sirris materials day 2010 - sustainable investments - capricorn venture partners

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Sustainable investments

about materials based ventures and cleantech

Marc Lambrechts

Sirris Materials Day 2010

Heverlee – 29 April 2010

Capricorn Venture Partners

2 Sirris Materials Day 2010 - Sustainable Investments 2010-04-29

Agenda

About us, cleantech and materials ventures Business models Value chain Some examples Materials ventures – watch out for ....


3 Sirris Materials Day 2010 - Sustainable Investments

Your speaker today

Dr ir Marc Lambrechts research in microsystems and PhD on biosensors

at KU Leuven industrial R&D experience at Terumo Europe RTD programme management experience at IWT + 10 years experience as senior investment manager in early

stage venture capital technology fusion as special area of interest board member Boondoggle, fluXXion, Neosens, Leuven.Inc

Capricorn Venture Partners founded in 1993 independent and partners-owned pan-European activity, located in Leuven, Belgium hands-on, early stage & technology focus investing out of Capricorn Cleantech Fund – € 112 M raising the Capricorn Health tech Fund

2010-04-29



Portfolio examples

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http://www.orthovita.com/�



Materials related portfolio examples

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http://www.orthovita.com/�



Advanced Materials = Cleantech

Cleantech is not something “new“but a regrouping of topics

that are and will remain important at least for the next decades

“more with less”2010-04-29


Photovoltaic energy = materials



Energy storage = materials



and also wind energy, desalination, ...



Cleantech investments in 2009


HSBC estimate : green stimulus package $ 521 billion worldwide


Are all tech SMEs born equal?

Consultancy company Start as a one-man band Self supporting

Life style ventures Growth profile - 1 FTE per year knowledge and experience based, little IP 20 persons – a few million € in sales - profitable

‘High growth potential DNA’ ventures Technology as long term competitive advantage Capital intensive International ambition – substantial markets High growth - high value – high risk Exit orientation


SMEs

no/low tech companies

life styleventures


The Venture Capital model


IPknowledgeexperience

+proof of concept

business plan+

marketcustomers ..

entrepreneurs and teaminvestors

€ € € €€ € € €€ € € €€ € € €

€



Tech VC’s prefer to invest in

Entrepreneurs and a team Technology as sustainable competitive

advantage strong and clean intellectual property/capital proof of concepts exists and mode of action is

understood

A business model we understand and like Growing and huge markets ‘Need to have’ proposals with ‘identified

customer pain’ Focus combined with mutant potential Well funded and capital efficient companies Exit perspective @ 5 to 10 x multiple

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Business model

i.e. the architecture of revenue and profit The functions of a business model are to:

articulate the value proposition, that is, the value created for users by the offering based on the technology;

identify a market segment, that is, the users to whom the technology is useful and for what purpose;

define the structure of the value chain within the firm required to create and distribute the offering and determine the complementary assets needed to support the firm’s position in this chain;

to specify the revenue generation mechanism(s) for the firm and estimate the cost structure and target margins of producing the offering, given the value proposition and value chain structure chosen;

describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementary firms and competitors;

formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals.

Based on : Open Innovation, Henry Chesbrough, HBS Press

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Materials related business models

IP licensing = €’s for use of patents

Consultancy = €’s for hours of thinking and writing reports

Services = €’s for hours of hard work

Own production = €’s per kg material you produce

Fabless production = €’s per kg material someone produced

Toll manufacturing = €’s per kg material produced for someone

Equipment = €’s per machine you deliver

Gate fee model = €’s per kg waste you process

Materials leasing = €’s per time unit for the use of a material

Software = €’s for the use of your software code

WEB 2.0 - media = €’s per pair of eyeballs

....15 Sirris Materials Day 2010 - Sustainable Investments 2010-04-29


16

Choosing the business model

Leo Baekeland on the IP license business model

"I firmly intended to escape the recurrence of business occupations, as in my Velox days. So I planned, instead of manufacturing myself, to grant licenses to established manufacturing concerns, especially experienced in plastics. But I soon was confronted with a repetition of my former experience with Velox: that it was very difficult to teach new methods to men who had acquired routine in older processes. The preparation of the new resinoid and its molding compositions, which to me seemed very simple, appeared either very difficult or needlessly complicated to others. Reluctantly I had to start manufacturing the raw materials in a sufficiently advanced stage so that the users had only to complete the operation of molding and polymerization.“

See also ”The Baekeland story - Lessons for today’s ventures in new materials”http://be.linkedin.com/in/marclambrechts

2010-04-29Sirris Materials Day 2010 - Sustainable Investments

http://be.linkedin.com/in/marclambrechts�


Generic materials value chain

feedstock molecules materials components system end user recycling



Concentrated PV value chain


Source : Emcore - Concentrix




substrate epitaxy processing dicing packagingsolar celltesting

solar cell optics heat management

CPV module manufacturing

CPV module

tracking systems

inverter and grid

connection

turn key installer

owner / operator


Concentrator Optics



Avantium



Metallkraft



Metallkraft

Business model is based on buy-back principle: Metallkraft takes full responsibility for the spent slurry Metallkraft sells recovered SiC and PEG back to the

wafer manufacturer Agreed quality parameters Joint R&D programme



Metallkraft



Materials ventures require ...

... pilot plants to be able to deliver sufficient material for customer testing




... partners to scale up




... access to raw materials Resource constraints to be expected ?

Lithium for batteries Indium for transparent conductors (e.g. LCD TV) and thin film solar

(e.g. CIGS) Rare earth metals for permanent magnets Platinum for catalyst and fuel cells ...

= also an opportunity : for technologies based on renewable or abundant, cheap, safe, non

toxic raw materials for recycling for new business models – e.g. chemical or material(s) leasing




... understanding of competition (narrow & broad)




... understanding of the time line to market introduction




... more than good knowledge of material science

“Some chemists, who have little experience with industrial enterprises, are over-inclined to judge a chemical process exclusively from the standpoint of the chemical reactions involved therein, without sufficient regard to the engineering difficulties, financial requirements, labour problems, market and trade conditions, rapid development of the art involving frequent disturbing improvements in methods and expensive changes in equipment, advantages or disadvantaged of location of the plant, and other conditions so numerous and variable that many of them can hardly be foreseen, even by men of great experience. And yet, these seemingly secondary considerations become deciding factor for success or failure of an otherwise well-conceived chemical process.”

33

From “Some Aspects of Industrial Chemistry – The Chandler Lecture” by

Leo Baekeland - 1914

2010-04-29Sirris Materials Day 2010 - Sustainable Investments



For more information

Contact: Dr ir Marc Lambrechts

Capricorn Venture Partnersmarc(at)capricorn.be

Lei 19/1, B-3000 Leuven, BelgiumTel. +32 16 28.41.00 Fax +32 16 28.41.08

http://www.capricorn.be

2010-04-29

http://creativecommons.org/licenses/by-nc-sa/3.0/

http://www.capricorn.be/�



CCF’s investment strategy

Companies meeting the following criteria:

Geography core activities in the heart of Europe and co-investments in other areas alongside strong and return-driven local VC partners

Financial instruments equity investments resulting in a significant minority stake

Technology stage minimum requirement: a proof of concept exists and the mode of action is understood; with a strong preference for defendable intellectual property

Company stage € 0.5 to 5 M initial investment in the first and second VC rounds; reserve for follow-on investments

Exit perspective activities applicable to a growing market segment with an exit window of 3 to 7 years after initial investment

sirris materials day 2010 - sustainable investments - capricorn venture partners

Economy & Finance

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examples materials ventures

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