💸 VC DEEP DIVE Archives • The Impact

The Fund Investing In Israeli Founders Fighting Climate Change

Daniel Kriozere — Mon, 22 Aug 2022 17:45:42 +0000

Firstime Ventures (Firstime) is a $250M AUM fund investing in Israeli founders and companies that are building a sustainable & accessible future for all. Firstime Ventures is investing in Israeli entrepreneurs that are building scalable products with a clear business model.

Fund Snapshot

Stage: Seed – Series A
Check Size: $2-8M
Geography: Israel or Israeli Founders
Lead/Follow: Both
Revenue/Valuation Thresholds: Post-Product Market Fit

About the Fund

Why was the fund created?

Firstime Ventures started as a successful government-backed incubator called “The Time.” Firstime was created to support these incubator companies.

In 2020, Firstime started a sustainability fund that focused on businesses that aligned with the UN Sustainability Development Goals. Within the scope of investing in sustainable startups, the partners all understood the importance of climate. Over the next 3 years, Firstime hopes to deploy $100M to combat the climate crisis.

What is a contrarian idea Firstime believes to be true/accurate?

Firstime doesn’t see climate as a niche – climate is a paradigm. The fund sees climate as a generalist thesis because it allows for investment in energy, agriculture, circular economy, and many other sectors.

What domains in climate tech does Firstime have the greatest expertise in?

While Firstime has more experience in software, over time the team’s thesis and investments have included digitally enabled hardware that can make a difference when it comes to climate change.
Within climate, Firstime will look at opportunities across many verticals, including agriculture, circular economy, energy, water, carbon reduction, carbon measurement, and transparency.

What type of portfolio support does Firstime provide?

Firstime is proactive when helping startups, but they also know how to avoid backseat driving. Firstime can help startups with:

Follow on funding
Marketing and branding
Strategic planning
BD
PR/Media
Business and financial plans
Sustainable reporting
Carbon measurement

About Investments

How can a startup get investment from Firstime?

Reach out to them via LinkedIn or on their website www.firstime.vc/apply

What is Firstime’s investment process and timeline?

Firstime is considerate of a founder’s time and emotions, and only takes meetings if there is enough interest. Their diligence process usually takes between 2-6 months, and takes 45 days or so from term sheet to check.

When engaged in due diligence, Firstime spends a lot of time focused on the founders and the team. Itamar Weizman, the Head of Climate Investments at Firstime, says that “[VC] is a business of nine funerals and one wedding.” As such, Firstime invests in the people they want to work with over the next 5-10 years. He continued on saying that “You need to pick the people that you want to go to the funeral with, which is tough. Sometimes people fail, not because they weren’t good enough, but because of reasons you can’t control.”

Besides the people behind a startup, Firstime also needs to understand the narrative and analyze the opportunity.

What would make Firstime consider deviating from its typical criteria?

Firstime’s current fund is limited to investing in 15-20 companies over the next 3 years (due to fund size). As a result, Firstime adheres to its investment criteria.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

Daniel currently works at Lawrence Livermore National Laboratory as a Product Manager. Outside of his day job, he is a Principal at C3, Tech Scout at For ClimateTech, and Venture Scout at Prithvi. He also works with various climate incubators/accelerators (Cleantech Open, Techstars, and Joules Accelerator) and runs The Impact and Innovate Climate – both are newsletters covering startups in the climate space.

The post The Fund Investing In Israeli Founders Fighting Climate Change appeared first on The Impact.

The Emerging European a16z

Daniel Kriozere — Sun, 07 Aug 2022 23:46:33 +0000

Extantia invests in deep decarbonization technologies that will lead us to a world beyond fossil fuels. They are actively searching for companies that have the potential of becoming Gigacorns. These are companies that are ultimately capable of saving in excess of 1 gigatonne (1 billion tonnes) of CO2e emissions per year and are also commercially viable with scalable business models.

The first gateway for every incoming deal is to assess and forecast the CO2e savings of the technology over time. If it has the potential of reducing at least 100 million tonnes of CO2e a year, either through direct impact or indirectly, then they move forward with the deal review.

Fund Snapshot

Stage: Pre-Seed – Series B
Check Size: $500K – 2M
Geography: 80% Europe, 20% Global
Lead/Follow: Both

About the Fund

Why was the fund created?

We have seen a funding paradox where 80% of the VC money went into companies that can solve only 20% of the CO2 emissions problem. Extantia wanted to found a climate-first tech-agnostic fund, which focuses first and foremost on the big piece of the climate puzzle.

From experiencing the need for early capital firsthand, the Extantia founders have been investing in climate for the last decade. Extantia’s founders saw a need and opportunity to provide investment support for technology innovation in Europe. As a result, Extantia was started as an avant-garde to mobilize private capital to put climate first and create an impact for generations to come.

What is Extantia’s core belief?

Climate is the biggest challenge of our generation and entails a lot of risks. Yet, it is also one of the biggest opportunities in business history and probably 100x bigger than the internet revolution. Getting to Net Zero by 2050 will require trillions of investments, partially in technologies that we still don’t have. This is where startups and VCs have a major role to play.

Extantia believes that the world needs more solutions to tackle climate change. They are focused on supporting technologies to help the world achieve net zero by 2050.

What domains in climate tech does Extantia have the greatest expertise in?

Extantia’s experience and investments are across the climate stack, yet three categories are mainly in focus. The first is energy, as this represents more than 70% of the challenges we face – electricity, heat, and fuel. The second is industrial processes and advanced materials. And last, advancing carbon sinks, such as direct carbon capture. rect carbon capture.

What type of portfolio support does Extantia provide?

Extantia differentiates itself as a fund by analyzing carbon impact and assisting with capital structure. Analyzing carbon means helping startups understand, communicate, and position impact. On the capital structure side, Extantia realizes that startups should use equity financing for certain aspects of a business, and non-dilutive funding for others. Extantia can help ensure equity financing is spent on the right activities and introduce startups to non-dilutive capital providers. Many of their companies have a 1:1 ratio (equity to non-dilutive raised).

The other areas Extantia supports startups are with:

Fundraising
Go-to-market strategy
Marketing and positioning

About Investments

How can a startup get investment from Extantia?

Extantia invests in companies that develop technologies that at scale have the potential to abate or remove more than 100Mt of CO2 from our atmosphere per year in a commercially viable way. To assess this, Extantia uses the EPIC methodology (Extantia Projected Impact Calculation) which combines the best practices of Life Cycle Assessment with forward-looking analysis.

What is Extantia’s investment process and timeline?

Extantia can negotiate a term sheet in as little as 4 weeks but usually they want to take the time (at least 3 months) to get to know the team. What it takes to get them there is a lot of carbon math, with the focus on answering the question: “Will this change the world by 2050?” Carbon math, according to the EPIC methodology, happens in 3 stages. Their first go/no-go decision is based on if a startup can reduce greenhouse gases by at least 100Mt or more CO2e per year by 2050. If the startup can, Extantia will then be more rigorous and figure out the actual and potential impact a startup can have by 2050. At this point, Extantia will also run due diligence on other pieces of the business – technology, scalability, USP/competition, team, business model, demand/traction, risk profile, and so on. When Extantia is finalizing a term sheet, they look at the impact a startup can have within the next 5 years. This last piece sets milestones for the startup and Extantia employees’ compensation.

What would make Extantia consider deviating from their typical criteria?

The most important consideration for Extantia is a startup’s carbon impact. Other than that, Extantia is open to investing in startups outside of their typical geography, stage, and check size based on the opportunity.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

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Maersk Is Investing In Climate Startups Decarbonizing Supply Chains

Daniel Kriozere — Mon, 01 Aug 2022 03:20:48 +0000

Maersk Growth is the venture arm of A.P. Moller – Maersk (Maersk). Maersk is an integrated logistics company working to connect and simplify customers’ supply chains. Maersk Growth’s mission is to digitize, democratize, and decarbonize supply chains. Maersk Growth believes that they can accelerate supply chains to go carbon neutral by being a leader in investing in and deploying technology.

Fund Snapshot

Stage: Seed – Series A
Check Size: $500K – $5M
Geography: North America, Europe
Lead/Follow: Both

About the Fund

Why was Maersk Growth created?

Maersk started its corporate VC, Maersk Growth, in 2017. This was a strategic decision, so Maersk could engage with startups for corporate innovation. Additionally, as the biggest end-to-end logistics company, Maersk Growth sees investing in climate tech as a way to decarbonize supply chains.

What domains in climate tech does Maersk Growth have the greatest expertise in?

Maersk, the parent company, is a supply chain and logistics company. The team has expertise in and invests in pain points the industry faces. This includes asset management, robotics, warehouse automation, and solutions that address decarbonization (e.g. eliminating scope 1,2 and 3 emissions, alternative fuels).

What type of portfolio support does Maersk Growth provide?

Maersk Growth is the interface between Maersk and the industry. There are many advantages that Maersk Growth provides to portfolio companies, besides industry presence, expertise, and insights. They have a dedicated portfolio management team to help startups connect with:

Resources to scale and/or co-develop technology
Customers within the network
Talent

About Investments

How can a startup get investment from Maersk Growth?

We are keen to engage with Founders early on and establish a good mutual understanding of the startup’s solution and our potential value-add. So if you digitize, democratize, and decarbonize supply chains, reach out to our Copenhagen-based team at growth@maersk.com or directly to the Investment Team members.

What is Maersk Growth’s investment process and timeline?

Maersk Growth has a standard diligence process (calls with the team and customers, data room, etc.), both quick and transparent. Being an active investor, the team also connects with relevant business partners within Maersk so that the portfolio management team can hit the ground running immediately after investing.

What would make Maersk Growth consider deviating from its typical criteria?

Maersk Growth is disciplined around its investment mandate as an early-stage investor within the supply chain space. But, at the same time, they can deviate opportunistically, as it makes sense strategically for the business (pain points and opportunity).

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Maersk Is Investing In Climate Startups Decarbonizing Supply Chains appeared first on The Impact.

The Leo DiCaprio Backed, Circular Economy Driven VC

Daniel Kriozere — Sat, 09 Jul 2022 14:19:25 +0000

Regeneration.VC (Regeneration) recently announced their $45M fund in March of 2022. Regeneration.VC is investing in consumer-powered climate innovation driven by circular and regenerative principles. Michael Smith, one of the fund’s GP’s, explained what exactly this means and what Regeneration is investing in:

“Over 90% of materials end up in landfills or natural ecosystems, and the consumer supply chain accounts for 45% of global emissions. Reimagining apparel, food, and CPG presents a $4.5T opportunity to ensure the prosperity of our species and planet. Our mission at Regeneration.VC is to reimagine consumer industries through an environmental lens.”

Fund Snapshot:

Stage: Seed – Series A
Check Size: $500,000 – $3,000,000
Geography: Global (75% North America, 25% Global)
Lead/Follow: Both

How can a startup get investment from Regeneration.VC?

Regeneration.VC looks for 3 things.

The first piece is vertical alignment. Regeneration.VC invests in:

Circular Economy Design (material inputs)
Circular Economy Use (brands that are using input materials to tell a circular pathway)
Circular Economy Re-Use (waste to value)

The next piece that matters is business traction. Regeneration.VC likes to see product-market fit with early customer signal, revenues as little as a few hundred dollars, joint-development agreements (JDA), or off-take agreements from downstream partners.

Lastly, Regeneration.VC looks for the right business profiles to invest in. For reference, as a fund, Regeneration.VC wants to see 20%+ internal rate of return and looks to underwrite for 7-10X+ multiple on invested capital (MOIC) outcomes. On the environmental side, they want to support technology that reduces CO2e, improves water, waste and gets rid of toxins.

Why would a startup want Regeneration.VC’s capital?

Regeneration.VC’s tagline is that they are supercharging consumer-powered climate innovation.

Supercharging means that Regeneration.VC works with each portfolio every quarter on one goal. This forces startups to prioritize asks, meanwhile getting Regeneration.VC’s help on anything, including:

Fundraising help
Non-dilutive funding
Hiring
Supply chain (bill of materials, packaging recommendations, etc.)
Business development and sales
Environmental measurement or lifecycle assessments
Packaging recommendations

Having previously operated and exited companies, Regeneration.VC assigns 1 Partner as a lead on every startup, in addition to each startup has an “advisor working group”. In these advisor working groups, advisors work together in smaller groups with clear agendas to complete the goal.

What can a startup do to get in front of Regeneration.VC?

Startups can submit their information through Regeneration.VC’s intake form (found on their website). Regeneration.VC looks at everything that comes in. However, to be seriously considered, startups should meet Regeneration.VC’s criteria that we listed above.

What can a startup expect while going through Regeneration.VC’s due diligence process?

Regeneration.VC’s first stage is based on materials provided by a startup and team meetings. Their deeper diligence includes customer calls, engaging technology advisors, market research, and much more.

If Regeneration.VC is interested, Regeneration.VC writes a short memo to present to the full team. If there’s enough interest, they will do a full memo. Regeneration.VC’s process can be done in as little as 10 days, but ideally takes a month or two.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Leo DiCaprio Backed, Circular Economy Driven VC appeared first on The Impact.

The Corporate VC In Search Of The Future Of Energy

Matthew Morris — Sat, 09 Jul 2022 14:04:38 +0000

Shell Ventures (SV) is the corporate venture capital arm of Shell, a leading global energy provider. They launched a new $1.4B investment fund in December 2021 to thematically invest in three core areas: power, mobility, and industry.

SV has 80+ portfolio companies, LP positions in a dozen top climate tech funds, and a seed stage-only fund called SVX that invests in the earliest innings in the above-mentioned core areas. The Shell Ventures team of 30+ operates across 10 offices in 7 countries with investments throughout 5 continents.

Fund Snapshot:

Stage: Seed to Pre-IPO
Check Size: $1M to $50M
Geography: Global
Lead/Follow: Flexible (lead on highly strategic deals)

About the Fund

Why was Shell Ventures created?

Shell Technology Ventures was originally founded in 1996 as a way for the fund’s parent company to incubate and spin out its technologies and commercialize them. However, as the threat of climate change loomed closer, Shell sought to find a greener future for energy. In 2012, Shell Technology Ventures changed its name to Shell Ventures to expand their scope to:

include business model and technology innovation, and
to accelerate the transformation of energy, mobility and industry/decarbonization

SV is closely aligned with Shell, helping the parent company gain early access to new technologies and business models, obtain insights on new markets and services, and leverage third-party funding to collectively de-risk novel solutions.

What domains in climate tech does Shell Ventures have the greatest expertise in?

SV invests thematically across three core areas in which the parent company and its product offerings play an important role. Thus, SV can leverage the interest and business units within its parent company to vet and provide subject matter expertise in these core areas:

Power: large-scale power generation, wind (floating & fixed), solar, nuclear, distribution, trading, consumption, whole-home electrification, heating and cooling and energy efficiency.
Mobility: electrification, ground, aviation, new business models
Industry/Decarbonization: carbon capture utilization and storage, nature-based solutions, hydrogen, waste to chemicals, electrification of industrial processes, ESG trading

What type of portfolio support does Shell Ventures provide?

SV’s position as a corporate venture arm allows the fund to be a strategic partner to its portfolio companies. SV can pave the route for companies to pilot their products with or become customers of Shell. SV connects entrepreneurs with implementation managers who can assist portfolio companies in gaining exposure within Shell. Additionally, due to Shell’s global operations, SV can help startups expand multi-nationally, aiding startups of all stages to grow and mature.

Aside from traditional sales assistance and growth inside the parent organization and its partners, SV is always analyzing market developments and can assist businesses in adapting to a changing ecosystem.

About Investments

How can a startup get investment from Shell Ventures?

SV likes to meet entrepreneurs early in their process and build long-term relationships. Founders can directly reach out to the local team to evaluate the opportunity. In the US, SV has investment teams in San Francisco, Houston, and Boston.

