Fellowships in Climate: De-Risking your Climate Tech Startup
(Editors note: This is part two of a two-part series. Part one here.)
by Mike Argosh and David J. Neff
Do you have an ambition to build world-changing technology that addresses the climate crisis…..but don’t know what to build?
That is admirable. Please stop reading here and put yourself in a position where you can build a unique set of skills, market intelligence, and/or relationships in a vertical relevant to the business of climate.
If you are already in possession of said skills, knowledge, and/or relationships and are ready to get started, a fellowship program can be an ideal source of initial funding and learning to de-risk the initial phase of your entrepreneurial adventure.
What the F(ellowship)?
For the purposes of this article, when we say “fellowships”, we are talking about climate tech business fellowships. Not an academic fellowship like a Fulbright or an NSF Research Fellowship.
Fellowships are programs that invest money and resources into individuals and technology or ideas. Which differs from an incubator / accelerator / or even a pre-seed investor who are typically investing in teams and companies. Key difference being around the evaluation metrics used by, and motivations of, the funder.
A fellowship will likely evaluate an individual’s academic record or professional achievements and the merit of some research topic or idea.
Fellowship programs are not typically seeking a financial return. Some are publicly or philanthropically funded to advance science and technology development for the betterment of society. Some are run by commercial entities to de-risk or build a pipeline of future investments.
Incubators / accelerators / pre-seed investors are trying to build successful businesses. So evaluation will be all of the above plus the commercial and execution potential of a given team and business concept.
Fellowships : Fellowships invest in individuals and tech / ideas
Incubators/Accelerators : Incubators invest in teams and companies
Launching in climate tech via a fellowship
Commercializing science-based / hardware technology addressing the climate crisis is a capital-intensive journey. Successful climate entrepreneurs must systematically de-risk both the technology and the markets they are selling into as fast as possible. This process can span years (compared to months for software), where the company is unlikely to be earning revenue.
For that reason, successful “tough tech” entrepreneurs are experts at leveraging various flavors of capital. The best type of capital to fund these pre-launch, non-revenue generating, de-risking activities is non-dilutive capital. Fellowships (alongside federal, state, and corporate R&D grants) are a great source of non-dilutive (or low-dilution) capital.
It is common for founders of tough tech climate companies to have a scientific or academic background, with the startup being their first foray into business. Fellowships are a way to lower the bar of business acumen required to initially fund your idea. Fellowships typically offer dedicated coaching such that participants are equipped with the business skills required for the next phase of commercialization.
The following are some benefits of climate tech-focused fellowship programs.
Learn how, before you’re measured on it
If you’ve made an amazing technical breakthrough in your scientific research that you would like to commercialize, but couldn’t tell the difference between an LLC or a C-Corp, fret not, fellowships may be a perfect place to start your company building journey. Fellowships, like many accelerator programs, provide a set of programming on the skills (technology de-risking, pilot development, go-to market strategy, customer discovery, team building & hiring, fundraising, etc) required to start a climate tech company. Because fellowships target founders before they have started a company or at inception, these programs provide judgment-free coaching. And most importantly, you can fund the early months of company building, without having to demonstrate aptitude in company building.
Ensuring there is a market for your tech
Defining a beachhead market, building a pipeline of early adopters, and eventually inking a first pilot customer can be particularly challenging for climate technologies that are building for a new, decarbonized market or replacing a very expensive piece of equipment in a high-value industrialized process. Contrast this with the fact that even your very first investor will want to see a clearly defined go-to market strategy validated with real customer interactions and proxies of demand. Leverage fellowships for early market de-risking. This can be one of the most impactful functions of a fellowship program. Not only because you can be compensated for this upfront market diligence, but also because programs can facilitate introductions to these potential customers and/or market experts to aid the development of a go-to-market thesis.
Connection to co-founders, customers, collaborators
If you want to build a tough tech company, find at least one co-founder with complimentary skills and a shared vision, before you start building. But if you are still not sure on whether you want to start a company, and are a solo technical inventor, a fellowship program is a great venue to meet reputable co-founder candidates.
