SPEAKER_00: okay everybody it's another sunday edition of this week in startups first up we have an impromptu vc sunday school molly and i took a random question from nodi gang member bob g on the live stream and it was supposed to be a nodi only moment but it was so good we thought we had to share it with you now if you want to join the nodi gang that's the notification gang and you can see myself and molly answer questions live you just go to youtube.com this weekend you click the subscribe button on youtube and then right next to it is a notification bell every time we go live you will get a notification and then molly has a great interview with jay ko he is an investor at the lightsmith group he's been investing in climate startups for over two decades and he was one of molly's first contacts in the climate space it's an amazing interview stick with us this week in

SPEAKER_02: startups is brought to you by coda coda is the all-in-one doc for teams if you've got a stack of niche workflow tools or if you're buried in docs and spreadsheets coda is the doc that brings it all together startups can get a 1000 credit at coda.io twist intercom if you're an early stage high growth startup you can get access to intercom's early stage academy today at a 95 discount join the program today at intercom.com early stage or email them at startups at intercom.io and microsoft for startups founders hub for the challenges you face as a startup founder microsoft for startups founders hub is here to help the platform provides founders with free resources like azure credits development tools like github mentorship resources productivity software training and so much more the program is open to all and takes five minutes to apply with no funding required learn more and sign up at aka.ms this week in startups hey jason have you ever participated in a down round if so what were

SPEAKER_07: your main lessons oh sure i have a couple times usually what i'll do is if the founder has done a great job uh executing with the founders and they're doing a down round and i still believe in them i will try to be supportive um if they have not been communicative maybe they haven't executed particularly well well then my job as an account capital allocator is to put that money and give it to the founders who have okay so let's just start with that right molly yeah we have a pool of capital yeah after we make

SPEAKER_09: the initial investments we have a reserve in that pool of capital and we wanted to go to the best performers in our portfolio for that fund let's say now uh that doesn't mean we want to be callous and not support founders who've had a rough go of it so if they had a rough go of it because of covet or something that's not their fault and we still believe in the founder and they got a bad beat and they've been communicative sure we might participate in a modest way and almost always the companies that

SPEAKER_07: get into down rounds majority of cases historically they do not wind up uh returning to the level that companies that have up rounds this makes total sense if the company's been doing well they have up rounds you're better off betting into a good hand than betting into a bad hand right so if you have aces and the flop comes down ace 10 2 like or ace 10 7 you know you're feeling like you want to put more money into that hand whereas you know if the hand was king queen and the flop came down to six jack you know you're like why am i putting more money into that i got to hit a runner runner so it's like you're basically it's longer odds so i have done it um we try to be disciplined we may put a small amount of money in and one of the mitigating factors is because we're high profile if we're on a cap table people will say molly what's jason doing and so for me i always am cognizant of because we're higher profile people might want to do and we will say yeah we're we're going to support it we our fund is not designed to do bridge rounds and down rounds but we will put in a little amount of support i wouldn't say token amount of support because it's still 25 or 50k typically so it's still a lot of money but we like to be supportive and it's signal right um if the founder hasn't given updates and they haven't been communicative then it's sort of like it's a little bit easier of a decision for us to make like they kind of ghosted us they never asked us for help they didn't keep us informed well then why are we putting more money into that situation because it's going to go bad again and they're not they've already told us they're not going to tell us it's going bad and they're not going to ask for help so i guess we will hold stand pat yeah this is why many funds molly will stand pat uh and only do rounds where there's a new investor pricing around many venture firms i would say dare i say the majority tell this to founders we don't do bridges but we will protect our pro rata or go super pro rata or participate in rounds when a new person values the company there

SPEAKER_17: it is there you go you know the dynamics of down rounds is a is a good topic it's a great topic

SPEAKER_23: especially for right now yeah there may be some of them i like a flat round i'm a fan of the flat round

SPEAKER_07: if you uh raise that 20 million company doubled revenue but didn't triple so you're growing but not high

SPEAKER_28: growth or you want a 50 of revenue and you're at 20 million and you know it's a year later and you

SPEAKER_07: have seven months of runway yeah you top off for an extra million at the same valuation and you just call it you know a series a seed extension or a series a extension no harm no foul you topped off the gas tank at the same price even though you traveled a little bit of a further distance it seems fair the market changed a little bit on you everybody feels fine about it our flat rounds

