Venture Capital Investment and Trend in Clean Technologies

Abstract

“Cleantech” is being widely used to replace “Green Technology.” It describes a group of emerging technologies and industries, based on principles of physics, chemistry, biology, and resource efficiency, new paradigms in energy, and water conservation. The scope of this field includes large-scale infrastructure projects as well as innovative technologies. The term Cleantech is also often associated with venture capital (VC) investment. A goal of this chapter is to provide readers with an overview of the scope and trends in venture capital-funded innovation in Cleantech, where and how to seek VC funding, and Cleantech implications on world climate change.

This chapter addresses the basics of venture capital and the dynamic field of Cleantech. Subjects covered are as follows: (1) VC investment trend based on the volume of funds invested and the number of projects funded; (2) the scope of Cleantech encompassing renewable energy, energy efficiency, green building, transportation, smart power, smart grid and energy storage, air, water, and waste; (3) Cleantech technology trend detailing 2014 Cleantech top 100 companies – a barometer of the changing face of global Cleantech innovation; (4) Cleantech investment in Silicon Valley assumed a leading role in the global competition to develop renewable energy and other clean, green technologies; and (5) Cleantech investment in emerging nations addressing the status in China and other developing nations.

The Concluding Remark discusses multidiscipline for Cleantech and the key to the deployment of Cleantech innovations. The Appendix provides a brief introduction of how and where to find information and seek for VC funding.

Appendix

Venture Capital Firms in the USA

USA has more than 2000 VC firms. The best way for an entrepreneur to seek VC funding is first look at the local or regional VC firms to begin with. The following is the list of 100 of the most active venture capital firms funding US start-ups in 2014. It is critical to find a firm that fits your journey. A true venture partner provides more than money but mentorship and strategic advice that can elevate your business to new heights (100 of the most active venture capital firms).

