the state of cleantech venture capital: what lies ahead...2013/09/12 · sources: pwc/nvca/thomson...

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The State of Cleantech Venture Capital: What Lies Ahead

Matthew M. Nordan

NextWave Greentech Investing September 12, 2013

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The System

Friends & family

Angels Venture capital

Growth equity

Outcome (IPO or M&A)

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The System

Friends & family

Angels Venture capital

Growth equity

Outcome (IPO or M&A)

Exits in 10 years

Markups in 3 years

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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on

Cleantech VC history In

vest

men

t (U

S$ b

illio

ns)

Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.

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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)


VC-backed IPOs

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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas


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Q4 2005

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2004 to 2013

$25 billion

1,000+ start-ups

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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas Dow

Waxman-Markey


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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas Dow

Waxman-Markey


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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas Dow

Waxman-Markey


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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas Dow

Waxman-Markey


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$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on


vest

men

t (U

S$ b

illio

ns)

Kyoto Protocol

Oil Natural gas Dow

Waxman-Markey


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vest

men

t (U

S$ b

illio

ns)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13

Initial Follow-on Oil Natural gas Dow

Kyoto Protocol Waxman-Markey


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Cleantech VC (recent) history In

vest

men

t (U

S$ b

illio

ns)

$0.0

$0.5

$1.0

$1.5

2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2

Initial Follow-on

Q2 ‘13 investment in new companies: $3MM

Source: PWC/NVCA/Thomson Reuters Moneytree.

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Fact #1: Cleantech VC has underperformed the asset class

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Cleantech returns vs. VC class

.7x

.8x

.9x

1.x

1.1x

1.2x

1.3x

9/30/2010 3/30/2011 6/30/2012 3/31/2013

Cleantech-only funds VC asset class

Value to paid-in capital net to LPs. Sources: NVCA, CalPERS.

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Fact #2: There haven’t been enough

exits

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Cleantech funding vs. IPOs

Sources: PWC/NVCA/Thomson Reuters Moneytree, SEC filings.

0%

3%

6%

9%

12%

15%

2004 2005 2006 2007 2008 2009 2010 2011 2012 H113

Cleantech share of VC funding (5-year lag) Cleantech share of VC-backed IPOs

(0)

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Cleantech funding vs. IPOs

Sources: PWC/NVCA/Thomson Reuters Moneytree, SEC filings.

0%

3%

6%

9%

12%

15%

2004 2005 2006 2007 2008 2009 2010 2011 2012 H113

Cleantech share of VC funding (5-year lag) Cleantech share of VC-backed IPOs

(0)

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Fact #3: Public equities have (mostly) disappointed

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Cleantech stocks post-IPO

Source: Yahoo Finance.

0

100

200

300

0 100 200 300 400 500 600 700 800

Days from IPO

CDXS TSLA AMRS LEDS GEVO SZYM KIOR CERE ENPH SCTY SSNI

$/sh

are

(cl

ose

of IP

O =

10

0)

180 days: 9 of 11 < IPO 5 of 11 < last VC

Tesla Solarcity

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Cleantech VC (recent) history In

vest

men

t (U

S$ b

illio

ns)

$0.0

$0.5

$1.0

$1.5

2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2

Initial Follow-on

Source: PWC/NVCA/Thomson Reuters Moneytree.

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More

Time Money

Risk

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“Cleanweb”

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$350MM

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$150MM

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Some history

‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08

IPO: 8.4x

Stock peak: 199x (!!!)

Founded First product shipped

$150MM Walton $$$

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“Game!”

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Cleanweb

Late-stage

Strategic

Cross-border

Cross-asset class

Patient

Philanthropic

New ideas

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The problems aren’t going

away

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GDP per capita Past two millennia

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

080

160

240

320

400

480

560

640

720

80

0880

960

1040

11

20

1200

1280

1360

14

40

1520

1600

1680

1760

1840

1920

2000

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Innovation isn’t

stopping

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?????

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Venrock • 55 Cambridge Parkway • Cambridge, MA 02142 • (617) 995-2000 • www.venrock.com

Thank you

Matthew M. Nordan

(617) 995-2020

[email protected]

@matthewnordan

the state of cleantech venture capital: what lies ahead...2013/09/12 · sources: pwc/nvca/thomson...

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