The U.N.’s Intergovernmental Panel on Climate Change (IPCC) recently released a report that was particularly grim. It warns that the world is on track to hit the “safe” limit of 1.5 degrees Celsius, set by the Paris Agreement, in the early 2030s. Unless sweeping changes are made soon, the world will suffer the effects of climate change: hurricanes, heat waves, polar vortices, fires, floods, and droughts.
It’s easy to be overwhelmed in the face of a crisis like this. Despite the outsized worry of the general public, investors remain eerily quiet in the face of such a daunting problem. Meanwhile, funds are being poured into software as a service, corporate spend cards, and other inconsequential investments. Why has investment in clean energy, which includes the likes of renewable fuels, solar, wind, and more, been so low when the industry could literally revolutionize the world?
Venture capitalists make deals to tackle big problems and reap big rewards, yet bigger risks aren’t being taken on climate-focused initiatives. Last year, investments in carbon capture and fusion energy made up only a portion of the $122 billion dollar SaaS market. Why isn’t venture capitalism tapping into the full potential of such initiatives?
The market for energy is worth $10 trillion, and successful fusion startups can capture a sliver of this. In the light of such extraordinary potential, firms should invest even more money into fusion energy and similarly risky climate breakthroughs. Take, for example, the $200,000 check handed to the founders of High Voltage Engineering in 1946 to produce X-rays to treat cancer. By today’s dollar values, this would amount to $2.8 million, and back then, venture capitalism didn’t even exist!
It is time for ambitious investors to rally together and take the big swings that can solve the climate crisis. Venture capitalists should look to climate techs to fund companies that are doing the inspiring and impossible—showing the world that making any significant progress is still possible.
The company mentioned in the article is the American Research and Development (ARD), the venture capitalist firm that handed the $200,000 check to the founders of High Voltage Engineering in 1946. American Research and Development (ARD) was a prestigious venture capital firm during the 1940s, with its founding members coming from the alumni of MIT, Harvard, and Yale. The firm was instrumental in foreshadowing the creation of venture capitalism as we know today and was the founding organization of modern-day venture capitalists.
The person mentioned in this article is the person behind High Voltage Engineering, the startup founded in 1946. This individual remains unidentified, but the remarkable fact is that having only a $200,000 check, they were able to handcraft a technology that was vital to the development of modern medical procedures. The company remains a testament to the power and potential of venture capitalist backed startups and a reminder to never underestimate the potential that significant investments can have to impact and revolutionize the world.
