Strictly private and confidential Funding the commercialisation of

Strictly private and confidential Funding the commercialisation of cleantech Ivor Frischknecht Investment Director 26 May 2011 1

Strictly private and confidential 2 The Commercialisation Process Pilot Early Customers Product Prototype Research Company/ Research Institute Spinout License Company Needs Analysis Commercialisation Commercial Rollout Company/ Project Vehicle/ Partner Product Packaging

Strictly private and confidential Private Equity Investing in Cleantech Buy Out Project Finance Growth Capital Offshore Venture Capital Australian Venture Capital Startmate, Angels <$1 M - $20 M – $100 M Investment Amount >$100 M 3

Strictly private and confidential About Starfish Ventures • • • AUD$400 million under management Investments in 60+ companies: ITC, Life Science and Clean Technology Exit track record: 6 ASX IPOs, 2 NASDAQ IPOs, 1 AIM, 10+ Trade Sales, 1 Backdoor listing Pioneer the migration of Australian companies to the US to access capital, markets and experienced executives Investment team of eight, two have a cleantech focus 4

Strictly private and confidential Venture Capital is a Risky Business $1 Billion invested, all lost in 18 months 5

Strictly private and confidential Sometimes they succeed • • • 1999: first VC funding 2006: NASDAQ listing Market Cap: USD$10. 67 B Revenue: USD$2. 56 B Profit: USD$762 M *Financial information as of 25 May 2011 6

Strictly private and confidential Sometimes they succeed • • • 1989: Secured first VC funding 2005: NASDAQ listing 2006: first profitable year Market cap: USD$2. 08 B Revenue: USD$2. 21 B Profit: USD$183 M *Financial information as of 25 May 2011 7

Strictly private and confidential Valuation Founders: “My company will be a big success” Investors: Portfolio Approach • • • aim for successes only high failure rate return across all investments must exceed public market returns 9

Strictly private and confidential 10 Investments Selection Criteria Contributions • Management Team • Growth Capital • Technology • Recruiting • Competitive Advantage • Corporate Governance • Market size and Growth • Strategy - REVC • Partnerships • International Market Entry • Exit

Strictly private and confidential Opportunities 11

Strictly private and confidential Opportunities What’s Hot What’s Not § Solar Energy § Fuel Cells § Wind Management/ Optimization § Hydrogen § Demand Management § Energy Efficiency § Energy Storage § Biofuels § Waste Management § Water Efficiency 12

Strictly private and confidential 13 Cleantech Industry: VC outliers Too Early Too Big § Next Generation Biofuels § Carbon Capture & Storage § Electric Vehicles § Utility scale renewable projects § Ocean Power Too Late § Wind Turbines Too Small § Fish tracking software § Services that don’t need much capital

Strictly private and confidential Cost of Solar Power Source: Mc. Kinsey Quarterly 14

Strictly private and confidential 15 Australian Solar Power Strengths R&D Powerhouse Limited Local Commercialisation Success • UNSW and ANU are top groups internationally • Sliver cells (Origin Energy) • Supporting efforts elsewhere • Suntech (NYSE/China) • Dyesol (ASX : DYE) • JA Solar (NASDAQ/China) • Nanjing PV (China) • CSG Solar (Germany) • Basic IP for dominant silicon PV

Strictly private and confidential Case Study: Pacific Hydro • Founded in 1992 • ASX IPO in 1993 at $10 MM market cap • Mid-1995 market cap dips to $3. 5 MM • Two private placements raised $30 MM • Acquired by IFM in 2005 for $788 MM 16

Strictly private and confidential Case Study: Suntech • Founder is Chinese Australian dual-national educated at the University of NSW • Much of the IP and technical talent originate in Australia • Active personnel exchange program with the University of NSW • 2005 NYSE listing • Market cap of USD$1. 38 B • Revenue: USD$2. 90 B • Profit (before tax): USD$10. 9 M *Financial information as of 25 May 2011 17

Strictly private and confidential Policies Make a Difference California Energy Use per Capita California Source: California Energy Commission, 2007 Integrated Energy Policy Report 18

Strictly private and confidential California Solar Policies 1. – – – 2. 3. Subsidies US$3. 2 B Rebates Tax Credits Home mortgage deduction Net metering Public Purchasing Policies Has led to: 30 -40% of North American investment in cleantech 20, 000 new jobs (solar only) 19

Strictly private and confidential In Closing – Early stage clean technologies are well suited to venture capital • Capital requirements and timeframes can be a challenge • Quality inventors for the capital required – Australia has a lot of capital and good clean technologies • More stable policies are required to overcome financing challenges • REVC will greatly expand renewable energy capital 20

Strictly private and confidential Ivor Frischknecht Investment Director Starfish Ventures Level 1, 120 Jolimont Road East Melbourne, VIC 3002 T: +61 3 9654 2121 www. starfishvc. com 21