Published August 30th, 2023
Why Policy And Climate Tech Go Hand-in-Hand
Jay Kapoor: Hey folks, welcome back to another episode of climb by VSC. My guest today is Vaughn Blake, who is a partner at Blue Bear capital, where he focuses on the renewable energy industry. Specifically, he's focused on themes and opportunities, where policy and technology catalysts interconnect. And prior to Blue Bear, Vaughn managed a portfolio of emerging and public funds and on both the public and the venture capital side for a South California based family office. Vaughn also held a lot of board positions at early and growing companies so I'm excited to dive in on all of that with you guys. I want to start by saying, Thank you so much for joining me on the climb today.
Vaughn Blake: Jay, thanks a lot. It's an honor to be here excited to have a chat with you.
JK: That's wonderful, man. Well, I want to start just so our listeners can have a sense of who they're hearing from today and who they're going to learn from. So what sparked your interest in the renewable energy industry? And how did that influence your career path towards, you know, now where you are a Blue Bear Capital?
VB: Yeah, it's interesting. I mean, I really came to this space almost opportunistically. I've been investing, both as a GP and an LP for a number of years. Started out as an angel, doing a lot of FinTech investing, then moved over to launch a solo general partnership focused on frontier technologies and their industrial and enterprise application. Out of that experience was really just brought to the industrial side of the software game. And as I sort of, began to think about my next move was I briefly went to a family offices on the allocation side for a bit. So investing in funds, both venture and then we did a lot of stuff across asset classes. So I did some public's a macro some credit, we did a crypto fund. So a lot of theories on what managers strategies were both successful and what sort of managers strategies were maybe a little bit overweight in the minds of LPs and I met my friend Ernst when he was getting Blue Bear started and you know, initially, the learning curve for the energy industry is quite steep. So I think it took me about maybe two years of just reading and listening and learning to understand just the the massive opportunity that was out of us on the energy transition side and more specifically within the venture and software piece of that, you know, sure a transition. It's funny Initially, I thought that the concept was almost too niche to be viable. And, you know, after two years of research, learning and you know, sort of getting closer and closer to both the existing portfolio and the opportunity set I recognize it's probably like one of the richest gains to tap as an investor and then jumped over, you know, 2000 at about halfway through the first one to Blue Bear is when I joined the partnership, that's awesome.
JK: And as somebody who has maybe a little bit earlier in their journey into this world of, you know, climate adaptation, climate innovation, I have to ask, what were the things you did to actually kind of get up to speed on this industry? And how did you sort of get comfortable with what is sometimes a pretty dense, you know, subject matter?
VB: Yeah, I mean, I think there are a couple of different ways to get up to speed. I think, first and foremost, having a significant amount of early stage investing experience just helps a lot, right, like, especially within stock within the software side of things. The business models were not entirely foreign to me, as well. Understanding different types of generation understanding the complexity in the utility side and the utility space understanding really, you know, product development in a more fundamental and comprehensive sense, like, those were the areas where I was most green, and that's where I had to do the most sort of research is really project side, understanding how utilities operated. They were to treat transmission and distribution like all these things, now that you know, I take for granted but even just simple like, you know, all the electrical engineering stuff that I don't think is is an absolute necessity to to have a PhD and to invest successfully at the early stage, especially with on the software side. But yeah, you know, the base and all. So that was a lot of the reading that I did, so that I can have meaningful and substantive conversations with founders. But on the business model side, I was very familiar with both AI as a service business models as well. As software as a service business models. And I had done a lot of investing within the deep tech space, right. I built primarily AI and space tech investing out of my first fund, a lot of immersive computing as well. The technical side wasn't very steep. It was, you know, more understanding the size of a one megawatt solar project versus a gigawatt solar tract.
JK: Yeah, so I guess you brought up sort of the the complexity of energy projects when you were initially speaking and I think one of the things that's kept a lot of venture investors at bay is kind of understanding what is actually venture scale and investable in this category versus, you know, maybe what is a debt project or better left as a private equity project. And, you know, I've heard you say that we need more digitized clean energy assets over time. So I guess within this perspective, how do you discern what is a venture investable business versus what is maybe best left to a different asset class?
