Wallet Max Planet Positive Podcast with Carbon13

​​Join Bhuva Shakti, Founder & CEO at Wallet Max, as she speaks with investors looking to leverage inclusion and impact without compromising growth of investments.

​​This month, Bhuva's guests are Puja Balachander and Sarah Jones of Carbon13, where they support pre-seed/seed stage climate tech startups to accelerate their progress. Both are focused on establishing Carbon13's place as a leading investor in climate tech and expanding out its proposition in the space.

​​About Puja Balachandar:
Puja Balachander is a climate tech entrepreneur, investor, and product leader dedicated to accelerating the just transition. She is the co-founder of UpGreen, her second startup, which is implementing and financing retrofits at scale.

​Currently, she serves as Director of Venture at Carbon13, where she supports pre-seed and seed-stage climate tech startups using her experience in investment, product development, and commercialization.

​Previously, she was Director of Product at Think of Us, a civic tech company focused on systems change in the child welfare system. Before that, she founded and led Devie (acquired by Think of Us), a direct-to-consumer health tech startup that digitized child psychology interventions to support parents of children under five.

​Her career began in civic tech, improving public services at the City of Austin, the White House Presidential Innovation Fellows, and the World Bank in Madagascar.

​About Sarah Jones:
​Sara has worked in the London startup ecosystem since 2012, specializing in the 0-1 stage of startup building, and starting her own venture. She joined Carbon13 as its first employee in 2020, responsible for building out the talent magnet for the Carbon13 Venture Builder. She now focuses on establishing Carbon13's place as a leading investor in climatetech and expanding out its proposition. She holds a First Class degree in Classics from University College London and spends her free time wildlife watching and tending her allotment.

​About Wallet Max:
​Wallet Max is an inclusive global community of corporate executives and venture capitalists with a mission to expand fundraising access for high-growth startups in the technology, AI, fintech, and climate sustainability sectors.

Wallet Max's Planet Positive Podcast is a monthly interview with investors driving impact globally. Aligned with our mission to challenge the status quo, we showcase personal and professional journeys of diverse investors (Angels, VCs, PEs, Family Office, Corporate Venture) looking to leverage inclusion and impact without compromising growth of investments.

​​About Bhuva Shakti:
Bhuva Shakti (she/her) is the futuristic founder and CEO driving sustainable innovation at Wallet Max, a global community of corporate executives, policy leaders, and venture capital investors expanding fundraising access for high-growth impact startups.

Join Bhuva and have a seat at the table to be on the forefront of planet positive investing. Get Tickets to an Upcoming Event Here.

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Learn more about Wallet Max and our mission on the website.

Transcript

Wallet Max Planet Positive Podcast - Bhuva Shakti – Carbon13

BHUVA:

Hey, everyone.

Welcome to the September edition of Wallet Max Planet Positive podcast. I'm Bhuva Shakti, based in New York, and the founder of Wallet Max. We are a global community of startups, investors, and executives focused on increasing funding access across climate tech, clean tech, both hardware and software startups, and also financial inclusion and fintech startups with tech sector, predominantly in the AI space. We interview impact investors and venture firms every month for our podcast to share their background, what differentiates them from the crowd in terms of prioritizing impact along with profits and planet. We deep dive into their personal and professional journeys and their mission to uplift.

Today, we are speaking with two amazing experts from Carbon13. Puja is a climate tech entrepreneur, investor, and Product Leader, dedicated to accelerating the just transition. She's the co-founder of Upgreen, her second startup, which is implementing and financing retrofits at scale. Currently, she serves as Director of Venture at Carbon13, where she supports pre-seed and seed-stage climate tech startups using her experience in investment, product development, and commercialization. Sarah has worked in the London startup ecosystem since 2012, specializing in the zero to one stage of startup building and starting her own venture. She joined Carbon13 as its first employee in 2020, responsible for building out the talent magnet for the Carbon13 venture builder. She now focuses on establishing Carbon13's place as a leading investor in climate tech and expanding out its proposition. Let me now hand over to Puja and invite her to say a few words about her background and career path, and then we'll hear from Sarah as well and switch between both of them as we chat further.

