Climate Ventures

Prelude Ventures “is a venture capital firm partnering with entrepreneurs to address climate change. Since 2013, we have invested in over 40 companies across advanced energy, food and agriculture, transportation and logistics, advanced materials and manufacturing, and advanced computing.”

X Prize “has designed and operated seventeen competitions in the domain areas of Space, Oceans, Learning, Health, Energy, Environment, Transportation, Safety, and Robotics.

Stanford Climate Ventures is “led by two Precourt Energy Scholars with decades of energy technology, business, and policy expertise…[who] launch plans for high-impact ventures in the context of a new energy development framework.” Here is the latest from the 2020 Impact Assessment.

Breakthrough Energy Ventures is a $1 billion dollar Bill Gates energy fund. “Our strategy links government-funded research to the patient, risk-tolerant capital so that more transformative clean energy innovations get to market faster.” Here is a great Quartz article on the latest portfolio.

Obvious Ventures. “Early-stage venture capital for startups reimagining trillion-dollar industries through a world positive lens.” They invest in health, wellness, energy, mobility, and sustainable cities.

Collaboration Between Start-Ups and Federal Agencies

The Information Technology and Innovation Foundation (ITIF) is led by its president and founder, Robert D. Atkinson, Washingtonian Magazine has called a “tech titan,” and it is a nonprofit think tank. “Its mission is to formulate, evaluate, and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.”

It’s august research publication produced recommendations on accelerating “Collaboration Between Start-Ups and Federal Agencies”

Collaboration Between Start-Ups and Federal Agencies: A Surprising Solution for Energy Innovation

The climate-tech start-ups take more “patient capital,” and this report aims to identify “approaches that help ease barriers faced by climate-tech start-ups can ultimately catalyze their role in accelerating clean energy innovation.” The report claims collaboration with federal agencies and laboratories, such as co-development and technology-licensing agreements to yield better results than their collaborations with universities or other firms, as measured by patents received and follow-on financing.

The authors also note the willingness of the policymakers and the wealth of federal research expertise, infrastructures, and technologies to mandate more effective technology transfer policies for federal agencies and laboratories. “But present practices have not fully capitalized on the synergies between start-up potential, federal resources, and the technology transfer mandate.

Here are the summarized recommendations.

Most start-ups don’t have access to federal experts or laboratories because they lack networks and knowledge, or they confront bureaucratic barriers and high costs. Federal agencies have weak incentives to work with start-ups, with no metrics to reward collaborations and few ways to cover costs. Finally, there is a lack of coordination on climate and energy technology transfer within DOE and its laboratories and across other agencies.

Scale-up mechanisms for start-ups to collaborate with federal agencies and laboratories.

  • DOE should partner with incubators to organize annual climate-tech start-up challenges involving federal agencies, industry partners, and private investors focused on specific topic areas. These peer-reviewed competitions should be fast and streamlined. Finalists should win awards to use laboratory infrastructures, and be assigned a federal expert to serve as a consistent point of contact. Such challenges would be scaled-up versions of individual lab-linked incubators and one-off programs.
  • Congress should appropriate increases in funding for federal lab-linked incubator programs to scale them up. In parallel, Congress should authorize federal agencies to award grants for the creation of new lab-embedded entrepreneurship and lab-linked incubator programs. These programs would provide more innovators with access to laboratory facilities as well as expertise and mentorship. Programs such as Cyclotron Road, Chain Reaction Innovation, and IN2 that work with DOE national laboratories have shown great promise.
  • The DOE OTT should invest more in start-up-centered communication and convenings, building on existing models such as NREL’s Industry Growth Forum. Such convenings bring together diverse stakeholders, build awareness about federal technologies and experts, and lay the groundwork for future collaborations.
  • Congress should authorize the extension and expansion of the DOE SBV program across the entire federal government. Competition for these vouchers could be administered by DOE with the participation of other relevant agencies. The vouchers should be available to any start-up or small business working on climate-tech commercialization. The SBV program can help reduce costs and red tape for start-ups and was recommended by ITIF and others before it was piloted in 2015.50
  • Building on NASA’s model for start-ups, Congress should authorize agencies to waive fees for start-ups that seek to license federal clean energy technologies.