VB: That sort of goes back to our thesis and you know how we see the opportunity for venture investing within the interview transition. I think there is a lot of opportunity on the project-oriented side to sort of yield investors here to invest in, you know, real product development, and you certainly need it. And I think we're gonna need more and more of it. And the way that we see the world is, all of those assets need to be orchestrated, managed, distributed, operating, and maintained, and protected in all the various forms. of digital technology. That's where we see the biggest lever is I mean, if you can increase the generation capacity, through optimization via software, a gigawatt or 20 gigawatts of wind, just five to 10%. That's a power plant sized amount of energy that you're adding to the grid via a fraction of the amount of capital it would take to actually construct that power plant. So if you can use software and use data as a lever, then you're not only increasing the generative capacity of an asset but you're also reducing the potential environmental impact and having to build a commensurate amount of generation via some sort of other power plant or even another wind farm there. So a solar project. So in the early innings of this massive deployment cycle on the asset and project side, every amount of data that can be captured, optimized and then utilized to make things more efficient provides us with increased generation, increased energy and you know, a lower footprint.
JK: No, it's super helpful to think about. I think we're kind of a decade of SaaS, verticalization, right, and sort of implementation within industries, real estate manufacturing, where we thought software would never reach. We're starting to see sort of more sections of that within sort of the broader, like energy transition. Now in these industries. What I sometimes struggle with understanding is like the round names, and maybe you can help me understand that a little bit better because coming from a software background myself before we spend time in this category, like there's very clear milestones and benchmarks, right? You know, okay, get to a million ARR you're in this round your priced this way, get to 5 million ARR and enlarge this new echelon of investor capital. What does that look like in your world when we're talking about energy assets and energy transition?
VB: We define a company's investable within the mandate for the military to take an opportunity seriously as post revenue and that's, you know, post pilot conversion essentially so early revenue businesses, let's say you're making your first couple $100,000 in AR, right. And the reason that we have you know, what seems like a wider spectrum than others is just oftentimes when you're dealing with heavy, like very serious end market, and markets and customers, it can take a little little bit longer than for example, like a consumer facing product, lead growth type of type of product, to hit those milestones, hit those conversions. Series referenceable customers that you know, hopefully you can replicate and build upon. It's just a different game when you're dealing with more on the industrial side of the market. And as a result, we've seen businesses that come to us and see that they are very promising and maybe that first approach or that first go to market doesn't work, they're able to raise more capital. So now we're gonna proceed to BBC series A, and the business looks much more digestible to us and it says, We understand what levers Blue Bear can pull to be of value to that business. And sometimes it just takes a round or two and we don't dismiss a company and think that it's over just because something didn't work from from let's call it the seed to the A if, if they you know, they end up figuring it out and we still see the upside that would be required to make an investment and return a substantial portion of our bond. Even if it's a series B Company, we're willing to jump in the boat.
JK: And yeah, it's something I tell founders all the time, which is like the round name is what you make of it, right? I've seen seed one, seed two, seed three, until they finally found product market fit and now it's a Series A Yeah, and it's like, exactly, so like it took him 12 million to get there.
VB: Yeah, exactly. I mean, you know, obviously you have to take a look at the cap table and make sure energy and the other folks you still properly incentivized to keep going but is this like urban does a really good example, we didn't enter that until Bing definitely saw the early iterations loved. Cory loved the CEO. Near the end of the day, he probably figured something out and he's definitely on the right track now and certainly check was a little bit bigger evaluation was a little a little bit farther along, but the risk of being reduced to giving you
JK: so you're spending time with a lot of these founders, you know, on the boards that you're on, but even as you're kind of meeting them on their pitching Luber capital and you've spent time outside of our climate and seeing what the founders' needs are. Are there two or three things that you've noticed when it comes to the founders that you're backing here at Blue Bear that they need that's different from the folks in sort of general tech to be successful?
