1 @matthewnordan The State of Cleantech Venture Capital: What Lies Ahead Matthew M. Nordan NextWave Greentech Investing September 12, 2013 @matthewnordan
1 @matthewnordan
The State of Cleantech Venture Capital: What Lies Ahead
Matthew M. Nordan
NextWave Greentech Investing September 12, 2013
@matthewnordan
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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
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
VC-backed IPOs
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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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
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas Dow
Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas Dow
Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas Dow
Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas Dow
Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on
Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
Kyoto Protocol
Oil Natural gas Dow
Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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Cleantech VC history In
vest
men
t (U
S$ b
illio
ns)
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 RR13
Initial Follow-on Oil Natural gas Dow
Kyoto Protocol Waxman-Markey
Sources: PWC/NVCA/Thomson Reuters Moneytree, Dow Jones, EIA.
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Cleantech VC (recent) history In
vest
men
t (U
S$ 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
@matthewnordan