What is Shell Ventures’ investment process and timeline?

For companies engaging with SV, founders will find a team that is keen to build long-term relationships. Each investment opportunity is assessed carefully and as a result, the timeline can vary. SV will have meetings with the teams of startups, engage with customers, do a competitive and market size analysis, understand unit economics, as well as engage with external partners at other funds to get expertise and potentially co-invest.

SV prioritizes financial returns over strategic objectives, yet both must be present when making an investment decision. So long as the financial return is there, the fund is open to technical and market risk.

What would make Shell Ventures consider deviating from their typical criteria?

SV will likely not deviate from its criteria, given that the scope of the fund is extremely broad and the team invests from seed to pre-IPO. The fund is flexible in capital and will invest within the bounds of its mission. As new topics emerge, SV is open to exploring opportunities that align with decarbonization and Shell’s net-zero targets.

About The Author

Matthew Morris

Senior Associate @ ADL Ventures

Matt is a Senior Associate with ADL Ventures, helping build the future of energy, transportation, and building materials through his consulting and business development work. Outside of his day job, Matt helps bridge the gap between startups and investors across all disciplines in climate.

The post The Corporate VC In Search Of The Future Of Energy appeared first on The Impact.

They Found Tesla, Now They Invest In Energy, Mobility & Buildings

Daniel Kriozere — Wed, 22 Jun 2022 03:39:03 +0000

The Green Room

This VC Found Tesla, Now They're Finding The Next Tesla

00:00 / 41:06

The Westly Group supports high-growth, capital-efficient businesses that support the digitalization and sustainability of energy, mobility, buildings, industrial technology and cybersecurity. To assist outstanding entrepreneurs in raising finance rounds that meet their growth needs, they’ve created a flexible investment approach.

Fund Snapshot

Stage: Series A – Series B
Check Size: $5-15M
Geography: Developed markets (primarily US)
Lead/Follow: Both (primarily lead)
Revenue/Valuation Thresholds: Commercial traction

About the Fund

Why was the fund created?

Steve Westly founded the Westly Group in 2007 to combine his government experience at the US Department of Energy, and as the Controller and CFO of the State of California and as an entrepreneur where he helped take eBay public. After experiencing Cleantech 1.0, Westly developed its thesis of investing in capital efficient, high growth, software startups.

What domains in climate tech does your firm have the greatest expertise in?

Westly has expertise in and is focused on 5 verticals:

Energy
Mobility
Buildings
Industrial Tech
Cybersecurity

What type of portfolio support does your team provide?

Unlike other VC’s, Westly was created with the intention of helping startups with sales and marketing, rather than helping with the technology. Additionally, Westly collaborates with portfolio companies and can help with:

Customer & Sales Pipeline development
Business development and/or sales support
Financing & exit strategies
Recruiting

About Investments

What is Westly’s investment process and timeline?

Westly prefers to build long-term relationships with entrepreneurs but can make investment decisions within a few weeks. Their process entails talking with the executive team and the startup’s customers, researching the market (size, competition, exits, etc.), and unit economics. That said, Westly puts emphasis on the team behind a startup, and as such, they are eager to develop relationships with startups after a Seed round. This enables Westly to track a company’s progress while showing how Westly can add value.

What would make Westly consider deviating from their typical criteria?

Westly is open to investing in startups outside of their typical criteria, as long as it is tangential to the verticals they are focused on. For instance, the cybersecurity vertical was included in their thesis after realizing that cybersecurity is a critical piece for their vision of a successful digitally enabled, sustainable future. If a technology provides value to the sector Westly invests in, they are open to it.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post They Found Tesla, Now They Invest In Energy, Mobility & Buildings appeared first on The Impact.

M Ventures Fills The Gap Between Internal R&D And M&A

Daniel Kriozere — Mon, 25 Apr 2022 17:09:40 +0000

Merck KGaA, Darmstadt, Germany is a leading science and technology company that operates across the healthcare, life science, and electronics sectors. The company makes a positive difference in millions of people’s lives every day by creating more joyful and sustainable ways to live. M Ventures is Merck KGaA, Darmstadt, Germany’s corporate VC that invests in innovative technologies to solve the problems of Merck KGaA, Darmstadt, Germany’s customers.

Fund Snapshot

Stage: Series Seed to Series B
Check Size: €1M – €5M
Geography: Global
Lead/Follow: Both

Why was the fund created?

M Ventures was created as a way to fill the gap between internal R&D/BD and M&A: “Over the past decade, M Ventures has established itself globally as a leading partner to the biotech and tech venture ecosystems.” Belén Garijo, Chair of the Executive Board and CEO of Merck KGaA, Darmstadt, Germany, added that “M Ventures [will] continue to advance our pioneering innovation strategy, to deliver sustainable business performance and be a catalyst for innovative companies to develop breakthrough technologies.” As a 70% family-owned, world-leading science and technology company, M Ventures believes in innovation, collaboration, and scientific progress.

What is a contrarian idea your M Ventures believes to be true?

M Ventures strongly holds to the principle that strategic and financial value is equally important and not mutually exclusive. The team has great success today, both financially and through a high level of engagement between portfolio companies and Merck KGaA, Darmstadt, Germany.

What domains in climate tech does M Ventures have the greatest expertise in?

Merck KGaA, Darmstadt, Germany has a long history of innovation in the healthcare, life science, and electronics segments. They have strong expertise in a diverse range of scientific disciplines. M Ventures invests in technology that aligns with the strategic interests of Merck KGaA, Darmstadt, Germany in Healthcare, Life Sciences, Electronics, Frontier Tech, and Sustainability.

What type of portfolio support does M Ventures provide?

Portfolio companies benefit from M Ventures’ deep experience in building and growing early-stage companies and from their access to Merck KGaA, Darmstadt, Germany’s expertise and network. M Ventures takes an active role in its portfolio companies and teams up with entrepreneurs and co-investors to strive for commercial success.

What would make M Ventures consider deviating from their typical criteria?

M Ventures has a broad thesis and looks at every opportunity on merit, recognizing that all investments are unique and that there needs to be alignment between strategic vision and a clear path to value creation. M Ventures doesn’t shy away from technology risk, as they manage it with a milestone driven approach and mitigate it with diligence. M Ventures is curious, science-focused, and value-driven. Disruption and changes in paradigms rarely emerge from sticking to “typical criteria.”

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post M Ventures Fills The Gap Between Internal R&D And M&A appeared first on The Impact.

Evergreen Addresses The Capital Gap For Startups In The Midwest

Daniel Kriozere — Mon, 18 Apr 2022 21:42:26 +0000

Evergreen Climate Innovations addresses the capital gap that exists for early-stage climate tech companies. They invest in Seed stage startups developing innovative solutions with the potential to make outsized climate impact.

Fund Snapshot:

Stage: Pre-Seed to Seed
Check Size: $200K-300K
Geography: US, Greater Midwest region
Lead/Follow: Flexible – typically invest via convertible note; can also lead or participate in equity rounds
Revenue/Valuation Thresholds: We seek to deploy catalytic capital in high-risk/high-impact climate tech startups. No stage of development is definitively “too early”, especially when it comes to hard-tech, though they like to see some early market traction for software investments.

Why was the fund created? What do the LPs/GPs deeply believe in?

Evergreen Climate Innovations’ (Evergreen) 501vc® Seed Fund was created to address the capital gap in early-stage climate tech funding. This gap is particularly severe in the Midwest region of the US – according to Pitchbook only $16.5 million was invested in climate/cleantech seed rounds in 2021 compared to $251 million invested in West Coast companies and $147 million invested in the Northeast/NYC area.

Evergreen’s unique 501vc® investment model combines the activities of a seed fund with the legal structure of a non-profit organization, which allows them to bear a little more risk than the market and provide patient, catalytic capital to entrepreneurs at the earliest stages of development.

The fund doesn’t have any LPs. Instead, they have donors. Their fund is capitalized with philanthropic dollars, and the fund is structured as a revolving evergreen fund – any returns generated by investments are recycled back into the fund and redeployed. Donors believe in Evergreen’s philosophy of “compounding impact”: Evergreen won’t deploy donors’ money just once; rather, they put their money to work again and again via their high-impact revolving fund.

What is a contrarian idea Evergreen Climate Innovations believes to be true?

The lack of early-stage climate tech funding in the Midwest is not for a lack of climate tech innovation in the region. Innovation in the Midwest is just not as geographically concentrated as it is in Silicon Valley or Boston because it is more spread out. There’s remarkable innovation brewing all over the region, from Argonne National Laboratory in Lemont, Illinois to The Battery Lab at the University of Michigan and from the Ag Startup Engine in Ames, Iowa to HG Venture’s Accelerator in Indiana. These are just a few of the innovation nodes throughout the region pumping out a wide range of high potential technologies and startups.

Also, according to Pitchbook, Seed stage valuations in the Midwest were 49% lower in 2021 than the West Coast and 44% lower than the Northeast/NYC.

What domains in climate tech does Evergreen Climate Innovations have the greatest expertise in?

Evergreen is focused broadly on climate-tech and environmental sustainability, seeking investments in climate mitigation, climate resilience, and natural resource conservation. Having made investments in 38 companies over the past 8 years, they’ve developed a wide range of expertise across many industries including energy, transportation, agriculture, water, and materials, among others.

What type of portfolio support does Evergreen provide?

Evergreen is a hands-on investor, working closely with portfolio companies to identify and execute a clear, well-funded path to market. Beyond the money invested, the team provides invaluable resources and opportunities that arise from their extensive network throughout the climate tech innovation ecosystem that they have spent over a decade cultivating.

More specifically, Evergreen runs a “Structured Fundraising” process to help portfolio companies raise their first institutional round. Another example is their CEO Summit, an annual leadership seminar that features expert speakers on a wide range of topics while also fostering engagement between their portfolio company founders. These are just a couple examples.

Evergreen also taps into their extraordinary board of directors, investment committee, and stakeholder network to leverage deeper domain expertise when needed. For example, their former CEO and current board chairwoman Amy Francetic, managing partner at Buoyant Ventures, has extensive experience investing in software technologies. And board member and Investment Committee chair Karen Kerr, formerly Executive Managing Director of GE Ventures, has deep domain expertise in industrial and manufacturing innovation.

What is your investment process and timeline? Who do you talk to? How many calls? What kinds of diligence steps (materials)?

Evergreen prefers not to take warm intros. Any startup can submit a pitch deck via the website. They prefer to keep things open and objective on the front-end; they’ve always had strong diversity metrics across the portfolio and believe that’s in large part due to their open-access approach to intaking deal flow.

Evergreen aims to respond within a few weeks as to whether they’d like to go deeper with a company. From there they run a process in which they go deeper as they greenlight a company to each subsequent stage. The team digs into every aspect of the business, assessing what could go wrong, as well as having a very optimistic view of what could go right. They are first and foremost seeking the highest potential impact. However, Evergreen fundamentally believes that meaningful impact will only come with scale, and therefore sound business fundamentals are equally as important as the potential impact promised by a new technology.

In the latest stages of their process, they talk to customers and partners, develop their own 10 year pro-forma financial model, and draft an impact memo and investment memo for Investment Committee prior to a company’s final pitch to their Investment Committee. The process typically takes 3-5 months.

What would make your fund consider deviating from your typical criteria?

Evergreen sticks to early-stage climate tech in the Greater Midwest (roughly Denver to Pittsburgh). Ultimately, they’re looking for investment opportunities where their capital and resources bring additionality to the table. That could mean being the first check into a company, or it could mean bridging a startup from friends-and-family/angel investors to institutional investors. The ecosystem is always evolving and so are they. As more money flows into climate tech, they will keep a close watch on the market and make the necessary adjustments to ensure they’re using their resources to maximize impact.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Evergreen Addresses The Capital Gap For Startups In The Midwest appeared first on The Impact.

A Fast And Founder-First Deep Tech CVC fund

Daniel Kriozere — Mon, 11 Apr 2022 16:12:30 +0000

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TDK Ventures is a deep technology-focused venture fund, investing globally in founders building revolutionary early-stage innovations across the energy, industrial, mobility, health, materials, and climate sectors. TDK Ventures invests primarily in scalable solutions that contribute positively to society with a line of sight to commercialization.

Fund Snapshot

Stage: Seed – Series B
Check Size: $0.5-5M
Geography: Global
Lead/Follow: Follow, Occasionally Lead
Revenue/Valuation Thresholds: None, they are return multiple-oriented

About the Fund

Why was the fund created?

TDK Ventures is the exploration engine for TDK Corporation. TDK is a 100,000+ employee company with over 100 core business groups spanning sensors to batteries, and TDK Ventures fulfills TDK’s need to discover and learn about new technologies and markets beyond the traditional context of corporate development and R&D.

TDK Ventures invests to understand what TDK should be looking at beyond its current horizons, and is building a core competency for working with founders developing technologies that dovetail with products and strategies essential to the continued growth of TDK. As an exploration engine, the TDK Ventures team also has a broader mandate to invest in and learn from technologies in completely new areas of digital, energy, and environmental transformation that may help guide TDK in building new competencies, products, and businesses in the coming decades.

What is a contrarian idea TDK Ventures believes to be true/accurate?

TDK Ventures believes that solutions rooted in foundational sciences are at the core of properly solving problems posed by the climate crisis. One of TDK Ventures’ essential competencies is comfort and understanding of hardware – and being able to help founders building hard tech with resources and guidance in commercializing their products. They are excited about technologies that can change current paradigms and bring physical products to the table to solve the problems we are facing today.

What domains in climate tech does TDK Ventures have the greatest expertise in?

At a fundamental level, everyone on TDK Ventures’ investing team has a background in foundational sciences or engineering and is passionate about helping climate tech founders bring their innovations to life. This combines with the decades-long experiences of TDK Corporation in commercializing cutting-edge electronic components, sensors, actuators, power systems, and lithium-ion batteries to build expertise in evaluating climate tech as it relates to the energy transition, specifically in energy storage, renewables, and energy management. TDK Ventures also has combined team and corporate expertise in chemical and materials engineering to support investments more broadly across electrochemistry, hydrogen, fuel cells, and carbon capture.

What type of portfolio support does TDK Ventures provide?

TDK Ventures is a financially-focused CVC that seeks to provide strategic support to its portfolio from TDK Corporation when it is most valuable to founders, and without constraining portfolio growth. In their pursuit of being “smart money” for deep-tech founders, TDK Ventures supports portfolio companies to seek positive collaborations with TDK for technical support, product development, and business development.

In addition to the relationship with the parent company, TDK Ventures is focused on comprehensively helping founders with:

Fundraising
Hiring
Market research and strategy
Governance
Channels partnerships
Customer network

About Investments

What is TDK Ventures’ investment process and timeline?

TDK Ventures encourages startups to understand the fund’s focus before reaching out and has an introductory deck about their fund available online in an effort to be as transparent as possible.

TDK Ventures is generally thesis-driven and invests based on deep insights developed for each portfolio company. The team balances pro-active thesis development, which enables them to move fast when meeting startups where technical and market knowledge is established, with fast-moving diligence relying on internal and external experts to learn about promising new technologies. They pursue conversations with startups when they have a deep enough understanding of a sector to ask the right questions.

TDK Ventures’ diligence process is founder-friendly and can move as fast as needed without dependence on explicit buy-in from TDK Corporation. At a high-level glance, they seek to understand a startup’s potential for outsized returns, strategic relevance, and positive societal impact. Some key pieces the team assesses in each startup are the technology differentiation, unit economics, team, and traction that will lead the company to be a “king of the hill” in their space.

What would make TDK Ventures consider deviating from their typical criteria?

TDK Ventures will consider investing outside of their “sweet spot” in situations where a startup’s core innovation is in an area that’s very relevant to TDK Corporation. They will also consider investing in software that enables climate impact in areas where the underlying hardware may be less differentiated / more commoditized.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post A Fast And Founder-First Deep Tech CVC fund appeared first on The Impact.

