Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Knoxville Business News Tennessee Mountain Scenery Background
April 05, 2023 | Tom Ballard

Climate tech founders face a difficult decision

More than one-fifth of all venture capital investments into climate tech start-ups in 2022 were in deals with participation from oil and gas companies, but accepting those dollars could create a perception problem.

PitchBook notes in a recent post that climate tech founders are facing a conundrum.

According to data it analyzed, the flow of fossil fuel dollars into climate tech venture capital (VC) deals jumped in recent years. More than one-fifth of all VC investment into climate tech start-ups in 2022 was in deals with participation from oil and gas companies: $6.79 billion out of a total $36.47 billion.

That said, accepting checks from “big oil” isn’t a straightforward proposition for some green start-up founders. Why? PitchBook explains that working with a corporate VC at an early stage could scare off customers or other investors by signaling that the start-up is working closely or exclusively with a particular client. That’s according to Wes Selke, Founding Partner at mission-driven investor Better Ventures.

“Investors might speculate that the deal comes with conditions, such as the right of first refusal in the company’s future exit,” Selke said.

The analysis can be found here.

Like what you've read?

Forward to a friend!

Don’t Miss Out on the Southeast’s Latest Entrepreneurial, Business, & Tech News!

Sign-up to get the Teknovation Newsletter in your inbox each morning!

  • This field is for validation purposes and should be left unchanged.

No, thanks!