On October 31st, 2023, in the framework of RESOURCE project, CEEI Aragon organized the first of two Expert Committee meetings to identify and analyze critical needs and ideas that investors have when investing in Innovative projects in general and Circular Economy projects in particular.
The Expert Committee is composed of representatives from the five most significant investor networks identified in the mapping carried out by project partners including VC Funds, Corporate VCs or Business Angel Networks but also Financial Consultancy and Specialist Consultancy firms focused on climate change mitigation and adaptation strategies with special focus on circular economy, energy transition and sustainable finance, willing to share their knowledge with RESOURCE Pilot projects funders and team members. It included partners such as the RESOURCE Advisory Board member Javier Artiach on behalf of CONEXObut also Orfeo Balboa from First Drop PVC with, Oscar Cantalejo from Iberdrola, Chema Piña from Aptki, Xana Belastegui from Swanlaab, Uffe Bundgaard-Jørgensen from Gate2growth, Jorge Rodrigues de Almeida from RDA, Berthold Karlic from Venionaire and Vincent Walczak from Liberset.
During the session those experts and investor representatives shared their thoughts about the most important topics and issues Investors find while going through investment funnels to find the most promising investment opportunities:
- Profitability. VCs are investment funds that look after the profitability of their investors. VCs are not philanthropic institutions. Companies rising VC funds should have a business and profit mind set.
- Market oriented. There are huge opportunities in the market for companies developing technologies around circular economy and related topics such climate change mitigation and energy transition.
- The golden triangle. VCs invest in people. A startup or a new business needs a team that include 3 expertise domains: Technology, Sales and Business management. A team of researchers or engineers moving to business will have problems if they don’t integrate the right partners with a sales and business profile.
- Lack of business approach. One of the mistakes companies do is to focus on the technology at lab scale, no in the products. While investing in product development they realize that industrial scale production is not viable.
- Smart capital. Other returns that new technology-based companies need is partnership, not only capital, but smart capital, investors that also add knowledge and expertise.
- Legal frameworks. Circular Economy (CE) is a sector very constrained for rules and regulations, i.e. insect farming. New entrepreneurs in CE sector need to understand what can be done and what not.
- Planning. Good ideas must be landed into strategies and business plans.
- ROI vs IMPACT. Traditional VCs prioritize ROI. Those projects far from the market or lower scalability need to find investors with a more balanced profile weighting environmental and social impacts. The way a company face VC should be different depending on the profile of such Investors.
- General vs specialized investors. Among investors we can find different profiles depending on their investment criteria regarding companies’ location, targeted market sectors, investment phase or co-investment strategies.
- CE value proposition. As happened with automation, digitation or other enabling technologies, CE is transversal to all industries and markets. Technology based new companies raising fund has to find their markets and client segments and build its Value Proposition as concrete as possible.
The next and last Investors Experts Committee will be held in January 2024. Stay tuned to this Newsletter and RESOURCE webpage to know more about its conclusions.