đ¤Â Howdy friends… The IPCC report is long, we’re reading it, but boy is it long and kinda puts off doomsday vibes…We’ll be coming out with a piece on our thoughts and summary on it in a few weeks.
Stay tuned.
– Stephanie Zulman & Swarnav S Pujari
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THE TL;DR đ¨
- Conservation used to be about saving the land from development
- Climate change threatens all ecosystems, not just one
- Therefore, conservation is now about engineering ways to mitigate climate change
- Engineering and technology develop links directly back to the land and waters
đď¸ Investing to Reduce 2.5 Gt of CO2e
- Clean Energy Ventures is investing in climate tech startups that can reduce 2.5 Gt of CO2e between now and 2050
- Clean Energy Ventures is funding and supporting early-stage clean energy startups
đ THE BIG PICTURE
How Cleantech is the New Conservation
By John Docter ⢠is an Engineering Analyst Fellow for a national laboratory. He's keen on saving the world through science and education.
On Bears and Beards
When you think of someone whoâs a conservationist, who do you think of?
I think of the Burtâs Bees guy; gray beard, weather-worn flannel shirt tucked into belted slacks, yodeling through the woods without a care in the world.
Spiritually, thatâs not far from the truth.
Paraphrasing a passage from John Muirâs My First Summer in the Sierra:
July 21st, 1869, John Muir is in Yosemite helping take sheep to pasture for the summer. Out on a hike, his dog, Carlo, alerts him to an animal nearby, which Muir judges to be a brown bear.
Intrigued, Muir seeks out the brown bear and finds it in a flowery, sun-dappled forest meadow and watches it from behind a boulder.
Deciding heâd like to see the bear in running form, Muir decides to run AT THE BEAR.
The bear turns towards Muir, lowers its head, and looks directly at Muir, taking a few steps towards him.
Muir decides to “be like the bear.” He stares into his adversary’s eyes and holds his ground until his inexplicably placated foe saunters away.
From Lakes to Legislatures
Thatâs one story among many within the pantheon of American conservationists. John Muir, Henry David Thoreau, and Aldo Leopold paved the way for the modern environmentalist movement.
Conservation was a movement from the 1850s to the 1920s that focused on managing and protecting resources for future use by humans â think sustainable logging or managing a large natural area to allow camping and canoeing.
The modern environmental movement emerged from conservation around the 1950s with legislation to control air and water pollution. Rachel Carsonâs Silent Spring also played a critical role during this period, spurring legislation limiting the biologically cataclysmic effect of heavy pesticide use.
Environmentalism emerged as an all-encompassing movement to include the political, economic, and social aspects of protecting nature.
Thus, the United States expanded from focusing on protecting the environment from direct harm, like logging and grazing, to protecting the environment from dispersed harm, like DDT use in agriculture.
Cleantech Emerges
However, as society expands, so too do environmental threats.
We are currently in the midst of a paradigm shift in response to greenhouse gas emissions.
The conservationist and environmentalist movements were responses to the specific threats of their time. We started by conserving a specific ecosystem then progressed to protecting a larger swath of the interconnected environment.
Now, weâre working to protect the global environment from the existential threat of climate change, namely the development of technologies to address greenhouse gas pollution.
In popular vernacular, these technologies are known as cleantech.
Connecting Cleantech Back to Conservation
Engineers, entrepreneurs, and scientists are responding to the existential threat of climate change by working on the technologies that will help our society reach circular economy milestonesâ like removing COâ out of the atmosphere and using microbes to extract resources out of waste.
While the value of cleantech can often be obscured in buzzwords and financial metrics, ultimately, the technologies cleantech is pioneering connect intimately to the land, forests, rivers, and mountains.
Cleantech is in pursuit of the same environmental goals that conservationists were pursuing some 172 years ago, albeit on a much larger scale.
Scientists, engineers, and entrepreneurs are modern-day Muirs working for the betterment of the global environment, a new breed of conservationists.
..Minus the huge beards and close proximity to bears.
The New Conservation
Thus, Iâd like to be the first to propose a novel definition of the phrase, The New Conservation.
The New Conservation is the collective development and implementation of technologies that will mitigate climate change and the disruption of the global environment.
This idea is highly valuable because it connects technology to the land, rather than siloing cleantech and conservation into two separate buckets.
If we implement tech to reduce atmospheric COâ, wildfire severity will decrease, preserving our forests. If we get our raw materials from waste, we donât have to destroy the environment to mine for natural resources.
Cleantech as conservation is a connection we cannot lose sight of as we enter the most critical years of the climate fight.
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đ EDUCATION // đ¸ VC DEEP DIVE
Making Ecommerce More Sustainable
By Daniel Kriozere ⢠is a Principal at C3, Tech Scout at For ClimateTech, and Venture Scout at Prithvi - and has an extensive network within the broader climate investment and startup community.
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 â Series A
- Check Size: $500kK â $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 firmâs 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), CEVâs 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 CEVâs core belief?
CEV believes that the serious reduction of greenhouse gasses and the profitability of businesses go hand-and-hand. They believe that you donât have to sacrifice a businessesâ 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 fundâs 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, thereâs 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 companyâs 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 startupâs 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.
- CEVâs 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 CEVâs 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. Theyâre 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 âcleantechâ 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 âhype cyclesâ and sticks closely to their investment criteria, while understanding that climate tech is also reaching into new markets and new frontiers regularly.
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Editors: Swarnav S Pujari, Stephanie Zulman Writers: Daniel Kriozere, John Docter
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