VB: I think it's probably more of like in an inverse to that question where hopefully climate tech founders hold themselves to the same standard drum, you know, is this operations, you know, margin delivery, working on working towards growth and efficiency every single day that a generalist founder would have and I think it has a climate founders sort of distracted outside of just getting the basic business fundamentals. Correct with whether that's a lot of media engagement, trying to tell the story of the company or trying to ensure that sort of broader industry into which he or she are actually operating gets elevated and gets a lot of capital, the less that you focus on the the core business fundamentals, the more likely you are to not be able to raise that next round or not be able to issue metrics, or the reason that we're doing this is we think that it's an incredibly lucrative pathway to invest in and if it's not, then we're in for trouble, because the transition itself won't be properly capitalized. We have to be able to make money with our investments. And as an extension, these companies need to be able to grow in an efficient capacity, I would say just sticking towards the basics of one's unit economics, one's growth rate and one's capital efficiency, especially in an environment like this. Now for pre commercial founders that are working on, you know, battery chemistry innovations or something that's more lab based. I think that there is definitely an entirely different set of success metrics. Oftentimes, they're more about TRL levels, things like technical readiness, readiness levels, or getting to a certain stage of efficiency or minimization, etc. And I think you just have to be really focused on those engineering problems and communicate them well to this is what happens when we get to this this next stage of the engineering innovation GERD and understanding that pathway and being extremely communicative about that with those early investors also being able to identify those sorts of sources of non dilutive funding that that are just an absolute necessity for pre commercial founders. But yeah, for the businesses that we're investing yet it's it's really just, you know, being able to grow efficiently and understand what what team building really means and is and understanding that you're basically building a new company every every 24 months, be comfortable with with change and be comfortable with being iterative about how to solve the problems that are inherent in the business.
JK: I want to click a little bit on something you just said there about the media component, given that that is something that ultimately we had a VC venture spend a lot of time and where do you see founders go awry on that?
VB: I think having a strategy around it creating an act, an actual strategy of how you're going to interact with the public and with your public persona with your brand, building it with very careful and thoughtful about how you want your story to be told in the media and in public and what elements of it you can control the elements of it. You can't control the narrative aspect, and it's incredibly powerful and incredibly meaningful, incredibly real. And we've seen this and there's a lot of success cases where we've seen the power of narrative, reshape industry and reshape the way we see the world. I think when you don't have a strategy and you're constantly trying to get in front of anybody who has a microphone or sort of product Sprint's where there's a lack of a thoughtful and reflective strategy around how you're interacting with the world. It can become a distraction and you can think that you're making a lot of progress by virtue of the number of panels or podcasts that you're on when the business is, you know, at a background on fire.
JK: Our listeners have heard us say this before, but you know, it's like, Look, you do PR you do press for one of three reasons, right? You need to reach customers. You need to hire new employees and you want to sort of convince them that you're a great place to work, or you're about to take off, fundraise, and you need to add more capital so you can keep doing the first few things. Anything beyond that is just ego. And it's wonderful to send a TechCrunch article to your family and say, hey, look, they wrote so nicely about me, but if it's not getting your customers, it's not getting you employees and it's not getting you more venture capital what's the point? Right, so you said it very well. Let's talk a little bit about a company that you've backed. I always love hearing the sort of surprising wins right? What was the company that you back that has surpassed even your kind of wildest expectations for how well they would do?
VB: Yeah, I'm pretty optimistic. So you know, I get really excited about any company that we're backing, one of my greatest strengths as an investor and certainly one of my greatest weaknesses as well. But usually they're pretty closely tied together. I think a business that the world would have continued to be surprised by and you know, certainly wouldn't have sort of identified as the breakout hip and it's become as it's transect, which is a company that's based in San Antonio, Texas, that was launched by first time founder Robin lane and her husband Sam lane, robins, the CEO and founder. The company basically provides environmental due diligence service for product developers something that let's say you want to put some solar panels in the ground and you know, you've got a great spot but lo and behold, you know, it's on a wetland or they're endangered species there or there's, you know, an easement. All of these things that can really throw a massive wrench especially into large scale development where you're, you know, at the finish line you've sunk 10s 10s of millions bucks into this in one way or the other. And Alison, you know, you're you're, you're out of luck on the basis of environmental estrangement. Robin was an environment consultant. That's how she began her career. And, you know, basically, developers would would hire her and folks like her to ground truth the site to run reports from a kind of laborious work consultancy paid by the hour type of approach and Robin relies to digitize her knowledge and digitize that job and make something that you know, took weeks and you know, 10s of 1000s of dollars and wrap it up and you know, with a couple of button clicks and software subscriptions, and they've really gone on, I think they had their best quarter last quarter. We won't get into the numbers, obviously, but they're doing extremely well and certainly riding that derivative wave of this trillion dollars of spending is going on the product development across the wind and solar grid. Every element of your product development that we're witnessing on an exponential scale, their product and service sort of is an absolute necessity.