The Fund Finding Sustainability Startups For LatAm

Daniel Kriozere — Sun, 03 Apr 2022 04:13:02 +0000

WIND Ventures is the strategic venture capital arm of COPEC, the leading downstream energy player in Latin America (gas stations and convenience stores). WIND Ventures’ purpose is to accelerate global startups and boost their growth in the United States and Latin America. They aim to lead the mobility, energy, and retail sectors’ transformations by opening up COPEC’s knowledge, expertise, and resources to help startups and scaleups around the world. In short, WIND Ventures offers global startups ‘unfair access’ to the Latin American growth markets.

Fund Snapshot

Stage: Series A+
Check Size: $2-6M
Geography: Global, Expansion into Latin America
Lead/Follow: Lead or Follow
Revenue/Valuation Thresholds: Revenue generating

About the Fund

Why was the fund created?

WIND Ventures was founded in 2019. COPEC needed to transform and wanted to do it the best way that it could. Prior to WIND Ventures’ launch, COPEC spent a year designing their new growth strategy that aligned with the energy transition trends and felt strongly that an open innovation platform was critical for success. WIND Ventures directly reports to COPEC’s Chief Strategy Officer with CEO and Board support.

What domains in climate tech does WIND Ventures have the greatest expertise in?

WIND Ventures leverages COPEC’s vast knowledge, expertise and resources to accelerate growth, primarily within Latin America, for startups and scaleups across the world in the new mobility, energy and convenience sectors. The team includes long time climate tech venture capitalists but also brings a product-market fit expertise for Latin America.

What type of portfolio support does WIND Ventures provide?

WIND Venture’s value beyond capital is the WIND growth platform that opens up COPEC’s vast resources to global entrepreneurs for “unfair” access to Latin America and the United States. Specifically, startups can leverage the WIND Garage, an innovation garage located in Santiago, Chile and Bogota, Colombia. Additionally, COPEC has over 3,500 gas stations globally – most with convenience stores – and is a ‘most trusted’ brand through Chile and Latin America. Through Copec’s WIND efforts, it now has a leading EV Charging business as well as renewable energy and energy storage businesses that look for global startup partnerships for collaborations.

About Investments

What is WIND Ventures’ investment process?

When making investment decisions, WIND Ventures thinks about a few different pieces, but leans heavily into how it, and its resources, can help the Founders succeed.

To do this well, one key piece is the geography of the startup and running a product-market fit analysis to ensure the value proposition resonates in Latin American.

Beyond the typical venture diligence buckets such as team, path to profitability, etc., WIND Ventures spends time on the potential collaboration details including evaluating the value to customers, willingness to pay and the likely adoption rates.

What would make WIND Ventures consider deviating from their typical criteria?

WIND Ventures has a perfected playbook in offering global founders a distinctive and real value proposition – access to Latin America. As such, they can be flexible in their typical investment criteria as long as it does not hinder its playbook.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Finding Sustainability Startups For LatAm appeared first on The Impact.

The Fund That Has Been Investing In Climate For 20+ Years

Daniel Kriozere — Sun, 27 Mar 2022 16:02:56 +0000

Get the full series showing you how to raise from the top climate VCs in this industry. Subscribing also adds you to our weekly newsletter.

SJF Ventures invests in high-growth companies creating a healthier, smarter, and cleaner future. SJF’s mission is to catalyze the development of highly successful businesses driving lasting, positive changes across a variety of sectors: clean energy and climate, circular economy and logistics, mobility and govtech, health, education, future of work, and sustainable food. Through its investment funds, the firm provides equity financing to companies seeking growth capital to scale.

Fund Snapshot

Stage: Seed – Series E, with a focus on Series A and B financings
Check Size: $2-10M
Geography: Mostly US, able to make international investments
Lead/Follow: Both
Revenue/Valuation Thresholds: $1M+ ARR

About the Fund

Why was the fund started?

Sustainable Jobs Fund (SJF Ventures) was founded 23 years ago with the thesis that the clean energy economy could provide quality employment opportunities across the US. The idea was to invest in companies with both financial and impact returns without compromise. Since its inception, SJF has supported a range of geographies through its investments, with portfolio companies in 23 different states to date.

What domains in climate tech does SJF Ventures have expertise in?

Over time, SJF Ventures has developed its investment expertise across a broad set of sectors, covering both environmental and social impact themes. Through its investments, the fund is focused on mitigating climate change, conserving natural resources, growing sustainable food, advancing education access and outcomes, improving health, and creating greater economic access. Within climate specifically, the team is interested in innovations across renewable energy generation and deployment (extending to batteries, grid enablement, etc.), circular economy, mobility and transportation, climate resilience and risk management, and more. Dave Kirkpatrick, managing director and co-founder of SJF, is one of the impact investing field’s experts, and he has spent his entire career in the climate change mitigation space. He has extensive experience in renewables and the solar industry, which he utilizes in SJF’s investment work.

What type of portfolio support does the team provide?

SJF is actively engaged with portfolio companies, providing various types of support. Some examples include: introductions to relevant industry partners and investors, value-add project design, a suite of operational resources and best practice guides, impact measurement and management tools, and more.

About Investments

What is SJF Ventures’ investment process and timeline?

Each investment opportunity is assessed on a case-by-case basis. The timing, speed, round size, terms, and more can all vary, and as a result, SJF’s process has some built-in flexibility. Deal teams are made up of a Managing Director and one or two other members of the SJF investment team. Diligence includes a combination of items, depending on the company. A diligence process typically consists of connecting with the company’s management team, conducting customer calls, and consulting with experts in the startup’s field, in addition to assessing the financial model, customer pipeline, market, product or service, impact thesis and efficacy proof points, and more.

As part of its impact diligence, SJF looks to proactively identify ways in which the firm may partner with a company post-investment to “bend the curve on impact.” Beyond supporting companies to grow and consequently scale the embedded impacts of each business model, SJF works in partnership with companies to deepen and/or broaden the impacts of its own engagement as a value-add, impact-oriented investor.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund That Has Been Investing In Climate For 20+ Years appeared first on The Impact.

NOVA • The Strategic Corporate VC of Saint-Gobain

Daniel Kriozere — Mon, 21 Mar 2022 05:26:38 +0000

The building and construction industry is hungry for more innovation, but many parts of the industry are still operating the same way it did 100 years ago. NOVA, the venture arm of Saint-Gobain, seeks forward-thinking startups whose philosophies align with Saint-Gobain’s focus on well-being and sustainability toward supporting their purpose of Making the World a Better Home, and the vision of light and sustainable construction. Saint-Gobain is committed to reaching carbon neutrality by 2050 by contributing to the global effort to fight climate change, protecting natural resources and providing comfortable and decent housing to all. NOVA is investing across many different verticals, including automation, robotics, pre-fab, in addition to new materials to improve energy efficiency, air quality, and more.

Fund Snapshot

Stage: Seed to Series B
Check Size: $ 100k – $ 3.0M
Geography: global
Lead/Follow: flexible
Revenue/Valuation Thresholds: flexible

About the Fund

Why was the fund created?

Saint-Gobain launched NOVA in 2006 to serve as a bridge, working collaboratively with startups to provide them with access to Saint-Gobain’s internal resources and support to form long-term partnerships. They have venture managers based in Europe, the Americas, and Asia with the primary mission of expanding their understanding of new and potentially disruptive developments in our areas of strategic interest.

What type of portfolio support does NOVA provide?

NOVA has helped create triple-digit numbers of partnerships for transformative innovation with startups in various stages and forms, including co-development, licensing, commercial agreements, direct investments and joint ventures, and we currently maintain an active portfolio of about 30 companies. NOVA is also a limited partner in a number of global funds. As strategic investors, they are primarily focused on expanding their perspectives and learning from our startup partners versus investing strictly for generating a financial return.

Through engagement with business partners, they help portfolio companies validate the key assumptions in their business model to advance their development. They provide access to the competencies across the Saint-Gobain organization and actively help their portfolio companies scale their business and explore opportunities in other regions. NOVA also provides support from Saint-Gobain in terms of intellectual property expertise, development, scale-up and commercialization. As a large multinational company, Saint-Gobain can sometimes be complex to navigate so their venture team helps startups engage with the right partners within the global organization.

About Investments

What differentiates NOVA from other investors (why take NOVA's capital over another)?

NOVA is strategically driven and committed to establishing “win-win” partnerships with portfolio companies. NOVA will only consider investment in a startup when they believe they can make a meaningful contribution to helping the startup succeed. It’s important to know that NOVA is not primarily motivated by financial gain, but rather the endeavor to work collaboratively with portfolio companies and to learn right along with them.

In order to work with a strategic investor like NOVA, potential startups seeking investment from NOVA need to do their research! Explain why Saint-Gobain would be a good partner and how the startups’ technology and innovation would support their purpose of Making the World a Better Home.

What would make NOVA consider deviating from their typical criteria?

We would consider deviating from our typical criteria if the startup is a strong, strategic fit for our business and presents the opportunity for us to create a strong impact in our business now or in the future. The technology would also need to be innovative and allow us to differentiate from other players in the market. And, we would also want the team to be passionate about their concept.

How can startups receive investment from NOVA?

Startups can connect with NOVA in many ways.

First, startups can learn more about what the NOVA team looks for when making an investment by visiting its website at nova.saint-gobain.com.

NOVA also has strong partnerships with several incubators and accelerators who provide startups with the resources they need to scale their business and achieve their goals. As one of the early organizations that partnered with Greentown Labs to help early-stage startups begin their journey into entrepreneurship, NOVA’s team has worked with many Greentown Labs startups relevant to Saint-Gobain. In fact, five finalists were recently announced for the Healthy Buildings Challenge, their second accelerator program with Greentown Labs, in partnership with the Massachusetts Clean Energy Center. Over the next six months, the Healthy Buildings Challenge will provide the five participating startups engagement opportunities with Saint-Gobain, opportunities to explore potential partnership outcomes, and unique visibility to the Saint-Gobain top leadership team.

Third, industry events, such as Builtworlds Venture Days, CEMEX Venture Days and many others offer direct contact with startups and a way to build relationships where the team can potentially find a fit for investment.

Lastly, NOVA works directly through venture managers, who are always on the lookout for startups where they can develop a “win-win” partnership with one of their global business teams. NOVA works collaboratively with the start-ups to advance business objectives and, ultimately, see them reach tremendous success in their endeavors.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post NOVA • The Strategic Corporate VC of Saint-Gobain appeared first on The Impact.

Supporting Venture Scale Positive Impact Startups

Daniel Kriozere — Mon, 14 Mar 2022 05:25:03 +0000

Responsibly Ventures backs remarkable teams focused on Venture Scale Positive Impacts. Responsibly is investing in Pre-Seed startups in both Sustainability and Social Good – using multiple UN Sustainable Development Goals (SDGs) as a guidepost per investment.

Fund Snapshot

Stage: Pre-Seed
Check Size: $50-250K
Geography: US
Lead/Follow: Both
Revenue/Valuation Thresholds: Less than $10M post-money valuation

About the Fund

Why was the fund created?

Zecca Lehn, GP of Responsibly Ventures, has been investing in sustainability for 20+ years. He started in the space when it was termed Socially Responsible Investing (SRI), which then turned into ESG and Sustainable Investing, and now Impact Investing. He is a long-term, impact-focused investor. Starting Responsibly Ventures gradually happened. Over the last few years, Zecca was an impact Angel investor, investing in about 40 startups across the US, which now sets the stage for Responsibly.

What is a contrarian idea Responsibly believes to be true/accurate?

Responsibly backs remarkable teams across the US that are highly diverse and VC impact focused. Within Zecca’s Angel portfolio, 84% of the startups have one or more underrepresented founders, and is in the top 1% among US VC since 2019 with 44 startups in his portfolio (as of 10/15/2021).

What domains in climate tech does Responsibly have the greatest expertise in?

Zecca is an Environmental Economist by training. As such, opportunities where there’s an aspect of behavior or consumer psychology get him most excited. As an Environmental Economist, Zecca looks at opportunities broadly within sustainability that can have multiple different ways of having an impact–at the nexus. For instance, alternative protein has an impact on CO2 mitigation, but there are other elements that are also impacted: health, water, land use, and labor.

What type of portfolio support does Responsibly provide?

Responsibly leads with empathy to understand the team and the startup before helping. The fund supports portfolio companies with:

Recruiting talent
Follow on funding (investor network)
Business strategy

About Investments

What is Responsibly’s investment process and timeline?

Responsibly is a PreSeed fund with access to companies that are just getting started. Responsibly likes to build relationships and monitor startup’s traction as early as possible – Zecca encourages founders to add him to their monthly newsletter updates right from the start. As a solo GP, Zecca can reference these newsletters (and their consistency) even before taking calls. Consistent updates are a key piece for Responsibly, as it shows dedication and perseverance.

In terms of process, Responsibly likes to meet founders virtually, through social media (Twitter, Clubhouse, etc.), and then spend a couple months to build relationships and track metrics before making an investment decision. Responsibly’s diligence process only takes 1-2 weeks.

What would make Responsibly consider deviating from their typical criteria?

Responsibly sticks to their criteria: Pre-Seed, check sizes up to $250K, and with valuations less than $10M post money. We also take a nuanced view, steering away from obvious vice, but do look at non-obvious vice on a per deal basis.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Supporting Venture Scale Positive Impact Startups appeared first on The Impact.

Investing to Reduce 2.5 Gt of CO2e

Daniel Kriozere — Mon, 07 Mar 2022 04:36:24 +0000

Clean Energy Ventures (CEV) is investing in climate tech startups that can reduce 2.5 Gt of CO2e between now and 2050 (each). CEV is open to investing in engineering and team risk, as they provide hands-on mentorship post-investment.

Fund Snapshot

Stage: Pre-Seed – Series A
Check Size: $500kK – $4M
Geography: North America, Europe and Israel starting in late 2022
Lead/Follow: Lead
Revenue/Valuation Thresholds: Pre- and post-revenue startups; valuations commensurate with stage of company

About the Fund

Why was the fund created?

CEV was created to make a meaningful dent in reducing the greenhouse gas emissions associated with climate change and provide a venture-grade financial return to investors. The firm’s founders have been investing together in climate tech since the early 2000s.

In 2005, Dan Goldman and Dave Miller co-founded the Clean Energy Venture Group (CEVG), CEV’s sister organization of angel investors, to create funding and support for early-stage clean energy startups and to help expand the overall clean energy ecosystem in the US. CEVG has invested in over 35 startups and generated a strong financial track record to date.

By 2017, the deal flow within the angel group far outgrew its capacity to make individual investments and help portfolio companies scale. To address this, Dave, Dan, and Temple Fennell co-founded CEV and raised a $110M venture capital fund solely focused on leading first round climate tech investments with large emissions reduction potentials.

Today, CEV and CEVG work together to source new investment opportunities, perform due diligence and provide heavy support to the portfolio companies in which they invest.

What is CEV’s core belief?

CEV believes that the serious reduction of greenhouse gasses and the profitability of businesses go hand-and-hand. They believe that you don’t have to sacrifice a businesses’ impact on climate change for financial returns, or vice versa. In fact, they believe the companies that can reduce more GHGs in the coming decades will be the companies that are intrinsically worth more.

What domains in climate tech does CEV have the greatest expertise in?

CEV has significant expertise in scaling B2B hard tech. Based on the fund’s name, CEV has expertise in clean energy, but they define it broadly: anything that can reduce 2.5 Gt of CO2e between now and 2050 through the production or use of energy. This includes the expected sub-sectors like solar panel innovations, startups focused on energy management, and energy storage. It also includes sub-sectors that might surprise you, such as recycling and re-use and advanced materials like concrete and carbon fiber.

