Climate Tech Venture Capital: Where It’s At And How To Get It — An Interview With MUUS
According to McKinsey & Co, climate tech as an industry has been growing at a phenomenal 30+% year over year even during the most recent economic turbulence of the last few years. As we swelter under the latest round of heat waves, and global awareness of climate change has (finally) hit a tipping point, we can only imagine this trend will continue and more than likely go even faster. Not only do we need it to survive, but it’s becoming increasingly clear that it also makes a smart financial investment.
We at CleanTechnica just launched our first raise, opening ownership in CleanTechnica to people outside our organization for the first time ever. We will be using the money to grow our flagship product (this website and its associated channels in audio, video, and social) as well as to launch our first mid-sized trade show focusing on sustainable homes. We hope to amplify our voice to further accelerate the clean tech revolution. (We are actively raising right now, and if you’re interested, you can sign up to be contacted here. We’re taking investment checks with a $5,000 minimum, and offering a discount on future valuations.)
As the guy leading the raise, I’ve been talking to a lot of investors in the climate tech space, mostly listening and learning. I’ve been talking to everyone from retirees looking to invest for their grandchildren to climate tech VCs from New York and San Francisco. One of the folks I talked to on the latter side of that equation is Benjamin Wolkon, a partner at MUUS Climate Partners, a venture firm based in NY. Ben has an MBA from the MIT Sloan School of Management and remains active in their MIT Sloan Sustainability Initiative as an alumnus. I asked him some questions about how to pitch VCs in this market, and his answers were interesting enough that I thought I’d share them as an article to help other climate entrepreneurs hone their investment pitches.
Ben began his journey by calling a lot of venture capital firms and asking if he could be their climate guy. This was before climate tech was as sexy as it is today, and predictably, he struggled a little. He then met Michael Sonnenfeldt by what he refers to as dumb luck. Sonnenfeldt hired Ben into MUUS and then started MUUS Climate Partners.
I asked him what was a high-level, one-line takeaway about his years in climate tech VC. He said, in a nutshell, that nowadays, you have to move fast as a climate VC — it didn’t used to be that way. In other words, climate tech entrepreneurs used to have to really pound the pavement. Now they’re sought after. Seems that the demand for climate investments is high, and the supply can’t keep up.
CleanTechnica (CT): How do companies get climate VC interest?
Ben: There are three things that really peak our interest. The first is the team. It’s the most important factor. You need to understand 2–3 years from now, the company may likely be very different. But the best teams are able to keep changing the company and being nimble. The worst teams can start with a really good idea and run it into the ground.
CT: In a team — what is of interest?
Ben: Obsession with the problem you’re solving, a sophisticated knowledge of the space, not just a general knowledge. We want to know, do they know their product and space better than others? And finally, we’re looking for leadership — can the leader be a resource obtainer (HR, $, etc.,) in addition to being a great leader of people? Another thing that’s useful is seeing members of a team who have accomplished (or attempted to accomplish) something comparable in the past, so they have relevant experience.
The second thing we look for is whether the offering solves a big problem. And the third, does it make economic sense?
CT: How do companies make a good/bad first impression?
Ben: Humility — we want to see that they’re clear eyed about how hard it is to build something. A lot of founders are high performers, but if they lack humility, it means they haven’t gone through some stuff yet — they haven’t heard a lot of no’s, which indicates they don’t know what’s ahead. They have to be able to take a little bludgeoning and keep going.
CT: What is the best way for climate entrepreneurs to approach you?
Ben: We love warm introductions and recommendations from someone in our network. Cold inbounds need to have a good hook, clear articulation, cut the jargon and BS.
CT: What are the most exciting in climate tech and types of companies?
Ben: “Hard to decarbonize” spaces are exciting. We seem to know how to address all aspects of emissions right now — a lot of the tech to do that is becoming more commercializable. A number of these areas thought to be really difficult just a few years ago now have a known solution set that are rapidly heading towards commercialization.
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