Why pay more to achieve less? Really, why? Yet, you see this everywhere in climatetech. How come? A reduction in man-made CO2 emissions measures the success of all climate technologies. But many of them require two other climate technologies as inputs - wind and solar energy. Green hydrogen, SAF, and e-fuels all require huge amounts of clean energy. To reduce emissions using these technologies, you first have to build a wind or solar power plant, then add the costs of these technologies. And these are major costs. Any green hydrogen project has half of its OPEX and CAPEX in clean energy. Looking at it this way, it is easy to see that 1 TWh of clean energy, used to produce hydrogen to be fed into a fuel cell EV, will reduce 3x less CO2 than the same amount of clean energy, used to power BEVs. It’s a great illustration of my second step in the framework for assessing the climate impact of cleantech startups - assessing systemic risks, opportunity costs, and rebound effects. The picture is taken from the post by Michael Liebreich.

BMW is famous not only for its cars, but also for its approach to advertising. One such great advert shows two scientists developing teleportation technology. It works, and they exclaim - “This changes everything!”. They then look back, see their BMW standing behind them, look at each other, and shake their heads. One of the scientists erases all formulas from the whiteboard, and another purposefully spills coffee on their computers, destroying any evidence of their breakthrough.  This ad delivers in a light-hearted way that not all technological breakthroughs are worth scaling. The right time to ask these questions is just before you are ready to start scaling up your technology, just as the two fictional scientists did. Scientific research can take any direction, and that’s ok, as the consequences are limited to the laboratory. Money and resources spent on R&D are always many orders of magnitude less than money and resources spent on deploying this technology at scale. We need to use available resources wisely, especially the most limited of them - time. Working to avert climate change, we are racing against time and need to focus our energy and resources only on solutions that can deliver tangible results now, not many decades in the future.  So, the first and foremost assessment of your technology is not for product-market fit, price, or delivery timeline. If that were it, this article would be just another startup management article. No, we are doing this business, we are developing this technology for a purpose - to make our planet livable for generations to come. The irony is that we, the founders and investors, might not even live to see the full result of today’s actions. But our children, and their children, certainly will. And if not, then we were doing something wrong.  It doesn’t feel well to devote the rest of your life to developing a technology, thinking that it will help make the world a better place, and end up doing simply another business that makes money, but fails to move the needle on climate. What’s the point? If we set out on this noble crusade, it is best to make sure that what we are doing will really make a difference and will have a positive impact on the climate and society. We thus need to ask ourselves, will our technology reduce a meaningful amount of man-made CO2 or its equivalent, and are there any unforeseen consequences of deploying our technology at scale? This is how to assess your FOAK Impact. The first question on the FOAK impact: Can this tech eliminate 1% of global emissions if scaled across the industry? Aviation is responsible for almost 2% of global emissions, so it makes sense to do something to decarbonize air travel. Universal Hydrogen, a US-based startup, claimed that it would do just that. A closer look revealed that the company seemed to target only propeller aircraft, which are responsible for 10-15% of all commercial air traffic. In case of success, Universal Hydrogen’s technology could, in theory, eliminate 0,3% of total man-made CO2 emissions. On the scale of challenge we are facing - it’s a rounding error. Yet, at least $100M was raised and spent, and the team was working on it for four years precisely because it was positioned as a climate technology.  The first question you should ask any cleantech startup is simple: is your cleantech truly clean, or just pretending? It is important to distinguish between business-as-usual ventures and those that can genuinely reduce CO2 emissions on a global scale. And if you’re not, it’s not a problem! You still can do business, but please, for the Earth's sake, rub out all mentions of how you’ll help to solve the climate crisis from your pitch deck.  Bill Gates, in his excellent book “How to Avoid the Climate Disaster”, suggested a good rule of thumb to test technologies for climate impact. Consider whether the technology in question could, in principle, reduce 500 million tons of CO2 annually. That’s roughly 1% of global emissions, which are estimated at 50 billion tons of CO2 equivalent. We are talking about not your specific scaleup here, but the entire market adopting this technology.  It is extremely important to get this right. Capital, talent, and, most importantly, time are scarce. We simply cannot afford to waste resources. There are many other global problems that we need to fix and that are competing for capital, talent, and time. Artificial Intelligence is one. Global pandemics, food security, nuclear deterrence, and a multitude of other things that require our attention. So, if you are sure that your scale-up can be a great business, but its technology will fail to make a meaningful impact, then rebrand your company in any other way and find different investors. You’ll do everyone a favor.  