Ranking	Firm names	US $million invested	No. of deals
1.	Andreessen Horowitz	1,020.23	50
2.	Khosla Ventures	808.63	45
3.	SV Angel	736.74	47
4.	Accel Partners	721.59	29
5.	New Enterprise Asso.	690.65	44
6.	Sequoia Capital	650.34	30
7.	Venrock	620.26	15
8.	First Round Capital	606.17	34
9.	Spark Capital	542.33	18
10.	Triangle Peak Partners	535.03	3
11.	Franklin Square Cap	505.00	1
12.	Kleiner Perkins Cauf	489.25	33
13.	Google Ventures	461.89	35
14.	Founders Fund	450.41	21
15.	ARCH Venture Parts	445.61	9
16.	Bezos Expeditions	425.50	6
17.	Lightspeed Venture	414.91	21
18.	Thrive Capital	390.70	18
19.	General Catalyst	373.22	24
20.	Redpoint Ventures	363.98	24
21.	Atlas Venture	359.45	35
22.	QED Investors	353.82	1
23.	Greylock Partners	336.41	20
24.	Formation 8	321.26	18
25.	Bain Capital VC	274.79	12
26.	Iridium Communica	270.00	1
27.	Lerer Hippeau VC	269.48	30
28.	Collaborative Fund	266.20	19
29.	Bessemer Venture	255.24	19
30.	Flagship Ventures	248.38	6
31.	OrbiMed Advisors	247.99	8
32.	SherpaVentures	241.37	15
33.	Insight Venture	230.00	5
34.	Institutional Venture	220.28	6
35.	True Ventures	217.26	33
36.	Greycroft Partners	214.55	22
37.	Menlo Ventures	211.77	13
38.	Intel Capital	210.69	22
39.	Battery Ventures	206.51	14
40.	Tiger Global Mgmt	206.08	7
41.	Deerfield Mgmet	202.31	4
42.	Charles River VC	199.96	17
43.	WRF Capital	199.86	7
44.	Benchmark Capital	198.90	7
45.	FirstMark Capital	196.51	11
46.	CrunchFund	196.51	20
47.	Canaan Partners	195.36	15
48.	Polaris Partners	195.19	12
49.	Sofinnova Ventures	194.51	5
50.	InterWest Partners	189.12	9
51.	Crestline Investors	176.00	1
52.	Third Rock Ventures	174.65	5
53.	Slow Ventures	169.83	14
54.	VegasTechFund	167.83	20
55.	Comcast Ventures	166.54	12
56.	Felicis Ventures	164.30	16
57.	Draper Fisher Jurve	162.85	11
58.	ff Venture Capital	162.63	11
59.	Norwest Venture	160.74	10
60.	Silicon Valley Bank	159.06	10
61.	5 AM Ventures	157.85	5
62.	Rock Springs Capital	157.75	3
63.	GGV Capital	157.40	8
64.	Social + Capital Partnr$153.39	13
65.	Correlation Ventures	152.43	19
66.	Qualcomm Ventures	149.74	16
67.	AME Cloud VC	149.41	14
68.	DCM	149.07	10
69.	Madrona Venture	149.00	15
70.	MPM Capital	146.62	8
71.	Harrison Metal Capital$146.58	9
72.	500 Start-ups	143.19	29
73.	RRE Ventures	142.41	14
74.	Shasta Ventures	141.06	17
75.	Alexandria Venture	140.88	4
76.	The Data Collective	139.02	18
77.	SV Life Sciences	138.05	4
78.	Alexion Pharma	135.00	1
79.	Foundation Capital	134.05	8
80.	Fidelity Investments	134.00	1
81.	RA Capital Managem	130.50	3
82.	BoxGroup	130.41	17
83.	Laboratory Corp America$130	1
84.	Crosslink Capital	128.49	16
85.	e.ventures	128.14	11
86.	Revolution	126.28	4
87.	SoftBank Capital	125.11	16
88.	Fidelity Biosciences	124.00	5
89.	T. Rowe Price	122.75	2
90.	IA Ventures	119.48	7
91.	Western Technology	119.20	8
92.	Matrix Partners	116.61	12
93.	Summit Partners	116.39	2
94.	Wellington Mgmt	113.75	3
95.	Trinity Ventures	113.58	12
96.	Aisling Capital	112.68	6
97.	FLOODGATE Fund	112.32	16
98.	Cisco Investments	112.05	6
99.	Forerunner Ventures	110.38	8
100.	Mousse Partners	104.21	4

Venture Capital Firms in Europe

Europe historically did not have many VC firms. In recent years, the VC industry has flourished. Here is a directory as provided by Directory (2010):

3i:

Investment focus: European and South-East Asian start-ups

Add Partners Limited:

Focus: early- to late-stage European start-ups in information technology

AltAssets:

Focus: news service for global venture capital and private equity professionals

Ariadne Capital:

Focus: part of a new European model, helping manage investor exits, drive consolidation, and leverage entrepreneurialism

Athena:

Focus: international, for-profit, high-technology, business incubator

Baring Communications Equity:

Focus: media and communications focused fund for Central and Eastern Europe and the CIS

Business Angels Connect:

Focus: global services package to young entrepreneurs

CGS Management:

Focus: medium-sized technology-based European companies with an emphasis on Switzerland

Cobblestone Private Equity:

Focus: venture-oriented direct investments in emerging European technology companies seeking expansion and US market penetration

Copan:

Focus: leading European technology executives and investors

Delta Partners:

Focus: venture capital and private equity early-stage funding to high-technology companies in Europe and Ireland

DeMinds:

A pan-European investment group focused on the global Internet market

European Equity Partners:

Investment focus: Euro one-half to three million initially and up to Euro five to eight million based on meeting key milestones and criteria

Financier Natexis Banques Populaires:

Focus: private equity investment holding company active in all segments of the business including venture capital

Hunter Lovec:

Focus: consultants helping Central European companies solve their financial problems and achieve their financial goals

IDEA Network:

