Developing A Successful Strategy To Attract Venture Capital Financing

CHARGED 2020
The Global Energy Storage Forum 2010
30 June-1 July, San Diego-USA

Driving sustainable innovation along the energy storage and
smart-grid value chain

Developing a Successful Strategy to Attract Venture Capital
Financing
Gerd Goette
Siemens Venture Capital

Developing a Successful Strategy to
Attract Venture Capital Financing
Charged 2020 – San Diego - July 14th, 2010
Gerd Goette, Siemens Venture Capital

Copyright © Siemens AG 2010. All rights reserved.

Developing a Successful Strategy to
Attract Venture Capital Financing

Siemens and Siemens Venture Capital

Investment Activity in Energy Storage

Venture Capital Financing

www.siemensventurecapital.com Page Copyright © Siemens AG 2010. All rights reserved.

Siemens is the Green Infrastructure Giant –
Well Positioned for a Sustainable Future

Siemens environmental portfolio Business volume of environmental portfolio

The world’s largest environmental portfolio (in billion €)
consists of products and solutions that 25.0
make a direct, quantifiable contribution to 23.0
environment and climate protection* (~ €23 20.7
billion).
Siemens' green portfolio has grown by 11%
in comparison with fiscal 2008 2008
In fiscal 2009, energy-efficient products
and solutions of our environmental portfolio CO2 abatement at customers
abated about 210 million tons of CO2 for
our customers. By 2011, we expect it to be (in million tons)
300 million tons… 300 = New York
210 London
… that equals the total CO2 emitted by 161 Hong Kong
New York City, London, Hong Kong, Singapore
Singapore, Rome, Tokyo and Berlin Rome
Tokyo
Berlin
2008
* reviewed by PwC


Siemens in the USA: Snapshot for FY2009
A Global Company with strong U.S. presence
 Rank 30th on Fortune Global 500
 Rank #1 on Fortune’s Electronics, Electrical Equipment list
 Export $1.6 billion from U.S. operations
Answers for America’s Industrial Needs
 We’re a leading provider of product lifecycle software for
digital manufacturing
 We process all mail in the USA for the U.S. Postal Service
 We’re a leading provider of air pollution control systems
 We provide building and lighting solutions for airports,
U.S. Fast Facts hospitals, stadiums and renowned American landmarks
Fiscal Year 2009:  We’re the #1 provider of light rail mass transit vehicles
 We’re the #1 supplier of water treatment systems for industry
and municipalities
Revenues $21.3 billion
Answers for America’s Energy Needs
Orders $19.9 billion  We provide turbines powering one-third of America’s total
daily energy needs
Employees 64,000  We’re a leading provider of power generation and delivery
solutions designed to help reduce C02 emissions
Building Answers for America’s Healthcare Needs
Locations 760
 We’re the first integrated healthcare company that brings
together imaging and lab diagnostics, therapy, and IT.
Global HQs 9  We’re the #1 healthcare IT service provider
Patents 5,329
(1)

Quick Facts

Investment Focus:
Energy and Environmental Care
 Emissions control
 Renewable energies: wind, solar
 Smart grid
 Grid level storage
SVC Quick Facts:  Water technologies
In operation since 1999 Industrial and Public Infrastructure
Invested over Euro 800m  Motor and drive technologies
 Sensors
Portfolio of
 Energy efficiency
140 start-up companies  Lighting technologies
40 VC funds  Clean transportation

Geographic focus: North America, Europe, Healthcare
Israel and Asia  Imaging technologies
 Molecular diagnostics
Team of 30
 Healthcare IT
Offices in Munich, Boston, Silicon Valley,
Beijing and Mumbai


Overview of our Active Cleantech Portfolio
US Europe Asia

Power Generation

Smart Grid

Energy Efficiency

Clean Transportation

Water Technologies


Public Markets: Stock Performance vs. NASDAQ
Source: Yahoo! Finance


Public Markets: IPO Activity
Source: ThinkEquity


Private Markets: Total VC Investment in Cleantech
US VC Investment in Cleantech Source: Ernst & Young
$6,000 300

