Climb By VSC: Episode 30

Published May 24th, 2023

⁠FootPrint Coalition⁠ invests in high-growth, sustainability-focused companies. They make charitable grants to non-profits that advance the adoption of environmental technology and entertain, inform, and mobilize the public with original and curated content. They are a coalition of investors, donors, and storytellers committed to scaling technologies to restore our planet. ⁠Jonathan Shieber⁠ is the Chief Editor and a Venture Partner at FootPrint Coalition. He previously worked as Climate Editor, Contributors Editor, and a Senior Editor and writer at TechCrunch. Before TC he was a reporter covering venture capital and private equity investment in the U.S. and China at Dow Jones & Co. with work published in Dow Jones Newswires and The Wall Street Journal. ⁠Manuel Waenke⁠, Director at FootPrint Coalition, is an experienced leader in the sustainability and climate tech industry. He previously served as the Head of Corporate Strategy & Development at an agriculture biotech startup. Starting his career at McKinsey in Austria, Manuel later moved to the US after earning his MBA at Stanford. His focus is on leading diligence and investment activities at FootPrint Coalition.

Anyone Can Make A Difference, One Purchase At A Time

Jay Kapoor: Hey climbers, welcome back to Climb by VSC. Today I'm excited to be joined by two amazing individuals working on really game-changing things at the Footprint Coalition. So we're gonna start with our guest today, Jon Shieber, editor and venture partner of the footprint coalition. And Manuel Waenke, a director of ventures at the Footprint Coalition. Gentlemen, thank you so much for joining me.

Jonathan Shieber: Thanks for having us.

JK: Awesome. Well, you know, I was digging into your background, and like I said, there're so many aspects of what the footprint coalition is doing, and some really amazing people that are partnered with you to help build this and bring it to life. So why don't we kick it off by giving us a brief overview of what the footprint coalition is, the origin, the structure, and some of the different entities that are part of it.

JS: Manuel, since you precede me at the coalition, you wanna you want to take a first crack at this, and I'll back clean up if there's anything else that we need to chat about.

Manuel Waenke: That sounds good. So if we start with the origin story from the beginning, we're probably best known for one of our co-founders Robert Downey Jr. Ironman. And Footprint Coalition was set up a kind of from the get-go as a media investment and grant-giving company all focused on climate change and climate. And so there's a bunch of aspects to this, and I'll let Shiva jump on the media side because he's much, much better versed in this than I am. But the whole idea behind the footprint coalition is how do we build a global community, an audience around climate change or climate tech, get people involved, get them excited? And do that through media and content publishing it, investments and venture capital, and we can talk about that in a second and how we differentiate ourselves in the market and then also do it at an earlier stage by supporting scientists and research projects at a stage where a typical investor probably couldn't get involved

JS: When they're not only an investor, but where like academic money doesn't even flow at that point. So like, when the history of the organization really started with that nonprofit side first, right like the first person who was brought on board is, was our partner Rachel Krupa to manage the nonprofit investments and what she was looking at is like trying to accelerate the adoption of technologies that are focused on climate like mitigation, climate adaptation, and sort of ultimately planetary restoration by bringing some of these technologies to the frontline and fenceline communities that didn't have access to them. So that was one of the things that we were doing early on. And then that sort of evolved into providing fast grants to researchers that were working in areas that we thought were very important for the next generation of climate solutions are that Rachel and a group of experts that were very important and giving them sort of small-dollar fast grants to get started to get that research going so that they could eventually apply for more money down the line. And then after that was sort of set up then the ventures team came in. And like the family office, Roberts, like the Investment Office, pivoted to start focusing exclusively on climate deals and climate tech deals.

JK: So I'll start with the category that I know a little bit better. So I know we said grantmaking a nonprofit on one end ventures on you know, sort of one spectrum and then the media business. So we'll start in the venture world because that's where we come from, man. Well, maybe talk to us a little bit about what makes FPC ventures different. What are you able to bring to some of the companies that you're working with? That you feel like is unique or that you really felt like you know, needed to exist in this ecosystem?

