It’s hard to build high-growth cleantech companies using venture capital: Despoiling the planet has a much higher return on investment than saving it.
Twenty years ago, there were high hopes for companies aiming to mitigate environmental impacts, but a prolonged recession, China’s dominance of solar power manufacturing and low natural gas prices were only a few factors that have undermined investor expectations and left the industry hobbled for years. Many much-vaunted products and technologies never made it to market.
A 2016 MIT Energy Initiative working paper found that VC is “the wrong model for clean energy innovation.” It takes years to create economies of scale, and not all investors are willing to foot the bill for a decade of R&D.
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“If a new, more diverse set of players avoids the mistakes of the rise and fall of cleantech venture capital, they may be able to support a new generation of cleantech companies,” the paper concludes. .
This hypothetical cohort is now a reality: a McKinsey report found that climate technology “could attract $1.5 trillion to $2 trillion in annual capital investment” by 2025.
Senior Climate Writer Tim De Chant spoke to five investors to get their thoughts on the state of the industry in Q3 2022. Their responses shed light on how VCs are responding to the downturn, which technology can have the greatest potential for impact and what they’re looking for right now:
- Pae Wu, General Partner, SOSV; CTO, IndieBio
- Christian Garcia, Partner, Breakthrough Energy Ventures
- Rajesh Swaminathan, Venture Capital Partner, Khosla Ventures
- Andrew Beebe, Managing Director, Obvious Ventures
- Amy Burr, President, JetBlue Technology Ventures
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In a downturn, sales teams need to think like product managers
SaaS sales teams spare no effort in the pursuit of greater efficiency, but their goal is almost always to solve their own problems.
Investigating strategies to boost lead generation is great, but sales teams also need to “look at successful customer experiences and identify what went well in each case,” says Erol Toker, CEO and Founder of Truly. .co.
How many trades were needed before a customer got a demo or signed a contract? Do you use prospect quotas as a performance benchmark?
“Thinking like a prime minister means there are no prospect quotas,” according to Toker. “It means focusing on the customer journey instead.”
Looking for product-market fit in a declining market? Hire freelancers to manage your burn rate
Firing employees often comes with an opportunity cost that can be difficult to offset later: remaining employees are demoralized and companies can lose years of institutional knowledge in an afternoon.
To control costs, founders should consider hiring freelancers to test strategies, manage products and execute sales to preserve cash, writes Dean Glas, co-founder and CEO of SellX.
“In today’s uncertain market, using freelancers is a way for companies to find or deepen product-market fit without betting on the farm.”
A 7-step method to organize effective pitch meetings
We often publish articles with tips for composing pitch decks, but if you need a framework to manage the meeting itself, we’re here to help, too.
Nathan Beckord, CEO of Foundersuite.com and host of the “How I Raised It” podcast, shared a seven-step method that helps founders set their expectations and connect on a personal level with the investors they introduce.
“Even if the investor isn’t a good fit for your startup, they might introduce you to their contacts.”
Why it’s so hard to bring enterprise AI/ML products to market and what to do about it
To build an effective demand generation strategy, organizations need to understand how their customers search for solutions. But what do you do when your category is so new that no one knows how to define it?
The ambiguity around AI and ML creates a major challenge for marketers in this space, writes Mike Tong, director of enterprise strategy and operations at B Capital.
To solve demand generation, Tong advises companies to stay in category building mode, avoid complexity, and choose a specific vertical and problem statement.
“While today’s environment is complex, in many ways it can liberate your marketing strategy. Your business can play a role in defining the space it will one day gain.
How Startups Should Handle the Slowdown
As investors tighten their markets, the trail is now, more than ever, a crucial measure of longevity.
That’s why, in the coming recession, the amount of cash you have should dictate how aggressive or conservative your plans are, writes Mike Volpi, general partner at Index Ventures.
The best advice for dealing with the slowdown should be based on the length of your track and the efficiency of your business. The track falls into one of three categories: Two years or older; between one and two years; a year or less.
The corresponding strategy for each would be, respectively, “stay aggressive”, “prioritize ruthlessly” and “time to cut”.