1. Funding the commercialisation of cleantech
Ivor Frischknecht Investment Director
26 May 2011

2. The Commercialisation Process
Research
Product
Prototype
Pilot
Early
Customers
Commercial
Rollout
Research Institute
Company/ Research Institute
Company
Company/ Project Vehicle/ Partner
Spinout License
Needs Analysis
Product Packaging
Commercialisation

3. Private Equity Investing in Cleantech
Buy Out
Project Finance
Growth Capital
Offshore Venture Capital
Australian Venture Capital
Startmate, Angels
<$1M
$1M - $20M
$20M – $100M
>$100M
Investment Amount

4. About Starfish Ventures
AUD$400 million under management
Investments in 60+ companies: ITC, Life Science and Clean Technology
Exit track record: 6 ASX IPOs, 2 NASDAQ IPOs, 1 AIM, 10+ Trade Sales, 1 Backdoor listing
Pioneer the migration of Australian companies to the US to access capital, markets and experienced executives
Investment team of eight, two have a cleantech focus

5. Venture Capital is a Risky Business
$1 Billion invested, all lost in 18 months

6. Sometimes they succeed
1999: first VC funding
2006: NASDAQ listing
Market Cap: USD$10.67B
Revenue: USD$2.56B
Profit: USD$762M
It manufactures photovoltaic solar modules using a thin film semiconductor process based on CdTe, to produce photovoltaic modules. It is the largest manufacturer of thin-film cells in the world[1], with production capacity expected to reach over 1 GW per year by the end of 2009.
Funded in large part by True North Partners – investment arm of the Walton family (Walmart)
Info on First Solar:
*Financial information as of 25 May 2011

7. Sometimes they succeed
1989: Secured first VC funding
2005: NASDAQ listing
2006: first profitable year
Market cap: USD$2.08B
Revenue: USD$2.21B
Profit: USD$183M
SunPower Corporation designs and manufactures high-efficiency , roof tiles and solar panels based on a silicon all-back-contact solar cell invented at Stanford University.
Sunpower info:
*Financial information as of 25 May 2011

8. Valuation Founders: “My company will be a big success”
Investors: Portfolio Approach
aim for successes only
high failure rate
return across all investments must exceed public market returns

9. Competitive Advantage Market size and Growth - REVC Growth Capital
Investments
Selection Criteria
Contributions
Management Team
Technology
Competitive Advantage
Market size and Growth
- REVC
Growth Capital
Recruiting
Corporate Governance
Strategy
Partnerships
International Market Entry
Exit

10. Opportunities

11. Opportunities Solar Energy Wind Management/ Optimization
What’s Hot
What’s Not
Solar Energy
Wind Management/ Optimization
Demand Management
Energy Efficiency
Energy Storage
Fuel Cells
Hydrogen
Biofuels
Waste Management
Water Efficiency

12. Cleantech Industry: VC outliers
Too Early
Too Big
Next Generation Biofuels
Electric Vehicles
Ocean Power
Carbon Capture & Storage
Utility scale renewable projects
Too Late
Too Small
Wind Turbines
Fish tracking software
Services that don’t need much capital

13. Cost of Solar Power
Source: McKinsey Quarterly

14. Limited Local Commercialisation Success
Australian Solar Power Strengths
R&D Powerhouse
Limited Local Commercialisation Success
Sliver cells (Origin Energy)
Dyesol (ASX : DYE)
Suntech (NYSE/China)
JA Solar (NASDAQ/China)
Nanjing PV (China)
CSG Solar (Germany)
Basic IP for dominant silicon PV
UNSW and ANU are top groups internationally
Supporting efforts elsewhere

15. Case Study: Pacific Hydro
Founded in 1992
ASX IPO in 1993 at $10MM market cap
Mid-1995 market cap dips to $3.5MM
Two private placements raised $30MM
Acquired by IFM in 2005 for $788MM

16. Case Study: Suntech
Founder is Chinese Australian dual-national educated at the University of NSW
Much of the IP and technical talent originate in Australia
Active personnel exchange program with the University of NSW
2005 NYSE listing
Market cap of USD$1.38B
Revenue: USD$2.90B
Profit (before tax): USD$10.9M
*Financial information as of 25 May 2011

17. Policies Make a Difference
California
California Energy Use per Capita
Source: California Energy Commission, 2007 Integrated Energy Policy Report

18. California Solar Policies
Subsidies
US$3.2B Rebates
Tax Credits
Home mortgage deduction
Net metering
Public Purchasing Policies
Has led to:
30-40% of North American investment in cleantech
20,000 new jobs (solar only)

19. In Closing
Early stage clean technologies are well suited to venture capital
Capital requirements and timeframes can be a challenge
Quality inventors for the capital required
Australia has a lot of capital and good clean technologies
More stable policies are required to overcome financing challenges
REVC will greatly expand renewable energy capital

20. Ivor Frischknecht Investment Director
Starfish Ventures Level 1, 120 Jolimont Road East Melbourne, VIC 3002 T: