循环经济基金循环经济投资就绪项目业主分步指南2026

circularinvest

INVESTMENT-READINESSIN

THECIRCULARECONOMY:ASTEP-BY-STEPGUIDEFOR

PROJECTOWNERS

http://www.circularinvest.eu/

Fundedby

theEuropeanUnion

FundedbytheEuropeanUnion.Viewsandopinionsexpressedarehoweverthoseoftheauthor(s)onlyanddonotnecessrilyreflectthoseoftheEuropeanUnionorEuropeanCommission.NeithertheEuropeanUnionnortheEuropeanResearchExecutiveAgencycanbeheldresponsibleforthem.

Contents

PurposeofthisGuide3

WhatisCircularlnvest3

PartI.InvestmentReadinessintheCircularEconomyContext4

Framingthechallenge5

Understandinginvestmentreadiness6

Keyfactorsininvestmentreadinessandtheirrelevanceinthe

circulareconomy8

i.Businessmaturitylevel8

ii.Typesofcircularbusinessmodel10

iii.Typesoffinancing12

iv.Typesoffunder15

PartII.FundingGuideforEarly-stageCircularEconomyBusinesses18

UsingthisGuide19

STEP1.Preparingthebusinessfoundationsandgrowthstrategy19

1.1.Elaborateyourbusinessstrategyandclarifyyourvalueproposition22

1.2Buildthelegalandgovernancefoundations38

1.3Mapyourecosystem,provesupplyanddemand,anddetermine

themarketfit49

1.4Defineandembedyourimpactstrategy37

1.5Understandyourrisksandthepolicyenvironment39

STEP2.Developafundingstrategy38

2.1Determinethefundingask38

2.2Determinetheoptimalfundingstrategy40

2.3.Developthefinancialmodelandfinalisethebusinessplan45

STEP3.Engagingwithinvestors49

3.1Prepareyourallmaterialsforinvestorpitchingandduediligence49

3.2Investorengagementanddealstructuring52

Concludingremarks54

Referencelist55

PurposeofthisGuide

Thisguideisintendedtosupportfoundingandmanagementteamsofearly-stagecirculareconomybusinessesthathaveambitionstoraisecapitalforscalinganddevelopment.Itservesasageneralsteppedprocessapplicabletoalltypesofcircularbusiness,spanningdifferentmaturitystages,businessmodeltypes,andfundingexperience.

Theguidebeginsbyframingthechallengeofaccessingfundingforcirculareconomyventures,recognisingthestructuraldisadvantagestheyfaceineconomiesandfinancialsystemslargelydesignedtosupportlinearity.PartIoftheGuideintroducesallofthekeydistinctionsrelevanttodiscussionsofinvestmentreadinessinthecirculareconomy-maturitylevels,circularbusinessmodels,typesoffinancingandtypesoffunders.Ifyouarefamiliarwitheachofthesedistinctions,youcanmovedirectlytoSectionTwo,whichisthemorepracticalsectionofthisguide.SectionTwo,theFundingGuideforEarly-stageCircularEconomyBusinesses,iselaboratedoverthreebroadlysequentialstagesnecessaryforraisingcapital.Thestagesmovefrompreliminarybusinessnecessitiesthatarenotdirectlyrelatedtofinance,todevelopingthekeyfinancialdocumentsneededtoapproachinvestors,beforedetailingsomeconsiderationsaboutinvestoridentificationandoutreach.Withineachofthethreestagesthereareanumberofstepstoconsider.Unlikethethreestages,thestepswithinthemarenotexpectedtobechronologicalnorsequential,andtheywillbemoreorlessrelevantdependingonthefundingroutetaken.