The Second Question – Does it avoid creating new systemic risks or rebound effects? One of the epic economic achievements of the turn of the century was the rise of China. More recently, China has been hailed as an “electric state” - a country whose primary energy source is electricity, rather than fossil fuels. One of the key reasons for “going electric” is the unintended consequences of fossil-powered economic growth. In a rush to pull the country out of poverty, the government relied on tried and tested technologies like coal power and internal combustion engines, neglecting health risks. In 2005, 2,6 million people died in China from air particle pollution. Towards the turn of the first decade of the XXI century, the Chinese government fully acknowledged the problem, declared a “war on air pollution,” and by 2019, total deaths attributed to air pollution (all causes) were estimated at approximately 1.85 million. The danger of unintended consequences is not limited to fossil fuels. My favorite example is green hydrogen. The world is currently producing around 100 million tons of hydrogen, predominantly from fossil fuels. Making one kilogram of green hydrogen requires approximately 50 kWh of clean energy. Thus, to decarbonize hydrogen completely, we will need 5,000 TWh of clean energy per year. Total renewable energy generation in 2023 was 8500 TWh. So, we would need to almost double today’s output of clean energy to simply make all currently used hydrogen clean. Instead, we could have used clean energy to decarbonize our electricity grid, pushing out coal energy generation. The Oath of Hippocrates, sworn by doctors worldwide, says, “First, do no harm”. Our case is the same. Our technologies have already taxed the planet to the extent that we start to feel rebound effects (people in China certainly did). The key to decarbonization is to create technologies that will improve the lives of people on this planet and avoid creating new, unintended, and systemic risks. This includes your technology.  Not everything that can work in the lab should be scaled worldwide. When assessing a climate technology, think holistically, think like a circular economist. Examine what be upstream and downstream effects of deploying your technology at a planetary scale are. Look at what critical raw materials are required. Where and how are you going to get them? Be careful of unintended consequences, as the EV industry found out, that the prevalence of nickel-manganese-cobalt cathodes in EVs led to widespread child exploitation in the DRC in the mining of cobalt. Never in history have we run out of raw materials, but time and time again, from coal mines in England in the XVIII century to cobalt mines in the DRC in the XXI century, technologies were certain led to the exploitation of people. Check the energy needs of your technology. How much would it need at a global scale? Is it available? Where will your company and its competitors get it? Would that clean energy be better used elsewhere to decarbonize energy generation? Go downstream, and think about how your product will be used. How about end of life? How will your product be disposed of or recycled?  Climate change is the first worldwide crisis that has forced humanity to think far beyond the next couple of years. Tackling climate challenges makes us think in decades, even centuries. At this timescale, we need to consider not only the immediate effects of technology on its use cases and our business. We need to look wider at what economists call “externalities” of running a business.

This morning, while sipping on my coffee and scrolling through the news, I found myself devouring 30 minutes' worth of video footage about the Renault 5 EV. Honestly, can’t remember now how I got there, but I was unable to unglue myself from the screen. A couple of things went towards me missing my most productive time of the day: 1. I’ve a soft spot for retro-themed cars. When Hyundai showed its electrified Grandeur, I was blown away (a pity they aren’t for sale). The Renault 5 EV is based on the iconic Renault 5, which was produced from 1972 to 1996. I’ve always thought that modern cars don’t have a soul, and all are just bland copies of one another. Well, Renault seems to break the mould! 2. I love being wrong, as that’s the only way to learn. If you read my posts, you might have noticed that I’m a bit sceptical of European battery industry survival chances in the era of electric transport. The Renault 5 seems to deliver good performance at an affordable price of €33,000, while, of course, not yet beating its Chinese rivals on it. It was developed only in three years, instead of the usual four to five. Could this hint that it is too early to write off European car manufacturers? 3. It’s the batteries that I was most interested in. The car uses an NMC battery from Envision-AESC. which helps to explain a higher price than that of Chinese brands. Currently, the batteries are shipped from overseas, but the plan is to source them from the AESC Doui factory in France. It should be operational as of summer this year, but knowing how battery factories ramp up production, I’d expect that for the next two to three years, these NMC cells will continue to arrive by sea. Renault also seems to be aiming at introducing lower-priced models with LFP batteries from CATL later on. What is your take on the Renault 5 and the future of the EU automakers? Can cars like this turn it around?