MW: Yeah. I think it kind of links back to this, this entire environment, and all these capabilities are building ads for the print coalition as a whole. And just quickly, linking it back to the media side, what we mean by media and Jon will keep me honest here is we were becoming a very broad digital publishing content creator that includes social media, short-form content, and news articles. We just finished production, our first TV show that Robert is doing and starring and so while we're building all these muscles and channels, on the media side, we can use that where I sit on the venture side, to help the companies that we end up investing in. I think we've heard from a number of different experts in this space that one of the problems with climate tech is that the technology is very strong. The storytelling often sucks. We've seen it over and over in the past that so much adoption of technologies can hinge on the stories that we tell ourselves, and so we can bring that to bear with our companies. We can help them from a storytelling and awareness perspective, we can include them in content that we're already creating, and we can create content with them and for them to begin to add this very differentiated value than really anybody else around the cap table, which makes it really fun.

JK: And John, coming from the world that you came from, and maybe this will be a good chance to sort of give your background and what brought you to the footprint coalition. But coming from that world where you hear a lot of VCs launching new funds, broadcasting their value add. I gotta imagine that your meter went up a little bit. You're like, really is this a real value add? Is this something that's actually working or is it like the value add that other venture funds so maybe give us a little bit of like, what brought you to Footprint Coalition and why you believe that this was different?

JS: This sort of opportunity to continue to like to tell stories and be involved in that side of things which has been like my only thing I can actually do. I've only done that. That's been my professional career for 22 years, right. So that's the only experience I have, it's sort of telling stories. So that was attractive and just the ability to work on a plant on a platform at a scale that very few others you know, institutions or organizations can match is pretty amazing. Like, just the breadth of projects that we can work on on the storytelling side and the different levers that we can pull to tell stories whether it's through sort of social media, whether it's through, you know, television and streaming, and that kind of storytelling, whether it's through you know, using occasionally when, when Downey is Danny's into it like his own platform, right, which is 150 million people to help you know, tell the story is about what's possible. And this is the kind of future that we want to build that is sort of better for everyone, better for people and better for the planet. It was really too good of an opportunity to pass. Up. And then, you know, the opportunity to then sort of leverage the filter that we get by telling the stories probably about all of these innovations and opportunities to improve the world and putting on a venture partner hat and being able to kick those deals over. To the team and have them that and get a sense of like the kind of deal flow that's coming through and the the different approaches that that companies are taking, I think gives us on the venture side, an ability that it's pretty unmatched in terms of the kinds of deals that we're seeing, and the grounding that we're getting an education that we're getting in all of these different areas.

JK: Yeah. And maybe I'll come back to you on this one, John, but I'd love your thoughts on it as well. Manuel, you know, we're not the first wave of climate tech investing, right? We've been on coastline green tech 1.0. And, you know, some of those companies turned into something valuable but a lot of investors ended up losing their shirts. As we look at the billions of dollars that are coming into broad spectrum climate tech investing over the last couple of years. In your years of covering this at TechCrunch. John, like, what is different? What do you feel is innately different about this moment in time? And why does this wave of climate investing make sense?

JS: I've been covering this stuff since 2006, when I was first writing about the clean tech industry as it was called them. The economics are radically different, right? So it's not a question of whether or when wind and solar would become more economical than traditional fossil fuel sources of energy. On its face, these are the cheapest sources of energy available. So if you are in the market, you're going to be developing these kinds of power projects because they make the most sense. And that is radically different from from the experience in the mid 2000s. The sort of consumer demand that exists is also much different than you had in the in from this earlier period. I think there's a realization that, you know, these kinds of energy sources are in fact cheaper, that they are cleaner and are better for communities, right. So it's not just a matter of like it's not a matter of climate change for sale, though I think everyone on this call would agree that climate change is real. And it's happening. And it's not academic. For me. I grew up in Baton Rouge, Louisiana, and I'm used to you know, hurricanes regularly decimating you know, my city and New Orleans, the city where I spent a bunch of time as a kid. All that to say, like, there's, I think a realization that this is important, not just from, from sort of the climate perspective, but also from, you know, an economic base economics. And then in addition to that, you know, it's it's the political environment within which all of this is taking place and the sort of leverage that you're seeing aggressor of countries put on on other nations because of their, their sort of fossil fuel wealth and thinking that that will enable them to get away with invading other countries and risking political stability in the global order. It is another example, the stresses that that conflict has put on the supply chain and food resources for people as well have, I think, made folks a little bit more aware that it's not just climate from an energy perspective, but also the risks associated with droughts and trying to shore up water security. It's the risks associated with food security and trying to find alternative and better ways to to make produce for everyone so we can create this world of abundance.

