Maximizing Value for Money in Climate Projects

Ever wonder how climate founders get the best terms on their equity rounds? We've found they're engineering their capital stacks. They blend customer commitments, early revenue, LOIs, offtakes, grants, project debt, and equity into one cohesive plan. Why? Hardware isn’t software. Plants, batteries, charging networks are capital-heavy and investors want proof before they pour in fuel. Here's our playbook we share with our partners: 1. Revenue: the original non-dilutive capital. Paid pilots and early sales tightened our unit economics and cut dilution. 2. LOIs & Offtakes: contracted future revenue. They anchored pricing and made growth financeable. 3. Grants & Subsidies: de-risk the technology. They extended runway and made every equity dollar go 2–3× further. 4. Project Debt: scale without dilution. Once customers were lined up and the math worked, lenders funded assets, not your cap table. 5. Equity: used twice, with intent. Early: a small dose to recruit the team, ship the prototype, and hit real proof. Later: once leverage existed, to accelerate milestones — not to finance assets. Our takeaway: Equity is often the most expensive money you’ll take. The better you manage revenue, contracts, grants, and debt, the cheaper that equity becomes. If you’re building in climate tech today: Are you raising a round, or engineering a stack? ClimateDoor

At a time when climate finance is stretched and needs are growing fast, we need to make every dollar count. That’s why World Resources Institute's latest research is so exciting: every dollar spent on adaptation yields over $10 dollars in benefits over a decade. We analyzed 320 real-world adaptation projects worth $133 billion and found they can deliver $1.4 trillion in benefits over 10 years. And here’s the surprising and even more compelling part: these investments pay off even when disaster doesn't strike. Over 50% of monetized benefits can occur even without climate shocks — from improved productivity, healthier communities, and stronger local economies. Adaptation is often seen as a safety net. But, this report makes the case that it’s a launchpad for long-term, resilient growth. Learn how smart adaptation investments can create a safer, fairer, and more prosperous future: https://bit.ly/4kzoBIw

One of our climate strategists had a call with a customer; they were showing off our platform’s price compression capabilities — things like aggregating demand to unlock bulk pricing, reverse auctions, fee transparency, price insights, etc. The sustainability leader started to get uncomfortable at the thought of paying less for the same carbon credit. In their eyes, they were looking to deploy dollars toward scaling climate solutions. The idea of negotiating down the price seemed counterproductive to that goal. That’s not the predominant view among carbon market players — price per tonne is still a major consideration among most of the buyers we talk to. But it’s still something to interrogate: Why is it good to compress pricing in a sector that’s so hungry to prove demand? To answer that question, you need a bit of a deeper understanding of how the VCM works. It’s fragmented, and it’s really hard to know everything that’s available at a point in time and what it costs. On top of that, tranches of credits from one project and vintage might be for sale by multiple parties (brokers, aggregators, the developer itself) at different price points — which means different margins. Altogether this means the market is opaque. If you can only see a sliver of it at any moment in time, you can’t know what fair market value is for a given project. You can’t know if there are other credits that meet your criteria at a better price. It’s obviously bad for buyers who need to run a competitive process to prove business value. But it’s also bad for the market. Patch's theory of change is to productize climate impact and unleash the scaling power of capitalism. We don’t know which solutions will ultimately scale the fastest or which ones will be the most cost-effective. When opacity — or charity — inflates prices, it can distort the market. This can also happen in the opposite direction. The lack of integrity in VCM 1.0 artificially lowered prices. The market was flooded with an oversupply of cheap credits which represented less of an impact vs. what was promised. The market was chilled, the reputational hit was enormous, and we needed a major correction. VCM 2.0 needs much more accurate pricing — read: matching supply to demand. The key is transparency. At any given moment, a buyer should be able to know the full breadth of available credits that meet their criteria and price points so they can make the right decision for their strategy. That’s what we’re building in the Patch platform. As you can see from the chart (link in the comments below) — the savings for the buyer can be significant, but suppliers are on board because the larger, aggregated demand is a major incentive. I’d love to show it to you. If you’re a buyer, leave a comment and I’ll get you a demo — no strings attached.