The humble transformer is at the heart of the electric grid. And for decades, it’s been a tailor-made marvel. Engineers loved the craft, utilities loved the high price that they passed on to consumers, and factories loved having “just the right” unit. But times changed, and the transformer industry didn’t. Until now. Meet One Power, a U.S. company taking the most boring, glacial, and conservative part of the grid… and flipping it on its head. Not by reinventing the tech, but by making it standardized, boring, and, above all, fast. Jereme Kent, CEO of One Power, describes the transformer industry: “Every single transformer coming down that line is different. It’s rare to get an order for two or three of the same thing. Bespoke doesn’t work when you need a gigawatt in Columbus, Ohio, tomorrow.” Instead of 18-month lead times, Kent’s team builds substations with “standardized 30 MW blocks”, and can drop them in “just 90 days”. That’s unheard of in a world where data centers wait 5 years to get grid access. So, what’s the secret tech? Not magic. Not software. It’s a 100-year-old "Ford Model T” logic: “We said: I’ve only got one block. It’s 30 megawatts. If you need 40 MW, you get 60. No custom designs. You want that? Wait five years like everyone else.” This approach turns supply chain chaos into a competitive edge: * Predictable costs and timelines * Available spare parts and timely maintenance * Real-time transformer health monitoring every 10 minutes (not once a year by oil sample 🤦‍♂️) As someone who’s built and scaled factories and invested in electrical grid companies, I’ve seen what lack of standardization does. In my experience, trying to launch with tailor-made gear meant constant redesign, missed deadlines, and spiraling budgets. One Power is skipping that pain and showing others how. The irony here is that One Power takes the most boring piece of energy equipment and makes it even more boring. But that might be the most exciting innovation in grid infrastructure today. So maybe boring is the new disruptive. This post was inspired by this episode of Redefining Energy Podcast: https://open.spotify.com/episode/7yjpE4HApyHMIkarxk8jYq?si=omVvl8ecR5yyL93QJkQsAg #FOAK #EnergyTransition #Grid #Transformers #ScaleUp #Cleantech

In May 2025, the European Commission published a new staff working document titled “Choose Europe to Start and Scale.” The document positions itself as a comprehensive assessment of the EU startup ecosystem—its achievements, the barriers it faces, and the support measures needed to improve scale-up performance. It’s a dense, data-rich report. There are facts worth knowing and trends worth watching. But if you’re looking for a practical playbook, this isn’t it. Where the EU startup and scaleup ecosystem stands There’s a surprising headline buried in the first pages: the EU has created more startups per year than the US over the past five years (15,200 vs. 13,700 between 2018 and 2023). European startups raised $426B in venture capital since 2015, and over 35,000 early-stage startups now operate in the region. In raw numbers, the EU’s startup scene is alive and expanding. And yet, the conversion rate from startup to scaleup remains weak. Only one in five startups make it to scale, compared to significantly higher ratios in the US. Despite the volume, the EU still trails in late-stage funding, unicorn creation, global IPO presence, and cross-border expansion. The five barriers The report identifies five structural bottlenecks: 1. Regulatory fragmentation Europe’s national laws remain stubbornly misaligned. From incorporation to tax compliance to employment law, setting up across borders still means starting over from scratch. The only EU-level company form (SE) requires €120K minimum capital—hardly “startup-friendly.” 2. Venture capital and finance gaps The EU startup scene is underfunded at every stage, especially late-stage. Between 2016–2024, the US raised $932B in VC. The EU raised just $133B. Only 12 EU VC funds managed to raise above $1B, compared to 157 in the US. 3. Corporate engagement disappoints 80% of EU startups say they want to work with corporates. Only 1% of startup projects actually reach the market via corporate collaboration. For those who try, the main takeaway is frustration: different speed, different priorities, and a hell of a procurement process. 4. Infrastructure and talent bottlenecks Cleantech, manufacturing, and energy startups especially struggle with access to industrial infrastructure. Even when funding exists, talent is hard to hire—and harder to retain. Efforts like the new €10B AI Factories are promising, but small compared to global competitors. 5. Public support is fragmented and hard to access There’s a lot of public money on paper, but getting it requires navigating a maze. Administrative burdens are high. Tax rules differ across every border. And smaller companies, with no dedicated compliance teams, suffer most. What the report gets right The document doesn’t sugarcoat the situation. It acknowledges the growing financing gap, the underperformance in exits and unicorns, and the uncomfortable truth that EU corporates invest more in US startups than in European ones. It also flags that public procurement—potentially one of the strongest levers for scale-up support—is underused. Only 10% of EU public procurement is “innovation-oriented,” compared to 20% in the US and 25% in South Korea. The diagnosis is clear. What’s less clear is the cure. What’s missing: a real strategy The report ends without clear next steps. There’s no timeline, no