JK: I'm glad you talked about the tail winds there, but that sounds like fantastic company. And I'm glad they're kind of riding those tail winds. One of the things that really surprised me is that every quarter, CTVC publishes where venture funding is added in different categories. And obviously climate is one that we track pretty closely as I'm sure you do as well. Q2 Series B funding down 26% q3 or q2 Series C funding down almost 75%. Like how do we square that circle when we see the size of the opportunity, the immense amount of interest in it? And yet we're seeing Series B and Series C funding droplets. Can you help connect those dots for us and look at what's going on there?
VB: There's a retrenchment that's going on at the growth stage. Folks, we're so far over there's ease and a lot of the it's interesting the generalists that have like climate sub bonds, you know, obviously there are parts in their books that have just been like decimated, they're just pulling back and they're going to pull back until we can collectively see like a significant reset, or, you know, on the flip side, LPs, really want to sort of deploy into these funds at scale again, and you know, we'll see another another run up. And then we've got, you know, the climate specialist funds that were sort of raised over the last couple of years that are growing there in orientation, but they've just kept their, you know, they've been very slow to act, I think rightly so. A lot of those GPs are similar to Blue Bear and that there are a lot of folks that come from later stage investing, and they just tend to be a little bit more rigorous and conservative on the underwriting and analysis. And if you know you're looking at a business that is trading at, you know, essentially an infinite revenue multiple might be diverted to wait and see until you know, cooler heads prevail. And I think you know, it's not just a one way street either. Obviously, we've certainly witnessed it in the first half of the year. I think founders were going out with valuation expectations that were probably mismatched where investors were. And, you know, just in the sense that, you know, strong founders may be waiting to test the market or vendors that just weren't able to meet their valuation expectations were not weren't able to get transactions actually closed. So there's a push and pull like a reticence on the side of the of the boundaries to to raise capital evaluations that VCs were providing and then, you know, an apprehension on the side of the the investor for one for just general macro to to calm down a little bit and to to wait for founder expectations to be reset. So, I think well, you know, we may be closer to the bottom than we are to the top. It's hard to say, but no, the proof is in the pudding. I think it's just that we don't have the same rose tinted glasses that have become a little bit more clarified. So yeah, I think but you know, on both sides, so I think boundaries gonna be much more aware and equipped to create compelling, capital efficient businesses that are growing and meet investors who are you know, being forced to reconcile sort of the mania that is happening.
JK: No, I mean, it's sort of a sobering perspective, but I think a much needed one. Like, I guess what you said makes a lot of sense for the founders that have a little bit of runway and they're sort of thinking about the targets they need to hit to get there. I guess how do you advise the founders, you know, whether they're your portfolio or ones that you're talking to, that are raising in this market? Because they have a runway through the end of 24? Let's or the 23 are the early sort of innings of 24. How do you advise them?
