byob08022011

Report
The Ideal “Green” Business Plan:
A Venture Capitalist’s Perspective
Presentation at the BYOB
Spring 2011
Po Chi Wu, Ph.D.
Adjunct Professor
HKUST
Spring 2011
What is business planning?
 On-going process
 Why write a business plan?
 Who will read it?
 Why will they read it?
 After reading it, what will they do?
 After feedback, how will your plan change?
“Green” Businesses
 How are “green businesses” different?
 More stakeholders
 More complicated - multi-disciplinary
 Longer-term
 More costly
 Different investor mentality
 Higher uncertainty (of ROI), higher risk
What is “Ideal”?
 Powerful, inspiring Vision & Mission
 Experienced, committed TEAM
 Outstanding “partnerships”
 Proprietary tech/business model
 Strong government support/alignment
 Patient investors
 Solid Resources, Processes, Values
Top Sectors in 2010
 Solar accounted for 24% ($1.83 billion) of total
 Transportation (17%, $1.35 billion)
 Energy Efficiency (14%, $1.05 billion). Measured by number of
deals, was most popular sector (21% share, 151 deals)
followed by Solar (16% share, 117 deals).
 N. America accounted for 68 percent of total invested, 21%
for Europe & Israel, 10% for Asia
US VC Investment in Cleantech
 2010 US VC investment reflected a turning point in the
industry due to improving credit and capital markets, the
deployment of stimulus spending and increasing corporate
cleantech adoption
 Increased by 8% to $3.98B in 2010 from $3.7B in 2009 and
deal total increased by 7% to 278
Investments by Segment
 Energy/Electricity Generation segment - $1.32B in 2010
 Solar increased by 77% to $1.58B
 In Q4 2010 solar investments reached $279.17M
 Largest - Abound Solar, Fort Collins, CO, provider of
photovoltaic modules, raised $111.18M
 SoloPower Inc. of San Jose, CA, a solar cell developer, raised
$51.57M
 Industry Products and Services - 79% year on year increase,
raised $1.24B through a total of 80 deals in 2010
Investments in 2010
 In 4Q - $355.84M, including $100M in Elevance Renewable
Sciences Inc., of Bolingbrook, IL, a provider of specialty
chemicals derived from natural oils, and $80M in SAGE
Electrochromics Inc. of Fairbault, MN, a provider of
electrochromic smart window products
 Electric vehicles (EV) and charging stations - $695.17M, e.g.,
$350M in Better Place, Fisker Automotive, and Coda
Automotive, Inc.
 EV coalescing ecosystem: utilities, big box retailers, rental
car and battery storage,”e.g., Panasonic invested $30 M in
Telsa Motors.
Investments in 2010
 Energy Efficiency segment dropped 9% from 2009 to 2010, to
$688.99 million through 68 deals
 In Q4, OPOWER, Inc., of Arlington, VA, an energy consumption
technology provider raised $50M
 Seed stage – $477M in 18 deals, averaging $26.5M each (8 in
2009)
 Second rounds accounted for $1B
Exits in 2010
 Globally, cleantech IPOs raised $16.3B for 93 companies
 China accounted for 68% (63) of the IPOs completed and 61%
($10.0 billion) of the total amount raised
 China Goldwind, the Xinjiang-based wind turbine
manufacturer raised $917M on the Shenzhen Stock Exchange
 3 IPOs in US: Amyris, Tesla Motors and Codexis, Inc.
 M&A totaled an estimated 716 transactions in 2010, of
which totals were disclosed for 203 transactions totaling
$36.0 billion
Issues to Watch Out for…
 Over-optimistic, idealistic (wishful) thinking
 Timing
 Alignment
 People (cross-industry culture)
 Financing model (payer/beneficiary)
 “Resistance”
 Accelerating rate of change – driven by China
How to Proceed?
 Comprehensive preparation to understand complexity
 Extensive networking – cultivate relationships
 “Problem-solving” => “innovation” in all domains
 PASSION & CURIOSITY MUST GROW
Hot Trends for 2011
 1. Sustained worldwide VC investment
 2. Venture capital will continue to cede importance
to corporate and non-institutional capital
 3. A return to early stage venture investments
 4. Energy efficiency emerges as the clear rock star of
cleantech
 5. Biofuel investment could reach former highs
Hot Trends for 2011
 6. Nuclear surprises, but not in U.S.
 7. Recycling and mining will attract more investment
 8. Natural gas emerges to threaten solar and wind for
utility renewable power generation
 9. China becomes the most important market for
cleantech: if you're not selling in China, you won't
matter
 Source: http://www.globenet.com/articles/2010/december/3/predictions-forcleantech-in-2011.aspx

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