commitment to regulatory harmonization, and no bold financial instruments announced. We hear from founders and investors, but not enough from policymakers ready to act. To be fair, this is a working document, not a legislative proposal. But if Europe is serious about closing the scale-up gap, the real work starts now. My takeaway This report is a useful map of the terrain. It tells us where the mountains are. But a map is not a compass. For founders in cleantech, energy, and advanced manufacturing, many of the core challenges—like infrastructure access, cross-border compliance, and corporate partnerships—won’t be solved in Brussels. They’ll be solved by building local alliances, hiring internationally, navigating procurement, and keeping an eye on where the actual demand sits. Still, I’m glad the Commission is listening. Now let’s see if they’re ready to act. 💬 If you’re a startup working with corporates, raising public funds, or struggling to hire, get in touch! Some of these bottlenecks don’t need a new policy. They need better tactics. #scaleup #foak #startups #cleantech #vc #EU #publicfunding #corporateinnovation #policy #strategy

Financing and executing a FOAK is an exercise in creative de-risking. On top of all the uncertainty you have about new tech, which has never been tested in the real world, you don’t have collateral for loans, you don’t have a future income stream from off-take, and your CAPEX is eye-wateringly high. Yesterday, I had two interesting conversations, totally independent of each other, yet linked, and both pointing to ways of de-risking your FOAK. In one, we talked about a startup in biochar, getting ready to raise its next round to build a pilot plant. We spoke about the ways to de-risk its proposal and lower the necessary CAPEX. Going in incremental steps, such as suggested by the Breakthrough Energy Catalyst pilot-demo-FOAK, is one. Another one discussed was to ask equipment suppliers to provide finance for the equipment. The other talk was with a platform, bringing together B2B players for second-hand equipment in oil, gas, renewables, and even carbon capture. The oil and gas industry is cycle-prone, so there is a lot of used, but perfectly sound equipment available. Retired wind turbines can still find new uses. And you can even buy a carbon capture and storage facility (not that you really need to, but still). Using equipment finance lowers your equity needs and helps to avoid dilution, but using second-hand equipment reduces CAPEX. There are tradeoffs, such as lower flexibility in project scheduling in the former case and a higher risk of malfunction in the latter. Using second-hand equipment might work for the pilot or demo stages, where you don’t need to run it for thousands of hours, and are still tweaking your process. And these stages might prove too small for equipment manufacturers to provide you with a loan. When building your FOAK, though, you’ll have a greater need for reliability while having a scale decent enough for equipment manufacturers to consider finance. Would you consider using second-hand equipment for your pilot/demo/FOAK? #FOAK #risk #financing #equipment

What if everything we’ve been told about startup success is wrong? In my work, I spend more than half of my time analyzing climate tech startups for their ability to scale, and I often find myself at odds with investors, especially VCs. This has puzzled me for a time, but after taking a course in VC investment, speaking to several investors, and hearing them speak at events, I finally got it. When I look at a scale-up, I try to understand the challenges it has to manage to get to profit. When investors look at the same companies, they are often looking to see whether they fit the latest hyped-up narrative. You can see it in the movement of venture capital. Last year, investments in one of the most pressing problems facing humanity - climate change dipped, while investments in AI surged. In the past, investments in other “micro-bubbles” like blockchain, NFTs, big data, IOT, drone delivery, and VTOL aircraft followed the same pattern. Massive amounts of cash were burned on spurious technologies, while real-world problems went ignored. I got confirmation of my ideas after reading a book, “Unicorns, Hype And Bubbles: A Guide To Spotting, Avoiding And Exploiting Investment Bubbles In Tech” by Dr. Jeffrey Funk. I’ve run into Dr. Funk's posts on LinkedIn first. These days, it is very hard to avoid posts either singing praises for AI or scaremongering about it. Both types of posts were really pissing me off, so when I saw a post by Dr. Funk, it was, as we say in LinkedInese, a “change of perspective”, or that “aha” moment. After reading his posts for a while, I bought the book. I recommend you do the same - read the posts and get the book. Dr. Funk names and deconstructs myths of modern techno-optimism and exposes its dangers. Being no Luddite though, Dr. Funk suggests principles of separating hype from real breakthrough technologies, or “killer applications” as he calls them. I’ll go over the myths, dangers, and frameworks that resonated most with me. This list is not exhaustive, and barely covers some of the key arguments. But it should give you a feel for the character of the book. The Myths of the Unicorns Musée de Cluny is one of my favorites in Paris. It’s famous for hosting a series of six tapestries, The Lady and the Unicorn, woven in Flanders around the 16th century. Human fascination with unicorns dates back millennia, and the elegant tapestries are one well-known symbol of