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A candid interview with Ivor Frischknecht
The annual Cleantech Investment Showcase is a highlight of the Cleantech Forum in Melbourne. This year, we interviewed one of the Investment Advisory Panel members who selected the showcase companies.
Ivor joined Starfish Ventures in 2005 after 15 years of hands-on management and investing experience. Starfish is a venture capital manager with over $400 million under management. The company invests in globally competitive cleantech businesses that develop energy, water and environmental technologies.
What are the biggest challenges in raising seed capital in this economic climate?
Raising seed capital at this time has many challenges. Angel investors, those who generally fund early stage companies, are scaling back, while government subsidised pre-seed funds managed by venture capital firms, like Starfish Ventures, are mostly fully committed. Entrepreneurs looking to secure seed capital will need to focus on using their own resources to get as far as possible, pursuing government grants and finding the few funds that invest in very early stage start-ups.
What is your primary motivation behind supporting the annual Cleantech Investment Showcase at the Cleantech Forum?
Starfish Ventures is interested in building a cleantech industry so that Australia can become a strong global player in the sector. As investors, we see a lot of really good clean technology innovation emerge from research institutions and entrepreneurs. We want to support and enhance that; the best way of doing so is helping to commercialize the best ideas. The Investment Showcase is a good opportunity for cleantech company founders and executives to network, develop their marketing strategies and become familiar with investors who are committed to investing in clean technology.
What is your advice for Australia's most innovative cleantech startups who are looking to raise capital in this climate?
Be sure to find an investor that has a proven background in the sector; strong global business connections to help you expand, raise capital and develop networks globally; and sufficient investment capital to follow-through on funding, especially if everything doesn't quite go as planned. In the current climate, investors will be looking for companies that have a capital efficient business plan and have taken as many steps as possible to reduce risk. One way to accomplish this is to line up customers and feed stock, if applicable, even before the technology is fully proven.
What are the unique fundraising challenges for cleantech companies?
Cleantech companies are in a relatively unique position globally because they are in one of very few growing sectors and are backed by a supportive political environment. However, compared to IT companies, cleantech companies typically require more capital and tend to take longer to develop. Furthermore, some cleantech companies require project finance, which currently is in very short supply. Government grants, loan guarantees and market incentives can help overcome the additional cost and risk.
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