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Hello again for those of you who are just joining us now for session.

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My name is Kathryn Graddy I'm. The Dean of Brandeis International Business School, and the Fred and Reader Richmond distinguished Professor in economics.

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Our next discussion in the Trends and Asset Management Conference will focus on the role of venture.

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Capital funds in spurring, sustainable innovation.

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Modern. This discussion will be Brandeis international business schools, own Debars. Nandi. Debarshi is the Barbara and Richard M.

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Rosenberg, Professor of Global Finance, the director of our Master of Science and Finance Program, and the Code Director of the Rosenberg Institute of Global Finance.

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In addition to a member of our asset Management Council, Debarshi will be joined by panelist.

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Tansel Ismail. Jane Karen's Josh. Lerner and Laura Lindsey.

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10 cell is a vice president at energy impact partners.

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Jane is partner at evoke innovations. Josh is the Jake Jacob H. Shift, Professor of Investment Banking at Harvard Business School, and Laura is in the department of Finance is the Department of

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finance chair and the color family endowed Professor at Arizona.

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State universities. Wp. Carey. School of business, Debar Sheet.

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The floor is all yours. Thank you. Thank you, Katie.

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For the introductions, and if I may quickly add, welcome to Josh Jane Laura and time cell great to have you here as Dean Graddy mentioned.

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You know, Tansel is at energy and back partners, which is a multi-stage venture capital firm with about 2 billion Au. M.

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Under management and focuses on conservation in the energy industry.

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And towards decarbonization and an electrified future.

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Jane is a partner at evoke innovations. and she is a leader with great decades of experience in clean technology, sustainability, and venture capital.

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And she herself is co-founded, and exited a renewable energy company as well.

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Professor Josh Lerner is has been the champion for venture.

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Capital innovation, entrepreneurship, research in academia, globally and for many of us in Academia, and certainly personally for me Also, his extensive research has, you know, inspired us to kind of get attracted and

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look into different issues in this area. So welcome, Josh.

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Great to have all of you here. Laura is the as you know, being ready mentioned, she's the share of the department, and also the customer.

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Fabulous professor at Arizona State University, and the addition to her interests in entrepreneurship, capital, and private equity.

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Laura also has a lot of research interest in

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Governance from governance in ESG in particular, and also on the boundaries of firms and in financial contract too, welcome everyone.

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Welcome, Laura. Great to have you here. So we are going to start off with a presentation from Josh.

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Who will tell us about the big challenges and opportunities? in

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The venture capital space, as it relates to sustainability and clean energy.

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Josh over to you. Thank you very much for the opportunity to talk here and to and i'm gonna share my slides a little.

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Anxiety written here in terms of the technology. But you know, such as the nature of the Zoom mirror

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Think we're just gonna live with live with this and not try to push it any further, lest they could be the enemy of the could be the enemy of the great, which is usually the case in most my zoom expert teaching expeditions.

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You just do a little more adjustment, and then things go completely.

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Hey? wire. So let me just you know sort of frame the discussion.

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We're gonna have here with a couple of things the first is Demarse promised is that I am an enthusiast for venture

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capital. And I think what we're gonna show to start off with is just how influential venture capital really is.

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So that essentially, and keeping this in context, you know essentially in a typical year in the United States, less than one half of 1% of companies receive venture capital for at any given time.

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But as we'll see the impact of venture capital is huge and much of that impact seems to be causal, not just simply accidental, but the same time I don't I think it's possible to overstate

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things and sort of you venture as a cure.

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All, and in particular i'll highlight some of the sort of potential limitations, so that are there that we need to be aware of as as well.

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One way to sort of start is to sort of begin by just thinking about that one half of 1% number, and contrasted with the share of companies that have gone.

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Public. This essentially looks companies which went public, which are, which went public between '95 and 2019, and then takes snapshot of those companies, the ones which survive to the end of 2019 and it highlights

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that essentially, from that one half of 1%, Essentially, half the companies are ones that ended up being the venture back.

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So these are incredibly likely to be successful as companies, and particularly striking is when you look at the statistics in terms of young companies, you see things like 70% of the public market capitalization of young companies is that subset of

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venture back companies even more striking. If you look at R and D by being done by young companies, almost 90% of the R.

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And D. that's being done is essentially being done by the venture backed subset of those young companies so hugely influential in terms of the kind of consequences that he has for innovation in the United States we can see this in

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a bunch of other ways. One way is to simply just simply contrast the patents of companies that are backed by venture capital with the ones that aren't back by venture capital.

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And essentially, when you look at citations which is often an indication of importance, you know, you see, they're almost 5 times more likely to be in the top 1% close to the intellectual frontier and close to science various measures

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of path breaking, you see very much you have this kind of sense that not only is there more innovation taking place, but it's really important innovation that's taking place.

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So an increase in both inputs and outputs moreover, it seems to be a causal relationship.

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It's not just simply that the venture capitalists are showing up at the right place and giving money to companies that would have been successful anyway.

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So one fastening study that was done by my colleague, Shy Bernstein, along with a couple of co-authors recounts.

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And then Saviour looked at essentially situations where you had a venture capitalist who had a ready funded a company in another city.

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But where there wasn't a direct flight between where the venture capitalist was located, and that city, the addition of the direct flight basically meant that venture capitalist ended up coming, spending more time with those companies 200

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presumably they don't like to change planes any more than we do, and it basically turned out to the companies.

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As a result, we're more innovative and we're more likely to be successful, like going public.

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So again. it's sort of consistent with this notion that it's not just simply you know, some selectatory, but it's really hands on value added in terms of the process that there at the same time we know there are concerns

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so good, Peter, and bad Peter here's good Peter saying making the point that you know, venture capitalists didn't fund didn't fund a lot of stuff that they should have funded you can see it in the data so

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here's some compilation that my colleague Ramen Andanda did of looking at basically what was the funding in 2,010 and 2,019, and venture capital.

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I mean. one thing we see is, there was a lot more in 19 than of 10.

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If we look at the bottom line energy materials and resources right that's the red that's not really budged right right.

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The yellow, the hardware? it's not really budge very much at all.

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Where's all the growth? men? it's been in the it services you you know the web enabled consumer products and services and business products and services right?

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That there's been this sort of tremendous growth there and that this sort of corroborates in some sense the the the team and i'm sure when the panelists join.

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They'll talk a little bit about some of the changes that have happened subsequently, both for better and for a better and for worse.

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In some sense this is not completely irrational in the past venture capitalist.

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So this is a compilation done by one of the consulting firms out there.

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Sandhale kind of metrics where they basically try to create indexes of how good you would do, how well you do with a venture investment over time.

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And if you just invested in a single industry so what they're doing, is basically taking the the portfolios of most venture funds which consists typically of a variety of industries and essentially just slicing it

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up, and basically essentially creating a pure play in a given in a given industry or index.

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And one sees that as you take it into 2020 here right that the you know the it software has been through the roof right? consumer in bad health care.

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It's done. Okay, as you get into computer hardware in a variety of other stuff.

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You're doing a lot worse. and particularly you look at that little green line at the bottom, going nowhere, and i'm afraid that's the clean tech line.

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So what this suggests in some sense is that you know this is not. You know this: This kind of disparity in terms of funding is not a totally irrational kind of thing.

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And we might think that you know the there's a variety of aspects that make you know that make the Monica tough, tech very rational, right?

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That it takes. You know, the beauty of software. You can put a little bit of money in, prove the business model and then scale it up.

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Once, you know, it works in in many of these kinds of tough tech investments.

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It takes a lot more money for things to really figure out where they work or work or or not.

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We can talk about the difficulties in terms of market structure right in saying that of the beauty of you know pharmaceuticals is got a patent, and if you're carrying the drug and no one else can cure it you

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can't carry the disease. and no one else can cure it that's worth a lot, and clearly, if you're just selling electrons, you know It's very hard to say my electrons are better than than than your electrons and

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you in in some sense, unless there's public policy intervention and we but we also might say there's some rigidities in terms of the venture industry, and that may make some of this stuff.

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You know more difficult that there may be ways that the industry can adapt it.

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Just to be more successful. Yeah, doing these kind of investments.

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And hopefully, we'll hear from the panelists about exactly that topic.

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So without further ado, let me bring my remarks to an end and throw it open for the panelist.

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Thank you, Josh. Why, don't we go around our panel, and have some introductory thoughts and comments as we start our discussion.

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Jane would you like to lead us off sure I think I have officially unmuted myself. It wouldn't be a zoom call if you know somebody didn't talk well muted.

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Hi! everybody it's really it's really nice to be here.

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As you know. i'm Jane Kearns, i'm a partner with Evok

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Innovations. We are a venture firm.

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That was fun founded in 2016 our head office is in Vancouver, but with the launch of fun, too, we now have well, we always had a bay area office, but we now have Seattle and Toronto which is where

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i'm based we're focused on climate energy energy transition and so fun!

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One was a 100 million dollar fund 15 portfolio companies, 4 exits to date, including the Canadian Venture Capital association deal with the year last year, and we've just announced the first close of our second

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funds. So that was 150 million, we're targeting 300 million for that fund.

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And focus will be on. Let me see if I can do this.

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I always forget one carbon capture. clean. fuels clean energy and grid industrial innovation materials and circulation and mobility. Yes, I did it.

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So that's broadly You know industrial innovation, energy transition, climate for sort of our our broad focus series, A fund fund one was was se fun.

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2 is series a we're happy to Leave so any of you are out there looking for it for checks and leads and you're working on technologies. that Will help us solve the climate crisis please reach out

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and then just like sorry i'm take it a long time, but just a little bit about us, because I think it's actually important to understand where we the the team come from.

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On on this and on climate. So there are 4 partners.

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We are all entrepreneurs we are all investors.

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And then we've got a team of technical experts as well.

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So basically, we have all spent time building businesses, And we come at this with the perspective of how how do you build businesses that are going to have a really important impact on the environment and climate?

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And it has Josh so rightly pointed out.

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Easy, hard tech. tough tech has a bit of a history which I think will get into.

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There are some reasons why into that are, you know, Gary.