Jason Calacanis: and down rounds and i'm stealing this from nick but our flat rounds and down rounds viewed the same by vcs like you're saying a flat round is okay flat round is very very different a flat round could

SPEAKER_09: be a savvy move to top off your gas tank build up your dry powder it would be the equivalent of you know listen i'm if you think about this like we're flying the plane to a destination and we're halfway across the atlantic and we've got enough fuel to get there in all likelihood but somebody drops in with one of those you know mid-air fueling systems it's like how'd you like another thousand gallons at the price you paid when you left t to borrow that's a private airport in new york let's be showing off and i'd say yeah sure why not we'll take it maybe we hit some headwinds going into you know uh charles de gall we got a little extra fuel we got to divert and and and you know go to london heathrow or something and circle for a bit okay we got a little extra fuel so it's look very differently if you are issuing more shares you know and lowering the share price you know giving warrants whatever it is yeah that's looked at as the company's damaged goods something's wrong with the plane you you lost an engine the engines burned too much fuel you're not piloting it correctly so one is the pilot's fault the ceo's fault the founder's fault you know just to give you candidly what vcs will say behind closed

SPEAKER_07: door the company the founders didn't do a good job anticipating executing raising money when the market was hot whatever it is and then the flat round they said they're going to actually put into the bucket of savvy mature founder realizes hey not you know every time you hit up you get up to bat you don't hit a home run but if you get a walk walks as good as a hit i mean that's what my coach told me

SPEAKER_43: literally when i was in baseball the first year the coach was like hey jacal just lean in a little

SPEAKER_44: bit with your left elbow when they release the pitch i was like oh is that how you swing the bat

SPEAKER_07: better he's like no that's how you get hit with the ball that's your best chance of getting on and i was like explain that to me this is what i'm like 10 or 11. yeah he's like because you don't know how to hit the ball yet but you're going to be great next year so what i want you to do right now is lean into it so literally i became a master of getting hit with the ball and took pride in it to the point at which the rep uh admonished me one time because the first pitch i went like this and i did my

SPEAKER_43: shoulder looks super obvious and the guy called time out he pulled me aside listen i know what you're doing you can't lean into the pitch you do it again i'm throwing you out of the game so then i was just like just a little help of course i can do it with it now i'm just stretching i'm just the master of getting i was i was moneyball 20 years before uh so i think it's a moneyball move you know like when you think about it yeah how is the original jason the original flopper no seriously i i literally had you know that uh trey young like oh you know oh trey young getting that uh call yeah listen those are the rules you play by the rules the rules are flat around good flat around

SPEAKER_07: great mature move because you know what you're the vc what just think about what just happened molly you're an existing vc you got a million dollars in the company the founder just put another million in the gas tank at the price you paid already what are you thinking fine

SPEAKER_09: why yes yeah but why why is it fine for you as sure you just invested at a 20 million dollar valuation yeah it comes to you a year later says hey i got this offer from this other vc to put a million dollars in are you cool with me putting it in at 20 million uh you know things haven't been great they've been good they've been okay sometimes good but it's obviously we're not great and we're not going to just get a series a right now at 100 million post what is your thinking in game theory

Jason Calacanis: i mean i suppose i think that what i'm hoping is that it's a historic storm right on your flight route that sort of upset you a little bit and that those conditions are not going to last forever so it's better than the alternative it's better than raising in a down round or closing down and i lose all my money now you got it that last piece is where you got it yeah yeah and so like this sounds like a way for me to keep my money especially if somebody else is putting in the million bucks and not

David Friedberg: me that's the real okay the company is doing okay but not great yeah and somebody else is preserving my valuation from the last round and they're taking the risk yep that see it took you a minute but

SPEAKER_62: you were like working through but you got there i know i was like stall stall stall stall i got it you

SPEAKER_07: got it if we're in a poker game right and like i i'm drawing to a flush and the other person's raising and then somebody whispers in my ear um i'll call i'll call the thousand dollars for you um and then if we win uh i get a portion of the pot you'd be like okay oh yeah i don't have to take the risk i don't feel too strongly about this hand i was going to fold and you just paid my call for me great let's keep going so you bail me out basically it's like you're getting bailed out by another group um so it's wonderful so that's how you think about it okay so there's an ad hoc sunday

