• How climatetech incubators rallied to help startups after SVB collapse
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Clean energy journalism for a cooler tomorrow

How climatetech incubators rallied to help startups after SVB collapse

The failure of Silicon Valley Bank sent many climate-focused companies spiraling — and turning to their incubator and accelerator programs to navigate the crisis.
By Maria Gallucci

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A woman stands on a stage and looks up at a projector displaying images about her startup
Lina González, co-founder of SpadXTech, presents at Greentown Labs' office in Boston. (ACCEL)

Climatetech incubators and startup accelerators help entrepreneurs turn their fledgling ideas into products and technologies by serving as early-stage investors, mentors and networkers that connect newcomers to more established firms. In recent days, however, such programs have taken on another role: crisis manager.

The collapse of Silicon Valley Bank last Friday sent shockwaves through the U.S. economy and the clean energy industry in particular. More than 1,500 companies working on climate-focused technologies had their money tied up in the financial institution — including climatetech startups that suddenly had to worry about being forced to shut down just as they were gaining their footing.

As the dust continues to settle, it’s still unclear how deeply the debacle will affect companies that are developing novel and expensive technologies geared at fighting climate change. Leaders of programs that foster and develop startups say their organizations can play an important role in helping entrepreneurs through this next period of uncertainty.

Matt Petersen, CEO of Los Angeles Cleantech Incubator, said the weekend was quite tense for a lot of our founders and for us, figuring out ways we can help them navigate the crisis.”

Before the federal government stepped in on Sunday and committed to ensuring full payout to all the bank’s depositors, incubators said they had been scrambling to help founders find bridge loans to help meet payroll and secure emergency liquidity support.

It’s been a crazy few days over here,” said Maya Nitzberg, vice president of community at Greentown Labs, which serves over 220 startups in Boston and Houston. The Greentown team really has been all-hands-on-deck supporting our startups who banked with SVB.”

Pat Sapinsley, managing director of cleantech initiatives at Urban Future Lab, said her inbox was flooded” with emails from venture capitalists, lawyers and other incubator directors who sought or shared advice, such as how to expeditiously create new accounts at still-functioning banks. The lab, based in New York City, has supported about 70 climate-focused companies over the years.

Now Sapinsley said she is considering bringing on a financial adviser to help entrepreneurs develop better strategies for storing and investing their money rather than tying it all up in one institution, as many companies across the industry did with the California bank.

Climatetech startups are thinking more about how to strengthen their treasury functions, diversify their holdings and get introductions to other banks,” said Rushad Nanavatty, managing director of Third Derivative, a startup accelerator founded by RMI and New Energy Nexus. (Canary Media is an independent affiliate of RMI.)

Since the initial news hit, we’ve been working diligently with our startups to assess their immediate needs pulling together guidance and support,” he added. Our priority is to alleviate any pain experienced and to help strengthen our portfolio as a result.”

Going forward, Greentown Labs is thinking about which wraparound services” it can provide, such as coaching founders as they develop pitches and slide decks for investors in the challenging market, and helping companies pursue funding from government agencies, small-business research programs and other types of non-dilutive” capital that don’t require startups to give up equity in their fledgling business.

Our startups are going to continue to need guidance around what to do next, given the ripple effects that are going to come from what happened,” Nitzberg said.

Jason Grillo, director of partnerships and operations for AirMiners, said he hasn’t seen any sky-is-falling panic” from the startups within his organization’s network.

AirMiners supports companies working in carbon dioxide removal (CDR), including technologies that aim to capture or store CO2 from oceans, forests, soil, rocks or directly from the air. Through its Launchpad program, AirMiners helps CDR startups pitch to both venture capitalists and buyers of carbon-removal credits, which the startups can generate and sell by capturing tons of carbon. About 100 startups have graduated from the program in the last two years.

Still, There is a longer-term concern about the [economic] environment for investors and what that might mean for getting funding to climatetech companies,” he said. The role of accelerators is going to be that much more important, because we still face a climate emergency, and we still need to make good on our decarbonization efforts.”

Maria Gallucci is a senior reporter at Canary Media. She covers emerging clean energy technologies and efforts to electrify transportation and decarbonize heavy industry.