What do cleantech investors want? Rupert Merer tells all

Last week, we kicked off the MaRS Best Practices Special Valuation series with experts talking about investor interest in the biotech industry.

The message: the economy is pretty quiet these days, and cash is not flowing like it once was, especially for R&D companies in the biotech or life sciences fields.

This Friday, Rupert Merer, a Director of Equity Research at National Bank Financial, will join Tim Babcock from the TSX Venture Exchange, where he will issue a similar warning for the cleantech field in Canada.

“It’s a tough market for IPOs these days, but there’s always money for good companies,” says Merer. “The market doesn’t have much patience for companies burning too much cash. They’re looking at companies that are better at bootstrapping.”

One of the things that cleantech start-ups want to know is how investors determine how much their company is worth. “Investors value a company based on its potential to generate cash,” says Merer. “There are lots of different metrics to evaluate.”

One of the key metrics to look at is the company’s potential for global competitiveness. “It’s really an international market these days,” he says. “We market Canadian equities to the global investment community.”

A bright side to the state of venture capital in Canada is that we don’t suffer from the same extremes of boom and bust as in cash-rich Silicon Valley. “There are a number of US companies that are moving to Canada,” he says. “They are attracted by the conservatism that fits Canada’s culture of investment. In this kind of economy the Silicon Valley model suffers more.”

Merer and his team at National Bank Financial have broadened the scope of their portfolio. Instead of just focusing on technology that generates clean power, they look carefully at anything that could be considered a “clean environmental technology.” Merer’s team is looking at water technologies, alternative fuels, waste management, recycling technologies and energy efficiency.

All this work has paid off. Recently, Merer was named by Brendan Wood International as the top analyst in the country in the alternative energy category. “It really is a group effort,” he says about the award. “We have a whole sales desk working in this space.”

Merer has worked both at start-ups and at large companies such as Enbridge, so is well placed to examine opportunities in the market of environmental entrepreneurship. “I track the industry and make recommendations to investors on where to put their money in the industry,” he says. Rupert Merer is the guy you want on your side.

Join us for the MaRS Best Practice Special Valuation Series focusing on the cleantech industry on November 19 from 12:00 – 1:30 p.m. in room CR2. Registration is free but required.