VB: Yeah, I mean, I think it's just fundamentally that there is capital. There's tons of dry powder. There are tons of folks that are interested in investing in high quality businesses. So when you're going out have the expectations that diligence requests and the bar at which one has to be in order to command capital at a price that is, you know, like sort of in a line with historical dilution from round around, that bar is just going to be raised a little bit higher. So know that if your expectations are to take 20% dilution, then you hopefully are extremely efficient and you have a high growth rate like those in your Trend risk is your, you know, you're the that you're sticking essence has been proven over a longer period of time. If any of those sort of core metrics like you know, basically, you know, if you're churning a lot of customers you're growing bigger efficiency is just garbage. Or, you know, your efficiency is great, but, you know, you're not going quite as fast as one one would hope and expect, you know, to be gained from a valuation perspective and expect to be diluted a little bit more than you than you would have 2, 3, and four years ago, there's obviously like that, you know, every business I think, these days that is doing very well and has investors that that tend to follow on and you know, have dragged out or want to, you know, support the continued success. A lot of folks on the venture side are looking at this as an opportunity to grab more ownership, right. So, you know, making sure that business does have capitalism in 2020. For just, you know, you know, the existing investors and then you know, testing the market, you know, six months time I think that's happening a lot but above all, it's just unless your report card is straight A's you know, expect you know, more dilution then you probably are are going to be happier with.
JK: It's a fair point. There's one thing that, you know, we share with our founders, which is like, Look, you have to understand the incentives of the folks you're raising capital from, right, like, where are they in their funds cycle? Are they 40% deployed? 60% deployed is the rest of their capital reserve for the winners in their portfolio? And if you're trying to get in there, you know, they may only have one or two deals left in this fund. And oh, by the way, they're not in a position to be raising the subsequent fund or maybe they're not even close to getting that first close. And I think it's important that you said that there is a lot of dry powder out there. I think it's ultimately about helping founders understand who that is, where they are in their cycle and kind of what their incentives are. Why are they deploying slower? Because they aren't, they're not gonna be ready to raise their next one.
VB: Yeah, I mean, what people were certainly like on two year deployment cycles there for a while, which was crazy. And yeah, it's obviously biting some people back at this point. The other component that I think is an honest conversation is just understanding how to manage your runway, right? And like if there is any existing fat that needs to be cut in order to, you know, give yourself another quarter then it's probably the time to make those hard decisions. Unfortunately, the one anecdote that I would drop one of our venture partners, who as was an LP in the in a in a fair number of funds, both here in the US and also in Europe, had just mentioned recently that everybody that he's known that's made a significant cut as of late has not seen growth slowdown at all. So I think that there's I don't think that's obviously anecdotal. And you know, I wouldn't fall for that in my store. I agree that data is unscored by data. But I think it's an interesting anecdote and there's probably like you know, a kernel of truth.
JK: Yeah, very, very much. So. So, you know, speaking from the LP perspective, since we're there, you gotta spend some time on that other side of the table, running manager selection for a family office, obviously, having raised capital for funds yourself. What are two to three things that LPs are looking for from these sort of climate focus VC funds today specifically?
VB: Yeah, I think there are a lot of different types of LPs that have attraction in the climate space these days. And, you know, I think there are some they're like the jameelah and dramatic magical solutions to the climate crisis, which work yet because, you know, there are no radical solutions, unfortunately. But I think a lot of institutional investors, as always, are trying to find, you know, vehicles through which they can deploy large amounts of capital and, you know, efficiently insert in some capacity. So a lot of the institutions that are springing up these, you know, ESG, focused, funded funds, vehicles, you know, things like that. I think there's a massive prevalence in that now. I mean, we get more inbound now from folks that are sort of creating climate focused funds to fund vehicles than we've ever gotten. So that's an interesting development. I think there's still a steep amount of the curve that a lot of those folks that are meeting those vehicles right now in need need to sort of need to sort of climb before being able to make decisions in an appropriate Bassetti especially in terms of the risk and return box where you get into, okay, do I want to invest in companies that are, you know, more hardware or invest in funds that are invested in companies that are more hardware focused, you get a little bit on that project side? Certainly a longer timeline to commercial delivery, but at the same time, at scale, the amount of capital that can be put into something like this is very large and will eventually, you know, flip over to a yield play. So, large pension funds are examples. Are we as much interested in incentive to invest in managers that are enabling those longer term, places where capital can be placed down the road? So that's like, you know, much more of the extended stack and Extended Thinking or LPS; these are essentially infinite time horizons with extremely large pools of capital. So that is like their prime directive, right staying to the point where they can safely put those extremely large amounts of capital to work. Now, on the flip side, I think there's, you know, a lot of impact driven family office capital that's a little bit more. You know, it just ranges there's very sophisticated folks there, some of which are LPS that have been in space for decades. They're definitely folks that are newer and looking for more of those magical solutions. That people are, you know, that people are, are selling in some capacity. Right. Like there's a lot of ways to abate carbon that might not scale. Well, at least it might not scale economically. But yeah, I mean, I've been really enthusiastic about the state of LP interest in space. And, you know, there was a period of time where I was really worried that a lot of capital is going into, you know, funds that were more focused on that and there's all those magical solutions and would end up you know, turning off the spigot because the returns wouldn't be wouldn't be very good. I think. Now, they that over the last few years, I'd say that that level of sophistication is has really sort of risen and and I'm excited about the returns people are going to be LPs are excited that I think you know that little piece of the pie within, especially the larger endowment style portfolios that's dedicated to you know, climate tech is going to continue to grow.
