independent
committee of cleantech
specialists to source, and select the best deals
• Cleantech
is a global opportunity; joint‐marketplaces to exchangeinvestment opportunities with some of the world's most successful
cleantech
clusters (Sweden, Israel and other European countries)
• Partnership
with online content providers (i.e. www.energiaspiegata.it)
to source the best cleantech
technology
transfer investment opportunities coming from the top Italian Universities
A first step has just been done :“The Green Technologies Investment Forum”
• The GREEN TECHNOLOGIES INVESTMENT FORUM (GTIF), organized in
February 2010 by IBAN Association and the Swedish Business Region Goteborg
AB provided a unique chance during which investors and entrepreneurs coming
from Italy and Sweden matched
• Eleven Italian and Swedish “green”
companies, selected by a panel of experts,
pitched their activities to qualified investors, Business Angels, Seed, Venture
Capital Funds and Trade operators
• During the event two break‐outs had been forecasted in which an Italian and
Swedish keynote speakers presented strengths, weaknesses and opportunities
of today clean‐tech market
• All companies had a marketplace area where they could meet investors during
and after the event
• To cross experiences, best practices, business and trade opportunities and
networking have been the key words of the initiative
A second step in progress …
Why
Ideas
on Wheels?Ideas on Wheels is an initiative promoted by Landi
Renzo
Corporate University and others selected partners, to stimulate, capture and support the development of
innovative ideas of young people on sustainable mobility.
Technical and technological knowledge is not enough to translate ideas into projects or business initiatives; they also
need economical and managerial knowledge.
For this reason, Ideas on Wheels offers the opportunity to attend an intensive program (Boot Camp) at the Landi
Renzo
headquarters on business plan
‐
technology transfer and entrepreneurship creation.
The Partners
“Our
vision”
of
Sustanable
Mobility…
Road Safety
CO2 ReductionIntelligence Mobility
Info‐mobility
GAS Hybrid
Urban
Transports
Low Carbon
Economy
Energetic
Efficiency
Well
to
Wheel
Electric
Propulsion
The Innovative IdeaThe Idea may regard:
− a product− a technological solution− a service
and
may
be
able
to
make
the
future
mobility
more sustainable.
It may be a solution for the producers (business2business) or for the final customer (business2consumer)
Who
may
attend?Ideas on Wheels is an "idea competition" open to young
people such as high school or university students, high school or university graduates, employed or not, between 18
and 32 years old.
Candidates can also participate in a team, composed of a maximum of 3 young members, led by a group leader.
The competition is completely free.
The deadline for the idea presentation is the 30th
September 2011.
More info are available at the Corporate University website www.lrcu.it
The 10 best ideasThe
winners
will
take
part
to
the
"BOOT
CAMP
for
Young
Entrepreneurs"
organized
by
December
2011
at
the
Landi Renzo
headquarters
The Program will last for three days consisting on:
Associazione IBANVia Borgonuovo, 520121 Milan – Italy
+ 39.02.89011207FAX
+ 39.02.89011299