Chamath Palihapitiya: school edition we just uh saved 20 minutes our schedule this week got that in the can got that in

SPEAKER_66: the can oops efficiency is one of the main components in startup success everybody knows this you got to be efficient that's what coda is all about coda is the all-in-one doc for teams your text and tables live together in the same document and this helps any team collaborate more efficiently especially remote ones they've got thousands of templates to work with at coda or you can repurpose templates published by some of the best innovators out there for yourself coda works out of the box and it's completely customizable so you can create a wiki or a knowledge hub for your team you can onboard new hires quickly and adapt fast to any major or minor changes in your business here's how we use it at this week in startups my guy presh made an upvoting system on coda so that you the audience of this week in startups can ask questions and request topics to be covered on this very program you can see this at thisweekinstartups.com questions and if you go there you can submit a question or a topic and our producers might include you in the show you can vote things up and down how amazing and awesome is that coda has an amazing program for startups i want to tell you about they're here to optimize and support your docs and they're going to give you a thousand dollar credit right now yeah you heard that right one thousand dollar credit at coda.io twist coda.io twist okay next up on this week in

SPEAKER_00: climate this week molly sits down with jayco an investor from the light smith group jay was one of molly's first contacts in the industry it's an awesome interview stick with us jayco is co-founder and

SPEAKER_71: managing director of the light smith group thanks for coming on this week in climate startups thanks so much molly great to be here so tell us about the firm because the light smith group to my knowledge is the first private investment firm that focuses on resilience and adaptation is that accurate

SPEAKER_73: that's right by a number of different analysts they suggest that we're the first dedicated private equity or private investment firm focused on climate resilience or adaptation so light smith is focused both on reducing greenhouse gas emissions which we track in our investments but really uh dedicated to looking at the effects side of the climate change problem so what happens with risk and impact gets more complex because of climate change talk to me about this is actually

SPEAKER_71: adaptation and resilience is how i came to this topic as you well know because you were one of like i think my first sources at marketplace when i started doing this reporting because it sort of comes down to what i pithily titled how we survive like it's you know is grounded in the reality that there is change baked in and pain baked in and extreme events baked in and that we have to sort of respond to that on lots of levels i think that's absolutely right and the latest

SPEAKER_73: shot across the bow from the ipcc six report um about a month ago now uh was that hey look one and a half degrees is kind of the table stakes now and it would be extremely difficult to achieve that politically and technologically um and it's a very unpleasant place to live in we're at 1.1 degrees now we have gigafires um i don't know if anyone's called something a gigaflood yet but if they haven't i'd like to trademark that because i'm sure that's gonna be a thing or what will describe something in the midwest sometime this year unfortunately uh we've seen that in you could have picked your continent to get flooded out of last year with tragic loss of life and so this is now the increasingly new abnormal i guess how has the when did you form so we um launched the firm at the end of 2016 and really the beginning of 2017 and where we started to develop the background to the strategy uh at lightsmith of focusing on tools so our idea was as the problem of climate change increases and becomes

SPEAKER_75: more complex um what are the tools that are out there that can help us to understand what happens

SPEAKER_73: to risk and impact and manage risk and impact in the agriculture sector and the water sector and transportation and energy even in health care uh in infrastructure and real estate everywhere else

SPEAKER_71: and how has the landscape and the conversation around adaptation and resilience changed because i know that you know the overall spending is a tiny fraction of what we spend on mitigation and for a long time there was kind of a philosophical resistance to the idea of adaptation because it might have taken attention and money away from trying to fight emissions overall absolutely there there are three

SPEAKER_73: things to think about in how adaptation has or hasn't changed one is climate is now a thing in the investment landscape so two years ago um mal you were looking at this i think a long time earlier than that as well climate change was still considered to be in the united states at least something that is a long-term problem this is like 2100 no polar bears fewer coral reefs um and you know we'll get around to that uh what's happened in the last 14 to 16 months is i think over 40 billion dollars has now suddenly been raised for climate investing in private equity and venture capital and other areas which is wonderful to see um that being said it's still less than eight percent on the adaptation side of all climate investing that's currently tracked and according to the climate policy initiative less

