You have two products — why climate tech founders need a good CFO
A few years ago as I issued a term sheet for an investment, I told the climate tech founder:
“You have two products. You are very, very good at building the physical product your customers want. You need to hire someone that is very, very good at packaging up that product for the capital markets.”
What I had realised during due diligence was that this specific company was going to have to raise non-dilutive debt alongside equity to scale and that a financial “product” needed to be created alongside the physical one they were selling or leasing.
That conversation has been repeated almost verbatim with half a dozen other Hard Tech founders since then. The delta in momentum for those that followed the advice has been noticeable.
And here I am not talking about FOAK funding but access to mainstream pools of capital from the likes of HSBC Sustainable Finance, Blackstone-backed ClearGen, Blackrock or Barclays — all of which have provided non-dilutive funding to the 2150 portfolio. The capital has been used for asset-financing, Hardware-as-a-Service, working capital, M&A capital or facility buildouts.
Structured finance is a key tool (and milestone) in the scaling of climate tech solutions. Just like you are looking to hire the best-in class chemical engineer or software development, hire a best-in-class stretagic CFO to be your partner for this other, but just as critical, audience of “customers.”
NB: The founder I first said this too did follow the advice and the person he hired has been instrumental in growing the business and becoming a trusted partner to the CEO and the Board… I just wish I could clone him several times over!