this fascination with the myth. Another one is startup culture. The first, and maybe the biggest one, is that startups are central to economic growth. VCs peddle this myth to other investors, bureaucrats, and the media. Economic growth depends on increasing productivity and on investments that bring value, i.e., profits to investors. Currently, though, startups that are touted as successes are not the ones that are profitable or deliver extreme customer value, but those that raise the most funds. This is akin to putting a wagon before a horse, confusing inputs with outputs. Yet, the media and social networks are full of it. If we look back to the last century, when real breakthrough technologies emerged, like electricity, the microprocessor, and LED displays, the vibe was different. Here is a quote from the book, comparing startups across the two centuries: “the percentage of startups profitable in the year before their IPO fell from 90% in 1980 to 12% in 2022. Of the 278 biggest, costliest startup failures of all time identified by CB Insights in August 2023, only three that went bankrupt before 2018 had greater than $ 500m in VC; those were Solyndra with $ 1.7bn in 2011, Better Place with $ 675m in 2013, and Abound Solar with $ 614m in 2012.21 Already nine recent startups with more than $ 500m in VC funding have gone bankrupt since 2018”. It’s common to hear now that we live in the age of unparalleled innovation and progress. Looking at the data like this has a much-needed cooling effect. The dangers of mythical creatures Hype is nothing new, it even has its own graph - the famous Gartner curve. The danger with this representation is that it implicitly assumes that ALL technologies follow this curve. Reality is not so forgiving, as many technologies that do not bring profits or productivity increases eventually die. Appealing to the Gartner curve, however, can extend the life of these zombie technologies for very long times. This is the key danger of hype. It draws our attention to superficial and trendy, by feeding on FOMO. Meanwhile, real problems and real solutions get less interest and investment. I’ve started this review with how the AI bubble drives capital away from real climate solutions. But even in the climate space, we have micro-bubbles and zombie industries like hydrogen-powered flight, DAC, and the most recent hype - water startups. These draw away capital from credible solutions such as heat pumps, batteries, and practical applications of green hydrogen. The hype is pushed by the people profiting from it. VCs are the main culprits, as they benefit from new investors down the line, fixed fees, and general unaccountability. Hype is central to getting next investors, in the worst cases, consciously passing it to “the next idiot”. But at least this approach requires guts to stick to the same story for 10+ years. Consultants, on the other hand, are always the first to profit from a new hype. They have zero sunk costs and are there with their slide decks, when exasperated managers call them, after being bombarded with bogus requests from their investors and boards on how they are going to navigate the next wave of big data/AI/3D-printing/other “hopium”. Finally, the real sharks, circling the hype cycles, are established investors who see through the hype and wait for the right moment to short-sell their stock at volume, burning retail and institutional investors. Myth-busting frameworks in Unicorns, Hype, and Bubbles Dr Funk does not provide any ready-to-use frameworks or tools to separate hype from reality. Instead, he pushes us to question the narratives pushed by startups, VCs, consultants, and media along two lines of thought. First, look for a “killer application” technology - a technology so good that users will eventually flock to it. This means that the technology should deliver clear benefits for the users, and at the same time, be able to generate sufficient profits quickly for the technology owner. In the author’s own words, “progress in the form of higher performance or lower cost over time is an important driver of new technologies and their diffusion.” Second, evaluate productivity gains at the systems level. A good example of this is ride-hailing tech. Uber did not invent a taxi. It made it easier and more convenient to book one, and easier for new drivers to start offering taxi services. What it failed to foresee is that as more taxis get on the road and more people order taxis, they create congestion, speed slows to a crawl, and finally, you are not getting anywhere in your Uber. Finally, I’ve found it insightful and fascinating how D. Funk integrates and references recent research and books by my favorite authors, Daron Acemoglu, Vaclav Smil, and Clayton Christensen. In the Christensen case, Dr. Funk sees the problem with his theory as being taken further than its core proposition, that incumbents find it hard to innovate in the niche, low-margin markets. It was assumed a law that low-end innovation would eventually displace mainstream products. That’s clearly not happening across the range of products and services. You can read my reviews of books by these authors here ( Christensen , Acemoglu , Smil ) For anyone involved in evaluating early-stage technology—especially in capital-intensive sectors like climate, energy, or hardware - “Unicorns, Hype, and Bubbles” is a reminder to stay grounded. The work of building real companies still relies on solving real problems for real customers, at a cost they are willing to pay. And that should never go out of fashion.