SPEAKER_75: than 500 million dollars in adaptation and climate resilience so we've gone from five percent of public and private investment around adaptation to eight percent so that's good uh the u.n secretary general last year wants it to be 50 percent we're way far away from that um and we're only at the very beginning of private investment private equity and growth equity investment and venture capital

SPEAKER_71: investment and resilience and adaptation but you just raised if i'm not mistaken a hundred million

SPEAKER_73: dollar fund yeah we have lightsmith announced 186 million dollar final close of our double double what i said just about but uh so we're excited that we have got some great partners uh in that fund and have already begun making investments uh and 186 million dollars um is not a tremendous amount of

SPEAKER_75: capital but at least it's a first step towards what we think will end up being you know a multi hundreds

SPEAKER_71: of millions or billions of dollars investment opportunity how are you focusing your investments now i mean you said you sort of initially started out in risk assessment and those tools has that approach changed at all is there more i mean you know as long as we've been talking it's basically been like but kind of like it is now actually where i keep joking that there are three climate tech investors for every startup but there seems to be sort of money chasing solutions are you finding more

SPEAKER_73: solutions uh we are finding more solutions and so our broad idea which was to say look there's categories that we would call climate intelligence now most of the companies that we talk to or have historically talked to uh at lightsmith don't call what they do climate change anything they're supply chain management companies or agricultural analytics companies or digital mapping companies or catastrophe risk modeling and weather modeling companies but all of those types of technologies are already analyzing the risk and impact that now becomes a lot more complicated and we originally mapped about 20 different areas of the economy that we thought would be relevant to how climate change

SPEAKER_75: will affect all of society and the economy and are focused on these kind of six areas so the other

SPEAKER_73: two are resilient food systems and water harvesting and water efficiency technologies but this the set of potential investment opportunity unfortunately just keeps growing um so one thing that we've been looking at most recently is air quality monitoring and environmental monitoring um you know five years ago sea level rise and hurricane sandy um were the giant kind of poster children of what would happen

SPEAKER_75: as climate change starts to occur and you didn't think childhood asthma was a climate change thing that it turns out if you light all of california on fire every year or a half of australia or parts of europe or parts of south africa then you increase dramatically the amount of smoke particularly in the air you enhance the impact of other environmental pollutants particularly on disadvantaged populations and older people poorer people children have a dramatically different experience of health and i think health is going to be one of the most important impacts we're going to see and healthcare diagnostics becomes a really interesting and important investment area for us you might not realize it

SPEAKER_94: but you've almost definitely used intercom before you know when you visit a website that little chat

SPEAKER_66: bubble pops up to help you with any questions that's intercom it's the best way to connect with your customers intercom's platform helps you engage and support your users through personalized chat like experiences over 25 000 companies use it every single day including dozens of mine why because they want to foster their relationship with customers and those customers have great things to say here's a testimonial from twitter in fact it's almost like all websites i visit with that intercom chat button i instantly associate them with great customer service just like intercom intended and that's really the point if you have that intercom box if it pops up people know you're serious about being a great customer service organization if you are an early stage high growth startup you can get access to intercom's early stage academy today at a 95 discount join the program today at intercom dot com slash early dash stage or you can just email them startups at intercom dot io that's i-n-t-e-r-c-o-m dot i-o and by the way if you're a founder in the bay area and you want to network with other founders and vcs email startups at intercom dot io to request a link to rsvp to a founder's happy hour at kel's irish restaurant and pub on april 14th hosted by our friends at intercom can't wait sounds like a great time yeah which

SPEAKER_71: area do you think is the most overlooked when it comes to i mean clearly i think that that connection between health care and climate has not been well understood are there other areas like that that you think are are sort of very overlooked or that we're sort of just now starting to realize our

SPEAKER_73: climate stories i think one of the areas you might not think of initially uh is supply chain management right so supply chain management and what does that have to do with climate change well if you again have giant fires in the pacific northwest or you freeze all of texas for 10 days you can't deliver personal protective equipment on rush orders to deal with the early part of covid and you can't distribute vaccines when the economy's frozen so technologies that can help us dynamically

SPEAKER_75: reroute shipments manage logistics and transportation in an increasingly complicated

SPEAKER_73: environment are going to be very important ways that we actually adjust and continue to adapt to climate change and then the other side of it i think molly as you and i have talked about before

