Evan Smith

Data from the International Energy Agency (IEA) illustrates the current "readiness" of #ClimateTechs + their potential impact on carbon reduction. As shown, many techs are at an early stage of being able to have a material impact. Concerningly, some tech funds recently returned capital back to investors recently + closed their funds - citing inability to fund capital intensive techs, found in areas like ClimateTech. This in part may be contributing to the $2 trillion shortfall in ClimateTech, that Deloitte estimates. What this may mean for the future? - The migration of LPs to global, super VC funds within ClimateTech, given the large capital pools needed to fund tech development - Greater specialization from smaller funds, energizing more niche elements of the ClimateTech market - but also altering their / LP's risk profile - A greater role to be played by debt financing in funding growth entities at an earlier stage - impacting cashflow dynamics Will be an interesting space to watch moving forward. We at The Proptech Connection are constantly working with all parts of the Proptech ecosystem. From the leading LPs, funds, techs and adopters in market, providing an independent view. Reach out to us today to find out how we can help. #InvestorTrends #Strategy #Global Ivo van Breukelen Stuart Daun Kiki C. Ethan Ward

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Check out my recent post on why President Trump is the forcing function for us to solve the “Missing Middle” and catch the industrial Tsunami of onshoring coming to the US!

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Last week, I had the pleasure of moderating a discussion on navigating FOAK in climate tech at the Greentown Labs Summit in Boston (which had >600 people!!). Here’s a quick rundown of what was shared by Katherine St. James of Spring Lane Capital, Paris Smalls, PhD of Eden GeoPower, and Hannah Friedman of Planeteer Capital: 🌱 What is the definition of FOAK? We discussed how the term can be controversial - it's almost too general because it doesn't identify what kind of "First" FOAK refers to - first team project? First geography? First of a technology in a sector? First time for the integration of a system? It's also too specific because it has the word "first" in it, which can be anathema to later stage / project finance investors. 💰 Partnerships for Funding FOAK Projects We discussed how important it is to build a blended capital stack & use off-balance sheet capital for a project so you're not using the most expensive equity dollars to fund an infrastructure project with low-ish IRR. We also talked through being creative about using corporate partners to provide in-kind services or ink some agreement (at least an LOI) to attract this funding. 🏛 Role of Government We talked about how government capital is seen by investors & how it can be catalytic for FOAK. Government capital can provide validation that a startup has passed a rigorous diligence process by a third party - and incentives like grants or credits can help improve returns for the first project- but it's important to be doing this in conjunction with getting customer validation and to be able to present line of sight to competitive economics without concessionary capital. 👥 Advice for FOAK startups The panelists offered some very specific pieces of advice for startups going through FOAK: how to get creative with things like revenue sharing agreements or convertible notes, getting smart with project development early on (like with DeveloperU), being careful about using FOAK too liberally with certain investor groups, getting the right commercialization / FOAK talent in and around you early Huge thanks to the panelists and the team at Greentown Labs (Jill Kirkpatrick, Julia Travaglini, Aisling Carlson, etc you rocked it!!) for hosting this discussion on bridging the FOAK gap. Also immensely enjoyed the rest of the agenda. Check out the full recap & videos here: https://lnkd.in/d9ApYe9Y #ClimateTech #FOAK #ClimateFinance #ProjectDevelopment #GreenTech #CleanEnergy

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📢 Some big news this week that marks another pivotal step in the evolution of carbon markets… The Biden administration, led by Treasury Secretary Janet Yellen, will be unveiling the first broad US government guidelines on the use of carbon credits as part of decarbonization strategies. It’s a much needed step that will promote high-integrity carbon markets, and boost corporate confidence in using carbon credits. The Bloomberg article's sources suggest the upcoming framework will align with the government’s stance that: “voluntary carbon markets have a role in reaching net zero, as long as they promote high-integrity emissions reductions and channel meaningful amounts of capital into nature-based projects today as well as carbon-removal technologies in the future.” And that is the key. There is no silver bullet for the climate crisis. Whatever the critics may say about carbon credits, more transparency, clarity and official endorsement on their use will serve to unlock billions of much needed corporate dollars for carbon projects. Couple this news with recent initiatives by major tech companies like the Symbiosis Coalition of Google, Meta, Microsoft and Salesforce and we’re starting to stride in the right direction. Read more and sign up for the live stream: https://lnkd.in/ddDRA8yd #carbonmarkets #carboncredits #naturalcapital #climateaction #breakingnews

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Avoiding bloody water (lots of competition) might be the most high leverage way to engineer success…here’s our blue ocean strategy: Avoid venture backed players (who can spend on unsustainable growth practices) by targeting niche industry verticals Avoid private equity buyers (who drive up valuations via auctions) by staying under $3M ARR What else can be layered in to avoid other dimensions of competition? #microsaas #saasgrowth #acquisitionentrepreneur