Incentivize federal agencies and laboratories to work with start-ups.

  • Congress should provide DOE OTT a budget line outside department administration and increase funding to laboratory technology transfer offices. Most of the labs today are funded out of overhead, which imposes strict limits. With greater resources, these offices would be able to more actively evaluate whether technologies are ready for commercialization, and market them to start-ups.
  • Congress should authorize entrepreneurial-leave programs for federal experts in agencies and laboratories. These programs allow government employees to explore entrepreneurship without giving up their positions for a fixed period of time. Entrepreneurial leave reduces the risk of taking the leap into a start-up by providing job security. These programs would build on experiences from the ESTT program at Sandia National Laboratory, among others.
  • Congress should authorize the Energy I-Corps program, which connects laboratory researchers with industry mentors, to also involve experienced climate-tech entrepreneurs.
  • DOE should incorporate metrics on technology transfer in the national labs’ PEMPs that capture collaboration with start-ups. These metrics should include measures of both codified knowledge transfer, such as licensing to start-ups and co-development contracts, and tacit knowledge transfer, such as the number and frequency of informal interactions with start-ups. ITIF and others have previously recommended similar improvements to these metrics.

Improve coordination between federal agencies, laboratories, and other entities in support of climate-tech start-ups.

  • The National Science and Technology Council, under the White House Office of Science and Technology Policy, should lead an interagency effort to develop a repository of collaboration opportunities across major federal R&D agencies that is targeted to climate-tech start-ups. The repository should be made available through an online portal, which could be housed and managed by DOE or the Small Business Administration.
  • Technology transfer offices of federal agencies should encourage laboratories, federal research facilities, and regional offices to maintain active relationships with regional economic development agencies, incubators, and nonprofit industry networks that work with clean energy start-ups. For instance, technology-transfer offices can invite regional entities to participate in federal convenings focused on technology transfer, or represent their agencies in regional innovation convenings. When federal programs engage with regional innovation ecosystems, they can become more relevant to economic advancement and develop a larger network of start-ups across the United States.
  • Congress should establish a nonprofit Energy Technology Commercialization Foundation to would work closely with the DOE and entrepreneurs to help bring clean energy technologies to market. By catalyzing its connections with DOE, entrepreneurs, regional partners, and incubators, this foundation would foster collaborations among start-ups and federal entities.

Tackling Climate Change with Machine Learning: the Due Diligence

ML can be an invaluable tool both in reducing greenhouse gas emissions and in helping society adapt to the effects of climate change. Climate change is a complex problem, for which action takes many forms – from designing smart electrical grids to tracking deforestation in satellite imagery. Many of these actions represent high-impact opportunities for real-world change, as well as being interesting problems for ML research.”

A community of researchers including OpenAI, DeepMind, Element AI together has started to explore the role that “machine learning can play in mitigating and adapting to climate change. They have published a research agenda, started to collaborate with climate experts, inspired faculty to develop courses on climate and ML, and organized workshops at the major ML conferences such as ICML and NeurIPS.”

Here from limited my purview, with the help of friends and a climate scientist, here are my thoughts on the four research ideas proposed to combat the greatest climate crisis of our generation.

Initial Thoughts:

  • I thought those were all very good ideas grounded in solid research with a team of unparalleled caliber.
  • $2 million may not be enough. A startup can burn $2million quickly, even in one year using Amazon Web Services. This would require a very good engineer to build a beautiful system, that would mean competing for someone with well-rounded startup experience OR 10 engineers in SF with salaries ranging around 150K to $2million/year easily.
  • Calling these tech/innovative components may not create the urgency for the burn rate for each the startups, which I think would be $500K each, which is doable, but needs entrepreneurs that can grind with the money. Great salespeople.