SPEAKER_75: you know climate change isn't just like risk risk risk forever and that's certainly the first point of contact and dealing with the potential humanitarian impact is really important but at lightsmith we think climate change also creates an enormous opportunity on the upside for the development of new technologies and new products or different types of services that really provide a better outcome that also help you adjust to and be resilient to the impact

SPEAKER_71: of climate change right i mean adaptation and resilience involve a lot of investment like you have to redo your infrastructure redo your house you know there's a lot of things that go into that at the state city country and even individual level right and it feels like there are thousands hundreds of

SPEAKER_104: thousands millions of companies in there absolutely i mean one example is you know we made an investment in source global which makes solar powered hydro panels these look like solar electricity panels but they

SPEAKER_73: generate pure drinking water one of their major projects last year with navajo nation only 30 percent of people in navajo nation have access to pipe drinking water and that's kind of a tragedy that's compounded when you have to go pick up big flats of water bottled water in the middle of covid um so they deployed

SPEAKER_75: their panels which look like solar electricity panels but generate water in the remote communities within

SPEAKER_73: the navajo nation and for the first time you have a local 100 sustainable renewable source of drinking water at your house um for 10 to 15 years so that's a better outcome right it's not simply building

SPEAKER_75: resilience to increasing water stress and drought uh it's giving you a distributed solution that's local that's 100 sustainable so there's upside there it's not just you know let's build the seawall another foot higher and hope that things will only be five percent as opposed to twenty percent worse

SPEAKER_106: right it's like um not literally but metaphorically regenerative which is a word i'm starting to hear

SPEAKER_104: a lot more yeah i think that's a better word than than better that's the best thing we've called like we think it's just better outcomes um right uh but uh but i think that's that's like 4g right to extend

SPEAKER_71: my metaphor even further we had the internet and it was great when we got 4g we got a mobile economy that had not previously previously existed before and there's a possibility that if we can make ourselves more resilient then we will have more energy to put into economic development of various types but also if we create better outcomes through those you know products and services and developments that then we end up with potentially a better society definitely so if people are thinking

SPEAKER_73: about things like nature-based solutions so instead of building a giant sea wall maybe we build a park that can deal with flooding and all of a sudden you have a greener healthier part of your city that

SPEAKER_110: also helps to protect you and not just more cement and having to build more cement on top of more cement

SPEAKER_71: yeah another thing about you so people who are not watching the video won't realize that you're wearing a tie right now and that every time we talk i have to think about my outfit because you're always very natalie dressed which is one of the reasons i think of you as sort of the anti-silicon valley another reason is that you are founder and chair of the global adaptation and resilience investment working group which works directly with the un right as an official partner of the un secretary general's a2r climate resilience initiative you're like the anti-silicon valley in many ways not least of which is you are engaging with global governments tell me about this so the global adaptation

SPEAKER_113: and resilience investment working group it's a long name by the way like everything i just said i was

SPEAKER_107: like i'm exhausted yes so i i pronounce it gary from because i'm a kid from chicago um other people

SPEAKER_73: pronounce it gary uh gary sounds like a guy you met on saint patrick's day uh but i think i think it's friendlier yeah but it's a working group that's now a 501c3 funded by the kresge foundation and state street global advisors foundation and it's it's real mission was to say okay let's take real investors like pension funds uh like um asset management houses like investment banks and regular

SPEAKER_75: normal investors and put them in a room with climate experts with governments with risk management experts with credit rating agencies and talk practically for the first time about what happens

SPEAKER_73: to the value of your investments when the physical impact and risk of climate change starts happening and then what are the opportunities that are created to invest by the need for resilience to climate change so it's met about 46 times in the last several years here and produced a few investor

SPEAKER_75: guides which are designed to be read in a taxi to answer the question of like what do i think and why do i care about this problem and what questions should i be asking about how i'm making investments whether i'm an individual or whether i'm a large-scale pension fund that's paying attention to how

SPEAKER_71: teachers can retire that by the way is that's the sign of a guy based in new york it's designed to be read in a taxi that's right as opposed to uber yeah i'm sorry what now um but i do think i i sort of want to dig into this conversation with you because i think and this is not to say that you know my colleagues in the valley and in the san francisco bay area are not talking about sustainable development goals and that they don't have some awareness of esg reporting but there is a different mentality i think when you're engaging with the un and big investment partners and when you're out here like we're just going to invent a silver bullet and you know it's going to be an x for x and we're gonna