Over to you, Puja.

PUJA:

Thanks, Bhuva. It's great to be here. In terms of my background and how I ended up in climate investing, I started out in public sector, actually. I was working in the Obama administration, so I was actually back in the US. But I was working in the Obama administration at the Office of Science and Technology Policy, where basically this is where I really started with my product development work. We were basically looking at doing almost internal innovation in government and often looking at introducing new products that would make services much more accessible, especially for more vulnerable communities. I did a couple of things that were climate adjacent, but not really in climate, more impact-related. I then moved to the World Bank, where I was doing chronic malnutrition work, but ironically, got to see a lot of the intersections between health and climate, because parts of Madagascar were going through a protracted drought for decades now, where whole regions have been dependent on food aid for decades, because and generations are malnourished and this thing because of changes in climate patterns. So climate change is an existential crisis in a lot of places, Madagascar being one of them, and got to see that quite upfront and personal. Then I moved into the city of Austin, where I was in a very similar role, but basically doing that at the city level. And then I went to do an MBA and wanted to transition to private sector. I started my first company, which was in digital health. Once I exited that, I wanted to get into climate in my day job completely and joined Carbon13 and have been using a lot of my operational experience from all of those different experiences, but especially as a founder, most recently, to help our founders that are on our programs. That's a great journey.

BHUVA:

Thanks for sharing, Puja. So many times when I talk to people about climate, people think it's "climate", but it's not really climate. It's about food, air, water, policy, and things that impact our day-to-day lives right? That's where you have started, so you have a strong background that leads you into the climate sector. Sarah, I want to talk to you about how you landed at Carbon13 and working for Climate Tech.

SARAH:

I think planned serendipity sums it up, which I think is a good watchword for just the startup world in general. You never know what connections you'll make will result in something down the line. I did Classics at university, so I'm a Humanities grad, went straight into working for startups, loved working with driven, passionate, creative, knowledgeable people. I was like, This is great. Then over the years, working in startups, working with entrepreneurial programs. By the time 2020 came round, I unintentionally had developed a skill set of marketing accelerator programs to entrepreneurs. So when the founder of Carbon13, therefore, needed somebody to do that, and I had made the connection with him five, six years before. That worked out really well. That was during the first lockdown of COVID, actually. I reached out and said, I'm on furlough. Can I help? Because I'd been too busy before. I joined as the first employee because job one was to get founders. Carbon13, it starts and ends with amazing founders, and it's a privilege to work with them and support them to build their startups. I do a bit of everything. It's as your intro said. I suppose communication and words lie at the root of it.

BHUVA:

Thanks, Sarah. I think 2020 is a pivotal moment for many of us, and many people have re-established old connections. And I think that's a great thing for you. And even today, your next big thing is going to come from someone you have no idea or you met several years back. So, Sarah, quickly going into your expertise. So what do you think your unique secret sauce is when it comes to climate venture building? What do you think is the pivotal moment? Do you think the pandemic time is the pivotal moment for you, or what is the moment that brought out your unique secret sauce in expanding and scaling this post the pandemic?

SARAH:

Deep question. Words. I'm good with words. I like doing lots of different things, and I both like the words and data side of work. That's where I'm quite good supporting early-stage startups who need jack-of-all trades, and they need somebody who's able to storytell because that's what early-stage founding is, it's storytelling. But then understand and analyze data both in your product but also in the results of the campaigns that you're trying to run. I think that's my secret sauce. I mean, at least three people this week randomly have said to me, “Sarah, you're so good at reflecting my pitch back to me in a simpler way.” I guess that's my secret sauce. The second part of the question was for climate tech specifically?

BHUVA:

Yeah, I would potentially say climate tech, specifically. What was that pivotal moment, even though you started at Carbon13 during the pandemic, that this is where you're going to be or at least now, it's five, six years already?

