Accelerators help start-ups scale up quickly, typically by supporting those that already have a product for sale and a detailed business model. Accelerators can have different approaches and specialise in different services, but they generally focus on helping companies become self-sufficient as quickly as possible through mentoring and networking. The distinction between accelerators and incubators, which typically focus on earlier-stage start-ups, is not always sharp, and some initiatives straddle the two models of support. For convenience, this report generally uses the term "incubator".

Clean energy technology

Any device, component of a device or process for its use dedicated to producing, storing or distributing energy with low CO2 emissions intensity; or a novel device that provides a new or improved energy service or energy commodity that enables users to minimise their contributions to atmospheric CO2 concentrations in line with net zero CO2 emissions globally. A list of clean energy technologies – including those related to renewable energy, buildings, hydrogen, nuclear, energy storage, power system flexibility, and carbon capture, utilisation and storage – can be found in the IEA ETP Clean Energy Technology Guide. Clean energy technologies overlap considerably with the range of technologies frequently grouped together as “cleantech” or “climatetech”. However, these other classifications are broader and can include recycling, air monitoring, mobility services and land use in addition to energy applications.

The term technology is commonly used to refer to a “technology application” (e.g. renewable power), “technology type” (e.g. solar PV), “technology design” (e.g. perovskite cells) or “technology component” (e.g. novel membrane). In this report, it generally refers to a design or component.

Corporate venture capital

Equity investments in start-ups that are developing new technologies or services, by companies whose primary business is not venture capital or other equity investments. In addition to playing the traditional role of a venture capital investor, corporate venture capital investors often support start-ups by giving them access to their customer base, R&D laboratories and other corporate resources. Corporate venture capital is used by companies as part of their energy innovation strategies to enter new technology areas or learn about technologies more quickly than by developing them in-house.

Debt financing

Raising money by borrowing (or selling what are known as “debt instruments”) and taking on an obligation to pay back the amount of the loan (the principal) and the interest on the debt at an agreed date in the future. Unlike with equity financing, the company does not have to give up a portion of ownership to receive funds. The most common forms of debt financing are loans, lines of credit and leasing of equipment.

Deep tech

A term used since the late 1990s to refer to organisations and companies tackling major science and engineering challenges to solve environmental and social problems or capture commercial opportunities. The term generally includes the following sectors in its scope: advanced materials; advanced manufacturing; artificial intelligence; biotechnology; blockchain technology; robotics; photonics; electronics; and quantum computing.

Dilutive (or equity) funding and financing

Dilutive funding is any financing that requires a company to give a portion of ownership (i.e. equity) in return. The shareholder is entitled to future profits but has no entitlement to repayment. If the company fails, equity holders are the last in line to receive money. Equity gives shareholders some control over the direction of the company, and some shareholders in start-ups provide managerial or technical expertise. Common examples of dilutive funding include selling shares to angel investors or venture capitalists in a funding round. It could also include equity crowdfunding, in which numerous investors each buy a small share of the company.


In this report, “early-stage” refers to the phase in which a company is continually innovating and refining a technology product through R&D, demonstration, field trials and intensive learning-by-doing. To reflect this period of innovation between lab and market, we consider early-stage funding to include capital acquired up to the equivalent of a Series B funding round.


Equity is the value of the shares that would be returned to a company’s shareholders if all the assets were liquidated and all debts were paid off.

Equity funding and financing

See “dilutive (or equity) funding” above.


The transfer of funds, usually with an obligation to spend the money on a contractually defined project or set of eligible expenses. Grant payments do not need to be repaid with money or equity as long as the contractual conditions are met. Grants are the most common financial support governments provide to innovators. Some grants (often in the form of a prize) are direct cash payments with unrestricted use.

Growth equity funding and financing

While the boundaries are often blurred, a company that graduates from Series funding (often after a Series B round) raises growth equity. Growth equity rounds can be worth USD 100 million or more, depending on the type of company and its technology or product. Compared with Series rounds, growth equity is more like to have a single large investor, such as a corporation, bank or hedge fund, accompanied by secondary market groups. Companies raising growth equity typically already have a successful business model and promise large returns to investors, either through revenue, acquisition or an initial public offering.


Incubators nurture and mentor start-ups in their earliest stages when they are beginning to develop their technology into a product and their idea into a business. Different types of incubators offer different combinations of services, including workspace, funding, mentoring, access to networks or access to other legal, business or procurement services. Various sources can be used to cover incubators’ costs, including government or philanthropic grants, fees charged to client start-ups or revenues from the sale of equity stakes acquired in exchange for incubation.

Net zero-aligned technologies

Technologies that contribute to a global energy sector pathway consistent with achieving net zero greenhouse gas emissions by 2050 and limiting the global temperature rise to 1.5ºC without a temperature overshoot (with a 50% probability), with no offsets from outside the energy sector and with low reliance on negative emissions technologies (such as direct air capture or bioenergy with carbon capture and storage), while ensuring continued economic growth and secure energy supplies.

