Lauren Dunford

Summary: The article discusses the challenges faced by climate tech startups as they transition from the lab to commercial outfit. These companies, which work on hardware and infrastructure projects for climate solutions, struggle to raise necessary funds and often face difficulties in scaling up production. Key takeaways: The transition from early-stage startup to commercial operation is difficult, especially for hardware and infrastructure projects in the climate tech industry. The lack of financing options and specialized expertise for these types of projects creates a "commercial valley of death" that many companies struggle to overcome. Startups often fall into the trap of trying to expand their business too quickly, losing sight of their core value proposition and failing to ensure proper execution. Counter arguments: Some may argue that this "first of a kind" problem is not unique to the climate tech industry and can be seen in other industries as well. Others may argue that with the increasing focus on climate change and need for sustainable solutions, more funding and support will become available for these startups. #venturecapital #vc #startups

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Prime Coalition has long taken a different tack to climate finance compared to its for-profit brethren. It makes the usual venture-style investments in startups through Azolla Ventures and also helps philanthropists direct their money to climate-related projects that it deems high impact. Trellis Climate follows the latter model with a focus on middle stages, where capital has grown scarce. #climatetech #climateVC #climatefinance

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As climate startups continue to grow and scale, understanding the cost of borrowing is crucial for making informed financial decisions.  We’ve talked with a lot of founders struggle with this, so we figured we’d share what we’re seeing: What are typical interest rates for climate businesses? - Venture Debt: APRs typically range from 9% to 15%+ (given a Prime rate of 8%), with banks like Silicon Valley Bank landing at the bottom of this range.  Venture Debt is generally senior secured, and also comes with warrants and covenants. - Bank Debt: APRs can vary widely, but you might expect rates between 8% and 14% for senior secured, personally-guaranteed loans to cash-flowing businesses. - SBA Loans: APRs vary by transaction size, typically around 11% to 14% (given a Prime rate of 8%).  These are generally senior secured and personally guaranteed. - Alternative Lenders: These lenders often offer faster approval times and less stringent requirements, but they typically charge higher interest rates. For example, OnDeck currently offers APRs as high as 27%. - Enduring Planet: for companies with government receivables, EP offers advances at 15-17.5% APR with limited collateral, no personal guarantees, no dilution, and no complex covenants. Common loan terms and their impact on pricing: - Collateral: This is an asset that a lender can seize if a borrower defaults on a loan; secured loans have collateral. The more valuable the collateral, the lower the interest rate.  For reference, most commercial banks will require an all-assets lien on the business to lend. - Personal guarantees: These are promises by business owners to repay a loan personally if the business defaults. Personal guarantees can often lead to lower interest rates but put the founders at risk if things go wrong. - Loan term: The length of time over which a loan must be repaid. Longer terms generally result in higher interest rates. - Repayment schedule- The frequency of repayment will impact the cost of capital, with some lenders requiring monthly, weekly, or even daily repayment terms, while others tie repayment to some future outcome (a receivable, a fundraise, etc). How do these factors impact pricing? A combination of these factors will influence the overall cost of borrowing. For example, a well-established climate business with strong financials and substantial collateral will be able to secure a loan with a much lower interest rate than a startup in their first few months of operations. Are you seeing anything different in the market?  Please share your thoughts below!

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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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Since I wrote and published this article in April of this year about why #climatetech isn't working I have been inundated with requests for "catch ups", mostly from former colleagues at the various companies I've worked at, but also a fair amount of people who I hadn't previously met. On average I would estimate that I've had a call a week in the past 7 months. This has been a joy. The topics of conversation have been largely the same and easily categorised into two overlapping buckets: 1/ Why do I do with this feeling I have that there is something wrong with this whole "green growth" idea? 2/ How do I figure out *what* to do? "I don't know," is my usual answer, "but I'm happy to talk about it." If this seems like a cop out, it isn't. It is exactly what I think needs to be done. Listen, learn, debate, understand, then act. In many ways the exact opposite of the cutthroat VC model that not only values speed and profit at the cost of breaking pretty much anything, but is well known for a ridiculously high failure rate. Anywhere between 50-90% depending on how you count. What a colossal waste of time, energy, money, and people that could otherwise have had real #impact. However, back to the What can I do? question. You are certainly welcome to DM me for a chat 🙂 I also always recommend reading Braiding Sweetgrass, Bright Green Lies, and Less is More. And if you have time and money to invest in a guided educational programme I also recommend highly Project Tipping Point, RegenIntel's "Regenerative Foundations" course (with whom I'm affiliated), Melanie Rieback's series of free lectures on "Post Growth Entrepreneurship", and Stirling College's "Surviving the Future." https://lnkd.in/gbDG-vCz