SARAH:

I think a crucial bit for me with climate is part of it is technology and part of it is money. But the third thing I don't think people talk about enough is people. Yes. About getting the the right people to work on the right problems at the right time together. That's my contribution to climate. On a personal side, though, I'm from a farming background. I love nature. I do birdwatching. I have an allotment. I never thought my farming background and my startup life would ever converge, and I love that it has quite unexpectedly. I was always interested nature and all of that. I just never thought that it would be applicable to the startup life. But I think that's an angle that I bring that you don't often see.

BHUVA:

Yeah, rightly said. Storytelling is really important. You may have the best patented solution, but if you're not able to communicate to your investor, it's very difficult, or even to your customers, right. Glad that you brought up money. Many people think when you're working in climate, you should not talk about money. But then if you don't have money, how can you scale the change, right? We have to care about people, planet, and profits as the saying goes. Thanks for sharing that. Also, very unique farming background. Who knew that it's going to be helpful today, right? And I'll go to Puja as well. Puja, what do you think your unique secret sauce as well? Because you've transferred from policy to government as well as at city level and then going into the private sector. What is that one pivotal moment you think that positioned you, that this is the climate-tech work that I love?

PUJA:

I mean, to follow Sarah's, I think my personal moment was honestly seeing the starvation and deprivation in Madagascar. I think that was for me the turning point of, okay, at some point, I need to work on the actual cause of the problem and not dealing with the consequences, I guess, to some extent, or at least dealing with the consequences in a more scalable way because you know I was working on basically rolling out some of those food aid programs in a more effective way, which is important, of course, but I think it felt like you were putting this massive band-aid on this extremely gaping wound, right. That was like personal sort of, pivotal moment, perhaps. But I think for me, my special sauce is just that I'm a founder and that I've done that now twice. I think that's actually Carbon13's Special Sauce in general, is that we bring a lot of really entrepreneurial people together to support the founders. Most of them have started and successfully exited their startups before and are actually paid to spend time with the companies. So it's not your average voluntary mentorship type support. It's very much like quite intensive, reasonably harsh support, but very operational. And it comes from a place of, we've done this and we've tried it, and here's what worked for us, and here's what didn't. And now you can take it and do with that what you will. So I think by far, the way that I add the most value is by basically putting my founder hat on and saying, Here's how I would approach this. Or here's a framework through which how you could look at this problem. And I found that even though my former startup was a D2C health tech product, those frameworks and the way that you approach problems is still super applicable even to building a deep tech climate startup.I'd say that's my secret sauce.

BHUVA:

Yeah, definitely. Because transferable skills are really important, especially if you know someone who has done this before. It's very easy to work with them because you're spending your energy in the critical problem instead of trying to explain everything, right. And also the pivotal moment, when we have an opportunity to mitigate, why can't we? Of course, we'll have to work on adaptation, resilience, but if we can mitigate, let's get ahead of it, right. So thanks for sharing that. And Puja, just going into the next set of questions for you. Why do you think, now that you have your secret sauce and your pivotal moment, venture studio investing is the right way to do that. And since you are in UK, where do you see the opportunities and challenges between UK and Europe, US, and the rest of the world?

PUJA:

So I think on the Venture Studio and sort of why we actually consider ourselves a venture builder, not a venture studio, I think there are some whatever subtleties there, but I think we all know what we mean. In terms of what we do as a venture builder, we bring together founders to come and start ventures. I think the difference between an accelerator is one where a team already exists, but they're super early stage and you support them with moving forward. I want to say a venture studio is basically where you've scoped out the company and you've done a lot of research to come up with a really good problem area and idea, and then you almost staff founders on it. And so we don't do that. Effectively, I think the reason that we use a venture builder model is because we think that the founders coming together and having that serendipity of how they actually come up with their own ideas using their backgrounds and their unique skillsets is what leads to better things than we could engineer for, basically. So I think that's the core reason why we pursue the venture builder model. And for me, it also felt like where I would be the most impactful as primarily an operational person. I'm not an investor by background. My background is very much in product as a founder, as a CEO, actually building something from zero to one. And so when I'm working with a bunch of founders that are doing the same thing, that means I can be most helpful to them. It felt like where sort of my special sauce and where the model would you know meet most serendipitously, perhaps. And then your second question around the UK market in particular. I think one of the reasons why it's particularly well positioned to be a venture builder market is because there are some incredible universities here, which means that you have really good PhDs and postdocs that are working in really relevant areas who now need to commercialize that work. Which brings us to why the UK is maybe a less great market is because actually those paths to commercialization are not nearly as developed here as they are in the US, for example. And so even though you have an equal, if not greater number of really great research coming out that is super commercializable, those paths are just not as clear. The way cap tables are structured as university spinouts, all of this stuff tends to stymie innovation in the UK. That ecosystem isn't as developed. I think that's one of the ways.

