The existing investment networks, both online and off have a significant number of inefficiencies built into them in their categorization and matching features leading to wasted efforts, missed opportunities, and delays in bringing forth new planet-saving technologies.
For capital-intense / deep-tech startups, angel and VC money is usually not appropriate at the beginning stages due to misalignment of time requirements, and growth expectations.
For capital-light startups, some have found success in the existing angel networks and platforms, but most startups in this space have also faced extreme communication inefficiencies. The three most common problems spoken to us are:
- They connect with the popular, later-stage investors they met via news articles & conferences and can’t get capital now.
- They reach out to an angel investor that’s listed “CleanTech” on their investment profile, and that investor is only personally interested and not actually investing in the space.
- They find someone who is investing in seed-stage CleanTech company, but they aren’t interested in that startups technology or area of operations.
For instance, a company that has technology that can turn CO2 emissions into ethanol needed 15 years and $215M in funding before completing their first commercial installation. They received a lot of government and philanthropic grants, as well as strategic investment to get them here. Angel and VC investors would not have been appropriate when they were just getting started with their long time to market requirements. On our platform, similar startups will be able to more effectively connect with philanthropic and governmental granting organizations, foundations making PRIs and MRIs, and private investors with multi-generational time horizons to de-risk their R&D phase. Once they progress far enough along the TRL timeline, they’ll be ready for strategic and institutional capital to enter into and grow within the market.
How are we going to match everyone up?
As our base, we’re using technology/market sectors and a modification of the Technology Readiness Levels (TRLs) first developed by NASA in the 1970s and since taken up and refined for other areas, including energy. This gives a finer-grained segmentation of where each startup and technology is now, and which level of funding they’ll be ready for next. This will also allow us to show investors “what’s next” without them and the startups wasting their time with too-early informational meetings while that startup is raising an earlier round.
We’re bringing on angels, institutional and corporate VCs, accelerators/incubators, government agencies, philanthropic foundations, and family offices to match the right level of risk-tolerance, return requirements, and time-to-exit expectations with the startups.
We also look at:
- Non-financial returns, eg CO2 reductions, tons of food produced/acre
- Area of operations
- Capital light / Capital heavy
Benefit for startups:
- Increase connections to appropriate capital sources
- Reduce poorly matched and informational meetings
- Match with both non-dilutive and dilutive capital
- Can combine multiple financing vehicles into one funding round
Benefit for capital providers:
- Increase properly matched pipeline
- Act as a filter to reduce or stop non-relevant inbound requests, allowing private-funders to operate on an “outbound only” basis
- Be notified of and track startups that are too early, but fit along other criteria
- Act as an LP behind syndicate leaders to participate in more deals and utilize others expertise
As we continue to improve our methodology, we’ll update this document. We welcome your feedback and input.