Investing in Early Stage Impact Startups • City Light Capital

City Light Capital invests in early-stage impactful companies within the education, safety and care, and environmental sectors. (Image: City Light Capital)
City Light Capital invests in early-stage impactful companies within the education, safety and care, and environmental sectors. (Image: City Light Capital)

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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:

  1. 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).
  2. 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.
  3. 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

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.

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