When it comes to finding a successful exit for your cleantech startup, good luck finding a buyer willing to pay the price you want. That was the consensus of investors at the Dow Jones Alternative Energy Conference this week. The cleantech industry is too young for its M&A market to have matured, and the IPO market, for certain sectors, is offering a lot better options.
Tim Woodward, Managing Director of Nth Power: “When we make investments today we still look for an IPO exit opportunity…if [M&A is] the only exit path that we think a business has available to it, we’re less likely to make an investment at an early stage. We’ve played in this industry for 8 years and we’ve waited for the M&A market to materialize and it never has, to date in any significant way. . . .We see the potential for that to change. We see companies that will go public at valuations that you’re not going to see GE pay for a company, but now SunPower, First Solar, Comverge, EnerNOC are the acquirers and potentially an exit path for early stage companies. . . ”
Gary D. Vollen, Managing Director, Pacific Growth Equities: “The M&A market in this industry is far from mature. This is still three to five years away.”
Paul T. Ho, Director, Renewable Energy, Credit Suisse: “In the eyes of big companies this is still a very small space. In the eyes of big oil, biofuels is just a drop in the bucket on their balance sheet…The only exception might be in the wind space, there are a a lot of small scale wind developers.”