Financing Bioeconomy Ventures Pt. 11: Series Summary

By Martin Wahl and Gerald Kutney, Lee Enterprises Consulting
Special to The Digest

The preceding articles in this series cover the major steps that investors and entrepreneurs should take to advance bioeconomy project product and process development. In retrospect, the most striking aspect of the articles is the diversity of talent, experience and approaches exhibited by the authors as they addressed the variety of requirements in the project development and funding processes.

What We Learned

The articles in the series taught us:

• The Pro Forma – More than a ROI calculator; a tool for sensitivity analysis throughout the development process.
• The Business Plan – Include what you know, and what you need to know, to handle anticipated risks.
• Competitive & Strategic Analysis – Assess the technology, the market and logistics: Considering all of these, make wise choices.
• IP & Patent Analysis – Key to new venture success: patent infringement can work both ways so don’t be an unwitting violator while ensuring your processes are protected.
• Pilot Plant Assessment & Data Evaluation– A pilot plant is a microcosm; unnoticed small problems can grow into significant issues in commercialization. Measure carefully.
• Front-End Engineering Design & Loading Evaluation – How well-prepared design documentation supports more accurate CAPEX, OPEX and risk management assessment.
• Planning Startup & Operations – The plan components that will minimize start-up headaches and transition to smoother operations.
• Risk Analysis for Biomass Feedstock Acquisition – Much more than transportation and adjacent farm area assessment: Identify the elements in the landscape that can help and hinder getting feedstock into the process.
• Regulatory & Community Concerns in Plant Site Selection – From NIMBY to the EPA, how to structure plant site identification and preparation activities.

Each article is also available via Lee Enterprises Consulting’s website, here.

Commentary

Lee Enterprises Consulting has extensive experience dealing with entrepreneurs and other project developers looking for financing. The majority are ill prepared and are largely naïve of the daunting process of venture capitalists, angel investors and other professional financing mechanisms. When informed of such deficiencies, entrepreneurs can become angry of our lack of understanding of the “great commercial potential” of their technology/process. However, even with a biofuel or biochemical with “great commercial potential,” professional preparatory work is necessary to have any chance to attract the funding to achieve their goals. While project developers routinely use engineers and other experts on technology development and plant design, they are often reluctant to provide the necessary resources to attract the equally important financing. The above articles provide a guideline of the due diligence process that is common in the financial community.

The skills, experience and aptitude required for treating the various steps for obtaining project financing differ greatly, ranging from macro-level economic and strategic analysis to hands-on process and materials planning and management. These distinct professions must be coordinated and integrated to ensure success of unique projects, and hence their funding. We are fortunate at Lee Enterprises Consulting to have the breadth of talent in our network and the flexible management structure to tailor teams to meet those needs; to apply the talent where and when needed.

About the Authors

Martin Wahl, MBA, is the Marketing Director of Lee Enterprises Consulting and has more than 25 years’ experience in data product development, marketing and management, including biofuels industry surveillance database development and management. Martin manages market research and communications for Lee Enterprises Consulting employing his unique blend of alternative energy, market research, product development and business planning experience. His hands-on experience with a WVO biodiesel start-up during the wild-west days in the Bay Area brings a practical perspective to his work.

Gerald Kutney is the Executive Vice President of Emerging Technologies, Biomass Power, Biogas/AD, and Investor Services for Lee Enterprises Consulting, and Managing Director of Sixth Element Sustainable Management in Ottawa. He has a Ph.D. in chemistry and over two decades of executive experience with global corporations and entrepreneurial enterprises in the forest bioeconomy.