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| 1 minute read

Forget IPOs, climate tech investors are chasing a different exit

I talk often on my Leaders in Cleantech podcast about how much media, and especially much tech and cleantech media all paint ‘success’ and the path to exit in one colour. Not every founder wants to create and run a unicorn, not every start-up can be a unicorn. The unicorn fetish is wearing and can be detrimental. The chasing of an IPO can be a great outcome of course, especially for the investors and VCs. But look at the numbers. So few start-ups IPO. Many that do are SaaS businesses. It's harder (certainly not impossible) for a hardware/infrastructure company, and it may not be the best option anyway. 

We've seen- and we've worked with some at Hyperion- Private Equity firms raising large funds to deploy in the cleantech space. Particularly for mature technologies and business models. A PE or a strategic corporate investor can be the best option. 

Don't always follow the path most trodden. At different stages of a business, and different types of businesses can benefit from looking outside of the VC A-round, B-round, C-round etc and IPO path to riches. Strategics, Venture Builders and Private Equity can all play a critical part in creating a great company, a great exit, and most importantly, a great climate impact.

Regardless of whether you are bootstrapping, VC backed, or are part of a PE or corporate portfolio, Hyperion Executive Search has the experience to find the critical leadership talent you need to scale. Wherever that may be.

The typical path to exit for software startups is well-trodden — fundraise from VCs and then look to an initial public offering (IPO).  In the hardware and infrastructure sector, the exit strategy is less clear cut, says Stefan Maard, general partner at VC fund Climentum. “There’s three pathways: the typical IPO track, the trade sale to corporations and then there’s a third one, the private equity exit.” Private equity (PE) firms typically invest in mid-stage or mature-stage companies, taking a majority stake. They take less tech risk than venture capital, favouring companies with tech proven at scale and that is already profitable.

Tags

c-suite, investment, leadership, cleantech, climate tech, emobility, energy storage, future mobility, batteries, renewable energy, solar, grid