Focus: network of international experts and consultants working under donor-funded projects

Innova Capital:

Focus: advises private equity funds with more than Euro 300 million for investments into profitable companies in the EU accession countries of Central Europe

Internet Ventures Scandinavia:

Focus: adds capital and partner experience to unique Internet ventures

Invest Mezzanin:

Investment focus: later-stage private equity investing in companies in Austria, Switzerland, and Germany

Investindustrial Holdings Limited:

Specializes in medium-sized companies, principally in Italy and Spain

Kildare European Leader Teoranta:

Focus: rural development company for County Kildare, Ireland, with funding to distribute to innovative rural projects

Mericom:

Focus: venture capital financing and investment services for telecommunication projects, start-up companies, and new businesses in the telecom industry

Michelsen-Partners:

Focus: European cross-border mergers and acquisitions advisory services, structured finance advice, and international fund management

Net Partners:

Investment focus: European start-up and early-stage initiatives related to the Internet

Northzone Ventures:

Offers early-stage venture capital investments and focusing on technology companies

ORAH Investments:

Swiss-based venture capital holding financing businesses in Southeast Europe

Permira:

Investment focus: formerly known as Schroder Ventures Europe, a leading private equity group and advising funds

Pino Venture Partners:

Investment focus: Italian company for operations in information technology, communications, and media

PrivateEquityOnline.com:

Focus: tracks private equity activity across Europe, delivering daily news on funds, deals, and exits

PROPHETES:

Focus: providing and investing venture capital into innovative companies and projects and providing support to investors who invest capital in the countries of Southeastern Europe

Seven Summits Capital:

Focus: active in the international private equity market participating in buyouts as an investor, initiator, or catalyst

Start-up Avenue:

Paris-based B2B incubator funding Internet start-ups that focus on Europe

Stratos Ventures:

Investment focus: wireless information and communications technology companies with substantial global growth potential

Triago:

Focus: private equity fund-raising, limited partnerships, and joint ventures

Trust Capital Partners:

Focus: Belgian venture capital investment fund

VCG.dk:

Focus: lists all Danish venture companies and a profile on them

Venture Capital in Europe:

Discussion of the state of venture capital in Europe and its trends

Venture Consulting:

Focus: professional business consultancy and services based on extensive international experience

ViewPoint Capital Partners:

Specializes in software technology companies in early-, expansion-, and late-stage situations. Offices in Frankfurt, Amsterdam, and Zurich

West Private Equity:

Focus: provides capital for management buyouts and buy-ins and the expansion or refinancing of companies headquartered in Western Europe

Venture Capital Firms in India, China, Japan, and Israel

India’s venture capital industry has about 25 VC films. Wekpedia.com has a listing.

China’s venture capital industry has more than 150 VC firms, which altogether manage over US$100 billion in venture capital and private equity funds. China Venture Capital Association (CVCA) provides details of its VC services at www.cvca.com.cn (China Venture Capital 2010).

Japan’s venture capital industry has about 100 active funds. A list could be found at www.irasia.com/venture/jp (2010).

Israel’s venture capital industry has about 70 active venture capital funds, of which 14 international VCs with Israeli offices. For more information, refer www.investinisrael.gov.il (2010).

Australia’s venture capital industry has very limited VC films. It is mainly supported by the government. For detail, see www.avcal.com.au (2010).

How to Secure Venture Capital Money?

Venture capitalists invest money in start-ups in exchange for an equity ownership in the company. VCs receive hundreds of business plan from entrepreneurs each year. There are more than 1,000 venture capital funds around the world. Here are few tips to gain the attention of VC:

• Step 1: Prepare a comprehensive business plan. VCs will expect you to clearly define the purpose of your business, disclose pertinent financial information (including revenue streams and projections), and provide information on your executive management team.

• Step 2: Do research on venture funds to find the appropriate fit for your company. Look in Pratt’s Guide to Venture Capital Sources, available in many bookstores and libraries, to see what fields each firm is likely to fund. Some focus on retail and service companies, while others look specifically for technology start-ups.

