Climate tech investments are not only an opportunity to contribute to the global fight against climate change but also a chance to achieve profitable returns. To help you navigate this space and make impactful investments, here's a step-by-step guide inspired by Federico Giannetti's presentation at the Business Angels Talks webinar on Climate Tech Investor's Handbook.

‍

Start with Education and Research

‍

Climate tech investments require a deep understanding of the sector. Study the technologies that can have a significant impact on reducing CO2 and greenhouse gas emissions. Familiarize yourself with the key subsectors within the energy sector, transportation, agriculture, waste, and more.

‍

Network and Collaborate

‍

Join climate tech-focused communities, attend industry events, and collaborate with like-minded investors. Networking will provide you with deal flow, insights, and potential co-investment opportunities.

‍

Focus on Impact

‍

Climate tech investments should directly mitigate or remove emissions, help adapt to climate change, or provide valuable data for understanding the climate. Look for startups that have a clear strategy for achieving these goals.

‍

Emphasize Hardware Solutions

‍

While software plays a role, impactful climate tech solutions often involve hardware components. Hardware-based startups may have a higher potential for reducing emissions and delivering substantial returns.

‍

Diversify Your Portfolio

‍

To cover a wide range of climate impact areas, create a diverse portfolio. Invest in startups that address various sectors within climate tech, such as energy, transportation, and agriculture.

‍

Evaluate Timing Opportunities

‍

The climate tech market is rapidly expanding, leading to temporary lower valuations in some sectors. Consider entering the market during these phases to potentially benefit from later valuation rebounds.

‍

Implement Due Diligence

‍

Conduct thorough due diligence, including technical evaluations, climate impact assessments, and financial analysis. This will help you assess the viability of a startup and its potential returns.

‍

Align with European Union Taxonomy

‍

Consider investments that align with the European Union's taxonomy for sustainable activities. This alignment can open opportunities for additional grants and government funding.

‍

Monitor and Report Impact

‍

Regularly review and evaluate the environmental impact of your portfolio startups. Demonstrating reliable impact reporting will be essential for future investments and stakeholders.

‍

Plan for Shorter Exit Timelines

‍

Climate tech startups may offer faster exit opportunities compared to traditional VC investments. Prepare for exits within a few years, as some startups may be acquired early in their lifecycle.

‍

Remember, investing in climate tech startups goes beyond just financial returns; it's about contributing to a sustainable future for our planet. By following these guidelines and staying informed about the latest developments in climate tech, you can become a successful investor in this critical and rewarding field.

‍

This article has been written inspired by a talk by Federico Giannetti, Leader of COREangels Climate, during a 2023 Business Angels Talks. Business Angels Talks are monthly online webinars for angel investors.

‍