Blog | Federal Investment
June 7, 2023
Dr. Chris Wedding, Founder, Entrepreneurs for Impact
Dr. Chris Wedding is the Founder of Entrepreneurs for Impact, a private climate CEO peer advisory group, and a professor at Duke University and UNC Chapel Hill. He is also the Founder of IronOak Energy Capital and a registered representative with Finalis Securities LLC (Member SIPC/FINRA). He produces ZERO, a climate finance newsletter, and The Climate Torch, a climate CEO interview series. Dr. Wedding is a member of CEBN’s Business Network. CEBN staff invited Chris to offer advice for cleantech startups looking to raise capital.
**Please note that the Clean Energy Business Network does not serve as a financial advisor. The information below is solely the opinion of the author and is for informational purposes only. Specifically, this content does not include a comprehensive discussion of all factors needed to make an informed investment decision. Nothing herein constitutes an investment recommendation.**
On the heels of the White House unveiling a $2T infrastructure plan boosting clean energy deployment and ahead of an updated U.S. commitment to the Paris Agreement, climate tech investment is front and center. The Biden Administration is looking to lead on climate ambition, but government can’t get us there alone.
Fortunately, climate is hot, and investors are piling in.
As proof, consider some numbers:
And on top of that, Special Purpose Acquisition Companies, or SPACs, have already raised more capital in Q1 2021 than all of 2020, topping $87B so far.
As a refresher, SPACs are known as “blank check” public companies that raise money in order to acquire a private company, thereby taking them public through a merger process instead of the typical IPO (initial public offering) route.
And some experts, like The Cleantech Group, suggest that cleantech or climate companies make up about 30% of the demand for SPAC strategies. That’s a lot of dry powder for sectors that we in CEBN care about.
Despite all of this new capital focused on companies tackling climate change, finding the right capital is not quite as easy as holding out your hat.
First, where might you find investors?
Below are a few resources to get you started.
Next, the investor meeting…
As you rev up for a discussion with potential capital providers, consider these tips below for what not to do. I think I’ve made all of these mistakes before, so now you’re off to a better start than I had many years ago.
Being on time for the beginning and end of your meeting is a sign of respect.
And respect is a great foundation for a long-term investor-entrepreneur relationship.
The correct answer is usually the former, if the investor allows you to do it.
Build rapport first. Connect emotionally before getting into facts and dollars.
People like to do business with people they can relate to.
Start with the big picture, the vision, the pain, the emotion, and the possibilities.
First hook them. Later all those nitty gritty details will be extracted from you during Q&A and their investment due diligence.
Instead, say, “That’s a great point. I’ll give it more thought and talk it over with my team.”
But do not let any differences of opinion come across during your investor meeting.
One. Unified. Force.
Advice can sometimes be more valuable than the capital.
But if the investor is a good fit for your company, please include the “ask” slide. No ask, no get.
Within one day of your meeting, send a thank you email and note the good feedback they gave you.
Within 3-5 days of your meeting, send a detailed response to their questions or criticisms.
Then ask for their suggested next steps.
Raising capital can be a major distraction from your core business. But to grow more quickly and stay ahead of competitors, it might just be essential.