Ratherthanidentifyingactualfundersorinvestorswithwhomtoengage,thecentralpurposeoftheguideistoadviseonalogicalfundingrouteandtoensureadequatepreparationtosuccessfullynavigatefunderduediligenceprocesses,toconvinceprospectivefundersthatyourbusinessissoundandhasstrongpotential.Todoso,itpositionsadocumentchecklistasthekeypointofreference.EachstepinSectionTwohighlightsthedocumentationthatshouldbedevelopedfollowingitscompletion.Havingdeterminedthefunderprofilethatyouintendtotarget,thedocumentchecklistshouldbereferencedtounderstandwhatyouwillberequiredtoproducewhenengagingwiththisprofile.Thisguideisdesignedtobeusedprimarilybyfor-profitcirculareconomyprojects,startups,venturesandSMEs.Itwasdevelopedthroughdirectexperienceworkingwithamultitudeofsuchbusinesses,directinterviewswitharangeofinvestorprofiles,anddeskresearch.

WhatisCircularInvest

CircularInvestisaninitiativedesignedtoaddressthedemand-sideofthecirculareconomyfinancingchallenge,helpingprojectdevelopersandentrepreneursbuildthecapacitytosecuretheresourcesneededtoscaleandsustainimpactfulbusinesses.Throughtailoredsupport,CircularInvesthasworkedwithprojectsacrossdifferentsectorsandmaturitylevelstostrengthenbusinessmodels,refineinvestmentpropositions,andconnectwithrelevantfinanciers.Thisguidedistilstheknowledgeandinsightsgatheredduringthedeliveryoftheprogrammeintoapracticalmanual,offeringcirculareconomyprojectownersconcretetoolsandstrategiestonavigatethecomplexinvestmentlandscapeandimprovetheirreadinessforfunding.

circular

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PartI

Investment

Readinessinthe

CircularEconomyContext

circular

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Framingthechallenge

TheEuropeanUnion'sCircularEconomyActionPlan!(CEAP),positionedin2020undertheEuropeanGreenDeal,determinedEurope'sintentionsinregardtothecirculareconomy.Theintroductionofapackageofpolicyinitiativesrepresentedacriticaljunctureincirculareconomypolicymaking,asthefirstcomprehensiveattempttoshiftEurope'seconomytowardsproductsthataredesignedtolastandsystemsthatreuseresourcesbyholdingproducersaccountableforthefulllifecycleofwhattheyputonthemarket.Morerecently,theproposedEUCircularEconomyAct²,aspartofthenewCleanIndustrialDeal,intendstofostermoreaccommodatingmarketsforcircularproducts,withthecoredeterminedgoaltounlockinvestmentinthetechnologiesandinfrastructurethatwillpowerEurope'ssustainabletransition.

RecentresearchhasshownthattheCEAPwaseffectiveinscalinginvestmentintothecirculareconomy,³withinvestmentvolumesinthethreeyearsfollowingitsintroduction62%higherthaninthethreeyearsprior,butthisimpactwasnotfeltequallyforalltypesofcirculareconomybusinesses.Globally,thecirculareconomysuffersfromapronounced'valleyofdeath’inregardtoscaleupfunding(Figure1).Veryearly-stagefundingisquitereadilyavailableforcircularventures,throughgrants,acceleratorprogrammesandsomeangelinvestment,whiledebtfinancingbecomesrelevantforthosebusinessesthatareabletoscaletoapointofbankability.Thereishowevera'missingmiddle,'inthatrelativelylittleinvestmentismadeinthecriticalscaleupphasewhenbusinessesbegingeneratingrevenuebutnotatlevelssufficienttofundgrowth.Theexistenceofthisphenomenonisasignificantbarriertoscalingthecirculareconomy,asitmeansthatcriticalinnovationsareunabletoreachself-sustainabilityandmaximisetheirimpactpotentialasaresult.

Investmentvolume(Sbilin)

$40

1600-

$30

200

$25

1000

$20

800-

$15

600

$10

400

200

Pre-seedSeedEarlystageLaterstageGrowth/ExpansionAcquisition

$35

Maturitystageofinvestment

FIGURE1:ACIRCULARECONOMY'VALLEYOFDEATH’-GLOBALINVESTMENTFIGURESINTHECIRCULAR

ECONOMY(2018-2023)-SOURCE:CGRFINANCE,2025

Manyofthemajorfactorsastowhythisfundinggapexistsrestonthe‘supplyside’ofthefinancingchallenge.AvailablefundingforEuropeancirculareconomyventuresisshapedbystructuralfeaturesofEurope’sfinancialsystemandtheinvestmentculturethatunderpinsit.Europeremainsabank-basedeconomy,whereventurecapitaliscomparativelyunderdevelopedandconstrainedbyregulatorylimitsonsupportfromlargeinstitutionalinvestors.EvenwhereVCisavailable,liquidityhastightenedinrecentyearsandexitshavebecomemoresparse-investorstypicallyprioritisehighlyscalabledigitalventureswithswifterpaybackprospects,otherwiselookingtomorematuregrowth-stagebusinesses

