What if we f**ck up?
The challenge of seeking VC returns while seeking impact
$40 billion is expected to go into Climate Tech VC in 2022. $94 billion has been raised by VC and PE for “climate” since Jan 2021:
That’s a LOT of moolah for a term (“climate tech”) that was not being widely used when we started incubating 2150. It matters that this is now a VC vertical. It matters that so many repeat entrepreneurs are now focused on this space…
… what keeps me up at night is “what if we f**k it up.” And by f**ing it up I mean not only loosing our LPs money but betting on the wrong technologies, teams…not delivering on the impact we want and need to have.
This carries so much weight beyond (alongside) TVPI and MOIC metrics. We get a few dozen shots on goals *in this decade* that halve our GHG emissions by 2030 and get them to net zero by 2050.
It weighs on me weekly in our IC: Is this the best use of $1, 5, 10m of our investor’s capital to deliver both VC style returns AND massive megatonne level impact in one fund cycle.
Venture Capital pursues power law returns. That does not change for climate tech. What changes is the mental battle around power law and impact. If I fund the next unicorn that fails to mitigate the damage we are having on our planet, I have won financially but failed morally.
To the entrepreneurs that we engage with: I apologise if we are sometimes slower and more thorough. This matters to us all on a very personal level and every dollar we deploy must have the greatest impact possible alongside the expected outsized returns…
For our investors, our own moral compass, our children… we can’t f**k this up…