• Step 3: Get an introduction to the venture capital firm. You’ll have a much better chance if you’ve been personally introduced to the VC rather than blindly sending your business plan. These introductions can be made by executives of companies already being funded by the VC or by lawyers and accountants who work with the firm. Try to contact four to five VCs.

• Step 4: Arrange a meeting with the VC. Consider bringing key members of the management team to the meeting.

• Step 5: Follow up your visit with a thank-you note and additional information.

• Step 6: Be persistent and polite; wait for VC evaluations.

How a Business Plan Is Evaluated?

When a business plan (BP) arrived at VC office, venture capitalists tend to give a quick review. If they decide a BP deserves a further study, the entrepreneur is invited to VC office for a power point presentation. In the process, one venture capitalist categorized BP into four types (2010): a Home-run, a Struggle, a Joy-ride, or a Time-waster. A Joy-ride project will get many media publicity, but investors would not make much return. The objective of VC is to sponsor a real winner – a Home-run. A project that is not too obvious or too easy to implement; otherwise, others will launch the identical or similar one. When great minds think alike, most of them don’t make much money. So a good BP needs:

• High market potential – customers will buy it.

• Technology novelty – nonobvious innovation.

• An entrance barrier – a valid patent protection.

• A cohesive and complementary team – technology skill plus management professional.

• A complementary business alliance.

• Reasonable funding requirement.

• Reasonable timing to realize a high return.

Cleantech Expert Panel for Global Cleantech 100

A valuable reference for those who seek investment and sponsorship from venture capitalists and corporate sponsors (CleanTech 100 2014):

• Laura Nereng, Business Development Manager, 3 M

• Andre Loesekrug-Pietri, Managing Partner, A Capital

• Grant Allen, Senior Vice President, ABB Technology Ventures

• Rhea Hamilton, Managing Director, Aeris Capital

• Greg Fleming, Investment Director, ALIAD (Air Liquide)

• Jean-Pascal Tranie, President, Aloe Private Equity

• Paul Gagliardo, Manager – Innovation Development, American Water

• Tae Jun Park, Senior Investment Associate – Applied Ventures, Applied Materials

• Pascal Siegwart, Partner, Aster Capital

• Rob Day, Partner, Black Coral Capital

• Eric Landais, Managing Director, Blue Orange (Suez Environment)