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Important to understand and we've had a bit of a spotty track record for some. so opinions on, and i'm sure the rest of the panel.

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So yeah, just really, really interested in figuring out how we solve climate crisis.

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Our team has a long history of doing it. quick. So Mike, one partner, GE.

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Dow Come in started and polymer recycling business that he scaled internationally.

01:18:36.000 --> 01:18:41.000
Marty serial entrepreneur, longtime clean tech investor.

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Is doing for 15 years before founding evoke main account was she's our Seattle based partner.

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She was managing a hard tech venture portfolio for Bill Gates before joining a vote, and then the entrepreneur background and finance.

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And then worked at a place called Mars in Toronto, which is one of the world's largest urban innovation.

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Hubs we worked with about 1,100 companies at any one time.

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So over the course of my nearly decade there I worked with literally hundreds and hundreds of So I've seen the good the bad and the ugly, which has been you know, really important. and you know how we do this going forward Okay, i'll stop

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that was too much. I really like what I do. Apparently I talk about it too much.

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Thank you, Jane. wonderful to have you, Laura.

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Do you want to tell us a little bit about your new research, and also about your interest in the space?

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Sure so. you know I I have work in venture capital, and I have work on Esg.

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But I do not have direct work on both of them together.

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You know, on the on the one hand, my work in public markets on Esg.

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And I understand that Esd and impact investing are 2 very very different things.

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And if you're in the area you understand the nuances of the different vocabulary.

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But people outside the area don't yet and so on the one hand our work is encouraging, and so briefly what we do is we show that various screens on measures in public markets don't impact your risk return trade

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off so you can, you know, be an investor that pays attention to Esg and not sacrifice, returns

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The the the negative interpretation of what we find is either that there's a lot of capital that has no such mandate.

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So it is a priced yet, or everyone's doing different things, so that these things are not priced in the aggregate, and and that that is consistent with conversations we've had with public company, Ceos and the like as

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well what i'm seeing in in the ecosystem here in Arizona, you know, as Josh pointed out right software scales and other things require capital.

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And so it. It is harder to invest in these hard tech areas.

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If if you're a pure return. seeker but that doesn't mean they're bad investments, and so what we're seeing here is a lot of corporations. acting as lps in in devoted funds because they're the ones that are

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gonna have to solve their own problems right they're the ones who are going to bear the cost of regulation and the like.

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If if if that comes down the the line and so we're seeing chemical companies.

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Be on the first lines of venture of course it's. It's usually public funding that's on the the basic science innovations.

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So you know I I I think that the you know the kind of stack, for lack of a better term is gonna have to get organized around these sorts of problems going forward.

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Thank you, Laura. cancel over to you to tell us a little bit about yourself, and also about

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And as you impact partners. Yeah, absolutely so I'm a vice president energy impact partners, we're 2 billion dollar venture capital fund.

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Based out of New York, I think you know, as Laura alluded to us.

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You know most of our ups you know they're They're a corporation, most of them being electric utilities throughout the Us.

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And around the globe and and the thesis.

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There, you know we we came to them, saying, You know your call.

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Skill set is not is not to be venture investors.

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And so you know, pull your capital together and have us invest on your behalf essentially and and the reason that model really work with utility.

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Specifically it's because most of them they're either monopolies, or only copies.

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So they don't really care if they collaborate or share best practices of each other, because everybody has their own service territory, and they all benefit from from kind of hearing from each other.

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And so that that's our business model in a nutshell.

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You know. one thing we really look for. Normally we provide capital to a lot of these companies, you know.

01:23:15.000 --> 01:23:19.000
One big goal of our is making sure that most of the companies we invest in.

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They have an opportunity to, the, you know, commercialize their technology within our Lp base.

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So we also have a dedicated team, just do that specifically, and we're pretty flexible, like you know.

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Most of our investment will do them in the us but We chase opportunity, so we'll do stuff in Europe.

01:23:35.000 --> 01:23:47.000
We've done things in in canada as Well, and we've been around since about 2,016 we're onto our second fund, and it, you know, initially, we just had one strategy, which was mostly doing early stage

01:23:47.000 --> 01:23:58.000
visc in climate tech specifically but we we've come grown that because we realize that there's many places in the capital stack where we can play as a fun.

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So we also have the credits on. We have, you know, higher risk investment that are focused on long-term, longshot decarbonization.

01:24:06.000 --> 01:24:18.000
Funds to invest in in my minority founders fund specifically for Europe and asia. so I think we we've we've brought in our strategy to make sure, because we're seeing a lot of

01:24:18.000 --> 01:24:23.000
innovation happen, and I think especially these last 2 years we've seen a ton of activity in the space.

01:24:23.000 --> 01:24:35.000
So. Yeah, I think it's it's a great time to be in venture, and it's an even more exciting time, you know, to invest in in climate tech Thank you thanks for your time.

01:24:35.000 --> 01:24:46.000
So. why don't we go back josh to the the data that you presented and I think all of you kind of alluded to as well.

01:24:46.000 --> 01:25:05.000
So in in thinking about. why clean, clean, tip investments haven't really, you know, or at least being as as as growth oriented as that, that, use an it in or in other fields is there and you know

01:25:05.000 --> 01:25:11.000
Is there a a place here for more public private partnership type?

01:25:11.000 --> 01:25:31.000
Funds to come in to. perhaps mitigate the early stage risk, or perhaps in some of the ways to Get Get this jump started, Josh: why don't we start off with with you and Then

01:25:31.000 --> 01:25:45.000
There we go. So I think it's a great question I mean, I think that certainly you can look at a lot of areas, within you know, climate and impact investing, and point to one piece of public policy.

01:25:45.000 --> 01:25:51.000
That pretty much. every economist degrees is something that would be a great thing to do.

01:25:51.000 --> 01:25:56.000
It also seems to be completely impossible, which is obviously putting a real price at carbon.

01:25:56.000 --> 01:26:09.000
That reflects the you know the sort of social externality sort of the negative social externalities associated with with the carbonization of the world, right?

01:26:09.000 --> 01:26:20.000
And you know, one can think about a lot of areas you know One of the areas that we've had a student team, and we've been trying to do some reach our child which is forest conservation.

01:26:20.000 --> 01:26:28.000
Finance is a great option of this, you know. Essentially, if you want to do an investment in forest, you know Right? you get.

01:26:28.000 --> 01:26:30.000
You know these sort. you can get these tiny carbon credits.

01:26:30.000 --> 01:26:38.000
You can get, maybe do a little timber cutting. you do some selling off some conservation restrictions, and so forth.

01:26:38.000 --> 01:26:50.000
But just the economics of it just aren't really Very good right, and you know, until there is sort of more of a real price on carbon, it can be very hard to do that.

01:26:50.000 --> 01:26:53.000
Now it's not to say that there haven't been relevant investments done so.

01:26:53.000 --> 01:27:09.000
There was a fascinating company funded that basically is using you know, lower satellite data to try to monitor deforestation, and even seeing the quality of what's grown, because you know one of the points that's made

01:27:09.000 --> 01:27:15.000
is that a lot of the the You know the the offsets that are done?

01:27:15.000 --> 01:27:22.000
People not just, you know, very inappropriate trees which die very quickly, and so forth, and there's never any kind of follow through them.

01:27:22.000 --> 01:27:29.000
I have to run on it. So sort of there you say here's the case where it's really more of a you know it, style investment right?

01:27:29.000 --> 01:27:38.000
It's really software that's the crucial engine that's allowing one to at least shed some light on.

01:27:38.000 --> 01:27:47.000
You know, a big, complicated kind of problem without having the the carbon pricing, but it, it seems like certainly that would be the most direct solution to.

01:27:47.000 --> 01:27:55.000
I think a lot of what We've been talking about is challenges here.

01:27:55.000 --> 01:28:03.000
Thank you. Jane. so you know just yes, I I don't.

01:28:03.000 --> 01:28:07.000
I don't have a lot more to say on carbon pricing like.

01:28:07.000 --> 01:28:12.000
Yes, we need. We need a price on carbon if We don't start pricing those externalities.

01:28:12.000 --> 01:28:19.000
It, it becomes incredibly complicated to meet our climate targets and frankly, it's existential.

01:28:19.000 --> 01:28:31.000
So. Yes, we need a price on carbon. I guess i'll also approach it from a slightly a slightly different angle, which is we?

01:28:31.000 --> 01:28:36.000
We have a lot of these technologies. you know, through various stages.

01:28:36.000 --> 01:28:42.000
Venture capital. A lot of the technologies have actually been largely derived.

01:28:42.000 --> 01:28:49.000
The challenge comes when we get to the deployment side of things.

01:28:49.000 --> 01:28:59.000
And you know, if we don't deploy the technologies they don't have the impact that we need So So you know, deployment and execution becomes super critical and a lot.

01:28:59.000 --> 01:29:06.000
Of the you know th this comes down in a lot of cases to project, project or infrastructure finance.

01:29:06.000 --> 01:29:10.000
Those are large dollars that come from places like pension funds.

01:29:10.000 --> 01:29:15.000
And they are inherently risky. They are managing or risk ofverse.

01:29:15.000 --> 01:29:25.000
They are. They are managing people's retirement income so you know we've got this we've got this gap that we see

01:29:25.000 --> 01:29:32.000
Between, you know, getting the getting the technology development developed and then getting the technology deployed.

01:29:32.000 --> 01:29:38.000
So I think there's a role in there for government perhaps for philanthropy.

01:29:38.000 --> 01:29:43.000
The the tax laws are different in the us then in Canada in Canada.

01:29:43.000 --> 01:29:56.000
We can't actually use philanthropic dollars in that way yet that you can in the States So, as a way to offset risk to enable the private capital to flow into the sector, because frankly we can't

01:29:56.000 --> 01:30:01.000
do this all with government dollars or philanthropic dollars.

01:30:01.000 --> 01:30:07.000
We need the entire capital stack, like everybody, needs to be playing in order to be able to deploy these technologies.

01:30:07.000 --> 01:30:15.000
Yeah. So so I think there's a I think there's something there that needs to be explored.