But At that being said, I think Carbon13 is actually trying to solve some of those problems. We bring in PhDs and postdocs who have those ideas. We bring in technical founders, both hardware and software founders, to help them build it. And we bring in commercial founders who can help them commercialize it. So we sort of solve that problem with people. Like coming back to what Sarah said, that the people are the most important bit of this. Like the reason we have a venture builder model is for that reason. And it also sort of plays to our strengths as an ecosystem while maybe making up for some of our weaknesses.

BHUVA:

Got it. How frequently do you do this in a year? Do you continuously keep bringing new set of founders and ideation throughout the year, or do you have, let us say, a roadmap? You bring them together two or three times a year, and then you focus on the rest of the aspects towards commercialization. How does your timeline look like in a year?

PUJA:

So we do have cohorts. We bring them together in concentrated times, basically. So generally, we run them once a year in terms of there's a Cambridge cohort, there's a Berlin cohort, and then we also have a venture launchpad cohort, which is actually an accelerator. It's not a venture builder. But basically, we're able to take about 160 founders between those programs through the program, and we're able to basically create, let's say on average, about 40 ventures per year through that process. That's a good number. And then we invest in a small percentage of that. Since 2021, which was our first program We've worked with 1,300 founders and counting. And I believe we're on track to hit 100 ventures invested this year.

BHUVA:

Wow. Okay. So that's a steady flow of founders and startups and ideas coming in, but not just coming in, also materializing in the end towards the next step of investing and growing big. Sarah just wanted to touch base on that point with you, with the current political landscape, geopolitical challenges happening everywhere, not just in US, UK, right. You see, big corporations and private investors are also shifting priorities So a venture builder model can only invest, typically in the seed series A, potentially, but then you need other investors to scale it, right. So why do you think still investing in sustainable ideas and venture builder models important today for the long term? And you spoke about profit earlier, right? Money is important. So how do you showcase the return on investment, even with the current landscape, when you take those risks and challenges?

SARAH:

Yeah. Big question. I think, as always, the future of VC, VC-backed startups is going to be where the flow of talent is. And I think UK and Europe now at the moment, in the current geopolitical landscape, has a strong magnet for that talent Puja has already touched upon our universities, but I would also say in the VC ecosystem in Europe in general. And our programs are very global with our founder make up. A cohort of 80 people will have like 30 different nationalities, and that's normal. Climate and the Carbon13's founding thesis was, we train our founders as much in the carbon or impact strategy as in the commercial strategy. And so even before we let them get to the investment committee, if they're not demonstrating that their solution could mitigate emissions by at least 10 million tons per year of carbon dioxide or equivalent, or an equivalent impact in terms of biodiversity or water resource or other challenges to the planetary boundaries. And we've always had a very strong connection between the company's prediction of commercial scaling and the locked-in climate impact. So, all of our startups are pitching a VC-size return on their commercial scaling plans as any other non-climate startup. But the value proposition that they have should have that impact baked in so that as they scale, it will inevitably happen. That's the approach. And climate is not going away, it's just morphing into normal business. So now, they're calling it energy security or they're calling it material security, food security. Our startups may not necessarily be presenting to customers as a climate startup, but it underscores the mission and the reason why they did it in the first place.nSo for example, we have a startup that's started in the US.nIt's launched in the US and it's in the steel industry. ns there anything more American or Trumpian than support for the US steel and construction industry? And because of the climate mission of the founders, they found a way to process the byproduct of the, I think it's the electric art furnaces, and turn it into a cementitious material, so a material required for cement, which is the most used material after water. To their customers, they don't look like a climate startup. They just look like a really good idea that steel makers want to engage with because it makes them money. I'll just use that as an example of how we might see the global landscape at this point in time. As we spoke at the start as well, so climate solution may not look like a climate solution, but it's in every part of our lives. 

