The market for clean technologies which reduce energy consumption and pollution, known as cleantech, is becoming crowded with small start-ups, according to an investment-readiness programme.

For that reason it is important for entrepreneurs to do their homework before deciding to enter the sector, the manager of gateway2investment claimed.

Simon Littlewood said that the attraction of small-business company formation within the "hot sector" of cleantech "may be a double-edged sword".

He explained: "There may be more investor demand, there are also many more start-up and early stage companies hoping to grab their share."

"It's never easy to secure investment and there is a real danger that even those companies with high-quality propositions will fail to stand out because of the number of rivals operating in the same area with similar technology and business models."

Mr Littlewood encouraged entrepreneurs to make sure they stand out from their competitors.

Cleantech investment focus may include water purification, renewable energy and green technology.