CIIE: Seeding a Cleantech Entrepreneurship Ecosystem

Name: CIIE: Seeding a Cleantech Entrepreneurship Ecosystem (English version)
SKU: W35293

Vidit Mohan, Rohan Chinchwadkar, Valerie Mendonca, Supriya Sharma

Product #:W35293

Supplier:Ivey

Discipline:Entrepreneurship, General Management

Setting:India, 2018

Details:Case (PDF) • 15 pages • 2024-02-09

Subjects:

Incubators Innovation Entrepreneurship

Geography:

Asia India

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$9.71

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In 2010, the chief executive officer (CEO) of the Centre for Innovation, Incubation and Entrepreneurship (CIIE) at the Indian Institute of Management in Ahmedabad, India, had been working for several months on an initiative to catalyze cleantech start-ups in India. This required multi-point intervention, including mentoring, acceleration, and funding. Substantially funded by the Ministry of New and Renewable Energy (MNRE), this policy experiment aimed to address both market and government failures in developing countries like India by unlocking venture capital to clean-energy start-ups. As the project required CIIE to raise additional funding from other sources and there had so far been no venture capital funding of clean energy projects in India, the CEO wondered who he could approach for such funding, how to approach them, and how to structure the resulting fund to ensure the greatest potential support for innovative cleantech solutions.

Learning Objectives

This case introduces innovation and public policy for undergraduate and graduate students. It can be used to teach the role of the public sector in fostering high-tech innovation and entrepreneurship. It is also applicable in entrepreneurship courses, where it helps students understand the various sources of early stage and growth financing and illustrates how to structure funds to support high-tech start-ups. It can act as a guide for managers of incubation centers to demonstrate the effective stakeholder management required to foster entrepreneurial ventures. Based on class discussions and analysis of assignment questions, students will be able to do the following:

Describe the critical role of public funding in high-tech innovation and entrepreneurship, including its role in crowding in private investments in the clean energy sector.
Identify the various funding routes available to an incubator-managed venture capital (VC) fund for early stage investments in high-tech start-ups, and explain why conventional financing structures are not suitable for certain sectors such as cleantech.
Outline the characteristics and structure of an incubator-managed VC fund, along with various types of challenges in managing the interests of the diverse stakeholders in a fund aimed at providing early stage financing for high-tech start-ups.