01:30:15.000 --> 01:30:20.000
Further, which is, how do we de-risk deployment?

01:30:20.000 --> 01:30:27.000
So the private case we'll continue to to flow in or start to flow in and find the execution of these projects.

01:30:27.000 --> 01:30:34.000
Thanks, Laura, moving on to you. what do you think?

01:30:34.000 --> 01:30:41.000
From the public market perspective. you know. Do you see that,

01:30:41.000 --> 01:30:47.000
Is there any connection of corporate companies setting up? See arms?

01:30:47.000 --> 01:31:00.000
Perhaps in this particular space I I haven't seen that directly yet. but you you know you've seen you seen corporations, you you know.

01:31:00.000 --> 01:31:02.000
Put a little bit of money to work right because they have to.

01:31:02.000 --> 01:31:09.000
You know, in i'd be curious from the other panelists, what the differences are in us versus Europe right?

01:31:09.000 --> 01:31:15.000
So companies that operate and you're okay to adapt to different standards than here.

01:31:15.000 --> 01:31:23.000
You you know, on the public side I Another encouraging thing that one can see from the data is there.

01:31:23.000 --> 01:31:43.000
There has been a massive taste change over the past you know, decade or so, so that there there were higher realized returns for companies that implemented what whatever it was that led them to have good scores by the various agencies but that doesn't

01:31:43.000 --> 01:31:47.000
mean that they're gonna have a different sort of expected return profile going forward.

01:31:47.000 --> 01:31:54.000
So you know we're we're seeing interest rather than leaps, I guess, is how I would characterize it.

01:31:54.000 --> 01:32:03.000
I I Maybe the Us. can learn policy directors from elsewhere in the world.

01:32:03.000 --> 01:32:10.000
Thanks. Chancell going over to you. you you your company works exclusively on energy.

01:32:10.000 --> 01:32:22.000
And so we also see that there is a lot of clean energy patents that that are filed by you know all in gas companies, for example.

01:32:22.000 --> 01:32:28.000
And however, obviously on the Esg: metrics.

01:32:28.000 --> 01:32:34.000
They are not at all ranked and do you work with

01:32:34.000 --> 01:32:38.000
Do any of them? Are any of them lps in your funds?

01:32:38.000 --> 01:32:41.000
Or do you see them taking an active interest in this space?

01:32:41.000 --> 01:32:53.000
Yeah, I I would say yes to both so absolutely I think when I when I started doing climate tech investing about you know, 4 or 5 years ago, I don't think it was as prominent. but I would say really over the last 2 years I think what did you

01:32:53.000 --> 01:33:01.000
see, maybe, who's something like 8 or 9 oil majors committed to net 0 by 2,050, which is something, you know, 5, 10 years ago.

01:33:01.000 --> 01:33:07.000
You never thought about their denying climate change. so they're definitely, more, and they have a lot of capital. right.

01:33:07.000 --> 01:33:19.000
These companies are spending 2550,000,000,000 each a year on capex, So they have a lot of capital to throw these problems, and we've seen most of them, you know, spin up their own You know, quite venture capital arm So

01:33:19.000 --> 01:33:24.000
for example, shell has one chevron has one and they're pretty active sometimes, you know.

01:33:24.000 --> 01:33:38.000
We've co-invested with them on deals. they also, you know, they invest a lot whether either at the very early stage, so that billing lesson startup companies that will invest in utility scale projects like you know solar

01:33:38.000 --> 01:33:49.000
wind offshore wind things like that they're Also, investing a lot in in charging infrastructure, cause they're realizing their business models gonna get disrupted.

01:33:49.000 --> 01:33:54.000
I think now You are a point where it's not is that you know they're not the wondering is this going to happen.

01:33:54.000 --> 01:33:58.000
They know it's going to happen so you know they're being pretty aggressive about it.

01:33:58.000 --> 01:34:03.000
So yeah, I think net net it's positive but you know they're still very, very big polluters.

01:34:03.000 --> 01:34:16.000
And the other thing we're seeing you know there's a little bit of friction between you know utilities and all, and gas companies, because eventually both of them are gonna be in the business of selling electricity.

01:34:16.000 --> 01:34:24.000
Once we kind of roll off of of all this oil and gas? and that said so. then the question is, you know, who is gonna own stuff like your charging infrastructure.

01:34:24.000 --> 01:34:29.000
Is it the city? Is it the utility is it the oil and gas company?

01:34:29.000 --> 01:34:36.000
So it's it's a very interesting time and even you know. I think you'll see it we've been with the car manufacturers everybody's going to electric.

01:34:36.000 --> 01:34:48.000
They're making all these commitments so you're seeing all these historically big polluters coming into this space because they realize that their business models is being disrupted and need to look at companies like tesla you know which

01:34:48.000 --> 01:34:53.000
have huge valuations, and the public markets are receptive to it, and all these, you know, c.

01:34:53.000 --> 01:34:59.000
Suite executive are thinking, you know, we need to do something like this to see a nice up there lift in our stock price.

01:34:59.000 --> 01:35:10.000
So I think. you know people are voting with their wallets and they're seeing that decarbonization is is is the is the new thing, and it's a massive opportunity I think is something like if we go next 0

01:35:10.000 --> 01:35:24.000
by 2050. it's something like 5 trillion dollars a year in spent. So it's gonna be a massive opportunity for a lot of companies and a big big well transfer or the the next 30 to to 50 years great Okay,

01:35:24.000 --> 01:35:30.000
so my summary so far. very, very briefly, is we?

01:35:30.000 --> 01:35:42.000
We. We know that the is a lot of big players in in this space the incumbents in the public markets who have apparently a lot of capex and potential investment that they can bring to the table.

01:35:42.000 --> 01:35:53.000
Yet the puzzle seems that, on the on, on, on the private, in the private markets, we do not observe that investment.

01:35:53.000 --> 01:36:00.000
We do not observe that investment in early stage technologies and startups at the scale.

01:36:00.000 --> 01:36:09.000
That we have seen in the other sectors. What are your thoughts on that?

01:36:09.000 --> 01:36:16.000
Why is this? Why is this happening? Can I throw in my heap in the ring here? and

01:36:16.000 --> 01:36:21.000
I would be really interested in hearing Tansels thoughts about this as well.

01:36:21.000 --> 01:36:33.000
As well as the other panelists which is you know it's It's certainly seems like there is just sort of disconnect between the kind of innovation that we normally associate with clean tech and you know

01:36:33.000 --> 01:36:36.000
Sometimes what we think about is big utility, kind of thing, innovation, right?

01:36:36.000 --> 01:36:46.000
Where, you know things are being operating at, you know. quote, you know, reliability standards of 99, point, 9%, and so forth.

01:36:46.000 --> 01:36:56.000
And here, right we know that the modal outcome is failure, and often it's I mean it just seems from you know whether case studies or more.

01:36:56.000 --> 01:37:07.000
Advise me stuff I've done in terms of you know with some of the large utility companies that it's it's almost like, you know, Mars and Venus kind of thing in terms of just being a very different approach

01:37:07.000 --> 01:37:22.000
to innovation. it's, not impossible but i'm going to guess that a lot of work you guys do at your fund is just trying to get people comfortable with the whole process of what innovation in clean tech looks like these are the you know

01:37:22.000 --> 01:37:30.000
hardening a grid to make it, you know, completely reliable, even in a hurricane type condition.

01:37:30.000 --> 01:37:36.000
No, I I completely agree. I think there's some areas where we see them being very receptive, and then somewhere it's very tough.

01:37:36.000 --> 01:37:39.000
So I think you know the utility scale stuff, for example, solar and went.

01:37:39.000 --> 01:37:42.000
That took them a while to get used to it you know things like your thermal.

01:37:42.000 --> 01:37:45.000
They're not doing it. She want to spin up something like nuclear.

01:37:45.000 --> 01:37:50.000
It takes a while, but where we've seen them being very receptive.

01:37:50.000 --> 01:37:56.000
It thinks it's things like much more you know low dodge for implementation like if you brilliant for power plant you most like.

01:37:56.000 --> 01:38:00.000
Have it for 1015 years. You can't turn it off for a software right?

01:38:00.000 --> 01:38:12.000
You become a customer, one here you don't like it the next year you can get rid of it. so things like, for example, cybersecurity, which now has become as important for resiliency, we're seeing very fast

01:38:12.000 --> 01:38:18.000
adoption, and if not, you know utilities are probably with banks and things like that.

01:38:18.000 --> 01:38:21.000
Some of the top and fastest adopters of that those technologies.

01:38:21.000 --> 01:38:34.000
So I think, in certain areas they're ahead and in certain areas. it's been very, very tough for us to get them to adopt things because one they move very slowly to their mo their biggest focus. Is it's.

01:38:34.000 --> 01:38:42.000
Resiliency and low cost of energy and Then you have externalities, like things like you know emissions which they have to do over time.

01:38:42.000 --> 01:38:49.000
But it's not immediate and the other thing too, which I think doesn't help at all. it's not, they're regulated right?

01:38:49.000 --> 01:38:54.000
So you you you need to innovate and outcomes your competition.

01:38:54.000 --> 01:38:56.000
It's there to a certain extent but it's like 5, 10.

01:38:56.000 --> 01:39:05.000
Your cycles, whereas where you look in Europe fully deregulated markets, you know you're seeing much more innovation and much faster decarbonization.

01:39:05.000 --> 01:39:09.000
There. So let me jump in here with a question from our audience.

01:39:09.000 --> 01:39:14.000
Time since you brought out this regulated industry idea.

01:39:14.000 --> 01:39:20.000
So the question is that you know we know that healthcare is also a highly regulated industry.

01:39:20.000 --> 01:39:25.000
Yet. there is a huge amount of investment in biotech, and so on.

01:39:25.000 --> 01:39:32.000
In fact, you know, in Boston. you know, we we kind of have a whole lot of that happening here.

01:39:32.000 --> 01:39:36.000
So what is the What is the is that? Do you think that there is more of a

01:39:36.000 --> 01:39:43.000
This is more because of a balance in play of in terms of returns from investment in this space.

