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Raising Venture Capital for Clean Energy

VIEWS: 435 PAGES: 20

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									Capricorn Venture Partners

Raising Venture Capital for Clean Energy

20 March 2008

Capricorn Venture Partners

Agenda
 Your speaker

 The Venture Capital Landscape
 Some Clean Energy Statistics  How to attract Venture Capital

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Capricorn Venture Partners

Your speaker today


Ir. Paul Decraemer
 Master of Bioscience Engineering (UGent), Masters in
  



Financial Management (Vlerick) Head Cleantech Investment Practice at Capricorn As from 2001: CEO Sustainable Energy Ventures 1995 - 2000: investment manager in early stage venture capital at Flemish Environmental Holding Non Executive Director of several environmental oriented companies



Capricorn Venture Partners
 founded in 1993 by Jos Peeters  independent and partners-owned

 pan-European activity, located in Leuven, Belgium
 hands-on: early stage & technology focus  Capricorn Cleantech Fund > 80 MEUR

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Capricorn Venture Partners

Capricorn’s investment strategy
Companies meeting the following criteria:
Geography core activities in the heart of Europe and co-investments in other areas alongside strong and return-driven local VC partners equity investments resulting in a significant minority stake minimum requirement: a proof of concept exists and the mode of action is understood; with a strong preference for defendable intellectual property initial investment in the first and second VC rounds (series A and B); reserve for follow-on investments activities applicable to a growing market segment with an exit window of 3 to 7 years after initial investment
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Financial instruments Technology stage

Company stage Exit perspective

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Capricorn Venture Partners

The Venture Capital Landscape
 The Purpose of Venture Capital
 To provide high-risk capital to enable innovations and

inventions, often from universities and research institutes to move from concept to commerce  To help create large economic value for founders, management, employees and investors  To build new companies, create jobs and help ensure economic growth

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Capricorn Venture Partners

The Venture Capital Landscape

Source : New Energy Finance
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Capricorn Venture Partners

Some Clean Energy Statistics

Source : New Energy Finance
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Capricorn Venture Partners

Some Cleantech Statistics

Source : New Energy Finance
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Capricorn Venture Partners

Some Clean Energy Statistics

Source : New Energy Finance
9 Confidential 2008-03-20

Capricorn Venture Partners

Some Clean Energy Statistics

Source : New Energy Finance
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Capricorn Venture Partners

Some Clean Energy Statistics

Source : New Energy Finance
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Capricorn Venture Partners

Some Clean Energy Statistics

Source : New Energy Finance
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Capricorn Venture Partners

Summary
 Venture capital investment in clean energy has

multiplied by five in the last five years  The biggest growth has been in solar, biofuels and wind; increasing vc interest for smart grid technologies  Investor interest in clean energy is huge. There are at least 1250 venture capital/private equity investors worldwide now chasing investment opportunities  Need for venture quality companies with innovative technology and experienced management

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Capricorn Venture Partners

Key points for start up companies


Provide solutions with sustainable competitive advantages
 strong and clean intellectual property/capital

 proof of concepts exists and mode of action is understood

 


 

Address a major market – large markets enable large exits Identify the customers and insure the solution is a “must have” with identified customer pain Understand the competitive landscape – other startups Build a strong team and execution plan, taking account of capabilities and markets globally Have strong, early financial support to execute on the product development and go-to-market plan

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Capricorn Venture Partners

Most VC’s prefer not to invest in
 Excel spreadsheets  Word templates

 PowerPoint wizards
 Technology    

in search of application „Nice to have‟ solutions Stuff we do not understand People we do not trust Entrepreneurs who like to keep control

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Capricorn Venture Partners

Typical fundraising process
 

Approach
 “Elevator‟s Pitch” and executive summary

Presentation
 Business plan or PPM (private placement memorandum)
 Meetings with presentation(s)  NDA (VC community is reluctant to sign NDA‟s before initial presentation)



Negotiation
 Letter of Intent/Interest (LOI))

 Term Sheet

   
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Verification and Validation
 Due diligence

Closing & Financing Value Creation Exit
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Capricorn Venture Partners

No rooftop without foundations
Mission Statement 1 paragraph Elevator Pitch 30 seconds

Executive Summary 2-5 pages Investor Presentation 10-15 minutes

Full Business Plan
20-30 pages

Competitive Analysis

Sales and Distribution

Technology

Financial Projections

Intellectual Property

Market Analysis

Detailed Support/Foundation

Source : Joe Hadzima http://entrepreneurship.mit.edu/15975/
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Team

Capricorn Venture Partners

Business model
 i.e. the architecture of revenue and profit  The functions of a business model are to:
  



 

articulate the value proposition, that is, the value created for users by the offering based on the technology; identify a market segment, that is, the users to whom the technology is useful and for what purpose; define the structure of the value chain within the firm required to create and distribute the offering and determine the complementary assets needed to support the firm‟s position in this chain; to specify the revenue generation mechanism(s) for the firm and estimate the cost structure and target margins of producing the offering, given the value proposition and value chain structure chosen; describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementary firms and competitors; formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals.

Based on : Open Innovation, Henry Chesbrough, HBS Press
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Capricorn Venture Partners

Some suggestions
 Be sure you sell a “need to have” not a “nice to have”


  

solution Be focused Assess your competition (present and future) Be concise and speak the truth Be complete and clear in your analysis
 state ALL your assumptions  do not hide cons

 Have details ready if requested

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Capricorn Venture Partners

For more information
Contact:

Paul Decraemer Capricorn Venture Partners paul(at)capricorn.be
Lei 19/1, B-3000 Leuven, Belgium Tel. +32 16 28.41.00 Fax +32 16 28.41.08 http://www.capricorn.be

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