Case studies in this chapter

Business services

Technical expertise

Validation and public recognition

American-Made Challenges

Indirect

Direct

 

Clean Energy International Incubation Centre

Indirect

Indirect

 

EcoLabs-COI

Indirect

Indirect

Indirect

EIT InnoEnergy

Indirect

 

 

Energy Systems Catapult Living Lab

Indirect

Indirect

 

Green Innoboost

 

Direct

 

IN2

 

Direct

 

Innovation Norway

Direct

 

 

Start-Up Chile

Direct

 

 

Start Up Energy Transition

 

 

Direct

Technology Business Incubators

Indirect

 

 

Women in Cleantech Challenge

Indirect

Direct

Indirect

Non-case study initiatives in this chapter

AGNIi; Breakthrough Energy Solutions Canada;
Chile Global Ventures

 

 

External knowledge is a highly prized commodity for new companies, especially if their founders do not have substantial previous business experience. For small firms, gaining this knowledge through a consultant is often very costly, or is impossible without strong expert connections. This section covers some of the key services start-ups need, which government policies and programmes offer in various ways. As many of them are the core competencies of incubators and accelerators, governments generally provide these start-up services through third parties rather than developing the capacity to offer them directly.

The most common form of government support is grant funding for incubators, either to carry out general activities or, in some cases, to execute defined programmes for clean energy technology start-ups. Globally, more incubators and accelerators are funded by subnational governments (provincial, state-level, regional and municipal) than by nation states, but it is becoming more customary for them to receive both local and national funding. A notable recent example is the US Department of Energy’s Energy Program for Innovation Clusters (EPIC) awards of USD 50 000 to each of 20 regional energy-related incubators, many of which also have local public support. Some countries also finance incubators by offering them tax breaks.

The most pertinent services start-ups require are business services (management assistance, market research, and legal and intellectual property support); access to technical expertise; and validation and public recognition.

Business services

Management support can encompass a wide range of activities, including help to assemble a management team, improve pitches to investors, formulate a financial structure, recruit staff and devise a business strategy. These often constitute energy technology entrepreneurs’ widest knowledge gaps, and they can make innovators hesitant to start a new company to commercialise their idea. Most incubator programmes cover these services in their standard programmes and tailor their offerings according to a company’s maturity.

In some countries, however, state aid restrictions limit the extent to which governments can finance this type of support, so policies for clean energy start-ups tend to focus more on technology funding. Therefore, rather than selecting companies and providing them with grants to purchase management services from incubators, it is more common for these governments to fund incubator operations directly, enabling them to evaluate and accept more clean energy technology start-ups. Several of the publicly-funded incubator programmes reviewed in this section respond to the longer development times of clean energy hardware by supporting start-ups for longer periods than are typical for digital or other technology fields.

For Canada’s Women in Cleantech Challenge programme, Natural Resources Canada partnered with an independent innovation support organisation, MaRS Discovery District, which designed and delivered the business service elements and was reimbursed for its expenses. MaRS created a support package tailored to the Challenge’s six finalists, taking the needs of very early-stage technology developers and any gender-related barriers into account. Services were then further adapted to the participating entrepreneurs’ requests once they entered the three-year programme.

The resulting services therefore closely resembled the support MaRS gives to companies in its “growth services” programme, even though the finalists were more like clients who normally receive MaRS’s much more limited (and less hands-on) “early-stage services”. The Challenge package included:

  • A curated curriculum of in-person workshops and training every three months, designed to address any issues that had arisen.
  • Remote learning modules taught by external experts (partly enforced by the Covid-19 pandemic).
  • Access to a hands-on mentoring team of external business consultants and advisers for each finalist.
  • Help with milestone-setting and in-person feedback on progress from the support team every three months.
  • Introduction to an investor network, and regular feedback from a team of investors on the business proposition.
  • Speaking slots at relevant events in Canada and the United States.
  • Assistance with market research, for Canada and globally.

In interviews, participants reported their appreciation of the customised support, especially their freedom to select topics such as negotiation training, which has dimensions specific to female founders. They also placed high value on the personal and in-person training but noted that the uniform travel support budget did not take finalists’ distance from Toronto into consideration.

EIT InnoEnergy Highway, which is co-funded by the European Commission, also customises its acceleration programme to each participating start-up. Start-ups sign a “roadmap” that details the services to be provided over the course of the programme, which lasts on average two-and-a-half years, reflecting EIT InnoEnergy’s investment case for each start-up and responding to their needs. The services are categorised as: access to finance; access to market; access to talent; citizen engagement; governance; product and intellectual property; regulation; sales; and supply chain management (industrialisation).

Services that cannot be provided in-house are externally sourced, including:

  • Team-building, including installing a management team.
  • Market research and market dynamics studies.
  • Intellectual property advice, including how to find and write patent applications.
  • Access to financing sources and advice on how to communicate with funders.
  • Legal assistance.

