Why I Joined FullCycle
By: Tatiana Koffman
I am proud to say that I am part of a generation that wants to do good. But as a very smart friend of mine once said, “choosing how you do good in this world, is a very personal decision.” From tackling race and gender discrimination, to human trafficking, to education, to basic human rights, the choice of HOW to do good varies person to person.
I spent my early career optimizing for stability. My immigrant parents encouraged me to go to law school and business school, hoping that I would have a steady income and become insulated from the possibility of economic chaos. I fulfilled their wishes, but as I moved through the world of investment banking, and saw the destruction left by the 2008 financial crisis, I realized there was no certainty in life. The stability I craved, did not exist and I pushed myself to find a new path.
After working as a VC for a rock band and running my own start-up, I entered the world of blockchain. What I loved about this nascent industry is that it sought to create solutions for global problems affecting all people regardless of location and socioeconomic status. It gave hope that perhaps for the first time in history, the answers to humanity’s most significant problems were not with our governments but instead with our communities and with the private sector.
One such global cause that has come up frequently in my search to do good was climate change. To me, however, climate change seemed too big of an issue to comprehend. Too cataclysmic. And perhaps not urgent enough. Like most people, I use plastic bottles too often, enjoy an occasional steak, and don’t keep track of my carbon emissions as I zig-zag around the world. Even more honestly, I never thought about this issue because I assumed someone else would solve it.
The climate change narrative continued to come into my life.
As the frenzy of blockchain continued and large Bitcoin mining outfits expanded, the need for clean energy became obvious. In fact, Bitcoin mining consumes a whopping 1% of the world’s electricity, or more than the State of New York, or 159 individual countries. And one Bitcoin transaction can use enough electricity to power 1.5 American homes for a day.
Hearing about natural disasters became more frequent. The Woolsey Fire destroyed 400 homes in Malibu, a 15-minute drive from my home in Los Angeles. Just last month, a ‘bomb cyclone,’ caused a flood in the midwestern states of Iowa, Missouri, Nebraska, and South Dakota creating an agricultural loss of over $1 billion.
The impact of climate change is not slowing down. According to a U.N. climate report released earlier this year, the world has only about 12 years to roll back carbon emissions and avoid the worst impacts of climate change — which will negatively affect our air quality, our water supply, and our GDP.
As the crisis moved closer and closer to home, I started looking at projects in infrastructure, smart cities, and renewable energy, where I could apply my skill set while still making a difference.
I first met Ibrahim AlHusseini a little over a year ago. I was immediately impressed by his track record as an early investor in Tesla, Uber, Aspiration, and Bloom Energy. He seemingly took the profits from a business he started in college and developed the midas touch as an investor. What was even more captivating, however, was his desire for his work to benefit everyone around him.
Ibrahim was starting his third FullCycle fund at the time, which traditionally invested in waste-to-energy and other clean energy assets. The dream for this fund, however, was much bigger. He believed that if we deployed enough capital into certain assets (think waste, water, food, and electricity), we could solve for the harmful effects of climate change.
FullCycle was the first climate thesis I saw based on infrastructure and sounded familiar. The majority of “old wealth” in North America was created in the late 1800s through old world infrastructure such as railroads, oil, steel, electricity, and cars by Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, Thomas Edison, J.P. Morgan, and Henry Ford. The track record of these businessmen is impressive, but what is even more notable, is that the infrastructure they created is still used more than 120 years later.
As the global population increased, so did our use of that infrastructure, causing ALMOST irreversible damage to the planet. Today, shifting to a low-carbon economy represents a similar multi-trillion dollar infrastructure opportunity. The combined markets for renewable energy ($297 billion), energy storage ($2.5 billion), green buildings ($388 billion), climate-smart urban transport ($288 billion), water recycling ($23 billion) and municipal waste management ($160 billion) are worth more than $1.1 trillion.
So what do we actually do at FullCycle?
FullCycle is an investment firm that is reversing the effects of climate. We do this by investing in the next generation of infrastructure designed to deliver a low carbon future. We act as both an equity investment vehicle, taking substantial ownership stakes in our portfolio companies, AND as a project finance vehicle. Simply put, FullCycle is making it more profitable for investors to restore climate change than to cause it.
An example of our work is our Waste-to-Energy portfolio company Synova. Synova converts any type dry waste, including plastic (yes even those pesky plastic straws!) into energy or fuel. We help Synova scale from 10 projects to 100 to 1000. Each project comes with a 20-year power purchase agreement, making sure our returns are protected. At full deployment, this company will abate one gigaton of carbon annually from the atmosphere, or the equivalent of 400,000 Olympic sized swimming pools.
Our secret sauce is finding and scaling companies like Synova across other verticals including water, food, and energy storage. We don’t invest in early-stage companies, as the current state of the planet does not leave us enough time for experimentation.
Climate change doesn’t affect everyone equally. Extreme weather events, such as fires and floods cause deterioration to infrastructure and stressed ecosystems, magnified by the growing wealth divide. Those with lower incomes have a lower capacity to prepare for extreme weather events and fewer resources to rebuild.
FullCycle’s introduction of new investment tools will help democratize wealth creation and mobilize the world’s largest stakeholder community to restore our climate. These new instruments will utilize some of the latest financial technologies available, including but not limited to the distributed ledger. Why? Because we believe that restoring our climate represents the greatest investment opportunity of our lifetime, and we want to share this opportunity with others.
Yes, we are in the business of creating wealth for our investors. But more importantly, we are in the business of making the world wealthier (and healthier), as a whole.
I invite you to join me on a journey, not of idealism, but radical pragmatism.
Follow the FullCycle journey here.