Cleantech Investor

Stephan Decher and Peter Whiting, founders of corporate finance boutique Clean Capital, run The Clean Capital Champagnebox Event. This networking and investment pitching event, held on the first Monday of every month in a winebar in London's Mayfair, brings together entrepreneurs and investors in clean technology and other related fields. Each entrepreneur makes a three-minute pitch on a podium constructed from champagne boxes to an audience of investors and experts. Two cleantech 'dragons' (venture capital investors) comment on the pitches. The audience then votes for their favourite pitch and the winner receives a bottle of champagne. The rest of the evening involves professional networking over a glass of wine. Stephan and Peter talk to Cleantech magazine editor, Anne McIvor, about the event and its place in funding cleantech companies.

Anne:

How long has The Clean Capital Champagnebox Event been running? And what inspired you to set it up?

Peter:

Actually, the upcoming event is the 28th consecutive event, so we have entered our third year.

Stephan:

We have now had over 60 cleantech and clean energy companies pitch over the past two years.

Peter:

The business philosophy behind the event was inspired by wanting to offer something of genuine value to the industy whilst building awareness of Clean Capital, our corporate finance boutique.

Stephan:

And it has proven to be the right thing to do. It is now an established event internationally known. The feedback we get is very positive.

Peter:

Last but not least, we enjoy hosting it and meeting the various different professionals involved with this emerging industry.

Stephan:

We believe that the Champagnebox pitches are a real innovation. We have already met people who have taken to the concept and want to do it on the other side of the world.

Anne:

The Champagnebox event strikes me as a sort of hybrid – a typical venture industry 'elevator pitch' style event – sort of a 'Dragon's Den' crossed with a networking event. It is a unique format. Has the event changed over the years?

Peter:

Frankly, it was very different in the early days. At the start we only had 40 or 50 people in the room and the focus was purely the networking. Now, the main focus of the evening is the Champagnebox pitches. The pitches create excitement, the dragons add to this with their insight - and there is a bottle of champagne for the most popular pitch.

Stephan:

Now we have more companies and investors in the room – but the underlying philosophy hasn’t changed at all. Last month we added another new feature: Clean Monday London. This gives companies the opportunity to meet service providers for a free consultation. Several providers sign up every month and offer sessions on the same day as the main evening event.

Anne:

What are the qualifications for a company to pitch at the event?

Peter:

We apply just three simple criteria. First, only a member of the management team may pitch. Second, they must be either a cleantech or related environmental company, or be providing services to the environmental or cleantech sectors. Third, we require them to make a structured three minute pitch about their business.

Stephan:

Companies may be in any stage of their lifecycle. We have had companies pitching who wish to raise anything between £300,000 and £8 million.  

Anne:

How does the typical clean technology/environmental entrepreneur differ from ‘dot com’ era entrepreneurs?

Stephan:

Well, there are obvious differences. For example, most cleantech entrepreneurs are older than the entrepreneurs of the 'dot.com' era. Some have substantial industry experience. It’s what you need in this sector. These are often complex engineering solutions which are being targeted into sophisticated markets. Many entrepreneurs are technologists though, lacking commercial experience: from what we observe there are great opportunities for experienced business leaders from traditional industries to get involved in this sector.

Anne:

Do the cleantech investors differ as well? What is a typical profile of the investors who attend the event?

Peter:

Well, many investors started out investing in IT or life sciences, but have now added a cleantech focus – and some have completely transitioned to the sector. Others are solely focused on all or parts of the sector. We see quite a variety of investment approaches, from angels to more established investors.

Stephan:

We are pleased that some of the most cleantech focused investors in London attend our event regularly. These include Foresight Group, Atlas Venture, Wheb Ventures, Ludgate Investment, Conduit Ventures, Good Energies, Frog Capital and others. As Clean Capital we are maintaining contact with many more, not just in London, but also in Europe and other parts of the world.

Anne:

How many of the investors have a 'sustainable investment' approach?

Stephan:

Our impression is that investors rarely call it sustainable investing any more. Maybe that is because making money has become the overriding reason for investing while at the same time – quasi as a positive side effect – forging sustainable solutions rather than sustainability as such.

Peter:

…and the term cleantech seems to be catching on as the all-encompassing umbrella term for this sector. We believe this is more good than bad. It really helps attracting money to this so important sector.

Anne:

Can you recount some memorable pitches?

Peter:

Yes, we've had some great presentations, such as Alex Korda of EnviroGene, a company which has developd a molecular diagnostics technology for ground water and surface water.

Stephan:

Yes, and BlueH, a deep sea offshore wind technology floating platform: Neil Bastick presented that pitch. Oh, and Karl McCarthy, who presented his IP portfolio of LED lighting to extend the shelf life of food products.

Peter:

We want strong pitches and attendees leaving the event with a quality networking experience. The fact that we have a number of repeat pitches and regular attendees shows us that the concept works.

Stephan:

We will be expanding the concept soon by introducing virtual Champagnebox pitches, whereby companies from other parts of the world can sign up. We will deliver their pitches on their behalf at the event.

Anne:

Is the credit crisis making it more difficult for cleantech and environmental companies to raise funds?

Peter:

Yes, it is having an impact. Investors’ first responsibility is for their portfolio businesses. And, beyond that, with limited capital available they are forced to be even more highly selective about their investments. Of course, this means that companies must demonstrate fundamentally robust business models, operate in attractive industry sub-sectors and have a clearly structured, argued and quantified plan for their business

Anne:

What are the biggest challenges for a cleantech or environmental business at an early stage/startup?

Stephan:

One challenge we see often is the process of managing the transition from R&D and prototyping to commercial deployment.

Peter:

Recruiting a management team with the right mix of skills to deliver the business plan is another. Particularly, businesses need to match their strong technology expertise with professional sales and marketing skills as early as possible. There seems to be a natural hesitation with many technology-centered companies to invest in the sales and marketing operation.

Stephan:

Some companies are a long way ahead of their time in that they anticipate  a market long before it has developed. This is very noticeable where regulation is being talked about but hasn’t been implemented, or even created. The challenge for entrepreneurs is to decide on the timing of market entry.

Anne:

What is your view on the outlook for the sector?

Stephan:

Considering the enormous challenges we are facing to modernise our aging energy infrastructure, the sector will have to grow substantially over a very long time frame. We probably need the next thirty years and staggering amounts of capital before all necessary investments have been made. While being affected by the downturn just like other sectors, we believe cleantech investing might rebound more quickly than other sectors.

Peter:

A lot will depend on cleantech-enabling regulation by governments in the largest economies. The speed for adoption of many technologies and infrastructure roll-out will be strongly influenced by the pace, effectiveness and consistency of the regulatory change.