$4,500 225
US$ (million)

Deals
$3,000 150

$1,500 75

$0 0
2003 2004 2005 2006 2007 2008 2009 Q1 2010
Year

US$ Deals


Private Markets: VC Investment in Cleantech
Segments
US VC Investment in Solar US VC Investment in Biofuels
Source: Ernst & Young
$3,000 60 $700 30

$2,250 45 $525 23
US$ (million)

US$ (million)
Deals

Deals
$1,500 30 $350 15

$750 15 $175 8

$0 0 $0 0
2003 2004 2005 2006 2007 2008 2009 Q1 2010 2003 2004 2005 2006 2007 2008 2009 Q1 2010
Year Year

US$ Deals US$ Deals

US VC Investment in Efficiency US VC Investment in Storage
$800 70 $400 30

$600 53 $300 23
US$ (million)

US$ (million)
Deals

Deals
$400 35 $200 15

$200 18 $100 8

$0 0 $0 0
2003 2004 2005 2006 2007 2008 2009 Q1 2010 2003 2004 2005 2006 2007 2008 2009 Q1 2010
Year Year

US$ Deals US$ Deals


A VC Perspective: It’s a Big Market –
But Fragmented and Very Competitive
 Technology choices:
 Electrical
 Mechanical
 Thermal
 Chemical
 Trade-offs:
 Power density
 Energy density
 Weight
 Charge and discharge properties
 Safety
 Environmental
 Pricing power of large incumbents
 Companies competing with countries


VC Considerations

 Evolution vs. disruption
 Technology vs. capacity
 Price elasticity
Risk
 Competition and barriers to entry
 Incentives (non-dilutive funding) Reward
 Capital requirement Ratio
 Holding period
 Where does the exit come from?
 Valuation metrics?
 How many success stories?


Go-To Market Strategy

 Why will customers buy your product?
Value proposition, ROI …
 How will customers buy your product?
Direct sales vs. channel partners
 How long is the sales cycle?
 Smart marketing:
 Customer references
 Industry analysts
 Media coverage
 Which parts of the value chain do you need to cover?
Do it yourself vs. outsourcing


Execution

 Pick the right syndicate and set expectations right:
opex, revenue ramp, capital requirement, time to exit …
 Smart money vs. just money
 Big piece of a small pie vs. small piece of a big pie
 Align interests to ensure all are in the same boat:
management, employees, investors, board members
 Don’t over-promise but over-deliver
 Share the good news right away…
… and the bad news even faster
 The board is your partner…
… but get the right people on your board


Siemens Venture Capital – Contacts
Siemens Venture Capital GmbH Siemens Venture Capital in China
Munich Office Siemens Venture Capital (SVC) Beijing Rep. Office
Otto-Hahn Ring 6 No. 7, Wangjing Zhonghuan Nanlu
D-81739 Munich, Germany Chaoyang District
Tel.: +49 89 636 33585 P.O. Box 8543
Fax: +49 89 636 34884 Beijing 100102, P.R. China
Tel.: +8610-6476 8890
Fax: +8610-6476 4984
Siemens Financial Services, Inc.
Silicon Valley Office Siemens Venture Capital in India
1230 Shorebird Way, M/S 1-1 Siemens Corporate Finance Pvt. Ltd.
Mountain View, CA 94043, USA 5th floor, Electric Mansion
Tel.: +1 650 587 4558
Fax: +1 650 587 4581
1086, Appasaheb Marathe Marg
Prabhadevi
Mumbai 400025
Siemens Financial Services, Inc. Tel. +91 22 6757 2203
Siemens Venture Capital Fax. +91 22 6757 2260
Boston Area Office
801 Boylston Street, 5th Floor
Boston, MA 02116, USA
Tel.: +1 617 531 2903
Fax: +1 617 531 2908

www.siemensventurecapital.com


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