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"Simply put, there is too much capital seeking too few opportunities, particularly at the seed stage. Multi-stage firms have eliminated pricing discipline at seed stage and the proliferation of seed firms has made the task of investing at this stage as competitive as it’s ever been, leading me to believe that indexed seed investing in today’s environment will produce poor returns. What does this mean for today’s environment? It’s never been more important to break away from median performance. While there is risk in breaking away from the pack, the risk (at least performance wise) of staying part of the herd is simply far worse. Median returns for the recent vintages are simply terrible. One could argue that funds are still in their j-curve phases, but I suspect this doesn’t explain the divergence we’re seeing between GOOD performers and GREAT performers. More than ever before, it’s clear to me that playing the same game as everyone else will not work, so fund managers should question whether they are really capable of being in the top 5% of whatever strategy they are employing. From a LP perspective, allocators should likely ask the same of their managers and consider whether allocating to indexed mega funds or indexing across too broad of a portfolio of managers is tenable in achieving their return targets." https://lnkd.in/g8GqHY-P

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Excited to announce our investment in Alta Resource Technologies alongside Leonardo Banchik (Voyager Ventures) with participation from Orion Resource Partners, Overture Ventures, and WovenEarth Ventures. Rare earths are critical in products from magnets to ceramics and it's important for the US to develop its own supply chain. While the US has some of the best rare earth resources, separating them has historically proven expensive and environmentally unfriendly. Alta through it's computationally designed and optimized proteins allows the US to bring back rare earth production with a cleaner, lower capex, and lower opex solution - and that's just the beginning. Congrats to Nathan Ratledge and the entire Alta team. Read more here: https://lnkd.in/gbGnAJn3

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Excellent blog post on the realities of Climate & VC. While these are "tough times for the transition," there are also many opportunities. Significant capital will continue to flow, with Corporate VCs playing a larger role in financing this transition. Through this process, they will strengthen their LP positions in funds tackling climate challenges. I receive weekly calls from large Holding & Corporate VCs seeking introductions to Climate / Energy / Infra VC Funds. When I ask about their target sub-verticals within Climate / Energy, they often mention that they default to focusing on specific regions due to limited resources and coverage. In other words, rather than evaluating whether a DACH VC is better positioned for solar or grid-tech compared to a Nordic or US VC, they simply pursue whichever regions they can access—a haphazard approach at best. I always advise LPs to evaluate VCs within their operating market context. Since sourcing is crucial in venture capital, Holding Cos. and Family Offices should carefully assess a VC's location, regulatory context, and market environment before investing and building a portfolio of Funds. I've heard "I wish I had discovered this VC / region sooner" far too many times... * At ComposeVC's Built World Fund, we do not invest in Climatetech or Energytech directly, only as it relates to our Built World thesis.

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One of the reasons we invested in Carbon Ridge is the team’s pragmatic approach to decarbonizing up to 90% of shipping vessels’ total CO2 emissions. Chase Dwyer and I had the pleasure of diving into Carbon Ridge’s potential for massive global impact with Jamie Hailstone at Forbes this week. To learn more about Carbon Ridge’s onboard #carboncapture and storage solutions for the #maritime sector, check out the full article: https://bit.ly/48jrMPK

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Partnering with startups can help companies to "solve a product problem, create a new avenue for revenue, accelerate R&D, or accelerate time to market for a specific product," according to Otilia Barbuta, principal at HP Tech Ventures, the venture capital arm of HP. She was talking at a breakout session at Circularity 2024. "There are solutions in the market created by startups and in this circularity realm, I think it's more important than ever to partner with [them]." #climatetech #startups #climateVC

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'Drill, baby, drill' isn't just for oil and gas - it could unlock geothermal energy and geologic hydrogen too. That's the fascinating paradox of climate tech I discussed in a recent TechCrunch feature examining how VCs are viewing the sector's future. The reality is that policy impacts are rarely straightforward - deregulation of drilling and permitting, such as for overhauls in transmission and distribution, could actually accelerate clean energy solutions. Furthermore, the sector has shown remarkable resilience through multiple administrations and market cycles. The core message I shared with Tim De Chant and Rebecca Szkutak rings true: technological advancement and declining cost curves will keep driving solutions forward, regardless of the political situation. The energy landscape continually presents new opportunities at every turn. Worth a read for anyone interested in the exciting future of climatetech investing. https://lnkd.in/gjNdm4DW #ClimateInnovation #VentureCapital #Geothermal #GeologicHydrogen

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I really enjoyed recording this episode of The Digital Industrial Podcast with Ty Findley. We talked about common misconceptions for deep tech, the "Why Now" for the category, and differences between investor diligence for deep tech and traditional tech. https://lnkd.in/eKtwjauu

