VertueLab has its sights set on bringing green technology to market. Despite a myriad of challenges, the business development fund just secured a large boost.
Business development group VertueLab has worked with more than 100 startups hoping to bring carbon-neutral products to market. Funding from VertueLab has gone on to assist startups developing of green roofs, energy storage and energy-efficient home products. Its goal is to make green technology affordable to consumers, and this week, that goal got more manageable.
The group was awarded $300,000 by the U.S. Economic Development Administration toward launching a new fund for startups that create solutions to climate change. Despite the Trump administration's animus towards climate change policies, it appears federal economic agencies are still prepared to funnel money toward the climate crisis.
The group plans to raise $5 million in total over the coming months for the climate change business fund. It is hoping to attract investment from foundations to get the fund off the ground. Eventually it would like to attract private investment and grow to $20 million.
“We have a compelling concept to address a really thorny problem. We need more innovation focused on climate change. The climate crisis is accelerating and the measure that we’re taking today aren’t really up to the task,” says VertueLab Director of Investments Ken Vaughn
Green technology faces structural challenges to get to market. Only 2% of investment from foundations and private investors goes towards climate change solutions. “Private capital has not kept up with the need for innovation and entrepreneurship related to climate change,” says Vaughn.
“Innovations related to climate change are like hardware versus software. They sell it to slow-moving regulated markets, they take longer more technology risk, they might require more capital just to build prototype. Venture capital tends to steer away from those kind of products because they seem to be too risky and take too long to get to market.”
The organization offers development dollars to a wide range of companies at different levels of development. Instead of a traditional venture capital model, VertueLab aims to get green technology up to market scale rather than see a return on investment. The funding from the Economic Development Administration is only the beginning. It will will serve to increase staff, cover legal costs, and conduct outreach to both investors and philanthropic foundations that support efforts to limit greenhouse gas emissions.
“We’re creating a vehicle to enable philanthropic dollars to flow to companies who can address climate change,” says Vaughn. “Today, these philanthropic donations go towards policy work and legislative things. We’re creating a system which will get this money to engineers, scientists and entrepreneurs.”
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