Probability of Going Public for Cleantech Startups Based on Fundraising Milestones

Abstract

The path to the wide adoption and commercial success of cleantech technologies is hindered by large research and development costs, long testing times, and uncertainty over long-term viability. These risks have made it difficult for many cleantech startups to raise investment capital. Fortunately, the cleantech sector has gained a lot of traction over the past decade, with many companies entering public financial markets, the golden standard for a successful investment exit strategy. This thesis collects and examines empirical data on the private and public investment into the cleantech sector between 2000 and 2015. The data contains information on nearly 4,000 investment rounds received by over 1,000 startups from the top ten cleantech nations and the six oldest cleantech sectors. I fit a statistical model to predict the probability of a company going public based on the different investment sources the company was able to attract. I prove that not all financial sources have equal significance, and only loans, structured debt, and Series A are predictors of a company going public.