Here are the tech ideas:

  1. Improving energy efficiency of buildings by using ML to interpret building occupancy data, and reducing energy consumption on HVAC and lighting; 

The biggest problem in HVAC is energy waste is from dissipation (poor insulation or non-passive designs) and lack of renewable alternative fuels (heating). Renewable energy sources are generally very sporadic in power generation say 30% uptime, but the main solution so far has been to have fundamental breakthroughs in battery storage that could efficiently store and use locally the DC (generated via the solar/wind plants – local usage think powering the lights in remote mines that is right next to and connected to the DC power source), convert into AC and power other parts of the surroundings or even feedback into the grid. It’s a storage and/or distribution problem on a physical/chemical level and not too much of an info asymmetry level that feeding data overlaying utility rates can be solved.   

If forecasting is the best landscape for say wind/hydro generation entirely from a power generation efficiency point of view this application of ML can be interesting in improving planning because for hydro/wind. This can take years to construct and plenty of “collateral” geographical impact so proper prior planning prevents poor performance due to the high CapEx cost. Right application of data learning to process immense datasets and speed up/improve decision making in an expensive “wrong decision” environment.

2. Using model-based reinforcement learning for perishable inventory management to reduce the GHG emissions associated with food waste by supermarkets by 30 percent;

Supermarkets do not have a huge margin, so they may not be motivated to adopt new tech. There is an app called Damago, run by a Korean American doing this – a food app that connects customers with unsold menu items – at a discounted price.

3. Improving forecasting of solar and wind power forecasting, which increases the capacity of utilities to use solar and wind without undermining the reliability of the grid;

 4. Supporting the Measurement, Reporting and Verification needed to pay developing countries for forest conservation, using “interpretable ML” to analyze satellite images.

Ah yes, but also costly. Most of AI/ML is geotagging/grunt work – requiring CNN (convolution neural network) tech knowledge. There is a great startup by a close friend named Karina, former UNDP Consultant. She runs TaQadam with former Syrian refugees essentially geotagging satellite imagery data making them “AI-ready” in other words, much cheaper. But there are a lot of attempts to do this to improve satellight imagery data, I think also by the CTBTO. 

Forest conservation a really tough nut to crack because it involves the basic livelihoods for almost all commodity/land driven economies + political stability of the nation as a whole involving the employment of locals. A wide variety of economic-political factors are in play here so not something that a market enterprise approach like paying a dollar off to Indonesia’s lost land-related GNI can solve. 

Even if images were ready & AI definitively incriminates Indonesia/Brazil of killing Earth’s lungs, they’re not going to shut down their palm oil plantations or cattle ranches. And no developed country is going to be able to sustainably pay them to stop. for this one, AI will only confirm what we already know, a sustainable development problem. Real choke point is smoothing supply/demand mismatch cheaply, a la cheaper battery. battery chemistry problem.


FullCycle is a Cleantech VC Building an Acceleration Economy

So I found FullCycle from last year’s Davos Forum highlights.

As you can see from the video, the thesis is to find technologies that transfer high carbon to low carbon economy – a “gigaton of carbon annually.” The company they highlighted is called Synova.

Transforming waste into valuable resources

Synova has developed a cost effective, closed loop system that converts all types of trash – including plastic – into clean energy, fuel, high-value chemicals, or virgin plastic feedstock, without fossil fuels.

Synova’s technology is disruptive in the developed world and the first to fulfill a huge unmet need in the developing world.”


Unfortunately, other than Synova, I haven’t seen too much other updates this year. I believe they have a solid team though. Their advisors – Erika Karp, Nathalie Nino – are faces quite active in impact investing circles.

Despite the $100 million committed at the Climate Action Summit, I’m not sure where exactly FullCycle is at. Synova hasn’t provided an update since 2018 either. Corona snooze? I’m not quite sure.

Arabesque: Beauty based on Geometry and Math

Arabesque is the first ESG Quant Fund global asset management firm founded by Georg Kell, the founder and former Executive Director of the United Nations Global Compact. It is focuses on advisory and data solutions by combining big data and environmental, social and governance (ESG) metrics to assess the performance and sustainability of companies worldwide.

