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The first six months of Cleantech Bridge - two „old hands“ sharing a new journey

Six months ago, Tobias and I founded Cleantech Bridge Equity Advisors to help address the challenges of „First-of-a-kind“ financing of cleantech innovations.


What did we learn during this time?


It is a lot of fun to work with an absolute pro as a partner! Mutual trust, openness and advanced pattern recognition are our super-powers as a team. We skipped „learning it the hard way“ in so many situations because we both paid that price already earlier in our individual entrepreneurial careers. Recognising patterns and enabling better judgement are unfair advantages available to experienced founders as long as they stay curious and continue to update their know-how. We feel this every day in our work together.


During the last half year, we spoke to a broad range of very inspiring people, from entrepreneurs, scale-up founders to family office investors, from VC’s to private equity or fund leaders of all kind. Our industry recognition and network made it easy to connect and opened many doors.


Some of our key findings:


The pain point that triggered our entrepreneurial venture is even bigger than we expected

Cleantech innovations find very few suitable financing solutions as they need entrepreneurial capital at the beginning, followed by smart asset-equity in order to scale. This combination is rare.


Funding silos in need of breaking The finance world continues to be organised in very distinct „buckets“ of capital. That is a challenge for the type of innovation we need to bring into the world. At the same time, the fallacy that „capital is capital, wherever it comes from“ seems stronger than ever among founders. Even the people working in different types of funds and institutions have surprisingly little in common with each other. Case in point: when we connected the infrastructure and the venture people in the same large investment house for the first time, it felt like a „Mars and Venus“ event.


Consumer finance is the (wrong) go-to solution Scale-up companies in cleantech are often forced to compromise instead of developing a robust funding solution that can scale and function long-term. Consumer finance has become the „go-to“ approach for companies selling cleantech hardware such as heat pumps, solar systems, batteries and charge points to private customers. This shifts the lifetime risk of these systems to the customer. They buy a 20-year energy asset as if it would be a couch. With the difference that the couch has a little less in „technical failure risk“ and the impact of having a defect couch may be felt less than being without electricity or heat. Shifting risk to the unassuming consumer is an easy solution for the companies selling these systems (for now) - it is a risky proposal for the buyer and for the investor backing the purchase.


The robust, but more complex alternative An asset-based leasing structure would be a much more robust solution, but as it considers the risk, reserves and services needed to keep the system going for 20 years, it is also more complex to set up and more expensive at first sight.


VC may be the wrong source of capital for asset-heavy scale-ups While Venture Capital has an important role to play in the startup ecosystem, VC money may not be the best source of funding for asset-heavy scale-ups. At the same time, few other investors are there to fill the void, so startups and scale-ups are driven into the „asset-light“ trap by their VC owners, foregoing the true potential of their products and systems. Venture capital lacks patience and the return requirement is simply too high for an asset business. Specialised asset equity with a path to de-risking over time is the better solution and that is where we have turned our attention to in the first half year of Cleantech Bridge.


Debt can’t solve equity risk Another narrative we encountered numerous times was the attempt by scale-ups to engage banks and other debt providers as well as infrastructure funds in taking perceived elevated technology risk. This is futile. The key piece of the puzzle is „First-of-a-kind“-equity. Debt providers and infrastructure funds will step in once a proven track record will help them to qualify actual risk.


Our first hire: AI Who do you hire first? In our case, we both had our „been there, done that“ moments in CEO roles years ago and were aiming for something else in our small organisation. Among the most important shared values for us are independence, learning, flexibility, mental stimulation and impact. During our first six months, we felt that we can create most value by leveraging our own experience rather than by building an organisation around it. So our first „hires“ are a bunch of AI tools we use daily, from creating meeting summaries to brainstorming concepts, researching companies and ideas, filling the blank page and keeping us organised. We feel that we don’t loose authenticity but instead achieve more in less time and without the responsibility for dependent employees. Also, our remote-first work setup in two different countries is working better than expected.


Opportunities too numerous to count

The breadth of opportunities in the cleantech space is staggering. During the last few months, we explored what it takes to clean up and electrify freight, flight, infrastructure, commercial and industrial heating and power. We shared views and co-created with so many entrepreneurs poised to make a positive impact and change the way we think about powering our future. We sparred with investors of all kinds to give perspective on the gap between perceived risk and actual risk of cleantech assets and portfolios. With our Cleantech Bridge Investment Screening Report we created a product for institutional investors that helps them better understand investment opportunities by giving them expert guidance. We invested as business angels and gave advice to founders and fund managers alike. What a cool job we have created for ourselves ;-).


**The best of all: we are just getting started**.


Thank you for following us on the journey so far. Please don’t hesitate to comment or reach out if the topics we are passionate about resonate with you.



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Tobias and Christian

We build Cleantech Bridge Equity Advisors based on our first-hand experience in driving innovative cleantech business models and connecting investors with new asset classes.

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