01:39:43.000 --> 01:39:50.000
So is it is it. Is it a discounting factor like that that we are thinking about?

01:39:50.000 --> 01:39:53.000
Is it? You know what Josh alluded to about having a patent.

01:39:53.000 --> 01:39:58.000
That kind of protects the innovation for the drug for 20 years.

01:39:58.000 --> 01:40:03.000
So is Is that the reason, Jane, would you like to start off?

01:40:03.000 --> 01:40:11.000
Sure tenth. all may be more up up the curve on specifics of the regulations.

01:40:11.000 --> 01:40:17.000
They're both very happily regulated the regulated differently.

01:40:17.000 --> 01:40:24.000
And the outcomes are are different. so if you think about a utility to Josh's.

01:40:24.000 --> 01:40:37.000
No, I think it was your point you know an electron is an electron And so you're kind of competing against an incumbent technology in a lot of cases with biotech you're solving a problem that hasn't

01:40:37.000 --> 01:40:44.000
been solved yet. And so, because of that, this is this is my somewhat uneducated Take on it, but I think because of that.

01:40:44.000 --> 01:40:51.000
There is like Yes, there is process that you have to go through.

01:40:51.000 --> 01:40:55.000
You know you have to go through your phase. 1, 2, 3 trials.

01:40:55.000 --> 01:41:07.000
In order to have say, a new drug approved but that's a very clear process, and at the end I think the adoption is more clear, because you end up with a product that solves a very specific and as yet often

01:41:07.000 --> 01:41:13.000
unsolved problem. it's a little it's a little trickier.

01:41:13.000 --> 01:41:21.000
Utilities and electrons. but I don't know a more detailed answer on that one.

01:41:21.000 --> 01:41:26.000
I I think, from my my perspective, like thinking, you know, regulation and and valuation.

01:41:26.000 --> 01:41:30.000
I think it it clearly leads to a discount and and my rational.

01:41:30.000 --> 01:41:36.000
There. It's because if you're regulated and you have monopoly, less need to to innovate.

01:41:36.000 --> 01:41:39.000
If there's less need to innovate you know you're buying stuff at a slower pace.

01:41:39.000 --> 01:41:44.000
And so if you're startup and you're selling into a heavily regulated industry.

01:41:44.000 --> 01:41:56.000
You know it takes you whatever 1218, 24 months to get a sale done, and you're not going as fast, And these kind of startups are not as attractive to investors where we wanna see like 100 200%

01:41:56.000 --> 01:42:09.000
growth the over year, and as a result you know when we're pricing these deals, we're giving them a lower evaluation because we are realized that your potential to hit escape velocity growth is more limited because you're selling it to

01:42:09.000 --> 01:42:22.000
an industry that it is not forced to innovate that's faster or as fast as other industry like Tag, or or retail, where you know it's it's extremely competitive, and it's it's much less

01:42:22.000 --> 01:42:28.000
regulated. so perhaps you know. but I mean I mean my take on.

01:42:28.000 --> 01:42:33.000
This would be that wouldn't there be public financial market pressure on this.

01:42:33.000 --> 01:42:39.000
I understand the regulation point. I understand the point about having a captured market.

01:42:39.000 --> 01:42:44.000
But if the public markets are putting weight on Esg.

01:42:44.000 --> 01:42:49.000
If firms, If there is a group, reward on that front, then good.

01:42:49.000 --> 01:42:59.000
Bring or translate an impact into how they are adopting newer technologies, clean tech, etc.

01:42:59.000 --> 01:43:06.000
Into this into their operations. Laura, do you have?

01:43:06.000 --> 01:43:09.000
Do you have a insight on this from the esther front?

01:43:09.000 --> 01:43:19.000
Yeah, I don't wanna be too pessimistic but I mean they're just there are too many players out there in the market that just don't care right so it's you know i'm moderated a panel

01:43:19.000 --> 01:43:27.000
yesterday for family offices that were all in on oil and gas, given the disruptions in the market from the from publicly traded banks. Right?

01:43:27.000 --> 01:43:35.000
So , you know, when we talk about clean tech that.

01:43:35.000 --> 01:43:38.000
Yes, there are those that are going to be selling into utilities right?

01:43:38.000 --> 01:43:51.000
Whether we have a few. You know the few buyer problem and and all sorts of issues with what the payment stream and the incentive to make large capital investments are there.

01:43:51.000 --> 01:44:01.000
But you know on the edges they're they're There should be lots of profitable opportunities to lost profit investments, right?

01:44:01.000 --> 01:44:08.000
You know there are, you know. Wind and wind and solar are taking hold.

01:44:08.000 --> 01:44:15.000
But I You know we can't forget that it takes a cartel to prop up the price of fossil fuels right.

01:44:15.000 --> 01:44:24.000
It's very cheap so it's you you know you Won't get an argument from economists not to price carbon.

01:44:24.000 --> 01:44:31.000
But how do you set the price? pick one arbitrarily, and then iterate around it?

01:44:31.000 --> 01:44:41.000
That's what we did in Canada. Yeah, you know I think this actually ties back devotion to your to your previous question.

01:44:41.000 --> 01:44:48.000
That really for me is around adoption and a, you know, adoption by corporates

01:44:48.000 --> 01:45:04.000
And then the 2 things are kind of links like having spent nearly a decade at Mars, where I was, you know, trying to actively build markets for our companies to sell into like my head is bruised from Banging it.

01:45:04.000 --> 01:45:12.000
Against the wall with corporates trying to trying to figure out how to encourage adoption of technologies.

01:45:12.000 --> 01:45:23.000
But the motivation is by and large quite low because we call it clean tech. But it's really industrial tech like everything that happens in impacting climate.

01:45:23.000 --> 01:45:41.000
Texas. industrial technology. Industrial companies are by necessity risk averse right, like people invest in their utilities because they want that utility to deliver electrons and they get a return that They They are super comfortable with.

01:45:41.000 --> 01:45:53.000
Is going to go on for the long term, because that utility is very reliable at delivering electrons, and you can translate that into the chemical industry, the oil, and gas industry.

01:45:53.000 --> 01:45:56.000
You know all of the industries that really are the adopters of of clean Tech.

01:45:56.000 --> 01:46:07.000
They are extremely risk. Averse with good reason, and I spent I i my team at Mars.

01:46:07.000 --> 01:46:20.000
Worked really hard, like we had a whole group that worked with with large corporates, teaching them how to adopt innovation.

01:46:20.000 --> 01:46:26.000
And there were so many challenges that we came across that were like so unexpected.

01:46:26.000 --> 01:46:32.000
Because I like technology is proven cheaper than what you're doing already.

01:46:32.000 --> 01:46:39.000
Adoption is is the logical next step but it's just not.

01:46:39.000 --> 01:46:51.000
It's not the way they think they think about being careful. They think about not having any industrial accidents, and they think about ensuring that they are delivering their product to do their end consumers so that their

01:46:51.000 --> 01:46:59.000
shareholders are happy. So it's we've got this big circular thing that's happening around risk adoption.

01:46:59.000 --> 01:47:08.000
Public markets. they're inextricably linked thanks Jane Josh! coming back to you.

01:47:08.000 --> 01:47:11.000
What what are your thoughts on? you know Biotech.

01:47:11.000 --> 01:47:28.000
Why do we have on the regulation front. and you know investments in It's it, I mean it is an extremely interesting area, and it it certainly deserves more more thought. I mean, I guess you know, one thing that is

01:47:28.000 --> 01:47:38.000
intriguing is that there has been, you know, certainly some efforts to try to differentiate electrons from bad electrons, Right? you know.

01:47:38.000 --> 01:47:48.000
You can certainly in your power, our bill opt to get the clean energy, and you know you can sort of see that as a sort of small step in that direction.

01:47:48.000 --> 01:47:59.000
But in in some sense the figuring out ways, right? I mean, you can sort of think about there really being process and product into the innovation right?

01:47:59.000 --> 01:48:04.000
And in some sense in Pharma you know the path to very clear product.

01:48:04.000 --> 01:48:20.000
Innovation is there, because, as we pointed out when he has this sort of real differentiation in terms of the ability to either, it cures your particular kind of cancer or doesn't.

01:48:20.000 --> 01:48:34.000
And clearly. the willingness to pay is going to be very high. If it does right, which you know in some sense, you know you, you can, you know, certainly expect that while people are willing to pay more for clean electrons.

01:48:34.000 --> 01:48:39.000
Is it 5%, or 10% I don't think it's a 100% right?

01:48:39.000 --> 01:48:53.000
Maybe the world will change some in the will eventually get there but I don't sense that the world's at that point where there's a large mass of people willing to pay twice as much for for for clean electrons and so in a

01:48:53.000 --> 01:48:57.000
way you know that that sort of goes back to. I think Tensor is common about the importance.

01:48:57.000 --> 01:49:05.000
You know the the fact that a lot of the innovation he has been on the process side for things like, you know, software resiliency, and so forth. Right?

01:49:05.000 --> 01:49:11.000
Because they are clearly there is some sort of potential for direct direct direct direct benefits.

01:49:11.000 --> 01:49:16.000
That's at least one way of one way of thinking about that.

01:49:16.000 --> 01:49:21.000
And you know, I think you probably can see this in a lot of ways in areas like forest finance as well.

01:49:21.000 --> 01:49:27.000
Right, you know, in some sense, you know if you were if you know getting a table made up sustainably harvested wood.

01:49:27.000 --> 01:49:35.000
You'd be wanting to pay somewhat more for it but probably not hugely more as well.

01:49:35.000 --> 01:49:40.000
Time cell coming back to you on on this.

01:49:40.000 --> 01:49:46.000
So you you know Again, this is a question from one of our audience.

01:49:46.000 --> 01:49:50.000
Actually you mentioned about you know when you're working with these utility companies.

01:49:50.000 --> 01:50:00.000
You see the difference in trying to push major stuff versus the the marginal innovations, which are easier, as you said so.

01:50:00.000 --> 01:50:05.000
How do you see can venture venture capital like, you know?