Going from project to product is hard and unique in many ways. Here is how LeydenJar is doing it. In the early days, LeydenJar was a research company. They tinkered with what was possible with silicon anodes and what it could mean for battery performance. The team was small, mostly engineers and scientists, and the work was defined by speed, uncertainty, and technical breakthroughs. This worked well for a time. Customers took an interest. However, as plans for commercialization became more concrete, the constraints started to shift. A pilot line was no longer just a milestone - it had to function. Samples weren’t just for internal testing - they were being evaluated by major clients. Conversations moved from "can this work?" to "can this be scaled?" The culture powering early discovery started to create friction. Teams were still solving problems in real-time, but the problems were no longer scientific; they became operational. Timelines were slipping, reproducibility was an issue, and the existing quality control systems, built during the R&D phase, were too brittle and too early. It became clear that a reset was needed. At this point, LeydenJar brought in a COO with a background in manufacturing. His role was not to optimize what was already there, but to introduce a completely new logic. There had to be a deliberate transition to a production-oriented organization. “Our COO is a no-sayer. And that’s exactly what we needed”, says Ewout Lubberman, head of product at LeydenJar. As an example, one of the first decisions was to dismantle the early-stage quality control system. It had been implemented with good intentions, but it was misaligned with the maturity of the product and was consuming too much attention from a team that still needed to solve core engineering challenges. This transition also changed how the company thought about hiring. The priority was no longer deep specialization or theoretical brilliance, but execution, discipline, and the ability to operate within defined boundaries. This required different people. The people who thrive in chaos are rarely the ones who maintain order. What LeydenJar understood, and what many FOAK hardware startups sometimes miss, is that scaling is not just a function of capital or customer demand. It’s a cultural transformation. And unless that shift is timed correctly, the entire organization can end up stuck between modes: too structured for real innovation, too chaotic for reliable production. LeydenJar didn’t manage to avoid that tension. They managed through it. 💬 What was the moment when your startup stopped being a project and became a product? Source: LeydenJar #FOAK #scaleup #manufacturing #cleantech #batteries #operations #climatetech

Can you find unicorns in water? There is a hype around water tech startups. Climate is changing, and some countries, such as Turkey, where I currently reside, could face severe water shortages. The recent documentary by Sir David Attenborough spurred more enthusiasm for investing in water startups. I am all for Sir Attenborough’s art and insights. But art is one thing, and investments are another. The only possible unicorn in a water business would resemble Water and Power Corporation from the 90s Tank Girl movie. Why so? Water is so crucial to our lives and many industries. The demand is there, and it will only grow! There are so many new industries using water - AI, robotics, and vertical farming! Yeah, sure. In a recent FT cites a paper, in which researchers estimate that AI water consumption could reach 6,6 billion m3 by 2027! That’s a lot, isn’t it? Well, it sounds like a lot, but compared to the current US total consumption of 444,4 billion m3 per year, it’s peanuts. And if we dig into the report, we’ll find that 3/4 of that AI water consumption happens off-site - either in chip manufacturing or in power generation. We already know how to solve that last bit. And what about robotics and vertical farming? Forget about it. Robotics has been developing for the last 70+ years. They are not even a blip on water consumption. Vertical farming is a waste of time, as you can only grow greens there, which have the lowest calorific density, so not overly useful for feeding people. At the same time, agriculture uses extreme amounts of water, so some innovation might be needed there. What is special about water is that it is a public good. This means that all people are entitled to access to water, state-run monopolies provide water, and water prices are regulated. Yes, you can still buy bottled water all you want, but you are not likely to use it to shower or wash your clothes. So, which markets are those startups targeting? The only free market is the bottled water market, others are regulated. Now, say a startup develops a novel way of desalination or purification. Would it be able to expand its customer base quickly? Would it be able to charge premium prices? No, and no. Under normal conditions, who would need it, when state-run utilities provide you with cheap water? And in times of water crisis, do you really think that governments of any country would allow a private startup to profit from the crisis by selling water? If you do, then think again. How is it that I am so sure about it? Well, I happened to spend the beginning of my career, the first 13 years, advising municipal water utilities on investments, reading water regulations, and studying the experience of water utilities all over the world. Water issues are taken very seriously by national and local governments. Water underpins the health, safety, and economic development of any nation. No sane government will let private startups and some VCs determine who gets water, when, and at what price. Sources and opposite views: Article by Yoann Berno on watertech: https://climateinsiders.substack.com/p/water-tech-the-most-undervalued-climate?r=14vtgc&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false FT article with link to research paper: https://www.forbes.com/sites/cindygordon/2024/02/25/ai-is-accelerating-the-loss-of-our-scarcest-natural-resource-water/ Water usage data: https://ourworldindata.org/water-use-stress

