EcoMachines Incubator - Investment Pitch Day - Cambridge - 17 Oct 13


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EcoMachines Incubator is using Lean Startup principles to transform the early-stage funding model for hardware and engineering companies in the energy and cleantech industries.

EcoMachines Incubator holds Investment Pitch events throughout the year, both in the UK and internationally. These are key to EcoMachines' investment selection process

Attached are the slides from our 1st Investment Demo day in Cambridge, UK in mid-October 2013

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EcoMachines Incubator - Investment Pitch Day - Cambridge - 17 Oct 13

  1. 1. An Introduction to EcoMachines Incubator Accelerating Advanced Engineering Startups Cambridge Investment Pitch Day ILIAN ILIEV (CEO) 15th October 13 Cambridge ©2013 EcoMachines Incubator Ltd. All rights reserved
  2. 2. About EcoMachines Incubator EcoMachines Incubator invests in and accelerates the growth of the UK’s most promising advanced engineering startups EcoMachines was founded in order to: - fill a gap in funding for early-stage hardware companies - make it easier for innovative entrepreneurs to get the support they need to launch their business Companies enter the Incubator through an intensive Accelerator programme, with up to £100k in investment Companies leaving the programme will be ready to raise a larger round of investment, for which EcoMachines will provide anchor funding of up to £500k ©2013 EcoMachines Incubator Ltd. All rights reserved
  3. 3. EcoMachines Incubator’s approach • • • • invests in and accelerates the growth of the UK’s most promising startups in highvalue manufacturing and advanced engineering; helps entrepreneurs to transform their business from a startup with a proof-ofconcept technology into a high-growth, investable company; has a 9-month Accelerator programme specifically designed for hardware & advanced engineering startups; is specifically focused on energy, renewables, transportation and industrial high-tech; • • • • • provides seed funding of up to £100,000, with potential for sizeable startup funding for selected programme graduates; provides access to a truly global industrial and investor network including in key emerging economies; provides intensive mentoring in core business areas; provides access to specialised equipment and workshop facilities, has a strong alignment with the Government’s technology development priorities and support initiatives. ©2013 EcoMachines Incubator Ltd. All rights reserved
  4. 4. Sectors of Interest Smart City Materials Power generation Energy efficiency Water Transport ©2013 EcoMachines Incubator Ltd. All rights reserved
  5. 5. Selection Criteria We are flexible in our expectations for the level of maturity of the business and technology. There are several broad selection criteria Strong and committed team: • Successful teams must contain a range of expertise • Key team members must be working on the startup on a full-time basis • Willingness to change business model... repeatedly! Exciting technology or product: • The technology should be at least at a proofof-concept level • We are interested in disruptive innovations, rather than incremental innovation • Patents or patent pipeline Market focus: • We favour technologies or products with multiple possible market applications. • We are interested in businesses that are scalable at reasonable capital cost Credible exit scenarios: • Can you demonstrate a credible exit scenario showing a) possible buyers of the company if you’re successful and b) what the drivers of an acquisition would be? Technology maturity and type: •At least at Proof of Concept level (TRL 3+) • Software and connectivity plays an increasingly important role in hardware innovation – so we’ll look at software-enabled hardware too Grant applications: • We are particularly interested in companies that have been awarded or are awaiting results of a grant application • Use our equity as leverage for more applications! ©2013 EcoMachines Incubator Ltd. All rights reserved
  6. 6. Management Team Ilian Iliev Oleg Evdokimenko Alexei Krenke Oksana Hilinskaya Robert Snellgrove CEO and Founder Founder Director Director Investment Relations Analyst Peter Feulner Igor Turevsky Laurence John Leader of Technology, Innovation and Strategy at Ricardo Germany Ex-Global Sales and Busdev Director of Alstom Network Management VC and investor; ex-CEO of Amadeus Capital’s Seed Funds Professor Nelson Philips Chair in Strategy and Organisational Behaviour at the Imperial College Business School ©2013 EcoMachines Incubator Ltd. All rights reserved
  7. 7. Mentors Mike Barlow Billy Boyle Robert Brady Peter Feulner Simon Hombersley Former head of intellectual property at BP; Founder and owner of Fairoaks IP Co-founder and President, Operations at Owlstone Nanotech Founder and Non-Executive Director of Brady plc Leader of Technology, Innovation and Strategy at Ricardo Germany CEO of Puntios, which creates and finances technology spin-outs from industry. Laurence John VC and investor; ex-CEO of Amadeus Capital’s Seed Funds Sir Eric Peacock Business change and growth leader Mahdi Kazemzadeh Alan MacDougall Hristo Mitchkovski European Patent Attorney, Partner at Mathys & Squire Director at Fidem Partners Hugh Parnell Chairman of Cambridge Cleantech Energy Policy Advisor , Energy Technologies Institute (ETI) Professor Nelson Philips Chair in Strategy and Organisational Behaviour at the Imperial College Business School Nick Rodgers John Rowland Founder Director at Productiv; Chairman at Oxford BioMedica Managing Partner and Co-Founder of White Lake Strategic Advisory Group Igor Turevsky former Global Sales and Business Development Director of Alstom Network Management ©2013 EcoMachines Incubator Ltd. All rights reserved
  8. 8. Operating out of Central London... Our London location enables access to investors, corporate HQs, family wealth offices, exhibitions, industry experts... While remaining close to the Cambridge high-tech cluster ©2013 EcoMachines Incubator Ltd. All rights reserved
