How to Navigate Fundraising in Climate Tech

Venture Capital is not set up for Climate tech. You don't need to spend a lot of time fundraising as an early-stage startup to know this. The rate of VC funds shot up between 2010-2020, valuations were at an all-time high and we started to think we could throw money at anything and it will give us 20 to 30% return annually (IRR). Well just about anything. As long as it was SaaS. Hard tech is a whole new ball game. Green steel and CO2 capture, for example, require substantial investment at an early stage and need more time to break even and scale. VC may eventually come in and play an important role but the early capital stack for climate tech startups looks different than traditional VC-backed companies. To get to product market fit Climate tech start-ups need a combination of the following in their capital stack: -Non-dilutive project Grants: from governments, philanthropic foundations, private grants and prizes -Angel Investors / Syndicates : High net worth individuals, previous founders etc Catalytic Capital: These are funds prioritizing impact potential over financial returns -Rolling funds: funds raised on a rolling quarterly basis, minimizing the hurdle to fund launch. Typically thematically or community-focused, with similar terms to VC deals  -Accelerators/ Incubators/ Fellowships: Programs offering funding and resources such as strategic partnerships, advisors, and workshops to help founders build and iterate on their ideas and technology.  (Kinda like what we are doing with Energy Tech Nexus) You should talk to VCs, but do so knowing that many may not ready to take the cost burden until you have sufficiently derisked your solution. And if that is the case, you have other options. #founder #climatetech #VC #entrepreneurs

Venture funding can get a business started, but working capital keeps companies alive. In times of fluctuating federal funding and fleet-footed investors, climate founders need a reliable #workingcapital strategy to extend runway, scale smarter, and avoid unnecessary dilution. We go deep on these under-appreciated financing instruments and the when, what, and how to wield them in Sightline Climate (CTVC)‘s Working Capital Playbook. TLDR: 💳 Debt stabilizes cash flow. Credit lines, term loans & venture debt fund operations but require assets or revenue. 💡 Hybrid instruments bridge early gaps. SAFEs & convertible notes offer flexible funding without immediate dilution. 🏗️ Grants fuel deep tech. Government & catalytic capital de-risk FOAK projects and unlock follow-on investment. 🔄 Creative financing frees up cash. Factoring, revenue-based financing & invoice advances fund growth without equity. 🏛️ Policy & community capital add leverage. Green banks, philanthropy & state incentives provide non-dilutive funding. Nerd out on the full pros & cons analysis, self-assessment questionnaire, and case studies with Enduring Planet, DexMat, Thea Energy, HSBC Innovation Banking, Rondo Energy, and Breakthrough Energy in the report below 👇 https://lnkd.in/ettJuAGv

❓ How can you raise #projectfinance for your #climatetech startup? As we navigate the complexities of financing climate tech startups, especially those in the hardware and infrastructure sectors, it's crucial to understand the role of debt and structured finance. I had the pleasure of speaking with Jeremiah Lim, CFA, a Director at Barclays Sustainable and Impact Investment Banking Group, who shared some valuable insights on how #climatetech companies can raise project finance. 3 key takeaways: 🤝 The importance of early engagement with banks and financial advisors - It's not just about securing funds; it's about building a relationship and getting guidance on structuring your project correctly from the start. 🛠️ Establishing an early track record or partnering with experienced operators is crucial ahead of securing project finance - For climate tech founders, it's crucial to demonstrate that your company can not only develop a technology but also operate it at scale. 💼The role of off-take agreements in securing debt- For lenders, the security of knowing there's a committed buyer at a fixed price for the output of a climate tech project is a cornerstone of making the debt issuance decision. 🔗 Link to the episode from Climate Tech 360: https://lnkd.in/eQvtcv3E This is the first episode in a series on how to finance climate #hardtech companies. Tag a hardtech founder who could benefit from learning more about how to raise debt 👇 Your feedback is always welcome, so please drop a comment or DM me if you have any thoughts or questions. #debtfinancing #StartupFunding #CT360 #carbonremovals #biochar #enhancedrockweathering #climatetech360