Portland-based nonprofit VertueLab launched its $5 million Climate Impact Fund on Wednesday to support early stage, clean tech entrepreneurs focused on addressing climate change causes and moving to a carbon-free economy. The fund has raised $525,000 so far and is accepting applications from startups seeking capital.
Anyone can give to the fund, and while it supports for-profit enterprises, donations are tax deductible.
New technologies for reducing carbon emissions and removing warming pollutants from the atmosphere are essential for combating the climate crisis, which is linked to the current plague of wildfires and other extreme weather events.
But the sector faces it’s own challenges. Clean tech startups can be slower moving as their innovations often include hardware and their prototype process can take longer, particularly if it involves biological or chemical processes. It can be more expensive to build and test the technology, compared to software-based enterprises.
The Climate Impact Fund aims to get entrepreneurs past the “valley of death” that stalks the earliest stage clean tech startups. It’s providing funding for companies before they’re generating revenue, and even before they have a product.
“We’re filling a gap to get them to the point where they’re a viable candidate for traditional venture capital funding,” said Ken Vaughn, VertueLab’s director of Impact Investments.
VertueLab offers a variety of support for new companies. It’s hosting Fuel 2020, a virtual conference spread over more than two weeks that brings together leaders, innovators and investors concerned with climate issues. The annual event kicked off Wednesday.
The organization also runs the Cascadia CleanTech Accelerator in partnership with Seattle-based CleanTech Alliance. This summer, the accelerator accepted 10 early-stage companies in the latest round of the program. It included companies working on EV recharging, recycling household water, biofuel technology, clothing and textile recycling and EV use in the marine industry.
The plan is to distribute the new fund to 10-20 companies over a three year period, with the first startup or two selected by the end of the year.
Initial contributors include individual donors as well as the Woka Foundation, ImpactAssets and Vanguard Charitable. Woka donated $250,000 and committed to another $250,000 next May. The hope is that the fund will draw dollars from foundations that make program-related investments that align with their missions, as well as from individuals with donor advised funds that are stoked with billions of dollars waiting to be allocated.
The Climate Impact Fund joins other initiatives to support companies tackling the climate crisis:
- In June, Amazon unveiled the Climate Pledge Fund, a $2 billion venture capital program directed at sustainable technologies that could help the company fulfill its promise to become net carbon neutral by 2040.
- Microsoft in January created its $1 billion Climate Innovation Fund. In July the company announced an investment of $50 million in Energy Impact Partners, a venture capital firm that supports new energy and transportation tech.
- Seattle-based E8, a network of angel investors that backs clean-tech companies, in May launched a fund that targets slightly later stage startups than VertueLab. Decarbon8-US, or D8, this month announced its first three investees.
- Other efforts include the Los Angeles Cleantech Incubator’s LACI Impact Fund, the Midwest-focused Clean Energy Trust, Elemental Excelerator and Northwest-based Craft3. The wealthiest donors can invest through the Bill Gates-led Breakthrough Energy Venture, Prime and Khosla Ventures.
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