Dan Goldman has seen it everything in the world of climate technology: the clean tech boom, the clean tech crisis, the dark years that followed, and now the bull market that has made climate technology one of the hottest areas in the entrepreneurship world.
Goldman this week to find out what he thinks of the current market and how he is advising the businesses in his portfolio to position themselves for the coming year.
We want them to be careful with money all the time, but especially now,” he said. Though the reasons why that’s the case today aren’t necessarily the same as they were a decade or so ago when the last cycle went bankrupt.
Goldman has been investing for almost 20 years. He comes from a more traditional energy background working on energy projects in Asia and funding large-scale energy and power generating projects. He began working in the clean energy sector in the early 2000s, and in 2006 he helped establish the Clean Energy Venture Group, a network of angel investors in Cambridge, Massachusetts, that focuses on climate-related energy technologies. Clean Energy Ventures, an early stage investment firm, was launched in 2017 with his business partner. Since the firm’s founding, it’s made over 100.
Clean Energy Ventures invests in early-stage startups who have already received some grant money or angel investments but have yet to secure a venture round. The company prefers to play a pioneering role in the initial institutional funding round, directing funds into initiatives like employee growth, IP protection, and brand building. It also offers introductions to partners for follow-on finance, which it typically participates in as well.
The company has narrowed its attention to climate technology. Energy is a common thread through all of its investments, which range from material recycling to hydrogen generation to software. To make sure their investments are in line with the company’s “mandate,” according to Goldman, Clean Energy Ventures conducts in-depth lifecycle analyses. To qualify for the firm’s portfolio, a company must demonstrate that it can cut greenhouse gas emissions by 2.5 gigatons between the time of investment and 2050.
“If they can do that, we think that aligns with financial objectives of returns because we see the potential for them to grow to really large businesses.” His confidence rests, at least in part, on the most current statistics. Statistics show that overall venture markets have dropped by more than 20% over the first nine months of the year. Furthermore, Goldman noted a 50% increase in climate tech.
Suggestions for founders
Naturally, getting there isn’t simple, and Goldman has some words of warning for budding entrepreneurs. This isn’t because of doubts about the future of climate technology, but because of the influx of funding from sources not usually associated with start-ups.
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