  9. 9. Portfolio Companies was the first to succeed in commercially producing multiApNano layered, spherical and tubular nano-structures from inorganic materials These materials can facilitate the creation of “super performing” lubricants, coatings, and polymer composites. “Power Electronics Company” The company has developed a drive for industrial electric motors more efficient by improving the drives that power them. Electric motors account for 70% of industrial electricity use, but are only are efficient when working at full load, and become less efficient at partial loads. The company’s innovation enables motors to be operated efficiently at a greater range of loads, providing an energy saving of up to 30%. Rotary EcoMachines is developing a family of innovative rotary combustion engines with a jumping axis geometry. Its first product - EcoPulse - is a compact, light-weight and highly efficient engine aimed at the hybrid and electric car market as a range extender. Rotary EcoMachines is working on other engine designs that can be used as a primary engine for other light transportation devices. ©2013 EcoMachines Incubator Ltd. All rights reserved
  10. 10. ©2013 EcoMachines Incubator Ltd. All rights reserved
  11. 11. Why the Accelerator approach The Accelerator programme is a company’s entry point into our Incubator EcoMachines is the 1st hardware focused Accelerator in the UK. There are others in the Netherlands, Boston, San Francisco... Building on the success of the likes of Y-Combinator, TechStars, 500 Startups in the Web 2.0/Digital space Common to all Accelerators is: • • • • • a structured approach of equity investment + Accelerator programme Prepare the company for a follow-on/Series A funding round Key role of mentors and partners in accelerating growth Use of Lean-type strategy - change of business model is encouraged A 2-6 month period of intense focus on company, then followed by lower engagement EcoMachines Incubator’s Accelerator programme - USPs • • • • • Focus on specific verticals Customize one-on-one Accelerator programme design Currently the largest in terms of level of funding Unique in providing an anchor funding of up to £500k Validated ability to syndicate £8mln+ round (e.g. NIS/ApNano) ©2013 EcoMachines Incubator Ltd. All rights reserved
  12. 12. The EcoMachines Approach 1 What is a startup for us? A startup is an organization formed to search for a repeatable and scalable business model (2010, Steve Blank) A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty (2010, Eric Ries) A startup is most of all a business experiment EcoMachines’ Accelerator programme aims to: • Provide you with the resources and guidance to design and conduct the business experiment... order to help you build a validated investment proposition... ...And get the funding required to scale your model ©2013 EcoMachines Incubator Ltd. All rights reserved
  13. 13. The EcoMachines approach 2 What is the Lean Startup method ? The Lean Startup approach has been tremendously influential as an entrepreneurial approach for Web/software companies... ....Which has seen the bulk of VC investment in recent years... ...So hardware companies should be curious! The key principles of Lean Startup: Startups can shorten their product development cycles by adopting a combination of business-hypothesisdriven experimentation, iterative product releases, and "validated learning". This can help reduce the market risks and sidestep the need for large amounts of initial project funding and expensive product launches and failures Key elements of Lean Startup : • Minimum Viable Product • Continuous deployment • Split testing • Actionable metrics • Pivot Source: Eric Ries, The Lean Startup; HBR (2013) “Why the Lean Start-Up Changes Everything” But... Is Lean Startup appropriate for Hardware? ©2013 EcoMachines Incubator Ltd. All rights reserved
  14. 14. The EcoMachines approach 2 Is Lean Startup applicable to hardware? Hardware is ‘tricky’... And B2B is different from B2C Here are some ideas on how Lean Startup translates into the hardware B2B space Lean Startup – key elements Hardware implications Minimum Viable Product It takes more investment and time to build an MVP for hardware Solutions •Virtual prototyping •Rapid prototyping & additive manufacturing •Scenario testing with clients •Industry partnerships •Low-cost prototyping Continuous deployment It takes more time and ££ to do iterations on hardware prototypes Split testing Its more expensive to build hardware prototypes Actionable metrics Different type of metrics for hardware and B2B Use deep sector expertise to identify relevant metrics Pivot More expensive Do market-product fit testing earlier on ©2013 EcoMachines Incubator Ltd. All rights reserved
  15. 15. Lean vs. Traditional business models Source: HBR (2013) Why the lean startup changes everything ©2013 EcoMachines Incubator Ltd. All rights reserved
  16. 16. Food for thought? ©2013 EcoMachines Incubator Ltd. All rights reserved
  17. 17. Next steps Whether we decide to invest or not, we will always strive to provide you with constructive feedback Key step Timeline (from initial contact) One-on-one with EcoMachines Incubator representatives at Pitch Day Today Company informed if we are interested in further discussions 1 week Detailed application by company Asap! Detailed investigation by EcoMachines (at least 2 references and further information) 1-2 months Decision in principle on whether to invest Agreement on Termsheet Begin work Within 3 months from application ©2013 EcoMachines Incubator Ltd. All rights reserved
  18. 18. EcoMachines Incubator Ltd. Rainmaking Loft, International House 1 St Katharine’s Way, London, E1W 1UN (m) +44 (0)77 863 73965 (t) +44 207 1939 041 (e) (w): @ilian_p_iliev @EcoMachinesUK Company Reg. Number 8357617 ©2013 EcoMachines Incubator Ltd. All rights reserved