Like any startup industry, ClimateTech's funding landscape is convoluted, but there's more to consider.
ClimateTech is a relatively new industry and therefore many of the companies are startups. Similar to any startup industry, this space brings an oftentimes-convoluted and tricky funding landscape.
According to Climate Tech VC, “To avoid a climate catastrophe, we must invest an estimated $4T annually (just in infrastructure!) into the clean energy transition globally. This year, we invested $800b - and a mere $32b in venture capital.”
We desperately need to scale up climate investment but the funding gap is not closing nearly fast enough. Instead of focusing on traditional routes, founders need to explore all of their funding options to move fast enough and scale alongside the climate crisis.
When we take a critical look at the overall ClimateTech landscape, we can see the infinite growth and the possibilities. That being said, founders need to be strategic about where and how they are establishing their funding. We’ve outlined the traditional path that founders can take to get venture funding for their start-up companies.
→ When the founder is getting their operations off the ground.
→ This is the first official equity funding stage. Seed funding helps a company establish its beginnings: market research, product development, business trajectory planning, etc.
→ Once a company has established itself, it can try for Series A funding to help build out its product offerings. Funders at this stage are looking for founders with a solid business trajectory and a product to show for it.
→ Series B funding allows founders to scale their businesses. These companies have proven that they’re prepared for success and can now truly begin to bulk their recruitment efforts to match the industry demand.
→ Companies that have reached Series C funding are already successful businesses. Companies seek this funding to enter a new market, offer a new product, or acquire new companies.
Similarly, job seekers in this early-stage market need to take a critical look at the company and examine the risk in its funding model. These candidates should ask themselves a few key questions and weigh their comfort with risk paired with career aspirations:
While assessing risk is extremely important, it shouldn’t be a candidate’s sole consideration. We also encourage them to take a critical look at their career goals and desire to make an impact.
Early-stage startups are inherently riskier but that risk allows for more growth, financial gain, and flexibility. Getting hired “ahead of the curve” provides the opportunity for equity, business decision input, and high pay. Similarly, tech roles are often most in-demand at early-stage startups and tend to lend to higher salaries and equity packages.
Another extremely important thing to consider is the desire to make an impact. As we touched on earlier, climate companies are oftentimes early-stage startups that come with risk. However, in order to grow and scale these climate technologies at the rate needed to address the worsening effects of climate change, we need people to join in the early and “risky” funding stages.
We encourage candidates to think of climate startups in terms of supply and demand. We know that we have less than 30 years to reach net-zero emissions and in order to achieve this we need to fully decarbonize the ways that we do everything. There is an enormous amount of demand for innovative climate technologies to address the implications that coincide with climate change. Not only does this cause-effect scenario show the dire need for innovation in this space, but it displays how climate startups offer more job security than traditional early-stage endeavors.
Similarly, and more difficult to quantify, is the impact of working with passionate and sustainability-driven people. Individuals in the ClimateTech space are driven by this desire to make an impact and that offers a direct parallel to the financial wellbeing of the company.
According to BetterUp Labs, employees value salary, benefits, and company leadership, but meaningful work drives job satisfaction more than ever. Their study showed that 9 out of 10 career professionals would sacrifice 23 percent of their future earnings—an average of $21,000 a year—for "work that is always meaningful.”
All of this to say, we encourage job seekers to look big picture and consider the overall ClimateTech company’s trajectory rather than simply rejecting an offer because of the company's current funding stage. While the funding stage does directly equate to more money right now, it’s not the sole indicator of company success. We encourage candidates to weigh the funding stage as a piece of the pie rather than the full dish.
Are you wondering how to make a lasting impression after a job interview? Don't forget to send a follow-up email to your interviewer! It's a crucial step that many candidates overlook, but it can make all the difference in standing out from other applicants. To craft an effective email, be sincere, tailor your message to your interviewer, and convey enthusiasm. And don't forget about timing – send your email within one to two days of your interview to show that you're proactive and eager about the position.
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