Meanwhile, Start-Up Chile is a government initiative that directly provides extensive acceleration services, up to a value of USD 300 000. Assistance includes an advisory team that meets with recipients each month, workshops on various business services, pitch training and visa application support for overseas recipients. Start-Up Chile has also negotiated discounted external services, including cloud storage, software purchases and legal advice. Though it offers less extensive direct support, another example is AGNIi, an initiative of India’s Office of the Principal Scientific Adviser to the Government of India and housed at Invest India, the national investment promotion agency. AGNIi has in-house expertise to help Indian start-ups refine their business ideas and access online training, expertise and legal support. Clean energy is a focus area of the initiative, which also supports the country’s electric vehicles mission.

Some publicly backed incubators have distinctive ways of providing business services. For instance, India’s Clean Energy International Incubator Centre offers recipient start-ups some business services, including strategic advice, assistance with business and financial models, expert mentorship, discounted software and procurement support. In addition, Social Alpha vets a range of service providers and can help start-ups buy their services at a discount. Such services include hiring and payroll management, branding and communications administration, legal and compliance oversight, tax calculation and filing, secretarial assistance and intellectual property filing. During the 12-month programme, the Clean Energy International Incubator Centre also assesses start-ups for their product-market fit.

Under India’s Technology Business Incubator programme, Indigram Labs assigns each participating start-up an internal mentor to guide it through its business development. EcoLabs-COI in Singapore also has dedicated in-house expertise, assigning both technical and business consultants to start-ups to guide development of a strong business model, help position the product in the market and advise on customer and supplier acquisition.

Also in Singapore, start-ups accredited by Infocomm Media Development Authority are given access to Singapore Intellectual Property Office services free of charge, for example guidance on patenting strategies to help them decide whether and when to patent new ideas. In Europe, Innovation Norway helps start-ups with market research and international networking services. For start-ups at an early stage of concept design this support is free, but later-stage companies are charged a fee.

Chile Global Ventures has a notable model for funding business services for participating start-ups: it operates an “equity mentoring” programme through which start-ups can request additional mentors with specific expertise for two years in exchange for equity. While Chile Global Ventures initially takes 7% equity in all the start-ups it incubates, this stake falls to 6% if a start-up enters the equity mentoring programme, but the start-up must cede another 1% to the mentor, who receives a 2% stake. (Mentors also have the option of joining the board of directors once the start-up graduates from the incubator programme.) Suncast, a solar PV forecasting and predictive maintenance start-up, received support from Chile Global Ventures and reports significant benefits from the equity mentoring programme, especially the regular tracking of progress.

Most incubation programmes offer some type of intellectual property advice to technology start-ups, and start-ups consider this a very valuable element of the business services. There are many reasons why intellectual property issues are difficult for a new company to navigate, including the level of expertise needed to thoroughly review potentially overlapping patents. Intellectual property rights can be especially complex for university spin-off companies, technologies developed with public funding or new intellectual property generated while at an incubator. Chile Global Ventures therefore offers free one-hour sessions with legal advisers each month, and Breakthrough Energy Solutions Canada has offered intellectual property-related mentorship opportunities to selected companies.

Technical expertise

Technical expertise can sometimes be as important as business advice. It can help start-ups refine their technology as they turn it into a product, or to make choices about materials and manufacturing techniques. In some cases, it can help companies recognise opportunities to import ideas from other technology fields to improve their solution, or to pivot their product to an entirely different application. We have already discussed the value of expertise in public energy laboratories (see the Infrastructure chapter), but the case studies furnish other interesting examples of technology service provision.

In the United States, NREL assigns an expert researcher from a national laboratory to each start-up in the IN2 programme. In addition to other guidance, these researchers help start-ups undertake commercial-scale feasibility studies for their technology concept. The researchers work alongside the start-ups for the duration of the programme and help them develop any required testing equipment.

In Morocco’s Green Innoboost programme, each start-up must apply with at least one Moroccan scientific partner, usually from a university. IRESEN helps start-ups identify potential partners if they do not already have one, and it funds the scientific partner to provide the start-up with technical guidance for the duration of the programme and will seek additional technical advice as necessary.

Meanwhile, EcoLabs-COI in Singapore has developed relationships with relevant academic experts, and for each selected start-up it surveys these experts and other start-ups in its network to learn whether there is extant intellectual property in Singapore that could be shared to improve the product’s design.

In the United Kingdom, the Energy Systems Catapult Living Lab supports recipients with technical expertise to conduct their Living Lab trial. This includes access to historic data, data scientists and artificial intelligence algorithms. Business services are also available, including access to energy market research as well as user experience, service design and trial design information.

Validation and public recognition

Being selected for public programmes and prizes validates a start-up’s concept and confers public recognition. Several case study initiatives explicitly cultivate this service by providing selected start-ups with a platform to attract investor, policymaker and other expert attention. This is a central element of Start Up Energy Transition, for instance, which culminates in the annual Berlin Energy Transition Dialogue conference. In Singapore, the PowerACE prize, featuring the EcoLabs-COI Special Award, takes a similar approach by giving winners a platform at Singapore International Energy Week.

In Canada, Natural Resources Canada and MaRS helped finalists in the Women in Cleantech Challenge identify opportunities to speak at a variety of events in Canada and the United States, including some panels dedicated to the Women in Cleantech Challenge. The finalists’ package also included communications support to generate publicity through news outlets, which served to promote their companies and draw attention to the programme’s core objective of aiding women entrepreneurs who are advancing world-class clean energy innovation.