It has its headquarters in London and a research group in Frankfurt and has offices globally. It analyzes the ESG data first and then finds out how much to invest based on the company model. The fund has a 32.5% return on investment, higher than global investment growth rate of 24%.

It all began with George Kell’s speech at the Davos forum. He partnered up with Bob Eccles, the founding chairman of the Sustainability Accounting Standards Board. The vision is to enable everyone to be able to invest in responsible companies to hold them accountable.

The technology of Arabesque S-Ray is based on the dimensions of the UN Global Compact – environment, human rights, labor rights, ant-corruption and excludes those who rate poorly in the fields of arms, tobacco, or gambling. Kell hopes to continue to move a critical mass of companies in the right direction and markets demonstrate responsibility of creating a shared future.

Five Approaches to Impact Investing

The idea of impact investing and how to allocate capital based on different approaches have diverged over time. Asset classes can be clustered according to the way investments would deliver financial return by the approach that they take. As illustrated by the below frameworks, impact investments are intended to align with an investor’s preference.  In the impact investing spectrum, one end has the traditional investing mechanism and the other philanthropy and can compare the extent of impact and risk in an impact portfolio. The categories in organizing impact portfolio to determine level of impact, moving from less to more integral impact, are the following:

  • Responsible: Also known as Socially Responsible Investing (SRI), this approach involves the negative screening of investments due to conflicts or inconsistencies with personal or organizational values, non-conformity to global environmental standards, adherence to certain codes of practice, or other such binary impact performance criteria. ‘Responsible’ captures investment activity that may proactively contain a social or environmental component in its strategy.
  • Sustainable: Sustainable investments move beyond a defensive screening posture, actively looking for investments that are positioned to benefit from market conditions by integrating Environmental, Social and Governance (ESG) factors into core investment decision-making processes. This can include corporate engagement, innovations, and new markets that are recognized as a path to growth, with positive social and environmental benefits, such as, for example, alternative energy.
  • Thematic: Thematic or mission investments have a particular focus on one or more impact themes, such as clean water or deforestation, and work to channel investment allocations in those particular directions. These are highly targeted investment opportunities, in which the social or environmental benefits are fully blended into the value proposition of a commercially positioned investment.
  • Impact-First: Investments that seek to optimize a desired social or environmental outcome, without regard for competitive return. They are open to trading off financial return for more impact where a more commercially oriented return is not yet available.
  • Non-Impact Investments: Investments made for the sole purpose of financial return, without any explicit consideration given to the social impact of the investments.
  • 100% Impact Investment: The intentional commitment by asset owners of 100% of their assets to positive social and/or environmental impact.

To navigate the following strategies, the report recommends adopting an incremental philosophy to explore opportunities in the program that builds upon the internal capacity, investment functions, and existing relationships. For instance, mission related investments are “financial investments made with the intention of furthering a foundation’s mission and recovering the principal invested or earning financial return.”  Socially responsible investing focuses primarily on (negative) social   screening and proxy activity in public equities, while mission-related investing is a proactive approach in use across asset classes.[7]

Impact investing is no longer a niche market. As more investors are interested in exploring impact, they are seen as a simple mechanism with expected financial return and an approach to impact.

Impact investing can offer the following opportunities when pursuing impact investing:

  • Banks, pension funds, financial advisors, and wealth managers can provide client investment opportunities to both individuals and institutions with an interest in general or specific social and/or environmental causes.
  • Institutional and family foundations can leverage significant assets to advance their core social and/or environmental goals, while maintaining or growing their overall endowment.
  • Government investors and development finance institutions can provide proof of financial viability for private-sector investors while targeting specific social and environmental goals[8]

McKinsey & Company looked at financial returns for impact investments on 48 investor exits between 2010 and 2015 and found that they produced a median internal rate of return (IRR) of about 10 percent. The top one-third of deals yielded a median IRR of 34 percent, clearly indicating that it is possible to achieve profitable exits in social enterprises. The below figure shows some evident relationships between deal size and volatility of returns, as well as overall performance. The larger deals produced a much narrower range of returns, while smaller deals generally produced better results. The smallest deals had the worst returns and the greatest volatility.[9]

