I have no idea. Still, the question has been popping up in my head now and again for the last year. Every time I see some “hydrogen mobility” startup raising money or investors piling in some EV-charging solutions business, I hope that it's just me being wrong about the industry's future rather than hype-guided investors throwing cash at the most charismatic founder whose only plan is to spend investor’s cash.
Viktor Pelevin, in his cult classic “Generation π,” colorfully depicts this business model. Gangsters take a huge loan from a bank, presumably for some business project. They spend 95% of it on jeeps, prostitutes, and vodka. When the time comes to return the money to the bank, they use the rest of the cash to hire a PR agency that will explain to the bank why the “business project” is not going according to the plan and why they need refinancing. The VC model seems perfectly suited for the “Generation π” business model, as it explicitly allows for a 90%+ failure rate. If you play small, you don’t even need to hire a PR agency.
Mikhail Taver, founder of Taver Capital Partners, doesn’t invest in climate. He has been investing in AI for almost ten years now. Today, he published an article on Crunchbase about the erosion of trust in the startup and VC AI community. His conclusions resonate with what I see in the climate tech space, although I can’t pinpoint the facts like Mikhail does for his industry.
Honestly, I hope that most failures are just failures of execution or, at the very worst case, stupidity, but not fraud. Climate tech isn’t as money-loaded as AI or SaaS, and founders tend to start because they genuinely care about the problem.
What is your opinion? Have you encountered fraud in climate tech?