If you have a solid idea for anything green or clean, and it involves recycling plastics or making bio-based products, there are plenty of investment dollars available.
``There are so many dollars being invested in the clean-tech space right now, that if you have the right team and the right idea, you can find investors if you look in the right space,'' said Eric Koester, a lawyer in the Seattle office of San Francisco-based law firm Heller Ehrman LLP, which claimed to be one of the top 25 U.S. law firms for merger and acquisition activity in 2006, based on its number of deals.
Koester spoke at the Global Plastics Environmental Conference, held March 6-7 in Orlando and sponsored by the Society of Plastics Engineers in Brookfield, Conn. According to Koester, investment in clean technology is no longer a ``niche play,'' but a mainstream venture-capital market because of growing bipartisan political support and consumers' renewed appetite for Earth-friendly products.
``There are a lot of investment dollars in areas such as California, Oregon, Washington, Wisconsin and the Northeast, where laws are environmentally friendly and support clean technology,'' said Koester. ``That is where investors lean toward putting their investment dollars. It is more of a pull than a push, particularly in California and the Silicon Valley.''
U.S. and European clean technology venture-capital investments topped $3.6 billion in 2006, according to Cleantech Venture Network LLC in Ann Arbor, Mich. That's a 44 percent increase over the $2.5 billion invested in clean technology in 2005 and more than twice the $1.7 billion spent in 2004.
Of the $3.6 billion, $192 million was invested in the U.S. alone, in companies involved with recycling and waste reduction.
``Recycling projects and waste-to-energy projects are attracting the interests of governments and municipalities,'' Koester said.
``Venture capital investors are traditionally looking at two things - who is on your team and do you have a compelling idea,'' he said. ``The venture capitalist must believe in your founder and team. The venture capitalist can help you with more than just financing if he sees eye-to-eye with you on the project.''
Koester said he recommends that companies looking to attract venture capital dollars put together an advisory board of individuals with the expertise their organization needs - whether it be financial, international, regulatory or technical - and keep in mind the unique considerations relative to clean technology.
``There are often regulatory challenges and tax considerations, and you may need to partner with established businesses for credibility, or if you are entering a foreign market like China,'' said Koester.
``Find people with industry knowledge to get you in the door,'' he said. ``You need to show that you have a team with industry expertise and demonstrate to investors'' that your technology differs from competing products or equipment.
In addition, because the clean-tech industry is ``poised for a wave of future consolidations and acquisitions, make sure you have people on your team who have expertise and knowledge in that regard.''
It's also critical, he said, to develop a strategy to protect your intellectual property and to consider a partnership or joint venture for overseas markets.
``We advise companies to first file for patents in the United States, hold the reins on certain key technologies and use them as trade secrets, and then go forward globally,'' said Koester.
Firms should ensure that their IP strategy considers ``the substantial markets'' in China and India, and the potential significant losses that could result due to a poor IP strategy: ``In China, they research our ideas and develop them. It is part of their culture to replicate someone else's ideas.''
``Intellectual property protection is critical to getting government investments,'' said Koester, who also advised companies to develop strong partnerships with government agencies and groups that often establish mandates or provide subsidies that make development of clean technologies feasible.
California, for example, has $20 million in market development grants that it will allocate in mid-May, largely for projects that create products from recycled plastics.