MW: It's just going to add, I think, the two things and the question is one of them is probably a lagging indicator, the other one's a leading indicator. The amount of venture capital and private capital that's been flowing in the space over the last couple of years has been both unprecedented. And I also think it's just vastly unexpected. But then the other thing is, is talent. And I think there's this big change there. There's a lot of young talent, some of the smartest people at universities and companies who are coming into the climate who want to work for climate positive or kind of technology companies that start them on their own.

JK: Yeah, I was I was in an eco and I'm with Jon said around the the economics changing and the importance of the economics changing because I think when when we evaluate investments, you know, one of the things that my my partner Vijay likes to say is like, would people buy this even if they didn't give, you know, a shit about the environment? Like, does this work in Arkansas and Oklahoma, right, like, in a way because there are so many of these that you know, companies that come and say, Oh, we have, you know, better materials, better packaging, maybe, you know, batteries, whatever. And eventually we'll get to cost parity. Right. And that's it to this point. It's almost like it doesn't have to just be a cost parity today. It has to be better. It has to almost stay top of mind for folks as the better economic choice such that we can solve some of the other problems and I think the venture capital is a good like, I don't know initial, you know, injection of energy. No pun intended, but long term what sustains it is that you know the unit economics makes sense. And the customers actually care for the product. So I just didn't want to double click on that because I'm glad you mentioned that piece. John Doe speaking of your co-founder, Robert Downey, Jr. You know, one of the things that I heard him say was, the most important thing when you're promoting a startup is knowing that they're actually going to make good on their promises. I think this was a conversation that you guys had about a year ago. And now you know, we look at it from the PR lens. These words like green sustainability, eco friendly, they kind of don't mean anything or we're not really sure what they mean. How do you help the startups that you're working with make good and stand out from the crowd? And really, you know, show folks that they are gonna be able to accomplish what they say they're going to accomplish.

JS: You know, the products should ideally speak for themselves, right? And if we've done our job as investors, then we're choosing the companies, the right companies that are making the right products that will in fact, you know, be better. Um, and the idea is to understand that narrative of what better means and what better is right. And I think that a lot of things are frankly, you know, we invest so early, a lot of these things are still in development, right? So it's still the promise of what will be better but we are, you know, patient with our portfolio companies, and we want to help them tell their stories at the right time. Part of the problem is, I think jumping the gun as well. Like one of the things that you saw, I think in that first generation or iteration of climate tech, clean tech startups are a lot over promising and a lot of buying into the hype cycle. Very early in pushing that hype cycle before these things had a chance to scale and be commercialized. So at every point on that journey, as these companies are developing their technology, there are you know, little moments that you can realistically communicate and sort of speak to you that are promising that are amazing, right like, but, but are just that like points on a continuum of a narrative that will be told for 10 years, at least, if not longer, right. These are companies that we're investing in to last.

JK: So let's talk about some of the investments that you guys have made and maybe we'll make it a little broader but happy to hear some examples like what are some of the things that you're looking for in a company that confirms this is the right investment for us to make at footprint coalition.

MW: What we look for is one of the long -term structural trends and industries that are going to undergo vast transformations and there's a couple of examples for that right that we've seen it with. We've seen ongoing progress with electrification mobility. We'll see a similar trend with electrification, energy efficiency in homes. We'll see how that affects how we produce energy and how our grid gets transformed. We'll see that in how our food system is formed and will be a driver I'll show off and sustainability as opposed to a detractor from it. So we look for these long term structural trends. We look for technologies and businesses with the potential to out compete legacy markets. Going back to what you said because they're just cheaper and better. Or we have a potential of getting there. The folks that I think 50 years I've put that the best they call it the Mr. Burns test, and any technology that they invest in has to meet the Mr. Burns criteria who, for everybody who knows Simpsons would have never invested in technology that wasn't there wasn't better and wasn't going to make any money. And then the third point, and I think it speaks to how we are our position in the market is we look for we look for value inflection points in a company's trajectory and so, because we have this broad coverage of the space through all the work that we're doing, and to the publishing ever since Jon has joined us, I think we've published to be honest, over 500 articles covering this space,

JS: We're pushing 500. We're like 480 right now. So almost 500.

MW: We cover these sectors and companies that we love, and we can kind of follow them over time and then and then can make the dividend investment decision as we see these value inflection points looming or happening, whether that's a technical breakthrough, whether that's unit margin trends, whether that's tipping points in commercial adoption, whether it's demand signals from large customers, policy changes, etc. So that's what we look for at a high level and obviously happy to go into any more specific examples.