BHUVA:

And good that you pointed out that I also see a lot of university and other talent, entrepreneurial talent also shifting towards UK and Europe, and even investors trying to diversify in and out of US, for lack of a better term. And you also mentioned some of these startups typically also have their thesis proved even before they come to your committee, right. That's a great thing to validate. Now, talking to Puja. So Puja, with all this being due diligence before they reach the investment committee right, how do you think some of the cross-border and volatile regulations within UK and rest of the world affect this? So you can do everything you can to the best possible, but then these are external factors. How do you plan for it and prepare for it?

PUJA:

Yeah, so Sarah and I have had this conversation at length, actually, about basically one of the Carbon13 things that we look for in a slightly like lower key way, perhaps, or at least it's something that we're very aware of, is the level of regulatory risk around some of these startups. So because there are some that are you know software platforms for a very specific compliance with a regulation that's climate-related in the EU. And there's you know obviously 100% risk that if that regulation goes away, that business case goes away. Unless, of course, the founders can pivot and that sort of thing. I mean the reality is like, one way that we mitigate for that is by investing in people. So you know that these are people that have the skills that when they see that coming, they will actually be able to be flexible and adapt. Because the reality is, even if you are building a startup for a regulation that's no longer there, you would have probably had connections with a lot of corporates who are all thinking about compliance in the climate space. And even if that regulation isn't the case, there's probably something sort of adjacent that you could design for. So you know all hope is not lost, I suppose. But there are some that are much more aligned with regulations than others. And so we have to form an opinion as Carbon13 about, okay, you know is this regulation likely to last? How politically, How politically charged is it? And then, okay, like how dependent on that regulation is this company on whether they have a business case or not? And so most of the time we're trying to mitigate on both sides. There's basically, so for example, one of the companies that has recently joined our portfolio is doing... They're recovering plastics from like scrapped cars and using that as a plastic for the automotive industry because there's a regulation around a certain percentage of recovered plastic from old cars that is in the EU regulation, but it's been around for quite a while. So basically for us, we're like, Okay, this has been around since the '90s. Therefore, that's not a super high risk that this is a really political thing that's suddenly going to be struck down. Even if it is quite key to their business case, we probably like can get behind that or we can get comfortable with that. The other side is, They've also made the case that as they're getting to scale, they'll be able to bring down the cost enough that it will actually just be cost-competitive with any other recycled plastic. There maybe even eventually with the virgin plastic, depending on how those regulatory wins go. So basically like, we try to see both the resilience of the regulation and how likely that is to change. Then the other side is, does the business have a path to viability, even if that regulation does go away? We do to kind of get both, where basically there's a short term opportunity created by the regulation, but there's a long term resilience that doesn't depend on it.

BHUVA:

Yeah. In fact, I also hear from a lot of people, these regulations are, in fact, a plus for us in the sense you are reinventing your supply chain, you are rethinking circular economy. So more of the reuse, repair, recycle is coming into play, so you don't have to depend on a lot of volatility in the supply chain. Thanks for sharing that, Puja. And Sarah, so far, since you've been the first employee at Carbon13, how has success been for you, especially from a personal point of view? Is there one or two companies that you really thought were doing great and you were impressed from Carbon13, personally, for your mission?

SARAH:

A hundred percent. And I think Again, it's bringing people together who would never have met, and also especially for female founders. So one of our companies is Kita from our second cohort, so we invested in early 2022, I think. The world's first carbon insurer, female founder, two male cofounders. They would never have met otherwise. The female CEO, this is her first time doing a startup. She'd always harbored those ambitions, and this was a way for her to transition in and leave. She was not a lawyer, but she was very senior at a law firm, so as corporate as it gets, going into the startup world. The company doing decarbonising steel and concrete. Again, the CEO of that, he had already done a very successful health tech company in the UK, and he was choosing to come and build his next startup with us. He already knows how to do a startup, He's done one, MedTech, incredibly difficult, highly regulated physical product already. But he came to build with Carbon13 because he recognized what we can do. And that was very heartwarming because also I'd known him a little bit since about 2015 as well. Again, that planned serendipity. And just as you know with any early employee or founder, it's incredible that it went from no website to I go into a room and say, I work for this thing called Carbon13, and people go, Oh, yeah.