SPEAKER_73: make it all go yeah i think um so i have to confess i lived in the marina the silliest part of san francisco for a number of years and worked in the transamerica building doing uh generation 2.0 investing in wireless uh before color phones were a thing so i was a tech investor in that part of the world for the car law group many years ago and my partner sanjay wagley is based in san francisco so we do have an angle and a perspective on the tech world and i might actually show up without a tie on molly if i ever met you on the west coast i know it's biz dev blue and i wouldn't recognize you i'd be like who's that guy totally um i'm trying to pretend it's still 2019 and people wear ties um but i i do think that the that both approaches are really important so our approach at lightsmith is to focus on growth stage companies so companies that already have customers already have technology and commercial products because we don't think there's a lot of time left right so if you're already mapping wildfire risk and selling to utilities to help them manage their networks um we want to help you scale even faster there's certainly a need for new technology that's even better uh to model wildfire or to model flooding or model parts of um how food production is going to change going forward uh but we're focused on the growth stage now in that other area in the early stage tech area i think that there's you know no part of the world more dynamic than silicon valley

SPEAKER_75: and we're looking at companies actively there right now as well one challenge that we think was a lesson of the climate um 1.0 or clean tech 1.0 experience is how quickly you can take those technologies and get them adopted particularly by utilities or by large-scale corporates or by government and so um you know our strategy of looking at companies already have that engagement and helping them scale is our preferred approach here but we also think we can help companies with great technologies access and get their company their technology deployed more quickly when you say a

SPEAKER_71: lesson of clean do you mean that it took too long to get those technologies adopted or that they were

SPEAKER_92: adopted more quickly than you thought i think it took way longer than people expected to sell into those

SPEAKER_75: markets so you might have had an amazing technology in battery science but to get yourself into the automotive supply chain back then took a lot lot longer um if you had you know intelligent water metering or intelligent utility metering um those things delivered efficiencies back in the 90s and will continue to deliver efficiencies but if you don't understand how utility procurement works you have a very long road to travel right and so finding folks you know we've been focused at lightsmith on platforms that have uh an understanding of how that works and then helping then to partner with technology companies to help bring their technology to um the people that need it as quickly as

SPEAKER_66: possible by some estimates over 90 of startups will go out of business in year one that's why microsoft created the microsoft for startups founders hub the hub provides founders at any stage up to six figures in resources wait until you hear this ridiculous list of perks you're going to get technology benefits like free access to github's enterprise tier up to 150 000 in azure credits based on your stage and size technical advice from experts at azure and microsoft cloud one-to-one mentorship from their mentor network exclusive benefits and discounts from companies like open ai huh and the best part there are no fundraising requirements unlike others in the industry the microsoft for startups founders hub doesn't require startups to be investor-backed or third-party validated to sign up and access the benefits nope it's truly open to any founder and it's not about who you know any founder at any stage can get up to six figures of value by signing up at aka.ms slash this week in startups once again aka.ms slash this week in startups to get six figures in benefits right now yeah what are the parts i mean

SPEAKER_71: now i think there's a growing conversation about what are the parts all over again there's a growing conversation in this space about what venture is good at and what it isn't but at least with some learnings behind us you know like are there areas that venture should just steer clear of when it comes to climate because we just can't be impactful fast enough or you know or what should we not waste our

SPEAKER_107: time on in search of the most impact i think the cautionary tale piece of it from the cleantech 1.0

SPEAKER_75: experience is a lot around being thoughtful around capital expenditure right so if you have software which is awesome and scalable you know right once um and then copy many many times uh then that's a great approach that can be uh deployed quickly and innovation can happen very quickly in that area if you have a novel manufacturing process that requires you know 100 million dollars to deploy the first factory and prove that it works then it's a it's a very different scale of investment that you're talking about now that being said you know the venture and growth landscape has also changed where there are much larger players that are out there now that are willing to invest in larger check sizes to scale those technologies and we've seen the kind of and a third reel of the spac film come and go uh where people were really excited about bringing those companies quickly to the public market um i don't know that that movie will end this time around or what the next netflix season is going to look like in its back world um but i think um really being careful and thoughtful about how your companies consume cash uh and how much of that is going to be required for capital expenditure is a really important distinction between where you are in the venture stage versus uh growth investments or more