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Who doesn't love a good top 50 list?! Very excited to launch Congruent Ventures and SVB's inaugural 50 by 2050, focused on identifying the companies with the highest potential to drive carbon reduction over the next 25 years. I'm 100% certain that we've missed some amazing companies. I'm also 100% certain the companies on the list are awesome. Sadly, by our own methodology many or our incredible companies at Congruent didn't make the list (but suppose that is as it should be). Check out the report below. Live / interactive list here: https://lnkd.in/dYgCfEv8 Tim De Chant TechCrunch coverage here: https://lnkd.in/dkUJm_Sn The Congruent/SVB team collaboration was awesome Dan Baldi Eliza Cushman Marianne Wu Joshua Posamentier!

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Congrats to Christopher Robson, Kurtis Broda and Kristen Cote at Wyvern on bringing on fantastic new investors Guy Filippelli, Dan Madden and Isaac Carp, CFA at Squadra Ventures. I'm a broken record at this point, but we're in the early innings of the Earth Observation market, and as we're seeing with Wyvern there is more demand for hyperspectral data than supply. As we will see in the coming years, there will be all kinds of problems that can be addressed by understanding our world beyond what our eyes can see. https://lnkd.in/gEzTjYks

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"(The) transition to net zero emissions... estimated cost.... Roughly $275 trillion investment in physical assets from 2021 to 2050, or approximately $9.2 trillion annually - cites a new report by King’s College, London. "In 2023, governments earned $74 billion through Emissions Trading Systems (ETS). Then, there are voluntary carbon markets that trade carbon credits, creating economic opportunities and pushing governments and corporations to invest in low carbon infrastructure and technologies" The challenge is huge, but so is the opportunity (over $1.2Tn / yr for banks). A once-in-lifetime chance to invest in sectors with gigantic positive externalities, which dwarf any negative outcomes they can create. https://lnkd.in/eumcQGwM

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Wonderful article about Emily Knight and the whole The Engine Accelerator team on the amazing work their doing changing the world with #ToughTech!

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That feeling when you watch the macro forces that undergird your Industrial Transformation & Supply Chain Technology investment thesis at ⁦‪REFASHIOND Ventures: The Industrial Transformation Fund unfolding every single day: Escalating Geopolitical Tensions; The Climate Crisis & Severe Weather; Consumer Behavior & Demographics. At most venture capital firms, Industrial Transformation & Supply Chain Technology is a tiny, emerging “area of interest” . . . At REFASHIOND Ventures, it’s our entire world. Join us. #IndustrialTransformation #SupplyChain #Innovation #Technology #Startups #VentureCapital

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💡 Interesting takeaways (+ my own commentary) from this #SFClimateWeek session on startups engaging with #utilities - Bits (software) and atoms (hardware) will both be required to power #decarbonization and the #energytransition. Enterprise SaaS is a proven business model that needs to complement innovations in deeptech. Start by targeting the customers most open to moving quickly with new approaches - which might be municipal and coop utilities. Referencing those early customers and successful deployments then helps when you start targeting more risk-averse companies, who have higher expectations and potentially more to lose from new technologies. I've seen the latter play out many times in SaaS markets. Successfully penetrating more mainstream (and conservative) segments of a market requires thoughtfully sequencing and orchestrating product development, partnerships & integrations, go-to-market capabilities, and delivery/service capabilities. Would have loved to be at the session to hear firsthand from Adriana Penuela-Useche Louisa White Page Crahan Andrea Sguazzi Giancarlo Savini.

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A SAFE and convertible note had a baby and Wilson Sonsini Goodrich & Rosati was the midwife- out popped the D-SAFE! 👶🏽🎉 A new #climatetech funding instrument was announced by Elemental Excelerator last week. One of the company’s main goals is to support smaller, up and coming companies during the awkward “Scale Gap” phase between #VC funding and natural growth. It’s called the #DSAFE (Development Simple Agreement for Future Equity) and it aims to aid the process by giving companies a small amount of cash to overcome initial risks and expenses during the developmental stages of a product launch or company. How does it work? D-SAFE has a redemption clause meaning companies can choose to have their payments offered as a loan or convert to equity at the investor’s discretion. Funders and companies will have clear communication and expectations about where the money is going and how it will be applied to either the company or the projects at hand. Financiers and companies will work together with more #transparency, and that’s a great boon for #startups and VC alike. As of this month, Elemental has already invested using D-SAFE in eight different companies, including Dimensional Energy and Origen — both companies investing in innovative and out-of-the-box solutions to environmental issues! Seems like a win-win on the surface. What do you all think about the D-SAFE? Alfredo Coppola Momoka Ueda Tim Wagner Stephen D. Torres Olya Irzak Natsuho Toyama Noriya Tarutani Shin Ogawa

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