.4

Againstthisbackdrop,circulareconomybusinessesareoftenperceivedasunattractive-comparedwithdigitaltechnologiestheytypicallydeploymaterialinnovation,whichcantakealongtimetogettomarket,orbusinessmodelinnovationthatdoesn’toftenscalebydouble-digitordersofmagnitude.Thelargeupfrontinvestmentrequirementsandlongertimehorizonscanputoffriskcapital,whilewidespreadsubsidiesforlinearindustriesfurtherunderminethecompetitivenessofcircularmodels.Itisimportanttoacknowledgethatthesedynamicsleavecircularstartupsatastructuraldisadvantagewhenitcomestoraisingcapitalatcriticalstagesofgrowth.

However,‘demandside’factorsalsoplayakeyrole.Ontheothersideoftheequation,investorsregularlypointtoashortageof‘investment-ready’circulareconomyopportunities.Circularventuresfrequentlyrelyonnovelrevenuemodels,multi-stakeholderpartnerships,andcomplexvalue-chaincoordination,allofwhichcanfalloutsidetheconsiderationsofstandardfinancialassessmentmethodologies.Theirbusinesscasesmayinvolverecurringrevenuemodels,longerpaybackperiods,infrastructuredependence,orrelianceonregulatorytailwinds,allofwhichheightentheperceptionsofrisk.Inproductasaservice(PaaS)modelstheriskalsoshiftsontotheproducer,whoretainstheassetsonthebalancesheet.Forcircularentrepreneursnavigatingthechallengingworldoffinance,itiscriticalthattheyareabletotapintothemotivationsofinvestors,alleviateconcernsabouttheassociatedrisksofcircularmodels,andacknowledgetheuniquechallengestheyfacetodevelopfundingstrategiesthatmaximisetheirchancesofraisingcapital.Itisthesedemand-sidefactorsthatthisguideseekstoaddress.

Understandinginvestmentreadiness

Investmentreadinesstypicallyreferstohowpreparedabusinessorprojectistoengagewithinvestorsandsecurefundingfromexternalsourcesfordevelopmentandscaling.Thereisnoonedefinitionofinvestmentreadiness,andasthisguidewillelaborate,itdependsonspecificvariablessuchasthematuritystageofyourbusiness,thecircularbusinessmodel,thetypeoffunderandthetypeoffundingsought.

Inmostcases,itencompassesboththeinternalcapabilitiesofthebusinessandtheabilitytoclearlycommunicatetheopportunityexternallytopotentialinvestors.Preparednessthereforerelatestoboththespecificprocessesandrequirementsnecessarytolegallyraisecapital,butalsotothemanyandvarieddetailsanddocumentsneededtosuccessfullynavigatethecompetitivefinancinglandscapeandsecureinvestmentofsomeform.Forabusiness,conceptorprojecttobeconsideredinvestment-ready,itshoulddemonstrateaclearandcredibleplanforusinginvestmenttoachieveitsgrowthand(inthecontextofsustainability)itsimpactgoals,whilealsoofferinganappropriatereturnoroutcomefortheinvestor.Mostfundamentally,itmeansthattheperceivedrisk-returnratioispalatableenoughforagiveninvestortoentrustyourideawiththeirmoney.

Onamorepracticallevel,investmentreadinessrelatestotheabilityoftheleadershipteamtoidentifyandmeettheexpectationsandrequirementsofthespecificprofileoftheinvestormostrelevanttotheirproposal.Therearedifferentfacetstothis:

●Internally,itmeanshavingarobustbusinessmodel,acapableteam,transparentfinancialsystems,andtherelevantprocessesinplacetoreceiveandmanagecapitalinserviceofdeterminedobjectives.

