Cleantech Investments: How China & US investors are different

As green investments continue to gain momentum worldwide, you should not limit yourself just to the local investors? Indeed, there are many places you should consider that are known to be more supportive to green investments than others; here are some we have compared. Today, we have collected some thoughts to compare between US and China. 

United States (Institutional Driven)

Whether in recession or not, it is undeniable that US remains as the hub for venture capital & private equity investments; there are more green VCs / PEs in US than any other country in the world. However, this also means possible deal competition would be higher, as you will be competing with other opportunities. 

In US, however, investors should look at several opportunities – apart from the green/cleantech specific VCs/PEs, you should also look at VCs that invest in technology and life-science opportunities as they are making changing their mandates. 

Intel Capital for instance, has now backed more than 20 energy efficient and energy management companies; also Chevron Technologies, which is now investing actively into renewable energy companies. 

Other advantages US have are availability of the university grants and programs, including many university sponsored venture capital firms. Another opportunity are utilities companies especially if you are involved in energy efficiency technologies or renewable energy are large number of utilities companies in US. 

Funding can range significantly; some angel investors and university-sponsored investors provide funding from $100,000 and upwards; whereas you can also get funding up to $20bn from large private equity firms & utilities companies.

China (Government & Individuals Driven)

There are many talks about finding investors from China into cleantech & renewable energy projects. The fundamental venture capital / private equity industry is completely different in China compared to the US systems.  One example is, there are a very few Chinese banks operating VCs.

First, the majority of investments relating to cleantech are invested by the Government or related programs and investments; the majority of these investments are made to expand China’s competitive edge in the global stage, in another word; there is a political and national interest behind these investments.

When you approach Chinese investors, it is very likely that many of these investors are controlled by provincial or central governments – if your technology can create new job opportunities and technology expertise in China; then the Chinese investors would have more interests in investing in your company. 

Other investors are primarily made up by wealthy individuals, some are through western style venture capital firms; while many more are more like investor club style investment schemes, where individuals will pour in $1m or $5m each and form a small syndicates. 

Recent deals done by Chinese investors into US cleantech opportunities are often led by strategic investors; there were a number of investments made into US battery technologies made by Chinese automotives companies, wind energy and geothermal projects made by Chinese provincial government controlled utilities companies.; or solar technologies invested by Suntech Power for instance.

However, we also see emergence of Chinese VCs such as TianDi Growth, CITIC opening and expanding their operations in US seeking more opportunities.

End Users, Strategic and Immigrants

Our view is that; if you are looking for investors from China for your cleantech project, match with their end users (eg. battery for electric vehicles or e-bikes, energy storage solutions for computer manufacturers) and target investor clubs or prospective individual immigrants; as there are many Chinese immigrants looking to move to North America, and business investment is a popular and legitimate avenue for their immigration. 

These are just some of the feedbacks we have collected from companies that have raised capital from Chinese investors, we hope you find them useful.

Looking for investors for your project?

Why not check out our Global Green Investors on http://researchwhitepaper.com ?

A new platform http://businesschinese.asia is also now available for you to promote your investment opportunities to individual Asian investors – have a look of our website for more information.