Experienced CEO and founder of How women leadventure capitalist and sought-after speaker on female entrepreneurship.
I believe that over the next 30 years, cleantech companies will create more value and have a greater positive impact on our planet and our economy than any other business sector. We are already seeing the beginnings of the massive transformation in the way we build and grow everything we use in the quest for net zero – from cars, to agriculture, to buildings and clothing – and this fundamental shift is having an incredible positive impact and opportunities to build wealth.
According to Larry Fink, CEO of Blackrock, companies in clean technology, aka greentech or climate technology, will “de next 1,000 unicornscompanies with a market capitalization of more than a billion dollars”, not search engines, media companies and the like. “Green hydrogen, green agriculture, green steel and green cement,” and other green technologies that fundamentally change the way we produce, will probably rank among the most valuable companies in the world.
Bill Gates has that too predicted that the return on climate investments will be comparable to that of technology companies. And while he cautions about the risk of investing in companies at such an early stage, he is confident there will be “eight Teslas, 10 Teslas.” And only one of them is, is well known today.
Women are likely to invest where they can “do good by doing good,” it said Research commissioned my organization, How Women Lead, and they are poised to invest at scale in companies they believe will change the world. From where I sit, climate technology companies represent the greatest opportunity to create wealth for women and build and scale businesses that are built for the future with talented, gender neutral, diverse organizations designed to help us go net zero. achieve in a fair and equitable way that creates more equitable opportunities for all – unicorns in so many ways.
We are already seeing this happening in the electric car industry.
Electric vehicles will be one of the largest innovation and wealth-creating industries in the next 30 years. In 2021, the industry was valued at $287.36 billion. This figure is expected to grow over the next few years to more than $1.3 trillion by 2028 at a compound annual growth rate of 24.3%.
This emerging category has several veteran female founders and CEOs leading the fundamental shift in the auto industry, including GM CEO Mary Barra, who recently promised that GM will surpass Tesla in sales of electric cars. Cathie Wood and her Ark Investment Management firm, known for their Tesla predictions, are also making bold moves. My company, How Women Invest, also invests in the category.
On the founders’ side, Factorial Energy, led by founder and CEO Siyu Huang, is a renewable energy manufacturing company that enables a sustainable future with safe, high-performance batteries for electric vehicles, homes and critical applications. Nth Cycle also focuses on batteries; led by co-founder and CEO Megan O’Connor, the metal processing technology company uses its proprietary electro-extraction technology to support battery recyclers and miners.
The women behind these and other companies are already changing industry dynamics by providing innovative technology that will advance the EV market while creating tremendous wealth opportunities. They are solving critical issues, addressing the critical issue of climate change and ensuring a level playing field for women and people of color in the industry.
For the women in the EV and cleantech industry looking to raise capital, it’s important to do your research on the venture company’s premise and the type of investments they make. Every venture company is different – some rely heavily on who else is investing in the company or who is the lead investor and don’t do much due diligence, while others focus primarily on the founder’s credibility, presentation, and coachability. Other VCs will focus their decision making heavily on who else is in the market and whether you are entering the market as a first mover or second mover, or whether you are in a crowded market. There is no right answer because different venture companies have different areas of focus. EV founders need to understand the industry standard for multiples and performance so you can wisely share your current performance against the market and communicate how you plan your strategy.
A challenge for scaling up is generating sufficient investment in the early stages. Many traditional venture capital firms are woefully behind in investing in women-founded companies, which make up the vast majority of women venture capital. This is despite study after study showing that companies founded by women bring in higher revenues at a rate of more than twice as much per dollar invested than those founded by men. I think now is the time for the company to break through the gender barrier it has created and get involved in funding the unicorns of tomorrow. Amazon and the US Agency for International Development have recognized this and recently launched their Climate Gender Equity Fund to address these inequalities.
I also encourage more women to get into venture capital as part of their investment strategy. In my opinion, women funding women will be the dynamic that creates a more equitable and profitable economy. Like a 2017 report of Angel Capital Association found that 51% of female investors think the gender of founders and leaders is very important.
For women who want to invest to get great returns and create big positive change for the planet, for business impact and for fair business, clean technology could be the answer. And from these investments – clean technology that will completely change the way businesses of all types work while improving our planet – unicorns of many shapes, colors and sizes will emerge. Because women believed in it.
The information provided here is not investment, tax or financial advice. You should consult a licensed professional for advice on your specific situation.