01:50:05.000 --> 01:50:14.000
At the very beginning. as Josh outlined right, even though this is half of a percent that of startups that get funded

01:50:14.000 --> 01:50:19.000
The the in in the public domain. it accounts for about 90% of the R.

01:50:19.000 --> 01:50:26.000
And d expenditure of public companies, about 70% of the market capitalization of public companies.

01:50:26.000 --> 01:50:35.000
So, if and so so it's a it's an oversized role that venture capital does play in the business strategy of public companies offering system public companies.

01:50:35.000 --> 01:50:42.000
So. So how do you see? And you know also to you, Jane, the same question: How do you see the role of venture?

01:50:42.000 --> 01:50:55.000
Capital in shaping this particularly for climate fins. I I mean, I think I think we have an important role to play, because you know, as Josh alluded to a lot of times.

01:50:55.000 --> 01:51:05.000
You know, some of these companies they will be successful because of venture capital, because they're just running castro negatives for the first 5 years, and if you don't have a venture capitalist to plug in the whole

01:51:05.000 --> 01:51:11.000
you know there's no way to go so I think it. It is very important to have venture capital.

01:51:11.000 --> 01:51:20.000
I think there's certain areas where we where you know there's less red tape rest like less regulation. and there's big adoption where we can be more impactful.

01:51:20.000 --> 01:51:28.000
I think an easy example of that is ev's I think consumer saying, we want Tvs, You know there's a bunch of there's a whole software stack that needs to be developed.

01:51:28.000 --> 01:51:33.000
If you know you're gonna see why the adoption there's a lot of charging that needs to go in place.

01:51:33.000 --> 01:51:39.000
And so I think, in those places it's a good place for for venture capital to come in and play because we can.

01:51:39.000 --> 01:51:53.000
We can provide capital no ad really make a difference and then there's other things that it's a little bit tougher, you know, like maybe the next generation of fusion right that's maybe 50 and 20 years down the line maybe that's

01:51:53.000 --> 01:51:57.000
more fit for somebody like Bill gates. where he's not really motivated by financial returners.

01:51:57.000 --> 01:52:04.000
But more, you know, impact and and legacy right and so it just kind of depends wherever you wanted to play.

01:52:04.000 --> 01:52:08.000
But I think most of the time if it's if it's software based.

01:52:08.000 --> 01:52:13.000
We can have a lot of volume because we're we're really comfortable with just business models.

01:52:13.000 --> 01:52:21.000
You would have that on grown and there, there's room for you know somewhat rapid adoption. there.

01:52:21.000 --> 01:52:27.000
Yeah, I mean, I totally agree. and you know, obviously so I.

01:52:27.000 --> 01:52:37.000
My entire career has been focused on climate then i've been doing this for for longer than I care to admit.

01:52:37.000 --> 01:52:44.000
I've I I was initially invested in clean tech for the church.

01:52:44.000 --> 01:53:00.000
I believe in. You know the importance of of venture for making happen, and the one thing that I wanted to just sort of highlight in terms of you know, is there is there a a for venture to play in encouraging

01:53:00.000 --> 01:53:15.000
investments in in sort of climate friendship. so I guess i'll call them and something is happening that has happened before, and actually created huge problems

01:53:15.000 --> 01:53:22.000
And gave Queen Techie very bad name, which was a lot of people it for me.

01:53:22.000 --> 01:53:28.000
It started in 2,001. A lot of people made a lot of money.

01:53:28.000 --> 01:53:35.000
In the dot com boom, and then went. Oh, I want to do something good with my money.

01:53:35.000 --> 01:53:43.000
I'm going to invest in things that are good for the environment and you know there's a huge difference has been pointed out several times.

01:53:43.000 --> 01:53:50.000
There's a huge difference between them investing in software and investing in hard physical things.

01:53:50.000 --> 01:53:55.000
Infrastructure, some really terrible investment decisions were made.

01:53:55.000 --> 01:54:01.000
People lost a lot of money. it happened again in, you know.

01:54:01.000 --> 01:54:18.000
Sort of 2,009 to 12 began lots of people lost a lot of money, but you know, learning learning from the first one not as many problems, not as much money lost. and we're seeing the same thing now, driven by things like

01:54:18.000 --> 01:54:25.000
26 all of the climate commitments governments are making.

01:54:25.000 --> 01:54:31.000
The corporates are making There is again this push towards environment and climate.

01:54:31.000 --> 01:54:40.000
And so, because of that, a lot of new investors are coming into the space which is fantastic.

01:54:40.000 --> 01:54:46.000
This. This is not a problem that can be solved by, you know.

01:54:46.000 --> 01:54:48.000
Cancel. And I like this is we need all brains.

01:54:48.000 --> 01:54:53.000
We need all the money we like. This is. This is, as I said before, next essential problem.

01:54:53.000 --> 01:54:59.000
So, having all of this new money come in is really important it's amazing that it's focusing on it.

01:54:59.000 --> 01:55:16.000
We just have to make sure that we're making good investment decisions, Because if we go back to you know early days and people losing money again, money will start to flow out and and that's problematic So I do

01:55:16.000 --> 01:55:24.000
really think that we are at a time right now, where capital has a really important smart role to play.

01:55:24.000 --> 01:55:29.000
We need to be smart about what we're doing can't we can't have another setup.

01:55:29.000 --> 01:55:39.000
Oh, I would just I I was reading something interesting. They were saying, you know, when they were this whole euphoria, but easy vehicles and and Spanish.

01:55:39.000 --> 01:55:46.000
They're saying the last time and a lot of them on public with your revenue, and they're saying the last time we saw this many companies go public with your revenue.

01:55:46.000 --> 01:55:49.000
It was during the dot-com bubble 20 years ago.

01:55:49.000 --> 01:55:52.000
So of course you're gonna have you know stories and investments that work.

01:55:52.000 --> 01:55:56.000
But a lot of people you know. they said i'm producing 0 cards today.

01:55:56.000 --> 01:56:00.000
I'm gonna do a 1 million a year in 5 years and people are willing to buy into that.

01:56:00.000 --> 01:56:12.000
And you're optimistic, but you were dealing with physical goods at the end of the day, and it's very hard to execute on, and especially even more now with inflation and supply chain challenges.

01:56:12.000 --> 01:56:17.000
I mean. On one hand, I guess you can argue that every you know technological revolution is.

01:56:17.000 --> 01:56:28.000
He had this sort of cycle of hype to it right that there's been a variety of research that's looked at, you know, the arrival of L Electricity and even earlier canals and stuff, like that railroads

01:56:28.000 --> 01:56:34.000
right where you had a lot of frothiness. you know this sort of boom kind of activity.

01:56:34.000 --> 01:56:49.000
With lots of people rush again. and then this sort of very painful shakeout with you know, the people who survive being much stronger in the sector being, you know, ultimately, you know, getting to the place of influence that it has

01:56:49.000 --> 01:56:59.000
you know, to this day. I guess the challenge is that, you know you can also imagine cases where you have this know just as you have overreaction on the way up.

01:56:59.000 --> 01:57:04.000
You have overreaction on the way down, and you get people just, you know.

01:57:04.000 --> 01:57:19.000
Essentially. we you away from, you know, investments that might actually be quite attractive once, because they just, you know, everybody knows that this sector doesn't really doesn't really work right? And you know, one of the fascinating areas.

01:57:19.000 --> 01:57:35.000
He has been this you know the experience of you know the many of the companies that were doing early versions of the personal computer in the mid 1970s, which was a severe venture drought where they just couldn't get

01:57:35.000 --> 01:57:44.000
funding for the life of them, and we know that, like 10 years later, the sector was real there, and you know, maybe there was, you know.

01:57:44.000 --> 01:57:57.000
There was, indeed, some ensuing technological innovation in that decade. But you can also imagine that you know he had investors not been so negative on, you know, personal technology during that period, because they've been battered by losing so much

01:57:57.000 --> 01:58:03.000
money in the early '70s that much of that stuff could be the advanced a few years.

01:58:03.000 --> 01:58:14.000
So in a way that's that in some sense is the challenge is, How do you preserve the good without having the the the the throatiness, you know.

01:58:14.000 --> 01:58:19.000
Easier said than done, of course. So thanks, Josh.

01:58:19.000 --> 01:58:24.000
So I would like to incorporate a couple of the comments and questions coming in from the audience.

01:58:24.000 --> 01:58:31.000
And I think just based off our last discussion. maybe this is a question for you, Laura, and Josh.

01:58:31.000 --> 01:58:40.000
Given So first of clarification actually cancel when you talk about Bill Gates, you know, perhaps investing infusion.

01:58:40.000 --> 01:58:48.000
I is it? Is it true to kind of interpret that what you mean is much more patient capital than you know?

01:58:48.000 --> 01:58:54.000
Typically, what standard Vc. fund would do, which is like a 10 year horizon?

01:58:54.000 --> 01:58:57.000
Is is is is that kind of what you? What do you mean?

01:58:57.000 --> 01:59:01.000
I mean, yeah, no, absolutely and and and we're big believers in it.

01:59:01.000 --> 01:59:04.000
And so we realize that you know we see a lot of these opportunities too. right?

01:59:04.000 --> 01:59:15.000
Long shots deep decarbonization that but that don't fit the traditional, you know, 10 year model right And so what we did also to address that because we see a lot of deals.

01:59:15.000 --> 01:59:19.000
In that space we launched just a dedicated vehicle, and also your risk appetite is much different.

01:59:19.000 --> 01:59:25.000
Right me as a Vc. if i'm making 10 investment maybe expecting toward 3 to fail.

01:59:25.000 --> 01:59:35.000
But I need to make the money on the 7 others. but I think in the deep the conversation stuff is gonna be more like you make 10 investments, you know.

01:59:35.000 --> 01:59:43.000
7 or 8 are gonna fail. but on the one or 2 where you make money. You're gonna make 50 a 100 X, but it's gonna take much longer.

01:59:43.000 --> 01:59:49.000
So you need dedicated strategy and you're seeing this phones emerge like you know we have one.

01:59:49.000 --> 01:59:55.000
There's lower. carbon there's a few others a lot of them like breakthrough that by bill gates so it's emerging.

