We are in a period of urgent optimism when it comes to climate investing. To make the best of the critical years ahead, we have to learn from our past.
https://twitter.com/rypan/status/1223746586984865794
###
Presented on January 30, 2020 at a summit hosted by the Environmental Defense Fund.
8. Investing was nascent until
oil prices rose and attitudes
started to change
$141
$92
$75
$52
$36
$25
$35
$30
$39
$14
Dollars Per Barrel of Oil
Dig Deeper @ EIA.GOV
9. Seeing opportunity -
founders started companies
and optimistic investors
poured in capital
>$3B
>150 deals
$4B
>200 deals
>$6B
>300 deals
>$1B
<100 deals
# of deals
$Bs invested
Dig Deeper @ BROOKINGS.EDU
10. By 2011, nearly every startup
founded during this period
had shutdown or was in
shambles
Year of
Series A
2006
2007
2008
2009
2010
2011
Failed to
Return Capital
80%
86%
99%
100%
91%
100%
Why?
Dig Deeper @ ENERGY.MIT.EDU
11. Subsidies were never
sufficient to give the
renewable sector the
lift it needed
Historical Average of
Annual Energy
Subsidies
$4.86B
$3.5B
$1.08B
$0.37B
Dig Deeper @ DBLPARTNERS.VC
13. Investments shifted to later
rounds and to project financing
Dig Deeper @ DATA.BLOOMBERGLP.COM
14. Some companies funded during the
period survived and thrived
$7.3M $111B 15,291x $1.1B
$4.8M $8B 1,679x $300M
$5.2M $4.2B 805x $102M
$39.6M $3.2B 80x $96.6M
$27.5M $2.1B 76x $16.7M
Data from CapIQ and Pitchbook
2003
2009
2006
2010
2007
15. The effects of over emitting
into the atmosphere are being
felt across the globe 1.Second warmest year,
warmest month, and
warmest decade on
record globally
2.Indiaโs wettest
monsoon in 25 years
replenishes reservoirs
but kills 1750 people
3.Near-record melting
of Arctic sea ice
4.The long-feared
permafrost carbon bomb
may be exploding, says
NOAA
16. Today, we are in a period
of urgent optimism.
From
<$6B to ~$10B
2000-2004: 2.0%
2005-2009: -8.3%
2010-2013: 11.4%
2014-2017: 26.1%
Dig Deeper @ DATA.BLOOMBERGLP.COM
Dig Deeper: CAMBRIDGE
ASSOCIATES.COM
17. There are new and existing
funds supporting early stage
investments.
...and we need more.
18. Hard Lessons
Be ruthless in
removing key risks
You are always
raising money;
syndicate
Unit economics rule
commodity markets
Own the customer
relationship
Buyers expect superior
products (no compromise)
Policy accelerates and
sustains change
Incumbents will fight;
some adapt; some die
We all need to play our
part
19. Links & Photo Credits
Slide 8 - Cushing, OK Crude Oil Futures - EIA.GOV
Slide 9 - Cleantech venture capital: Continued
declines and narrow geography limit prospects -
BROOKINGS.EDU
Slide 10 & 12 - Venture Capital and Cleantech @
ENERGY.MIT.EDU
Slide 11 - What Would Jefferson Do? -
DBLPARTNERS.VC
Slide 13 & 16 - Clean Energy Trends 2019 -
DATA.BLOOMBERGLP.COM
Slide 14 - Data from CapIQ and Pitchbook
Slide 15 - The Top 10 Weather and Climate
Stories of 2019 - Scientific American
Photo by USGS on Unsplash
Photo by Mike Setchell on Unsplash
Photo by Marten Bjork on Unsplash
Photo by Antonio Garcia on Unsplash
Electricity - Photo by Gibson Hurstโข
Agriculture - Photo by Ales Krivec
Industry - Photo by eddie howell
Transportation - Photo by RayBay
Buildings - Photo by Sean Pollock
on Unsplash
Thank you for all the research help Quinn Marvin!
Slide 16 - Clean Tech Company Performance
Statistics - Cambridge Associates