●Externally,itrequirespresentingacompellinginvestmentproposition-onethatclearlydefinesapurposeandambitions,howmuchcapitalisneededtoachievethem,whatitwillspecificallybeusedfor,whattheinvestorcanexpectinreturn,whytheteamistheoptimalonetomakethevisionareality,andcriticallyanhonestawarenessoftheriskstowhichyou’reexposedandaclearplanonhowtomitigatethem.

●Inthecirculareconomy,however,investmentreadinessgoesbeyondcommercialfundamentals.Itincludestheabilitytoarticulateenvironmentalorsocialvalue,demonstrateeffectivecircularbusinessstrategies,andoftenanabilitytoalignwiththeexpectationsofmission-drivenorcatalyticcapitalproviders.

TheCircularInvestprogrammewasdevelopedonthepremisethatinvestmentreadinessisuniquelychallengingforcirculareconomyventures,andthatthisinhibitsthescalingofnecessarycirculareconomyinnovation.

Wheremyriadinvestmentreadinessguidesexistgenerally,thisisnotthecaseforthecirculareconomy,wherethefirstofitskindwasreleasedonlyinearly2025

.5

Whilethisguidewillensurecoverageofallnecessaryconsiderationsrequiredinthecapitalraisingprocess,itsparticularcontributionwillbeinprovidingcontext-specificinsightsforcirculareconomyprojectslookingtonavigatethepersistentbarrierstoinvestmenttheyface.

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Keyfactorsininvestmentreadinessandtheirrelevance

inthecirculareconomy

i.Businessmaturitylevel

Circulareconomyventurestypicallyfollowthesameinvestmentjourneyasconventionalstartups,butwithdistinctchallengesshapedbytechnicalcomplexity,ecosystemdependencies,andimpactconsiderations.ThestagesbelowoutlinehowCEstartupsmature,whatinvestorsexpect,andhowproduct-marketfit(PMF)evolvesalongtheway.

Seed

Later-stage

Proofofscalability

TRL8-9→

Capitalneed:multipleofpreviousphase

Mainsources:Seniordebt(banks),leasing.

strategicinvestor,privateequity.publicinvestor

Pre-seed

ProofofconceptTRL4-6

ProofofprincipleTRL1-3

Capitalneed:€0.5-610m

Mainsources:Subsidies.innovation

credi(banks),financing(RDA).

crowdfunding.strategicinvestors.

venturecapital/debt

Capitalneed:E01-E1m

Mainsources:Subsidies.incubator

programmes,regionaldevelopment

agencies(RDA),angelinvestors

Early-stage

ProofoftechnologyTRL6-8

Capitalneed:€1-6150m

Mainsources:Subsidies,funds.(limitedbank)financing.leasing.

strategic/privateequityinvestors,

privatecredit,venturedebt

Needtosubstantiatesustainabilityclaims

FIGURE2:MATURITYSTAGEOVERVIEW-THEMOREMATUREYOURBUSINESS,THEHIGHERBURDENOFDUEDILIGENCETOSUBSTANTIATESUSTAINABILITYCLAIMS

Pre-seed

Atthepre-seedstage,venturesareworkingonaconceptorearlyprototype,oftenwithlimitedtechnicalvalidationandnoincomingrevenue-theTechnicalReadinessLevel(TRL)wouldtypicallybe1-3.6Activitiesheremightincludefeasibilitystudies,materialtesting,andearlystakeholderengagementwithsupplychains,municipalities,orindustrypartners.Intheabsenceofdemonstrabletrackrecord,foundersareexpectedtoshowstrongqualitativesignalsofdemandthroughmarketresearch,stakeholderfeedback,surveydata,orexpressionsofearlyinterest.

Investorsmakedecisionslargelyontheperceivedpotentialofthebusinessmodel,thestrengthoftheteam,andthealignmentwithimpactobjectivessuchaswasteprevention,resourcesubstitution,orclimateinnovation.Fundingisusuallysourcedfromfriendsandfamily,publicR&Dgrants,angelinvestors,oracceleratorprogrammes,withaverageticketsizesofUSD500,000/EUR423,00(CGRFinance,2025).Ensuringenoughpre-seedcapitaltodemonstrateproofofconceptisoftenagoodbarometerforhowmuchyouneed.