01:59:55.000 --> 01:59:58.000
But you know what I would caution against is working, you know.

01:59:58.000 --> 02:00:09.000
Valuation kind of get out of hand in those spaces you know there's companies they're just making scientific breakthroughs and milestone, but no commercialization yet, you know and they're going from the 100

02:00:09.000 --> 02:00:18.000
1 million dollar pre to 500 million dollar pre all of a sudden, just because you've proof of concept work, and they're raising massive amounts of money.

02:00:18.000 --> 02:00:26.000
And so the expectations keep getting higher and higher and those businesses There's not necessarily salvage value, because it's binary right? either.

02:00:26.000 --> 02:00:30.000
It works where the doesn't whereas software it's like sometimes you can get build a great product.

02:00:30.000 --> 02:00:34.000
You just never could go to market. Engine was not good, right?

02:00:34.000 --> 02:00:45.000
So I think. of course, there's gonna be successes but there's gonna be a lot of pans and you need a specific dedicated strategy to to address that I would say Okay, So if you can tell tell us a

02:00:45.000 --> 02:00:53.000
little bit quickly about what is the basic structure difference in this particular fund that you're talking about versus a standard you know Vc.

02:00:53.000 --> 02:00:59.000
Fund like we see as a 10 year closed end fund so it's first of all it's it's longer.

02:00:59.000 --> 02:01:03.000
So it's about 15 years and second of all, it's a dedicated strategy like me as a Bc.

02:01:03.000 --> 02:01:11.000
Phone, because I said, you know maybe if i'm expecting one or 2 to really do well in just the deeply carbonation bed.

02:01:11.000 --> 02:01:22.000
I need to have a lot of bets right I need to place 30 40 50 beds, whereas you know if I'm doing that out of my normal fun, and i'm only facing 2 or 3 or 4 beds i'm

02:01:22.000 --> 02:01:25.000
setting my step up for failures because i'm having enough shots on goal.

02:01:25.000 --> 02:01:31.000
So do you really need a dedicated strategy that allows you to have enough shots on goal?

02:01:31.000 --> 02:01:39.000
Do something that works because if i'm only making 3 4 5 of these investments and they all go to 0, most likely i'm never gonna do it again.

02:01:39.000 --> 02:01:47.000
Right, Josh. and I jump in with a couple of observations, one of which is, I mean, I.

02:01:47.000 --> 02:01:52.000
I sort of hinted at this in my remarks, and I was trying to avoid doing a filibuster.

02:01:52.000 --> 02:01:59.000
But now I guess I will do a filibuster, which is that, you know, in a way, I think, what tunnel is getting at is really important stuff, right?

02:01:59.000 --> 02:02:07.000
Which is, you know, saying that the venture model is not necessarily suited for all kinds of investments. right?

02:02:07.000 --> 02:02:11.000
I mean when you start to think about this right? you say, where did the you know?

02:02:11.000 --> 02:02:23.000
10 year fund. Life, you know, come from Well, The story seems to be that when General Draper was getting the first venture partnership to grab her, and sent in Silicon Valley in 1,958 he went to

02:02:23.000 --> 02:02:26.000
the lawyers, and they said Well, here's an oil gas partnership.

02:02:26.000 --> 02:02:37.000
And let's use that and you know that basically said you got, you know, 5 years to go dig drill for oil, and then another 5 years to get it out and liquidated.

02:02:37.000 --> 02:02:42.000
Not quite, but more or less. and you know we can then say, Well, that really mirrored you.

02:02:42.000 --> 02:02:57.000
You know British shipping contracts, and you know David Rubenstein says this is all basically from Jennifer and shipping, you know, partnerships in the fourteenth century and others say it all goes

02:02:57.000 --> 02:03:06.000
back to the code of Hammurabi that You'd have to really squint, hired to find it in the code of Amarabian 1900 Bc.

02:03:06.000 --> 02:03:13.000
But be that as may right, you know, we, you know, in a way it seems like there was basically like often lawyers do.

02:03:13.000 --> 02:03:19.000
They took one thing, scratched out one thing put something else in and said, Here, use this.

02:03:19.000 --> 02:03:24.000
Meanwhile we'll send you a big Bill for all the hours we could have spent for writing it from scratch.

02:03:24.000 --> 02:03:34.000
But that's a whole nother, subject but you know There's a real sense in which you can imagine that there's need for innovation on the front, end and the back end. right the back.

02:03:34.000 --> 02:03:44.000
End, I think you know, was very well articulated here in terms of saying there are going to be some investments where just holding it for longer is going to make sense, and we've seen this in infrastructure.

02:03:44.000 --> 02:03:59.000
For instance, you know, if you build a highway with an expected life of 40 years, the idea of selling it after 10 years is often not the most net present value, creating thing because of all the rigidities that they're just not that many

02:03:59.000 --> 02:04:05.000
people want to buy highways, and you're probably much better off holding it for its useful life of 40 years.

02:04:05.000 --> 02:04:10.000
If you, as a long-term investor, want to maximize.

02:04:10.000 --> 02:04:19.000
You know, maximize net present value. And similarly, you can imagine that you know sort of pushing for premature exits on some of these long term deals might make sense.

02:04:19.000 --> 02:04:25.000
I think the other areas clearly in terms of thinking about the early stages right.

02:04:25.000 --> 02:04:41.000
And you know here clearly we've seen examples of innovations, where people are trying to combine some features of the incubator accelerator model with the kind of difficulties of clean tech and you know, obviously with the you know the

02:04:41.000 --> 02:04:50.000
engine here in town being a prime example thereof but basically where you know, there's clearly more subsidization in terms of funding.

02:04:50.000 --> 02:04:59.000
You know, without this expectation, necessarily, that people are going to graduate in 8 weeks and be kicked out into the world to fend for themselves and so forth.

02:04:59.000 --> 02:05:11.000
Really imagine that there's sort of probably a lot, more that can be done both at the front end and back end, and probably you know the again to some of their marks earlier you know, probably with much greater involvement of corporate and other

02:05:11.000 --> 02:05:16.000
partners earlier in the earlier in the process than would be necessarily the case for a software.

02:05:16.000 --> 02:05:29.000
For thanks, Josh Jane. do you also have any any fund that it's kind of thinking about a different structure in your investments, or

02:05:29.000 --> 02:05:35.000
So i'm sorry actually could I also add something to it as you mentioned right at the beginning.

02:05:35.000 --> 02:05:41.000
Your kind of launching a series a fund right now and

02:05:41.000 --> 02:05:45.000
What are the different methodological attributes you might think of.

02:05:45.000 --> 02:06:01.000
How do you screen your investments like is there a way. for you to kind of quantify your qualify the portfolio investments that you are going to make in on this or Yeah, So it's it it's good question it's actually a topic

02:06:01.000 --> 02:06:09.000
of conversation. so let me answer the first question because it's a it's a quick one.

02:06:09.000 --> 02:06:22.000
Our fund. one was different. fun. One was seed stage, and it was anchored by corporate strategics who had a very specific mission.

02:06:22.000 --> 02:06:29.000
In the energy transition, and so that funds the the lens was very much around.

02:06:29.000 --> 02:06:35.000
Can we it actually a lot like, yeah, can we solve specific challenges for the industry?

02:06:35.000 --> 02:06:42.000
And also financial return. Obviously, second fund is slightly different.

02:06:42.000 --> 02:06:49.000
And because of what we've already talked about with like customer slides it's 12 plus one plus one.

02:06:49.000 --> 02:06:55.000
So potentially a 14 year fund life. Again, it takes a long time to commercialize these things.

02:06:55.000 --> 02:07:07.000
How do we screen so we've we've sort of had this conversation back and forth?

02:07:07.000 --> 02:07:23.000
Around quantifying outcomes. So you know we have a We have an ESG lens, ESG fully.

02:07:23.000 --> 02:07:40.000
Not not just climate, but from a climate perspective we've actually chosen not to do climate modeling upfront partly because I think we've all worked in space long enough, cause we're all old and been

02:07:40.000 --> 02:07:46.000
around and we have a relatively good gut sense on

02:07:46.000 --> 02:07:53.000
What will have climate and climate impacts and it's based on the the that we have developed.

02:07:53.000 --> 02:08:01.000
And the impact that a company will have depends on how it's rolled out.

02:08:01.000 --> 02:08:11.000
So if it rolls out in 3 years versus 5 years versus 10 years, the climate impact is dramatically different. So what we've chosen to do is pick our verticals.

02:08:11.000 --> 02:08:19.000
No one understand what's deeply important to us as both individuals and as a firm in terms of of impact.

02:08:19.000 --> 02:08:26.000
And to use that as our as our lens but it's not honestly it's an ongoing conversation.

02:08:26.000 --> 02:08:33.000
Everybody. Everybody is still learning and something we can talk about later.

02:08:33.000 --> 02:08:43.000
If you want we're just in the process of doing our first ESG report on Fund one, and so you know, had the some learnings there on on ESG lens, as well.

02:08:43.000 --> 02:08:50.000
Great. Thank you, Jean. So going back to perhaps one of our questions from the audience.

02:08:50.000 --> 02:08:52.000
This is from my colleague, Philip Wells.

02:08:52.000 --> 02:08:59.000
Philip says. it seems that part of the issue with adoption in clean tech is the hesitancy of large risk.

02:08:59.000 --> 02:09:07.000
Averse corporations. Tesla sort of bypassed this by appealing directly to consumers, and has, of course, been hugely successful.

02:09:07.000 --> 02:09:15.000
Do. we just need more Tesla to basically approach these markets from one of our direct to consumer point of view, although it's probably not tough to come up with the director.

02:09:15.000 --> 02:09:21.000
Well type home runs is, Is Is there enough direct to consumer?

02:09:21.000 --> 02:09:28.000
Opportunities that could change the tip to balance I don't know.

02:09:28.000 --> 02:09:40.000
So i'll be interested in what there's the gang has to say, We honestly don't see a lot of direct consumer opportunities, because so many of the things are are industrial the other thing is Elon

02:09:40.000 --> 02:09:51.000
Musk is unique in ability to create these incredibly difficult companies based on outcome that he wants to achieve.

