If entrepreneurs were mountaineers, starting a climate tech company would be like traversing the Himalayas. Beyond almost every peak lies another summit, and between them financial valleys of death. The environmental nonprofit Rocky Mountain Institute counts no less than four lethal gaps for aspiring climate startups, from leaving the lab to raising tens of millions of dollars before commercialization.
A successful traverse requires luck, technological prowess, and, of course, money. Lots of it. The companies that have pulled it off are rare and, like Tesla, often the exception that proves the rule. The issue of funding is particularly tricky.
“If you tell investors, I want to save the world but I have this technology risk, policy risk, and this market risk, the number of investors who say ‘I’ll invest in that’ is vanishingly small,” says Noah Deich, executive director of Carbon 180, a nonprofit pursuing carbon removal solutions.