Background The research is executed as a master thesis for the MSc program Management of Technology at the TU Delft and is conducted in collaboration with the Embassy of the Kingdom of the Netherlands to the state of Israel in Tel Aviv. The researcher has spent six months in Israel to perform this research and was subsidized by Climate-KIC to execute this research. Problem statement and research question This research is an empirical exploration of the influence of external factors on the commercialization process for cleantech Technology Based New Ventures (TBNVs) in Israel after these ventures have received seed funding. External factors are defined as factors outside the influence of the entrepreneur. Literature has described the progression of TBNVs in different stage-based models, although these mainly describe the organizational development. This thesis uses models of Kazanjian et al (1989) and Vohora et al (2004) to describe the growth process of cleantech TBNVs and zooms in on the processes which cleantech TBNVs have to execute after they passed the credibility threshold (Vohora et al, 2004). This milestone reflects in the research by only considering cleantech TBNVs which have received seed funding and where thus deemed credible enough by their investors. Previous research has named Israel the most innovative country in cleantech, but showed that there is a lack of commercialization of this innovation. The purpose of this research is to explore explanations for this phenomenon and test whether the factors distilled from the literature study can be found in practice and explain the phenomenon. Ten factors were determined based upon a literature study and these were tested by conducting field interviews and studying research reports. The overall research question for this study is: Which factors, outside the influence of cleantech TBNVs, have consequences for the progression of cleantech TBNVs to the sustainable returns phase after seed funding has been received? Research Process Three angles were chosen in the literature study to determine external factors – markets, resources and policy. These factors served in general as a good framework for the practical exploration of the influence of external factors on the commercialization process of cleantech technology based ventures in Israel. The studied factors are accessibility of international markets, the need for high-paced growth, the need for an international network, availability of financial and human resources, risk tolerance of available financial resources, competition for financial resources with other fields of technology, the formal institutional regime for new innovations, the formal institutional regime for new sustainable innovations and perceived stability of the governmental policy by investors. Empirical research was done in the form of two rounds of data collection. The first data collection contained semi-structured interviews with ten respondents who were (in)directly involved with cleantech in Israel. These respondents were from four different areas – business development, government (policy), late stage finance and venture capitalists and were interviewed about the aforementioned factors. The results from these interviews prompted a second data collection in two specific topics that were thought to hold more explaining value about the observed commercialization gap. These two topics included the availability of financial resources and related factors, the policy for innovation in Israel in general and the policy surrounding cleantech innovation. The second data collection contained another four semi-structured interviews on these specific topics and the study of reports on the topics. Findings and conclusions The results of the empirical research showed that all the proposed factors were relevant and influenced cleantech TBNVs in Israel, although the influence of some factors is more explicit than that of others. Especially the availability of financial resources which can be used to invest in technology development of cleantech TBNVs were found to be lacking. This can be explained by the high financial costs of technology development for cleantech TBNVs. The investment in such a project bears a lot of risk, which only a few types of investors can cope with – namely specialized, early-stage Venture Capitalists, business angels and the government. Moreover, many cleantech TBNVs develop technologies related to the field of infrastructure which is a tough market for a start-up. Finally, the shift in policy relevant for cleantech TBNVs can be expected to offset investors, which also contributes to the lower amount of available financial resources. Implications Scientifically, this study contributes evidence to the validity of the applied theories in a specific setting – namely development of cleantech TBNVs in Israel. The conceptual model used in this study would be useful to explore similar research problems in other countries although a zoom into specific topics remains necessary. In this research the specific topics included policy relevant for cleantech TBNVs and the needs for funding for cleantech TBNVs. Practically, this research has implications for entrepreneurs and investors in this field and for governments both in Israel and Europe. Entrepreneurs and investors in this field should realize themselves that they are in a precarious position due to factors like the high costs of technology development and instable policy that heighten the already high amounts of uncertainty that is currently surrounding the process of cleantech TBNV development. Risk reduction strategies should be high on the priority list of these actors. Governments should realize that investors make investments with a five to ten year horizon and regulatory stability is therefore an important factor to take into account if one aims to increase in the sector. Especially the case which described the instability of the solar sector in Israel is an example of an increase in investment insecurity by governmental decisions. Moreover, the financial resources necessary for most of the cleantech start-ups are momentarily simply not available. The Venture Capital investment model is only suitable for those start-ups that can achieve high growth rates, which can be difficult for cleantech start-ups. Making different financial resources available tailored to the needs of cleantech TBNVs, for instance via debt financing instead of equity financing should be a priority for the governments both in Israel and Europe. Previous research of EIM showed challenges in Europe to be similar to the challenges that have been found in this research.