1. European Energy Innovation & Financing (EIFN)
Helping start-ups in the energy sector to improve their deal and access to early stage finance
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2. The Energy Sector Innovation-Financial Network, EIFN, is a European Network focused on helping start-ups and expanding companies in the energy sector to access to early stage finance. EIFN provides firms with tools and a network of financial agents through:
Training of financial actors to understand energy sector innovation needs.
Providing practical and efficient solutions to facilitate start-ups and financial actors in the energy sector.
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3. The Network is focused on innovation in the following activities in the energy sector:
Power generation
Renewable energies (power)
Biofuels
Power & natural gas transmission and distribution
Petrol refinery processes
Energy efficiency
… and in these entrepreneurs profiles:
SMEs
R&D institutions
Universities
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4. APPLY FOR FINANCIAL SERVICES
Services Providers
Engineering, Lawyers, Financial advisors, Business Angel Network…
EIFN is a network formed by European enterprises, scientific institutions, universities, energy agencies, private and public financial institutions: 526 organizations and companies in 34 countries.
Energy Sector Innovation-Financial Network Team
Finance Resources
Services providers
Innovators
Energy companies
SMEs
R&D Institutions
Universities
Tools & standard
Energy Companies
Deal structuring and coach to access financial services
Investor and market readiness
Self assessment tool (SAT)
Financial Institutions
(public and private)
Business plan+ Budget
Insurance Companies
Financial analysis
Sensitive analysis
Venture Capital Companies
Subventions and incentives library
Business Angels
APPLY FOR FINANCIAL SERVICES
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5. EIFN Services
Public & Private Financing library focused on innovation in the energy sector
EIFN Newsletters
Access to methodologies and tools for financial and economic assessment
Virtual facility where R&D promoters in energy sector can contact financial services providers: Entrepreneurs can require financial services (financial support, risk management,…)
Innovation brokerage days
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6. Financial services providers
Public & Private Financing library focused on innovation in the energy sector
Financial services providers
Public sector
Others
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7. Public & Private Financing library focused on innovation in the energy sector
Main characteristics of the Innovation projects in the energy sector: Projects with long maturation periods, high volume of financial resource requirements, high cash flow volatility, and problems to engage guaranties
In most of the cases financial suppliers lack enough knowledge to evaluate energy innovation projects or to manage those services required by innovation agents
Problem s
Promote collaboration schemes
Tools to enable the access to financial services
EIFN approac h
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8. Financial services providers: What do entrepreneurs in the energy sector demand?
They do not want to lose the control of their business
They require services based on the characteristics of the innovation projects:
High volatility
Long term maturation
They lose more than 30% of their time applying for financial services; every financial agent has its own procedure
Obtain guarantees
Appropriate tools to valuate energy innovation projects
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9. Financial services providers
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10. Financial services providers
Private Investors called business angels are generally experienced entrepreneurs, who invest their money, skills and time in newly created businesses in exchange for a share of their capital. Usually they invest between € and € and up to €. More recently, business angels’ networks have emerged at regional level to recruit angels and match them with local entrepreneurs looking for finance and advice. As they mature, the range of services provided by business angels networks becomes increasingly sophisticated, including: angel syndication, setting up of dedicated funds that invest alongside angels, provision of easier exit routes for angels, business angels academies, investment readiness programmes, integrated finance and co-investment funds.
Information about financial services providers:
European Business Angel Network
kassel.de
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11. Financial services providers
Nowadays
Requirements
Usually, financial institutions do not provide services adapted to the needs of energy entrepreneurs: long maturation periods, high volatility of cash flows…they just offer their traditional services.
Usually, the innovation community does not have an easy access to the information of all the financial services that are available. As a result, many potential projects are never launched for economic reasons or lack of necessary services (e.g. risk management).
There is no standard procedure to apply for financial services; every provider has its own requirements.
New services focused on energy innovation characteristics
Standard procedures to access to financial services
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12. Financial services providers
Nowadays
Requirements
The financial market providing services to small energy innovation communities (SMEs and R&D institutions) is regional or local. Nowadays, it is not realistic to think that a small venture capital agent finances an innovation activity of an engine manufacturer outside of its usual scope.
Traditional tools are not appropriate to evaluate high volatility projects (energy innovation activities).
Definition of collaboration schemes among small venture capital agents around EU
Channels and procedures to expand the geographical scope of the services
Application of project valuation to manage appropriately high volatility projects
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13. Private investors: Venture capitalist
Venture capitalists offset the high risk with expectation of high return on the investment (IRR>40%). The investment is usually in the form of stock or convertible bonds. As the business matures, an initial public offering may take place, or the business is merged or sold, or other sources of capital are found. Any of these would occur with the intention of buying out the venture capitalists. Venture capitalists typically expect a high percentage annual return on their investment at the time they invest in the private company. Venture capitalists typically invest in high growth companies with the potential to generate revenues of €20 million a year, and typical investments range from between €500,000 and €5 million. Management experience is a major consideration in evaluating financing prospects. Because of fixed cost and ability of investment monitoring venture capitalists are not interested in smaller investments.