JK: Let's talk about like a happy surprise one that you know, obviously you were excited to make the investment in but even you've been surprised by how well they've been received or how well the company has done would love to, you know, this is this is your moment to sort of pound the chest a little bit. I want to hear I want to hear about some of those wins.

MW: So I was just catching up with with the CEO at wild type, food investments, proper, cultivated protein and cm and probably the best alternative protein products to end up with the best cultivator product that I've ever that we as a team have, have tasted, just knocked us off our feet before as we met the company and before we made the investment, and that is technologically such a tough space and obviously you you expect that major major hurdles will be left to be overcome. There's multiple, multiple problems second sort of could get in the way but the think that company has so far been such a great example of just great execution and delivery and just given the complexity of the problem, how they've been able to stick to timelines, worked through all the work through all the issues that they said we're gonna work through. It's been incredible and like bet better than I would have even expected in my underwriting of the investment.

JK: That's one of my favorite portfolio companies in your portfolio. I'll tell you that because I love my salmon. That's sort of my go to dinner choice. And the more I learned about farm raised, you've got your own issues in terms of the pesticides and everything they're doing, but even out in the ocean you know, we can start to talk about like microplastics and how they end up in our fish and they ended up backing us and now you know, people are discovering that newly born babies have microplastics found in their systems because it's passed through. It is frightening. I don't know how else to say it right? As somebody who is a consumer realizes, all of this stuff isn't happening in a vacuum. We're not just polluting the oceans in a vacuum. It is directly coming back to us and even if you're somebody that you know, doesn't sort of believe in big picture climate change. It's that it believes in you, man, it's affecting you. And so that was when I was looking at your portfolio. That's a company that I've been reading about and following for a couple of years now. And definitely one that I'm rooting for just as a consumer so that we can sort of stop having to worry about some of these things. Yeah, absolutely. John, we're not gonna let you off the hook man. Talk to me about something that you're excited about. And it doesn't have to be a portfolio company. Maybe it's an under-discovered or under-discussed technology that you feel like more people are gonna know about, so we're probably going to breach 1.5 this year, right?

JS: We ostensibly now have seven years to make a significant dent in our greenhouse gas and we need to really bend that arc by the end of the next seven years if we're going to achieve what we want to achieve. So anything that can help these companies come to market faster in ways are things that I'm really interested in. Whether that's accelerating the capacity for you know, some of this doesn't look like venture deals. Some of it may look more like an infrastructure play or a private equity play. But things that can sort of accelerate the amount of capacity that's available for cellular agriculture and cultivated means, things that can help sort of bridge that gap between consumer adoption for things that still do have a green premium. associated with them. Heat pumps are a good example. They're still pretty pricey and hard to install, finding ways to like, get installers over that hump and get them comfortable and incentivize them to install this stuff rather than just bringing these benefits directly to the consumer I think is really important. New products and services that sort of take existing appliances and make them better through electrification and energy storage, right? So, you know, Channing three copper is a company that's doing induction ovens that have batteries attached to them so that they can work. When the power's out, or also be like a source of energy that can feed back into the home in a power outage. There are other I think impulses, another company that's doing the same thing. There are a range of innovations coming for consumer demand, I think that are also really interesting. That app directs touchpoints to the consumers, I'd never seen it. So much innovation comes from so many different factors to address this problem. That's another difference from the previous iteration of cleantech1.0.

JK: Yeah, well, we always like to end our show on that optimism. I'm glad you've jumped the gun a little bit, which is great, Jon, because I echo that with you. I think one of the things that excites me about about doing what I do and like I've invested in SAS companies in the past I've invested in, in healthcare, but the the energy, just the pure energy around the folks that are working on these solutions and people that are leaving, you know, other industries to come work on this, I think is what kind of wakes me up and gives me me hope every day. And we know that a lot of founders listened to our show and you know, they always reach out to us and hopefully now you guys for advice on storytelling, other than working with footprint coalition other than working with VSC ventures, what are two or three things, Jon, that a seed stage founder today or a company today could be doing to you know, improve their storytelling ability to actually help them stand out?

JS: Read widely and broadly keep track of who you're reading as well. Start building out your internal Rolodex of who you want to start communicating with and when you want to start telling your story. Look at how other people are telling their stories. So, you know, be as open to what else is going on in the market as possible. And then I think, you know, to your point earlier, think about how to tailor your messaging to the audience. That you want to reach. And sort of one piece of advice I try to give companies is to always think in terms of KPIs and see what sort of, of outcomes on the back end you want from the communication that you're the stories that you're telling, and make sure that you are getting those outcomes, right. And if you're not, then think about tuning your story to address those issues, in some different ways.

