Emerging models for funding cleantech innovation : the Alberta case study

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Udwin, Trevor Charles

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Cleantech is a broad term and requires further definition. The first part of this thesis will paint a landscape of the cleantech industry, which will in turn help define the term. The cleantech industry as it is generally perceived has come on hard times; talk of cleantech is all but absent in the corridors of Silicon Valley and chambers of Congress. Starting in the late 2000s both endogenous and exogenous factors compounded and investment in the industry dropped, as traditional early investors like Venture Capitalists (VC) confronted barriers that were unique to the industry and antithetical to their investment model. Notwithstanding, since the cleantech downturn some VC investors have emerged successful and have sparked new interest in the industry. Possessing the knowhow and skills that will allow them to continue thriving in the space, these VCs will play an important role in the growth of the sector. Other investment models are required to take hold where VCs were unable to succeed, however, providing the influx of capital that is required to incentivize disruptive change in such a large and dynamic industry. Moving forward, the success of the cleantech industry will rely on whether new models for early investment will fill gaps where traditional models have failed. To overcome the investment Valley of Death (there are multiple) cleantech companies need investment models that provide assurance for time sensitive follow-on funding, as they scale their technologies from prototype all the way to commercialization. This thesis will build on prior research highlighting that the investment challenges of yesteryear have shifted traditional investors in the VC community away from cleantech infrastructure and towards IT-like investments. Using the Alberta model as successful sample of an ecosystem of alternative models for funding cleantech innovation, this thesis will provide a better understanding of how investment in cleantech infrastructure can reach necessary funding levels in order to commercialize the myriad of clean energy technologies that promise to help mitigate climate change.



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