Where have all the risk takers gone? And how ‘safe’ does a deal have to be before investors will venture forward?
I’m beginning to wonder that this week, after our investment showcase on Monday, supported by the Carbon Trust, where we presented five cleantech companies that have created innovatons in energy efficiency. They have been through the Carbon Trust Entrepreneurs Fast Track programme, and are bang on trend as far as investment opportunities go.
Our timing couldn’t have been better, as we hosted our event just two days before the government launched its Green Deal, a programme to bring the UK’s buildings up to date with energy-efficiency improvements.
This is a major opportunity for businesses. Chris Huhne, secretary of state for energy and climate change, says that the Green Deal will give energy companies and investors “access to a huge and growing market, with implications for jobs and skills across the supply chain – and across the country”. He estimates that the energy-efficiency sector will support 100,000 jobs within five years across the UK – as well as helping the country to achieve its carbon emissions reduction targets.
The five entrepreneurs who presented their cleantech innovations can do exactly that. Eco Answers’ Loftzone – which was quoted in a BBC News story on the Green Deal – has a patented insulation system for loft floors; Lontra has an energy-saving compressor; Calon Controls has energy-saving lighting control solutions; ElectronicaUK has energy-efficient electronic control systems; and ModCell has pre-fab wall and roof cladding to improve insulation.
These five companies are well primed for investment, with a track record of revenues, and a robust, tested business plan that will bring healthy returns to investors.
It’s an exciting sector, ticking not just the cleantech box but also ticking a long-term return-on-investment box. We’re aware that the ROI is not a three-to-five years box, but what technology investment would achieve that?
Yet, while 30 investors came to our showcase this week and took away a positive impression and requested follow-ups on the five presentations, I’m sure that, given the excitement around the Green Deal opportunity, we should have five times as many investors turning up to our next showcase in March 2012. If they’re prepared to take what is a calculated but long-term risk.
The markets may have been affected by austerity measures across Europe – but even in this article in the Financial News on global cutbacks hitting cleantech investments, the commentator states that “energy efficiency and the water industry offer better prospects for mid-market investors” because they are “seen to offer a better risk/return profile”.
Being an entrepreneur is about facing the failures as much as celebrating the successes. That’s what risk is all about: it brings the buzz to a brilliant deal, and that buzz sustains you through the less buoyant times.
As the old adage goes: nothing ventured, nothing gained.
If you’d like to take part in the Entrepreneurs Fast Track programme, or to register your interest in our next showcase event, email holly.munns@conduitpartners.co.uk or call 01235 831777.