            Source: McKinsey & Co., 2018

Learn more:

[1] Jacen Greene, An Introduction to Impact Investing https://impactentrepreneurs.wordpress.com/2012/04/16/an-introduction-to-impact-investing/

[2] Jane Finkelman, Kate Huntington, Impact Investing: History & Opportunity, https://www.athenacapital.com/wp-content/uploads/Impact-Investing-History-and-Opportunity.pdf

[3] GIIN, 2018 GIIN Annual Impact Investor Survey,  https://thegiin.org/assets/2018_GIIN_Annual_Impact_Investor_Survey_webfile.pdf

[4] GIIN, What you need to know about impact investing, https://thegiin.org/impact-investing/need-to-know/#core-characteristics-of-impact-investing

[5] J.P. Morgan, Impact Investments: An Emerging Asset Class, https://thegiin.org/assets/documents/Impact%20Investments%20an%20Emerging%20Asset%20Class2.pdf

[6] NPC, Investing for Impact: Practical Tools, Lessons, and Results, 2015. https://www.thinknpc.org/wp-content/uploads/2018/07/KLF_Investing-for-impact_FINAL.pdf

[7] Heron, Expanding Philanthropy, Missionrelated Investing at the F.B. Heron Foundation, https://www.heron.org/sites/default/files/Expanding_Philanthropy_Mission_Related_Investing_at_the_FB_Heron_Foundation.pdf

[8] GIIN, Impact Investing Guide, https://thegiin.org/assets/documents/GIIN_impact_investing_guide.pdf

[9] McKinsey & Company, Private Equity and Principal Investors, https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/a-closer-look-at-impact-investing

Network of Networks: A Gathering of Philanthropists

Destination Impact was a conference in Utah hosted by Jeff Raikes of the Raikes Foundation, the former CEO of the Gates Foundation. It was an attempt to map out the “network of networks” of philanthropists and was well attended by several donor groups. Here below are are summary files and ideas that came out of it.

“Destination Impact convened the leadership teams of 18 donor education networks and donor-leaders from within those networks for a week of inspiration, sharing, and thinking together in July 2018. This was a “first of its kind” gathering, bringing together groups who don’t naturally cross paths in other established venues. Gathered on the slopes of Powder Mountain, Utah, this group of committed philanthropists, donor educators, donor organizers and staff spent three days engaging in dynamic discussions about the challenges facing philanthropy and opportunities to support more donors to give with more impact. Participants also had plenty of time to make new friends and catch up with old acquaintances—all while exploring the beautiful surroundings offered by the picturesque Wasatch Mountains.”

Accelerating Tech for a Secure and Sustainable Future

When you think of working in the defense industry, you are right think about the arms – the military equipment, missiles, submarines, helicopters, etc. You’re quite right. So what it mean to be working in sustainable solutions in the world of defense tech?

The idea of working with the private sector for public applications is not new. In the past, most predominant forms of spending were through governmental entities such as DARPA  as R&D directorate and for weapons and military development – the Central Intelligence Agency’s publicly funded venture capital firm – In-Q-Tel or the Defense Innovation Unit.

Their sponsored research today became the technologies in our daily lives – the GPS, the Internet, the microwave, artificial intelligence, were all products from the State investments in technology.

Emerging technologies today have far outpaced the contracting model, where it now needs to move towards venture financing. The types of threats we are facing today including cyber – are outside the security contractor supply chain. The existing model’s ability to keep pace in future warfare is questionable.

The world of defense tech is an interesting one, where it extends beyond the traditional arms to encompass artificial intelligence (AI), quantum computers, cyber, robot, 5G (5th generation), urban air mobility (drones) mobile communication, and aerospace technologies.

At the current Center, we build a hub of: a) challenging technical problems; b) globally shared security challenges c) the intersection of commercial and public sectors, and d) with significant economic upside. We seek to work with venture capitalists accelerating dual-use early-stage technologies by facilitating technology transfer, and forming strategic alliances. 

