>> CleanTech Venture Capital in Europe >> Download PDF >> Date: 13/05/2008 Gina Domanig is the Managing Partner of Emerald Technology Ventures, a major global leader in CleanTech Venture Capital. It has a portfolio of about 27 CleanTech companies and €300 ($470) million under management. Gina is also Chair of the European Advisory Board for Cleantech Group, the parent company of mosaic member, Cleantech Search. We have moved relatively rapidly from the situation in 2000 when CleanTech as a sector was clearly underfunded, with relatively few VCs active, mostly with small funds. We went through a period of educating the market to get to the huge growth in the number of institutional investors and the capital being deployed over the last two years. Government Funding The picture with regard to Government funding for CleanTech is unfortunately neither uniform nor coherent across Europe. There are basically three generic types – grants to develop technology, VC investing, and market incentives. Grants for technology development have clearly been beneficial in some cases, funding companies to get prototypes developed that can then attract institutional funding. But in many cases it has not helped the original aim, the actual adoption of CleanTech, merely boosting the returns of the institutional investors who would have funded the company anyway. In the UK, we have certainly seen VC investing by quasi government bodies more motivated to hit their own internal targets for deploying funds or to generate a press release rather than genuinely focused on generating returns. Unfortunately this actually makes it more difficult for companies to secure follow-on rounds as it distorts the marketplace and unduly raises expectations. We much prefer to see government spending to accelerate the market adoption of clean technologies, feed-in tariffs being one mechanism. Markets Deal flow is strong and growing. Last year we reviewed about 850 deals in the sector, investing in the US and Europe on a 60/40 split. Our hit rate in Europe is much higher. Germany is the handsdown winner for us in Europe - it’s a fabulous field for investors right now. There are strong coinvestors and a healthy level of technology innovation in the marketplace. The hurdle is recruitment, especially the CEO role but also others such as the CFO. We like to hire German nationals but there are not enough with portfolio company experience and hiring out of larger corporates is difficult. Your typical DAX 100 executive in a comfortable role is just not motivated to do a start-up. They don’t value options very highly, they are failure-averse, and in fact they often don’t understand the Anglo-Saxon obsession with getting rich! They have a comfortable life-style and that’s enough for them and there’s social stigma in getting wealthy. The major challenge for CleanTech moving forward? Public policy and political will. Visit Emeral Ventures at www.emerald-ventures.com

Gina Domanig, Managing Partner of Emerald Technology Ventures shares her view of CleanTech in Europe