Early-stage innovators should tap into impact investors and federal grants to get their technology off the ground, VertueLab director David Kenney said.
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Climate tech innovations often take lots of money and time to build in the early stages — long before it’s clear what impact they’ll have.
Early on, many traditional investors deem the ideas too risky to put their money behind. So many founders in the space struggle to raise funding, says David Kenney, the executive director and president at VertueLab, a Portland, Oregon-based group that supports and invests in climate tech and cleantech innovations.
If a founder is lucky, they’ll have the networks to raise a friends-and-family round to get them through the research stage. Or, they’ll have the connections to a university research lab to develop their idea there. But that’s not always possible. And even if it is, that funding eventually runs out.
“This is a critical time for a new technology, because without additional funding and support their technology could ‘die on the vine’ – which means it never sees the light of day,” Kenney wrote in an email.
There are other routes for founders to get the capital they need to create their tech. Innovators can tap into impact investor groups, like VertueLab, that are working to provide the capital to climate founders in their early stage, Kenney said. Founders can also turn to federal grants, Kenney said, such as the Small Business Innovation Research and Small Business Technology Transfer funds, which award about $3.7 billion in non-dilutive funding each year.
“There’s only one way to solve this capital gap, and that’s to funnel more capital into the early stages of business development,” Kenney wrote in an emailed statement. “Philanthropists, impact investors, and the private sector all have opportunities to change this systemic issue facing entrepreneurs across the globe.”
VertueLab launched in 2007 as Oregon BEST to fund innovators in the state working on cleantech solutions. The group changed its name in 2018 as it expanded to support startups beyond Oregon. It has invested more than $7 million into startups and is currently raising a $5 million fund with investments from groups such as Portland, Oregon-based Lemelson Foundation, Newbury Park, Calif.-based Woka Foundation and Portland, Oregon-based Meyer Memorial Trust, according to its website.
Here’s a link: https://vertuelab.org/
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This story has been updated to clarify that the funders contributed to the $5 million fund VertueLab is actively raising.
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