Ceres Power, a UK-based spin-off from university Imperial College London that manufactures fuel cell technology for use in small-scale combined heat and power systems, has called on the local government to introduce tax breaks for corporate venturing as a way of finding new shareholders.
In a paper called Green Growth by the UK-based non-government organisation Institute for Public Policy Research, Ceres executives were reported as saying incentives for corporations to invest in start-ups such as itself were currently limited. They added in the paper: "Introducing tax incentives for corporate investments in SMEs [small and medium-sized enterprises], together with any capital gains and dividends from these investments, could help stimulate the necessary step-change in corporate investment behaviour."
The IPPR said Ceres required a significant injection of capital to finalise product development and scale up its manufacturing ahead of commercial launch in 2014. The paper added that this capital needed "to come via equity finance, since raising debt is not a realistic option at this stage".
But even though Ceres floated on the Alternative Investors Market in 2004, the onset of the global financial crisis meant there was lower risk tolerance in the markets. So, the company had decided to examine alternative solutions, such as corporate venturing because "partnering with a large energy utility or manufacturer would help plug an immediate financing gap and allow Ceres Power to sustain production in the longer term".