VC remains driver and financier of innovations

With the ushe­ring in of the energy tran­si­tion, the energy market has chan­ged and will conti­nue to change as the energy tran­si­tion progres­ses. The chan­ges affect prac­ti­cally all areas of the energy sector in its present form. In addi­tion, new tech­no­lo­gies from other areas — such as block­chain or e‑mobility — are presen­ting the energy indus­try with comple­tely new chal­lenges that require solu­ti­ons. Here, it is important to deve­lop new solu­ti­ons quickly and effec­tively and to constantly adapt them to further deve­lo­p­ments in the other areas. This inter­ac­tion is likely to be both an oppor­tu­nity and a challenge.

The high poli­ti­cal importance of the topic of energy certainly offers a special oppor­tu­nity and a favorable envi­ron­ment for inno­va­tive solu­ti­ons because of the broad public impact and the poli­ti­cally speci­fied goals. On the other hand, it should not be forgot­ten that the energy market is a highly regu­la­ted market, stron­gly influen­ced by legis­la­tion. This is often unpre­dic­ta­ble, and new busi­ness models could quickly be threa­tened again by chan­ges in legislation.

Most finan­cial inves­tors have a very clear idea of the terms of their invest­ment and their (also contrac­tual) imple­men­ta­tion. As a result, the process has often been very inves­tor-driven in the past. Today, start-ups and foun­ders are presen­ting them­sel­ves as incre­asingly expe­ri­en­ced and profes­sio­nal. Not least spur­red on by the market situa­tion, the foun­ders and the start-up are now able to control the process signi­fi­cantly. In this respect, all parties invol­ved — inclu­ding us as legal advi­sors in view of the contrac­tual basis of the invest­ment — are called upon to find solu­ti­ons that take appro­priate account of the various inte­rests. A parti­cu­lar chall­enge often arises when, in addi­tion to mone­tary inte­rests, stra­te­gic inte­rests of inves­tors, mostly corpo­rate VCs, are also invol­ved. This regu­larly requi­res a very clear under­stan­ding of the invest­ment purpose and a corre­spon­ding imple­men­ta­tion in the rela­ti­onship with the start-up. Here, too, all those invol­ved are called upon to work actively on a joint solution.

As in many other areas, corpo­rate ventu­ring is play­ing an incre­asingly important role in the energy sector. Whereas a few years ago specia­li­zed funds were usually the main provi­ders of capi­tal in the energy sector, today both compa­nies from the energy sector and compa­nies from other sectors are getting invol­ved in energy issues. Many exis­ting play­ers in the energy sector are looking for new busi­ness models — in their core busi­ness as well as in comple­men­tary areas; they are also inte­res­ted in inno­va­tions that support their exis­ting busi­ness opera­ti­ons. In addi­tion, other compa­nies are also beco­ming active that do not prima­rily have an energy connec­tion but see new busi­ness oppor­tu­ni­ties in this area. First and fore­most, digi­tal busi­ness models in the energy sector should be mentio­ned here.
In the context of corpo­rate ventu­ring, the special chall­enge regu­larly arises of recon­ci­ling the stra­te­gic inte­rests with the mone­tary inte­rests of parti­ci­pa­ting finan­cial inves­tors and the foun­ders. Corpo­rate VCs ther­e­fore often take diffe­rent approa­ches to their invest­ments — those with predo­mi­nantly stra­te­gic inte­rests and those with predo­mi­nantly mone­tary inte­rests. — Moreo­ver, they regu­larly appre­ciate the special market over­view in the field of inno­va­tions that they obtain through their ventu­ring activities.

On the other hand, start-ups and foun­ders also bene­fit from corpo­rate VCs as inves­tors, as they can often gain comple­tely diffe­rent market access through them.

About Maria Weiers

Maria Weiers is a member of the Corpo­rate Prac­tice Area. 
She specia­li­zes in struc­tu­ring and assis­ting corpo­rate tran­sac­tions, with a parti­cu­lar focus on the private equity and venture capi­tal envi­ron­ment. In addi­tion, she advi­ses both inves­tors and compa­nies on corpo­rate law issues from forma­tion to exit. It has exten­sive exper­tise in the design of invest­ment models and forms of finan­cing. It also advi­ses funds within the scope of their self-governance.