Non-dilutive funding

Funding that is not in exchange for equity or other forms of ownership shares. Non-dilutive funding can include grants, debt, licensing and royalties from products, shared-earnings agreements, tradeable tax credits, debt-based crowdfunding, revenue-based financing and asset-based financing. Start-ups often prefer to raise non-dilutive funds to retain more control and a higher share of their company’s future value.

Seed capital

Typically, the first money raised by a start-up or enterprise that does not come from savings, friends or family. When seed funds are raised from “angel investors” or venture capital funds, a share of equity is usually expected to be granted to the investor, who is taking on more risk than later-stage investors are. Seed capital can pay for formation of the start-up, development of a business plan, initial operating expenses or R&D. Seed investors generally aim to develop a business idea to the point at which it can attract further funding, for example from venture capitalists or corporations with larger funds.


There is no universal definition for the term “start-up”. In this report, it refers to a young company founded by one or more entrepreneurs to develop and validate a unique product or service and bring it to market with a scalable business model. While there is no age cut-off for start-ups, some start-up laws, such as the Italian Start-up Act, target companies that have been operational for less than five years and are not listed on a stock market. However, under the Spanish Start-up Act, clean energy technology start-ups maintain their eligibility until they are seven years old if they are independent, have not yet shared profits with owners and have revenues of EUR 5 million (USD 6 million) or less. Germany’s Start Up Energy Transition prize is open to companies less than ten years old.

Start-ups often have an idea or a meaningful problem worth solving and build a team committed to transforming the idea into a validated, value-generating product and business model. Start-ups develop new products or services that do not currently exist in the market, or they enter an existing market with a modified product or service.

Series A and B funding

The stages of capital-raising that typically follow seed funding. Companies that raise “Series” rounds have usually demonstrated a viable business model with strong growth potential but need capital to repay initial investors, continue R&D and expand before entering profitability. Investors in Series rounds include large venture capital funds, corporations, private equity firms and even individuals via crowdfunding. A single lead investor usually invests the largest share, accompanied by small number of co-investors. In exceptional cases, a single round can have more than ten investors. Investors may receive common shares, preferred shares (which are paid before common shares but do not provide their owners with voting rights), deferred shares or debt, or some combination of these. The first round of Series funding is Series A, and successive rounds are named B, C and D (rarely any higher). Each successive round typically involves a larger sum (starting at around USD 1 million up to USD 10 million for most Series A rounds) and focus more on market reach than product development. There is a significant overlap between rounds of Series funding higher than Series B and growth equity.

Technology readiness level

Technology readiness levels (TRLs) provide a comparable snapshot in time of a technology’s level of maturity within a defined scale to indicate where the technology is on its journey from initial idea to market. A technology’s progress begins from the point at which its basic principles are defined (TRL 1). As the concept and area of application develop, the technology moves into TRL 2, reaching TRL 3 when an experiment has been carried out that proves the concept. The technology then enters the phase in which the concept itself needs to be validated, starting from a prototype developed in a laboratory environment (TRL 4) through to testing in the conditions under which it will be deployed (TRL 5-6). It then moves into the demonstration phase of testing in real-world environments (TRL 7), eventually reaching a first-of-a-kind commercial demonstration in a relevant environment (TRL 8) on its way towards readiness for full commercial operation if supportive market conditions exist (TRL 9).

While energy technology start-ups differ in their needs for capital and services, a start-up seeking seed funding and incubation typically has a technology at TRL 3-4. By the time a start-up is seeking the support of an accelerator and securing Series funding, its technology is typically at TRL 5‑8.

Valley of death

A concept in innovation theory that describes a period in which a new technology or product requires a significant increase in risk capital to demonstrate its effectiveness, costs and marketability. This period often results from a mismatch in available capital from public and private sources: available R&D funding is no longer appropriate and private investors generally do not have the risk appetite to support this increase in both capital requirements and risks.

For large-scale technologies, the valley of death usually coincides with the “demonstration phase” around TRL 8, after pilot testing and before near-term market potential has been proven. For smaller-scale technologies, this phase is more likely to require capital for field trials and testing in various commercial environments. In both cases, public support (sometimes more than USD 100 million) and co‑operation with industrial partners are usually necessary to bridge the valley of death successfully, regardless of whether the technology is owned by a start-up or a larger entity.

For start-ups, especially those developing clean energy hardware, the valley of death concept has been applied more broadly. In these cases, it denotes the period after conceptual R&D projects have been realised, when capital is first needed to buy equipment and pay salaries. Until revenue begins to flow, start-ups often have negative cashflow, and support from incubators and the public sector (in the region of USD 10 million) may be needed to top up what is available as debt or from angel and venture capital investors.

Venture capital

Venture capital is a form of private equity financing that venture capital firms or funds provide to start-ups that show high growth potential, in exchange for an equity stake. Venture capitalists usually invest in businesses that most banks and capital markets consider too risky for investment; they therefore expect a considerable return on their investment if the start-up is successful. Typically, the first venture capital investment comes after seed funding, in the Series A funding round. Venture capital funds usually seek to sell their shares in start-ups after around five years and return a share of any proceeds to the funds’ investors. However, some funds with longer time frames have emerged to target clean energy technologies in recent years.