The firm was founded by Dan Goldman, Dave Miller, and Temple Fennell. All three founders have been investing in climate tech for over a decade together, have founded their own companies, and have held senior operating positions in mature businesses.

Between CEV and their angel-investor sister organization, CEVG, there’s a team of 40+ experienced business operators, engineers, former/current entrepreneurs and investors who find deals, perform diligence and support companies after investment. This includes former FERC chairman; former senior executives at companies like Siemens, GE, and Cabot Industries; and founders of numerous successful clean energy startups and environmental non-profits.

What type of portfolio support does CEV provide?

CEV is considered one of the most hands-on and experienced post-investment mentors in climate tech by the multinational companies that co-invest with them and other VCs.

CEV has found that the companies that see the strongest returns are the companies where they provide great support after investment. The fund spends a disproportionate amount of time helping with a company’s success compared to other investors. CEV specializes in helping climate tech companies cross the chasm from early-stage (e.g., just out of the lab) through early-growth (e.g. quickly growing customer base):

CEV has leadership coaches who provide leadership team evaluation during diligence and then often continue engagement with a startup’s leadership team after investment to help them understand and improve the human system within the business.
The Director of Marketing plays an operating role, helping portfolio companies look and act like billion-dollar businesses before they typically would do so themselves. This helps them attract better talent, grab the attention of new investors, and build trust with customers.
CEV’s investments team (a highly technical group) regularly engages with portfolio companies after investment to help troubleshoot major engineering challenges, expand patent protection, and understand new markets.
CEV provides a network of connections for future investors, independent board members, advisory boards, customers, and multinational partners like major OEMs.

CEV can also leverage resources from the Clean Energy Venture Group (CEVG), their sister organization of angel investors.

About Investments

What is CEV’s investment process and timeline?

CEV has five stages of their investment process: Screening, Scouting, Pitching, Early Diligence, and Late Diligence. Since CEV performs diligence on deals together with CEVG, more than 40 investors are typically weighing in on a prospective investment at one stage or another.

All investments begin via an application on their website. They’re then screened for critical basic criteria, like focus area, stage of development, and geographic region. Then, more than 40 investors have the chance to review their application and provide written comments. The team then discusses these results as a group during Scouting and invites entrepreneurs to pitch in front of the combined CEV and CEVG group. Following a successful pitch, CEV moves into early diligence where they ask a lot of questions, review intellectual property strategies, conduct site visits, have select calls with customers, discuss with experts and business leaders for an outside perspective, and issue a term sheet. If the term sheet is accepted, CEV proceeds to Late Diligence, which focuses mostly on documentation, negotiation, and verifying data provided by the company. This last stage also includes leadership team evaluation, which is something CEV approaches rigorously with their leadership coaching team.

All-in-all, this process can take as little as four weeks, and as many as ten depending on how fast the company is at providing materials and making connections, and the competitive situation.

What would make CEV consider deviating from its typical criteria?

Most of the team has been investing in climate tech since the term ‘cleantech’ was coined in the early 200s. Also, the biggest challenge today is understanding and deciding how to deal with all the froth happening in climate tech venture capital. As a result, the team is resistant to ‘hype cycles’ and sticks closely to their investment criteria, while understanding that climate tech is also reaching into new markets and new frontiers regularly.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Investing to Reduce 2.5 Gt of CO2e appeared first on The Impact.

The Fund Transforming the Energy Ecosystem

Daniel Kriozere — Mon, 28 Feb 2022 02:42:33 +0000

Future Energy Ventures (FEV) is the venture capital investment and collaboration platform of E.ON, investing in start-ups that are transforming the energy ecosystem and pioneering the future of energy.

Fund Snapshot:

Stage: Series A+
Check Size: €1-5mm for Series A, €5-10mm for later stage
Geography: North America, Europe, Israel
Lead/Follow: Will lead and follow – case by case basis
Revenue/Valuation: Typically post-revenue, ~€1m for Series A companies

About the Fund

Why was the fund created?

FEV was formed in 2020 as the venture capital investment and collaboration platform of E.ON with the mission to invest in and support start-ups that have the potential to transform the traditional energy value chain and catalyze the transition towards a net-zero economy. By doing so FEV also supports E.ON’s sustainability goals and strengthens innovation in E.ON by bringing start-ups and industry partners to E.ON’s core business activities. FEV‘s team is committed to the decarbonization, digitization, democratization, and decentralization of the energy landscape, driving impact across industries.

What is FEV’s core belief?

The energy industry is known to be one of the most challenging for start-ups, but FEV believes their close partnerships with E.ON and other industry partners positions them to help start-ups innovate and work with utilities and/or organizations that accelerate their growth. FEV believes that cutting-edge technologies will drive the convergence of industries where energy infrastructure converges with other infrastructure and ultimately energy will be abundant, digitally-driven, and cheap. Hence, FEV invests in energy in the broadest sense, covering all aspects of a connected network, including but not limited to: electric vehicles, mobility, smart cities, proptech, climate risk analytics, smart grid infrastructure, artificial intelligence and blockchain.

What domains in climate tech does FEV have the greatest experience in?

FEV consists of a seasoned investment team with 100+ years’ of experience in the energy sector and 90+ years of investment experience in energy and climate tech. FEV focuses on the business models and technologies that build towards the energy transition, with an eye on broader trends across digital transformation, changing consumer demands, and impacts of climate change. Within the domain of climate tech FEV has expertise in climate intelligence, including greenhouse gas management and climate risk analysis.

What type of portfolio support does FEV provide?

FEV provides funding, industry expertise, mentoring and connections to accelerate portfolio companies’ growth trajectory. FEV is not just an investor but also a partner, working together with its portfolio companies to build their readiness for scaling, driving growth opportunities and providing access to new markets.

FEV’s extensive global network enables our start-ups to attract continued investment and innovate further, as well as opportunities to work with E.ON and other industry players, opening up new business and future revenue streams. FEV additionally supports portfolio companies’ HR and recruitment processes and provides opportunities for them to build their brands via participation in industry events, such as FEV’s Portfolio Days and E.ON’s Energy Innovation Days, and in FEV’s proprietary content, such as the Future Fuel series.

FEV’s hands-on support helps us attract the best companies in the industry, while the fund’s unique network and domain expertise help us drive financial returns and outsized impact.

About the Investments

What is FEV’s investment process and timeline?

Future Energy Ventures follows a disciplined sourcing funnel. The investment process at FEV begins with deal sourcing from our extensive network within the energy sector, in addition to meeting start-ups at industry conferences and events. The fund’s sweet spot is asset-light, digital, scalable companies seeking Series A and B funding that have shown evidence of a product-market-fit. After a series of calls, a startup will then present to the FEV team. FEV likes to take a board seat, or at the very least a board observer seat, in the start-ups we invest in.

FEV’s investment process can vary in duration depending on the type of company/technology due diligence required, but the fund aims for it to be as quick as 3 weeks, though it can take longer if needed.

What would make FEV consider deviating from its typical criteria?

FEV is always looking to expand its scope to encompass a wider definition of the future of energy, which includes smart city technologies and blockchain and AI-based business models, for example.

FEV recognizes that start-ups come in all shapes and sizes nowadays, and there can be some flexibility in our investment stage, check size and equity share if the fund finds a particularly exciting start-up to work with.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Transforming the Energy Ecosystem appeared first on The Impact.

Decarbonize the Economy One Startup at a Time

Daniel Kriozere — Mon, 21 Feb 2022 04:43:45 +0000

Get the full series showing you how to raise from the top climate VCs in this industry. Subscribing also adds you to our weekly newsletter.

VoLo Earth Ventures (VoLo Earth) is investing in early-stage climate tech companies that are focused on profitable decarbonization and are ready to commercialize and be deployed into the market this decade.

Fund Snapshot

Stage: Pre-seed – Series A
Check Size: $250K – 5M
Fund Size: $100M cap (fundraising still open)
Geography: Mainly North America with strategic external investments
Lead/Follow: Lead or follow

About the Fund

Why was the fund created?

VoLo Earth Ventures launched with their first fund in 2020, via an anchor investment from David Vogel, the CEO of Voloridge Investment Management. David is also actively involved with the Rocky Mountain Institute (RMI). The fund also welcomes numerous strategic LPs in the space and an institutional investment from Credit Suisse.

VoLo Earth Ventures’ mission is to decarbonize the economy and the climate this decade, by addressing mitigation at its roots through technology. VoLo Earth believes in capitalism as a mechanism for change and that decarbonization is now a signal for economic growth and investment return.

What is a contrarian idea the VoLo Earth believes to be true/accurate?

VoLo Earth believes that there is enough existing technology to decarbonize and enable the new energy economy, one that is sustainable, equitable, and profitable to humans and our planet. Embedded in this, VoLo does not think that carbon capture is the biggest investment opportunity of the decade (nor geo-engineering our atmosphere/planet, nor “sustainable” rocketry, nor terraforming other planets).

The team members at VoLo are capitalists, not just venture capitalists. They believe that investment turns innovation. If products can compete on economic merit, they will win, and products that decarbonize will provide superior investment returns.

What domains in climate tech does your firm have the greatest expertise in?

From Joe and Kareem’s time in leadership roles in the electricity practice at RMI, as well as nearly 2 decades a piece working in the new energy economy and building startups of their own, VoLo Earth has expertise in the clean energy system, mainly focusing on electricity and its core end uses – mobility, buildings, and industry.

What type of portfolio support does VoLo Earth provide?

Because the team has strong backgrounds in technology and engineering, as well as product launch, go-to-market, and growing companies, VoLo Earth focuses on the R&D phase and the go-to-market of the products, technologies, and companies it invests in. Other pieces VoLo Earth can help with, given their large and strategic team, include:

Strategy
Governance
Network
Company growth
ESG
DEI
Impact quantification
M&A
Legal and IP

About Investments

What is VoLo Earth’s investment process and timeline?

VoLo Earth is first and foremost adaptable, dynamic, and works with founders to ensure a collaborative approach that fits within their investment philosophy. If the fit is there, VoLo Earth puts flexibility at the forefront and works towards a fair and transparent process with founders. On average, VoLo Earth may typically take 2-3 months to get to know a founding team (sometimes longer) and have a number of calls (>5) covering tech, product, go-to-market, commercialization, financials/revenue plan, and other topics. VoLo Earth then does 1-2 customer/client calls, as well as a few calls in network with relevant personnel as sounding boards on the potential investment. VoLo Earth then has a full review of additional info in the data room, sometimes before and sometimes after a term sheet depending on if they are leading or not. This is all paired with VoLo Earth’s successful internal relative value matrix analysis coupled with a quantitative portfolio construction model. At the end of the day, fit within our investment thesis is first and foremost, as well as founder quality, commitment, and vision.

What would make VoLo Earth consider deviating from your typical criteria?

VoLo Earth stays firm on assessing economic merit and profitable decarbonization this decade. However, if hardpressed, the answer could be an incredible founding team that convinced us that our criteria and methodology had good reason to be deviated from.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Decarbonize the Economy One Startup at a Time appeared first on The Impact.

The Fund Bridging the Digital Divide

Daniel Kriozere — Wed, 16 Feb 2022 05:17:19 +0000

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Equal Ventures (Equal) is a thesis-driven, seed-stage fund investing across five sectors – one of which is climate, as climate change presents one of the biggest challenges of our time. Equal is open to investing in pre-revenue and pre-product businesses. The fund’s investment decisions are largely driven by founder-market fit.

Fund Snapshot

Stage: Seed
Check Size: $1-2M
Geography: US, Canada
Lead/Follow: Lead or Co-Lead
Revenue/Valuation Thresholds: No revenue required

About the Fund

Why was the fund created?

While Rick had always known he would eventually want to start a fund, the inspiration for Equal came from reading a book called Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. The book discusses innovation cycles throughout history and the turning points that enable a transition from building core technology to deploying it across society. These turning points only occur every 60-90 years. Rick wanted to take advantage of the opportunity to help democratize access to technology and solve some of the major issues facing society today. Equal Ventures is purpose-built to deploy technology across society and industry.

What domains in climate tech does Equal have the greatest expertise in?

Equal understands the power market and the utility market extremely well, especially as that’s where Rick’s career began. Rick has worked in many countries on various things – from rural electrification to renewable energy development and grid operations. Equal more broadly looks at electrification and sustainability of buildings.

What type of portfolio support does Equal provide?

Equal’s team is five strong, and Equal invests in 4-6 companies per year, so they are very involved with their portfolio companies. Equal believes that founders care about the 4 P’s:

Preparedness – understanding of the market
Perspiration – operations support
Partnership – alignment with the founders
Price – valuation and terms

About Investments

What is Equal’s investment process and timeline?

Equal is a thesis-driven fund, where they research markets and opportunities before looking for investment prospects. To this extent, the team has a multi-hour meeting every other week to pitch ideas on opportunities and debate before digging into more research. Once the team does their research, they look for startups.

Equal generally likes to meet founders well in advance of a process, often getting to know and helping founders for months in advance of an investment. That said, they’ve moved in as little as 5 days from initial meeting to term sheet. They only invest in sectors they understand, so their approach is primarily geared to evaluating:

1) Is this the right founding team to seize this opportunity?

2) Does their approach demonstrate the potential for near-term flywheels/moats?

3) Is now the most appropriate entry point for their firm?

What would make Equal consider deviating from their typical criteria?

Equal typically won’t deviate from its strategy, unless they find awesome founders that fit their focus/thought process/analysis.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Bridging the Digital Divide appeared first on The Impact.

Investing At The Intersection Of Impact & Venture • DBL Partners

Daniel Kriozere — Mon, 07 Feb 2022 03:33:03 +0000

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DBL Partners (DBL) was formed with a “Double Bottom Line” investment strategy to enable social, environmental, and economic improvement while also investing in companies that deliver top-tier venture capital returns. Since its inception, DBL has invested through an impact lens, in which social returns accrue without having to sacrifice financial returns. As DBL has been around and investing for two, going on three decades, it can act as a signal for the efficacy of this approach, new solutions, and market trends.

DBL invests in Series A and B startups in Climate, Information Technology, Sustainable Products and Services, Healthcare, and work-related themes. The Fund is open to investing in startups with market risk, regulatory risk, and team building risk, as they can support startups with each of these aspects.

Fund Snapshot

Stage: Series A – Series B
Check Size: $5-15M
Geography: Global, with US focus
Lead/Follow: Prefer to Lead

About the Fund

Why was the fund created?

DBL was started internally at JP Morgan when the Bay Area Council asked for a fund that would invest in great companies that were in or nearby low-income neighborhoods, so that the benefits of the entrepreneurial economy could be more broadly felt and experienced across the region. DBL finished raising its first fund of $75M in 2004, and has since continued to raise capital for new funds to invest in impact and ESG-related sectors.

What domains in climate tech does DBL have the greatest expertise in?

Through DBL’s experience investing over the last two decades, the team has accrued a broad range of knowledge across climate tech, broadly speaking. For instance, DBL helped define the EV industry with its investment in Tesla, as well as the circular economy with its investment in The RealReal. DBL is currently excited about:

Monetizing conservation (forestry, oceans, and health impacts of climate consequences)
Net zero agriculture
Electrification of transportation/Mobility
Future of Work
Space/Earth/AI nexus

What type of portfolio support does DBL provide?

DBL gets involved in every startup it invests in, and usually sits on portfolio companies’ Boards of Directors. DBL helps startups with:

Recruiting talent
Business strategy
Fundraising support
Impact metrics
Working with policymakers and advocacy/community groups

About Investments

What is DBL’s investment process and timeline?

DBL’s investment process is traditional and can take as little as a few weeks, or as much as a couple of months to get to a term sheet. The way the team screens companies, however, is a little bit different.
DBL pays attention to the management team. The two questions the team asks here are:

Is the team trying to change the world?
Is the team trying to build a great company, and what evidence is there to support a successful outcome?