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Seed

Seed-stageventurestypicallyhaveafunctionalprototypeandaretestingsolutionsinreal-worldcontexts,spanningTRL4-6.Earlytractionmightincludepartnerships,pilotprojects,signedlettersofintent,orfirstrevenues.Atthisstage,product-marketfitmustbecomesignificantandmustbemoretangible-investorslookforconsistentusage,earlyretentionsignals,andevidencethatcustomersfindvalueinthesolution.

Metricssuchascohortretention,repeatpurchases,orearlysalesgrowthbegintomatter.Thecapitalraised,typicallyfromangels,early-stageVCs,blendedgrant-equityfunds,oraccelerators,averagesaroundUSD2million/EUR1.7millioninthecirculareconomy(CGRFinance,2025).Itistypicallyusedtorefinethecommercialmodel,hirekeystaff,strengthenproductionoroperations,andscalepilotsintoearlycommercialdeployment.

EarlyStage(TRL6-8)

Earlystagereferstobusinesseslessthanfiveyearsold,usuallyraisingSeriesAorBroundswithaTRLanywherefrom6-8.Bythispoint,venturesareexpectedtodemonstratereliablerevenuestreams,scalableoperations,andaprovenimpactmodel.Product-marketfitshouldbeclearlyestablished,withstronggrowth,retention,andmeaningfulusagealldemonstrable,withretentioncurvesflatteningandcustomersconsistentlyreturning.

ForCEventures,thismaytranslateintolong-termcontracts,recurringsupplyagreements,orrobustmaterialrecoveryflows.Institutionalinvestors,mainlyventurecapitalfunds,becometheprimarysourceofcapital,withaverageticketsizesaroundUSD9million/EUR7.6million(CGRFinance,2025).Fundsareusedtoscaleoperations,expandintonewgeographiesorverticals,strengthengovernance,andbuildinfrastructuresuchasreverselogisticsormaterialrecoverysystems.Atthisstage,investorsscrutiniseuniteconomics,governance,andregulatoryreadinessmoreclosely,particularlygivenCE'sdependenceonpolicyandecosystemcoordination.

LaterStage(TRL8+)

Laterstageventuresaretypicallyolderthanfiveyears,withTRL8+andwithestablishedoperationsandpresenceacrossmultiplemarketsorgeographies.Fundingroundsatthisstagesupportmajorexpansion,capitalexpenditure,orverticalintegration,withtheabilitytosustainitunderrapidgrowthandacrossnewmarketsthemajorchallenge.ForCEbusinessesthisoftenmeansprovingthatimpactmodelsscaleeffectivelywithoutmargindilutionormissiondrift.Investorswillalsolookforresilienceagainstregulatoryshifts,supplychainvolatility,orenvironmentalexternalities.Financingincreasinglyincludesdebtalongsideequity,withaverageticketsizesofaroundUSD21.5million/EUR18.2millioninthecirculareconomy(CGRFinance,2025).

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ii.Typesofcircularbusinessmodel

Circulareconomystartupsnotonlydifferbymaturitystage,butalsobythetypeofbusinessmodeltheyemploy.Thoughoftenoverlookedincirculareconomyfinanceconsiderations,thebusinessmodeldistinctionmatters-differentmodelsimplyquitedifferentcapitalneeds,risk-returnprofiles,andinvestorexpectations.Thevaluehillframeworkidentifiesthreemaincircularbusinessmodel(CBM)categories,depictedinFigure2.

repair/maintain

RETAINVALUE

reuse/redistribute

refurbish

assembly

remanufacture

recycle

extraction

ADD

VALUE

manufacturing

retail

PRE-USEUSEPOST-USE

FIGURE3:CIRCULARBUSINESSMODELSMAPPEDONTHEVALUEHILL-SOURCE:CGRFINANCE,2025

Design&Production

Design&Productionmodelsrefertoupstreaminterventionsthatembedcircularityintoproductsandprocesses,examplesincludemodularandrepairableproductdesign,materialssubstitution(recycledorbio-basedinputs),designforrecyclingandtraceability,andregenerativeproductionmethods.Thesemodelstypicallyhavethemostpotentialtoreducetotalvirginmaterialdemandandsupportsystemicchange.Inpractice,however,materialinnovationoftendependsonnichesecondaryfeedstocks,longR&Dcycles,andindustrialscale-upstepsthatrequirecoordinationwithmanufacturersandbuyers.