JK: Yeah, so the TechCrunch article is not the end goal. It should be the KPIs that come from, you know, the launch of it.

JS: The TechCrunch article isn't necessarily the article that you need or want, right, it could be, you want an article in, you know, water management, weekly or you want an article in the like every breakdown of what's new and technology or engineering review. Because each of these different publications have different audiences that are going to be important to you for something, whether you want new customers, whether you want to get in front of investors, whether you want to get in front of a store, these are all the secrets, right? potential hires, right like those are there different channels that you're going to want to tell that story and to reach those different audiences.

JK: So coming down the homestretch, you guys have been at this for a little over two years now since the launch, and since you've been actively, you know, both on the philanthropy side investing and now media, what has surprised you the most to date and not to speak for your co founder, but you know, working with Downey Jr. Like what have you learned, working with somebody of that profile in doing this kind of work?

MW: It's been extremely energizing. The feedback from the founders has been incredible. And in many ways we're at the very early innings of this right so there's a lot we're building this plane is flying it there's a lot more work to be done. There's a lot more proving out that we'll have to do many more years that we'll be working with those founders and have to make sure that we live up to our promises and our great partners but just the, the energy that's that it's giving me the energy that it seems to be giving our founders and the response that we've been getting, has been maybe not maybe not entirely surprising, but just but just amazing to experience and to go through.

JK: Yeah. And then Jon, for you, what surprised you about working with somebody at that profile that cares about you know, this work?

JS: Surprising is maybe not the right way to frame it. I mean, it's really great and energizing to see how passionate he is about these issues and about storytelling and about wanting to, to get it right. And, and, you know, be engaged. It's not the right word. It's, you know, awesome to see him devote the time that he's devoted to some of the companies that we've, you know, to the companies that we've invested in and, and really, you know, engaged with us and with them, you know, it's not something that he has to do, right. He has a very successful and thriving career, as, you know, one of the most celebrated actors on the planet, who is incredibly talented, and continues to do amazing roles. So the fact that he's willing to carve out any amount of time to, you know, work on this stuff. And, to really be engaged is great. I'm not a Debbie Downer, but I want to get back to the point of what's been surprising. One of the things that's surprising to me, is how people still can't get their heads out of their asses around, like, the breadth of solutions that we need to solve this problem. And how there still seem to be these kinds of turf wars among climate, various climate interests and climate scientists.

JK: So tell me more.

JS: Well, I mean, like, you know, screw renewables, we should be focusing on nuclear fission, nuclear fission, we should just be focusing on renewables, screw nuclear fusion, we shouldn't be even touching that ship with a 10 foot pole. Like there, there are conversations that we are still having around. allocation of resources when the response is yes, and we're just not doing enough across any vector. We need all of the different levers of capital that we can deploy or pull to deploy and shove as much money at this as we can, right. It's $9 trillion a year by some estimates. Every year for the next 27 years. That's a lot of money that needs to be moved into new technology solutions, existing technology, solutions, infrastructure, all kinds of Public Works and development. And that's not a it's not a problem that gets solved when people are fighting over, which has the most potential impact. It's like just let Yes, let's do it all. And the fact that we still haven't managed to get over some existing sort of turf concerns has been surprising to me that this is still a conversation that's happening in the year of our Lord 2023.

JK: Yeah, I like that in the sense of like, I think folks are approaching it with a scarcity mindset. But coming back to the data that we see of just how much money is coming into even just early stage ventures, investing in climate, there's no reason to have a scarcity mindset. I mean, when we talk about public dollars, yeah, maybe maybe that's a different conversation. But when it comes to startups, there's no shortage of capital for climate. This has been a really wonderful conversation with John Schieber and Manuel Venky, from footprint Coalition. I have loved hearing their perspectives on just how to build a fund, a media entity, a nonprofit inside of the climate innovation world. So Manuel, and Jon, thank you so much for joining me today.

JS: Thanks, man. Have a good one.

MW: Thanks for having us, Jay.

Thank you so much for reading our latest update from VSC Ventures Fund I. We're in the early days of our long and healthy partnership with all of you, so please reach out to us with additional questions on anything above. Thank you again for your support for our vision and our fund!

Vijay Chattha & Jay Kapoor

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