Additionally, DBL will look at impact by asking:

How does this solution move the needle relative to the overarching problem?
Which needle does this solution move? Are there any unintended consequences?
Can we quantify the impact this company will make?
How does this solution compare to other potential solutions?

What would make DBL consider deviating from your typical criteria?

DBL is flexible and can deviate from its criteria. While the team’s sweet spot is investing in Series A or B startups, it will invest earlier based on opportunity and impact, and invest later, based on portfolio construction.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Investing At The Intersection Of Impact & Venture • DBL Partners appeared first on The Impact.

The Fund Bringing Energy Equity By Seeding Energy Founders

Daniel Kriozere — Mon, 31 Jan 2022 04:14:08 +0000

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Intelis Capital is on a mission to support entrepreneurs who will ensure equitable access to affordable, sustainable, reliable, and resilient energy globally. Many of tomorrow’s most iconic businesses will be built by leveraging emerging technology to solve these challenges. Intelis Capital wants to be the first-choice partner for the teams building those businesses.

Fund Snapshot

Stage: Pre-Seed – Series A
Check Size: $100K – 1.5M
Geography: Global
Lead/Follow: Lead and Follow

About the Fund

Why was the fund created?

Intelis Capital was founded in 2017 for the purpose of partnering with the best early-stage tech entrepreneurs accelerating the energy transition. Jonathan Crowder, Partner at Intelis Capital, explained that Intelis’ inception stemmed from the question of how to leverage his experience in climate policy research and climate tech startups to make a positive impact.

How does Intelis Capital think about investing in climate tech?

The energy industry is in the midst of a radical transformation. Intelis invests in technology companies that enable or accelerate one of the following trends:

Proliferation of wind, solar, and storage
Electrification of transport
Clean energy procurement
Improved grid resiliency
Deployment of infrastructure
Increasingly distributed industrial workforces

Jonathan summarized Intelis’ mandate: “What direction do we see a given part of the industry moving in, and what challenges will the stakeholders have to solve in order to move towards the future? First and foremost, we want to ensure we deeply understand the problem. We need to have strong conviction that it exists and close connections to customers that experience that pain point, so we can help reduce go-to-market risk for our portfolio companies.”

What type of portfolio support does Intelis Capital provide?

Intelis views investments as partnerships with founders, where founders think of Intelis as an extension of their team. Jonathan says that “whenever we are having conversations with an entrepreneur considering an investment, the guiding principle that I try to be explicit about is we want to be as helpful as they want us to be. We try to proactively anticipate the challenges they’re facing and are willing to roll up our sleeves anytime we’re needed.”

Intelis helps startups grow their business in a number of ways:

Business development with their network of industry contacts
Recruiting talent
Operational improvements
Business strategy
Product road map
Raising capital

About Investments

What is Intelis Capital’s investment process and timeline?

Intelis prioritizes research on its core focus areas so they can approach new investment conversations with a prepared mind. They generally prefer to build long-term relationships before investing, often meeting entrepreneurs months or years beforehand, but their typical due diligence process takes 2-6 weeks.

The four guiding questions Intelis asks when looking at opportunities are:

Is the market ready for this solution?
What’s the hardest challenge that the business is going to have to tackle?
Can we develop deep conviction that they can tackle that challenge?
Will this become a category-defining company?

In addition to reviewing pitch decks, financial forecasts, legal documents, and product roadmaps, Intelis meets with a startup’s customers to see if their feedback matches Intelis’ expectations of that market.

What would make Intelis Capital consider deviating from its typical criteria?

Intelis likely would not deviate beyond the confines of their mandate. Jonathan said that “We’re becoming more focused over time, not less. Being great partners to our portfolio companies is something we hold sacred, and building institutional knowledge in the key areas we’re most excited about is the thing that allows us to do it.”

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Bringing Energy Equity By Seeding Energy Founders appeared first on The Impact.

The Fund That Interacts with Each Portfolio Company 800 Times a Year

Daniel Kriozere — Mon, 24 Jan 2022 04:02:05 +0000

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Active Impact Investments provides capital and talent to accelerate the growth of early-stage climate tech ventures catalyzing the transition from finite to infinite sources of energy, food, water, and products. They typically invest in revenue-generating startups with product-market-fit.

Fund Snapshot

Stage: Mostly Seed, some Pre Seed and Series A
Check Size: $1.5M CAD
Geography: US, Canada
Lead/Follow: Lead Seed, Follow Series A
Revenue/Valuation Thresholds: Generating revenue

About the Fund

Why was the fund created?

Mike Winterfield founded Active Impact Investments because after 15+ years across 4 industries, he wanted to do more than just earn a paycheck. He wanted to create a positive impact by working on climate change.

He didn’t set out to become a venture capitalist. Mike mentioned, “I sort of backed my way into [becoming an investor]. Between the change I was trying to create in the world, my experience, and what I was good at, I realized that helping startups is basically giving them access to executive skills that I could help them with.”

What is Active Impact Investments’ core belief?

Active Impact Investments is looking to invest in startups that can have a meaningful amount of impact – it has to move the needle on emissions and fight climate change at scale.

What domains in climate tech do Active Impact Investments have the greatest expertise in?

Active Impact Investments is focused on 4 verticals:

Clean energy and transportation
Smart infrastructure
Sustainable food and water
Circular and sharing economy

What type of portfolio support does Active Impact Investments provide?

Active Impact Investments regularly hears from startups in their portfolio that they are the most active investor on the cap table. Mike shared that each founder interacts with the Active Impact Investments team about 800 times a year.

In a business, 5% of your time should be spent on strategy and 95% should be spent on execution. Active Impact Investments aligns with this and works with founders, rather than just providing advice. Active Impact Investments can help startups with:

Sales and marketing
Finance
Technology
HR

Additionally, there are roughly 100 LPs backing Active Impact Investments that can open doors for portfolio companies.

About Investments

What are Active Impact Investments’ investment process and timeline?

Active Impact Investments starts off by looking at if a company creates impact or not. This has to be a meaningful amount of impact, where at scale it would move the needle to fight climate change.

Active Impact Investments’ process is focused on relationship building and getting to know the startup. Their process is standard in terms of steps: a screening call, pre-screening memo, deal room meeting, pitch, due diligence, term sheet. Active Impact Investments can move as quickly as a startup needs.

What would make Active Impact Investments consider deviating from their typical criteria?

For Active Impact Investments, a startups’ impact and the founding team can convince them to invest outside of the typical criteria they look for.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund That Interacts with Each Portfolio Company 800 Times a Year appeared first on The Impact.

The Fund Accelerating The Future of Deep Tech x Climate

Matthew Morris — Mon, 17 Jan 2022 03:47:55 +0000

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Anthropocene Ventures (Anthro) is an early-stage generalist deep tech and climate tech fund investing in entrepreneurs developing hardware solutions that affect and reduce humanity’s imprint on the Earth. Anthro is concerned with technologies and opportunities that are being created today that will sell and be viable solutions 10-15 years down the road in areas such as ocean health, AgTech, and FrontierTech. The team is comprised of skilled entrepreneurs and investors who want to take a hands-on approach to help grow pre-seed and seed-stage companies at their core.

Fund Snapshot

Stage: Pre-Seed-Series A
Check Size: $300k-$3mm, depending on the stage
Geography: Global
Lead/Follow: Prefer to lead and be active in the lives of portfolio companies
Revenue/Valuation Thresholds: No revenue is required

About the Fund

Why was the fund created?

Anthropocene Ventures was created to invest in and accelerate early-stage deep tech and climate tech startups, as few funds exist who are willing to make early bets into unorthodox hardware technologies. Brainstormed in 2018 and founded in 2021, Anthro seeks to fill the deeptech hardware investment void by providing hands-on, early-stage investments into tough technologies that can impact human life on a global scale.

What is Anthro’s core belief?

Anthro believes that entrepreneurs do not need to fit into a certain mold and that quality founders with promising technologies are coming out of all sectors with diverse skill sets. Anthro is particularly interested in and aligned with national labs, which are ripe with skilled engineers and entrepreneurs ready to bring technologies to market that used to take 30 years to commercialize within a decade.

What Domains does Anthro have Expertise In?

Anthro combines its internal knowledge and talent with a large network of technical advisers who are able to provide additional insights. The internal team has specific expertise in renewable energy, manufacturing, water, infrastructure, and general sciences. They seek outside help to better understand the intricacies of an innovative technology as a company progresses deeper into due diligence. Additionally, the Anthro team knows how to grow and scale businesses from concept to commercialization, and is able to support their portfolio companies through their countless entrepreneurial experiences and intimate understanding of the startup journey.

What type of portfolio support does the team provide?

In addition to infusing capital into startups, Anthro likes to be hands-on in their startups, especially at the seed stage. Anthro provides support in a number of ways, including but not limited to:

Scaling industrial processes
Support early-stage entrepreneurs (both physically and mentally)
Running the business
Operational support
Networking with investors and strategic partners, particularly in Asia
Skill development

What is Anthro’s investment process and timeline like?

Pre-seed – Anthro moves particularly fast for very early-stage companies, making a decision within roughly 2 weeks. At this stage, Anthro focuses particularly on the team and the overall market size and potential for the product.
Seed – The sweet spot for Anthro, these companies will undergo a lengthier due diligence process which can take upwards of a few weeks. Anthro does this as the investor team will be particularly active within the lives of these startups, taking board seats and being close advisers, helping with the day-to-day of these startups.
Series A – Anthro will also move through these deals particularly quickly, as these companies tend to have traction, and the investor team works closely with investors in the company to move through diligence swiftly.

What would make Anthro consider deviating from their typical criteria?

As a generalist fund, Anthro has a lot of flexibility in terms of what the team will invest in. While not contrarian, the team will deviate from its typical criteria for stage and sector if the product or service positively impacts climate and humanity, is a clever solution to a real problem, and has a diverse founding team. Even though the fund is not an impact fund, the team will use impact as the driving factor for these investments.

About The Author

Matthew Morris

Partner @ The Impact

The post The Fund Accelerating The Future of Deep Tech x Climate appeared first on The Impact.

Investing in Early Stage Impact Startups • City Light Capital

Daniel Kriozere — Sun, 09 Jan 2022 05:35:34 +0000

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City Light Capital invests in early-stage impactful companies within the education, safety and care, and environmental sectors. Within the environment, they are investing in energy efficiency, food and agriculture, circular economies, smart cities/IoT, and enabling renewables onto the grid. City Light Capital has emphasized that an experienced and mission-driven team is one of the biggest factors they consider when evaluating a startup.

Fund Snapshot

Stage: Seed – Series A
Check Size: $50K Seed, $2-4M Series A
Geography: US
Lead/Follow: Follow for Seed, Lead or Follow for Series A
Revenue/Valuation Thresholds: < $1M ARR Seed, > $1M ARR Series A.

About the Fund

Why was the fund started?

City Light Capital was started as a response to 9/11 and the events at ground zero, with the goal of investing in companies that could prevent the next catastrophe.

One of City Light Capital’s first investments was in a company called ShotSpotter. ShotSpotter provides acoustic gunshot detection that enables law enforcement to respond to, investigate and deter crime more effectively. City Light started thinking about how to prevent situations like gun violence from occurring in the first place and concluded that systematic issues like access to health care and education were inequities that, if addressed, could lead to better outcomes.

City Light invests in the climate because climate change is one of the biggest safety and security threats to all of humanity. City Light believes that climate change must be addressed from a multitude of angles in order to effect real change.

What is City Light Capital’s core belief?

City Light Capital at its core is an impact investment venture capital fund. They care about the organizations in their portfolio and the impact their portfolio companies have on the world. For every startup they invest in, City Light creates an impact pro forma to quantify and measure the company’s impact. City Light Capital believes that startups with quantifiable impact are more valuable.

What domains in climate tech does City Light Capital have expertise in?

City Light Capital has expertise in energy/resource efficiency, manufacturing, smart cities/IoT, food & agriculture, demand response, and grid resiliency. City Light’s climate investments include Omnidian, OhmConnect, Xage, Circ, and Zero Grocery, to name a few.

What type of portfolio support does the team provide?

City Light Capital has a data analytics platform, called “The Machine”, that helps City Light source new companies, evaluate new companies and support portfolio companies.

Some of the ways “The Machine” helps portfolio companies is in:

Fundraising – When a portfolio company is raising a funding round, “The Machine” is able to identify investors who have previously invested in companies like the portfolio company (Based on round size, sector, subsector, stage, and valuation).
Talent Search – “The Machine” is able to help portfolio companies find the best available talent by identifying individuals that have the best experience for the job.
Competitive Analysis – “The Machine” is able to identify all competitors of a portfolio company, including new entrants, and provide a granular market landscape to founders

The City Light team has deep expertise in:

Board management and strategy
Sales and marketing
Scale and growth
Manufacturing
Impact Measurement

About Investments

What is City Light Capital’s investment process and timeline?

City Light Capital’s investment process depends on the investment round.

For seed-stage investments, the team moves fast and usually has a decision in 2 weeks or less. They take a couple of calls with the founder, review the deck and financial model, and draft a memo. At the Seed stage, City Light Capital writes $50K checks.

For Series A investments, City Light creates a detailed investment memo that includes perspectives on the problem the company is solving, the effectiveness of the solution it is offering, the TAM, the backgrounds and experience of the team, a rebuilt internal financial model, regulatory headwinds / tailwinds and potential for measurable social impact through core product. In addition City Light talks to members of the board, key customers and the entire leadership team.

What would make City Light Capital consider deviating from its typical criteria?

City Light may invest at a slightly earlier or later stage if they feel like they can uniquely help a team execute on their mission, but City Light generally sticks to their criteria.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Investing in Early Stage Impact Startups • City Light Capital appeared first on The Impact.

Funding the Circular Economy • Closed Loop Partners

Daniel Kriozere — Mon, 03 Jan 2022 05:44:05 +0000

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Closed Loop Partners (CLP) is a New York City-based investment platform and innovation center dedicated to the circular economy. Closed Loop Ventures Group (CLVG) is the earliest direct investment vehicle within the investment platform. CLVG invests early-stage equity across the sectors of plastics & packaging, food & agriculture, fashion & beauty and supply chain logistics & tech. Closed Loop Ventures Group now has 25 portfolio companies across two funds and is actively deploying capital out of their second fund of $50m+.

Fund Snapshot

Stage: Pre-Seed – Seed
Check Size: $250K – 1M
Geography: Global
Lead/Follow: Lead and follow
Revenue/Valuation Thresholds: Pre- and Early-revenue, At or below $10M post-money valuation

About the Fund

Why was the fund created?

CLP was created to build the circular economy. CLP’s Closed Loop Infrastructure Fund was started in 2014, where they were making loans to recycling infrastructure across collection, sortation and processing of recyclable commodity types found within curbside recycling streams. The Infrastructure Fund is backed by some of the world’s largest beverage, CPG, and retail companies including The Walmart Foundation, Coca-Cola, Starbucks, Unilever and Amazon, among others. Building out this infrastructure, CLP recognized the potential of breakthrough innovations that could help catalyze the circular economy. Thus, the Closed Loop Ventures Group (CLVG) was born in 2017 to invest in these novel technologies and business models.

What is a contrarian idea CLVG believes to be true?

CLVG believes that the linear economy is as inefficient as it is inequitable and environmentally damaging. CLVG challenges instances when all net-positive impact is flattened into oversimplified metrics, particularly CO2e. While it is perhaps easy to communicate in the same units, and while it is certainly important to both reduce and remove emissions, not all impact is easily quantified in this way.

CLVG looks at impact in a very nuanced and holistic way. They are thinking about systems change everywhere, from upstream in the supply chains through how products are designed and manufactured, as well as considering how consumers might interact with new products/services, and then also looking at the end of the life cycle. For instance, in the process of reducing emissions, CLVG is cognizant of biodiversity and the impacts of enabling innovations.