We work with a network of highly vetted global advisors and partners, enabling us to map technologies to globally shared security challenges. We base our selection on performance, application of technologies to our partner’s mission capacities, and on complete alignment of interest. 

So how can defense tech serve as means for sustainability?

Aerospace and automobiles both rely on high technologies but are both major manufacturing industries relying on advanced materials, electronics, embedded systems, mechanical components, engines, and structures.

The basic idea is the same – you invest into new technologies that are more efficient, faster, smarter but to invest into clean technologies doesn’t also release toxic chemicals or with greater mitigation mechanisms to control GHG emissions.

The battery-powered electric airplanes are, believe it or not, already here. By investing into dual-use (commercial and public) technologies, clean technologies in the commercial sector could be bolstered with public sector investments. Through partnerships and their collaboration with domestic and foreign defense conglomerates, we can accelerate the progress of companies making a material difference in carbon emissions through increased incentives.

The vision is to invest into technologies to help advance the capabilities of the defense sector to have advanced technologies and to develop technologies that will enable the industry to shift from nonrenewable to renewable resources for energy and materials in a significant way – and thus will help to achieve a secure and sustainable future.

Let My People Go Surfing: The Education of a Reluctant Businessman

Title: Let My People Go Surfing: The Education of a Reluctant Businessman–Including 10 More Years of Business Unusual

By Yvon Chouinard

Link here

He is the founder and CEO of the Responsible Company, and Simple Fly Fishing, and Patagonia.

This book is not a marketing gimmick or any other self-promotional preachy book. It took me a bit, but Yvon wrote his first edition of this book took him fifteen years. I realized reading his book was essentially an invitation to be a part of his family.

You can tell a lot about him and Patagonia by this book. It is simple, authentic, consistent, zen, and has something to say.

The book is mainly divided into two parts. One is a history, a recount of how he has built his company. Second is a collection of philosophies like product design philosophy, financial philosophy, etc.

Reading this book is like opening his family album of his childhood and an honest account of failed his marriage after he was drafted to be in Korea. He was a small kid who couldn’t speak English in a public school in Burbank, California. His escape was with his friends in climbing.

He began his business exhibition when he partnered up with climbing friends who could design climbing tools. More they needed help, more they hired, friends, aunts, family members who could provide different areas of expertise. His HR manual was quite simple – just like the title of his book – you have to go surfing when the tide is right. He also joked that it also made it very difficult to fire his own people. His products were based on his own experience of traveling, climbing, and studying snow. He blurred distinction between work, play and family. Patagonia was his life.

He also mentions how he couldn’t find the companies he couldn’t model the values after. The one he did like was called Espirit, the original founders of North Face.

The book goes in-depth into his every struggle of the business building process from different types of fiber, design, to transportation. The compromises and decisions he had to make from “environmental and quality standards” always came with how to encourage the rest of the industry to work toward sustainability. It was always about quality over quantity – to stick to his core values and relationships to nurture those that demand time and energy – as friends and family.

“I think of Patagonia as an ecosystem, with its vendors ad customers as an integral part of that system. A problem anywhere in the system eventually affects the whole, and this gives everyone an overriding responsibility to the health of the whole organism. It also means that anyone, low on the totem pole or high, inside the company or out, can contribute significantly to the health of the company and to the integrity and value of our products.”

His marketing philosophy is as simple as it could get – “tell people who we are.” It was their heavy stance on their environmental issues. There was nothing to make up or to pretend or to even create a fictional character for. The below ad created quite a splash. It was on a full-page during Black Friday.

 ‘The Common Threads Initiative’ asks people to buy only what they need, repair what breaks, and re-use or recycle everything else.

“We’re at the opposite spectrum of big brand disposable fashion. We’re about making great quality products that are designed to last, so we have a lifetime warranty on our products.”

“Patagonia will never be completely socially responsible. It will never make a totally sustainable nondamaging product. But it is committed to trying.”

So, here I try to wrap up this recount of this amazing book I am so glad I have in hard copy. I’ll best try to carry on his message. We’re not the problem, therefore, each of us individually is not the solution. But those who are interested to start asking the right questions, this is where I would start.

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