Angel Investing Empowers Climate Action
Climate change seems too massive to reverse. Its sheer size and scope make climate anxiety seem inevitable. I often struggle with how efficacious I can be as a mere individual. We have clear limits: without trillions of dollars or control over policy, how is anyone expected to put a dent in a global crisis?
The problem at hand is that we need structural change. Construction needs to get cleaner; agriculture needs a more sustainable composition; transit needs to be less individualistic. These all seem like greater problems than what’s accessible at the individual level. Societal infrastructure requires massive reconfigurations with the intent to become sustainable.
A solution that I find attractive is angel/venture investing.
Disruption of existing industries is necessary to create structural change. Some of this might come from within: legacy firms and governments will invest in a more sustainable future or new technologies. There are some problems with that, however.
Legacy firms have incentives to prolong the status quo. There is uncertainty of whether they can maintain current revenue or market leadership if their industry undergoes change. Investment in new technology also has speculative ROI.
Further, governments get caught in political games like gridlock, undoing the actions of the opposite party, and managing optics over delivering policy.
New technology and innovative business models come out of startups. Successful startups are led by visionaries with the ability to create social welfare or solve problems at scale.
A great startup will create value for its market by delivering on some want or need and doing it cost effectively. This is what gives me conviction in private businesses.
If there were a vehicle that crushed emissions yet was expensive, demand would fall short. If there were a vehicle that crushed emissions AND was cheaper than your average combustion engine, adoption would be inevitable.
People are given no choice, because there is no better choice, than to make the world more sustainable when it is their most economically viable option. Cement has notable emissions; however, a less carbon-heavy cement replacement would rise to ubiquity if it were competitive on cost.
Making the pragmatic choice and the sustainable choice need to start becoming the same option if there is going to be structural change.
That is why I’m convinced that investing in startups is a good path forward. Ambitious climate founders with commercially viable ideas need backing. Getting potentially disruptive ideas off the ground is within the grasp of an individual. At the same time, its magnitude could be tremendous.
Angel investing — investing in startups as an individual — opens the door for people who are concerned about the climate yet don’t know where they can fit into solutions.
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