BHUVA:

That's incredible.

SARAH:

Or even I was at a house party and someone had heard of us. Even in that social context, I think that was...The most special moment was when we closed applications for the first time and brilliant people were choosing to build with us when we had no track record at all, right. And when we look at these startups, I think there's roughly We have 500 million-ton decarbonization potential already. 10% of the portfolio are Earthshot nominated. 65% have at least one female founder. When I look at our impact report, there's a thousand people that we've supported who, even if they don't have an active startup right now, will still be using those skills in their next role. That impact will continue to ripple beyond this as well. And so you're helping people realize long-held dreams, and what's nicer than that?

BHUVA:

So true. And I also basically think of those people who helped me when I had nothing, right when I have everything, it doesn't matter. But those are the people who really trust in your abilities. I come from Columbia Business School as well, so we are the Climate School. There are a lot of our startups have been nominated and have won Earthshot Prize. So it's really impressive to see some of your startups are also getting entry into that. Thanks for sharing that, Sarah. And Puja, I wanted to ask a similar question to you as well. So how does your personal mission fit into the venture building initiatives? Do you have one or two examples? Of course, everyone will be a favorite, but one or two if you want to call out.

PUJA:

Sure. So I came to Carbon13 to start our Venture Launchpad program initially. And so my favorites are in that program. So I'll maybe shout out a couple from our first pilot cohort. Again, so like Sarah, back when we didn't have any track record, basically, of doing this program at all, there were two founders who, both female founders, who were in that first cohort and got our investment. So one was Shruti from Pattern Projects, and the other was Chloe from Natural Building Systems. On both, I I just think because it was the first cohort and I was the one in charge of it, I think I took a special interest where I had hour long meetings with every founder every week for the whole program, which now, unfortunately, I don't get to do anymore because we have so many We have so many founders now. It's like you know 30 minutes here and there is sort of what I'm able to do at this stage. But basically was able to work with them so kind of intensively one to one and really see their journeys and see like sort of the impact that we could have on their strategy, on their traction, on their investment rate and their raise. Like it was just amazing how we could take something in both cases that had been around for a while and actually had quite impressive traction already, but somehow hadn't managed to raise or hadn't managed to get beyond a certain point and get them to the point that like, okay, now both of them have raised. Chloe just built their first home with their panels at the Installer show quite recently, and they built that entire house in three days. Shruti has raised a more than million pound round, is now rolling out their factory automation software and has pivoted to the point that, I think to Sarah's point earlier, it's both an incredible commercial case because it started out that they were doing made to order and custom-fit clothing to now being the operating system for these micro factories to be able to do made to order fashion. And so it's really exciting to just like be part of those journeys and be part of those really formative decisions that have basically unlocked growth and scale potential for both these founders that I've also just I've had the you know privilege of working really closely with.

BHUVA:

Thanks for sharing. I'm an angel investor and a venture capital investor myself. When my startups do something, I feel like, Okay, I'm doing it. I'm always constantly checking in on them. It's really fulfilling. Thanks for sharing, Puja. And Sarah, I wanted to quickly check in with you also. So what are some emerging trends you are excited about at the moment? And specific to those trends, how do you think Carbon13 differentiates itself? I mean, there are so many venture builder organizations. You have differentiated yourself so far, but looking forward into the emerging trends, how do you differentiate further? So you attract more startups and founders that are also aligned to some of the emerging trends.

