alternative energy, carbon, venture capital, vc, seed, finance, innovation, carbon trust, uk, scotland, stanford, burton lee

1. The Carbon Trust
Bridging the Valley of Death in Low Carbon
Innovation
Dr Robert Trezona, Head of Research and Development
9 March 2009

2. The Carbon Trust is a private company
with a public good mission
A not-for-dividend company set up in 2001 by UK
government
Our mission:
To accelerate the move to a low carbon economy, by
developing commercial low carbon technologies and helping
organisations reduce their carbon emissions
£150m turnover; 180 employees

3. Low carbon entrepreneurship requires
progress on four different “journeys”
Proof of Proof of Proof of Proof of Proof of Proof of
Technology principle concept viability scalability value quality
journey (Basic (Applied (Early demon- (Full demon- (Marketable (Warranted
research) research) stration) stration) product) product)
+
Grow
1 or 2 Form venture Bring in first Recruit operational 30+
Company individuals (or new unit) outsider specialists staff employees
journey (sweat (Friends & (Angel or seed) (Venture (IPO, (Profit)
equity) family) Capital) revenues)
No Markets Market Field Early adopt- Rational Technology
Market interaction identified trial ers & niches economic & market
(Technology purchase evolution
journey (Indifference) (Recognition) (Benefit
push) quantified) (Market pull) (Feedback)
General General Specific General General
Regulation Regulation Regulation Regulation Regulation Regulation
neutral or neutral positive positive neutral or
journey negative positive

4. The “valley of death” is caused by costs
increasing faster than risks decrease
INDICATIVE
“valley of death”
100 1.2
Probability successful business not established
90
1
Indicative investment required [£m]
80
Level of risk
70
0.8
60
50 0.6
Chance of success
40
per unit investment
0.4
30
20
Required investment 0.2
10
0 0
Basic Applied Early Demo Full Demo Marketable Warranted
Research Research product product Successfu
(Proof of (Proof of (Proof of (Proof of (Proof of (Proof of l business
principle) concept) viability) scalability) value) quality)
Source: Carbon Trust analysis; Mahler Ventures Ltd

5. Directed Research and Technology
Acceleration tackle these issues
Public competitions for Convening industry to
“valley of death”
technology venturing address common issues
“Directed “Technology
Research” Acceleration”
• Equity • Work across a
investments into whole sector to
R&D projects spread risk and
• Identify leverage assets
opportunity and • Use public funds
select teams to demonstrate
• Create key technologies
commercial • Feed outputs
vehicle and directly to policy
capitalise it formation
Basic Applied Early Demo Full Demo Marketable Warranted
Research Research product product Successfu
(Proof of (Proof of (Proof of (Proof of (Proof of (Proof of l business
principle) concept) viability) scalability) value) quality)

6. The Carbon Trust
www.carbontrust.com