JK: Yeah, and I'm glad you said that. I mean, I certainly, you know, when we were going through our fundraisers and kind of 21 and 22 really felt the tenor of the conversation changes. We started talking to LPs, I'd say towards a later kind of second close of our fund, where they would look at the companies they were already invested in. We probably had six or seven investments, and they would say we told him about the climate. And I'm like, oh, that's kind of the more you know, early stages, we hadn't done as many deals in that category versus other ones. And that was the one they specifically wanted to talk about. And I think it was for a host of those reasons, right? It was okay, we see that as a stepping stone to further opportunities for investment in this category. And I think others, especially on the family office side, were just like, No,I just personally care about this. Like, this is something that I feel like I need as you know, dumping them into my portfolio. So much so that you know, we got questions like hey, well, why don't you guys just do a Climate Fund? And all in due time, LPs? Well, we'll see how that goes.
VB: Yeah. Well, yes, it's really interesting. I mean, from our perspective, as GP is now you know, gone or, you know, we're on our third fund now, and funds one and two would go into, you know, an endowment. And we'd be chatting about strategy and we would get kicked back and forth between the energy group like the Natural Resources Group and the private equity slash venture group constantly. It was always this sort of battle or game of ping pong. And now you know, just in a relatively short time later there are folks that are running purely climate strategies at the same institution. So our depth is definitely evolving in the right direction.
JK: Yeah, that's great. So I mentioned that at the kind of closing of our show, we play a game called hyp or hopeful where I kind of make a statement, and I'd love your thoughts on whether you think it's hype or hopeful and then, you know, we'll unpack it for a couple minutes if we can. So there's been a drop in venture funding as we talked about, but an uptick in investments and kind of energy transition at the project layer, specifically, things like long duration storage. Is this a hopeful sign of diversification within climate tech or kind of another hype surrounding a new trend like we've seen in the past?
VB: I mean, I think it's hopeful, it's going to need long duration storage. There's no doubt about it. We have an investment in a few companies, but probably most applicable in a company called assure that will help with analysis, terminal event prediction, and that's something that is a little bit worrisome, as of now around that long duration storage. I think the issue there is just a dinner connection, right? Like we can, we can build these things till the cows come home. We need to interconnect and that seems to be just quite a bottleneck.
JK: Yeah, I guess. So thinking sort of a different tack here, then like, you know, for a long time VCs have kind of shied away from investments without the interface with government that have to interface with, you know, public utilities, like anything that is sort of in that sector and now given this sort of broader energy transition. We're hearing Hey, the government is more ready. These public utilities are more ready. So I guess in your perspectives in the companies that you've seen, government interaction with startup public utilities, interaction with startups, turning in the right direction, hype are hopeful
VB: Yeah, I mean, definitely at the macro scale. I don't think there's ever any, maybe not since the beginning, like Dorito in the early days of venture capital, where, you know, there was basically a lockstep relationship. Between funding innovation. He had a government in sort of commercializing that, that innovation, you know, at HBS back in the day, I think it's probably come full circle and, you know, you've got like, the NATO venture fund, let's be put to work. I saw that, you know, you know, the American dynamism side of, of the venture capital stack, in many ways. It's, it's a little bit counterintuitive, given like the sort of 2000 10s to 1000s shying away from government that I feel like a lot of was was sort of just the cultural turn, especially in in Silicon Valley, are very libertarian, I would say, you know, and there's there's this sort of recombination between the public and the private side, which I think is interesting, obviously, events but by the by the IRA and the chips Act, which we may or may not get into later. Yeah, I think it's, I think it's one of those things where we're talking about basically, World War scale level levels of investment needed for the transition, you know, trillions of dollars, you can't really do that purely on the on the private side, and you certainly need their support and concordance of the public sector to get these massive projects done. So it's exciting. I hope that we're able to continue to make it work and that, you know, the biggest issue is just the bureaucracy on the government side to get in the way and at least as of now, it seems like folks are trying to be more facilitative than they are up here.