SARAH:

Emerging trends.The cost of electricity is not going away. You might argue that's not emerging, but actually, I think there's a redoubled effort to face it because it just underpins everything from AI. When you're looking at OpenAI or DeepSeek or any of it. It's an energy question which is restricting the roll out of those technologies. Likewise with the intersection of AI and robotics is

still an with a lot of room to grow and a lot of potential. But I'm seeing still more and more energy storage or grid tech. We just made an investment in a new way of solar panel where it's capturing heat and to store that in molten sand as opposed to just a photovoltaic system which generates electricity.

To solve intermittency of solar is the point there. So I feel like that's just getting stronger and stronger. Ai is emerging, I think in climate, actually, a benefit of climate is we already have that mentality of this is something that the market needs. The AI startups that we have have good answers for that question. If you're saying that the defensibility of, say, a SaaS startup is starting to fall and the cost of creating software is getting lower and lower and lower. Therefore, it needs to be something that the market very much needs. In climate, as I say, that argument has already been thought out. We made our first legal tech startup, which is AI, for example, which would not have come across our desk even a year ago, I don't think. And then in terms of our differentiation at Carbon13, I actually think we still remain one of the very, very few places on Earth where you can find a co-founder who's ready to build a climate startup now, which is either deep tech, hard tech, or SaaS in any industry. I actually still think we're an outlier in that respect. And also in terms of the impact on carbon strategy, that education that we train the founders in how you strategize with climate and impact. I still think that's something that's very rare to get any other venture builder or accelerator. You can do courses. But not an accelerator still. So yeah, I'll pause there.

BHUVA:

Finding the co founder is the hardest thing and the It's a difficult decision, right? You have to do the right thing because you need it to sustain long term. Thanks for sharing that, Sarah. My final tiny point is, we also do this in Europe, in the EU, based out of Berlin, Germany. An emerging trend in 2025 is Europe, voting for Europe and investing in Europe as a source of strength. I think that's something that's different to a year ago. So an ecosystem that bridges UK-EU, I think, is more valuable than it was a year ago. Yeah, and they just passed the Nature Act, which is also very important to showcase the commitment to sustainability,and you are able to work with EU in that respect as well, because now there is a real need, and there is a law and an act that European Union has passed towards climate and sustainability. So thanks for sharing that, Sarah. And Puja, I just wanted to check in. What are the key elements of your investment thesis? Again, not sharing any confidential or sensitive data. This is for the benefit of founders or other investors listening to this conversation. So if someone has to reach out to you, what are things that they should keep in mind, specifically things that you think are important from a due diligence and an investment committee perspective?

PUJA:

Yeah. So in Carbon13, because we're investing at the absolute earliest stage, like pre-precede, there's really three things that we look at. So one is the team, and that's probably the most important part. Basically, why you? Why are you uniquely qualified to be working on this startup? Why will you be the one to achieve something that inherently probably lots of people have tried to do and failed at. So I think that's number one. The second is around the commercial impact. So basically, like I said, we're looking for - and the commercial and the climate impact, I should say, go really, really hand in hand, like Sarah referred to earlier. So like I said, our primary thesis is actually that every company we invest in has to have the potential to mitigate 10 million tons of carbon per year at scale. And we say that in a quite, I suppose it can be directly or indirectly. So you can be literally removing carbon, but you can also be like, for example, we invested in this legal tech platform recently. They could basically help enforce some regulations that wouldn't have otherwise been enforced and therefore, indirectly lead to that carbon mitigation as well. We count either way, but we require that our founders actually quantify that.

They basically take their financial model and look at commercially how they scale and look at, okay, what's the equivalent of how much carbon dioxide equivalent that that would mitigate as a result? We forced them to put it in those units. The fact is, in order to reach that 10 million tons per year at scale, you pretty much have to be building at a venture scale of speed as well as size. And so you know some investors will talk about, Okay, we're like more patient capital, or you know we have a different type of returns threshold. We're not looking for a 10X return, something like that. Actually, at Carbon13, I'd say we're unashamedly looking for those things. The reason is because, A, the scale of the problem and the time value of mitigating carbon today versus tomorrow is massive. The problem is huge. You have to have that scale. And carbon mitigated today is more valuable than carbon mitigated tomorrow, and so you have to have that speed. When you put those things together to get there, you kind of have to have a venture style business that grows really quickly and needs to return that kind of investment to make it worth it for the investors up front. So, really looking for that commercial potential, solving a real commercial problem, and as well as the impact thesis really tied into that So team commercial Impact in a nutshell.