CGRFinancefindsDesign&Productionreceivesthesmallestshareofcommercialinvestmentofthecircularbusinessmodels(≈8%),despiteitsimpactpotential.Becauseoflongtechnicalriskhorizons,uncertainearlyrevenuesandcomplexsupply-chain

circular

invest

coordination,Design&ProductionventuresaremorelikelytorelyonpublicR&Dgrants,innovationprogrammes,andimpact-focusedearly-stageinvestors.Earlyequityfundingisavailablebutconcentratedamongspecificbusinessmodelswithsubstantialregulatorytailwinds,demonstrableclimateimpact,andlargegrowthpotential.Traditionalbanksandmainstreamdebtprovidersaretypicallynotrelevantuntilproductyields,feedstockandofftakeareproven.

Usemodelsextendtheutilityandlifetimeofassetsvialeasing,subscriptionorsharingplatforms,repair/refurbishmentandremanufacturing.FromaCEperspectivetheyareimportantbecausetheykeepvaluecirculatinglonger,shiftincentivesfromthroughputtoutilisation,andcanmateriallyreduceresourcedemand.Usemodelsmixattractiverecurring-revenuewithsignificantupfrontcapitalrequirements-thecompanyoftenretainsownershipoftheassetstockandthereforehassignificantneedforbothcapitalexpenditurestoprocureassetsandoperatingexpenditureforrepairservices.

CGRFinanceshowsUsemodelsreceivecomparativelysubstantialfunding(≈42%ofcircularbusinessmodelinvestment),withprivateequityandventurecapitalshowingstrongerinterestinscalabledigitalormarketplaceiterations(e.g.second-handelectronicsmarketplaces).Moretraditionalservicemodels(repairco-ops,localremanufacturing)arelabour-intensiveandoftenoperateatsmallermargins,makingthemlessappealingtomainstreamequityinvestorsunlesstheycandemonstratehighretention,uniteconomicsandscalablechannels.Significantly,researchfindingsshowthatprominenttransitioninstruments(greenloans,sustainability-linkedloans)failtosupportUsemodels,whereeligibilitycriteriadonotyetadequatelyallowfortheinclusionofservicemodels.Provingretention,lifetimevalue,repeatcontractratesandstrongoperationalsystems(reverselogistics,maintenancecapability)iskeytounlockingbothequityanddebtforUsemodels.

Recovery

Recoverymodelsoperatedownstreamtoundertakecollection,sorting,materialrecovery,recyclingandothervalue-addingusesofwasteorbiomass.Fromacircularitystandpointtheseareessentialforclosingloopsandrecoveringvaluefromwastestreams,reducinglandfill,pollutantsandsomevirginextractionthroughsecondarymaterialuse.Financially,Recoverytendstolookmorelikeinfrastructureorindustrialprojects,withheavycapitalexpenditure,facilities,andlongpaybackprofiles,butoftenwithstablecashflowswhenfeedstocksupplyandofftakearecontracted.

CGRFinancedocumentsthatRecoveryreceivesthelargestsingleshareofcircularbusinessmodelinvestment(≈50%)andthatbanksandcreditprovidersarethedominantbackershere,withdebtanaturalfittoasset-backed,cashflow-predictableoperations.However,Recoverymodelsareimpactedbypricecompetitivenesswithvirginmaterialsandrelyonbothregulatorysupportandaccesstofeedstock,allof

whichshapethefinancestructure.Typicalcapitalstackscombineprojectorassetfinance,bankdebt,andsometimesDevelopmentFinanceInstituti