They IPO’d before raising VC. Here’s why that was genius. ATOME Energy didn’t follow the usual startup playbook. No pre-seed. No seed. No “100-slide deck for Sand Hill Road.” Instead, they went public. Early. That’s not just bold - it’s strategic. 💡 Why? Because in capital-intensive, FOAK-scale cleantech, your biggest bottleneck isn’t idea validation. It’s credibility. To secure $400M in project finance, off-take agreements, and long-term power deals in emerging markets… You need more than a good pitch. You need auditable processes, financial discipline, and regulatory transparency now, not after Series C. An early IPO made ATOME investable to sovereigns, banks, and utilities. It signaled: “We’re not another hydrogen hype deck. We’re building a real business.” 🚫 No gigawatt dreams. ✅ A focused niche (fertilizer). ✅ A capex-heavy but mature tech stack. ✅ A team with finance, policy, and chemical engineering chops (more on that in a separate post - stay tuned!) ✅ A solid business plan with clear margins. ✅ Secured ultra-cheap, already existing energy supply. It’s not a path for everyone, but for FOAK players solving boring but crucial climate problems, it’s an example of a creative solution to crossing the “Valley of Death”. 📽 Full interview with CEO Olivier Mussat here 💬 Have you seen other early IPO strategies in cleantech? Drop them below. Let’s deconstruct what worked. #FOAK #climatetech #hydrogen #greentech #startups #IPOstrategy #projectfinance #scalingup #decarbonization

You don’t need to have a financial degree or a background in finance to understand the key principles of funding a FOAK. As someone who graduated with a finance degree and worked with infrastructure investments all of his life, I know how finance types like to swarm you with jargon and seemingly endless financial options. Shut out this noise. There are three main types of funding available to FOAK scale-ups, and, for that matter, to anyone who raises funds. Below is the breakdown of FOAK funding with extremely extreme examples and some statistics thrown in at the end for good measure. Equity First, are the money people give you and expect high returns, but are ready to tolerate high risks. That’s equity. In traditional finance theory, equity investors take the highest risks, get paid last in the event of bankruptcy, but can lay claim to all the profits of the company. As a founder, you are an equity investor, even though you might not have put in a single dime. Equity investment can take several forms. The most straightforward one is cash for a share in the firm’s stock. Founders most often contribute to equity in kind, with their effort and technology. Some might contribute with intellectual property. Others might contribute with equipment. Equity finance is the prime source of finance for FOAK projects and for startups in general. After all, startups are risky businesses, and equity is the second most risk-tolerant type of funding. So expect a lot of negotiations around company valuations and who gets what share. One example of pure equity funding is a green fertilizer startup, ATOME. It went public in 2021 and raised $12,5M of equity capital in two rounds of IPO. They have subsequently raised an additional $7M in equity over the following years. At the time of writing, these equity injections allowed them to shore up enough assets to start negotiations on a $400M project finance for their FOAK green ammonia plant in Paraguay. Several factors allowed ATOME to raise so much equity. First, they had an A-rate team of finance and industry professionals, with a track record of successful infrastructure projects and IPOs. Second, they had de-risked their project as much as possible. They had the construction site, the off-take, and the cheap, abundant power supply secured. The ATOME approach, however, is extreme and relies heavily on the experience and the network of its founders. Debt The second type of funding, are the money people give you, but expect it to be returned on a precise schedule and with fixed interest. That’s debt. People who give you debt finance generally don’t like risk. They like to give money to safe, predictable businesses with stable cash flows. And they will be the first in line to get paid in case of bankruptcy. Debt can take on many forms. It can be as simple as a loan for a fixed term with a fixed interest rate. It can be bonds, issues on the open market. It can be equipment, shipped to you with payments spread out over months. Debt issuers look for two things: stable cash flows and collateral, i.e., something of value, that they can take from you in case you fail to pay on time. And guess what, your FOAK isn’t likely to have any of those. That’s why banks and bond markets are generally not the places where you can raise capital for FOAK. Of all climate technologies, solar and wind were primarily financed by debt. The key here was long-term fixed-price off-take agreements, secured with either big, reliable customers or more often with the government. In my case, when building the first large-scale wind farms in Russia, we were able to secure approximately $1B of debt for our first 600 MW of wind farms and a wind turbine factory. While at the time of signing a loan agreement, we had neither the sites, nor the technology, nor a wind turbine factory, two things worked in our favor and were crucial to convincing the banks. First, we had secured 10-year conditional off-takes with the government. These contracts would enable us to sell electricity at a very high price should we build on time and meet necessary local content requirements. Second, our sole shareholder was Rosatom, the Russian state nuclear corporation, with a sovereign credit rating. While Rosatom did not provide explicit guarantees for the loan, its presence in the deal was enough to convince banks of our creditworthiness. This is again an extreme case of almost 100% debt financing for a FOAK. But extreme cases are good as they show exactly the conditions under which such extreme cases are likely to happen. By measuring your own project against