BHUVA:

I mean you rightly mentioned. So anytime I'm talking to a startup, they will have a financial projection slide, but I'll be looking for the impact matrix slide. So if you don't quantify, you're not going to achieve it, or you may not get the next level of funding, or today's scale is not tomorrow. Scale. Tomorrow, we need much bigger scale, right. Thanks so much for sharing that. That's very well aligned with what I do. Go ahead, Sarah.

SARAH:

I just had a stat to back at what Puja was saying is when we talk about founders and cofounders, the average age of somebody on our programs is 37, which is unusual if you compare it to a lot of other accelerators or incubators, not all of them, but quite a lot of them. Or you know you see new programs which I'm sure we'll have a lot of success. They're focusing on, Okay, get these PhDs into startups, et cetera. We do have PhDs and postdocs who are coming fresh out of their university journey and will be in their mid to late 20s. But the average age is 37. The founders that we're backing, have half of the people who are joining a program will already have done a startup before. That's what we mean when we talk about the caliber of founders that we're working with. I think that's unusual. Execution is everything. You can have the best idea, but if you don't have the way to execute you may have to pivot. You should be able to manage that. I think that caliber comes with that level of experience.

BHUVA:

Thanks for sharing, Sarah. And then is there anything else you'd like to share with our audience before we wrap up? We are coming up-time. I wanted to check in, Sarah, with you and then Puja next. I have something really quick. I'll try to make it quick. People can follow up afterwards if they've got questions. 

SARAH:

A message to any founder listening to this podcast and you're trying to raise money is don't ask yourself if it's a good idea. Ask yourself if it's a better idea than the thousand startups which are pitching the VC, addressing a similar problem with a similar solution. The competitive element is your idea is probably a good one. It's not necessarily better than the others that have been brought to an investor's table. So just be aware of you're in a competition, not in a passing an exam situation.

BHUVA:

Yeah, that's so true. And especially there are so many coming up today. And earlier we spoke about AI. Now, every startup is an AI startup. So how are you going to differentiate that? So really important to understand that difference. And Puja, how about you?

PUJA:

I just have a couple of calls to action, which is that both our Europe, Venture Builder Europe and Cambridge applications are open right now. So if you're considering being a founder and anything we said kind of speaks to you, then definitely apply. We would love to be part of your journey to starting a company. But otherwise, in terms of my advice, I would say, just go out and start. Honestly, it's also what makes you more competitive, right. You have an idea. I mean, first of all, I guess I can give my experience. I'm a founder. I've started a couple of companies now. I have a notebook where I have 99% terrible ideas. If I come across a problem or I come across something that I'm interested in, I'll write it down. I'll generally give myself a week to do quite a bit of research into it. Usually, even that level of desk research is like, Probably this isn't it. Like I can probably not do better than most people who already had this idea. And you know this idea isn't worth solving because of whatever you know, economics thing, something like these. Something like this. And then if an idea passes that, I'm like, Okay, I'm allowed to get excited about it. But then I'm not allowed to actually look at an investor or something like that until I can actually get a customer that I think would actually be interested in that thing. And the thing is, it's the bar is quite low to try and get a customer interested in something. All you have to do is have them have a conversation with you and say, Yeah, that sounds interesting, you know. And so I think go out, get started. Honestly, you are the best at invalidating and being critical of your own ideas. And so if you've done that critical work, don't rely on an investor to do it. It's better coming from you.

BHUVA:

Yeah, exactly. So if you have spoken to your customers, and they have validated it, it's already a good proposition for the investors. Then don't be afraid to pivot. Stay with the mission, but pivoting is part of the process, right. Thanks for sharing that, Puja. I know we are really at time at the moment, but we can also talk quite a lot. I'll share all the call to actions. Thanks so much, Puja and Sarah, taking time to talk to us.

SARAH

Thanks, Bhuva.

PUJA

Thank you.