What domains in climate tech does CLVG have the greatest expertise in?

CLVG looks widely across the value chains of their core sector focuses of plastics & packaging, food & agriculture, fashion & beauty, and supply chain logistics & technology. Across the team and their network, they have expertise and knowledge in:

Mechanical recycling and MRF operations
Advanced recycling
Biopolymers, and plastic alternatives
Food loss
Organics processing
Regenerative agriculture
Fiber materials
Fashion
Distributed manufacturing
Supply chain transparency and traceability
Carbon utilization
Biomanufacturing

The team learns new industries with each new deal, and as such they remain humble experts and life-long learners.

What type of portfolio support does CLVG provide?

CLVG is an active, engaged investor, especially as CLVG only invests in 20-25 startups per fund. Danielle Joseph leads CLVG’s portfolio management and is supported by a number of other folks within the ecosystem who sit on boards and provide strategic support, including other Managing Directors and Venture Partners.

About Investments

What is CLVG’s investment process and timeline?

CLVG has a relatively intensive diligence process because they are active investors who like to hit the ground running with their portfolio company. CLVG vets a team, in addition to really digging into a startup’s financials and unit economics. CLVG typically takes 3-7 weeks of diligence before getting to a point of a term sheet.

What would make CLVG consider deviating from their typical criteria?

CLVG is disciplined with their investment criteria – particular for returns and impact. That said, the circular economy wasn’t a popular term even just about 2 years ago, so they’re constantly listening to where the market is going and ensuring that they meet the investment opportunities who are innovating at the forefront of this burgeoning space.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Funding the Circular Economy • Closed Loop Partners appeared first on The Impact.

The Climate Fund that Welcomes Hardware Innovation

Daniel Kriozere — Mon, 27 Dec 2021 03:49:35 +0000

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Congruent Ventures is a leading early stage venture firm focused on partnering with entrepreneurs to build companies addressing climate and sustainability challenges across four themes: Mobility and Urbanization, the Energy Transition, Food and Agriculture, and Sustainable Production and Consumption.

Congruent Ventures invests in startups that will positively impact climate change and environmental sustainability. Congruent is typically the first institutional capital into early-stage startups, even if there’s a high level of risk involved at that early stage. The key piece when it comes to risk is that there is a clear path to de-risk the technology.

Fund Snapshot

Stage: Pre-Seed – Series A
Check Size: $500K-4M
Geography: US
Lead/Follow: Lead or Follow

About the Fund

Why was the fund created?

Back in 2017, one of the reasons for starting Congruent was to fill the gap in pre-seed and seed stage climate tech funding. Congruent also wanted to get mainstream VCs to start investing in climate. The idea was for Congruent to do the early stage investing and pull in mainstream VCs for the larger follow-on fundraising.

What is a contrarian idea Congruent believes to be true?

Congruent welcomes hardware innovation, and the science and engineering risk that comes with it. The catch is that Congruent is very selective when investing in hardware companies. In order for them to make an investment in hardware, they look for founders and teams that have an extremely clear roadmap for de-risking the tech before they need to raise enormous amounts of capital.

What domains in climate tech does Congruent have the greatest expertise in?

As the team has been investing within the climate sector over a number of years, they collectively know a lot about many different sectors. That said, the four areas Congruent invest in are:

Mobility and Urbanization
Food and Agriculture
Production and Consumption
Energy Transition

What type of portfolio support does Congruent provide?

With 40+ companies in the portfolio, Congruent is amongst the most active investors in the climate ecosystem led by co-founders and managing partners Joshua Posamentier and Abe Yokell, along with an experienced senior team with diverse investor and entrepreneurial backgrounds.

Congruent spends time with founders both in and outside of the boardroom. Congruent likes to help portfolio companies out as much as possible, including:

Business strategy
Network (potential customers, investors, LPs, etc)
Resources, subscriptions, and discounts

About Investments

What is your investment process and timeline?

Congruent starts their process with a couple of calls with startup founders. If Congruent is interested in the startup, they will then proceed with backchannel reference calls, as Congruent is really investing in a team at the pre-seed and seed stage. Additionally, Congruent likes to understand how a team talks through and thinks about unit economics, techno-economic analysis, and financial models. From the team’s years of investing experience, Congruent can make investment decisions as quickly as a startup needs.

What would make Congruent consider deviating from their typical criteria?

Congruent is investing in founders and teams. They will invest in riskier startups with great teams.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Climate Fund that Welcomes Hardware Innovation appeared first on The Impact.

The Largest Venture Fund Focused On The Built Environment

Daniel Kriozere — Mon, 20 Dec 2021 16:42:36 +0000

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Fifth Wall is the largest venture capital firm focused on the global real estate industry and property technology for the built world. Fifth Wall is investing in technologies to decarbonize the built environment. To do so, Fifth Wall connects many of the world’s largest owners and operators of real estate with entrepreneurs. Fifth Wall believes that building a strategic corporate consortium can result in game-changing investments and collaborations.

Fund Snapshot

Stage: Series A – Series C
Check Size: $5M – 20M
Geography: Primarily North America but Global Scope
Lead/Follow: Lead

About the Fund

Why was the fund started?

Fifth Wall’s climate fund was created to remedy the real estate industry carbon footprint, which accounts for 40% of the world’s greenhouse gas emissions. Even if all technology in real estate and the built environment were updated with the most efficient and sophisticated technology, it would only reduce emissions from real estate from 40% to 20% of the world’s global emissions. This is the challenge real estate stakeholders face when trying to decarbonize – they simply have no other feasible option. Fifth Wall wants to change this by identifying and supporting the next generation of technologies to decarbonize the $2-5T built environment opportunity. To achieve this, Fifth Wall will invest across all solutions, including software, hardware, deeptech, or CapEx heavy startups. Fifth Wall is building a consortium of corporates in the sector to bring them technologies that can decarbonize the space.

What domains in climate tech does Fifth Wall have the greatest expertise in?

Fifth Wall sees climate tech as two broad categories – energy and industrial technology.
Energy means focusing on clean and green energy going into buildings. Subsectors here include sources of generation (solar, wind, etc.), grid decarbonization, and grid resiliency.

Industrial technology entails making buildings clean and green. The different verticals here are materials, life of the building, and end of life. The main facts that support this part of the thesis are:

The construction industry uses 40% of the world’s raw resources.
5% of all materials that are sent to construction sites get sent directly to landfill.
40% of materials in landfills are from construction.

What type of portfolio support does your team provide?

The way Fifth Wall is structured differentiates them as a fund and supporter to their portfolio companies.

Fifth Wall has a consortium of 70-80 of the world’s developers and operators in the sector of which are all investors in Fifth Wall. As a result, these businesses have buy-in to the startups Fifth Wall invests in, which leads to a startups’ success in finding and selling to customers.

In addition to access to corporates and customers, Fifth Wall provides support to a startups’ capital stack. Fifth Wall can support startups from equity financing through to IPO, including debt financing. Half of the team at Fifth Wall, the capital markets team, supports startups with access to debt capital.

About Investments

What is Fifth Wall’s investment process and timeline?

Fifth Wall is focused on long-term relationships for investments. Due to their size and consortium of LPs, Fifth Wall knows about almost every startup that intersects with climate and the built environment. Typically, Fifth Wall knows about new startups within the first year of operations. Fifth Wall uses their knowledge, size, and network to help startups succeed – they will help make introductions that could lead to pilots and customers.

Fifth Wall’s investment process can vary based on the relationship between a startup and Fifth Wall. If there is already a standing relationship, Fifth Wall can make investment decisions quickly. On the other hand, if, by any chance, there is no relationship by the time a startup approaches Fifth Wall for investment, Fifth Wall will make a quick decision to either pass or dig in deeper into diligence.

What would make Fifth Wall consider deviating from their typical criteria?

Fifth Wall asks two questions when evaluating startups:

Can the product sell?
Is the product good for the environment?

If the answer is yes to both questions, then Fifth Wall is open to digging in more, even if the round size is smaller than where Fifth Wall would normally invest. Fifth Wall is open to investing earlier on if the technology is innovative and if there is an opportunity.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Largest Venture Fund Focused On The Built Environment appeared first on The Impact.

The Fund Reverse Engineering Unit Economics for Climate Startups

Daniel Kriozere — Mon, 13 Dec 2021 07:20:42 +0000

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At One Ventures is exclusively helping humanity be a net positive to nature. At One Ventures only invests in early-stage companies that strive to reverse the negative impact humanity has had on nature. At One Ventures is open to taking investment risk, as long as it aligns with their core focus.

Fund Snapshot

Stage: Seed – Series A
Check Size: $500K-3M
Geography: Global
Lead/Follow: Lead or Follow
We invest in companies that are earning revenue as well as those that are pre-revenue

About the Fund

Why was the fund created?

Tom Chi founded At One Ventures at the beginning of 2020. Tom watched the coral reefs near his home in Hawaii die out and disappear from one season to the next. At that point, he asked himself, “If not me, who? And if not now, when?” With those two questions resonating, he quit his job and started At One Ventures.

What is a contrarian idea that the fund believes in?

According to Chi’s conversation with TechCrunch:

“[At One Ventures] believes that the most severe carbon emission cuts are unlikely to prevent global warming of 1.5 degrees Celsius above pre-industrial temperatures by 2040. Instead, the answer is beyond stopping emissions to repair the damage and fix problems on a deeper level…A majority of startups are trying to be planet-positive, but their business model involves asking consumers to pay more money for a product that may only benefit the environment 30% better. Instead, the firm is looking for the companies that can scale a product that, for example, will cost three times less, and be 50% better for the environment.”

What domains in climate tech does your firm have the greatest expertise in?

Everyone on the team brings something different to the table, ranging from astrophysics and biotech to emerging markets investments. Each person on the At One Ventures team has a different background and skill set, however, the one piece in common is the drive to work on solving climate change. The team’s combination of scientific, financial, and deeptech experience gives them the advantage to evaluate hardware and environmental economics.

What type of portfolio support does your team provide (strategy guidance, network etc.)?

Tom has hired people to fill in the gaps in skill sets and knowledge. From technical backgrounds to consulting and investment experience, the At One Ventures team can help in many different ways:

Science and engineering
Customer intros
Fundraise support (financial modeling, data room, pitch decks, etc)
Recruiting
Go-to-market
Design
Pricing

About Investments

What is your investment process and timeline?

At One Ventures looks for 3 core things in every startup they talk to:

Deep technology – the underlying thesis is that deep tech creates an automatic moat that gives companies defensibility and differentiation
Unit economics – if the solution can’t be at cost parity or cheaper than existing solutions, it will never be adopted
Total addressable impact – Environmental impact needs to move the needle vis-a-vis the size of the planetary problem of 43 billion tons of CO2 emitted per year

That said, their investment process is straightforward. If a first call goes well, At One Ventures will start digging into the 3 core things they look for before moving onto a second call, where the industry expert at At One Ventures will join the discussions. Once all three criteria from above are met, the team gets together to make investment decisions – the whole team serves as the investment committee, At One Ventures can move as quickly as a startup needs.

What would make At One Ventures consider deviating from your typical criteria?

At One Ventures is open to investing earlier than Seed, depending on traction, if the team can help, or if the opportunity makes sense. Other than the stage, At One Ventures can deviate based on their 3 core things they look for, but this would likely be on the deep technology side – they are open to investing in enabling technologies that aren’t necessarily deep tech.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Reverse Engineering Unit Economics for Climate Startups appeared first on The Impact.

This Climate Fund is Enabling Industrial Markets to Decarbonize

Daniel Kriozere — Mon, 06 Dec 2021 02:47:33 +0000

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Founded in 2019, Piva Capital backs technology companies bringing new software and hardware solutions to the world’s industrial markets. Piva is actively looking for companies that are involved in industrial adaptation to make industry greener, more efficient, cheaper, and more productive. The three verticals Piva typically invests in early commercial-stage businesses are 1) the future of industry, 2) the future of materials and production, and 3) the future of energy and mobility.

Fund Snapshot

Stage: Series B
Initial Check Size: $5M-$10M
Geography: North America and Europe
Lead/Follow: Both (prefer to lead)
Revenue/Valuation Thresholds: Early commercialization

About the Fund

Why was the fund created?

Historically, a shortage of later-stage capital has limited the industrial-scale adoption of promising new technologies. Piva Capital was founded in 2019 by Ricardo Angel and Adzmel Adznan to address the need for industry to transition to a more sustainable, cleaner, smarter future. The firm’s managing partners bring almost 2 decades of individual experience in investing in the industrial space and have built a team with a strong combination of technical expertise to evaluate companies and technology, industrial experience to find the best areas to innovate and disrupt, and experienced investors to identify and support world-changing portfolio companies.

What is Piva’s core belief?

Piva believes we are now entering a new era of industrial disruption- significant changes in consumer and corporate behavior are accelerating the trend to re-envision industry. There is now more capital flowing into the industrial innovation space, and there is a need for investors that can marry technical depth with industrial experience to be able to support companies through their growth journey. Piva is investing in startups that enable industry to become smarter, more sustainable, and to adapt to climate change. The firm focuses on industries that represent over a third of global GDP, and over two-thirds of global GHG Emissions: food, agriculture, energy, transportation, steel, concrete, chemicals, manufacturing, etc.

What domains in climate tech does Piva have the greatest expertise in?

Piva’s team looks at their expertise in two ways – industrial and functional experience. Industrial expertise entails technical and commercial knowledge, which they leverage to evaluate and support companies throughout the technology development, scale-up and market adoption phases. In terms of functional backgrounds, Piva has a diverse set of experiences that span startups, investing, big companies, deep technology development, and more. Additionally, Piva’s team members come from a variety of different roles, from project management to scale and growth and CEOs.
In terms of specific verticals, the team is always learning and developing deeper knowledge in new topics.

What type of portfolio support does Piva provide?

Piva likes to provide real support to startups by rolling up their sleeves for portfolio companies. This can include helping with:

Business development
Follow on fundraising
Storytelling / PR
Customer acquisition
Business strategy
HR (management team hiring, team building, board members, company culture)

Piva also has deep technical expertise in-house. This is not just understanding technology and science, but also scaling technology to maturity for massive industrialization and impact.

About the Fund

What is Piva’s investment process and timeline?

Piva tends to track companies and build relationships with teams prior to their fundraising process. The firm’s process is quite straightforward, internally. When a team member is excited about an opportunity, especially after a couple of calls with a startup and market research, the startup is invited to their Monday meeting to pitch to the entire team, including Piva’s advisors. The Piva team sees this as an opportunity to get the entire team excited about the potential company and all the different ways they could support them. After that, Piva’s team privately discusses/debates the opportunity. Ultimately, it takes a couple people to love the deal, and the rest to like the deal to move forward.

What would make Piva consider deviating from their typical criteria?

Piva is opportunistic when looking at deals outside of where they traditionally invest. On the early side, Piva would consider investment if the technology is compelling, differentiated, and if there is no later stage technology in the market already doing something similar. On the later stage, Piva would think about opportunities where companies have hit an inflection point for growth and that fit the thesis of helping industry become smarter and more sustainable.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post This Climate Fund is Enabling Industrial Markets to Decarbonize appeared first on The Impact.

This Fund Drives Climate Impact Today

Daniel Kriozere — Mon, 29 Nov 2021 20:07:06 +0000

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Buoyant Ventures is a female-led venture fund investing in entrepreneurs using digital technology to mitigate and adapt to climate change. Buoyant invests in startups that can reduce carbon emissions in four major industries: energy, transportation, agriculture, and the built environment. Buoyant is accelerating the shift to a clean, resilient future by investing in technology that can be deployed and scaled today.