• Ulrich Quay, Partner, BMW iVentures

• Meghan Sharp, US Director, BP Ventures

• Sulkhan Davitadze, Investment Director, Bright Capital

• Dr. Paul Decraemer, Senior Investment Manager, Capricorn Venture Partners

• Ian Cooke, Director, Head of New Ventures, Carbon Trust

• Dr. Wal van Lierop, President and CEO, Chrysalix Energy Venture Capital

• Paul Straub, Partner, Claremont Creek Ventures

• Stefan Brand, Senior Manager, New Business Development, Clariant

• Troy Ault, Director of Research, Cleantech Group

• Sheeraz Haji, CEO, Cleantech Group

• Michele Parad, Senior Analyst, Cleantech Group

• Richard Youngman, Managing Director, Europe and Asia, Cleantech Group

• Alex Betts, Partner, Climate Change Capital

• Peter Kennedy, Managing Director, CLSA Capital Partners

• Nancy Pfund, Managing Partner, DBL Investors

• Olivier Dupont, Chairman of the Board, Demeter Partners

• Rodrigo Navarro, New Business Creation Manager, DSM Innovation Center

• Konrad Augustin, Principal, Strategic Co-Investment Group, E.ON

• Valery Prunier, Director, Innovation North America, EDF

• Luis Manuel, Executive Director, EDP Ventures

• Gina Domanig, Managing Partner, Emerald Technology Ventures

• Carlo Papa, Chief Innovation Officer, Enel Green Power

• Sumit Sarkar, Director – Venture Investments, Energy Technology Ventures

• Wally Hunter, Managing Director, EnerTech Capital

• Fabrice Bienfait, Principal, Environmental Technologies Fund

• Dr. Bernhard Mohr, Managing Director – Corporate Venturing, Evonik Industries

• Dr. Dirk De Boever, Head of Investments, Finindus

• Ignacio Martinez, Partner, Flagship Ventures

• Chris Thomas, Founder and Partner, Fontinalis Partners

• Iyad Omari, Partner, Frog Capital

• Hendrik Van Asbroeck, Director Corporate Venture Capital, GDF Suez

• Andrew Lackner, Senior Director, Investments, GE Ventures

• Colin Le Duc, Partner, Generation Investment Management LLP

• Nicholas Atkins, Partner, Georgieff Capital

• Sherwin Prior, Corporate Strategy and Business Development, GM Ventures

• Eric Wang, Partner, GRC Chrysalix

• Thorbjorn Machholm, Business Development Director, Grundfos New Business

• Tony Pandjiris, Managing Director, Hercules Technology Growth Capital

• Diego Diaz Pilas, Head of New Ventures, Iberdrola

• Nicolas Chaudron, Partner, Idinvest Partners

• Kelsey Lynn, Director, Technology Ventures, Imperial Innovations

• Sean Petersen, Senior Investment Officer – Venture Capital, International Finance Corporation (IFC)

• Glen Schwaber, Partner, Israel Cleantech Ventures

• Joe McGee, Executive Vice President – Strategic Planning and Development, Jabil

• Kevin Self, Vice President, Strategy and Corporate Development, Johnson Controls

• Eric Tao, Partner, Keytone Ventures

• Guido Ketteler, Innovation and Technology Manager, Lanxess

• Kai Engelhardt, Head of Corporate Venture Capital, Mahle

• Yossi Yaacoby, Director of WaTech Division, Mekorot

• Kevin Kuhn, General Manager, Mitsubishi Corporation (Americas)

• Martin Kröner, Managing Partner, Munich Venture Partners

• Ravi Viswanathan, Partner, New Enterprise Associates

• Keith Gillard, General Partner, Pangaea Ventures

• Iñigo Palacio, Director, Repsol Energy Ventures

• Keimpe Keuning, Investment Director, Robeco SAM Private Equity

• Dhiraj Malkani, Partner, Rockport Capital Partners

• Fabien Mondini, Senior Investment Manager, Sabic Ventures

• Chris Brown, Partner and Chief Scientist, SAIL Capital Partners

• Delphine Geny-Stephann, Director of NOVA External Venturing, Saint Gobain

• MJ Maloof, Investment Director, Saudi Aramco Energy Ventures

• Xavier Datin, Senior Vice President – EcoBusiness, Schneider Electric

• Gerd Goette, Investment Partner, Siemens Venture Capital

• Joshua Raffaelli, Partner, Silver Lake Kraftwerk

• Thierry Piret, Head of Corporate Venturing, Solvay

• Mark Bonnar, Investment Director, Southern Cross Venture Partners

• Kurt Faulhaber, Investment Director, Stafford Capital Partners

• Vicky Sharpe, Strategic Advisor to the Board, Sustainable Development Technology Canada (SDTC)

• Peleg Chevion, Global Head of Abiotic Stress Management/Crop Enhancement, Syngenta

• Astorre Modena, Partner, Terra Venture Partners

• Nick Cizek, Sensor Strategist, The Climate Corporation

• Mike Jackson, Managing Partner, The Westly Group

• Steve Kloos, Partner, True North Venture Partners

• Don Ye, Partner, Tsing Capital

• Stephan Dolezalek, Managing Director, VantagePoint Capital Partners

• Mia Javier, Senior Open Innovation Officer – Americas, Veolia Environnement

• Joseph Vaillancourt, Vice President – Corporate Venturing, Waste Management

• Samer Salty, CEO, Zouk Capital