SPEAKER_71: more mature investment strategies is there some truth though or some pain in the idea that if we all fund a bunch of sas dashboards that like maybe we're not going to contribute that much meaningfully

SPEAKER_75: well um i kind of wonder what the mollywood 2024 person coming back in the short time machine would think about telling us right now yeah because what you've had is in the last again like 14 to 16 months you know 40 billion dollars of capital with the word climate attached to it a bunch of that is in much larger cap funds and a bunch of it is in like very early stage climate tech so when all those

SPEAKER_73: climate tech funded startups get to the next round in about two or three years who funds them at that

SPEAKER_75: point is a really interesting question what the world looks like from a competitive standpoint from an investment standpoint is also a really interesting question so we are growth investors at lightsmith we're looking at companies between five and a hundred million of revenue it's a pretty broad range so we could be a target to shoot for so if you graduate from the early stage startup range we're there to help you really go global really to scale really to position um robustly around adaptation and resilience to climate change um and so we're one of the players that is you know eagerly mapping and looking to new technology companies and investors so that we can track their progress and be the people that can be helping them scale at that point um but i don't know if we're in the same range of capital company as very early stage climate tech or very late stage um renewable energy type investing so i think that part of the landscape will be created uh we're happy that other people will hopefully join us in that part of the investment uh pathway but i think you could see a tremendous number of the same kinds of uh early stage climate investments all come to the next stage of financing all at the same time and the question is how many people will be able to have follow-on investment at

SPEAKER_71: that point right so are you saying there aren't that many of you there aren't that many firms at that

SPEAKER_73: growth stage right now i don't think we've seen as many as you've seen launch in the climate and the

SPEAKER_75: earlier climate tech state and the much larger cap um uh buyout style uh climate investment oriented funds show up so i think there is at this point still this area of growth equity that hasn't been as heavily competed and then again you know that's in broader climate which has always been focused on what we would call mitigation or reducing greenhouse gas emissions really important uh and not in our

SPEAKER_86: area which is adaptation to climate change or resilience to climate change right the effects

SPEAKER_106: of climate change side of things why aren't there do you think why are why is there this sort of

SPEAKER_73: mid-stage gap in that level of funding i think there there's probably two reasons one is there has been this idea that climate is a totally new thing right like climate climate risk is like aliens landing

SPEAKER_75: on the earth risk it's risk that we've never seen before it's going to be totally different and i'm

SPEAKER_73: glad that people are calling this basket of risks climate change risks and saying it squarely um because

SPEAKER_75: it's really important to mobilize everyone around this on the investment side and on society side that being said our view is climate change risk isn't aliens landing on the earth risk it's existing risk it's existing sets of situations and challenges and problems that are now going to become a lot more complicated so if you thought that climate change was a totally new thing then you would say okay we need brand new technology to start to deal with it if you thought climate change affects all kinds of existing things then you might take as we've said before more of a macgyver approach like what's out there that we can use right now to help us begin to solve the problem right now you know how do we manage fire risk right now that is going to be supersized to manage it as those risks become supersized we don't have to start for the first time to think oh geez have we ever thought about wildfire before have we ever thought about flooding before have we ever thought about drought affecting agriculture before so i applaud folks that are innovating and investing in early stage technology we absolutely are going to need that but i think there's also a whole range of companies that we're running into in the growth stage that already have a lot of these technologies and customers that should just scale a lot faster with capital and so that's what we're doing so should some of the early

SPEAKER_71: stage folks that i'm talking to like peel off and start raising more money well i think if you could write a prescription here for that because this sounds dangerous it sounds like a lot of turtles are going to be running toward the sea they're going to get picked off anyway by birds right because a lot of them aren't going to make it and then heaven forbid they're going to get to a sea that doesn't have

SPEAKER_113: any fish in it or whatever turtles eat i think they eat fish uh but yeah but no but i think the landscape will i think i'm thinking about what i know about finding nemo and that's i like i'm shocked at the lack of knowledge i have about turtle diets um so i i think uh i think that that the capital will be raised as the opportunity goes there i just think that it's useful to to think about

