Entrepreneurs need smart thinking to stand out from the cleantech crowd
Increasing flows of investment cash into the cleantech sector is opening up new opportunities for entrepreneurs but also creating dangers, according to gateway2investment, the innovative investment-readiness programme.
Investors are flocking to place funds in the sector in the hope of high future returns, in turn encouraging more start up and early stage businesses to seek outside investment to develop their ideas. But g2i believes entrepreneurs must do some smart thinking to make their ideas stand out in an increasingly crowded market.
Cleantech currently a 'hot sector' with investors
“Cleantech is undoubtedly one of the hot sectors with the activity driven by increasing fund flows from both private and public sector sources, not only in the UK but across the globe,” says Grant Thornton’s Simon Littlewood, manager of the g2i programme.
“But this may be a double-edged sword for entrepreneurs because although there may be more investor demand, there are also many more start up and early stage companies hoping to grab their share."
“It’s never easy to secure investment and there is a real danger that even those companies with high quality propositions will fail to stand out because of the number of rivals operating in the same area with similar technology and business models."
Simon Littlewood said the expertise of g2i can also help entrepreneurs identify and focus on their own cleantech credentials to increase investor interest.
“Investment readiness programmes such as g2i are a good way to gain that advantage,” he said. “These put the focus on honing the business proposition, aligning entrepreneurs’ aims with those of the investors, and opening the door to the investment networks where much of the action is taking place.”
Billions poured into cleantech bring fears of bubble
Billions has poured into the cleantech sector as investors target companies offering products and services that can boost productivity while reducing energy use, waste and pollution. But this has inevitably raised concerns over a cleantech ‘bubble’ and fears the prospects of many new technologies have been over-hyped.
“The better the business proposition, the less likely it is to get hit by external factors such as a sudden withdrawal of investor interest in a sector. Cleantech is buzzing but entrepreneurs looking for long-term commercial success need to ensure their businesses are well prepared to ride out the storms too.”
Posted May 2, 2007