these extremes, you’ll be able to get a more accurate picture of the right funding mix for it. Grant Now, the third type of funds you can get is the money that people give you, and don’t expect much in return. That’s a grant. Grant can be thought of as having the highest risk tolerance. They are not expected to be repaid, and they do not lay claims to any share in the company; that’s why they are called non-dilutive finance. This might sound fantastic, but in reality, this is not so. As a founder, you are likely to be quite familiar with grants already. You’ve probably raised a few during your early development stages. Governments and various foundations, public and private, are keen to spur technological development and regularly give away free money to promising technologies. The sums are usually modest, barely enough to run a team of a dozen researchers, rent a lab, and purchase a minimum amount of materials. When it comes to financing something of an order of magnitude higher, like €10M+, grants suddenly tend to make themselves scarce. Why? Because by the time you are in your pilot-demo-FOAK stages, you start talking more about customers and profits, rather than science and technology. That’s something that grant issuers are trying to avoid, as their mandate isn’t to support commercial technologies, but to spur innovation and science. You could probably consider the Manhattan Project to be an example of 100% grant funding for FOAK, but that’s certainly not a climate tech project that we can relate to. When it comes to climate tech, FOAKs with a large share of grant funding are rare. One such example is Ineratec, a German provider of e-fuels and synthetic chemicals. As of 2025, Ineratec raised almost €40M of grant funding, with the latest round of €31M in grant money coming in March 2025. Out of the total of over €170M raised, grants account for almost 24%. Grants, however, are not completely free money. They are hard to get, and may come with many strings attached. This is such a special financing option that it deserves a separate discussion on how to understand whether your FOAK needs a grant or not, and how to manage one once you get it. You can read more on grants in this post . What can a founder expect from FOAK finance? In the age of the Republic of Genoa's dominance over the Mediterranean, the main way of making a fortune was to trade overseas. This was a dangerous enterprise. Storms, disease, and pirates were all very real and present dangers for any maritime startup of the era. And as you can imagine, the main source of funding for such ventures came from equity. A survey by Net Zero Insights, published in Building and Scaling Climate Hardware: A Playbook, illustrates the challenges of climate tech FOAK financing (see the chart below). As in the times of the Genoa Republic, climate FOAKs are overwhelmingly financed with equity. Source: https://planet-a.notion.site/4-Capital-Stack-174ea18bcd7a497ab8a739c8a5657d0e Investors' appetite grew almost exponentially until 2022, and then dipped. This happened not only to climate tech but also to a range of other industries, owing to tightening capital markets coming to their senses after the pandemic era's boundless government spending. At the same time, a share of debt significantly increased, as climate tech matured and many FOAK projects secured off-takes. Grant funding, not surprisingly, did not amount to a significant share, despite growing in real terms. The statistics by the Net Zero Insights clearly show that equity capital is the only type of capital that can consistently stomach FOAKs. Still, as the examples above and some of the examples in the following sections show, this doesn’t mean that your FOAK is doomed to be 90 %+ equity financed and founders squeezed to mere percentage points of the cap table. In the following blog posts, I will detail what type of expectations different investors have and how to manage them, so that you, as a founder, can keep your share. For now, it is important to get a firm understanding of the three main sources of finance - equity, debt, and grants. Don’t allow yourself to be overwhelmed by your CFO’s or investors’ attack with various financial instruments, such as mezzanine debt, convertible bonds, or SPAC (God forbid!). All are a mix of two or three, or a new take on just one. So, if someone presents you with a novel finance tool, ask them - is it a debt, equity, or a grant?

Off-takes are the holy grail of climatetech FOAKs. You would expect one to be signed by every hardware scale-up. But ask Northvolt’s investors, and you’ll find most off-takes aren’t worth the paper they’re printed on. 🚩 A typical, conditional off-take goes something like this: “If you hit these specs, and if the price is right, and if we’re still interested… We’ll buy it. Maybe.” Can we do off-takes differently? LeydenJar, a solid-state battery startup from Netherlands, shows how: 🔁 They run a customer through the following framework: 1. Intro + NDA 2. Sample testing → Claims verification 3. Joint development agreement (JDA) – Tailor performance specs to actual applications 4. Design-in validation – Send kilometers of anode foil to the client’s contract manufacturer – Prove yield, cost, and scalability 5. Then, and only then, off-take And not a conditional one. A real one: So, a JDA-based off-take would sound like “We’ve validated your product. You’ve demonstrated cost-competitive mass production. Now we commit to buy X volume at Y price.” Still, this approach is not for every climate scale-up. Pros: You get to build traction and trust with a customer You get to refine your product to full customers’ specs before launching at scale You get a “hard” off-take Cons: No conditional off-take - harder to raise funds Longer validation process, During which you need to somehow finance your burn 💬 Would you take the long road to an off-take? What red flags do you watch for in startup contracts? Download the post as a PDF carousel here Follow me for more FOAK and scale-up stories, tactics, and frameworks! #cleantech #batteries #foak #offtake #scaleup #climatetech #hardware