Climate Startups Weather the Economic Storm
Partner and lead investor of 4WARD.VC’s early stage climate syndicate, Matt Ward is a serial entrepreneur and host of The Startup Tank Climate Investor Pitch Show who also runs the Climate VC Crew Slack channel—a community of over 360 climate VCs.
“The only way we defeat climate change is by working together—the challenge is insurmountable without extreme collaboration,” Ward commented. “Knowing this and that my goal was to become a serious player in the climate VC space, I spent the last 12 months connecting with 700+ climate VCs, incubators and accelerators, sharing great deal flow and accumulating a database and network of climate funders.”
A strategic advisor to high-growth companies working on tackling the climate crisis, Ward shared his insights about the climate venture capital and startup arena with The Carbonic.
The following interview has been edited and condensed for clarity.
Q: Provide some background on how you got involved in the climate VC-startup sphere and how the 4WARD.VC database got started.
A: After years as a serial entrepreneur, growth hacker, angel investor and podcaster with multiple modest exits, I realized I was tired of doing things that didn’t matter. I was tired of helping meaningless B2B SaaS companies grow, scale and acquire more customers.
I decided to spend the rest of my life doing something that really matters—empowering great founders to change the world. And for me, that meant addressing the largest and most pressing problems of our day.
Having experience with angel investing and venture capital and seeing the obvious bottlenecks in early stage climate funding, I decided to go all-in on climate investing and build the ultimate platform for promotion, collaboration and capital in the climate space.
Q: Do you have any competitors? And if so, what sets 4Ward.VC and The Startup Tank apart?
A: While The Startup Tank doesn’t really have any direct competition outside of generic pitch shows like Shark Tank, Dragon’s Den and Höhle der Löwen, 4WARD.VC’s climate syndicate has tons of “competitors.”
I use air quotes here, because we’re all on Team Planet to combat climate change. And that is truly how we view it. Our syndicate invests very collaboratively alongside leading climate funds and accelerators in breakthrough pre-seed and seed stage climate startups tackling huge problems that have the opportunity to massively better our world.
When it comes to differentiation on why founders take our money versus other climate syndicates or VCs, the answer is simple— we work harder for our founders and bring an enormous worldwide network of founders, investors and corporate executives to the table to help portfolio companies with fundraising, potential clients and hires and any other assistance we can give them.
I tell founders: “We won’t be the biggest investor at the table but we’ll definitely be the biggest hustler.”
Q: Given the economic downturn, how are climate startups faring compared to the startup scene in general? What advice would you give to climate startups to weather the contraction?
A: Luckily, climate startups are weathering the downturn well, at least when it comes to funding. Sure, the valuations have come down off their absurd highs, but tons of great climate companies are still getting funding.
I tell founders to take as much money as possible and worry less about the valuation. They need to survive the coming winter and have the momentum to power through. If they do, they stand a great chance of massive success.
And if they don’t and worry too much about valuations and ownership percentages, they’ll either get the wrong investment partners or be dead anyways.
Q: How would you characterize the typical climate startup investor? Is an interest in sustainability a primary motivator for them or are there other drivers at play?
A: Most climate investors I’ve met are very motivated by sustainability and saving the planet. Of course we want to be financially successful as well, but the majority of funds we are close to and co-invest with put their morals well above their returns.
The other primary driver that most climate investors have but will never admit to is the “superhero” syndrome. We all want to be Captain Planet, the incredible “good guy” that saves the world. There's definitely some ego at play, but much less than in other startup/finance areas as the folks in climate really do care about making a difference.
Q: What types of technologies and focus areas are trending in terms of climate investment appetite right now?
A: Everything! There is a ton happening in carbon capture technology that we are seeing and very interested in. Which is good and necessary given the amount of CO2 in our atmosphere and the fact that we need to pull many gigatons out per year to merely begin to slow the climate acceleration.
On top of that, we are seeing many awesome startups tackling interesting circular economy business models, turning waste into value, recycling, upcycling and more.
We are also very big on batteries and energy. The transition is happening and renewables are taking over, but there are trillions of dollars worth of infrastructure that needs replacing and every manner of startup doing critical things in the energy space.
For example, our largest investment to date, EExion, has a breakthrough battery that requires no pollutive or expensive rare materials like lithium or cobalt. It charges scooters and EVs in minutes, not hours and lasts 20-30x longer without degradation.
Also, this is the century of biotech. Big things are happening in genetic engineering, foodtech, agtech, biopolymers, advanced materials and more.
It’s all a bit overwhelming, that’s why we always ensure we have incredible co-investors to help with deep dives on tech and due diligence.
Q: What was your reaction to Big Tech's Frontier initiative to buy nearly $1 billion worth of carbon removal services in coming years? What do you think it means for climate startups?
A: I think it is a pretty big deal in that it helps to seed the market. Supply without demand always fails, so by artificially creating demand the initiative allows great carbon capture companies to reach scale, bring down costs and make mass carbon capture a real possibility.
Q: There's a lot of focus on decarbonization and energy efficiency, but sufficient investment in climate adaptation may be a blindspot. Are there any startups tackling this?
A: There are startups tackling everything, the only question is, are there enough startups and enough funding?
One such great startup is Climate Crop, a biotech seed company I advise, that has discovered a protein to make plants grow larger with crops achieving 20-90% greater yields, with more climate resilience and the ability to absorb twice as much CO2. If they pull that off at scale, it solves our challenge of feeding a growing world amid a worsening climate while simultaneously solving climate change.
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