If someone is not already in your network, finding the right person can take time. Like months and months of meeting and ‘dating’ time. Akin to a marriage, co-founder selection is the most important decision you will make in your company-building journey. This is something that David learned from the start in his first FinTech startup. Get help from a fellowship program to screen others and credentialize yourself. Beyond co-founders, programs may pair fellows with advisors or industry collaborators. Cultivating these connections can help accelerate the path to finding a first customer or a pre-seed investor. So let’s dive in.
Fellowships for Climate Tech Entrepreneurs
Activate Fellowship (Technical Founders)
For: Aspiring climate founders with a technical / science background and research or IP they would like to commercialize
Funding: $300,000 (non-dilutive)
Length: 2 years
Details: The two-year Activate Fellowship provides early-stage science entrepreneurs with funding, technical resources, and unparalleled support from a network of scientists, engineers, investors, commercial partners, and fellow entrepreneurs.
Link:https://www.activate.org/apply
LabStart Fellowship (Technical & Non-Technical Founders)
For: Aspiring technical & non-technical climate founders who want to spin out lab technology from government labs.
Funding: $100,000 (in form of a SAFE)
Length: 1 year
Details: LabStart helps reduce friction to commercializing lab technology by helping entrepreneurs overcome structural, policy, and financial barriers. The LabStart Fellowship helps diverse entrepreneurs launch startups from National Lab climate technologies. You will need to either pick from a pre-selected list of national lab IP or bring your own IP from university.
Link: https://www.labstart.xyz/apply
776 Fellowship (Technical & Non-Technical Founders)
For: 18–24 year olds with a climate change project idea.
Funding: $100,000
Length: 2 years
Details: The 776 Fellowship is a two-year, full-time program for 18–24 year olds, across the world. Fellows will receive a $100,000 grant over two years to work on projects to fight climate change instead of pursuing a university degree. David has spoken with this group many times and would be happy to connect people.
Link: https://www.776.org/
Department of Energy — Lab Embedded Entrepreneurship Program (LEEP) (Technical Founders)
For: Aspiring climate founders with a technical background and scientific research they would like to commercialize.
Funding: $300,000+
Length: 2 years
Details: This program has multiple cohorts at various National Labs. Some of these programs include: Chain Reaction Innovations (Argonne — where David is an advisor), Westgate (NREL), Innovation Crossroads (Oak Ridge). These programs are a two-year funded fellowship that will help founders take emerging technology into the market. Early-stage startups embed at respective national lab and are mentored by a lab scientist. The programs also provide local, regional, and national ecosystem support including business entrepreneurship training to eliminate the hurdles traditionally faced by early-stage cleantech startups. Typical candidate has a PhD.
Link: https://www.energy.gov/eere/ammto/lab-embedded-entrepreneurship-program
Breakthrough Energy Fellowship (Technical & Non-Technical Founders)
For: Aspiring climate founders with a technical / science background and research or IP they would like to commercialize OR experienced executives looking to explore climate opportunity spaces
Funding: $100,000
Length: 1 year
Details: The Fellows program is designed to tackle early-stage barriers to climate technology innovation, accelerating discovery and increasing the number of projects and companies working toward commercialization. By providing innovators with research funding and hands-on support, our program ensures projects have the resources and community they need to advance to the next stages of development. The Breakthrough Energy Fellows program has three pathways: Innovator Fellows are world-leading scientists and engineers who enter the program with critical climate technology to commercialize. Business Fellows are experienced professionals with tech commercialization skills who support the Innovator Fellows in accelerating their path to market. Explorers receive funding for earlier stage, higher technical risk endeavors. These projects are typically led by scientists at university labs or research entities.
Link: https://breakthroughenergy.org/our-work/fellows/
Chevron Studio (Technical & Non-Technical Founders)
For: Aspiring technical & non-technical climate founders who want to spin out lab technology
Funding: $40,000
Length: Phase I (3 months); next phases over 12–24 months
Details: Chevron Studio is a one-of-a-kind program designed to help entrepreneurs build companies by linking them with world-class, early-stage technologies developed at national labs and universities. You will need to pick from a pre-selected list of technologies.
Link: https://chevronstudio.com/apply/
What did we miss? Want to add something? Let us know in the comments below!