Fund Snapshot

Stage: Seed – Series A
Check Size: $500K – 5M
Geography: US, Europe
Lead/Follow: Prefer to Lead
Revenue/Valuation Thresholds: Need Customers and Revenue

About the Fund

Why was the fund created?

At the end of 2019, the GPs of Buoyant Ventures, Amy and Allison, realized from their previous experience in venture capital and strategy consulting that the market needed digital solutions for climate. They saw that digitization and data have revolutionized other industries and saw that the climate sector was mature enough to begin disrupting technology built on the backbone of its core foundations.

What is Buoyant Ventures’ core belief?

Buoyant Ventures invests in solutions that directly impact climate change. For Buoyant, however, this impact needs to occur today. Therefore, the team believes and is seeking out solutions that can be easily deployed and scaled immediately with minimal technical risk. The state of the world and climate change needs to change, and Buoyant wants to make an impact and help streamline more capital entering the space.

What domains in climate tech does Buoyant Ventures have expertise in?

From Amy’s previous experience at Energize Ventures and Clean Energy Trust, and Allison’s time in strategy consulting, they approach climate from the lens of finding problems that need to be solved. They have a wide range of expertise, which includes energy, regulatory markets, built environment, EVs, and climate risk intelligence. Buoyant is a research first fund that is supported by a network of experts to help assess and analyze new sectors.

What type of portfolio support does the team provide?

Buoyant wants to be as helpful to the ecosystem as possible. With the startups they support, Buoyant likes to be on the board. The team is happy to help startups, even before investment. Support includes:

Business development support
Talent acquisition (screening, recruiter, network)
Expert/advisors network
Business & Operational Strategies
Fundraising

About Investments

What is Buoyant Ventures’ investment process and timeline?

Buoyant is a Series-A sweet spot investor with typical investments ranging from Seed to early Series B. Buoyant strongly emphasizes investor-founder relationships and likes to connect with founders and their startups prior to them formally launching their Series A raise. This way, Buoyant can help and get involved earlier, and Buoyant can see how the startup progresses over time.

Buoyant’s investment process is quick and transparent. One of the GPs takes the first call with a startup, and if that goes well, the other GP will talk to the startup as well. Because Buoyant is focused on building relationships, they like to meet in person (if possible) and talk to all of the core team members, as well as a few customers. Buoyant then puts together a competitive analysis that they share with the startup and ask for feedback. At that point, Buoyant makes a decision to invest along with their LPs, or make other introductions for the startup.

For investments at the Seed stage, Buoyant focuses on the founding team and needs to have a high conviction in their abilities and person. Buoyant understands that Seed-stage companies are at the beginning of their sales process and may not have significant customer traction; however, the company must fully understand their market and that their solution is market-ready such that Buoyant can be ready and active to help in that space.

What would make Buoyant Ventures consider deviating from their typical criteria?

As Series A investing is Buoyant’s sweet spot, for them to invest at the Seed stage would mean that they would have high conviction in a team and their vision. At Series B, Buoyant would need to be able to add value to the startup, which usually lends itself to bringing a different perspective to the table or tapping into Buoyant’s network.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post This Fund Drives Climate Impact Today appeared first on The Impact.

The Fund Betting on Technologies That Have Derisked Since CleanTech 1.0

Matthew Morris — Mon, 22 Nov 2021 06:12:46 +0000

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Energy Transition Ventures (ETV) is a new climate venture fund dedicated to investing in and advancing technologies directly impacting the shift towards a clean energy future. ETV focuses on five major themes in the clean energy transition: distributed energy, electrification, mobility, resource efficiency, and enabling technologies. The fund likes to take on engineering risk, technologies with reasonable timeframes for development and deployment, business model innovations, hardware and software, and will bet on technologies that have derisked themselves from Cleantech 1.0.

Fund Snapshot

Stage: Seed – Series A, with select later stage
Check Size: $1-5mm
Geography: North America focus, but not restricted
Lead/Follow: Lead or Follow
Revenue/Valuation Threshold: None

About the Fund

Why was the fund created?

Craig and Neal have both been in the clean energy field for 15+ years, prior to launching the fund in March 2021. Both previously worked in venture funds (Accel Partners, Jane Capital Partners, and Shell Ventures) and startups during Cleantech 1.0, and the two came together during the pandemic on strategy and philosophy, around the belief that the energy sector had substantially changed.

Renewables had gone from the most expensive source of energy to among the cheapest in a decade. And that would create opportunities for a whole new set of companies to be built on top of cheap, clean energy. In particular, there was a true gap in true early-stage venture funding after the exodus from Cleantech 1.0. Cleantech 1.0 focused on making renewable energy cheaper, with much of the money invested going into the core sciences and advanced materials that promised cheaper clean energy. Many of those advancements did not materialize at the performance and cost points promised, and incumbent technologies, like silicon for solar and lithium-ion for batteries, ultimately won. With those technologies at scale and, the time for accelerating the transition with novel businesses on the backs of cheap, clean energy is now, with those inventions ready to shine.

What are Energy Transition Ventures’ core beliefs?

Energy Transition Ventures believes that there is no single formula for startups and companies. As previous successful investors in Cleantech 1.0 and operators at startups and large companies in these sectors, the team has a significant amount of experience working in the space and understands the role of R&D, advancements in learning curves for previously risky hardware, and engineering risk vs. science risk. Additionally, the capital stack for climate technologies is now complete with private capital flowing from early-stage startups through growth capital, private equity, corporates, and public markets. VC funds no longer have to foot the entire financial burden for technologies in the industry.

What domains does Energy Transition Ventures have expertise in?

The Energy Transition Ventures team has a wealth of experience in energy technology, startup development, and investing in energy transition technologies in both hardware and software. Craig brings to the table years of experience working in solar at leading companies SunEdison, SolarBridge, and SunPower, building and delivering both software and hardware solutions to the industry. Neal is a true investor, understanding the ins and outs of startup viability and investing, and can help portfolio companies structure themselves to be poised for success.

What type of portfolio support does Energy Transition Ventures provide?

Energy Transition Ventures aim to help drive the development and commercialization of their portfolio companies by leveraging the resources of each individual partner. Energy Transition Ventures helps their portfolio in the following ways:

Streamline the process for acquiring and launching pilot projects, particularly in Asia, through their anchor limited partner, the GS Group.
Business development, customer introductions and pipeline development
Access to ETV’s network, including cleantech.org, one of the largest professional networks in cleantech, managed by ETV.
Product and manufacturing strategy

About Investments

What is Energy Transition Ventures’ investment process and timeline?

Energy Transition Ventures’ investment process is fairly straightforward. The team functions as a tight group and can move very quickly with their investment decisions. Startups engaging with ETV can expect an introductory call with one of the partners to establish a fit, followed by pitching to the team as a whole. From there, ETV will dive deeper into due diligence – team, technology, market – and request customer interviews prior to a term sheet. This whole process can be fast (days) or slow (weeks to months), depending on the company, technology, and the market. ETV prefers to lead, and is not swayed by the opinions of other investors. But, they will also follow if there is a strong lead they trust, and alignment on the path forward.

The most important element of ETV’s decision-making process are the customer interviews. In these calls, the partners look to understand why customers choose to use the startup’s product and what exactly the customers’ pain points are. Cross-referencing this information with the partners’ industry experience, the investment team will move to look to see how strong/credible the team is, look into how big the market truly is, and evaluate whether or not the pain points the startup is trying to solve are real and impactful.

ETV are selective investors, and judge their investments through the lens of the broader venture capital asset class – not just the climate sector. They believe success in climate and energy can yield just as good returns as general technology.

What would make Energy Transition Ventures deviate from its typical criteria?

Given that ETV has a broad mandate for what the team can invest in, nothing is contrarian to its thesis. If the potential company either drives or benefits from the energy transition, ETV may consider investing in a materials science company so long as the technology and team have reached an inflection point in its development and traction, and the learning curve for the technology is already sufficiently advanced. There are a lot of technologies that have been around for 10-15 years that are still poking around and are just starting to gain maturity and traction. ETV is opportunistic and flexible in finding investments and would be willing to deviate in stage, role, investment area, and investment type. They believe that this wave of investment will create a handful of huge companies that will change the world, and they want to be a part of all those companies.

About The Author

Matthew Morris

Partner @ The Impact

The post The Fund Betting on Technologies That Have Derisked Since CleanTech 1.0 appeared first on The Impact.

The Fund Finding the Climate Superheroes at the Seed Stage

Daniel Kriozere — Mon, 15 Nov 2021 01:55:39 +0000

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Collaborative Fund invests in businesses pushing the world forward while aiming to outpace the market and produce alpha returns over the next decade and beyond.

To do so, Collaborative asks two questions:

If this startup becomes massively successful, will it make the world a better or more interesting place?
Would a ‘villain’ invest in this company if their motive was one of pure self-interest?

Collaborative is investing in startups that are a “yes” to both questions.

Fund Snapshot

Stage: Seed and Series A
Check Size: $1-5M
Geography: US, Europe, Asia, LatAm
Lead/Follow: Both

Why was the fund created?

Collaborative Fund was founded in 2010 by Craig Shapiro. Collaborative believes that entrepreneurs working at the intersection of “better for me” and “better for the world” produce outsized returns on capital and for humanity.

What is a contrarian idea that Collaborative Fund believes in?

Though Collaborative’s core belief seems commonplace today, in 2010 it was a bit contrarian. The idea that extraordinary financial returns can also produce positive social benefits is rooted in the idea that the economy is becoming more values-based. Collaborative believes that, over time, consumers will increasingly value intangibles such as happiness, creativity, and or transparency. This shift will greatly affect the way we live and work in the future.

It also means that many successful businesses will look different than the ones we know now. For instance, consumer preferences for food may evolve to include products that are environmentally sustainable and ethically produced, given increasing knowledge of how unsustainable our current food system is.

What domains in climate tech does Collaborative Fund have the greatest expertise in?

Collaborative Fund invests in the future of food and all the ways it intersects with the climate.

Collaborative made early investments into next-generation food brands such as Beyond Meat, Sweetgreen, Blue Bottle Coffee, Good Eggs, and The Farmer’s Dog. More recently, the firm has expanded its focus to include broader agricultural ventures, including; sustainable fertilizers, methane capturing hardware, and advanced farm robotics.

The future of food is a space that impacts all of us in our everyday lives and is undergoing massive disruption, from how things are produced, shipped, packaged, and consumed.

What type of portfolio support does Collaborative Fund provide?

Collaborative Fund partners with our portfolio companies to meet their needs. This varies on a company-by-company basis, but can include:

Operational support
Go to market strategy
Branding
Hiring

What is Collaborative Fund’s investment process and timeline?

Collaborative does not have a rigid investment process. They work closely together as a team to source, research, and decide on investments. The portfolio is their primary sourcing engine and acts as a key component of the diligence.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post The Fund Finding the Climate Superheroes at the Seed Stage appeared first on The Impact.

This Fund Scales Climate Impact Beyond Their Capital

Daniel Kriozere — Sun, 07 Nov 2021 22:44:36 +0000

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Energize Ventures is a leading global alternative investment manager focused on technology companies accelerating innovation in energy and sustainable industry. Energize provides financial, operational and commercial support to digital-first startups spanning renewable energy, critical infrastructure, climate resilience, cybersecurity and mobility. They partner with entrepreneurs to help them scale their companies from early commercialization to growth stage and into the public markets.

Fund Snapshot

Stage: Series A – Series C (Growth Fund includes Series C and later)
Check Size: $10-20M
Geography: Global
Lead/Follow: Prefer to lead round
Revenue/Valuation Thresholds: Product is working and ready for commercialization at scale

About the Fund

Why was the fund created?

Energize was born from operators in the energy transition that realized there was a huge opportunity ahead for digital solutions. The energy landscape was changing very rapidly, with a trend to decarbonize. To accelerate that transition, operators needed to implement and use more digital tools within businesses to drive greater efficiencies and to drive better sustainability.

Energize sits at a unique time where new, enabling technologies are being utilized to improve the operations of existing physical assets. In addition, the growth in renewable energy has hit an inflection point and digital technologies can help deploy sustainable infrastructure more efficiently.

What is Energize Ventures’ core belief?

Energize believes that the renewable energy markets are now sizable enough to build big digital businesses within them. There has been a significant increase in the investment in and buildout of infrastructure in the energy and industrial markets over the past decade. For example, the cost to develop a wind farm, a solar farm, or battery array has dropped roughly 5-10% per year. Because of that decline in costs, there’s been a large layer of applications that can now be built on top of the infrastructure layer. That’s necessitated software solutions to come in, and to manage the scale of these new types of assets. And that’s where Energize steps in.

What domains in climate tech does your firm have the greatest expertise in?

The Energize Ventures team is unique because they are a group of individuals with very different yet complementary backgrounds. They have a unique team with specialties in several climate topics, including wind/solar, utilities, oil and gas, agriculture, carbon accounting, construction, manufacturing, and retail energy.

What type of portfolio support does your team provide (strategy guidance, network etc.)?

Energize supports its entrepreneurs throughout commercialization and growth, which includes:

Hiring
Strategic planning and decision-making
Commercial introductions
Sales and marketing material
Product expansion
Capital raising

What is Energize Ventures’ investment process and timeline?

Their process can move as quickly or as slowly as needed. Typically, Energize has a few calls with the CEO and senior management before requesting a data room with more detailed product and financial information.

They look for companies that have a few million in revenue, that are growing quickly, and where they can leverage their network to help startups grow.

What would make your fund consider deviating from your typical criteria?

Consistency is one of Energize’s strengths. Energize sticks closely to their investment thesis because it is proven, and it’s where they can add real value as investors. With their Growth Fund, they are writing larger checks for later-stage companies. Energize currently has investments in four different countries and is always exploring opportunities on a global scale.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post This Fund Scales Climate Impact Beyond Their Capital appeared first on The Impact.

A Fund Identifying Top Climate Founders Before Product Market Fit

Daniel Kriozere — Mon, 01 Nov 2021 00:44:07 +0000

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Wireframe Ventures is an early-stage fund investing in founders on a mission to improve the health of people and the planet. Wireframe Ventures likes to be the first check in pre-seed/seed-stage startups and work closely with founders from inception to success. Their capital is early, active, and patient.

Fund Snapshot

Stage: Pre-Seed, Seed
Check Size: $200K-1.5M
Geography: US, Canada, Europe
Lead/Follow: Lead and Follow
Revenue/Valuation Thresholds: No revenue is required

About the Fund

Why was the fund created?

Paul and Harsh started Wireframe Ventures in 2016 based on over a decade of experience at the time investing and operating in climate and health startups. Over the prior few years, there had been a cleantech crash and also an explosion of generalist seed funds. Despite the urgent and enormous opportunity in climate and health, there was a lack of high-quality funding sources committed to supporting founders at the earliest stages. Paul and Harsh saw an opportunity to pair their deep domain experience and networks in these areas with a service-based approach to partnering with teams at the early, chaotic stages of company development.

What is Wireframe Venture’s core belief?

Climate change is the biggest risk to human health on a global scale. As such, Wireframe’s investment thesis is focused on human and planetary health. Both are intertwined at a societal level – people care so much about the climate because they also care about the wellbeing of 8 billion souls who call it home. Additionally, in many cases, the approach to building a startup in a regulated area, with channels to market, often a physical product that must be delivered, entrenched incumbents and sometimes significant capital requirements create similar challenges for startups in both areas. And at a specific level, some of the same tech stack, whether synthetic biology or computational biology is being applied to health, agriculture, new foods, or sustainable consumer and industrial materials.

What domains in climate tech does Wireframe Ventures have the greatest expertise in?

Paul has more than 15 years of experience investing in renewables, energy and climate while having been an active early-stage investor throughout the first cleantech wave. Harsh has over 20 years of experience as an entrepreneur and investor in climate, human health (genomics, personalized medicine, etc), and “deep-tech” areas.