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Health x Climate: I have spent a lot of time thinking about the intersection of climate and health, so I appreciated the City Futures: HealthTech and ClimateTech Intersections panel discussion during NY Tech Week, with Ben Furnas, Sara Holoubek, and Joel Cesare as panelists. They highlighted the work happening in NYC; even though subway use helps our GHG emissions, there is still opportunity to prepare the city and electrify our buildings for the changes to come. Some key takeaways 🔄 Health + Climate: The effects of climate change impact our health and our health decisions impact climate change. We often think about climate and health in silos but they are very connected.  🔥 Heat waves: Hotter temperatures are the biggest risk to health from climate change, so we must prepare now. I learned about NYC's AC giveaway to support vulnerable communities.  🤓 New ideas: There is much opportunity to engage in mental cross training and leverage learnings from analogous spaces and industries at this intersection. What do you think about the intersection of health and climate? A big thanks to Climate Health Innovation & Learning Lab, Women in Healthtech and Fenwick for hosting this event and showcasing how government, innovators, and investors can work together to address these challenges. Thanks Oriana Fuentes and Chethan Sarabu, MD, FAMIA, FAAP for your thoughtful curation too! #climate #healthtech #innovation #NYtechweek

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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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🌍 Exciting news! Apparel Impact Institute (Aii) has just announced the newest round of Climate Solutions Portfolio (CSP) grants, part of the $250 million Fashion Climate Fund aimed at unlocking $2 billion in blended capital for industry-wide decarbonization. These grants provide essential funding and support for scalable, science-based solutions that help the fashion industry reduce its environmental impact.🌱 This round of grantees – Pozzi, Grant Thornton, and Amphico – are tackling unique supply chain challenges with innovative technologies, offering measurable greenhouse gas reductions. Collectively, these projects have the potential to save over 24,000 tCO2e within their first year of implementation! 💡 Highlights include: * Pozzi's advanced heat recovery system for the textile wet processing sector * Grant Thornton's innovative approach to energy conservation in the lubricant industry * Amphico's cutting-edge color-mixing technology for textiles, creating vibrant fabrics with reduced environmental impact A huge congratulations to these trailblazers for their commitment to a sustainable future. Learn more about their projects and how Aii is driving decarbonization efforts across the industry #Sustainability #ClimateAction #Decarbonization #FashionIndustry #ApparelImpactInstitute #InnovationForImpact #CSPGrantees #SustainableFashion #Decarbonization

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Calling all early-stage climate tech founders in the US, we'd love to hear from you!! Just a couple of weeks left to apply to NETI's Climate Tech Bootcamp Cohort 3.0, a pre-accelerator program powered by Climate Tech Bootcamp OHUB and Greater New Orleans, Inc. – GNO, Inc., part of H2TheFuture, a Build Back Better Regional Challenge of The Economic Development Administration. This bootcamp is a 10-week pre-accelerator program for climate tech and new energy entrepreneurs in the United States that have an interest in building in or expanding to South Louisiana. ‍ Five (5) founders from the program will pitch for a $100,000 (US) investment on the terms of their current round. Application is in the comments and here's a quick overview as well: - 📆 When: September 3 - October 31, 2024 - ⏰ Deadline to Apply: August 27, 2024 - 💻 Location: Virtual - 🆓 Cost: Free. The $5,000 per person fee is waived thanks to GNO, Inc. and The Economic Development Administration's Build Back Better Regional Challenge. - 💰 Funding: Up to $100,000 US (equity investment) in current round to the top startup selected at the end of the cohort. - 🈺 Cohort Size: 25-30 entrepreneurs - 🌍 Cohort Geography: United States - 📈 Stage: We welcome applicants from multiple stages, though having a minimum viable product is ideal.

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🌿 Spotlight on Climate Justice & Food Sovereignty! 🌍 Meet Dr. Alexa White, Ph.D., co-founder of the Aya Research Institute, who's revolutionizing our approach to environmental justice and food systems. 🔬 AYA Research Institute conducts cutting-edge environmental justice policy research 🌱 Focus on food sovereignty - everyone's right to culturally relevant, sustainable food 🌡️ Small-scale farming could be key to reducing agriculture's 33% contribution to greenhouse gas emissions Dr. White's advice for getting involved: 1. Check out La Via Campesina website 2. Get politically active, especially around policies like the US Farm Bill 3. Consider power dynamics in agriculture and food systems With the climate crisis intensifying, how can we support initiatives like AYA's in our own communities? Are you involved in any food sovereignty or environmental justice projects? View full article here -> https://lnkd.in/gDaBpRwT Climatebase, Abigail Bassett #FoodSovereignty #EnvironmentalJustice #ClimateAction #Sustainability

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Listened to Bloomberg’s Zero: The Climate Race recently—worth a listen for anyone in the climate tech space. Akshat Rathi interviews Eric Toone from Breakthrough Energy Ventures. Key topics: ⚡️ Carbon removal ⚡️ Grid modernization ⚡️ Nuclear fusion and fission ⚡️ Green hydrogen—the hype, promise vs reality Good insights on where innovation is heading in sustainability and energy. #ClimateTech #Sustainability #Energy #Innovation

