In a world where global warming is a serious issue, green firms should be encouraged by the state and everyone should promote eco-friendly strategies. Sadly, this is not the case and many eco companies, including tech ones, have a hard time
trying to obtain funding. A firm named Opus 12 is the best example. Opus 12 was created by three entrepreneurs and it aims to use carbon dioxide in order to produce fuel, a green alternative for energy. However, they have to deal with numerous obstacles. Here are the reasons why green firms find it difficult to get started.
Less people invest in eco-friendly technologyThere was a period when things looked bright for green companies. Between 2006 and 2011 there were plenty of investors that were willing to provide the money for this technology. Only in 2007 the industry received almost $3 billion. In 2011 the number got bigger, and investors pumped $4.3 billion.However, the situation changed. Investors are less likely to supply this industry, and there are plenty of reasons for that. For example, more people started to use electric cars, new laws appeared and they cut emissions, and gasoline prices continued to go up. The green energy industry proved to be a failure when it came to profits, and most investors recorded losses bigger than 50%. In 2015, the investments dropped to $1.3 billion.
Higher costsCompanies that aim to create green energy, have a harder time than regular ones. For a startup like this, the technology is more sophisticated and it requires more funds. It will also need complex safety testing and modern laboratories. Since these ideas are new on the market, the companies will have to spend more in order to come up with a prototype. And even if they manage to do that, most of the time prototypes need refining.
There is hope Eco-friendly technology still has a chance. The company might receive funding using the traditional methods like banks or other type of lenders such as
sba 7a loan. However, there are some other options that might be better suited for these companies.For example, there are some investment opportunities for clean technology startups. There are private investors and government agencies that are still willing to supply the funds. One of the best examples is the Breakthrough Energy Coalition. This is a fund created by Bill Gates, the former CEO of Microsoft, and it is designed for inventors.Opus 12 received some help from Cyclotron Road, a business incubator. The Lawrence Berkeley National Laboratory program received funding from the Federal Energy Department. This program takes care of the living expenses and the medical coverage of the participants and it also offers funds for clear energy research and mentoring services.This program is amazing for all startups, since it allows them to use government laboratories for experiments. Opus 12 was very lucky, since this program began to assist green technology three years ago. There are around 125 applicants every year, but only seven or eight are lucky enough to benefit from the Cyclotron Road.
