?? Entrepreneurs for Impact #156: D-SAFE, a new climate finance tool

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Today’s topics.

1. ?? “How VCs Become A**holes” [article]
2. ??? Climate tech: Go where you’re needed most, where we’re falling behind. [graph]
3. ?? New funding tool, D-SAFE, for first-of-a-kind projects
4. ?? “Each of you is perfect the way you are, and you can use a little improvement.”

1.

?? “How VCs Become A**holes” [article]

I have three quote notes on this LinkedIn commentary from Omri Drory, a general partner at NFX and an early-stage tech investor.

#1

This is not my personal opinion. Many of my friends and readers are VC investors, and I live by a “no a**hole” policy. ??

#2

Instead, it is a word of caution for how investors interact with founders.

#3

And two things can be true at the same time, kind of like being low on cash and also being a coffee snob.

1. VC investors mean well but are managing an inhumane amount of deal flow
2. Founders deserve quicker and better feedback on whether VCs will invest

2.

??? Climate tech: Go where you are needed most, where we’re falling behind. [graph]

If you’re transitioning into climate tech or looking for your next role, consider this research from McKinsey & Company.

It speaks to the…

1. Gaps we need to fill (where the blue line is higher than the dashed line)
2. Annual growth rates that are needed to reach our climate goals (look at the “+xx%” in blue rectangles).

Find a great role for you among 38,343 job openings in climate-focused companies from my friends at ClimateList.

3.

?? New funding tool, D-SAFE, for first-of-a-kind projects

Deploying climate tech into project infrastructure is hard.

Here’s why:

Deploying capital in first, second, up to nth-of-a-kind projects before they have been de-risked tends to be “too big for venture, not commercial enough for growth equity, and too risky for infrastructure investors.” Most innovators are not project developers. These constraints create a “Scale Gap” of more than $150 billion globally.

Read more from BCG and Elemental Excelerator.

—

To help fix this issue, Elemental teamed up with law firm Wilson Sonsini to create a new financing instrument called D-SAFE that…

…is modeled after Y Combinator's Simple Agreement for Future Equity (SAFE), providing a familiar yet innovative solution to this funding challenge. The D-SAFE aims to support companies through the critical early stages of project development, including securing permits, project design, budgeting, contracting, community engagement and more, with the ultimate goal of getting climate projects developed, derisked and deployed as quickly as possible. It can operate either as a loan, to be repaid at the company's discretion, or as convertible equity like a traditional SAFE, if the investor so chooses.

Kudos to all involved.

A final takeaway:

• Financial innovations can be just as important as technology breakthroughs.

4.

?? “Each of you is perfect the way you are, and you can use a little improvement.”

The quote above comes from Shunryu Suzuki, the Japanese monk who established Tassajara, the first Zen monastery outside of Asia, in 1967. *

Nestled “at the bottom of a Big Sur canyon deep in California’s Ventana Wilderness,” it is an “off-the-grid alter-universe” with natural hot springs and ice-cold creeks “surrounded by rising mountains and old-growth pines where time is marked by a cloud-shaped gong.” (more here)

After college, I did a work-study there for six weeks. It was simple and hard at the same time.

In my work today with dozens of climate tech CEOs in EFI’s peer group community, this quote reminds me of the need to…

1. Be vs. do
2. Compliment vs. criticize
3. Be satisfied with where we are vs. striving for that next [bleaping] mountaintop

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* As a monastery, I was surprised to find a popular nude swimming hole in the cold creek nearby. Maybe that’s the influence of the hot springs resort they run to support operations. Regardless, it was a refreshing way to “be here now.” ??

Apply to be an EFI Climate CEO Fellow.

If you’re a growth-stage climate tech CEO who wants to join a community of 80+ CEO Fellows, Alumni Advisors, and Mentors (investors) representing over $20B of market value or AUM for climate solutions…

And you’re obsessed with constant improvement, helping others succeed, being a mindful leader, and tackling climate change through entrepreneurship…

And you want to grow your climate tech startup faster without burning out or going alone…

Apply to be an EFI Climate Fellow here.

That’s all, y’all.

Make it a great week because it’s usually a choice.

~ Chris

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If you want more, here’s how EFI might be helpful:

• Find your tribe — Join our peer group for climate tech CEOs.
• Get clarity — Let’s do some executive coaching together.
• Meet climate tech CEOs and investors — Listen to our 180+ podcast episodes.

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