Investing in climate tech makes ethical sense and it might be the best-returning category in venture capital history

To learn more about Greg Smithies and why he joined Fifth Wall, check out his conversation with Co-Founder and Managing Partner Brendan Wallace during episode 8 of Building to Zero. Greg frames his experience as a climate tech investor and outlines real estate’s path to decarbonization — and where he believes climate technology can make an impact.

From rising sea levels to wildfires, a lot of ink has been spilled in articles about the climate apocalypse and why it is businesses’ ethical imperative to decarbonize. As a result, we’re starting to see cracks in the traditional business façade against making investments in climate tech. Earlier this month, 40 of the largest companies in America signed a letter urging Congress and the Biden administration to do more. …


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Source: Prometheus Fuels

Note: This story is a repost from the BMW i Ventures blog

Imagine you drive to the gas station and pump your car with gas…except, this time, your weekly pit stop won’t affect the environment whatsoever. The new kind of gasoline coursing through your vehicle doesn’t add CO2 to the atmosphere. In fact, it is molecularly identical to the gasoline made from oil — but instead of being mined from the earth, the fuel comes from existing CO2 in the atmosphere. …


A brief history of an investment in Software Motor Company

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Note: Opinions are my own, this is not an official BMW i Ventures post

BMW i Ventures just invested in Software Motor company — here’s my behind-the-scenes take on how that happened, and why we’re so excited about the company.

The Oracle of Electricity

When I first met Ryan Morris, currently Executive Chairman of Software Motor Company (SMC), it was at a dinner three years ago in San Francisco. At the time, Ryan was an activist hedge fund investor, and had been elected Executive Chairman of Sevcon, a 50-year old electric power-train company primarily focused on fork-lifts and other small industrial applications. I fancy myself something of an electrical and mechanical technology nerd, and know more about this stuff than most people in most rooms. But I was in for a rude awakening. Unlike most investors who have a light passing knowledge in a given subject, Ryan was deep in the space. Extremely deep. …


For SaaS companies, tracking the Expected Lifetime Value of a Customer (LTV) is one of the most critical key performance indicators (KPIs) that they can track, because it has massive implications on the unit economics, and therefore viability, of their businesses.

For both transactional, and recurring revenues (subscription) businesses the ratio between Customer Acquisition Cost (CAC — how much you pay to get the customer in the door), and the LTV of that customer (how much money they will deliver to you) → the CAC:LTV ratio, is the turning point that defines if they have a good business or not.

In simple terms, if it costs you $1 to get a customer in the door and they pay you $100 of Gross Margin over their life, that is probably a good business; but if it costs you $100 to get a customer in the door, and they only give you $1 of Gross Margin over their life as a customer, you should probably shut that business down. …


In frank conversations with my founder friends, entrepreneurs, and even just the startup-curious, I often hear questions along the same general theme:

  • My company is growing well, why aren’t any VC’s interested?
  • VC’s keep telling me this is a “lifestyle” business, what the hell is that?

There are also a bunch of darker things I hear (and dark tales of VC’s of yore that I’m sure you’ve heard), that, once you dig into it, you’ll also realize are related to this same theme, e.g.

“It was completely crazy, the company just needed a small bridge round, and we could have gotten to an exit, but instead the investors let it die even though they’d invested millions of dollars previously, they just let it all go down the toilet.” …

About

Greg Smithies

Investor in Climate Tech, Sustainability, Robotics, AI, Software, and Sustainability applied to Unsexy Industries

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