02:09:51.000 --> 02:09:58.000
So yeah, I mean bypassing the corporates would be in some sense as delightful.

02:09:58.000 --> 02:10:05.000
And you know the other. the others side of that is, then you have to figure out how to market to individuals.

02:10:05.000 --> 02:10:14.000
And keep your company alive for the you know, decades to do that like. I first saw Tesla when I was working in New York.

02:10:14.000 --> 02:10:27.000
So that was, you know, like 20 years ago. basically you know it was not an overnight success, and he nearly met broke a Zillion times, and you know he's he's on musk.

02:10:27.000 --> 02:10:42.000
So he pulled through. but I it's there's challenges on both sides of that one is all i'm trying to say and it is fair to say Solar City right was struggled right despite the line, magic

02:10:42.000 --> 02:10:48.000
which is undoubtedly there. you know there are regulation barriers as well.

02:10:48.000 --> 02:10:52.000
Right So here, you know i'm i'm in Arizona.

02:10:52.000 --> 02:10:55.000
And you know you want to put solar on your roof.

02:10:55.000 --> 02:11:06.000
You buy electricity also, right? So they can. They can kill a lot of direct to consumer with with policy.

02:11:06.000 --> 02:11:15.000
So given given our you know, discussion so far. perhaps we could talk a little bit about

02:11:15.000 --> 02:11:23.000
You know what are the opportunities at this point in time going forward and and trying to address these issues?

02:11:23.000 --> 02:11:40.000
Where do you each think that? you know, the biggest return is in in in investing in, in in venture funds I was, I mean, for venture funds in investing in sectors that can move the

02:11:40.000 --> 02:11:45.000
needle. is this Is this a lost cause? for?

02:11:45.000 --> 02:11:48.000
The traditional independent venture, capital funds?

02:11:48.000 --> 02:11:52.000
Or is this something that is going to be always dominated by the corporates?

02:11:52.000 --> 02:11:58.000
Or how can we co-op the corporates? Do we need public intervention to get in like Josh?

02:11:58.000 --> 02:12:04.000
You have done a research on SBIR grants earlier, on which you know a day.

02:12:04.000 --> 02:12:10.000
They kind of have relaxed these financial constraints greatly for young startups.

02:12:10.000 --> 02:12:13.000
Do we need a different envisioning of SBIR.

02:12:13.000 --> 02:12:26.000
In in some sense. if you take Sabrina housework, which focus specifically on the energy area and SBIR Grants right, I mean, she argued, You know, the results were.

02:12:26.000 --> 02:12:34.000
I mean, her results were very compelling. She basically did a comparison to the guys who were just above and just below the cutoff. for.

02:12:34.000 --> 02:12:41.000
Yeah, we did give Grants and compared what the outcomes of the companies were, and basically argued that SBIR one awards?

02:12:41.000 --> 02:12:49.000
Had he positive impact in terms of patenting employment growth willingness to, you know ability.

02:12:49.000 --> 02:12:55.000
Go out and raise venture, and Angel, finding, and so forth, has a real catalytic effect.

02:12:55.000 --> 02:12:59.000
On the other hand, once you looked at the face 2 awards, the much larger second phase.

02:12:59.000 --> 02:13:03.000
There was basically no noticeable impact of that on the firms.

02:13:03.000 --> 02:13:17.000
And when you know, when she looked a little deeper at it, you know a lot of it seemed to be that you know the phase one award ease where young, hungry little startups which really he had you know many cases where really nascent

02:13:17.000 --> 02:13:28.000
things where they really needed to get ready for prime time, and the quarter 1 million and a half 1 million, you know, you know, 100,000, you know, Couple of 100,000 h from SBIR.

02:13:28.000 --> 02:13:35.000
Could make an enormous difference in terms of being able to get the business into shape where a venture capitalist could take them seriously.

02:13:35.000 --> 02:13:45.000
But when you look at who is actually applying for the phase twos, it was overwhelmingly, You know the the dread SBIR males.

02:13:45.000 --> 02:13:52.000
The you know, companies which are basically, you know, habitual winners of these awards, and just go from a word to a word.

02:13:52.000 --> 02:14:04.000
You know, basically, professional grant writing shops, and essentially the venture guys, you know, either they, they, you know, with their little phase one they were able to go and turn their focus to private financing.

02:14:04.000 --> 02:14:15.000
And basically, you know, sort of ended up opting out of the SBIR what that being said, you know, essentially, the 80% of the money goes to phase 2.

02:14:15.000 --> 02:14:28.000
And SBIR right and this problem, with the mills has been documented for 30 years, and there's been absolutely no effort, no real momentum, to change it largely because essentially if you're a little company, and you get one of

02:14:28.000 --> 02:14:34.000
these awards, and then go on to getting dc you say thanks and that's last time you think about it.

02:14:34.000 --> 02:14:47.000
Well, if You're an organization that's living on this stuff, you know you're gonna have a whole cast of lobbyists, you know, every time Congress that comes to basically block any kind of changes to the program that's

02:14:47.000 --> 02:14:53.000
disadvantageous to yourself so you know I don't think that it's that public policy can't play a role.

02:14:53.000 --> 02:14:59.000
It's just that, you know he has i'm afraid I have said repeatedly. in my life, you know.

02:14:59.000 --> 02:15:13.000
But sort of forces that sort of end up, either, you know, distorting the program, you know, in will intention, but unproductive kind of ways, or else you know, this sort of capture problems can often make these programs far less efficient

02:15:13.000 --> 02:15:19.000
or far less effective than they would be otherwise. Thanks, Josh.

02:15:19.000 --> 02:15:31.000
But in general the model of government funding then venture at exactly the right time, and then moving on to another source of funding that isn't quite venture equity.

02:15:31.000 --> 02:15:40.000
Is probably the way this is gonna go And you know, just getting all the institutional partnerships necessary to build around.

02:15:40.000 --> 02:15:51.000
That is, is probably where we need to head. So you know, Probably the phase one, for example, is probably when the financial constraint is the most.

02:15:51.000 --> 02:15:56.000
And so, therefore the SBIR ground really helps these small innovative firms to jump to the next stage.

02:15:56.000 --> 02:16:04.000
So time cell, Jane, do you? look at when you look at your investments?

02:16:04.000 --> 02:16:12.000
Do you look at outcomes such as SBIR grants that these companies have been successful at?

02:16:12.000 --> 02:16:20.000
Or I wouldn't say so I think you know most of the time like we're on the riding this deal.

02:16:20.000 --> 02:16:31.000
I think the nice thing, with with energy it's like Once you Have a proof like, let's say you're doing power generation, or something like that, you know. You can get rid of you know Venture capital much faster.

02:16:31.000 --> 02:16:35.000
Right. Your cost of capital can go down much faster go down lower much faster.

02:16:35.000 --> 02:16:41.000
So you know they'll go to traditional infrastructure investors and things like that for that capital.

02:16:41.000 --> 02:16:45.000
But I think now more and more, you know, because we want to repatriate the supply chain.

02:16:45.000 --> 02:16:56.000
We wanna make our own batteries things like that we're seeing our companies seeking that funding a little bit more because it's very cheap, and it's much more accessible. but historically that that

02:16:56.000 --> 02:17:01.000
hasn't really been the case and we don't really on the right to it, like we think it's a upside.

02:17:01.000 --> 02:17:09.000
But when we're thinking about these deals, we're saying, no, most likely you would go to an infrastructure provider, and it's not that expensive like our cost of capital is VC's.

02:17:09.000 --> 02:17:13.000
Probably 2530% infrastructure 5 1015.

02:17:13.000 --> 02:17:18.000
If it's really on proven technology so that's not what we're really on the right thing, too.

02:17:18.000 --> 02:17:31.000
But it's kinda that's there and I think net net is gonna benefit, not only us, but the other companies as well, we look at it slightly differently, and part of it's because we're based in Canada.

02:17:31.000 --> 02:17:37.000
So I I should also say i'm the only Canadian partner the other 3, even though we're based in Canada.

02:17:37.000 --> 02:17:45.000
The other 3 partners are American although Marty has just become a Canadian citizen, so I guess I have another Canadian

02:17:45.000 --> 02:17:57.000
The the the Grant landscape in Canada's little bit different, and I don't want to go down that cause I don't think so relevant to most people here, but I wouldn't say we look at

02:17:57.000 --> 02:18:05.000
you know, have, has we? We don't use not access to non-volata funding as a as a screen.

02:18:05.000 --> 02:18:23.000
But it is a really important piece of you know companies especially companies being hard tech to get their intellectual property in place to, you know, to develop their technology to a point where it actually becomes investable So it's not a hard

02:18:23.000 --> 02:18:36.000
like. Yes, no you know, you didn't get granted we're not that interested, but but we definitely see the impact that that funding can in Canada just really quickly we have a thing called sustainable development technology

02:18:36.000 --> 02:18:41.000
Canada and what they do it's been around for about 20 years.

02:18:41.000 --> 02:18:44.000
It's the reason we have such a strong clean tech sector in Canada.

02:18:44.000 --> 02:18:56.000
Amongst other things, and essentially they require so it's a they they fund a commercial scale pilot.

02:18:56.000 --> 02:19:01.000
And they require you to bring a consortium together around it.

02:19:01.000 --> 02:19:19.000
And so basically, you go from not commercial to commercial in partnership with corporates, and it's been a super successful model for getting technology development for getting it slightly the risk. And for creating the partnerships with potential adopters that

02:19:19.000 --> 02:19:24.000
we've been saying have been missing from the center so it I something like that doesn't exist in the States.

02:19:24.000 --> 02:19:29.000
But you know, did any policy people out there it's a good model?

02:19:29.000 --> 02:19:34.000
So, do you? Do You have a more you know, going back to an earlier discussion.

02:19:34.000 --> 02:19:48.000
You think that that really helps in Canada to get the corporates to adopt the the the marginally significant changes that come with these technologies?

