che_june-2024 - 30

collected in the performance tests
should enable the team to make final
updates to the techno-economic
analysis and business case analysis,
to improve their accuracy.
Risk-mitigation strategies
Each stage of technology development
will have a different risk profile.
For instance, low TRL stages will
have higher technical and market
risks, because the yields, efficiency
and other performance parameters
of the technology, and its fit with the
market needs, are not yet understood;
whereas higher TRL stages
will have higher project-execution
risks, since potential cost overruns,
schedule delays, and health, safety
and environmental risks associated
with a large-scale project can bear a
large impact on the organization.
Table 3 shows some typical risks
faced at different TRL levels along
with typical risk-reduction strategies
that could be implemented.
Financing strategies. Technology
development has inherent risks that
make it unattractive to conventional
infrastructure project-finance
structures,
given the lack of reference information
to predict future cash flows
(and debt repayment).
Large, established companies typically
have an R&D budget to explore
new technologies and may be able
to fund the technology development
using revenue from their ongoing
operations. In their case, the R&D
team should remain aware of internal
resource allocation procedures and
timelines, to provide sufficient information
to secure internal approval
and reserve funds for the next cycle
(which varies from organization to
organization, but frequently is organized
so that project proposals are
submitted some time in advance of
the end of the fiscal year). The R&D
team's proposal, depending on the
size of the organization, may compete
against other initiatives for resources,
so it is important to ensure
that the project is aligned with the
organization's strategic direction and
that it is structured considering the
organization's financial situation.
Small businesses or startups, on
the other hand, are typically limited
by cash flow. For these organizations,
the development plan should allow
for significant investment of team
time into fundraising activities. Different
organizations offer alternatives for
dilutive funding (cash contributions
in exchange for a share of the company),
ranging from incubators, angel
investors, venture capital firms, and
others. When searching for funding
from these sources, the R&D team
should have a clear assessment of
the resources needed to achieve the
next milestone in technology maturation
and a clear plan to spend those
resources. The R&D team should
evaluate different potential investor
groups, their strategy and stage at
which they enter, and be aware that
lower TRLs are associated with lower
valuations of companies.
For large and small companies
alike, there is the opportunity to apply
for grants. Grants are a good source
of non-dilutive funding and reduce
For details visit adlinks.chemengonline.com/86464-16
30
CHEMICAL ENGINEERING WWW.CHEMENGONLINE.COM
JUNE 2024
http://adlinks.chemengonline.com/86464-16 http://WWW.CHEMENGONLINE.COM
che_june-2024

Table of Contents for the Digital Edition of che_june-2024