SPEAKER_73: what the ecosystem has to look like going forward uh and so you know we think there's a great opportunity in growth investing in this particular next phase of climate or the effects out of climate change and i also think what we're beginning to think about is this idea of a climate 2.0 approach

SPEAKER_75: meaning you know there's been a lot of activity around net zero commitments uh companies investors governments saying we are going to um operate at a zero emissions level or net out the emissions that we're generating into the environment we think that that's a great target and a great objective to get to but in order to reach that target you need to make sure that that net zero objective is resilient and deals with the fact that climate change will keep happening so for example if you thought you're going to reach net zero by planting a whole bunch of trees that's great but you better plan um for those trees to exist in an environment where there might be a lot more fire or a lot more drought or a lot more pestilence so you make sure that your investments in capturing carbon through trees or offsetting carbon through trees don't go up in the same fires that will destroy stuff that's not designed to to help solve climate change so making sure that adaptation resilience is part of how we think about all of climate investments uh or all investments um is going to be really important climate change isn't like a tale of two islands one which is reducing greenhouse gas emissions and the other one which is like dealing with the effects of climate change we're going to live in one future and that has to be both a low carbon future or we will have really really bad problems

SPEAKER_86: and one that's resilient to climate change because we're going to have some scale of problems that

SPEAKER_71: we're already seeing right now yeah um and then finally before i let you go where we know that there is always a lemming effect and investors love hype where are we what do you not

SPEAKER_106: want to hear about anymore like where are we maybe wasting a lot of time and capital when we could be

SPEAKER_73: a little more creative or risky um that's a great question i think what's great is that renewable energy

SPEAKER_75: has come an incredibly long way and electric vehicles have also come an incredibly long way too so if you know you got in your time machine went back to uh 2007 and said electric vehicles are going to be a definite thing and solar power will be the cheapest form of electricity on the planet you would have probably laughed yourself out of the room um and those two things i think are now i think well accepted by a lot of investors and so there's a ton of capital piling into renewable energy uh and that's great um it's probably not going to have the same kind of uh venture capital type of returns that you might have seen in the first or second wave of innovation but it'll have you know good returns for the type of projects that you're doing so i think it's great that we're deploying that kind of capital i think if you're looking for extra normal returns they could be generated in areas like adapting to or building resilience to climate change just because we're gonna have enormous need there and there's still only eight percent of anybody thinking about it and less than 500 million dollars of capital focused on it so with lightsmith's 186 million dollars we're beginning that and we hope a lot of other people will begin to think about that too um that also being said uh i think you can't stop innovation right so we're going to need all kinds of different types of technologies i would hope that people would begin to look at some of the other effects and the other impacts and considerations around climate change i think for example human health will be dramatically affected by climate change and planning for that and thinking about it is going to be a pathway to a much better future for ourselves and our kids and i don't think that's been as focused on um as could be and i think you'll see hopefully more capital going that direction

SPEAKER_71: yeah awesome where um where can people what's your check size and where can people find you

SPEAKER_73: we can be found at lightsmithgp.com and we at lightsmith are investing 15 to 25 million dollar

SPEAKER_75: checks into growth stage companies and we can scale up to 40 million plus with co-investments and we're looking for folks that can help us to understand risks and help manage risks that are being impacted

SPEAKER_73: by climate change and you know welcome folks at the early stage so we can track you and welcome

SPEAKER_162: folks at the growth stage so we can back you look at that you even have like a little rhyme ready to

SPEAKER_164: go jaco just i just dr seussed that right there for you molly really write that down luckily we recorded it so you can excellent come back and write it down later jaco thanks so much for the

SPEAKER_166: time it's great to talk to you thanks so much molly appreciate it hey everyone producer nick here i want to tell you about the sas syndicate if you're a founder of a sas company with a product and market our investment team wants to talk to you head over to the syndicate.com slash sas s-a-a-s to apply to raise from the sas syndicate and you can join jason syndicate of over 9 000 accredited investors at

SPEAKER_167: the syndicate.com producer justin here no cool startup check out openscouting.com where anyone can refer a startup to our investment team here at launch even if you don't know the founder if you're the first to flag a company for us and we decide to invest you'll get 5k in cash or 10 of our carry hey everybody

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