Strategic choices for renewable energy investment: Conceptual framework and opportunities for further research

The passage from R&D and demonstration to commercialisation (the valley of death) is the most critical phase and is a critical financing gap between initial public funding and regular private financing.

“The most critical phase is the passage from R&D and demonstration to commercialisation, the so-called valley of death, which describes a critical financing gap between initial public funding and regular private financing (Wüstenhagen & Menichetti, 2012).”

In the early stages of basic and applied R&D and demonstration, only little engagement from private investors can be expected.

“They argue that in the early stages of basic and applied research and development (R&D) and demonstration, only little engagement from private investors can be expected.”

Public support, such as funding R&D and large-scale demonstrations, compensates for the reluctance of private investors in early stages.

“Public support, such as funding R&D and large-scale demonstrations, compensate for the reluctance of private investors in these stages.”

Capital needs, risks, and investors differ along the innovation cycle from basic research to market diffusion, and after the valley of death, access to private financing can be crucial for survival as sustainable entrepreneurs move from niche to mass market.

“Capital needs, risks, and investors differ along the innovation cycle from basic research to market diffusion, and once the valley of death has been survived (Wüstenhagen & Menichetti, 2012; section 3.2), sustainable entrepreneurs and their innovations have to make their way from niche to mass market (Schaltegger & Wagner, 2011)another critical phase in which access to private financing can be Cru”

The valley of death challenges entrepreneurs to switch from public funding to private financing, for example based on venture capital, private equity, and project financing.

“Wüstenhagen and Menichetti (2012) offer a systematic perspective on the different phases that have to be passed on the way to market success and argue that the valley of death challenges entrepreneurs to switch from public funding to private financing, for example, based on venture capital, private equity, and project financing.”