02:19:48.000 --> 02:19:54.000
In some sense it's not a silver bullet but it helps

02:19:54.000 --> 02:20:04.000
So we? I think we are almost close to our end of this panel discussion.

02:20:04.000 --> 02:20:13.000
You know we can go on for a long time, but maybe we can spend the last few minutes talking a little bit about ESG.

02:20:13.000 --> 02:20:25.000
In the public markets, and how that potentially might have a deeper in impact on private investors or private investment.

02:20:25.000 --> 02:20:35.000
So. So if if if that if ESG is priced better, or you know, is is well, I guess we started the conversation with what is the price on carbon?

02:20:35.000 --> 02:20:40.000
But I and that's still up in the air But if that problem can be solved.

02:20:40.000 --> 02:20:46.000
Does it help private markets address a lot of these issues?

02:20:46.000 --> 02:20:57.000
I mean I think it would help right so if everyone were paying attention to the exact same thing and and had to that would effectively.

02:20:57.000 --> 02:21:04.000
I mean it wouldn't be the actual cost of carbon, but it effectively closer to the social.

02:21:04.000 --> 02:21:11.000
The social martial cost So you know. Yes, that would help

02:21:11.000 --> 02:21:26.000
But but, you know, are there enough investors that and enough in in investor? Capital is Is there enough out there to move the needle because they're willing to sacrifice returns in some way in a in a private market

02:21:26.000 --> 02:21:39.000
right LP's aren't always fiduciaries right so they can have a mandate time, So I I would say yes, cause I think you know us as venture investors.

02:21:39.000 --> 02:21:47.000
When we price around in the private market we're kind of back, solving to what things would be trading at if they went public eventually.

02:21:47.000 --> 02:21:57.000
Right. So, for example, just you know this quarter a lot of stocks have been going down, and so we use that when we're negotiating, we're saying markets you know we had one of the worst months in nasa in whatever 10 years.

02:21:57.000 --> 02:22:07.000
Here's a bigger discount because of what's going on in the public market. So it's all of a sudden, you know, all the clean text talks are training out a very big premium.

02:22:07.000 --> 02:22:14.000
You know, not. only us I think we'll be comfortable paying higher prices, Other investors are not necessarily focused on climate.

02:22:14.000 --> 02:22:19.000
They're gonna say you know while this market's really hot Everything's trading up.

02:22:19.000 --> 02:22:26.000
I think we need to get more active. in the space and that's kind of what you saw in 2,020 in 2,021 where you know us historically.

02:22:26.000 --> 02:22:37.000
We used to be one of the only entry investors at the later stages around the table in in clean tech And all of a sudden we're seeing you all these hedge funds private equity funds up to

02:22:37.000 --> 02:22:39.000
oil and gas spinning up a clean tech strategy.

02:22:39.000 --> 02:22:50.000
So I think the more the public markets are receptive to it, and the more you trade out a premium, you know it'll it'll definitely trickle down into the private markets, and and we've seen it so

02:22:50.000 --> 02:22:57.000
far. so, Josh, Do you think that public policy should then focus on the public markets?

02:22:57.000 --> 02:23:02.000
And have have it, as Tanzania saying, have the trickle down effect to Vc.

02:23:02.000 --> 02:23:14.000
Investment in this face. I think there's a lot to be said for the notion that, you know public markets are clearly very regulated beasts.

02:23:14.000 --> 02:23:24.000
To begin with, and that you know the notion of saying that you know one of the goals of public policy is for companies that are publicly traded to have a kind of disclosure.

02:23:24.000 --> 02:23:40.000
For instance, which goes beyond financial disclosure to impact disclosure and the like full force of you know the the government behind the accuracy and the quality of those disclosures it seems that's a very hard

02:23:40.000 --> 02:23:50.000
thing to to argue with, and that you can also imagine that that may indeed have, as we discussed, some trickle down effects to the to the to the private markets.

02:23:50.000 --> 02:23:54.000
I guess I get a little more nervous in terms of you know right?

02:23:54.000 --> 02:24:02.000
We've seen lots of examples of governments over the years trying to tell pension funds to invest in this or invest in that.

02:24:02.000 --> 02:24:10.000
Generally those have been recipes for disaster in terms of not just simply leading to a negative reaction.

02:24:10.000 --> 02:24:17.000
But actually, you know, souring the willingness of people to invest pensions to invest in this area for many years to come.

02:24:17.000 --> 02:24:29.000
So I guess I like the were the, you know, the sort of team setting stuff like encouraging the quality of disclosure and the information available to investors in the public market.

02:24:29.000 --> 02:24:41.000
And this more you know, Elizabeth Warren-style we're gonna tell you exactly what to do with your pension savings and so forth.

02:24:41.000 --> 02:24:57.000
Jane, your your thoughts on on this yeah I mean I think it's It's the it's the direction that I'm still lacking in before in common. I think it's the the direction that the markets are going I

02:24:57.000 --> 02:25:06.000
think it will start to to come down where you know We've asked our companies report on on their ESG performance.

02:25:06.000 --> 02:25:19.000
Because we're trying to quantify outcomes from fund one. I think North America is behind on on how it gets sort of action.

02:25:19.000 --> 02:25:32.000
I'm i'm having a i'm having a a moment. but Laura, the sustainable finance reporting disclosure did I get that right in in the eu where it's actually being you

02:25:32.000 --> 02:25:42.000
know public companies are being are going to be required to disclose and investors are going to be required to disclose ESG.

02:25:42.000 --> 02:25:50.000
Performance. And when that happens I think that that necessarily impacts public markets.

02:25:50.000 --> 02:25:54.000
But I also think that will start to flow down to private market.

02:25:54.000 --> 02:26:15.000
How we look at deals. If companies have a hard time accessing public capital, or large capital, because of a lack of sort of as they grow meeting the the standards of public companies, it's going to be challenging so, I think

02:26:15.000 --> 02:26:20.000
Great, too. Go ahead. Sorry, and of course proposed rules from the Sec.

02:26:20.000 --> 02:26:30.000
Are already being litigated. Right? So you know we and and the European disclosures are still voluntary.

02:26:30.000 --> 02:26:39.000
Right the double materiality and things of that nature but it's coming like It's just it's changing 5 years ago. We wouldn't have been having this conversation.

02:26:39.000 --> 02:26:45.000
It's just it's right so we can only hope that this takes shape.

02:26:45.000 --> 02:26:55.000
And you know then, that hopefully, influences how how we can invest and spur innovation in this area.

02:26:55.000 --> 02:27:07.000
And you know because that's that's essentially a standard as you mentioned that at the end of the day you're looking for an exit as an investor in the as a VC.

02:27:07.000 --> 02:27:15.000
And the valuations are going to drive that, and norms are quantifiable norms.

02:27:15.000 --> 02:27:20.000
Compliance issues in the public markets are going to shape that as well.

02:27:20.000 --> 02:27:25.000
So. Perhaps that might also address what you talked about previously.

02:27:25.000 --> 02:27:36.000
As to when you have these companies that without actually, you know, returning a profit.

02:27:36.000 --> 02:27:43.000
Their valuations are dramatically improving from one round to the next. and that's not sustainable in the long run.

02:27:43.000 --> 02:27:54.000
So clearly. any last thoughts on on our discussion today, Josh.

02:27:54.000 --> 02:28:03.000
What would you No, I think this is I mean these are important issues. they're not easy answers, but I think we've at least done our best to grapple with them.

02:28:03.000 --> 02:28:08.000
And thanks for such an able job of moderating this. Thank you.

02:28:08.000 --> 02:28:14.000
Cancel. I completely agree. I think you know this is a Mega Trend. that's here to stay.

02:28:14.000 --> 02:28:21.000
It's going to happen, I think the question is outside but you know there's more capital people are 10 times more receptive to it.

02:28:21.000 --> 02:28:26.000
People care about it. So I think it's going to happen you know there's gonna be bumps along the road.

02:28:26.000 --> 02:28:36.000
But you know, I think we'll get there eventually. great Jane. Yep. that was that was well, said by both I I I completely agree.

02:28:36.000 --> 02:28:41.000
You know the issue is here. I believe it's finally here to stay, which I've been saying for 20 years.

02:28:41.000 --> 02:28:50.000
But I think it actually is now and you know we're having the conversation, which is, is relatively new and relatively important.

02:28:50.000 --> 02:28:55.000
So thank you for hosting it. and, as Josh said, Thank you for doing such an able job of moderating.

02:28:55.000 --> 02:29:02.000
Well, then, Oh, I had The easy job is all right. Any last thoughts?

02:29:02.000 --> 02:29:09.000
Sure. just That consumer preferences are, I think, where we should pay attention.

02:29:09.000 --> 02:29:14.000
Because that will drive and investor preferences going forward.

02:29:14.000 --> 02:29:21.000
And so yes, the Regulators are on it. one can try to be optimistic about that.

02:29:21.000 --> 02:29:33.000
But not time, I will tell, but I I I do think that the the consumer is really important here, and educating the consumer about where their power comes from is is is a step forward.

02:29:33.000 --> 02:29:41.000
As well. So thank you. thank you. everybody for joining us today, and thank you, Laura. Thank you.

02:29:41.000 --> 02:29:43.000
Tansel. Thank you, Jane. Thank you, Josh, for this.

02:29:43.000 --> 02:29:52.000
This very nice discussion on this topic. you know it's hopefully we have a a Rosie future to look forward to.

02:29:52.000 --> 02:29:57.000
And things will happen in the near future. thanks

02:29:57.000 --> 02:30:01.000
Also to our audience for joining us. in for this session.

02:30:01.000 --> 02:30:06.000
Please stay tuned for our next session, which is starting at 1230 Pm.

02:30:06.000 --> 02:30:14.000
Featuring a fireside chat between Dan Simkowitz, head of Investment Management at Morgan Stanley, and the chair of our asset management counts in Perry Traquina.

02:30:14.000 --> 02:30:20.000
So your same zoom link will serve as well for that session.

02:30:20.000 --> 02:30:50.000
Thank you, everybody. Thanks. Goodbye, thanks. Everyone have a good rest of the day.