JK: Sure. So sure, yeah. Okay, well, we'll get a little spicy then you brought up the IRA. So I'll tell you this with every passing day, the more pitches I see on that site, the IRA as a massive win for their business continues to grow. And yet as I understand it, you have sort of other perspectives on that. So IRA is a real tailwind for early stage companies hype or hopeful.
VB: Yeah, I think it's a little bit I think it's character IP. Unfortunately, you know, I think that we've got a ways to go in terms of the implementation of the legislation. That's the issue. I mean, great things have passed. But honestly, the bipartisan infrastructure law is that the rubber there is on the road a little bit more firmly. The Nebby program, you know that like at the state by state level, that's, that's real. That's actually being implemented in the chip SOC design arena. Yeah, we are $2 billion to go in and start semiconductor research and to reclaim the throat of innovation there for the United States. I think that's absolutely necessary. I hope that the wheels turn without too much difficulty on that side. I just feel like the IRA is also a bit of a political football, that is just going to be especially when we've got elections coming up. It's going to be, it's going to be, it's going to be punted. It's going to be a piatra from certain sorts of places across the political spectrum. My concern there is that the understanding or the conventional wisdom is that this is something that's like inaction already happening where you know, so, you know, implementation itself is extremely complex and touches so many different departments of the government, let alone so many different elements. of deployment in certain aspects of the private sector, that it's just gonna be slower than we would have hoped. And certainly an early stage startup has very little to gain from that legislation even to begin with.
JK: It's very fair. Well, look, you're a very optimistic guy, but I do appreciate you calling out the height where it is. I gotta say we've been doing this segment for a couple of months now. And I tend to get a lot of Yeah, I'm hopeful answers. So I always appreciate it when somebody brings a little bit of realism and a little bit of perspective on that side as well. So thank you for that. We'll close where it was. I love to be close with a lot of my guests. You know, talking about this optimism we just referenced. So there's a lot of doom and gloom out there in terms of the lack of climate action or the lack of speed and these things. But, you know, we do this work every day. So we have to bring some optimism and focus on the good. What is one thing that gives you hope and optimism about the fight against climate change?
VB: The amount of talent that is pouring into this space that is incredibly serious, with every ounce of their intelligence, their creativity, passion network, there's nothing like that. I mean, I've certainly never seen anything like and and this is from folks that are, you know, across the spectrum of experience across the spectrum of demography, and, you know, it's really a cause that is universal in terms of the folks that are giving it their all, and that makes me excited. You know, there's clearly capital that's gonna continue to pour into the space, but it's the talent that it's going to help us you know, drive solutions here and that's what's what's what's exciting. There's just never been a greater abundance of talent. And there's never been a greater abundance of talents, talent pointed, you know, at this problem, so, we're gonna get there and there'll be twists and turns along the way, but I'm certainly hopeful about that.
JK: Yeah, absolutely. I'm right there with you, man. I think that's what I get inspired by too. When I meet these founders, you know, other than a college out of a master's program, this is their life's work where they want to dedicate it. You can't help but be excited and optimistic about that. So, Vaughn, thank you so much for joining me on the climb today for your measured optimism and realism. On some of these discussion topics. We're excited to see some of the investments you do and hopefully find some ways to partner together going forward. But thank you so much for your time.
VB: Jay, I really appreciate the invitation, and I'm looking forward to collaborating with you in the future. Thanks a lot.
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Vijay Chattha & Jay Kapoor