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As Energy & Climatetech is one of the tracks at TechChill, I’ll be out there this week, looking for founders ambitious to ramp up their activities. SFV is in search of just that. A few noteworthy speakers to look out for if you’re attending and are curious about cleantech in general: 📣 Julia Bialetska from S.Lab striking the stage with the topic of “Eco-innovations unwrapped”. A great person, a recognized founder hitting the heights. 📣 Andris K. Berzins from Change Ventures, Jarna Hyvönen from Volare Solutions and Janis Putrams from Aerones are discussing “The dilemma of commercializing deeptech”. It is never an easy task and never should be too easy either, right? 📣 Agate S. Freimane from Norrsken VC brings us insights on “Building a thriving climate economy”. A topic Norrsken is superb at and gets to the nuts and bolts of making a real impact. At side-events: 📣 Beamline Accelerator is hosting the “DeepTech Demo Day”! 📣 EIC dials in on details on “Funding your deeptech startup to scaling in the EU”!

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Fundraising decks are important but only within the context of a well-orchestrated fundraising process. A deck itself is unlikely to directly lead to a term sheet. Rather, it is important to understand how you want to use the deck (or any collateral for that matter) as part of your fundraise process. For example: - Is it to secure the first meeting with a VC? A teaser deck is important. But so is the email snippet and warm referral! - Is it part of a deeper-dive session about your business? Excellent. Is it a deeper dive on product or GTM? And, is the next step a track to a partnership meeting? - Is it a diligence deck? Excellent. Is it more about showcasing the financial plan and key levers? ... what is the ONE thing you want this deck to help you achieve? More tips on fundraising your early-stage round here: https://lnkd.in/gvWYaCwk #startups #venture #fundraising

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Wondering about the actual "how-to" to execute a great hiring plan for your startup? We've got you covered! Check out this Insights piece that we put together in collaboration with our friends over at Enduring Planet. Our team at Climate People has placed over 100 people into climate technology roles with dozens of Seed --> Series B/C startups. This insights piece reflects some of our learnings. If you're a startup looking for exceptional talent or help with your hiring process, reach out! Shout out to Natalie Lavery, Climate People's Marketing Lead for her contributions to this piece.

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What are your thoughts on the complexities of implementing renewable energy solutions in tribal communities? "Capacity development entails not only funding projects but also funding people, especially tribal energy champions, whose boots on the ground are essential for addressing inequities in energy distribution." ▶ Environmental injustices have left a legacy of skepticism towards large projects. ▶ Often, smaller-scale solutions like solar meet the community's needs without the complexities of larger projects. ▶ Essential needs, such as public health infrastructure often take precedence.

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Today marks a groundbreaking moment for BLCK VC and our fellow collaborators—Diversity VC, All Raise, 2Gether-International, SomosVC, StartOut, and VetsinTech—as we proudly announce the launch of the Diversity Data Alliance. This important alliance underscores our unwavering commitment to nurturing a venture capital and entrepreneurial ecosystem abundant in equity and inclusiveness. By standardizing and linking our data, we empower ourselves with the essential tools to track deeper trends that have, until now, eluded us to identify and fill funding gaps for historically excluded investors, founders, and operators. We can’t change what we do not measure, and now with the Diversity Data Alliance, we're now equipped to do both. Join us in this mission. Learn more and get involved: https://lnkd.in/eEZKdrac #DiversityDataAlliance #BLCKVC #VentureCapital #MeasureToChange

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Excited to be part of New York Climate Week! It’s going to be a fantastic opportunity to engage, share insights, and collaborate on innovative climate solutions. Here are a few key events I’ll be attending/speaking at: 🌎 Climate Week NYC: The Climate Group's event during New York Climate Week will focus on accelerating bold climate solutions through cross-sector collaboration and leadership to drive global climate action. 🌎 A Gender Transformative Approach to Climate Resilience: Hosted by IDEO.org, this panel explores how a gender lens in climate action fosters equity and community resilience. 🌎 Connected Women Leaders Reception: A closed-door event at The Rockefeller Foundation celebrating women's leadership in addressing the climate and nature crisis. 🌎 High-Level Roundtable on Scaling Up Adaptation Finance and Action at COP-29: Organized by DanChurch Aid and partners, this roundtable builds trust between nations ahead of COP-29. 🌎 Sustainability Summit: Co-hosted by GBBC, Microsoft, and Blockchain x Climate, this event highlights digital innovation’s role in achieving climate-related SDGs. 🌎 India Day Convening: Organized by ORF and UN India, this convening discusses the Global South’s leadership in delivering development solutions. 🌎 Centering Workers and Communities in Climate Resilience: Hosted by People’s Courage International, this event focuses on the role of workers in climate resilience, with insights from a multi-country migrant worker study. 🌎 Catalyzing Climate Innovations in the Global South: At Columbia University, I’ll be speaking on empowering grassroots climate entrepreneurs through a fellowship program. If you're attending, let’s connect! Reach out so we can catch up or collaborate to drive meaningful change. #NYClimateWeek #ClimateAction #GenderEquality #Sustainability #ClimateAsia

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