13 innovators pitching for investors are treated to masterclass in green fundraising at BusinessGreen Technology and Investment Forum
When it comes to fighting climate change and tackling the myriad other environmental challenges the world faces, we certainly aren't short on bright, innovative and exciting ideas. Not to mention ideas from which there is huge potential to build profitable and sustainable businesses - assuming the right investment can be found.
Some of these inspiring ideas were on display at yesterday's BusinessGreen Technology and Investment Forum, hosted in association with Innovate UK and Clean+Cool. Now in its second year, the investor pitch session saw 13 entrepreneurs and businesses each present four minute pitches, with the aim of connecting some of the best ideas in clean tech with those with the investment capital to help turn them into a commercial success.
From emergency zone roll-mat solar deployments and electric trucks to solutions for combatting coastal and coral reef erosion, the breadth of technologies on display with the potential to make a positive impact on the world was remarkable.
But while passion, intelligent ideas and financial backing are all crucial to entrepreneurial success, there are few things in life more valuable than sage advice and inside knowledge from those who have already experienced the roller-coaster ride of bringing clean tech to market. Julia Groves - now partner and head of crowdfunding at investment group Downing LLP following directorial roles at numerous digital and green start-ups - certainly has and she kicked off the forum with a pithy masterclass in the ups and downs of green entrepreneurship, how best to woo investors, and the lessons she has learned from her hard-won success in cleantech fundraising. It is fair to say her energy and optimism provided a welcome green antithesis to the Prime Minister's rather drab Tory party conference speech in Manchester.
"I'm bemused by people with wealth who don't feel any sense of responsibility to actually leave the planet in a better state than how they found it, and how our system perpetuates inequality," said Groves. "So I'm afraid I am the definition of a champagne socialist, and my theory of change is that if we can change money we can actually galvanise more sustainable business, planet and everything. And if we don't change money we are F****D."
Having moved to Downing LLP two years ago after leaving renewable energy crowdfunding specialist Trillion Fund, Groves said it felt "strange" to be sitting on the investment side of the fence after two decades as an entrepreneur. But she argued more in business should try working on both sides of the investor-entrpreneur divide. "It's such a shame there is so little of that cross-over," she said. "It's really disappointing that there aren't more entrepreneurs in the investment firms, and it's such a shame that there is somehow so much difficulty in bringing together investors with the entrepreneurs in a world where we're all madly trying to grow businesses at the same time as trying to raise money and get deals done."
While in the US there is no shortage of investors willing to take a punt on innovative companies, those in the UK are more risk-averse, she said - a situation not helped by inconsistent government policy on tax and subsidies, such as the feed-in tariff cuts, which impacted one of Groves' previous businesses.
But as long as there is as little reliance on government as possible, and entrepreneurs make the right pitches and decisions with regards to investment, there are still plenty of opportunities in the UK, Groves said.
To help realise these opportunities, she offered a list of 16 tips she wished she had known when she first set out to raise funds for her businesses.
For example, she advised that before pitching, it is crucial to get a good team around you - not just a business plan - as a selling point to investors, and then to understand and fully test your addressable market, as incorrect assumptions about its size can be catastrophic. Tax, too, is one of the most important areas to be clued-up on, as incentives give a buffer to investors and help lessen risks.
"If you have something that has a tax break around it, your chances of fundraising are quadrupled," said Groves. "It's very, very important."
Meanwhile, key for investors is that you can tell them the value of your business today and that progress is in line with expectations, she explained. But she also counselled that entrepreneurs should never offer a valuation too early on and try to avoid giving the impression there is no more than one interested investor.
Moreover, investors can too oftenwine and dine entrepreneurs without much progress being made - and Groves urged pitchers to reach heads of terms as quickly as possible, as there is always much further to go to get a deal over the line. In short, if an investor is going to say 'no', make sure they say 'no' quickly rather than wasting your time, she advised.
A former BusinessGreen Leaders Awards Entrepreneur of the Year, Groves also proffered sage advice for women in green venture capital, urging female entrepreneurs to demonstrate self-confidence to impress what are often largely male-dominated investment firms.
"They're just boys standing in front of a deal, wanting to do it," she explained. "Girls, I learned this lesson so hard - we don't pitch right to boys."
In the end, she stressed, investors are mostly motivated by profits - not so much by the ethical or environmental element of a business per se. "The interest in this sector is absolutely because of the opportunities in it," said Groves. "There isn't an ethical element, I don't think, at all."
Groves was followed by Innovate UK's director of infrastructure systems, Ian Meikle, who provided further valuable insights into the agency's work, which he stressed went far beyond merely providing grant funding.
A large part of the agency's remit, he said, was about data mapping, research and providing support opportunities for those starting out in cleantech, highlighting its work with Clean + Cool to deliver entrepreur missions to San Francisco and other global tech hubs. "We are creating the infrastructure, the products and the services of the fourth industrial revolution," he said. "And when I say 'we' [I mean] Innovate UK is helping to support that - but you are the investors and the innovators that are going to bring these products and services to market."
So what of the innovators pitching themselves? Each of the 13 stuck impressively to their four minute time limit,before taking several questions from the audience.
The sheer breadth of technologies on show makes it difficult to pick out clear trends, but there were several pitches geared towards the energy storage market, perhaps reflecting the wider green economy zeitgeist around grid balancing services at present. Two pitchers - Energy SRS and Gravitricity - both focused on utilising gravity for storing power, with the principle of their technologies based on the mechanics of the grandfather clock, just at a huge scale. And, with the wider move towards batteries for connectivity, mobility and grid services, ACELERON made their case for tackling the mountain of lithium ion batteries thrown away each year in the UK, with a process the firm claims can test, grade and repurposes batteries for reuse in new products.
Two companies also focused on improving energy efficiency in the home. AirEx is seeking to target social landlords with its smart, automated air vent system which promises to tackle both fuel poverty and air quality, while Verv's plug-in-and-go smart technology is already courting interest from major firms with its user-friendly means of detecting the real time energy use of electric home appliances.
Elsewhere there were several pitches for which the environmental and climate benefits were even more immediately clear. John Hingley of Renovagen showcased his company's portable, roll-up solar array, which he claimed could be deployed and generating energy within a single hour. With the Caribbean, Texas and India suffering from major storms this summer, the innovation, he said, was ideal for disaster relief and is piquing interest from the military.
And, looking towards the multi-billion dollar global diving tourism market, Zyba Ltd claims to have developed a cost-effective solution for coastal and coral reef erosion that can both create a habitat for marine life and effectively pay for itself by generating wave energy. "We are really just trying to counter global warming," the company's CEO and founder Dr Will Batemen told the audience of investors.
Each company clearly differed in experience, size and green solutions on offer, but all were looking for the same thing - cash and support to scale up their business and make a clear difference in the world. And while not every one of those pitching will turn in to the next Tesla, the expertise, knowledge and enthusiasm in the room was palpable, as were the relationships being formed. It will be exciting to see where all of these innovative businesses go next.
The full list of companies presenting at the forum is available here.