Venture capital Funds (or VC funds) are a great way for sustainable startups to access funding. VC funds invest in early-stage companies that can take risks and grow at a rapid pace without the pressure of needing to generate revenue in a short period of time.
With this type of financing, startups can develop their ideas faster than they could on their own. In addition, venture capital funds can help sustain new businesses by offering stable investment and providing company’s founders with resources such as technical assistance and networking.
But there are two major challenges with launching any startup from an initial idea: time and money. Rapid growth usually requires more funding, which may be hard for sustainable businesses to access. This issue is more exacerbated for sustainable startups because next to their economic mission, they have sustainability and societal impact as their mission.
However, recently several leading venture capital funds have started to focus on sustainability and made that an important investment theme.
This article will discuss some of the best venture capital funds that invest in sustainable startups.
1. Energy Foundry (Chicago)
Energy Foundry was founded in 2016 as one of the leading Chicago-based venture capital funds focusing on investments in clean energy, energy efficiency, and cleantech companies.
They offer three different investment strategies: Bridge, Accelerate, and Find. The Bridge strategy is for investors who want to make a small investment, with the expectation that the company will eventually return the investment with interest.
The Accelerate strategy is for investors who want to make larger investments over a longer period of time with the expectation that the company will eventually return the investment with interest.
Find is for investors who want to put their money into companies that do not meet any investment criteria.
All their investments fall under one of their two core areas of focus: residential and commercial energy efficiency. They invest in companies that are focused on advancements in technology, as well as entrepreneurs building sustainable businesses to transform the energy industry.
They also invest in companies that are working to lower energy costs for users. Some of the companies they have funded include: Better Buildings, Climeworks, Enernet, and Enerstate.
2. Radicle Capital (Louisville)
Radicle Capital was founded in 2016 as a Louisville-based venture fund focusing on investments in sustainable transportation, mobility, and logistics companies.
They offer two different investment strategies: Elevate and Accelerate. The Elevate strategy is for investors who want to make a smaller investment, with the expectation that the company will eventually return the investment with interest.
The Accelerate strategy is for investors who want to make larger investments over a longer period of time with the expectation that the company will eventually return the investment with interest.
All their investments fall under one of the following strategies: autonomous vehicles, electrification, shared mobility, and logistics.
They’re also interested in companies that improve transportation and logistics efficiency by connecting different transportation networks. They’ve funded companies like ULX, SemaConnect, and Arrivo.
3. Rethink Impact (New York)
Rethink Impact was founded in 2017 as a New York and Washington DC-based venture fund focused on investments in sustainable impact companies.
Seed to Series A+ funding is available from Rethink Impact with an investment amount anywhere between $2 and $10 million. Annual recurring revenue of $500,000 or more is one of the key qualifications for seed funding from this firm.
They also look for companies with a clear social impact mission and a proven business model. The firm invests in companies with female CEOs or C-level women, such as CFO, CRO, COO, and CTO.
To date, the company has invested in 29 companies including big names such as Spring Health, Wellthy, Solv., GUILD, and Change.org.
4. Eniac Ventures (San Francisco)
Eniac Ventures was founded in 2017 as a San Francisco-based venture fund focused on investments in emerging digital health companies.
Seed funding is offered to businesses operating in the B2B, Consumer, Deep Tech, Fintech, Healthcare, Sustainability, and Web 3 sectors.
Eniac Ventures invests in companies that also have access to the firm’s four general partners. This venture capital firm helps its portfolio companies succeed and grow by partnering with them.
Eniac Ventures does not publicly list the exact amount of its investment. To date, this venture firm has invested in 114 firms, some of which are Airbnb, Basket, Bedrock, Attentive, Boxed, Cameo, ChatGrid, Eden, and Hinge, among others.
5. Beringea (Detroit)
Beringea was founded in 2017 as a Detroit-based venture fund focusing on investments in sustainable food and agriculture companies. Beringea’s Series A and Series A+ funding is available to companies selected by this venture capital firm.
Beringea funds companies in a number of industries, including Advanced Manufacturing, Business Services, CleanTech, Consumer, Healthcare, Media, Retail, and SaaS. It typically invests between $2 million and $10 million in a company.
It is important for companies applying for funding to have a clear vision of the company’s future as well as proven commercial success.
All their investments fall under one of the following strategies: regenerative agriculture, climate change solutions, modernizing and improving traditional farming practices, and urban farming.
They’ve funded companies like Solazyme, Hain Celestial, and Living Light.
Summary
VC investing is a risky business, and it’s important to choose the best funding sources. Fortunately, Sustainable Startups have a great opportunity to find funding through venture capital. There are tons of great investments that focus on sustainable startups, and these five funds are a great place to start.
It is important to look into the funds criteria and the application procedure and deadline to ensure you have taken all the critical information into account.
1 Comment
[…] in areas such as AI, IoT, and biotechnology. Additionally, the country has a strong focus on sustainability and circular economy, which provides opportunities for startups in the green tech and circular economy […]