Raising Money from VCs for FOAK Projects: What Founders Usually Misread

Today I came across a curious piece titled “Micromobility Does Not Need Hypergrowth.” The author makes a simple point: not every industry is built for Silicon Valley–style blitzscaling. Some technologies grow slowly, linearly, and in close dialogue with infrastructure, regulation, and physical reality. Trying to force hypergrowth on them distorts incentives, misprices risk, and burns founders.

Reading that, I couldn’t help thinking about FOAK climate hardware. Micromobility founders are told to “be the next Uber.” FOAK founders are told to “be the next Tesla.” Both are equally unrealistic.

And yet the majority of the advice circulating online is written by people whose job is not to build bikes, cars, electrolyzers, batteries, or anything with a supply chain, but to deploy capital into stories that look like they could grow like software. That dissonance shows up everywhere in the FOAK fundraising journey.

I see this clearly because I’ve lived on both sides: scaling wind, cathode materials, and doing early evaluation for battery cell manufacturing, while also spending a year listening to VCs, interviewing them, and trying to understand how they really think. The conclusion I reached is quite an uncomfortable one: VCs are the performers of the cleantech stage, excellent at attracting attention, less equipped for the trench work of scale-up.

And that’s fine, as long as founders understand what game they’re playing.

VCs Are Optimised for Speed. FOAK Is Optimised for Physics.

The EnvoDrive article argues that micromobility collapsed under the illusion that every physical business must pursue hypergrowth. When the business is actually infrastructure-dependent and margin-sensitive, that mindset becomes toxic.

FOAK companies face the same trap. Hardware does not obey software scaling curves. Building factories takes years, not sprints. Procurement cycles run on seasons and budgets, not growth hacks. Your next customer is not “the next million users,” but one B2B account that can take six months just to align internally.

Trying to convince a VC that your FOAK will grow like SaaS is not just unrealistic - it can and will backfire. But there is a temptation to do just that, because VCs look for exponential scalability, and what grows better than SaaS?

So how do you manage this temptation and get the VCs on board? Here is a 5-step framework for pitching FOAK to VCs I’ve developed, based on what I’ve learned about how VCs see FOAK projects.

1. You Must Show a 10x–100x Outcome

VCs don’t get out of bed for businesses that might return 3x in 10 years. Their funds can’t survive that math. They need outliers. So when you pitch, TAM becomes theatre. You’re not asked to prove what’s achievable - you’re asked to prove that the market is big enough to absorb a unicorn-level outcome plausibly. FOAK founders often confuse this with a request for realism. It isn’t. It’s a request for a possibility.

Meanwhile, the EnvoDrive article reminds us of what happens when you push physical businesses into growth trajectories that don’t fit their physics: you lose the plot. Overfunding creates pressure to scale prematurely, just like the micromobility bubble did. FOAK is no different. Hypergrowth expectations can suffocate a hardware business that is still debugging its procurement and cost curves.

2. VCs Want to See Your Technical Brilliance, Even Though Scaling Is Not Technical

This is always the funniest part. VCs want deep tech, patents, PhDs, and simulations. Meanwhile, every founder who survived scale-up will tell you that FOAK success depends on:

- supply chain discipline

- vendor qualification

- off-take negotiation

construction management

operational reliability

…none of which show up in pitch decks.

But again, VCs aren’t wrong. They’re optimised for early risk, not operational risk. So they select for genius, not operators. They assume someone else (corporates, later-stage investors, project financiers) will pick up the baton later.

This is the same misalignment the EnvoDrive article points out: the investor ecosystem applies a software mindset to a hardware reality.

3. Show Modularity or a Path to Commercial Scale

VCs love modularity because it's a clear path to scalability. But many cleantech systems are not naturally modular. Nuclear reactors, district heating, and chemical processes are usually optimised for scale, not Lego.

There is no easy way around it. Show how 1 pilot becomes 10 pilots becomes 100 units (for more on that, see my article on choosing the right scale). If the underlying economics depend on going big, show the path to achieving the commercial scale you need. Show how fast you can go from equity finance to project finance - because that’s how non-modular technologies scale, and that shows how VC’s can exit.

4. FOAK Economics Are Not Unit Economics

The EnvoDrive article argues that micromobility companies misled themselves by applying SaaS-style economics to a physical business with physical depreciation, physical maintenance, and physical wear. FOAK founders fall into the same trap.

But the VC world wants to see improving unit economics. The thing is that your FOAK unit economics will be terrible, your NOAK economics may be good and your nth factory economics may be excellent.

The job of the founder is to show the cost curve clearly: what improves, when, and why. VCs need to believe in the slide from “today’s ugly” to “tomorrow’s profitable.” You are not judged on current numbers, but on narrative + physics + learning curves.

5. Show FOMO. And an off-take.

This is a classic fear vs. greed problem. No investors want to be first. Everyone wants to be second. Show who is already in your round, who is doing due diligence, who signed NDAs and who “can’t lead but would follow”. The biggest carrot would be a signed off-take, as it signals customer commitment.

Why FOAK Founders Must Understand This Dynamic

When you do FOAK projects, you face incredible complexity and have to operate with extremely limited time and energy. That’s why chasing the wrong investors and wrong metrics kills companies. Not everything needs to be pushed into hypergrowth. Not every market rewards speed. And not every FOAK project needs a VC investor.

FOAK hardware is fundamentally a reliability business. It is measured in uptime, cost per unit, procurement lead times, supply chain risk, off-take security, and regulatory clearance.

It rewards patience, discipline, and operational excellence, not blitzscaling. VCs, meanwhile, reward stories. There is no blame here. Only misalignment of risks.