Wireframe Ventures is technology agnostic but thematically focused. To date, Wireframe has invested in electrification of transportation, agriculture, sustainable consumer goods, circular economy, renewables, manufacturing, energy, computational biology and synthetic biology.

What type of portfolio support does your team provide?

Wireframe Ventures not only invests capital into startups they believe in, but they also get involved as an empathetic thought partner – Wireframe is flexible in whether it takes a board seat when investing because their relationship and primary engagement with teams are outside a formal board setting.

Wireframe wants to help early-stage founders with:

Company building – product, partnerships and “boring but important stuff”
Growing a team
Follow on funding
Networks of investors and potential customers

About Investments

What are Wireframe Ventures’ investment process and timeline?

For pre-seed investments, the process usually takes 1-3 weeks. At this stage, Wireframe views the investment in the individual(s), rather than the startup itself, especially as the startup is pre-product and pre-revenue. As such, Wireframe values relationships with founders and recommends that founders reach out to start building that relationship sooner, rather than later. A couple of the pieces Wireframe thinks about when vetting a team include leadership (charisma, confidence, EQ, etc), founder market fit, and business/commercial instincts.

Wireframe’s process is about the same for seed-stage investments. The main thing that is different is that Wireframe assesses a team’s product capability by digging into market validation and potential to achieve product-market fit with a seed round.

What would make Wireframe Ventures consider deviating from their typical criteria?

Wireframe reserves 10% of its fund for investments outside of their typical thematic and stage criteria. These investments are typically in teams they’ve previously backed (Tensil) or to invest in solutions where they have deep expertise but may be just past seed (LevelTen Energy).

About The Author

Daniel Kriozere

Co-Founder at The Impact

The post A Fund Identifying Top Climate Founders Before Product Market Fit appeared first on The Impact.

Climate Impact Investing at Pale Blue Dot

Daniel Kriozere — Sun, 24 Oct 2021 20:48:28 +0000

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Pale Blue Dot is an €87M pre-seed and seed stage ClimateTech fund investing in startups that reduce and reverse the effects of climate change and prepare for a new world. They are trying to fill the gap of providing funding for startups that need between €500K-3M. Pale Blue Dot invests in high conviction, extraordinary founders that are creating climate impact.

Fund Snapshot

Stage: Pre-Seed – Seed
Check Size: €500K – 2M
Geography: Europe, US
Lead/Follow: Lead or Co-Lead
Revenue/Valuation Thresholds: Maximum post-money valuation of €12M, preferred

About the Fund

Why was the fund started?

Pale Blue Dot was founded in 2020 by Heidi Lindvall, Hampus Jakobsson, and Joel Larsson focusing on addressing the climate breakdown. The team itself seeks to combine their entrepreneurial and investor past with hard sciences, storytelling, and humanitarian aid backgrounds to drive climate innovation at scale.

What is Pale Blue Dot’s core belief?

Trust is a key component to Pale Blue Dot’s ultimate investment decision, meaning that Pale Blue Dot puts founders first. They are all about having conversations with founders to understand their why and their thoughts on the problem they are solving. Trusting a founder means trusting that the founder can build a team and stay on track to build a 100% climate impact startup.

What domains in climate tech does Pale Blue Dot have the greatest expertise in?

Pale Blue Dot is a generalist climate fund. However, they like to approach sectors after doing their own research, meaning they know what kind of startup they would like to invest in. They have invested in many different verticals to date, from mobility to food/agriculture.

What type of portfolio support does the team provide?

Pale Blue Dot is a small team that truly cares about the founder first. Pale Blue Dot will prioritize the founder over the startup. If you make a founder great, the founder will be able to lead a great startup.
One of the three GPs is the startup’s coach, each startup syncs up with their GP on a biweekly basis and the founder can reach the GP day or night.

As Pale Blue Dot is focused on the people aspect, they can help with:

Culture
HR
Hiring
Process
Mental Health

About Investments

What is Pale Blue Dot’s investment process and timeline?

Pale Blue Dot’s investment decision can take as little time as 1 week, and as long as 3 months – it depends on the founder’s timeline. However, Pale Blue Dot’s process was made to create friction, in the sense of having quality conversations and getting to know a founder.

As mentioned previously, Pale Blue Dot does their own research on topics of interest before connecting with a startup. One of the three GPs will be on the first call with a startup – the GP that is on that first call is the lead. After that first call, the lead needs to love the startup in order to proceed. At that point, one of the other GPs will play devil’s advocate in order to think through the business.

There are standardized questions that Pale Blue Dot talks through – the conversation and the resulting questions is the important part. The questions indicate if Pale Blue Dot has a lack of info or a lack of faith. Regardless, all of these questions are shared with the founder.

When Pale Blue Dot is ready, the GPs vote on a deal. There needs to be at least one “Hell Yes” and one “Yes” for the team to proceed to an investment/term sheet.

What would make Pale Blue Dot consider deviating from their typical criteria?

At the end of the day, Pale Blue Dot cares more about the people behind a startup more than anything else. They want to invest in extraordinary people, even if the idea won’t be as high as an environmental impact return as they would traditionally invest in.

About The Author

Daniel Kriozere

Co-Founder @ The Impact

The post Climate Impact Investing at Pale Blue Dot appeared first on The Impact.

How to Get Funded by G2 Venture Partners

Daniel Kriozere — Mon, 18 Oct 2021 00:29:18 +0000

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G2 Venture Partners (G2) is a venture and growth investing firm focused on emerging technologies driving sustainable transformation across traditional industries like transportation, manufacturing, agriculture, energy, supply chain, and logistics, which together make up over half of the global economy. G2 is investing and supporting startups that are digitizing these industries (hardware and software). G2 is also investing in startups with diverse business models.

Fund Snapshot

Stage: Series B – Series D
Check Size: $15M-50M
Geography: Developed markets (primarily US)
Lead/Follow: Both (primarily lead)
Revenue/Valuation Thresholds: Millions or tens of millions of dollars of revenue (preferred minimum threshold)

Fund Snapshot

Why was the fund started?

G2 Venture Partners spun out of Kleiner Perkins’ Green Growth Fund in 2016. The Green Growth Fund was originally formed to invest in clean energy but quickly expanded to encompass broader digitization of traditional industry – specifically energy, transportation, logistics, manufacturing, agriculture, and eCommerce.

What is G2 Venture Partners’ core belief?

G2 Venture Partners is focused on the digitalization of traditional industries to reduce emissions and increase efficiency. The underlying belief is that the sectors G2 is investing in are analog (not digital) and ripe for disruption. By using digital technologies to make these resource-intensive sectors more efficient, G2 portfolio companies can simultaneously improve profitability and reduce emissions, doing well while doing good.

What domains in climate tech does G2 Venture Partners have expertise in?

G2 has expertise in all of its investment sectors listed above but wanted to highlight two areas in particular.

Transportation was a trend that G2 started noticing back in 2010, well before the general market considered it a core piece of climate tech. G2’s thesis is that the future of transportation will be shared, electric, connected, and autonomous. A few of G2’s transportation investments that have recently gotten press include Luminar, Proterra, and Shift.

Another theme is around Industry 4.0 and IoT – collecting data and using it to generate insights in industrial settings to modify and optimize operations.

What type of portfolio support does the team provide?

The G2 team brings investing and entrepreneurial experience in growth equity, venture capital, and technology. As such, G2 Venture Partners aims to be a service provider to their portfolio and a “go-to” board member for portfolio companies.

The team can help in many ways:

Industrial network serving as a community of customers and co-investors
Operational improvements and best practices on topics such as OKRs and governance
Recruiting
Financing and exit strategies

About Investments

What are G2 Venture Partners’ investment process and timeline?

G2 Venture Partners likes to meet entrepreneurs early in their process and build long-term relationships, but can make investment decisions within weeks when needed. The whole team participates in evaluating each deal, with 2-3 team members driving the process, digging into topics such as customer feedback and unit economics.

It is important to note that G2 prefers to connect with startups after a Series A round (G2 invests as early as Series B). Fostering this relationship is critical so G2 can understand a startup’s mission and track milestones, in addition to ensuring that G2 can add value to a startup.

What would make G2 Venture Partners consider deviating from their typical criteria?

G2 is focused on investing within its investment thesis. That said, over time they have expanded the sectors they are investing in – originally G2 was only investing in energy, and over time have added transportation, logistics, manufacturing, food/agriculture, and retail/eCommerce. If there is another trend that fits within the thesis of digitizing the industry to reduce emissions, it is possible they would explore broadening the verticals they invest in.

About The Author

Daniel Kriozere

Co-Founder at The Impact

The post How to Get Funded by G2 Venture Partners appeared first on The Impact.

Defining ClimateTech investing

Daniel Kriozere — Mon, 11 Oct 2021 02:29:45 +0000

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ClimateTech investments have been on the rise for the last half-decade, with over $60B invested into over 1200+ startups between 2013-2019. Valuations are exaggerated, deals are closing in a matter of days, and many startups are founded every day.

Over the last year, I have connected with over 250 investors in the space. Connecting with these investors has been very interesting, to say the least.

There are a few bins that I classify investors as:

Early-stage vs growth stage
Software vs hardware
Impact returns vs financial returns

Regardless of the classification of each investor, I thought it would be useful to define what early-stage investing in ClimateTech looks like.

Pre-Seed Investors

Pre-seed rounds are typically the earliest investment into a startup prior to the company having developed a minimum viable product. These rounds are smaller than traditional seed rounds at lower valuations and are often used to help a company achieve certain intermediate milestones prior to strong product-market fit and customer traction.

Investors writing checks into pre-seed startups are typically angel investors, friends/family, and accelerators. Angel investors can consist of high-net-worth individuals, former founders, and current/former executives that typically align themselves within a niche or a mission. Angel investors can really be an asset to startups, operationally or strategically.

At this stage, investors are typically investing in the team, rather than the product itself. When evaluating the team, investors look at the founder-market fit, as well as the product-market fit.

Seed Investors

Seed rounds are used to build an initial product and prove the business model. During this stage, it is common for a startup to demonstrate the technology and business via a pilot.

In addition to angel investors, institutional VCs and corporate VCs also make investments in the seed round. Traditional institutional VCs invest for financial returns and have the know-how to build strong teams for financial success. Meanwhile, Corporate VCs tend to have strategic objectives, which means that startups can leverage the corporate’s resources.

At this stage, investors are investing in the team, the product, and the market opportunity. Assessing technology and business model risk is part of the picture.

Takeaway

Investments in climate look relatively similar to traditional investing, except for the fact that many of these startups that will truly make a climate impact are science/engineering heavy (hardware/process innovation). This means that investors financing climate needs to be riskier than traditional software/tech investing.

About The Author

Daniel Kriozere

Co-Founder at The Impact

The post Defining ClimateTech investing appeared first on The Impact.

The Future of ClimateTech Investing

Daniel Kriozere — Mon, 04 Oct 2021 16:19:53 +0000

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Venture capital (VC) offers expensive capital for high-risk, high-reward investments to help innovative ideas go to market. However, VC investments in climate seem to be inherently riskier than traditional VC investments. This is because many of these startups have a high capital intensity for novel technologies with no historic precedent that can take several years to develop and exit. Climate investors today are more commonly financing businesses that are similar to traditional software/technology investments, or startups with notable investors on board.

However, even though risk profiles for climate technologies are higher, investors can’t charge as much for their capital. This means that return profiles might change with higher valuations/terms and lower returns. This is especially true in the case of hardware investing; however, the times are changing as more efficient, cheaper technologies are coming live with more investors recognizing the imperativeness of the problem at hand in climate change, finding new risk appetites and ways to financially and resourcefully support new startups.

Background

Sam Lessin’s post in The Information, “The End of Venture Capital as We Know It,” provides some context:

In the last several years, as software investing has gone from fringe to mainstream, enormous flows of global capital have been unlocked to finance software and the internet at increasingly competitive rates. What this means for investors who focus on Series A investment rounds and beyond is that the market should become more and more efficient while investing becomes less and less profitable. Greater predictability of and investor confidence in these early-stage investments will mean skyrocketing valuations as demand from investors grows. Every investor will see all the same deals and will have the same tools to evaluate their potential.

Though Lessin’s piece is focused on investing in software, I see the same kind of trends happening in the climate sector. Specifically, paying attention to how hot climate investments are today.

The Trend

There are many investors entering the climate space. Roughly 1,000 investment firms joined at least 1 climate tech deal from Q2’20 to Q2’21. The volume of investors in the climate market is going to lead to more investments happening earlier in a startup’s life.

Many first-time fund managers are entering the market, which means that smaller funds are investing in early-stage startups. This is going to start leading to later-stage funds starting to get into early-stage deals to secure investment in future rounds.

What does this mean for investors?

Investors will need to compete to give startups the cheapest capital (valuation and terms). Lessin mentions that “[funds] need to be as big as possible so that cash-on-cash returns are very high even if margins compress…if margins go down [investors] need to invest as much money as they possibly can in every deal. They need to make up for lower margins with higher volume.”

To support this transition, investors will need a new way to assess risk. Climate hardware startups don’t have the same metrics traditional software startups have, but there are other factors investors can reference (technology readiness level, customer traction, sales pipeline, etc).

Investors will also need to think about differentiation, specifically around portfolio company support. This can include team expertise, access to networks, and access to potential customers.

What does this mean for startups?

Startups stand to benefit from the changes in the investment landscape, as eventually, investors will compete to offer startups cheaper and cheaper money.

However, to compete for this capital, startups should focus on their technology risk and business model risk.

Technology risk entails science risk and engineering risk. Startups should focus on de-risking the science today, as well as thinking about risks when commercializing. With commercialization comes engineering risk – how can the startup scale their process to make sure the science works at scale?
Business model risk can be solved by achieving product-market-fit and validating the market. Finding key partners or first customers can make all the difference. Besides that, locking in letters of intent (LOI) or Memorandums of Understanding (MOU) can also de-risk the business, especially if this shows that an organization will become a customer when the startup hits a certain milestone. Anything the startup can do to build out the sales pipeline can only benefit them.

Outlook

Investors are waking up to the idea that the future of business is in climate, and no industry is excused from this crisis. That means capital will continue to flow into solutions that not only disrupt industries but all provide a positive climate and human benefit as well. Through this, we will continue to see new funds emerge in the next decade specifically geared towards investing in climate solutions, and more traditional funds and corporate venture arms evolving their investment theses and sector focus to include climate and ESG.

These funds will also begin to look different as well, ranging from traditional, large general funds to sector/issue-specific microfunds, where the partners are industry veterans looking to change the status quo. Corporate venture funds (CVCs) will also play a strategic role in testing and incorporating new technologies into the commercial environment. With deep pockets and a lot to gain from the emerging technology market, these entities will serve as tipping points for many novel products, materials, and processes as startups begin to scale.

Lastly, the world of ClimateTech investing is one that is mission-driven, where investors are looking to achieve a double bottom line of high returns with high impact. Public opinion and market trends will continue to shape the next generation of investment. As the climate crisis continues to hasten, investors will be taking bigger risks.

About The Author

Daniel Kriozere

Co-Founder at The Impact

Daniel currently works at Lawrence Livermore National Laboratory. His original assignment was to maintain and update facility safety documentation for all facilities on-site, and perform risk analysis. Over time, his role has expanded to leading continuous improvement efforts through product management.

Concurrently, Daniel volunteers with Techstars, helping organize startup weekends, and with the American Institute of Chemical Engineers, organizing events on the local and national levels of the organization. He also volunteers with One World, and previously with Powerhouse Ventures, to source and screen startups for potential investment.

Daniel holds a BS in Chemical Engineering from UC Davis, and recently completed coursework in energy innovation from Stanford. His passion is at the intersection of sustainability, innovation, and business.

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