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14. Private investors: Venture capitalist
European Venture Capital Association
Gate2Growth, at
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15. Public sector
Energy Sector Innovation-Financial Network, EIFN library:
Public sector contributions may include grants, investment subsidies, awards, employment subsidies, consulting aids, environmental protection grants, RTD subsidies, etc. Among the vast range of public, in general, subsidies are granted in the form of:
Tax relief
Investment subsidies
Support for job creations
Innovation grants
Subsidized advice
Business development support.
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16. Back Others services Stock markets Stock purchase warrants Factoring
Leases
Franchising
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17. EIFN Newsletters
You can apply for the EIFN Newsletter in the following addressees:
(EIFN)
The EIFN Monthly Newsletter has been published since December focusing on: Introducing EIFN Project results, advertising EIFN events, providing relevant information regarding public and private financial funds and services focused on innovation in the energy sector, providing information about innovation projects that require financial support,…
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18. Access to methodologies and tools for financial and economic assessment
Roadmap
Preliminary Tools to assess market and investor readiness, screening, selection and coaching
Budget Tool
Net Present Value
“Real-Option” analysis
Montecarlo simulation
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19. Back Next Roadmap Energy Sector Innovation- Financial Network approach
EIFN
Business plans and market and investor readiness assessment with EIFN tools and standards
Analysis of the project according to EIFN standards
EIFN
R&D
Entrepreneurs
Financial services providers
Apply for financial services
Service
provision
Services
providers
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20. Financial services providers /suppliers of added value services
Roadmap
Financial services providers /suppliers of added value services
The R&D Entrepreneur
The EIFN IT Platform
Please insert link to platform…
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PRELIMINARY TOOLS - Assessment of market and investor readiness through SATs and coaches (eg G2G SAT) prior to any business planning and funding
Elaborate business plan, budget and financial analysis using EIFN tools and methodologies
Receive alerts adapted by profile
EIFN generates alerts
EIFN innovation project database
Register project in EIFN IT
financial
services
Information analysis
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21. Financial Services and others
Roadmap
The R&D Entrepreneur
The EIFN IT Platform
Financial Services and others
Allow to access more information? NO
Require more information
end
YES
Consult more information
Negotiation
Negotiation
End
End
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22. Preliminary tools to assess market and investor readiness, screening, selection and coaching and financial services
Where can entrepreneurs in the energy sector apply for market and investor readiness, screening, selection and coaching and financial services?:
(EIFN)
Business plans
Innovation financial plans
Real options
Monte-Carlo methodologies
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23. Budget & Net present value tool
Standard tool developed by the Energy Sector Innovation-Financial Network and accepted by this community members to present project economic information. A Ms Excel file describes all the economic parameters of the project that refer to:
Revenues
Costs
Investments
Project financial structure and/or requirements.
The tool also allows to carry out and calculation of innovation projects in the energy sector.
Where can entrepreneurs in the energy sector access to EIFN budget and npv tool?:
(EIFN)
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24. Budget & Net present value tool
Design for innovation in the energy sector, the tool allows:
Establishing different scenarios according to the risks linked to the project (innovation in the energy sector):
Technology risks
Energy commodity price volatility: power, petrol, natural gas,…
Different scenarios of CO2 credits or RECs prices
Different scenarios of regulatory frameworks: incentives for renewable energy
Establishing different hypothesis for investment during the innovation project time scope
Simulating different financial structures for the project
Evaluating the project according different return rates.
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25. Real options
Innovation projects within the energy industry are characterized by high volatility due to:
Technology
Volatility of energy price
Legislation
Acceptance of new solutions by the market
The Real options approach is characterized by an integrated approach of:
Economic and financial analysis
Management
Decision making
Statistics
This approach allows to include volatility into the business plan.
Where can entrepreneurs in the energy sector access to the real options tool?:
(EIFN)
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26. Montecarlo simulation
Monte Carlo Simulation is a probabilistic approach that tests all the possibilities and looks at the likeliness of the occurrences. Entrepreneurs of the energy sector are forced to face certain risks besides technical and technological risks linked to all innovation processes that need to be considered:
Volatility of energy prices
Priorities of the governments
Innovation energy project integration within everyday life.
Where can entrepreneurs in the energy sector access to Montecarlo methodologies?:
(EIFN)
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27. Montecarlo simulation
Uncertainty 1
Uncertainty 2
Uncertainty 3 .
montecarlo.xls
INPUT
MONTECARLO
OUTPUT
Probability of PV PV
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28. Procedures to assess financial services: Roadmap
Virtual platform where R&D promoters and innovative businesses in the energy sector can contact financial services providers: financial support, risk management…
Energy Sector Innovation-Financial Network structure (January 2007)
526 organizations and companies:
Entrepreneurs
R&D institutions
Financial agents
Energy companies
Coaching
34 countries
40 energy innovation projects have already been managed
The EIFN network will provide coaching support to entrepreneurs and financial agents.
Procedures to assess financial services: Roadmap
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29. Procedures to assess financial services: Roadmap
Virtual platform where R&D promoters and innovative businesses in the energy sector can contact financial services providers: financial support, risk management…
The Europe Innova Energy Network wishes to invite organizations to take part in the network:
(EIFN)
Entrepreneurs can promote innovative projects to the Europe Innova Energy Network by connecting to:
(EIFN)
40 energy innovation projects have already been managed
Procedures to assess financial services: Roadmap
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30. Innovation brokerage days
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