The financial press thanks the venture capital community for a return to discipline and fundamentals in cleantech investing. Not surprisingly, we at Cleantech Open believe the U.S. cleantech startup ecosystem—including CTO—deserves some credit.
In the sustainability industry, it has become almost axiomatic that cleantech venture capital has done better by investors shifting to later-stage investments. That was certainly true during the 2005-2009 cleantech boom. But during the most recent period, the internal rate of return for both early-stage and later-stage investments are suddenly comparable.
A recent Forbes article, “Cleantech Venture Capital is Back? Early numbers say Yes,” points to a report from Cambridge Associates from December 2018, which tracked over 1,500 cleantech investments by 578 investment funds, with data reaching back into the early 2000s up through 2018.
While Cambridge Associates confirm the poor investment results during the “cleantech bubble” between 2005-2009, investments made from 2010-2013 did better, and then those investments made more recently have produced 23.9% gross internal rate of return. That’s a pretty stunning upturn! If you are interested in the wider cleantech market, it’s a report worth checking out.
In short, someone appears to be helping guide green startups toward more realistic growth and capital-raising plans. The financial press thanks the venture capital community for a return to discipline and fundamentals. Not surprisingly, we at Cleantech Open believe the U.S. cleantech startup ecosystem certainly deserves some credit.
Over those nearly 18 years (14 for CTO, founded in 2005), a clean technology startup infrastructure has grown, learned, adapted, become institutionalized, and strengthened by its increasing interconnectedness and by survival of repeated market shocks. In 2019, before cleantech startups make it to VC offices, the Cleantech Open accelerator and/or others in the cleantech startup support ecosystem ensures that the companies have a clear convincing portfolio consisting of well-informed analyses and a realistic strategy.
Cleantech Open alumnus leave the program with all the prerequisites for a meeting with a VC: Business Model Canvas/Strategy, Impact Statement (including Sustainability), Customer Segmentation, Competitive Landscape, Financial Model, Executive Summary One-pager, Intro Video (1-2 minutes), and Pitch Deck. We reiterate each until it is pitch perfect! We can’t take credit for the whole 23.9% gross internal rate of return, but the U.S. cleantech startup ecosystem can certainly take some credit! Bravo!
By Emily Lundberg on in