We need more ‘patient’ capital behind early-stage climate tech.
Without early-stage funding, only a small number of entrepreneurs are able to successfully move their innovations from the laboratory to the marketplace.
Investors need to understand that many clean technologies take longer to develop, scale and deploy than software—a poor fit for the short three- to five-year timeframe for a return on their capital that they are used to seeing.
Today, financing is flowing to clean technologies that are fairly far along in the development cycle, where the risk to investors is much smaller. The problem is that a very large funding gap still exists at the earliest stage; that point when entrepreneurs are starting to transition research discoveries into new startup companies. This early-stage funding gap causes many promising climate technologies to languish on the lab bench, never reaching their potential to help reverse the climate crisis and create new, green jobs. This is especially true for innovators without access to family wealth or connections to a handful of elite universities.